3/7. The U.S. Court of Appeals (7thCir) issued its opinion [29 pages in PDF] in ITOFCA v. MetaTrans Logistics, a case involving copyright interests in a computer program following several transfers, including a bankruptcy proceeding transfer of assets.

Background. ITOFCA developed a computer program to facilitate rail and truck freight shipping. It did not then register a copyright, but its ownership was not in dispute. ITOFCA later transferred most of its assets to another entity, ICI. An agreement referenced "all assets and operations involving freight forwarding services". Also, the person who wrote the program went to work for ICI.

ICI later filed a Chapter 11 bankruptcy petition. The Court approved the sale to another company, Amerifreight, of ICI's "right, title and interest in all patent, copyright and trade secret rights in and to all computer software and corresponding documentation developed or acquired by" ICI. Amerifreight then assigned its rights to MetaTrans. The person who wrote the program, who continued to work for MegaTrans, modified the program, which MegaTrans then licensed to others.

ITOFCA, belatedly, registered a copyright in the program. It also filed a complaint in U.S. District Court (NDIll) against MetaTrans alleging copyright infringement. The District Court granted summary judgment to MetaTrans. This appeal followed.

Court of Appeals. The Court of Appeals affirmed. Judge Richard Posner, who wrote the opinion, stated that "When a bankruptcy court approves the sale of an asset of the debtor, a person who has notice of the sale cannot later void it on the ground that he is the asset's real owner." (The Court cited La Preferida v. Cerveceria Modelo, 914 F.2d 900 (7th Cir. 1990).)

Posner continued that "That was the ground on which the district judge rejected ITOFCA's claim of copyright infringement. ITOFCA argues that all the sale did was transfer whatever copyright interest ICI had, and the only interest it had was a license to use the copyrighted program that had been transferred to it by ITOFCA when ICI was created."

Judge Posner rejected this argument. "It is true that ICI did not list a copyright among its assets on the asset schedule that it submitted to the bankruptcy court; true, too, that ordinarily persons who might have an interest in property being sold at a bankruptcy auction have a right to rely on the fact that the debtor's schedule of assets does not list the property in which they are interested. But it was apparent on the face of the bankruptcy judge's order that it was conveying the right to sell copies of the modified program -- which is precisely the right that ITOFCA claims to have retained for itself. Its failure to object to the bankruptcy court's order is compelling evidence that its claim of right is an afterthought. It knew it had no basis for objecting to the sale order."

Judge Posner also wrote that "ITOFCA is right of course that a copyright is not transferred automatically with the transfer of the copyrighted good. When you buy a book, you don’t obtain the right to make and sell copies of it. The copyright statute is explicit that there must be a memorandum in writing for the sale of the copyright to be enforceable. 17 U.S.C. §§ 202, 204(a). But it does not follow as ITOFCA believes that the agreement must use the word ``copyright.´´"

Judge Posner also threw in a bit of an economic rationale for affirming the District Court. He noted that neither ICI nor any successor could use the program "profitably unless it could adapt it to changing technology and the needs of particular customers. ITOFCA acknowledges that the sale to ICI carried with it the right to modify the program; and now suppose that ICI or its successor wanted to license the modified work to a customer. Did it have to get a license from ITOFCA to be allowed to do this? ITOFCA no longer had any technical or sales staff. It was a shell. How would it evaluate such a request? Who would evaluate the request? Would ICI have consented to have such an albatross around its neck?"

3/10. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Freeman v. San Diego Association of Realtors, a antitrust action involving a real estate multiple listing service that lets agents share information about properties on the market with the help of a computerized database. The Appeals Court concluded that "Antitrust law doesn't frown on all joint ventures among competitors -- far from it. If a joint venture benefits consumers and doesn't violate any applicable per se rules, it will often be perfectly legal. The decision to combine MLS databases fits comfortably within this category." The Appeals Court concluded that there is federal jurisdiction, and that the District Court appropriately dismissed the Sherman Act Section 2 claim. However, the Appeals Court reversed the District Court's dismissal of the Section 1 claim.

3/11. The U.S. Court of Appeals (6thCir) issued its opinion in American Council of Certified Podiatric Physicians and Surgeons v. American Board of Podiatric Surgery. This is a case involving state and federal antitrust and tortious interference claims against an association that provides professional certification services. The District Court granted summary judgment to the defendant on the Sherman Act Section 2 claim. The Appeals Court affirmed.

3/7. The U.S. Court of Appeals (DCCir) issued its opinion [16 pages in PDF] in Biltmore Forest Broadcasting v. FCC, an appeal of an order of the Federal Communications Commission (FCC) awarding an FM radio license. The Court of Appeals affirmed. Biltmore Forest Broadcasting FM appealed an order awarding an FM radio station license Liberty Productions, which was the high bidder in the auction of that license, asserting that Liberty should have been disqualified because of errors in Liberty's license application.

3/11. The House Judiciary Committee's Crime Subcommittee held a hearing on including HR 1161, the Child Obscenity and Pormography Prevention Act, which addresses, among other topics, computer generated images. The Subcommittee heard testimony on the bill, but did not mark up the bill, as had been previously announced.

This bill is very similar to a bill passed by the House in the 107th Congress. Rep. Lamar Smith (R-TX) introduced, and the House passed, HR 4623, the Child Obscenity and Pormography Prevention Act of 2002. The final vote was 413-8. See, Roll Call No. 256. However, the Senate passed a much different bill. Rep. Smith's bill reacts to the Supreme Court's April 16, 2002, opinion [PDF] in Ashcroft v. Free Speech Coalition, in which the Court held unconstitutional on First Amendment and overbreadth grounds provisions of the Child Pormography Prevention Act of 1996 (CPPA) banning computer generated images depicting minors engaging in sexually explicit conduct.

Daniel Collins, Associate Deputy Attorney General, testified in support of the bill. See, prepared testimony. He stated that "As the Administration supported H.R. 4623 last year, we continue fully to support H.R. 1161 this year. The Senate, for its part, recently enacted a revised and substantially strengthened bill, S. 151, which also received the Administration’s full support. The two bills overlap very significantly in approach, if not always in wording. We are confident that the relatively modest differences between the two bills can be readily resolved to produce a final bill that is the best that can be achieved."

Collins addressed the problem created by the Supreme Court opinion in Ashcroft v. FSC. He stated that "By invalidating these important features of the 1996 Act, the Court's decision leaves the Government in an unsatisfactory position that the Department believes warrants a prompt legislative response. Already, defendants often contend that there is “reasonable doubt” as to whether a given computer image -- and most prosecutions involve materials stored and exchanged on computers – was produced with an actual child or as a result of some other process. There are experts who are willing to testify to the same effect on the defendants’ behalf. Moreover, as computer technology continues its rapid evolution, this problem will grow increasingly worse: trials will increasingly devolve into jury-confusing battles of experts arguing over the method of generating an image that, to all appearances, looks like it is the real thing. The end result would be that the Government may be able to prosecute effectively only in very limited cases, such as those in which it happens to be able to match the depictions to pictures in pornographic magazines produced before the development of computer imaging software or in which it can establish the identity of the victim."

See also, prepared testimony of John Feldmeier of the FSC. See also, prior issues of the TLJ Daily E-Mail Alert containing stories regarding legislation related to computer generated images: No. 423, May 2, 2002; No. 454, June 19, 2002; and No. 534, October 24, 2002.

3/11. U.S. Trade Representative (USTR) Robert Zoellick announced several appointments at the Office of the USTR. See, USTR release.

John Veroneau was named the new General Counsel, effective April 1, 2003, replacing Peter Davidson. Veroneau was previously the Assistant U.S. Trade Representative (AUSTR) for Congressional Affairs. Before joining the USTR in March 2001, he was Assistant Secretary of Defense for Legislative Affairs. Before that he worked for former Sen. William Cohen (R-ME), Sen. Susan Collins (R-ME), and Sen. Bill Frist (R-TN).

Matt Niemeyer was named to replace Veroneau as the AUSTR for Congressional Affairs, effective April 1. Lisa Coen was named as Deputy AUSTR for Congressional Affairs.

James Mendenhall was named AUSTR for Services, Investment and Intellectual Property, replacing replaces Joe Papovich, who retired from the USTR. Mendenhall was previously Deputy General Counsel. Before joining the USTR in September 2001 he was a partner in the Atlanta, Georgia based law firm of Powell Goldstein Frazer & Murphy, where he focused on World Trade Organization (WTO) litigation, international arbitration, and trade policy.

Meredith Broadbent was named AUSTR for Industry, Market Access and Telecommunications, effective April 1. She will replace Florizell Liser, who was named AUSTR for African Affairs. Broadbent has been a staffer for the House Ways and Means Committee's Subcommittee on Trade for twenty years.

Ashley Wills was named AUSTR for South Asian Affairs, effective in June. He is currently U.S. Ambassador to Sri Lanka.

Ross Wilson was named Senior Negotiator for the Free Trade Area of the Americas (FTAA), effective June 23. He is currently the U.S. Ambassador to Azerbaijan.

3/11. President Bush announced his intent to nominate Joe Whitley to be General Counsel of the new Department of Homeland Security. He is currently a partner in the law firm of Alston & Bird. He was previously U.S. Attorney for both the Northern and Middle Districts of Georgia. See, White House release.

3/11. President Bush nominated Elizabeth Courtney to be a Member of the Board of Directors of the Corporation for Public Broadcasting for the remainder of the term expiring January 31, 2004. See, White House release.

3/11. Nancy Victory, Director of the National Telecommunications and Information Administration (NTIA), gave a speech titled "Transitioning from an Analog Past to a Digital Future" at the annual meeting of the Advanced Television Systems Committee (ATSC). She said "teamwork" is necessary. Robert Sachs, P/CEO of the National Cable Television Association (NCTA) gave a speech [6 pages in PDF] at the same event. Edward Fritts, P/CEO of the National Association of Broadcasters (NAB), also gave a speech at the event.

3/11. The Federal Communications Commission (FCC) released its Report and Order [68 pages in PDF] amending its rules for low power operations in the 450-470 MHz band. This proceeding is titled "In the Matter of Amendment of Part 90 of the Commission's Rules and Policies for Applications and Licensing of Low Power Operations in the Private Land Mobile Radio 450-470 MHz Band". This is WT Docket No. 01-146. The FCC announced, but did not release, this Report and Order on February 14.

3/11. President Bush signed HR 395, the Do-Not-Call Implementation Act. This bill authorizes the Federal Trade Commission (FTC) to collect fees for the implementation and enforcement of its "do-not-call" registry. The FTC released its amended Telemarketing Sales Rule (TSR) on December 18, 2002, which included creation of the do-not-call registry. This allows consumers to opt out of receiving unwanted telephone solicitations. It also prohibits telemarketers from calling those telephone numbers listed on the registry. See, White House release.

8:30 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB), which was previously named the Computer System Security and Privacy Advisory Board (CSSPAB), will meet. This is the second day of a three day meeting. See, agenda in notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Pages 9638 - 9639. Location: NIST, Bethesda Hyatt Regency Hotel, 7400 Wisconsin Avenue, Bethesda, MD.

10:30 AM - 12:30 PM. The Federal Communications Commission's (FCC) Wireless Telecommunications Bureau will host a forum to present a new license search interface that will be available for the public to access Multi-point Distribution Service/Instructional Television Fixed Service (MDS/ITFS) License data. Location: FCC, 6th Floor (South Conference Room), Room B516, 445 12th Street, SW.

Rescheduled for March 21. 12:15 PM. The Federal Communications Bar Association's (FCBA) Transactional Practice Committee will host a brown bag lunch. The topic will be FCC antitrust merger reviews. The speakers will include Jim Bird (head of the Federal Communications Commission's (FCC) Office of General Counsel's (OGC) Transactional Team) and Jim Barker (Latham & Watkins). For more information, contact Lauren Kravetz at 202 418-7944 or lkravetz@fcc.gov. This event had originally been scheduled for February 19, but was postponed due to snow.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch. The title of the program is "The Role of In House Counsel". The speakers Bob Calaff (T-Mobile USA), Melissa Newman (Qwest Communications), Bob Beizer (Gray Television), and Jim Coltharp (Comcast). For more information contact Yaron Dori at ydori@hhlaw.com or Ryan Wallach at rwallach@willkie.com. Location: Willkie Farr & Gallagher, 1875 K St., NW.

2:00 PM. The Senate Judiciary Committee will hold a hearing on pending judicial nominations: Cormac Carney (to be Judge of the U.S. District Court for the Central District of California), James Selna (Central District of California), Philip Simon (Northern District of Indiana), Theresa Springmann (Northern District of Indiana), Mary Ellen Williams (Federal Claims), and Victor Wolski (Federal Claims). See, notice. Location: Room 226, Dirksen Building.

Deadline to submit applications to the Department of Commerce (DOC) to participate in "Information and Communications Technologies Business Development Mission" to Northern Ireland and the Republic of Ireland on April 6-11, 2003. The DOC stated that this mission will offer "Numerous opportunities for trade and partnership in e-commerce, telecommunications, electronics, and software. Also opportunities for partnership in R&D in lab and university and cross-border initiatives." See, notice and application form [PDF].

8:30 AM - 2:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB), which was previously named the Computer System Security and Privacy Advisory Board (CSSPAB), will meet. This is the third day of a three day meeting. See, agenda in notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Pages 9638 - 9639. Location: NIST, Bethesda Hyatt Regency Hotel, 7400 Wisconsin Avenue, Bethesda, MD.

9:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property will hold a hearing titled "International Copyright Piracy: Links to Organized Crime and Terrorism". Webcast. Location: Room 2141, Rayburn Building.

9:30 AM. The Senate Judiciary Committee will hold a hearing titled "Setting the Record Straight: The Nomination of Justice Priscilla Owen". See, notice. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will meet in executive session to vote on pending nominations and legislation. Location: Room 253, Russell Building.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

10:00 AM. The House Financial Services Committee will meet to mark up several bills, including HR 21, the Unlawful Internet Gambling Funding Prohibition Act of 2003. See, release. Press contact: Peggy Peterson at 202 226-0471. Location: Room 2128, Rayburn Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Practice Committee will host a brown bag lunch. The speakers will be Policy Division Chief & Deputies. No RSVP is required. Location: Willkie Farr & Gallagher, 1875 K St., NW.

2:00 PM. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census will hold a hearing titled "Federal E-Government Initiatives: Are We Headed in the Right Direction?" The scheduled witnesses are Mark Forman (Office of Management and Budget), Joel Willemssen (General Accounting Office), David McClure (The Council for Excellence in Government), and Leonard Pomata (webMethods). Press contact: Bob Dix at 202 225-6751. Location: Room 2154, Rayburn Building.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Rainbow Push Coalition v. FCC, No. 02-1020. Judges Ginsburg, Edwards and Garland will preside. Location: 333 Constitution Ave., NW.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Homeland Security: Network Reliability Council VI will meet. FCC Chairman Michael Powell and Qwest Ch/CEO Richard Notebaert will chair the meeting. See, notice [PDF]. Webcast. Location: FCC, Room TW-C305 (Commission Meeting Room), 445 12th Street, SW.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "The Content, Tech & Telecom Industries Examine Intellectual Property". The panelists will include Jeffrey Campbell (Cisco Systems), Sarah Deutsch (Verizon), and Mitch Glazer (Recording Industry Association of America). See, notice. Register to attend by contacting Stefannie Bernstein at 202 289-8928 or sbernstein@pff.org or David Fish at dfish@pff.org. Location: Room 1539, Longworth Building.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Trans Intelligence v. FCC, No. 02-1098. Judges Ginsburg, Edwards and Garland will preside. Location: 333 Constitution Ave., NW.

Day one of a three day conference titled "Open Source for National and Local eGovernment Programs in the U.S. and EU". See, agenda. For more information, contact Tony Stanco at 202 994-5513 or Stanco@seas.gwu.edu. Location: George Washington University, The Marvin Center Grand Ballroom, 800 21st Street, NW.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding its notice of proposed rulemaking (NPRM) pertaining to the service rules for the Dedicated Short Range Communications Systems in the 5.850-5.925 GHz band (5.9 GHz band). See, notice in the Federal Register, January 15, 2003, Vol. 68, No. 10, at Pages 1999-2002. For more information, contact Nancy Zaczek at 202 418-7590 or nzaczek@fcc.gov, or Gerardo Mejia at 202 418-2895 or gmejia@fcc.gov.

Day two of a three day conference titled "Open Source for National and Local eGovernment Programs in the U.S. and EU". See, agenda. For more information, contact Tony Stanco at 202 994-5513 or Stanco@seas.gwu.edu. Location: George Washington University, The Marvin Center Grand Ballroom, 800 21st Street, NW.

8:25 AM - 5:00 PM. Day one of a two day meeting of the National Institute of Standards and Technology's (NIST) Visiting Committee on Advanced Technology. Pre-registration is required. See, notice in the Federal Register, March 4, 2003, Vol. 68, No. 42, at Pages 10205-10206. Location: Employees Lounge, Administration Building, NIST, Gaithersburg, MD.

9:00 AM - 12:45 PM. The Progressive Policy Institute (PPI) will host a half day conference titled "Beyond the IT Bubble". It will examine "the next phase in the information technology revolution and government's role in facilitating its positive impact on economic growth". Sen. Ron Wyden (D-OR) will deliver the keynote luncheon address at 12:15 PM. For more information, contact Karin Kullman or Eric Wortman at 202 547-0001. RSVP to TechProject@dlcppi.org or contact Brian Newkirk at 202 608-1245. Location: Hyatt Regency Capitol Hill, 400 New Jersey Avenue, NW.

10:00 AM. The Senate Banking Committee will hold a hearing on proposals to regulate illegal internet gambling. Location: Room 538, Dirksen Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The speaker will be Barbara Kreisman, Chief of the FCC Media Bureau's Video Division. For more information, contact Frank Jazzo at jazzo@fhhlaw.com. RSVP to Wendy Parish at wendy@fcba.org. Location: NAB, 1771 N St., NW, 1st Floor Conference Room.