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May 15, 2003, 9:00 AM ET, Alert No. 662.
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House Judiciary Committee Approves Internet Gambling Bill

5/14. The House Judiciary Committee amended and approved HR 21, the "Unlawful Internet Gambling Funding Prohibition Act of 2003". The vote on reporting the bill was 16-15. The final vote broke down mostly along party lines, with Republicans supporting the bill.

The bill would attempt to bar internet gambling operations access to the U.S. financial services system by banning the use of credit cards, wire transfers, or any other bank instrument to fund illegal gambling transactions. The bill does not ban gambling. This is a matter of state law.

Much of the debate at the meeting focused on an amendment offered by Rep. Chris Cannon (R-UT). The bill as introduced, and as reported last week by the Crime Subcommittee, provided, in its definitional section, that "The term ``bets or wagers´´ ... (E) does not include --- (ix) any lawful transaction with a business licensed or authorized by a State." The Cannon amendment simply strikes the line "any lawful transaction with a business licensed or authorized by a State".

Rep. Chris CannonRep. Cannon (at right), who represents a state that bans all gambling, argued that this exception creates a carve out for state approved gambling on horse racing, dog racing, and jai alai.

He also stated that he opposes the bill because of "the burden that this bill would create on the internet".

Rep. Ric Keller (R-FL) argued that the Cannon amendment makes the bill "unnecessarily controversial", and would likely kill the bill on the House floor.

Rep. Bob Goodlatte (R-VA) argued for passing the bill without the Cannon amendment, because otherwise the dog, horse and jai lai gambling groups would oppose the bill in the full House. He said that rejecting the Cannon amendment would keep these groups on the sidelines.

The Cannon amendment passed by a vote of 16-15.

Opponents of the bill offered many of the same arguments that they presented at the Crime Subcommittee's mark up session on May 6. See, TLJ story titled "House Crime Subcommittee Approves Internet Gambling Bill", May 6, 2003. For example, Rep. Bobby Scott (D-VA) predicted that the bill "will be ineffective", because gamblers will miscode credit card transactions and use e-cash transactions to evade the prohibitions contained in the bill.

Rep. Scott also offered an amendment that he stated would "make individuals subject to the provisions of the bill". It failed on a voice vote.

Rep. Sheila Lee (D-TX) offered an amendment that would have stricken Section 3 from the bill. This is the section containing the prohibitions. Rep. James Sensenbrenner (R-WI), the Chairman of the Committee, stated that "this amendment strikes the guts of the bill". It failed on a voice vote. Rep. Lee also offered an amendment that she stated "removes credit cards from the scope of HR 21". It too failed on a voice vote.

The Committee then voted on reporting the bill, as amended. It passed by a vote of 16-15. The Cannon amendment also passed by a vote of 16-15. However, the same 16 member did not make up the majority on both votes. First, some members were present only for the vote on the Cannon amendment, while some other members were present only for the vote on reporting the bill.

Also, there was some strategic voting on the Cannon amendment. That is, while the Cannon amendment expanded the scope of the prohibition of the bill, some members who opposed the underlying bill nevertheless voted for the Cannon amendment in order to report a bill that would be less likely to pass in the full House or Senate. These members voted for the Cannon amendment, but against reporting the bill. Similarly, some members who likely supported the concept of the Cannon amendment as well as the underlying bill, nevertheless voted against the amendment because they wanted to report a bill that would pass in the House and Senate.

More Information. See, story titled "House Subcommittee Holds Hearing on Internet Gambling Bills" in TLJ Daily E-Mail Alert No. 654, May 2, 2003. The House Financial Services Committee, which has jurisdiction over the bill along with the House Judiciary Committee, approved it on March 13. See, story titled "House Committee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 623, March 14, 2003. See also, story titled "Rep. Leach Introduces Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 579, January 9, 2003. The companion bill in the Senate is S 627. See, TLJ story titled "Senate Committee Holds Hearing on Internet Gambling Bill", March 18, 2003.

Federal Circuit Rules in StorageTek v. Cisco

5/13. The U.S. Court of Appeals (FedCir) issued its opinion [MS Word] in StorageTek v. Cisco, a patent infringement case involving communication networks.

Background. Storage Technology Corporation (StorageTek) sells storage products, including tape storage systems, disk storage systems, and software and services. It is the assignee of two patents that relate to the forwarding of packets by a network device: U.S. Patent No. 5,842,040 titled "Policy caching method and apparatus for use in a communication device based on contents of one data unit in a subset of related data units", and U.S. Patent No. 5,566,170 titled "Method and apparatus for accelerated packet forwarding". Both

Cisco Systems makes networking products. Its NetFlow Feature Acceleration technology and Multi-Protocol Label Switching (MPLS) technology are at issue in this case.

District Court. StorageTek filed a complaint in U.S. District Court (WDWisc) against Cisco alleging patent infringement. It alleged that Cisco's NetFlow Feature Acceleration technology and Multi-Protocol Label Switching (MPLS) technology infringe the '040 and '170 patents. Cisco moved to transfer venue pursuant to 28 U.S.C. § 1404(a). The District Court (WDWisc) transferred the case to the U.S. District Court (NDCal). The District Court (NDCal) conducted a Markman hearing, and entered a claim construction order. It then granted summary judgment of non-infringement to Cisco. StorageTek appealed.

Court of Appeals. The Court of Appeals affirmed the decision to transfer the case (becaues most of Cisco's witnesses are in Northern California), and the summary judgment as to the '170 patent. However, it held that the District Court erred in its construction of certain limitations in the '040 patent. It vacated the judgment of non-infringement of this patent, and remanded to the District Court.

Report Offers Recommendations for Authentication Systems

5/14. The Center for Democracy and Technology (CDT) released a report titled "Interim Report: Privacy Principles for Authentication Systems".

It states that authentication systems must build trust in consumer initiated transactions and government services and be consistent with applicable law. To accomplish this, the report offers six recommendations, which are as follows:

"1) Provide User Control -- The informed consent of the individual should be obtained before information is used for enrollment, authentication and any subsequent uses."

"2) Support a Diversity of Services -- Individuals should have a choice of authentication tools and providers in the marketplace. While convenient authentication mechanisms should be available, privacy is put at risk if individuals are forced to use one single identifier for various purposes."

"3) Use Individual Authentication Only When Appropriate -- Authentication systems should be designed to authenticate individuals by use of identity only when such information is needed to complete the transaction. Individual identity need not and should not be a part of all forms of authentication."

"4) Provide Notice -- Individuals should be provided with a clear statement about the collection and use of information upon which to make informed decisions."

"5) Minimize Collection and Storage -- Institutions deploying or using authentication systems should collect only the information necessary to complete the intended authentication function.

"6) Provide Accountability -- Authentication providers should be able to verify that they are complying with applicable privacy practices."

The report is supported by a working group comprised of the CDT, Consumer Action, Corporate Privacy Group, eBay, Hewlett-Packard, Intel, Liberty Alliance, Microsoft, NeuStar, TRUSTe, and VeriSign.

PPI Report Addresses Native American IPR and Digital Divide

5/14. The Progressive Policy Institute (PPI), a Washington DC based Democratic think tank, released a short report titled "Main Obstacles to Native American Trade: Digital Divide and Intellectual Property Piracy".

The report states that native Americans face higher unemployment and poverty than the population as a whole, but that "electronic commerce and trade promotion programs, by enabling rural and geographically isolated communities to reach world markets, can help tribes both with economic development and cultural continuity." That is, as native Americans market "traditional jewelry, textiles, and pottery" they face "significant obstacles in the form of digital divides and intellectual property piracy". The "reservations suffer more than most communities from the 'digital divide,' and thus are less able to reach overseas customers. Traditional arts are also highly vulnerable to intellectual property piracy." For example, "Hopis estimate losses to piracy at $44 million, or four times sales."

The report offers no legislative or policy recommendations.

The Senate Indian Affairs Committee held a hearing on May 17, 2000 that addressed piracy of native American arts and crafts. See, list of witnesses, with hyperlinks to prepared testimony.

More News

5/13. The Internet Corporation for Assigned Names and Numbers (ICANN) published in its web site a memorandum titled "Staff Manager's Issues Report on Privacy Issues Related to Whois".

5/14. The Federal Communications Commission (FCC) released a report [2.1 MB PDF file] titled "Statistics of the Long Distance Telecommunications Industry". The report contains data on revenues, market shares, and number of companies. It also contains data on residential long distance calling, focusing on usage patterns, market shares, prices, and expenditures. See, also FCC release [2 pages in PDF] summarizing the findings of the report.

5/14. The Office of Science and Technology Policy (OSTP) published a notice in the Federal Register stating that it wants "white papers" from the public regarding its High End Computing Revitalization Task Force (HECRTF). Also, it wants them within one week. The deadline to submit papers is May 21, 2003. See, Federal Register, May 14, 2003, Vol. 68, No. 93, at Page 25888.

5/14. The General Accounting Office (GAO) released a report [pages in PDF] titled "Free Trade Area of the Americas: United States Faces Challenges as Co-Chair of Final Negotiating Phase and Host of November 2003 Ministerial".

Thursday, May 15

The House will meet at 9:00 AM. It will consider HR 1527, the National Transportation Safety Board Reauthorization.

8:45 - 10:30 AM. The Global Business Dialogue (GBD) will hold a press conference titled "Singapore Issues". The speakers will be James Mendenhall (Office of the U.S. Trade Representative), Petros Sourmelis (European Commission), Seong-bong Lee (Institute for International Economic Policy in Seoul), and Melissa Haslam (JBC International). For more information, contact Judge Morris at 202 463-5074. The GDB states that there is a "$35 general admission ($25 for members of the National Foreign Trade Council). GBD members are prepaid for this event, and there is no charge for press or for US Government staff."
Location: First Amendment Lounge, National Press Club, 529 14th St. NW, 13th Floor.

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

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. The agenda includes consideration of the nomination of Michael Chertoff to be a Judge of the U.S. Court of Appeals (3rdCir). See, notice. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Banking Committee will hold a hearing to examine the Fair Credit Reporting Act (FCRA) and issues presented by the re-authorization of the expiring preemption provisions. Location: Room 538, Dirksen Building.

10:00 AM. The House Judiciary Committee will hold a hearing on HR 1115, the Class Action Fairness Act of 2003. The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

11:00 AM. Representatives of the Federal Trade Commission (FTC) and other government entities will hold a press conference to announce spam related enforcement actions. The event will be in Dallas, Texas. However, the FTC states that "Reporters who cannot attend can participate by calling: Phone Number: 1- 888-532-2243 Confirmation Number: 16950466". See, notice.

12:00 NOON. Stratton Sclavos, Ch/CEO of VeriSign, will speak at a Congressional Internet Caucus luncheon. RSVP to or 202 638-4370. Lunch will be served. Location: Mansfield Room (S-207), Capitol Building.

Friday, May 16

12:00 NOON. The Federal Communications Bar Association's (FCBA) Diversity Committee will host a brown bag lunch. The speakers will be Bill Bailey and Toni Cook Bush. RSVP to Harry Wingo at 202 418-1783 or Location: Room 253, Russell Building.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) [MS Word] regarding "Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band". Unlicensed devices would include, among other things, 802.11. See, notice in Federal Register, January 21, 2003, Vol. 68, No. 13, at Pages 2730-2733. See also, story titled "FCC Announces Notice of Inquiry Re More Spectrum for Unlicensed Use" in TLJ Daily E-Mail Alert No. 566, December 12, 2002. For more information, contact Hugh Van Tuyl in the FCC's Office of Engineering & Technology at or 202 418-7506. This is OET Docket No. 02-380. See, notice of extension [PDF].

Saturday, May 17

2:00 PM. Richard Clarke will speak at the commencement ceremony at George Mason University School of Law. See, notice. Location: GMU Center for the Arts, Fairfax, Virginia campus.

Monday, May 19

The Supreme Court will return from a recess that it began on Monday, May. 5.

9:30 AM - 5:00 PM. The Federal Communications Commisssion's (FCC) Office of Engineering and Technology (OET) will host a public workshop on cognitive radio technologies. See, notice and agenda [PDF]. This event will be webcast. For more information, contact Michael Marcus at 202 418-2418 or mike.marcus or Jim Schlichting at 202 418-1547 or jim.schlichting Location: FCC, Commission Meeting Room, 445 12th Street, SW.

Tuesday, May 20

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) program titled "What Every Communications Practitioner Should Know About Sarbanes Oxley and Corporate Compliance". The speakers will include Tom Hickey (Assistant General Counsel, Nextel), Barry Summer (Assistant Director, Division of Corporation Finance, SEC), and Andrew Hruska (Office of the Deputy Attorney General). Location: Dow Lohnes & Albertson, 1200 New Hampshire Avenue, NW, Suite 800.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding AOL Time Warner's petition [58 pages in PDF] requesting relief from the FCC's January 22, 2001 Memorandum Opinion and Order (MOO) approving the merger of AOL and Time Warner, and imposing conditions upon AOL Time Warner regarding instant messaging services. Specifically, AOL Time Warner seeks relief from the condition restricting its ability to offer internet users streaming video advanced Instant Messaging based high speed services (AIHS) via AOL Time Warner broadband facilities.

Deadline to submit requests to the U.S. Patent and Trademark Office (USPTO) to present oral testimony at it May 30 hearing regarding its notice of proposed rulemaking (NPRM) to amend its regulations to implement the Madrid Protocol Implementation Act of 2002 (MPIA). See, notice in the Federal Register, March 28, 2003, Vol. 68, No. 60, at Pages 15119 - 15138.

Wednesday, May 21

9:00 - 11:00 AM. The U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office (CO) will hold a meeting to discuss the preparation of a new text of the Hague Jurisdiction and Enforcement of Judgments Convention. See, notice. Location: USPTO, 2121 Crystal Drive, Crystal Park 2, Suite 902, Arlington, VA.

10:00 AM. The Senate Judiciary Committee will hold a hearing on the nomination of Hewitt Pate to be Assistant Attorney General in charge of the Department of Justice's Antitrust Division. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Banking Committee will hold a hearing titled "National Export Strategy". The witnesses will be Donald Evans (Secretary of Commerce), Philip Merrill (President of the Export Import Bank of the United States), Thelma Askey (Director of theU.S. Trade and Development Agency), Peter Watson (President of the Overseas Private Investment Corporation), Hector Barreto (Administrator of the Small Business Administration). See, notice. Location: Room 538, Dirksen Building.

12:00 NOON. The Federal Communications Bar Association's (FCBA) Transactional Practice Committee will host a brown bag lunch. The topics will include "the purposes of opinions within the context of various transactions and typical regulatory opinion language". The speakers will include John Quale (Skadden Arps) and James Rogers (Latham & Watkins). RSVP to Margery Singleton at 202 637-2200 or margery.singleton Location: Latham & Watkins, 555 11th Street, NW, Suite 1000.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch titled "Getting Ready for Radio Station License Renewal". The speakers will include Roy Stewart, Chief of the of the Federal Communications Commission's (FCC) Office of Broadcast Licence Policy, and Peter Doyle, Chief of the FCC's Audio Division. RSVP to Wendy Parish at Location: NAB, 1771 N St., NW, 1st Fl. Confr. Rm.

6:00 - 8:00 PM. D.C. Bar Association's Intellectual Property Law Section will host a continuing legal education (CLE) program titled "Recent Developments in Technology Transfer with the Federal Government: Focus on Intellectual Property". The speakers will be Paul Gottlieb (Assistant General Counsel, Technology Transfer and Intellectual Property, Department of Energy), Holly Svetz (Morrison & Foerster), and Richard Litman. The prices to attend range from $70 to $90. Location: DC Bar Conference Center, 1250 H Street NW, B-1 level.

Deadline to submit comments to the Copyright Office (CO) in response to its notice of proposed rules that rules would "govern SoundExchange, an unincorporated division of the Recording Industry Association of America, Inc., when it functions as the designated agent for the purpose of receiving royalty payments and statements of accounts from nonexempt subscription digital transmission services which make digital transmissions of sound recordings under a statutory license." See, Federal Register, April 21, 2003, Vol. 68, No. 76, at Pages 19482 - 19485.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [MS Word] titled "In the Matter of Second Periodic Review of the Commission’s Rules and Policies Affecting the Conversion To Digital Television". This is MB Docket No. 03-15, RM 9832, and MM Docket Nos. 99-360, 00-167, and 00-168. See also, FCC release and notice in the Federal Register, February 18, 2003, Vol. 68, No. 32, at Pages 7737-7747. And see, notice [PDF] extending deadlines.

Deadline to submit "white papers" to the Office of Science and Technology Policy' (OSTP) High End Computing Revitalization Task Force (HECRTF) regarding high end computing. See, notice in the Federal Register, May 14, 2003, Vol. 68, No. 93, at Page 25888.

People and Appointments

5/13. AOL announced that Kevin Conroy, who is SVP and General Manager of AOL Entertainment, has been promoted to the new position of EVP and COO of AOL for Broadband. He has been with AOL since January 2001. See, AOL release.

5/13. Computer Associates International named Gary Fernandes to its Board of Directors. He was previously Vice Chairman of EDS. See, CAI release.

5/14. David Marventano, staff director for the House Commerce Committee, will leave to become Senior Vice President of Government Affairs for the Fluor Corporation.

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