6/17. The Senate Finance Committee held a hearing titled "The Implementation of U.S. Bilateral Free Trade Agreements With Singapore and Chile".

Sen. Charles Grassley (R-IA), the Chairman of the Committee, wrote in his opening statement [PDF] that "The two agreements we are discussing today are the first to be considered under the Trade Promotion Authority (TPA) procedures that Congress implemented last year with the passage of the Trade Act of 2002." He noted that the Trade Act was passed with bipartisan support, and stated that "I hope this bipartisan consensus will carry through while we consider these two agreements."

Sen. Max Baucus (D-MT), the ranking Democrat on the Committee, wrote in his opening statement [PDF] that "These two agreements break new ground on a host of important issues", including "intellectual property, services, and e-commerce".

The U.S. Singapore FTA addresses technology related subjects, including e-commerce, intellectual property rights (IPR), and telecommunications. The U.S. Chile FTA similarly addresses several technology related topics. See, Chapter 13 (telecommunications), Chapter 15 (e-commerce), and Chapter 17 (IPR).

Peter Allgeier, a Deputy U.S. Trade Representative (USTR), included in his prepared testimony [PDF] summaries of the e-commerce, IPR, and telecommunications provisions of two FTAs.

He stated that "The U.S.-Singapore FTA provides for a very high level of IPR protection, including state of the art protections for trademarks and digital copyrights, as well as expanded protection for patents and undisclosed information. These are supported by tough penalties for piracy and counterfeiting, including procedures for seizure and destruction of counterfeit products, the equipment used to produce counterfeit products, and the establishment of statutory and actual damages for violations. Singapore will accede to international Internet treaties, extend the term of protection for copyrighted works, and maintain criminal penalties for circumvention of technology protection measures and for trade in counterfeit goods."

He also said that "The FTA ensures government involvement in resolving disputes between trademarks and Internet domain names, which is important to prevent ``cyber-squatting´´ of trademarked domain names."

"The FTA contains provisions designed to ensure that only authors and other copyright owners have the right the make their works available online. Copyright owners maintain rights to temporary copies of their works on computers, which is important in protecting music, videos, software and text from widespread unauthorized sharing via the Internet."

"The FTA requires that governments only use legitimate computer software, thus setting a positive example for private users. Singapore agrees to prohibit the production of optical discs (CDs, DVDs or software) without a source identification code, unless the copyright holder authorizes (in writing) such production", said Allgeier.

"The FTA provides for limited liability for Internet Service Providers (ISPs), reflecting the balance struck in the U.S. Digital Millennium Copyright Act between legitimate ISP activity and the infringement of copyrights."

He also addressed the e-commerce provision of the Singapore FTA. He said that "No previous U.S. free trade agreement contains such cutting-edge provisions on digital trade as the proposed FTA with Singapore."

"For example", said Allgeier, "the Agreement establishes explicit guarantees that the principle of nondiscrimination applies to digital products delivered electronically, such as software, music, images, videos, or text. This will provide fair treatment and protection to U.S. firms that deliver such digital products via the Internet. The FTA also establishes a binding prohibition on customs duties charged on digital products delivered electronically. For digital products delivered on hard media (such as a DVD or a CD-ROM), customs duties will be based on the value of the media (e.g., the disc), not on the value of the movie, music or software contained on the disc."

He also noted that the Singapore FTA "affirms that any commitments made related to services also extend to the electronic delivery of such services, such as financial services delivered over the Internet. This sets a very good precedent for U.S. services liberalization efforts in the WTO and in other FTAs."

He also addressed the telecommunication provisions of the Singapore FTA. He said that it contains "a full range of market access commitments on telecommunications services, consistent with the regulatory regimes of the U.S. and Singapore." He also said that the FTA "specifies that companies, not governments, will make technology choices, particularly for mobile wireless services, thus allowing firms to compete on the basis of technology and innovation, not on government-mandated standards."

Allgeier similarly addressed the IPR, e-commerce and telecom provisions of the Chile FTA. He said that the "Protection of copyrights, patents, trademarks, and undisclosed trade information in the U.S.-Chile FTA is state of the art, with protections that go beyond previous U.S. free-trade agreements."

He continued that "The Electronic Commerce text in the FTA identifies Chile as a leader in Latin America for the further development of digital trade, as both countries agreed to provisions on electronic commerce that reflect the issue's importance in global trade."

He added that "Chile and the United States committed to non-discriminatory treatment of digital products, agreed not to impose customs duties on such products, and affirmed that commitments made related to services also extend to the electronic delivery of such services. For digital products delivered on hard media (e.g., a DVD or CD), customs duties will be based on the value of the media (e.g., the disc), not on the value of the movie, music or software contained on the disc. Finally, both countries agreed to cooperate in numerous policy areas related to electronic commerce, including on the maintenance of cross-border flows of information."

James Jarrett, of Intel, testified on behalf of the Business Software Alliance (BSA) and High-Tech Trade Coalition (HTTC). He stated in his prepared testimony [6 pages in PDF] the Intel, the BSA and the HTTC support both FTAs.

He said that the "Singapore and Chile FTAs significantly advance the establishment of strong intellectual property protection, tariff-free and barrier-free e-commerce in Singapore and Chile".

He added that "Both agreements recognize the importance of strong intellectual property rights protections in a digital trade environment by building on the obligations in the TRIPS Agreement, and ensuring that works made available in digital form receive commensurate protection by incorporating the obligations set out in the WIPO Copyright Treaty."

He also noted that both agreements contain "Requirements to establish prohibitions against the circumvention of effective technological protection measures employed by copyright owners to protect their works against unauthorized access or use, coupled with the ability to fashion appropriate limitations on such prohibitions, again consistent with those set out in the Digital Millennium Copyright Act."

6/18. Rep. Zoe Lofgren (D-CA) and Rep. Rick Boucher (D-VA) urged passage of two bills that would amend the DMCA to provide exceptions to its anti-circumvention provisions. They also stated that Secretary of Commerce Don Evans has advised them that these bills would not breach the treaty obligations of the U.S. under the negotiated Singapore and Chile free trade agreements (FTA). President Bush signed the Singapore FTA on May 6, 2003, and U.S. Trade Representative (USTR) Robert Zoellick signed the Chile FTA on June 6, 2003. Both require approval by the Congress.

Rep. Lofgren and Rep. Boucher wrote a letter to USTR Zoellick on April 24, 2003. They stated that the FTAs "contain provisions that essentially mimic the Digital Millennium Copyright Act (DMCA), a law that is currently being litigated and whose scope is as yet unclear. As you know, the DMCA, while intended to protect the legitimate interests of copyright holders, may also be endangering the rights and expectations of legitimate consumers. Contrary to the intent of Congress, as expressed by Judiciary Committee Chairman Henry Hyde at the time of the adoption of the DMCA, section 1201 of title 17, United States Code, has been interpreted to prohibit all users -- even lawful ones -- from circumventing technical restrictions for any reason, including non-infringing use of a purchased content. There is substantial reason to believe that the DMCA is having an adverse impact on technological innovation. There are numerous cases in court or on appeal that would utilize this act to stifle competition and technological innovation." (Footnote omitted.)

They then posed the question, "If Congress decides to clarify the DMCA to strike the correct balance between copyright holders and the interests of society, as intended by Congress, would the United States be in violation of the FTA's?"

This April 24 letter specifically referenced two bills that would amend the DMCA that are pending in Congress. First, it mentions HR 1066, the "Benefit Authors without Limiting Advancement or Net Consumer Expectations (BALANCE) Act of 2003", introduced by Rep. Lofgren and Rep. Boucher on March 4, 2003. Second, it mentions HR 107, the "Digital Media Consumers' Rights Act of 2003", introduced by Rep. Boucher and others on January 7, 2003.

The April 24 letter also states that Rep. Lofgren, in a briefing by USTR staff, "was advised orally that the treaties would be breached by the enactment of these bills into law".

Rep. Lofgren (at right) and Rep. Boucher also wrote a letter to Secretary of Commerce Don Evans on May 9, 2003, in which they posed the same question, namely, "If Congress decides to clarify the DMCA to strike the correct balance between copyright holders and the interests of society, as intended by Congress, would the United States be in violation of the FTA's?"

On June 5, 2003, Secretary Evans wrote a letter to Rep. Lofgren responding to the May 9 letter. He wrote that "You expressed concern that the incorporation of provisions based on the Digital Millennium Copyright Act (DMCA) in the Singapore and Chile FTAs may have an adverse impact on technological innovation. I believe, however, that strong protection and enforcement of intellectual property rights in FTAs facilitate the expansion of trade and investment in digital technologies and products, thereby advancing the interests of all parties to the FTAs."

He did not state in his letter that the FTAs would be breached by passage of HR 1066 and HR 107. Rather, he wrote that "If the Congress amends the DMCA in the future, the FTAs should then be reviewed for consistency with the amended DMCA."

Of course, this statement by Secretary Evans stops short of advising that the two bills are consistent with the two FTAs.

Rep. Lofgren and Rep. Boucher (at right) issued a release on June 18, 2003. Rep. Lofgren stated in this release that "Earlier this year, I was advised by the Office of the U.S. Trade Representative (USTR) that if we amend the DMCA, we would be in breach of our treaty obligations with Chile and Singapore. I am pleased that the Secretary of Commerce has now confirmed that Congress may amend the DMCA even after the Chile and Singapore FTAs, containing DMCA provisions, are enacted."

Rep. Boucher stated in this same release that "The response we received from the Secretary of Commerce is promising. It alleviates our concern that the Administration had somehow sought to tie the hands of Congress by seeking to effectively prevent it from amending a law that has had many troublesome consequences for consumers and innovators of technology".

Rep. Boucher added that "With the Administration now negotiating the more far-reaching Free Trade Area of the Americas Agreement, we should amend the DMCA now so that the balance we strike can be incorporated into the agreement and preserve the fair use rights of consumers throughout the Western Hemisphere."

HR 1066. HR 1066 contains many provisions. One section would substantially rewrite § 1201, which was added to the Copyright Act by the DMCA.

First, it adds language stating that "Notwithstanding any other provision in this title, a person who lawfully obtains a copy or phonorecord of a work, or who lawfully receives a transmission of a work, may circumvent a technological measure that effectively controls access to the work or protects a right of the copyright holder under this title if -- (A) such act is necessary to make a noninfringing use of the work under this title; and (B) the copyright owner fails to make publicly available the necessary means to make such noninfringing use without additional cost or burden to such person."

Second, it adds language permitting circumvention technologies. It states that "any person may manufacture, import, offer to the public, provide, or otherwise make available technological means to circumvent a technological measure that effectively controls access or protects a right of a copyright holder under this title if (A) such means are necessary to enable a non-infringing use ... ; (B) such means are designed, produced and marketed to enable a non-infringing use ... ; and (C) the copyright owner fails to make available the necessary means ..."

See, story titled "Rep. Lofgren Re-Introduces Digital Fair Use Bill" in TLJ Daily E-Mail Alert No. 618, March 6, 2003. This is substantially the same bill as HR 5522, the Digital Choice and Freedom Act of 2002, which Rep. Lofgren introduced late in the 107th Congress. See, TLJ story titled "Rep. Lofgren Introduces Digital Fair Use Bill", October 2, 2002.

HR 107. HR 107 would roll back the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). Specifically, it would create fair use exceptions to the bans on circumvention of technological measures to protect copyrighted works. It would also provide an exception for scientific research into technological protection measures.

See, story titled "Reps. Boucher and Doolittle Introduce Digital Fair Use Bill" in TLJ Daily E-Mail Alert No. 582, January 14, 2003. This is essentially the same bill as HR 5544 (107th), a bill by the same title that the two introduced late in the 107th Congress. See, TLJ story titled "Reps. Boucher and Doolittle Introduce Digital Media Consumer Rights Act", October 3, 2002.

DMCA Provisions of FTAs. For example, the U.S. Chile FTA provides that "In order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors, performers, and producers of phonograms in connection with the exercise of their rights and that restrict unauthorized acts in respect of their works, performances, and phonograms, protected by copyright and related rights: (a) each Party shall provide that any person who knowingly circumvents without authorization of the right holder or law consistent with this Agreement any effective technological measure that controls access to a protected work, performance, or phonogram shall be civilly liable and, in appropriate circumstances, shall be criminally liable, or said conduct shall be considered an aggravating circumstance of another offense."

This FTA also provides that "each Party shall also provide administrative or civil measures, and, where the conduct is willful and for prohibited commercial purposes, criminal measures with regard to the manufacture, import, distribution, sale, or rental of devices, products, or components or the provision of services which: (i) are promoted, advertised, or marketed for the purpose of circumvention of any effective technological measure, or (ii) do not have a commercially significant purpose or use other than to circumvent any effective technological measure, or (iii) are primarily designed, produced, adapted, or performed for the purpose of enabling or facilitating the circumvention of any effective technological measures."

The Chile FTA goes on to state that "Each Party shall confine limitations and exceptions to measures implementing subparagraphs (a) and (b) to certain special cases that do not impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of effective technological measures." The agreement sets out eight specific exemptions and limitations that are permissible. Fair use is not enumerated.

6/18. Sen. Orrin Hatch (R-UT), Chairman of the Senate Judiciary Committee, issued a statement regarding his off the cuff remarks about copyright infringement on peer to peer (P2P) networks at the June 17 hearing of the Committee.

He stated at that hearing that if no other way can be found to protect copyrighted materials from piracy on P2P networks, "then I am all for destroying their computers".

See, stories titled "Senate Committee Holds Hearing on P2P Networks" and "News Analysis: Hatch Hyperbolizes About Destroying Computers on P2P Networks" in TLJ Daily E-Mail Alert No. 683, June 18, 2003.

He stated in his June 18 release that "I am very concerned about Internet piracy of personal and copyrighted materials, and I want to find effective solutions to these problems."

He added that "I made my comments at yesterday's hearing because I think that industry is not doing enough to help us find effective ways to stop people from using computers to steal copyrighted, personal or sensitive materials."

He concluded that “I do not favor extreme remedies -- unless no moderate remedies can be found. I asked the interested industries to help us find those moderate remedies."

6/18. The Department of Justice's (DOJ) Antitrust Division filed its brief with the U.S. Court of Appeals (DCCir) in an appeal brought by two non party trade groups to the District Court's denial of their motion to intervene in USA v. Microsoft. In addition, Microsoft filed its brief [29 pages in PDF]. This is A.C. No. 03-5030.

This is the antitrust case filed by the DOJ in 1998. The DOJ and Microsoft reached a settlement in 2001, and filed their Revised Proposed Final Judgment with the District Court. The District Court held that the DOJ and Microsoft had complied with the Tunney Act, and approved the settlement.

Two groups that are not parties to this litigation, the Computer and Communications Industry Association (CCIA) and the Software and Information Industry Association (SIIA), opposed the settlement. They jointly moved for leave to intervene in late 2002. The District Court denied their motion on January 11, 2003. The present appeal followed.

The DOJ wrote in its brief that "The district court conducted a careful and comprehensive Tunney Act review of the proposed consent decree in this government antitrust enforcement action, painstakingly reviewing massive quantities of information, including this Court's prior decision, the government's submissions, Microsoft's submissions, amici's submissions, and an unprecedented number of public comments. It concluded that the consent decree "takes account of the theory of liability advanced by Plaintiffs, the actual liability imposed by the appellate court, the concerns of the Plaintiffs with regard to future technologies, and the relevant policy considerations," and that, with one minor amendment, its entry is in the public interest."

The DOJ added that "Appellants, private trade associations representing many of Microsoft's rivals, nonetheless seek to intervene for the purpose of pursuing their own vision of relief. In so doing, they ignore the legal standards governing intervention and distort the purpose of the Tunney Act."

Assistant Attorney General Hewitt Pate (at right) stated in a release that "The Microsoft settlement is in the public interest and the Department remains committed to actively enforcing its terms. As today’s brief explains, the District Court properly rejected CCIA and SIIA's attempt to intervene in this case. Following painstaking review of the record, the District Court correctly found that the Department fully complied with the Tunney Act procedures, and that the settlement was in the public interest."

Microsoft wrote in its brief that "The District Court did not abuse its discretion in denying the request for permissive intervention. CCIA and SIIA failed to establish the requisite commonality between any issues that remain in this litigation and any antitrust claims their members may have against Microsoft. They also failed to comply with Rule 24(c)'s requirement that they file a pleading setting forth the claim or defense for which they sought intervention. With regard to intervention as of right -- which they pursue on appeal only in a footnote in connection with their challenge to the parties' compliance with the Tunney Act's procedural requirements -- CCIA and SIIA did not identify a legally protectable interest sufficient to give them standing to intervene. This Court thus should affirm the District Court’s denial of intervention and dismiss the remainder of this appeal."

6/16. Rep. Chris Cox (R-CA) and others introduced HRes 277, a resolution expressing support for freedom in Hong Kong. It states that "the traditional liberties of Hong Kong's 7,000,000 people are now immediately threatened by Hong Kong's proposed `Article 23´ laws, which were drafted under strong pressure from the Government of the People's Republic of China, dealing with sedition, treason, and subversion against the Chinese Communist Party". It adds that "similar subversion laws in the People's Republic of China are regularly used to convict and imprison journalists, labor activists, Internet entrepreneurs, and academics". Therefore, HRes 277 provides that it is "Resolved, That the House of Representatives ... condemns any restriction of the freedom of thought, expression, or association in Hong Kong".

6/18. The Copyright Office (CO) published a notice in the Federal Register announcing final rule governing SoundExchange, that takes effect on July 18, 2003. The notice states that this rule "will 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, June 18, 2003, Vol. 68, No. 117, at Pages 36469 - 36470.

6/16. Rep. Barney Frank (D-MA) introduced HR 2478, the "Cable Consumer Rights Act of 2003", a bill to reinstate the authority of the Federal Communications Commission (FCC) to regulate cable television service rates. The bill would repeal Section 301(b) of the Telecommunications Act of 1996, and reinstate Section 623 of the Communications Act of 1934. The bill was referred to the House Commerce Committee.

? S 1264, the "Federal Communications Commission Reauthorization Act of 2003", sponsored by Sen. John McCain (R-AZ).

The House will meet at 10:00 AM legislative business. It will consider several non tech related items. See, Republican Whip Notice.

9:00 AM - 5:00 PM. The Department of Defense's (DOD) Technology and Privacy Advisory Committee (TAPAC) will hold a public meeting. The TAPAC is a Total Information Awareness Project oversight board. The notice states that "The purpose of the meeting is for presentations of interest and discussion concerning the legal and policy considerations implicated by the application of advanced information technologies to counter-terrorism and counter-intelligence missions." For more information, contact Lisa Davis, TAPAC Executive Driector, at 703 695-0903. See, notice in the Federal Register, June 11, 2003, Vol. 68, No. 112, at Page 34909. Location: Hyatt Arlington, 1325 Wilson Blvd., Arlington, VA.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. The agenda includes consideration of several non technology related bills, and consideration of the nomination of William Pryor to be a Judge of the U.S. Court of Appeals for the Eleventh Circuit. See, notice. Press contact: Margarita Tapia at 202 224-5225. Location: Room 216, Hart Building.

9:30 AM. The Senate Commerce Committee will meet in executive session to mark 14 bills and consider several pending nominations. See, agenda. Location: Room 253, Russell Building.

10:00 PM. The Senate Banking Committee will hold a hearing titled "The Growing Problem of Identity Theft and Its Relationship to the Fair Credit Reporting Act". See, notice. Location: Room 538, Dirksen Building.

12:15 - 2:00 PM. The Forum on Technology and Innovation will host a panel discussion on intellectual property protections and their impact on innovation. The speakers will be Bruce Mehlman, Assistant Secretary of Commerce for Technology Policy, Gigi Sohn, President of Public Knowledge, and James DeLong, of the Progress and Freedom Foundation. Register by Tuesday, June 17 at 5:00 PM. A box lunch will be served. Location: Room 106, Dirksen Building.

Deadline to submit comments to the Copyright Office (CO) in response to its notice in the Federal Register "requesting comment on proposed regulations that set rates and terms for the use of sound recordings in eligible nonsubscription transmissions and new subscription services, other than transmissions made by certain noncommercial entities, together with related ephemeral recordings. The rates and terms are for the 2003 and 2004 statutory licensing period, except in the case of new subscription services in which case the license period runs from 1998 through 2004." This notice also states that "The agreement published herein supersedes the agreement published in the Federal Register on May 1, 2003, and parties should only comment on the proposed rates and terms set forth in this notice." See, Federal Register, May 20, 2003, Vol. 68, No. 97, at Pages 27506 - 27513. See also, superseded notice in the Federal Register, May 1, 2003, Vol. 68, No. 84, at Pages 23241 - 23249. For more information, contact David Carson (CO General Counsel) or Tanya Sandros (Senior Attorney, CARP) at 202 707-8380.

8:45 AM - 2:35 PM. The American Antitrust Institute will host a Fourth Annual Conference titled "Antitrust and Access". See, agenda at right. The price to attend is $400. Location: National Press Club.

10:00 AM. The Senate Judiciary Committee will hold a hearing on several pending judicial and other nominations, including Allyson Duncan (to be a Judge of the U.S. Court of Appeals for the 4th Circuit), Samuel Der-Yeghiayan (Northern District of Illinois), Louise Flanagan (Eastern District of North Carolina), Lonny Suko (Eastern District of Washington), Earl Yeakel (Western District of Texas), and Christopher Wray (Assistant Attorney General). Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Cable Practice Committee will host a brown bag lunch. The speaker will be Kyle Dixon, Deputy Bureau Chief of the Federal Communications Commission's (FCC) Media Bureau, and Special Counsel to the Chairman for Broadband. RSVP to Wendy Parish at wendy@fcba.org. Location: National Cable & Telecommunications Association (NCTA), 1724 Massachusetts Ave., NW, 2nd Floor Conference Room.

2:30 PM. The Senate Judiciary Committee's Antitrust, Competition Policy and Consumer Rights Subcommittee will hold a hearings to examine how to preserve and protect media competition in the marketplace. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Foreign Relations Committee's European Affairs Subcommittee will hold a hearing to examine "U.S. relations with respect to a changing Europe, focusing on differing views on technology issues". Location: Room 419, Dirksen Building.

The 21st Century Intellectual Property Coalition will meet. For information, contact Dana Colarulli at dana@ipo.org.

9:30 AM. The Senate Government Affairs Committee will hold a hearing on the nomination of Joshua Bolton to be Director of the Office of Management and Budget (OMB). Location: Room 342, Dirksen Building.

10:15 AM. The House International Relations Committee's Subcommittee on East Asia and the Pacific will hold a hearing. The witness will be
Ralph Ives, Assistant U.S. Trade Represenative for Asia-Pacific and APEC Affairs. Location: Room 2172, Rayburn Building.

12:00 NOON - 1:30 PM. The Congressional Internet Caucus Advisory Committee and the US Asia Policy Network will host a panel discussion titled "The Internet in Asia: Is the US Falling Behind?" RSVP to rsvp@netcaucus.org or 202 638-4370. Location: Room 216, Hart Building.

The Federal Communications Bar Association (FCBA) will host a luncheon. Federal Communications Commission (FCC) Chairman Michael Powell will speak.

2:00 PM. The Senate Judiciary Committee will hold a hearing on the nominations of Allyson Duncan (to be a Judge of the U.S. Court of Appeals for the 4th Circuit), and Louise Flanagan (Eastern District of North Carolina). Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

DELAYED. The Federal Communications Commission (FCC) will begin Auction 53, regarding licenses in the Multichannel Video Distribution and Data Service (MVDDS). See, notice in Federal Register, May 27, 2003, Vol. 68, No. 101, at pages 28825 - 28826.

Last scheduled conference of the Supreme Court in the October 2002 term. See, court calendar [PDF].

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