7/16. Rep. John Conyers (D-MI) and others introduced HR 2752, the "Author, Consumer, and Computer Owner Protection and Security (ACCOPS) Act of 2003". The bill would amend the Copyright Act and the criminal code to protect digital works from online infringement. It would criminalize the unauthorized placement of copyrighted works on P2P networks, and criminalize offering certain P2P software without first giving notice of the privacy and security risks. It would also criminalize registering a domain name with false information with intent to defraud, and provide that registering a domain name with false information shall be considered evidence of willfulness with respect to infringement committed with that domain name. The bill also calls for increased cooperation between the U.S. and foreign prosecutors, and authorizes appropriations for investigation and prosecution of copyright crimes.

The bill's original cosponsors are Rep. Howard Berman (D-CA), Rep. Marty Meehan (D-MA), Rep. Robert Wexler (D-FL), Rep. Anthony Weiner (D-NY), and Rep. Adam Schiff (D-CA). All are members of the House Judiciary Committee, to which the bill has been referred, and its Subcommittee on Courts, the Internet and Intellectual Property (CIIP).

Rep. Conyers (at right) explained in a statement submitted for the Congressional Record that "Those who invest so much into developing software, books, music, and movies and rely upon sales of that content are being deprived of their livelihoods because people are taking advantage of the Internet to obtain and share digital content for free." See, Congressional Record, July 16, 2003, at page E1496.

Rep. Conyers, who is the ranking Democrat on the full Committee, continued that "While there are laws on the books that protect copyrighted content from theft, they do not go quite far enough. Despite court decisions ordering various file swapping sites to shut down, new file-swapping programs and new file-swapping sites appear every day on the Internet, each one better than its predecessor. These sites do not develop their own content; instead, they rely upon the success and popularity of content created by others and allow that content to be distributed to millions with the single click of a mouse. These sites also create security and privacy risks, in that they open up entire the hard drives average consumers for the world to see, financial and personal information included."

Criminalization of Placing Copyrighted Works on Certain Computer Networks. One of the key provisions of the bill would criminalize putting copyrighted works on certain computer networks. Courts have held recently that individuals who put copyrighted songs on peer to peer (P2P) networks commit civil copyright infringement. See, for example, A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001). However, the standard for establishing criminal copyright infringement is higher. This bill would make clear that this sort of P2P infringement can constitute criminal conduct.

Currently, criminal infringement requires either (1) the purpose of "commercial advantage or private financial gain", or (2) "reproduction or distribution, including by electronic means ... of ... copyrighted works, which have a total retail value of more than $1,000". P2P infringers would not meet the first requirement. While they might meet the second requirement, prosecution would be difficult.

Basically, the bill amends Section 506 of Title 17. Title 17 codifies copyright law. 17 U.S.C. § 506 pertains to criminal offenses. Subsection 506(a) pertains to criminal infringement. It provides:

"Any person who infringes a copyright willfully either --
  (1) for purposes of commercial advantage or private financial gain, or
  (2) by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000,

shall be punished as provided under section 2319 of title 18, United States Code. For purposes of this subsection, evidence of reproduction or distribution of a copyrighted work, by itself, shall not be sufficient to establish willful infringement."

Title 18 is the criminal code. 18 U.S.C. § 2319 pertains to criminal infringement of copyright. Subsection 2319(a) provides that "Whoever violates section 506(a) (relating to criminal offenses) of title 17 shall be punished as provided in subsections (b) and (c) of this section and such penalties shall be in addition to any other provisions of title 17 or any other law." (Parentheses in original.)

In turn, Subsection 2319(b) provides, in part, that "Any person who commits an offense under section 506(a)(1) of title 17 -- (1) shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, which have a total retail value of more than $2,500;".

HR 2752 would add the following language to 17 U.S.C. § 506(a): "For purposes of section 2319(b) of title 18, the placing of a copyrighted work, without the authorization of the copyright owner, on a computer network accessible to members of the public who are able to copy the work through such access shall be considered to be the distribution, during a 180-day period, of at least 10 copies of that work with a retail value of more than $2,500."

Rep. Berman described this provision of the bill at a hearing on July 16. The hearing was not on HR 2752. Rather, it was on HR 2517, the "Piracy Deterrence and Education Act of 2003", sponsored by Rep. Lamar Smith (R-TX) and Rep. Berman. HR 2517 would enhance the government's resources for prosecuting intellectual property rights (IPR) crimes, and involve the Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in educating and warning the public regarding internet based copyright infringement. See, TLJ story titled "House CIIP Subcommittee Holds Hearing on Piracy Deterrence and Education Act", July 18, 2003. That is, HR 2517 would expand enforcement of existing IPR related criminal statutes, while HR 2752 would expand the scope of IPR related conduct that constitutes crimes.

Rep. Berman first praised HR 2517, regarding enforcement. But he added, "I think more can be done." He then launched into a long explanation of HR 2752, and why he believes that it is necessary.

For example, he addressed the section that criminalizes putting certain works on P2P networks. He stated that "Section 301 of that bill clarifies that the uploading of a single copyrighted work to a publicly accessible computer network meets the 10 copy, $2,500 threshold for felonious copyright infringement. Section 301 simply brings the law into accord with the reality that uploading a copyrighted work to a place from which millions can download it is equivalent to the distribution of ten or more copies having a value of $2,500. We do this because some prosecutors appear skeptical that they can successfully pursue cases against many uploaders of copyrighted works, otherwise."

Registering Domain Names with False Information. The bill also contains two provisions relating to the use of false contact information when registering domain names.

First, the bill would add a new Section 1037 to Title 18, that would provide, in part, that "Whoever knowingly and with intent to defraud provides material and misleading false contact information to a domain name registrar, domain name registry, or other domain name registration authority in registering a domain name shall be fined under this title or imprisoned not more than 5 years, or both."

Second, the bill would further amend Section 506 of Title 17 regarding evidence of willful infringement. It would add the following: "The knowing and intentional provision of material and misleading false contact information to a domain name registrar, domain name registry, or other domain name registration authority in registering a domain name shall be considered evidence of willfulness with respect to infringements committed by the domain name registrant through the use of that domain name."

Rep. Berman addressed the second of these two provisions on July 16. He stated that "Section 305 addresses the all too common phenomenon of operators of copyright infringing websites providing false domain name registration information. If the illegal activities on the web site attract the attention of law enforcement or right holders, the operators often disconnect it, and pop up elsewhere, under another domain name, with different contact information. Section 305 directs the courts to consider the knowing and intentional provision of materially false domain name registration as evidence of willfulness with regard to copyright infringements."

Consumer Privacy and Security. The bill would add a new Section 1822 to Title 18 that provides that "Whoever knowingly offers enabling software for download over the Internet and does not (1) clearly and conspicuously warn any person downloading that software, before it is downloaded, that it is enabling software and could create a security and privacy risk for the user's computer; and (2) obtain that person's prior consent to the download after that warning; shall be fined under this title or imprisoned not more than 6 months, or both."

The bill also defines "enabling software" as "software that, when installed on the user's computer, enables 3rd parties to store data on that computer, or use that computer to search other computers' contents over the Internet."

Rep. Berman stated that "Section 302 addresses the well documented concern that popular peer to peer software programs sometimes allow third parties to hijack personal computers to distribute child pornography and copyright infringing material, come bundled with spyware, and otherwise jeopardize the privacy and security of PC owners. Section 302 requires that PC owners receive clear and conspicuous notice, and provide consent prior to downloading software, that would allow third parties to store material on the personal computer, or use that personal computer to search for material on other computers."

This issues of privacy and security of P2P networks has been addressed at previous Congressional hearings.

The Senate Judiciary Committee held a hearing on June 17, 2003 titled "The Dark Side of a Bright Idea: Could Personal and National Security Risks Compromise the Potential of Peer to Peer File Sharing Networks". See, story titled "Senate Committee Holds Hearing on P2P Networks" in TLJ Daily E-Mail Alert No. 683, June 18, 2003.

At this hearing witnesses praised the benefits of P2P networks, but also cautioned about threats that they pose to the privacy and security of individuals' sensitive records, and to the security of sensitive government records. Witnesses also discussed the problem of pormography on P2P networks that is often disguised a popular music files, thus causing children to unwittingly be exposed.

On March 13, 2003, the House Government Reform Committee held a hearing that focused on the prevalence of pormography on P2P networks. See, record of the hearing [123 pages in PDF].

Other Provisions. The bill would authorize the appropriation of "not less than $15,000,000" for investigation and prosecution by the Department of Justice of violations of Title 17, which codifies copyright law.

The bill provides for increased information sharing by the Department of Justice with foreign law enforcement authorities to assist their enforcement of their copyright laws. Rep. Berman stated on July 16 that "Section 201 addresses the unique law enforcement challenge posed by the increasingly transnational character of online copyright infringement. In order to insure that the road across the border does not become an investigation dead end, Section 201 requires the Attorney General to assist the appropriate foreign authority in making a case against such online infringers."

Finally, the bill would amend 17 U.S.C. § 506 to provide that criminal copyright infringement includes copying "by the unauthorized reproduction or recording of a motion picture as it is being performed or displayed in a motion picture theater".

7/15. Sen. Byron Dorgan (D-ND) introduced SJRes 17, a resolution disapproving of the Federal Communications Commission's (FCC) Report and Order and Notice of Proposed Rulemaking [257 pages in PDF] regarding its media ownership rules. This invokes the Congressional Review Act, which is codified at 5 U.S.C. § 801, which provides the Congress a limited power to veto regulations promulgated by executive branch agencies.

The resolution states that "Congress disapproves the rule submitted by the Federal Communications Commission relating to broadcast media ownership (Report and Order FCC 03-127, received by Congress on July 10, 2003), and such rule shall have no force or effect." (Parentheses in original.)

The FCC announced the Report and Order on June 2, and released it on July 2. See also, stories titled "FCC Announces Revisions to Media Ownership Rules" and "Reaction to the FCC's Media Ownership Announcement" in TLJ Daily E-Mail Alert No. 672, June 3, 2003, and story titled "FCC Releases Media Ownership Order and NPRM" in TLJ Daily E-Mail Alert No. 692, July 7, 2003.

Sen. Dorgan (at right) stated in a release that "We are moving to roll back one of the most complete cave-ins to corporate interests I've ever seen by what is supposed to be a federal regulatory agency ... The FCC's decision on June 2 advanced big corporate interests, and did so at the expense of the public interest. They chose concentration over competition. They chose few voices over many voices. In a democracy which relies on the free exchange of many voices, that was the wrong choice."

Sen. Russ Feingold (D-WI), a cosponsor of the resolution, stated that "By invoking the Congressional Review Act, Congress can wipe out these new rules altogether, and the FCC will have to go back and redraft them. We plan to make it clear that the new draft should include some of the positive proposals contained in the recent media bill sponsored by Senator Ted Stevens that passed out of the Commerce Committee. The CRA specifically contemplated that agencies may have to redo regulations required by court or congressional mandate. If this disapproval resolution is passed by the House and the Senate, the preexisting rules will again be in effect until the FCC goes back to the drawing board and promulgates new regulations that are not substantially similar to the rules that Congress has disapproved." See, Congressional Record, July 16, 2003, at page S9490.

On June 19, 2003, the Senate Commerce Committee amended and passed S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003". The bill, as amended, would roll back some of the changes to the FCC's media ownership rules. The bill is sponsored by Sen. Ted Stevens (R-AK). See, TLJ story titled "Senate Commerce Committee Passes Media Ownership Bill", June 19, 2003.

The other cosponsors of the resolution are Sen. Trent Lott (R-MS), Sen. Ernest Hollings (D-SC), Sen. Susan Collins (R-ME), Sen. Olympia Snowe (R-ME), Sen. John Kerry (D-MA), Sen. Kay Hutchison (R-TX), and Sen. Ron Wyden (D-OR).

7/17. Secretary of Commerce Donald Evans sent a proposed bill to the Congress that would reorganize several, but not all, of the technology related entities at the Department of Commerce (DOC) into one unit. See, documents [11 pages in PDF] sent to Congress (cover letter, draft of proposed bill, and Statement of Purpose and Need). See also, DOC question and answer document [4 pages in PDF].

The bill provides that "There is established in the Department of Commerce a Technology and Telecommunications Administration. The Technology and Telecommunications Administration shall include --
  (1) the National Institute of Standards and Technology;
  (2) the National Telecommunications and Information Administration;
  (3) the National Technical Information Service; and
  (4) the Office of Technology Policy."

The new Administration would be headed by an Under Secretary, who "shall advocate technology and telecommunications policies at the federal, state, and local level that promote, among other important benefits, economic growth, job creation, national security and safety, a strong technology base, and a robust competitive telecommunications infrastructure."

Secretary Evans (at right) stated in his cover letter that "This bill modifies and modernizes the organizational structure of the Department of Commerce to enhance the formulation of technology, electronic commerce and telecommunications policy issues."

Currently, the Technology Administration (TA) includes three entities, the National Institute of Standards and Technology (NIST), the Office of Technology Policy (OTP), and the National Technical Information Service (NTIS). The NIST accounts for the bulk of the funding and personnel in the TA. The NIST conducts research, funds private sector research and development, and develops and promotes measurements and standards. It includes the Computer Security Division (CSD).

The National Telecommunications and Information Administration (NTIA) has spectrum management authority, domain name management responsibilities, and limited grant making authority. It also represents the administration on certain communications matters, and has been assigned by the Congress to write various communications and e-commerce related studies.

Secretary Evans' Statement of Purpose and Need recites that the e-commerce policy functions of the International Trade Administration (ITA) will be transferred to the new unit. However, this is not referenced in the draft bill. The Statement explains that "No legislative change is required to merge the ITA electronic commerce policy functions with the Technology and Telecommunications Administration as these functions are currently delegated to ITA by internal Departmental organizational order. The proposed reform will not impact ITA's responsibilities regarding trade negotiations and promotion as they pertain to electronic commerce."

The Statement of Purpose and Need states that "The Department of Commerce currently develops and implements technology, electronic commerce and telecommunications policy in three bureaus: TA, NTIA, and ITA. To complement the convergence in the private sector of technology and communications companies, Secretary Evans is proposing to reorganize Departmental personnel and management to formalize the coordination of domestic and international policy development for these inter-related sectors of the economy. The proposed structure would have the Under Secretary for Technology and Telecommunications oversee the expanded bureau."

Secretary Evans originally made this proposal on February 13, 2003. He did not at that time forward the draft of proposed legislation. See, story titled "Don Evans Proposes Combining Tech Related Entities at Commerce Department" in TLJ Daily E-Mail Alert No. 604, February 14, 2003.

There are other technology and innovation related entities at the DOC that are not affected by this reorganization, including the U.S. Patent and Trademark Office (USPTO) and the Bureau of Industry and Security (BIS). The BIS administers the export control regime, which grants export licenses for, among other things, dual use items, such as software and encryption products, and high performance computers.

7/16. The House Science Committee held a hearing titled "Supercomputing: Is the U.S. on the Right Path?"

Rep. Sherwood Boehlert (R-NY), the Chairman of the Committee, said in his opening statement that "Supercomputers help design our cars, predict our weather, and deepen our understanding of the natural forces that govern our lives, such as our climate. Indeed, computation is now widely viewed as a third way of doing science -- building on the traditional areas of theory and experimentation."

He continued that "maintaining U.S. leadership requires a coordinated, concerted effort by the federal government. The federal government has long underwritten the basic research that fuels the computer industry, has purchased the highest-end computers, and has ensured that those computers are available to a wide range of American researchers. This Committee has played an especially crucial role in ensuring access, pushing for the creation of the National Science Foundation (NSF) Supercomputer Centers back in the early '80s."

Rep. Boehlert stated that "Government action is just as needed now. But what action? The Department of Energy is proposing to move away from our reliance on more mass-market supercomputers to pursue research on massive machines designed to solve especially complex problems. NSF appears to be moving away from supporting supercomputer centers to a more distributed computing approach. These policies need to be examined."

Vincent Scarafino, Manager of Numerically Intensive Computing at Ford Motor Company, wrote in his prepared testimony that "Up until the mid 1990's, the Federal government had helped with the development of high-end machines with faster, more powerful processing capability and matching memory bandwidth and latency characteristics by helping to fund development and create a market for them. These machines were built mainly to meet the needs of government security and scientific research. Once they were built, there was a limited, but significant application of these machines in the private sector. The availability of higher capability machines advanced the application of science in the private sector."

Then, "In the mid 1990's the Federal government decided to rely on utilizing off-the-shelf components and depend on the ability to combine thousands of these components to work in harmony to meet its advanced high-performance computing needs. The result was an advance in the areas of computer science that dealt with parallel processing. Over the last eight years, some kinds of applications have adapted well to the more constrained environment supported by these commodity based machines."

However, Scarafino added that the "hardest problems do not adapt well to parallel architectures. Either we don't know enough about the problem to develop a parallel solution, or they are not parallel by nature."

He stated that the "Federal government cannot rely on fundamental economic forces to advance high-performance computing capability", and that the "Federal government should help with the advancement of high-end processor design and other fundamental components necessary to develop well-balanced, highly capable machines. U. S. leadership is currently at risk."

Daniel Reed, Director of the National Center for Supercomputing Applications (NCSA) at the University of Illinois at Urbana-Champaign, wrote in his prepared testimony [PDF] that "We must change the model for development, acquisition and deployment of high-end computing systems if the U.S. is to sustain the leadership needed for scientific discovery and national security in the long term."

He recommended that "In the short to medium term, we must acquire and continue to deploy additional high-end systems at larger scale if we are to satisfy the unmet demand of the science and engineering research community." Also, "we must fund the design and construction of large-scale prototypes of next-generation high-end systems that includes balanced exploration of new hardware and software models, driven by scientific application requirements."

Peter Freeman of the National Science Foundation wrote in his prepared testimony that the "NSF remains absolutely committed to providing researchers the most advanced computing equipment available and to sponsoring research that will help create future generations of computational infrastructure, including supercomputers."

"At the same time, we are committed to realizing the compelling vision described in the report of the NSF Advisory Panel on Cyberinfrastructure, commonly known as the Atkins Committee -- that ``a new age has dawned in scientific and engineering research, pushed by continuing progress in computing, information and communications technology.´´ This cyberinfrastructure includes, and I quote, "not only high-performance computational services, but also integrated services for knowledge management, observation and measurement, visualization and collaboration", said Freeman. See, Atkins Report Executive Summary [6 pages in PDF] and full Report [3.2 MB in PDF].

See also, Hearing Charter [12 pages in PDF], and prepared testimony of Raymond Orbach of the Department of Energy.

The House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. It will consider several items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Republican Whip Notice.

The Senate will meet at 1:00 PM. At 1:30 PM it will begin consideration of HR 2555, the "Department of Homeland Security Appropriations Act, 2004".

10:00 AM. Mozelle Thompson (FTC Commissioner), Jana Monroe (Assistant Director, FBI Cyber Division), Dave Baker (EarthLink), and Linda Golodner (National Consumers League) will speak regarding "phisher site" fraud. This is an internet scam in which criminals send spam that requests recipients to visit web sites that imitate the web sites of legitimate businesses, but then request personal information, which is in turn used for identity theft and other crimes. Press contact: Carla Shaw (EarthLink) at 404 748-7436. Location: Zenger Room, National Press Club, 529 14th St. NW, 13th Floor, Washington DC.

11:00 AM. The Consumer Federation of America and the Consumers Union will hold a telephone press conference regarding the Federal Communications Commission's (FCC) media ownership rules. To participate, call 888 747-3510; the passcode is 213649. After 2:00 PM, a playback will be available at 888 266-2081; passcode 213649.

3:00 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "The Regulatory Status of Broadband Services: Information Services, Common Carriage, or Something in Between?" The witnesses will include Robert Pepper (Chief of Policy Development at the FCC's Office of Strategic Planning and Policy Analysis), Robert Nelson (Michigan Public Service Commission), Charles Davidson (Florida Public Service Commission), Thomas Tauke (Verizon), Thomas Jones (Willkie Farr & Gallagher), Robert Sachs (National Cable & Telecommunications Association), David Baker (EarthLink), Debbie Goldman (Alliance for Public Technology), Paul Misener (Amazon.com). See, notice. The hearing will be webcast. Press contact: Ken Johnson or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn Building.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) pertaining to the possibility of incorporating receiver performance specifications into the FCC's spectrum policy. This NOI follows the recommendations of the FCC's Spectrum Policy Task Force (SPTF) report [PDF] of November 15, 2002. See, story titled "FCC Announces NOI Re Receiver Performance Standards" in TLJ Daily E-Mail Alert No. 624, March 17, 2003. See also, notice in the Federal Register, May 5, 2003, Vol. 68, No. 86, at Pages 23677 - 23686. This is ET Docket No. 03-65, FCC 03-54. For more information, contact Hugh Van Tuyl at the FCC's Office of Engineering and Technology (OET) at 202 418-7506 or hvantuyl@fcc.gov.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice in the Federal Register requesting public comments regarding changes needed to implement a Patent Cooperation Treaty (PCT) style Unity of Invention standard in the U.S. See, Federal Register, May 20, 2003, Vol. 68, No. 97, at Pages 27536 - 27539. For more information, contact Robert Clarke at 703 305-9177 or robert.clarke@uspto.gov.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking, released on April 30, 2003, regarding changes to its rules implementing the FCCs policy to carry forward unused funds from the schools and libraries universal support mechanism (aka e-rate subsidies) in subsequent funding years. See, notice in the Federal Register, June 20, 2003, Vol. 68, No. 119, at Pages 36961 - 36967.

The House will meet at 9:00 AM for morning hour and at 10:00 AM for legislative business. It will take up HR __, the "Foreign Operations, Export Financing, and Related Programs Appropriations Act for Fiscal Year 2004". See, Republican Whip Notice.

10:00 AM. The House Science Committee will meet to mark up several bills, including HR 2183, the "Minority Serving Institution Digital and Wireless Technology Opportunity Act of 2003". Press contact: Heidi Tringe at 202 225-4275. Location: Room 2318, Rayburn Building.

SOLD OUT. 10:00 - 11:30 AM. The Intellectual Property Law Section of the D.C. Bar Association will host a visit to the Copyright Office. Prices vary. For more information, call 202 626-3463. Location: Copyright Office, Room 401, Madison Building, First Street and Independence Avenue, SE.

10:00 AM. The Senate Judiciary Committee will hold a hearing on several pending judicial nominations: Steven Colloton (U.S. Court of Appeals for the Eighth Circuit), Henry Floyd (District of South Carolina), Brent McKnight (Western District of North Carolina), David Proctor (Northern District of Alabama). The hearing may also include the nomination of Rene Acosta to be an Assistant Attorney General in charge of the Civil Rights Division. Press contact: Margarita Tapia at 202 224-5225. This Committee frequently changes the time and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

10:00 AM. The House Agriculture Committee will hold a hearing on Location: Room 1300, Longworth Building.

DATE & TIME CHANGE. 2:00 AM. The Senate Judiciary Committee will hold a hearing "Bankruptcy and Competition Issues in relation to the WorldCom Case". Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

3:00 PM. The National Telecommunications and Information Administration (NTIA) will hold a public briefing on its creation of a second level domain within the .us country code domain that is restricted to material that is not harmful to minors. This is required by the Dot Kids Implementation and Efficiency Act of 2002, HR 3833 in the 107th Congress, Public Law No. 107-317. This briefing will provide information about the domain, instructions about registering a kids.us address, content guidelines and restrictions, and an overview of the content review process. See, NTIA notice, and notice in the Federal Register, July 17, 2003, Vol. 68, No. 137, at Pages 42401 - 42402. Location: Room 2123, Rayburn Building.

6:30 – 9:15 PM. The Intellectual Property Law Section, and the Arts, Entertainment and Sport Section, of the D.C. Bar Association will host a CLE seminar titled "Intellectual Property Issues In New Media". Prices vary. For more information, call 202-429-0960, ext 23. Location: Williams & Connolly, 725 12th Street, NW.

The House will meet at 10:00 AM for legislative business. It may consider HR 2739, the "United States Singapore Free Trade Agreement Implementation Act", HR 2738, the "United States Chile Free Trade Agreement Implementation Act", and/or HR __, the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004". See, Republican Whip Notice.

9:00 AM. Day one of a two day meeting to the Bureau of Industry and Security's (Bureau of Export Administration) Information Systems Technical Advisory Committee. Part of the meeting will be closed to the public. The agenda includes discussion of export controls on signal generators and arbitrary waveform generators, discussion of developments in micro-processors technology and export controls, discussion of proposal on encryption in network management, election of a new chairman, and secret matters. See, notice in the Federal Register, July 8, 2003, Vol. 68, No. 130, at Pages 40626 - 40627. Location: Room 3884, Hoover Building, 14th St. between Pennsylvania Ave. and Constitution Ave., NW.

9:00 AM. The Senate Judiciary Committee will hold an executive business meeting. Press contact: Margarita Tapia at 202 224-5225. This Committee frequently changes the time and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will hold a hearing to examine the "public interest and localism". The witnesses will be Robert Corn-Revere (Davis Wright Tremaine), Barry Faber (Sinclair Broadcasting Group), Dave Davis (WPVI-DT), Martin Kaplan (Annenberg School for Communication), and Brent Bozell (Media Research Center). See, notice. Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

2:00 PM. The Senate Judiciary Committee will hold a hearing on the nominations of Rene Acosta to be an Assistant Attorney General in charge of the Civil Rights Division, and Daniel Bryant to be an Assistant Attorney General in charge of the Office of Legal Policy. Press contact: Margarita Tapia at 202 224-5225. This Committee frequently changes the time and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Commerce Committee will hold a hearing "to examine privacy and digital rights management". Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

The House will meet at 10:00 AM for legislative business. It may consider HR 2739, the "United States Singapore Free Trade Agreement Implementation Act", HR 2738, the "United States Chile Free Trade Agreement Implementation Act", and/or HR __, the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004". See, Republican Whip Notice.

9:00 AM. Day two of a two day meeting to the Bureau of Industry and Security's (Bureau of Export Administration) Information Systems Technical Advisory Committee. Part of the meeting will be closed to the public. The agenda includes discussion of export controls on signal generators and arbitrary waveform generators, discussion of developments in micro-processors technology and export controls, discussion of proposal on encryption in network management, election of a new chairman, and secret matters. See, notice in the Federal Register, July 8, 2003, Vol. 68, No. 130, at Pages 40626 - 40627. Location: Room 3884, Hoover Building, 14th St. between Pennsylvania Ave. and Constitution Ave., NW.

10:00 AM. The House Armed Services Committee's (HASC) Subcommittee on Terrorism, Unconventional Threats and Capabilities Subcommittee will hold a hearing titled "Cyber Terrorism: The New Asymmetric Threat". The witnesses will be Eugene Spafford (Purdue University), Robert Lentz (Information Assurance, Department of Defense), and Robert Dacey (General Accounting Office). Location: Room 2118, Rayburn Building.

10:00 AM. The Senate Commerce Committee and the House Science Committee will hold a joint hearing on the future of commercial human space flight. See, notice. Location: Room 216, Hart Building.

10:00 AM. Status conference in U.S. v. Microsoft, No. 98-1232.

SOLD OUT. 1:45 - 3:30 PM. The Intellectual Property Law Section of the D.C. Bar Association will host a visit to the Copyright Office. Prices vary. For more information, call 202 626-3463. Location: Copyright Office, Room 401, Madison Building, First Street and Independence Avenue, SE.

The House will meet at 10:00 AM for legislative business. It may consider HR 2739, the "United States Singapore Free Trade Agreement Implementation Act", HR 2738, the "United States Chile Free Trade Agreement Implementation Act", and/or HR __, the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004". See, Republican Whip Notice.

The House is scheduled to begin its August recess.

7/18. The U.S. Court of Appeals (9thCir) issued its opinion [14 pages in PDF] in Scholastic Entertainment v. Fox, analyzing whether a case involving interdependent copyright and contract claims "arises under" the federal copyright laws for the purposes of 28 U.S.C. § 1338(a). The Appeals Court, following its precedent in T.B. Harms and other cases, affirmed the District Court's dismissal of the case for lack of subject matter jurisdiction.

Scholastic Entertainment makes and markets movies, TV, and video programming based on children's literary works. It entered into a contract with Fox Broadcasting Company (FBC) under which it agreed to produce a TV series based on the Goosebumps children's books, and to license the rights to exhibit and distribute the shows to Fox Broadcasting Company. The Appeals Courts wrote that "Fox was to air the initial exhibition of the shows on Fox Broadcasting and later distribute the series to other television outlets for a period of 15 years. In addition to the original exhibition fees, Scholastic was entitled to a portion of the profits made during the distribution phase."

Scholastic made 62 half hour TV programs and six one hour specials. Fox paid an initial exhibition fee of approximately $33 Million. Later, Scholastic learned that the Fox Family Channel (FFC), which was not a party to the contract, was airing the Goosebumps series. Neither FFC nor FBC compensated Scholastic for this.

Scholastic claimed that it was owed at least $2.7 Million as a result of the FFC airings because they constituted a distribution under the agreement. Fox claimed that the FFC airings were exhibitions for which Scholastic was not entitled to additional licensing fees. Eventually, Scholastic sent a letter terminating the contract. However, it stipulated that it would not relicense the programs to third parties

Scholastic filed a complaint in U.S. District Court (CDCal) against FBC, FFC, and other Fox entities alleging that the contract had been effectively terminated and that the ongoing use of the Goosebumps series constituted copyright infringement. The District Court dismissed the complaint.

The Appeals Court summarized the issue. "Scholastic and Fox entered into a contract, the subject matter of which was the copyright protected television series Goosebumps. Upon learning of material breaches by Fox as a result of the FFC airings, Scholastic terminated the agreement. Scholastic's termination, if effective, would cause the reversion of all ownership rights to Scholastic, rendering Fox's continuing use of the series copyright infringement. Fox, on the other hand, claims that the contract is still in effect and that, pursuant to the agreement, it alone has the right to exhibit and distribute the series. Because Scholastic has stipulated that it will not relicense the Goosebumps series until a determination is made as to the status of the agreement, however, Scholastic cannot be guilty of copyright infringement. Therefore, this case hinges entirely on whether Scholastic's attempt to terminate the agreement was successful."

28 U.S.C. § 1338(a) provides that "The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases." In contrast, contract law is a matter of state law.

The Appeals Court wrote that "Federal courts have consistently dismissed complaints in copyright cases presenting only questions of contract law."

It then applied the test outlined in T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964). It described this as "the majority rule".

The Court wrote that "the T.B. Harms test requires the district court to exercise jurisdiction if: (1) the complaint asks for a remedy expressly granted by the Copyright Act; (2) the complaint requires an interpretation of the Copyright Act; or (3) federal principles should control the claims."

The Appeals Court applied this test, and concluded that "subject matter jurisdiction is lacking and that the district court did not violate Fox's due process rights by sua sponte dismissing the claims. Once Scholastic's claims were dismissed, the only remaining issue was the validity of the termination. Scholastic's success in terminating the agreement is a pure question of state contract law appropriate for adjudication in the California courts."

7/17. The U.S. Court of Appeals (1stCir) issued its opinion in Global Naps v. Federal Insurance Company, a case regarding the scope of coverage of an insurance policy issued to a CLEC.

Global Naps is a competitive local exchange carrier (CLEC) in New York and New England. Verizon is the incumbent local exchange carrier (ILEC) in this region. Global Naps and Verizon had a dispute over reciprocal compensation. Global Naps filed an administrative complaint with the New York Public Services Commission.

In a separate lawsuit, Verizon filed a complaint in U.S. District Court (EDNY) against Global Naps alleging nine causes of action relating to Global Naps billings for reciprocal compensation, including violations of the Telecom Act, the Massachusetts Deceptive Trade Practices Act, breach of contract, unjust enrichment, and violation of RICO.

In the RICO count Verizon alleged that Global NAPs' prosecution of its administrative complaint before the New York PSC was a "predicate act" supporting RICO liability. It alleged that "Defendants' prosecution and maintenance of the New York PSC proceeding relating to the number of MOUs involved was itself a fraud, designed to confuse Bell Atlantic and conceal the nature of Defendants' racketeering activity." Verizon did, however, plead malicious prosecution.

Global Naps held an insurance policy issued by Federal Insurance Company that covered "a suit seeking damages for ... personal injury", including "malicious prosecution".

In the present lawsuit, Global Naps filed a complaint in U.S. District Court (DMass) against Federal Insurance Company seeking reimbursement under the policy of litigation expenses incurred defending Verizon's lawsuit.

The District Court granted summary judgment to Federal Insurance Company on the issue of coverage. The Appeals Court affirmed.

7/17. The Senate confirmed Allyson Duncan to be a Judge of the U.S. Court of Appeals (4thCir) by a vote of 93-0. See, Roll Call No. 289.

7/17. The Senate confirmed Louise Flanagan to be a Judge of the U.S. District Court for the Eastern District of North Carolina.

7/16. Makan Delrahim will become a Deputy Assistant Attorney General in the Department of Justice's (DOJ) Antitrust Division. He is currently Chief Counsel and Staff Director for the Senate Judiciary Committee (SJC). Before going to work for the SJC he worked for the law firm of Patton Boggs. See, release issued by Sen. Orrin Hatch (R-UT), Chairman of the SJC.

7/18. President Bush announced his intent to nominate Peter Lichtenbaum to be an Assistant Secretary of Commerce for Export Administration. He is currently a partner in the Washington DC office of the law firm of Steptoe & Johnson. See, White House release.

7/17. William Aylesworth, CFO of Texas Instruments (TI), will retire at the 2003. He will be replaced by Kevin March, TI's Controller. See, TI release.

7/17. TI named Richard Templeton to its Board of Directors. He is TI's Chief Operating Officer. See, TI release.

7/18. PeopleSoft and J.D. Edwards announced that "PeopleSoft has purchased approximately 110 million shares, or 88% of the outstanding shares of J.D. Edwards pursuant to its exchange offer to acquire all of the outstanding shares of J.D. Edwards that expired at 12:00 midnight EDT, Thursday, July 17, 2003. PeopleSoft expects to acquire the remaining shares of J.D. Edwards before the end of August 2003. The companies also announced that Michael Maples, a member of J.D. Edwards' board of directors, was elected to the board of directors of PeopleSoft." See, J.D. Edwards release and PeopleSoft release.

7/18. A collection of interest groups sent a letter to Representatives and Senators regarding pending spam legislation. The signatories, which include the Electronic Privacy Information Center (EPIC) and the Consumer Federation of America (CU), argue that several items elements should be included in any spam bill. For example, they want legislation to define spam as "unsolicited, bulk, commercial email." Also, they support establishing an opt-in rule, rather that an opt-out rule, as is provided for in several pending bills. They write that "The rule for bulk, commercial emails should be that they can only be sent with the recipients' prior affirmative agreement, with an exception for previously existing business relationships." They also advocate allowing a private right of action: "Individuals as well as ISPs should have the legal right to bring action against spammers. This the approach that Congress took with telemarketers and junk faxes and it is the approach that has been taken in the states to address the spam challenge. Depriving individuals of the right to seek legal action weakens consumer rights and leaves too much discretion to government agencies." However, the letter does not address class actions. The letter also opposes federal preemption.

7/17. SBC filed Section 271 applications with the Federal Communications Commission (FCC) for permission to provide in region interLATA services in the states of Illinois, Indiana, Ohio and Wisconsin. See, SBC release.