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August 12, 2003, 9:00 AM ET, Alert No. 716.
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Jury Returns Verdict of Infringement Against Microsoft in Eolas Browser Patent Case

8/11. A trial jury of the U.S. District Court (NDIll) returned its verdict that Microsoft infringed U.S. Patent No. 5,838,906 titled "Distributed hypermedia method for automatically invoking external application providing interaction and display of embedded objects within a hypermedia document". The jury also awarded damages of $521 Million.

Microsoft stated in a release that "While today's outcome is disappointing, we do plan to appeal this decision and we are confident the facts and the law will support our position. It's important to note that the court has already rejected claims that there was any willful infringement. We believe the evidence will ultimately show that there was no infringement of any kind, and that the accused feature in our browser technology was developed by our own engineers based on pre-existing Microsoft technology."

Microsoft added that "As an intellectual property company, Microsoft invests heavily in research and development, and is committed to respecting the intellectual property rights of others. Microsoft stands by its products and will continue to develop innovative technologies that benefit consumers. Regardless of the ultimate outcome of this case, Microsoft will work hard to ensure that there is very little if any impact on our customers."

The patent application was filed in October 1994. The patent was issued on November 17, 1998. The inventors are Michael Doyle, the founder of Eolas Technologies, David Martin and Cheong Ang.

The abstract of the patent states the following: "A system allowing a user of a browser program on a computer connected to an open distributed hypermedia system to access and execute an embedded program object. The program object is embedded into a hypermedia document much like data objects. The user may select the program object from the screen. Once selected the program object executes on the user's (client) computer or may execute on a remote server or additional remote computers in a distributed processing arrangement. After launching the program object, the user is able to interact with the object as the invention provides for ongoing interprocess communication between the application object (program) and the browser program. One application of the embedded program object allows a user to view large and complex multi-dimensional objects from within the browser's window. The user can manipulate a control panel to change the viewpoint used to view the image. The invention allows a program to execute on a remote server or other computers to calculate the viewing transformations and send frame data to the client computer thus providing the user of the client computer with interactive features and allowing the user to have access to greater computing power than may be available at the user's client computer." (Parentheses in original.)

Powell Addresses E911 and DTV Transition

8/11. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech [PDF] in Indianapolis, Indiana to the Association of Public Safety Communications Officials International. He focused on E911 implementation, but also addressed 800 MHz interference issues, and the DTV transition.

Michael PowellPowell (at right) began by stating that "Spectrum policy and homeland security are at the forefront of my strategic plan for the Commission. Central to that plan is the implementation of Enhanced 911 for wireless communications devices."

He noted that "the FCC cannot MAKE E911 happen -- we need carriers, public safety, ILECs, equipment vendors, and state and local governments ..."

However, he added that "our progress requires the use of an occasional stick. The Commission has not hesitated to use its enforcement power when wireless carriers are not justified in delayed deployment. Within the past fifteen months, we have taken a number of actions where carriers have failed to comply, including entering into consent decrees with multiple national carriers who did not adhere to their deployment schedules. In addition to substantial fines, each carrier is now subject to binding deployment schedules with automatic penalties if they fail to comply again."

Powell also addressed interference in the 800 MHz band. He stated that "public safety needs reliable access to its existing spectrum resources, particularly at 800 MHz. The interference issues at 800 MHz are very serious and complex. In fact, this may be one of the most challenging spectrum policy proceedings that will come before this Commission."

Finally, he touched on the 700 MHz band, and DTV transition. He stated that the FCC is "committed to speeding public safety deployment in the 700 MHz band. ... However, as you know, the band is currently encumbered by broadcasters. The delay in the initial auction of the 700 MHz commercial bands has required modification of the FCC's original voluntary band clearing plan. Congress is exploring new options for moving this process forward. In addition, we are tackling the challenge of the DTV transition to hasten the clearing of the band. Whatever the ultimate mechanism, rest assured that we understand the need to make these frequencies available as soon as possible."

See also, letter [PDF] from Powell to Melvin Carraway, Superintendent of the Indian State Police Department, and FCC release [PDF].

NetCoalition Propounds Interrogatories by Letter to RIAA Re DMCA Subpoenas

8/11. NetCoalition wrote a letter [6 pages in PDF] to Cary Sherman, President of the Recording Industry Association of America (RIAA), which propounds numerous written interrogatories about the RIAA's use of subpoenas issued by the U.S. District Court pursuant to Section 512 of the DMCA, that direct ISPs to provide information about subscribers alleged to be engaging in P2P copyright infringement over the ISPs' networks. There is no pending lawsuit between the NetCoalition and the RIAA.

The NetCoalition is a Washington DC based interest group. Its website lists as members Yahoo, Inktomi, Lycos, and DoubleClick. Its letter to the RIAA states that its membership includes "hundreds of small Internet service providers".

The letter includes 18 numbered paragraphs with questions to be answered by the RIAA. Many paragraphs include multiple questions. Furthermore, the NetCoalition wants the RIAA to meet with the NetCoalition "and other interested parties to discuss the RIAA's legal initiative and, hopefully, provide answers to the questions".

Some of the questions seek facts regarding the RIAA's subpoenas. They resemble written interrogatories submitted pursuant to Rule 33, Federal Rules of Civil Procedure. However, the letter exceeds the limit of 25 interrogatories. It also asks some questions regarding legal conclusions and litigation strategies and plans.

For example, the letter asks "What methods does the RIAA employ to search for potential copyright infringers on P2P networks?", "what criteria does the RIAA employ to determine whether to file a copyright infringement suit?", "Are the RIAA's investigative efforts also targeting potential file sharing that may be occurring through email, instant messaging, or other comparable technology?", and "Once the RIAA believes it has identified a possible infringing file through technological means, what ``due diligence´´ does RIAA perform to ensure the accuracy of this identification?"

The NetCoalition has not filed a lawsuit against the RIAA. However, on July 30, 2003, Pacific Bell Internet Services (PBIS), an SBC affiliate, filed a complaint in U.S. District Court (NDCal) against the RIAA seeking declaratory and injunctive relief regarding the validity of subpoenas issued by the U.S. District Court (DC), pursuant to Section 512 of the DMCA. In fact, several questions in the NetCoalition's letter reference allegations made by the RIAA in PBIS v. RIAA. Answers to the NetCoalition's questions would aid PBIS in its lawsuit.

See, TLJ story titled "Pacific Bell Internet Services Sues RIAA Over Infringer Subpoenas", July 30, 2003 (also published in TLJ Daily E-Mail Alert No. 709, August 1, 2003.

The letter also asks questions regarding legal conclusions and interpretations. For example, it asks "Can you explain the RIAA's interpretation of ``good faith belief´´", as referenced in the DMCA. It also asks, "Does the RIAA believe that it, too, has ``roving subpoena´´ authority, and can seek a subpoena in one federal court (e.g., the federal district court for the District of Columbia), which can be served no matter where a service provider is actually located?"

Similarly, the letter asks, "Does the RIAA believe that ISPs are legally required to reconfigure the operation of their networks, particularly WiFi networks and other networks using temporary or ``dynamic´´ Internet Protocol addresses, to facilitate the identification of alleged infringers using such networks?"

The letter also asks questions regarding the RIAA's litigation strategy and plans. For example, it asks, "what criteria does the RIAA employ to determine whether to file a copyright infringement suit?" It also asks, "Does the RIAA intend to reimburse Internet companies, especially small ones, for the resources they expend answering RIAA's subpoenas?" Finally, it asks, "What compensatory damages will the RIAA provide to an individual whose personal information was released by the RIAA as a result of the subpoena process but was not subject to a lawsuit or were wrongfully targeted?"

The letter also states that "There are understandable fears among many in the Internet community that the real purpose of this legal campaign is to achieve in court what the association has not yet been able to accomplish in Congress – to make Internet companies legally responsible for the conduct of individuals who use their systems, forcing these companies to become not only the police of the Internet but also permanent and constant watchdogs of the substance of all email traffic, instant messaging, and file sharing."

People and Appointments

8/11. Deputy Attorney General Larry Thompson will leave the Department of Justice (DOJ) at the end of August. He will take a position at the Brookings Institution. See, DOJ release.

8/5. Kevin Ryan, the U.S. Attorney for the Northern District of California (NDCal), made several changes in the U.S. Attorneys Office (USAO) for the NDCal. See, USAO release.

Ross Nadel, who has a background in prosecuting computer and intellectual property crimes, was named Chief of the Criminal Division. He was previously Chief of the San Jose Branch Office, and acting Chief of the Computer Hacking and Intellectual Property Unit (CHIP).

Nadel replaces Charles "Ben" Burch, who will return to the Oakland office, where he will be the interim Chief, while the Chief, Jack Laettner, continues to work full time on a homicide prosecution.

Christopher Sonderby was named Chief of the CHIP Unit. He will be based in the San Jose office. He was previously head of the Computer Crimes section and the Computer and Telecommunications Coordinator in the USAO for the Eastern District of California. Before that, he worked for the law firm of Sonnenschein Nath & Rosenthal in San Francisco.

Laurel Beeler was named Deputy Chief of the Criminal Division.

Joann Swanson was named Chief of the Civil Division.

Tuesday, August 12

The House is in recess until September 3. Senate is in recess until September 2. The Supreme Court is in recess.

10:00 AM. The U.S. Public Interest Research Group will hold a press conference to release a report on cable broadband. For more information, contact Jennifer Mueller at 202 546-9797  Location: National Press Club, First Amendment Lounge.

Deadline to submit comments, or requests to speak at the September 2, 2003 public hearing, on the Treasury Department's and the Internal Revenue Service's (IRS) notice of proposed rulemaking (NPRM) regarding regulations that "affect certain taxpayers who participate in the transfer of stock pursuant to the exercise of incentive stock options and the exercise of options granted pursuant to an employee stock purchase plan (statutory options)." See, notice in the Federal Register, June 9, 2003, Vol. 68, No. 110, at Pages 34344 - 34370.

Wednesday, August 13

10:00 AM - 12:00 PM. The Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB) will hold a public forum to present the new application search interfaces that will be available for the public to access Multipoint Distribution Service/Instructional Television Fixed Service (MDS/ITFS) Application data. See, notice [PDF]. Location: Room 4-B-516, 4th Floor, FCC, 445 12th Street, SW.

Day one of a three day conference hosted by the American Intellectual Property Law Association (AIPLA) titled "2003 Practical Patent Prosecution Training for New Lawyers". See, notice [PDF]. Location: Arlington, VA.

Thursday, August 14

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its document [12 pages in PDF] titled "Draft Federal Information Processing Standard (FIPS) 199 on Standards for Security Categorization of Federal Information and Information Systems". The NIST states that this document "defines requirements to be used by Federal agencies to categorize information and information systems, and to provide appropriate levels of information security according to a range of risk levels." For more information, contact Ron Ross at 301 975-5390 or See, notice in the Federal Register, May 16, 2003, Vol. 68, No. 95, at Pages 26573 - 26574.

Friday, August 15

Deadline to submit comments to the Federal Communications Commission (FCC) in response to a Petition for Rulemaking on compliance by carriers with relevant statutory provisions on disclosure of customer information in 911 emergencies. The petition was submitted by the National Emergency Number Association (NENA), the Association of Public Safety Communications Officials International (APCO), and the National Association of State Nine One One Administrators (NASNA). See, FCC notice [3 pages in PDF]. For more information, contact Barbara Reideler or Jared Carlson at 202 418-1310.

Monday, August 18

10:15 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host a panel discussion titled "Trade in Services: Is More Liberalization Possible in the Doha Round?". The speakers will be Stephen Canner (U.S. Council for International Business), James Mendenhall (Office of the U.S. Trade Representative), and Robert Vastine (U.S. Coalition of Services Industries). See, notice. Location: AEI, 12th Floor, 1150 17th Street, NW.

Deadline to submit reply 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

More News

8/10. Federal Reserve Board (FRB) Governor Susan Bies gave a speech in San Francisco, California about the role that legal counsel and other professionals should play in ensuring effective corporate governance in the aftermath of the WorldCom and other scandals.

8/12. The Department of Homeland Security's (DHS) Information Analysis and Infrastructure Protection  Directorate's (IAIP) National Cyber Security Division (NCSD) issued an updated advisory in which it stated that "MALICIOUS CODE DUBBED "MSBLAST", "LOVESAN", OR "BLASTER" BEGAN CIRCULATING ON THE INTERNET ON AUGUST 11TH. THIS WORM TAKES ADVANTAGE OF THE VULNERABILITY DISCUSSED IN THIS ADVISORY, AND CONTAINS CODE THAT WILL TARGET MICROSOFT'S UPDATE SERVERS ON AUGUST 16TH. THIS ADDITIONAL ATTACK COULD CAUSE SIGNIFICANT INTERNET-WIDE DISRUPTIONS. IT IS POSSIBLE THAT OTHER WORMS BASED ON THIS VULNERABILITY WILL BE RELEASED OVER THE NEXT FEW DAYS AS "COPY CAT" ATTACKS.)" (Capitals and parentheses in original.) See also, Symantec's report on the W32.Blaster.Worm, McAfee's report on the worm, and Microsoft's Security Bulletin MS03-026 regarding the vulnerability.

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