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August 28, 2003, 9:00 AM ET, Alert No. 728.
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Oklahoma Files Criminal Charges Against MCI WorldCom

8/27. The State of Oklahoma charged WorldCom, Bernie Ebbers, Scott Sullivan, and other former employees of WorldCom by complaint [PDF] with felony violations of the Oklahoma Securities Act.

Oklahoma Attorney General Drew Edmondson stated in a release that "It is rare that we name a company in a criminal complaint, but in this case it is justified ... The decision to commit this fraud was a company decision. This is not some rogue employee trying to line his own pockets. This was a conscious decision made for the benefit of the company."

Stasia Kelly, the recently named General Counsel of MCI WorldCom, stated in a release that "We intend to fully cooperate with the Oklahoma state Attorney General, but we do not believe this action will impact the bankruptcy process. MCI remains on track for its confirmation hearing before the federal Bankruptcy Court, which is scheduled to begin on September 8, 2003."

Kelly added that "Today's action against the company would only punish our 20 million customers and 55,000 employees -- 2,000 of which work in Oklahoma. MCI has made tremendous progress over the past year and we are working hard to put our house in order. MCI has, and continues to, cooperate with all investigations while implementing sweeping internal reforms. Our new management team and board of directors -- under the oversight of Corporate Monitor and former SEC Chairman Richard Breeden -- are committed to doing all the right things to ensure what happened in the past can never happen again."

DOJ Submits Its Evaluation of SBC Long Distance Application for Four States

8/26. The Department of Justice's (DOJ) Antitrust Division submitted its evaluation [PDF] to the Federal Communications Commission (FCC) regarding SBC's Section 271 application to provide in region interLATA services in the states of Illinois, Indiana, Ohio, and Wisconsin.

The DOJ concluded that "Because serious issues remain concerning SBC's ability to render accurate wholesale bills, the Department is not in a position to support SBC's application based on the current record. The Department does not, however, foreclose the possibility that the Commission may be able to satisfy itself regarding these issues prior to the conclusion of its review."

The evaluation also addresses "line splitting". The FCC defined this term in it just released triennial review order [576 pages in PDF]. It is "the process in which one competitive LEC provides narrowband voice service over the low frequency portion of a copper loop and a second competitive LEC provides digital subscriber line service over the high frequency portion of that same loop."

The evaluation states that "As the Department observed in its Michigan III Evaluation, line-splitting service to CLECs could provide an important platform for future broadband competition. The Department, after reviewing SBC's line-splitting services, expressed concern about SBC's processes for reconverting a customer from line-splitting back to UNE-platform service, concluding that the inability of SBC to allow CLECs to re-use loops may place CLECs at a competitive disadvantage as against SBC when they seek to sell DSL service. SBC's policy is the same in each of the four states for which SBC has submitted the application pending before the Commission, and CLECs continue to raise these concerns. Therefore, for the same reasons discussed in its Michigan III Evaluation, the Department believes that the Commission should determine whether SBC's processes provide non-discriminatory access to line-splitting and UNE-platform services."

See also, DOJ release. This is FCC WC Docket No. 03-167.

Federal Circuit Rules in E-Pass v. 3Com

8/20. The U.S. Court of Appeals (FedCir) issued its opinion [MS Word] in E-Pass v. 3Com and Palm, a patent infringement case involving Palm PDAs, in which the Appeals Court reversed the District Courts summary judgment of non-infringement.

Background. E-Pass Technologies is the assignee of U.S. Patent No. 5,276,311, titled "Method and device for simplifying the use of a plurality of credit cards, or the like".

The abstract states, in part, "In connection with a system for simplifying the use of a plurality of credit cards, check cards, customer cards, or the like, it is proposed to provide an electronic multi-function card comprising a storage accommodating a plurality of individual data sets representing individual single-purpose cards ..."

Claim 1 of the 311 patent, which is at issue in this case, discloses "A method for enabling a user of an electronic multi-function card to select data from a plurality of data sources such as credit cards, check cards, customer cards, identity cards, documents, keys, access information and master keys ..."

U.S. Robotics acquired Palm in 1995. Then, 3Com acquired U.S. Robotics (and Palm) in 1997. In 2000, 3Com spun off Palm as an independent, publicly traded company.

District Court. E-Pass filed a complaint in U.S. District Court (NDCal) against 3Com alleging that the handheld personal digital assistants (PDAs) named Palm Pilots infringed the 311 patent.

The District Court construed the claim at issue. In particular, it construed the term "electronic multi-function card" to mean a "device having the width and outer dimensions of a standard credit card with an embedded electronic circuit allowing for the conversion of the card to the form and function of at least two different single-purpose cards".

The parties filed cross motions for summary judgment. The District Court granted 3Com's motion for summary judgment of noninfringement both literally and under the doctrine of equivalents and denied E-Pass's motion for summary judgment of infringement under the doctrine of equivalents. It reasoned that credit cards are much smaller that Palm Pilots. (See, opinion reported at 222 F. Supp. 2d 1157.) E-Pass then brought this appeal.

Court of Appeals. The Court of Appeals held that the District Court erred in construing the term "electronic multi-function card" as something of the size of a credit card. It thus vacated the grant of summary judgment, both as to literal infringement, and under the doctrine of equivalents, and remanded to the District Court for further proceedings.

Reaction. E-Pass stated in a release that "A similar litigation against Microsoft and Compaq (now Hewlett Packard) in the U.S. District Court in Texas had been stayed pending the Federal Circuit decision. The basis for the stay is now over, the decision being binding upon the Texas court, and it is expected that both the Palm/3Com and Microsoft/Compaq litigations will resume sometime within the next four to six weeks." (Parentheses in original.)

E-Pass added that "It is expected that E-pass will be filing additional patent infringement actions in the not-too distant future."

This case is E-Pass Technologies, Inc. v. 3Com Corporation and Palm, Inc., No. 02-1593, an appeal from the U.S. District Court for the Northern District of California, Judge Lowell Jensen presiding.

9th Circuit Issues Another Opinion in LANS v. Reuters

8/21. The U.S. Court of Appeals (9thCir) issued its split opinion [PDF] in Los Angeles News Service v. Reuters Television, another in the series of opinions arising out of the Los Angeles News Service's (LANS) enforcement of its copyrights in video of the 1992 Los Angeles riots. This opinion, Reuters IV, addresses "whether a news organization may recover actual damages under the Copyright Act for acts of infringement that mostly occurred outside the United States."

LANS made and copyrighted video of the riots, including the beating of Reginald Denny. It sold licenses to rebroadcast to others, including NBC, which used them on its television program named the Today Show. Visnews International (USA) is a joint venture of NBC, Reuters Television, and BBC. NBC transmitted the Today Show broadcast by fiber link to Visnews in New York. Visnews made a videotape copy, which it transmitted via satellite to its subscribers in Europe and Africa, and via fiber link to the New York office of the European Broadcast Union, a joint venture of Visnews and Reuters. The EBU made another copy of the works, and transmitted it to Reuters in London, which in turn distributed the copyrighted works to its own subscribers.

LANS filed a complaint against Reuters Television International, Inc., Reuters America Holdings, Inc., Reuters America, Inc. and Visnews in U.S. District Court (CDCal) alleging copyright infringement.

Judge O'Scannlain, writing for the majority, concluded that "the Copyright Act does not provide LANS recovery for actual damages resulting from Reuters's and Visnews's infringement.

Judge Silverman wrote a sarcastic dissent. He wrote that "In our previous decision, L.A. News Serv. v. Reuters Television Int’l, Ltd. (Reuters III), 149 F.3d 987 (9th Cir. 1998), we decided the very issue the majority now re-decides the other way. At that time, we identified the issue as whether ``a plaintiff may recover actual damages accruing from the unauthorized exploitation abroad of copyrighted work infringed in the United States.´´ Id. at 989. We held that it could."

He continued that "There are any number of ways to compute actual damages. Neither the Copyright Act, nor our prior decision in this case, nor any other case, limits the calculation of actual damages to only the infringer's ill-gotten profits. LANS should have been allowed to put on its proof of its actual damages, as we previously held it could. I would remand for a trial on actual damages (just as we did last time) except this time, I would add that we really, really mean it."

This case is Los Angeles News Service v. Reuters Television International, Ltd., No. 02-56956, an appeal from the U.S. District Court for the Central District of California, Judge Consuelo Marshall presiding, D.C. No. CV-95-01073-CBM.

There will be no issue of the TLJ Daily E-Mail Alert on Labor Day, Monday, September 1, 2003.
Thursday, August 28

The House is in recess until September 3. Senate is in recess until September 2. The Supreme Court is in recess until October 6. (The Supreme Court will meet in special session to hear oral arguments in McConnell v. FEC on September 8.)

10:00 - 11:45 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Is There Any Development in the Doha Development Agenda?" The speakers will be Michael Finger (AEI), Arvind Panagariya (University of Maryland), and Sarath Rajapatirana (AEI). See, notice. Location: AEI, 12th Floor, 1150 17th Street, NW.

Sunday, August 31

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its second public draft [62 pages in PDF] of its publication titled "Guide for the Security Certification and Accreditation of Federal Information Systems". This is NIST Special Publication 800-37 authored by Ron Ross and Marianne Swanson. Comments may be submitted to

Monday, September 1

Labor Day. The FCC, USITC and other federal government agencies will be closed. The National Press Club will be closed.

Tuesday, September 2

9:30 AM. The Senate will return from its August recess. The Senate will begin consideration of HR 2660, the Labor/HHS and Education Appropriations bill.

The Treasury Department's and the Internal Revenue Service's (IRS) will hold a public meeting regarding their 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, September 3

2:00 PM. The House will return from its August recess. Votes will be postponed until 6:30 PM.

POSTPONED. 1:00 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "Digital Dividends and Other Proposals to Leverage Investment in Technology". The hearing will be webcast. See, notice. Location: Room 2123, Rayburn Building.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding making more spectrum available for unlicensed devices, including WiFi, in the 5 GHz band. See, stories titled "FCC Adopts NPRM to Increase Unlicensed Spectrum" in TLJ Daily E-Mail Alert No. 663, May 16, 2003; "FCC Releases NPRM Regarding Increasing Amount of Unlicensed Spectrum" in TLJ Daily E-Mail Alert No. 674, June 5, 2003, and "Delegates Discuss World Radiocommunications Conference" in TLJ Daily E-Mail Alert No. 703, July 22, 2003. See also, notice in the Federal Register, July 25, 2003, Vol. 68, No. 143, at Pages 44011 - 44020. This is ET Docket No. 03-122. The FCC adopted this NPRM on May 15, 2003, and released June 4, 2003.

Thursday, September 4

10:00 AM. The House will meet for legislative business.

The Federal Communications Commission's (FCC) changes to its media ownership rules, announced on June 2, 2003, take effect. See, notice in the Federal Register that recites and describes the rules changes. See, Federal Register, August 5, 2003, Vol. 68, No. 150, at Pages 46285 - 46358.

Friday, September 5

9:00 AM. The House will meet for legislative business.

9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host a seminar titled "The New World of E-Commerce Taxation". The speakers will be Michael Greve (AEI), Daniel Shaviro (NYU School of Law), and Kevin Hassett (AEI). See, notice. Location: 12th Floor, AEI, 1150 17th Street, NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry [21 pages in PDF] in its proceeding titled "In the Matter of Inquiry Regarding Carrier Current Systems, including Broadband over Power Line Systems". See, notice in the Federal Register, May 23, 2003, Vol. 68, No. 100, at Pages 28182 - 28186. See also, story titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 628, April 24, 2003, and story titled "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003.This is ET Docket No. 03-104. For more information, contact Anh Wride at 202 418-0577 or

12:00 NOON. Deadline to submit requests to testify orally at the September 18, 2003 hearing of the U.S. Trade Representative's (USTR) interagency Trade Policy Staff Committee (TPSC) to assist it in preparing its annual report to the Congress on the People's Republic of China's compliance with the commitments that it made in connection with its accession to the World Trade Organization (WTO). See, notice in the Federal Register, July 21, 2003, Vol. 68, No. 139, at Pages 43247 - 43248.

More News

8/25. The Electronic Privacy Information Center (EPIC) and other groups and individuals filed an amicus curiae brief [37 pages in PDF] with the Supreme Court in Doe v. Chao. The brief states that "At issue in this case is whether a plaintiff suing under the Privacy Act of 1974, 5 U.S.C. § 552a, for the wrongful disclosure of the Social Security Number must show actual damages in order to recover the statutory damages of $1,000." The brief argues that "The willful and intentional disclosure of Social Security Numbers constitutes a substantial invasion of privacy, as Congress and the courts have recognized. Congress created a liquidated damages provision in the Privacy Act to discourage wrongful disclosures of the SSN. ... At a time when identity theft, facilitated by the misuse of the SSN, is on the rise, the Court should ensure that this critical purpose in the Privacy Act is not lost. Requiring high thresholds of proof of actual damages for SSN misuse would undermine public safety and the very purpose of the Act."

8/27. The General Accounting Office (GAO) released a report [59 pages in PDF] titled "Homeland Security: Efforts to Improve Information Sharing Need to Be Strengthened". The report found that "no level of government perceived the process as effective, particularly when sharing information with federal agencies. Information on threats, methods, and techniques of terrorists is not routinely shared; and the information that is shared is not perceived as timely, accurate, or relevant. Moreover, federal officials have not yet established comprehensive processes and procedures to promote sharing. Federal respondents cited the inability of state and city officials to secure and protect classified information, the lack of federal security clearances, and a lack of integrated databases as restricting their ability to share information."

8/27. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register inviting public and private organizations to submit their information security practices for inclusion in the NIST's Computer Security Resource Center's (CSRC) Federal Agency Security Practices (FASP) web site. That notice states that this is an information sharing program intended to "enhance the overall security of the nation". There is no deadline for submissions. See, Federal Register, August 27, 2003, Vol. 68, No. 166, at Pages 51558 - 51559.

8/27. Ed Black, P/CEO of the Computer & Communications Industry Association (CCIA), wrote a letter [PDF] to Tom Ridge, Secretary of Homeland Security, to complain about the Department of Homeland Security's selection of Microsoft desktop and server software. Black asserted that Microsoft makes a "flawed software platform" that is "riddled with obvious and easily exploited vulnerabilities". The CCIA has also long been a leading antagonist of Microsoft in government antitrust proceedings against Microsoft.

8/27. Deputy U.S. Trade Representative (USTR) Peter Allgeier spoke and answered questions regarding the World Trade Organization (WTO) talks in Geneva Switzerland leading up to the the Cancun ministerial. See, transcript.

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