Tech Law Journal Daily E-Mail Alert
November 28, 2003, 9:00 AM ET, Alert No. 788.
Home Page | Calendar | Subscribe | Back Issues | Reference
7th Circuit Rules in Copyright and Database Protection Case

11/25. The U.S. Court of Appeals (7thCir) issued its opinion [13 pages in PDF] in Assessment Technologies v. Wiredata, a copyright infringement case. Judge Richard Posner wrote the opinion for the three judge panel, holding that extracting the data from an electronic database incorporated within a copyrighted program does not constitute copyright infringement.

Background. There are three relevant sets of entities, and two relevant legal proceedings.

First, there are Wisconsin municipalities that collect data on real estate located in their jurisdictions, including address, owner's name, age of the property, its assessed valuation, and number and type of rooms. They collect this data in the format of handwritten notes on paper, and electronic files on individual assessors' laptop computers.

Second, there is Assessment Technologies (AT), which developed and copyrighted a software program titled "MarketDrive". AT obtained the paper notes and files of the municipalities; it converted the data contained in the handwritten notes and files into electronic format; it compiled the data into one database which it designed, containing 456 fields in 34 tables; and, it included this database in a program that it developed. AT licenses this program to the municipalities. It enables them to access and query the electronic database, and hence, more efficiently collect property taxes.

Third, there is Wiredata, which is owned by Multiple Listing Services, wants the electronic data, but does not want to either collect it the way AT did, or pay AT to license it. It wants to obtain the electronic data from the municipalities, without payment. Three municipalities refused, citing copyright restrictions.

Proceedings Below. In a separate lawsuit, Wiredata filed a complaint in state court in Wisconsin against the three municipalities seeking the data. That lawsuit is pending.

In the present lawsuit, AT filed a complaint in U.S. District Court (EDWisc) against Wiredata alleging copyright infringement and theft of trade secrets.

The present case does not involve a breach of contract claim, even though the license agreement prohibits dissemination of the data contained in it. AT licensed the program to the municipalities, but the lawsuit is against Wiredata, with which it has no contractual relationship.

The District Court issued a permanent injunction against Wiredata, based on the copyright claim.

Ruling on Appeal. On appeal, Wiredata argued that the program lacks sufficient originality to be copyrightable. The Court rejected this argument. Posner wrote that "Copyright law unlike patent law does not require substantial originality. ... In fact, it requires only enough originality to enable a work to be distinguished from similar works that are in the public domain, ... since without some discernible distinction it would be impossible to determine whether a subsequent work was copying a copyrighted work or a public-domain work. This modest requirement is satisfied by Market Drive because no other real estate assessment program arranges the data collected by the assessor in these 456 fields grouped into these 34 categories, and because this structure is not so obvious or inevitable as to lack the minimal originality required ..."

Posner continued that the municipalities cannot give Wiredata a copy of the program, or the "database, that is, sorted into AT's 456 fields grouped into its 34 tables", without violating the copyright. However, it can "extract" the "raw data" and give that to Wiredata, without violating the copyright. The data, wrote Posner, is in the public domain. So, "From the standpoint of copyright law all that matters is that the process of extracting the raw data from the database does not involve copying Market Drive, or creating, as AT mysteriously asserts, a derivative work".

In Posner's words, "if WIREdata said to itself, ``Market Drive is a nifty way of sorting real estate data and we want the municipalities to give us their data in the form in which it is organized in the database, that is, sorted into AT’s 456 fields grouped into its 34 tables,´´ and the municipalities obliged, they would be infringing AT’s copyright because they are not licensed to make copies of Market Drive for distribution to others; and WIREdata would be a contributory infringer (subject to a qualification concerning the fair-use defense to copyright infringement, including contributory infringement, that we discuss later). But WIREdata doesn’t want the Market Drive compilation. It isn’t in the business of making tax assessments, which is the business for which Market Drive is designed. It only wants the raw data, the data the assessors inputted into Market Drive. Once it gets those data it will sort them in accordance with its own needs, which have to do with providing the information about properties that is useful to real estate brokers as opposed to taxing authorities." (Parentheses in original.)

Posner also elaborated on the extraction techniques that could be used.

Posner also threw in an analogy to Westlaw's compilations of court opinions. "It would be like a Westlaw licensee's copying the text of a federal judicial opinion that he found in the Westlaw opinion database and giving it to someone else. Westlaw's compilation of federal judicial opinions is copyrighted and copyrightable because it involves discretionary judgments regarding selection and arrangement. But the opinions themselves are in the public domain (federal law forbids assertion of copyright in federal documents, 17 U.S.C. § 105), and so Westlaw cannot prevent its licensees from copying the opinions themselves as distinct from the aspects of the database that are copyrighted." (Parentheses in original.)

Posner also rejected AT's argument that Wiredata is free to collect the public domain data from municipalities, as it did. Posner wrote that AT "has no legal ground for making the acquisition of that data more costly for WIREdata."

The Appeals Court reversed, and remanded to the District Court, with instructions to vacate the injunction and dismiss the copyright claim. The trade secrets claim remains.

At this point, Posner had decided the case. Nevertheless, he went on to discuss, and apparently rule upon, several other issues not before the Court.

First, he discussed the trade secrets claim. The District Court did not rule on the trade secrets claim, and hence, it was not an issue on appeal. Although, it might be litigated on remand. Nevertheless, Posner all but pre-judged the disposition of any trade secrets claim. Posner wrote that the trade secret claim is "incomprehensible".

Second, he wrote that "AT would lose this copyright case even if the raw data were so entangled with Market Drive that they could not be extracted without making a copy of the program." This would be "intermediate copying" that would be protected by fair use.

Third, he wrote that "if the only way WIREdata could obtain public-domain data about properties in southeastern Wisconsin would be by copying the data in the municipalities' databases as embedded in Market Drive, so that it would be copying the compilation and not just the compiled data only because the data and the format in which they were organized could not be disentangled, it would be privileged to make such a copy, and likewise the municipalities."

Economic Analysis. Posner also offered a little economic analysis.

Many of Judge Posner's other opinions in intellectual property cases contain substantial economic analysis. See, for example, opinion [11 pages in PDF] in Ty, Inc. v. Perryman, and related story titled "Posner Opinion Provides Economic Analysis of Trademark, Dilution & Cybersquatting" in TLJ Daily E-Mail Alert No. 524, October 7, 2002. See also, opinion of Judge Posner in Ty, Inc. v. Publications International Ltd., and related story titled "7th Circuit Rules in Copyright and Fair Use Case" in TLJ Daily E-Mail Alert No. 444, June 5, 2002.

The present opinion contains a little economic analysis. Posner did acknowledge that "The creation of massive electronic databases can be extremely costly, yet if the database is readily searchable and the data themselves are not copyrightable (and we know from Feist that mere data are indeed not copyrightable) the creator may find it difficult or even impossible to recoup the expense of creating the database." (Parentheses in original.)

But, he continued, that these arguments "have no relevance because AT is not the collector of the data that go into the database." The municipalities' assessors did "the footwork, the heavy lifting."

Posner's analysis ignores other economic costs incurred by database companies, such as AT, in establishing and maintaining contacts and relationships with myriad municipalities, periodically collecting handwritten notes and files, entering this data by hand, developing an electronic database, marketing their database products, and transacting with paying customers.

This case is Assessment Technologies of WI, Inc. v. Wiredata, Inc., No. 03-2061, an appeal from the U.S. District Court for the Eastern District of Wisconsin, D.C. No. 01-C-789, Magistrate Judge Aaron Goodstein presiding.

This opinion was written by Judge Posner, and joined by Judge Diane Wood and Judge Terence Evans. Whatever is the nature of random assignment of cases in the 7th Circuit, Judge Posner has ended up writing opinions in a disproportionate share of the recent intellectual property cases heard by the 7th Circuit.

Posner Addresses Copyright Misuse

11/25. The U.S. Court of Appeals (7thCir) issued its opinion in Assessment Technologies v. Wiredata, a copyright infringement case. While the holding of the case is that that extracting the data from an electronic database incorporated within a copyrighted program does not constitute copyright infringement, the opinion also addresses, in dicta, the doctrine of copyright misuse.

Judge Richard Posner wrote the opinion for the three judge panel. This is at least the third time is just over one year that Judge Posner has written about misuse in published opinions.

He also wrote the opinion [PDF] for the 7th Circuit in Scheiber v. Dolby Laboratories, in which the Appeals Court applied the doctrine of misuse in a patent case. He criticized the application of the doctrine, writing that the Appeals Court was compelled to follow Supreme Court precedent. However, in that case he criticized the application of the doctrine of misuse in a competition or antitrust context.

In the present case, as well as in the opinion in Ty, Inc. v. Publications International Ltd., Judge Posner discusses taking the doctrine of misuse away from its origins in patent law, and its grounding in competition or antitrust analysis, and making it a copyright doctrine that might be more relevant to digital content.

History of the Doctrine of Misuse. The doctrine of misuse was first developed in patent law. The Supreme Court held that there is a defense of patent misuse to prevent the holders of patents from using the authority extended to them under the Patent Act to prevent competition in products that are not protected by patent. See, Morton Salt Co. v. Suppiger Co., 314 U.S. 488 (1942). Similarly, in Brulotte v. Thys Co., 379 U.S. 29 (1964), the Supreme Court held that a patent holder's attempt to collect royalties beyond the term of the patent constitutes misuse of the patent

The doctrine of patent misuse is similar to, but not identical to competition, or antitrust, analysis. Judge Posner criticized it application in an competition context in the June 17, 2002 opinion [PDF] in Scheiber v. Dolby Laboratories. See also, story titled "7th Circuit Criticizes But Follows Brulotte" in TLJ Daily E-Mail Alert No. 453, June 8, 2002.

Recently, the doctrine of misuse has been extended from patent law to copyright law. The leading cases are Lasercomb America v. Reynolds, 911 F.2d 970 (4thCir 1990); Practice Management Information Corp. v. AMA, Alcatel U.S.A., Inc. v. DGI Technologies, Inc., 166 F.3d 772 (5thCir 1999), and DSC Communications Corp. v. DGI Technologies, 81 F.3d 597 (5thCir 1996).

In Lasercomb the Court found copyright misuse where the holder of a copyright in computer software used a license agreement that barred licensees from using ideas contained in its software to write their own software. In Alcatel the Court found copyright misuse where the holder of a copyright in software licensed its use on the condition that the licensee also use it only in conjunction with the copyright holder's hardware. The DSC case involved development of a competing microprocessor card.

However, while these cases have extended the doctrine of misuse to copyright, and have applied it in the context of computer software and hardware, these cases still basically apply a variety of competition analysis to find misuse.

Napster asserted the defense of copyright misuse in A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). The 9th Circuit rejected the copyright misuse defense in that case. In that case the alleged misuse arose out of alleged anticompetitive actions by the record companies in the online music distribution market.

Assessment Technologies v. Wiredata. In this case, Judge Posner speculated, but did not rule on, the issue of copyright misuse. He wrote that "To try by contract or otherwise to prevent the municipalities from revealing their own data, especially when, as we have seen, the complete data are unavailable anywhere else, might constitute copyright misuse."

He continued that "The doctrine of misuse ``prevents copyright holders from leveraging their limited monopoly to allow them control of areas outside the monopoly´´, citing A&M Records v. Napster.

He continued that "No effort has been made by WIREdata to show that AT has market power merely by virtue of its having a copyright on one system for compiling valuation data for real estate tax assessment purposes. Cases such as Lasercomb, however, cut misuse free from antitrust, pointing out that the cognate doctrine of patent misuse is not so limited, 911 F.3d at 977-78, though a difference is that patents tend to confer greater market power on their owners than copyrights do, since patents protect ideas and copyrights, as we have noted, do not."

He added that "The argument for applying copyright misuse beyond the bounds of antitrust, besides the fact that confined to antitrust the doctrine would be redundant, is that for a copyright owner to use an infringement suit to obtain property protection, here in data, that copyright law clearly does not confer, hoping to force a settlement or even achieve an outright victory over an opponent that may lack the resources or the legal sophistication to resist effectively, is an abuse of process."

But he concluded, "We need not run this hare to the ground".

Ty v. Publications International. In this more obscure case about Beanie Baby toys, Judge Posner offered a lengthy analysis of the purposes and economics of copyright protection. And in doing so, he hinted that copyright misuse might endanger copyrights. However, he did not decide this case on this issue.

The plaintiff in the District Court was Ty Inc., the manufacturer of Beanie Babies. These a toys made by putting bean pellets inside of bags, that are designed to resemble animals. Ty holds copyrights to these as "sculptural works". Publications International, Ltd. (PIL) publishes books, including For the Love of Beanie Babies and Beanie Babies Collector's Guide, which contain pictures of Beanie Babies, and text. That is, PIL took and published pictures (derivative works) of Ty's Beanie Babies (copyrighted works). However, these pictures were part of a guide to Beanie Babies marketed to collectors. Hence, PIL asserts that use of the pictures constitutes fair use. Ty differs. Unlike some other Beanie Baby book publishers, PIL has no license from Ty.

Ty filed a complaint in U.S. District Court (NDIll) against PIL alleging copyright and trademark infringement. PIL conceded that the Beanie Babies are copyrighted, and that its books are derivative works, but asserted the affirmative defense of fair use. The District Court ruled on summary judgment that the copying was not fair use, and granted Ty an injunction on the copyright claim.

PIL appealed. The 7th Circuit reversed and remanded. And, the Supreme Court denied certiorari.

Judge Posner hinted at misuse arising out of copyright licensing practices and litigation strategies intended to suppress critical reviews of its products -- a purpose that is contrary to the underlying purposes of copyright protection.

This is the gyst of his argument. Ty makes a product for kids. It sets production levels and low prices at levels that do not result in a clearing of the market. Hence, there is excess demand at Ty's price and quantity of production. This, among other things, creates a secondary market for the product. This secondary market, in turn, creates advertising for the product, and increases future demand.

However, for there to be an effective secondary market, there must be literature on the product, including collectors' guides. Posner then reasoned: "Granted, there is some question how, if Beanie Babies collectors' guides are indeed a complement to Beanie Babies (and they are), and Ty has a monopoly of Beanie Babies (and it does), Ty can get a second monopoly profit by taking over the guides market. The higher the price it charges for guides, the lower will be the demand for such guides and hence for collecting Beanie Babies and so the less effective will Ty's strategy of marketing Beanie Babies as collectibles be. This is the sort of question that has engendered skepticism among economists about the antitrust rule against tie-in agreements. But there is an answer here: Ty wants to suppress criticism of its product in these guides."

Posner also wrote that "ownership of a copyright does not confer a legal right to control public evaluation of the copyrighted work."

He also noted that "Some of the text" in PIL's guide "is quite critical, for example accusing Ty of frequent trademark infringements. Ty doesn't like criticism, and so the copyright licenses that it grants to those publishers whom it is willing to allow to publish Beanie Baby collectors' guides reserve to it the right to veto any text in the publishers' guides. It also forbids its licensees to reveal that they are licensees of Ty. Its standard licensing agreement requires the licensee to print on the title page and back cover of its publication the following misleading statement: ``This publication is not sponsored or endorsed by, or otherwise affiliated with Ty Inc. All Copyrights and Trademarks of Ty Inc. are used by permission. All rights reserved.´´"

However, he left it at that. He wrapped up this line of analysis with the statement, "We need not consider whether such a misleading statement might constitute copyright misuse, endangering Ty's copyrights."

Washington Tech Calendar
New items are highlighted in red.
Friday, November 28

The House is in adjournment until December 8.

The Senate is in adjournment until December 9.

The National Press Club will be closed.

Deadline to submit comments to the National Intellectual Property Law Enforcement Coordination Council (NIPLECC) regarding the agenda and mission of the NIPLECC. See, notice in the Federal Register, October 28, 2003, Vol. 68, No. 208, at Pages 61398-61399.

Monday, December 1

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding its Fourth Notice of Proposed Rulemaking [49 pages in PDF] in which it proposes to make spectrum available to federal users that will be displaced from the 1710-1850 MHz band to make it available for advanced wireless services. See, notice in the Federal Register September 2, 2003, Vol. 68, No. 169, at Pages 52156 - 52168. See, also stories titled "FCC Releases NPRM Regarding Allocating Spectrum to DOD to Replace Spectrum Allocated for 3G Services" in TLJ Daily E-Mail Alert No. 694, July 9, 2003, and "FCC Sets Deadlines for Comments Regarding Spectrum Reallocations Relating to 3G Services" in TLJ Daily E-Mail Alert No. 731, September 3, 2003. This is ET Docket No. 00-258 and WT Docket No. 02-8.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Intergraph v. Intel, No. 03-1153. Location: Courtroom 203, 717 Madison Place, NW.

10:30 AM - 3:00 PM. The Federal Communications Commission (FCC) will hold a forum on Voice over Internet Protocol (VOIP) issues. Subsequently, it will issue a Notice of Public Rulemaking (NPRM) "to inquire about the migration of voice services to IP-based networks and gather public comment on the appropriate regulatory environment for these services". See, FCC release of November 6, 2003, and agenda released on November 24, 2003.
  • 10:30 AM. Welcome, and speeches by FCC Commissioners.
  • 11:00 AM. Presentations by FCC staff.
  • 11:15 AM. Panel presentation on technical and market issues. The speakers will be Kevin Werbach (Supernova Group), Charles Giancarlo (SVP/GM of Cisco Systems), Jeff Pulver (, John Hodulik (UBS), and John Billock (COO of Time Warner Cable).
  • 12:15 PM. Break.
  • 1:00 PM. Panel presentation on public policy issues. The speakers will be Michael Gallagher (NTIA), Carl Wood (Commissioner of the California PUC), Charles Davidson (Commissioner of the, Florida PSC), James Crowe (CEO of Level3), Tom Evslin (CEO of ITXC), Jeffrey Citron (CEO of Vonage), and Gregg Vanderheiden (University of Wisconsin).
  • 2:30 PM. Closing statements.

Tuesday, December 2

9:00 AM - 4:30 PM. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) President's Council of Advisors on Science and Technology (PCAST) will hold a meeting that is open to the public. The PCAST's notice in the Federal Register states that the agenda includes the following: "(1) Discuss and, pending the discussion, approve a draft report from its information technology manufacturing competitiveness subcommittee; (2) discuss the preliminary observations and draft recommendations of its workforce education subcommittee; and (3) continue its discussion of nanotechnology and its review of the federal National Nanotechnology Initiative." The notice states both that the meeting will be on December 2 and December 3. Stan Sokul, Executive Director of the OSTP, states that the meeting is on December 2. For more information, contact Stan Sokul at 202 456-6070 or Location: Monticello Ballroom (lower level), Wyndham Washington Hotel, 1400 M Street, NW.

9:00 AM - 12:00 NOON. The Potomac Institute for Policy Studies (PIPS) will host a panel discussion titled "Enabling New Information Technologies in the War on Terrorism -- And Protecting Our Privacy at the Same Time". The scheduled speakers include Robert Popp (DARPA), Dan Gallington (PIPS), Michael Scardaville (Heritage Foundation), Jeff Jonas, and Kim Taipale. To register, contact 703 525-0770 or Location: Room 106, Dirksen Building.

10:15 AM. The Markle Foundation's Task Force on National Security in the Information Age will hold a press briefing on its report titled "Creating a Trusted Information Network for Homeland Security". From 11:30 AM - 1:30 PM there will be a panel discussion. Lunch will be served. RSVP to: or 202 638-4370. For more information, contact Todd McGovern at or 212 713-7633. Location: Russell Caucus Room (SR-325), Russell Building.

4:00 PM. Deadline for the U.S. Telecom Association's (USTA) and CenturyTel to file with the U.S. Court of Appeals (DCCir) their reply to the Federal Communications Commission's (FCC) response to their emergency motion for stay of the FCC's number portability rules.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to SBC Communications' petition requesting that the FCC forbear from applying the terms of 47 U.S.C. § 271(c)(2)(B) to the extent, if any, those provisions impose unbundling obligations on SBC that this FCC has determined should not be imposed on incumbent local exchange carriers pursuant to 47 U.S.C. § 251. See, FCC notice [PDF]. This is WC Docket No. 03-235.

Wednesday, December 3

9:30 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host a panel discussion titled "Should Regulators Set Rates to Terminate Calls on Mobile Networks?" The speakers will be Robert Crandall (Brookings), Greg Sidak (AEI) and Richard Feasey (Vodafone). See, notice. Location: AEI, 12th Floor, 1150 17th Street, NW.

Thursday, December 4

Day one of a two day event titled "21st Annual Institute on Telecommunications Policy & Regulation". See, notice. The price to attend is $1,295.00. Location: International Trade Center, Washington DC.

9:00 AM - 12:30 PM. The Internal Revenue Service's (IRS) Electronic Tax Administration Advisory Committee (ETAAC) will meet. See, notice in the Federal Register, November 7, 2003, Vol. 68, No. 216, at Pages 63192 - 63193. Location: Ritz-Carlton Hotel, Pentagon City, Diplomat Meeting Room, 1250 South Hayes Street, Arlington, VA.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Vernal Ent Inc v. FCC, No. 02-1297. Judges Sentelle, Tatel and Roberts will preside. Location: 333 Constitution Ave. NW.

The Federal Communications Bar Association (FCBA) will host its annual Chairman's Dinner. Location: The Washington Hilton Hotel.

Friday, December 5

Day two of a two day event titled "21st Annual Institute on Telecommunications Policy & Regulation". See, notice. The price to attend is $1,295.00. Location: International Trade Center, Washington DC.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in KERM Inc v. FCC, No. 03-1028. Judges Sentelle, Tatel and Roberts will preside. Location: 333 Constitution Ave. NW.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will hold a meeting. See, FCC notice. Location: FCC, Commission Meeting Room, 445 12th Street, SW.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "Taxes and Regulation: The Effects of Mandates on Wireless Consumers". The speakers will include Anne Boyle (Commissioner of the Nebraska Public Service Commission), Thomas Lenard (PFF), John Muleta (Chief of the FCC's Wireless Telecommunications Bureau), and Paul Rubin (Emory University). Lunch will be served. To register, contact Andrea Knutsen at 202 289-8928 or See, notice. Location: Room 1539, Longworth Building.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Report and Order and Further Notice of Proposed Rulemaking [198 pages in PDF] in it proceeding titled "In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets". The FCC adopted this item on May 15, 2003, but did not release it until October 7, 2003. This is FCC 03-113 in WT Docket No. 00-230. See, TLJ story titled "FCC Adopts Order Allowing Some Secondary Leasing of Spectrum", May 15, 2003, and story titled "FCC Finally Releases R&O and FNPRM in Secondary Spectrum Markets Proceeding" in TLJ Daily E-Mail Alert No. 755, October 8, 2003.

FCC Releases Order Regarding Service Rules for 3G Spectrum

11/25. The Federal Communications Commission (FCC) released its Report and Order [83 pages in PDF] in its proceeding titled "In the Matter of Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1 GHz Bands".

The FCC announced, but did not release, this Report and Order (R&O) on October 16, 2003. See, story titled "FCC Announces Services Rules for 3G Spectrum" in TLJ Daily E-Mail Alert No. 761, October 20, 2003. This R&O is FCC 03-251 in WT Docket No. 02-353.

This R&O containing service rules for Advanced Wireless Services (AWS) in the 1710-1755 MHz and 2110-2155 MHz bands. The R&O states that this proceeding pertains to "broadband access and increasing competition in the provision of such broadband services both in terms of the types of services offered and in the technologies utilized to provide those services."

Third Generation (3G) wireless is another term that has been used to describe the planned use of these bands. The FCC's R&O explains its use of the the terms AWS and 3G. "AWS is the collective term the Commission uses for new and advanced wireless applications, such as voice, data and broadband services provided over a variety of high-speed fixed and mobile networks, and which are popularly referred to as International Mobile Telecommunications-2000 (IMT-2000) or ``third generation´´ (3G) systems. The ``3G´´ nomenclature is based on the popular view that analog cellular systems represent the first generation of advanced wireless devices, that digital cellular and broadband Personal Communications Service systems represent the second, and that the next deployment of wireless technologies (which we include in the collective term ``AWS´´) represents the third generation."

The R&O states that "Licensees in these bands will have the flexibility to provide any fixed or mobile service that is consistent with the allocations for this spectrum. We will license this spectrum under our market-oriented Part 27 rules and, in order to accommodate differing needs, our band plan includes both localized and regional geographic service areas and symmetrically paired spectrum blocks with the pairings being composed of different bandwidths. Our licensing plan will allow the marketplace rather than the Commission to ultimately determine what services are offered in this spectrum and what technologies are utilized to provide these services."

On November 7, 2002 the FCC adopted a Second Report and Order in which it allocated spectrum for advanced services in the 1710-1755, 2110-2150 and 2150-2155 MHz bands. See, story titled "FCC Adopts 3G Order and NRPM" in TLJ Daily E-Mail Alert No. 546, November 11, 2002.

Senators Introduce Bill Related to FSC/ETI Replacement

11/21. Sen. Gordon Smith (R-OR) and Sen. John Breaux (D-LA) introduced S 1922, the "American Manufacturing Jobs Act of 2003", a bill to amend the Internal Revenue Code to comply with World Trade Organization (WTO) rulings that the Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) tax regimes constitute illegal export subsidies.

The Senate Finance Committee has already approved and reported a FSC/ETI replacement bill, S 1637, the "Jumpstart Our Business Strength (JOBS) Act". (See also,  Report No. 108-192.)

Sen. Smith offered an explaination of the difference between his bill, and provisions contained in S 1637. He stated in the Senate that "I am, however, concerned that the domestic manufacturing benefit in S. 1673 is not applied equally to all U.S. manufacturers. This bill includes a provision--a ``haircut''--that provides less of a benefit to companies that also manufacture abroad." (The reference to S 1673 is an error. The correct number is 1637.)

Sen. Smith continued. "For example, a company that has 55 percent of its manufacturing in the United States and 45 percent abroad will calculate its benefit under the bill and then reduce that benefit by a fraction--the numerator of which is the gross receipts from domestic manufacturing over the same derived from worldwide manufacturing. This company thus suffers twice. First, the domestic manufacturing benefit in S. 1673 is less valuable than the benefit currently provided under FSC/ETI. Second, this company's manufacturing benefit is further reduced by the ``haircut'' merely because it also has overseas manufacturing operations in order to be closer to their markets."

He concluded that "I believe that by eliminating the ``haircut'' and providing a tax rate cut for all manufacturers who employ American workers, we can help to revitalize the U.S. manufacturing sector."

The full text of the bill is printed in the Congressional Record, November 21, 2003, at Pages S15416-7. The bill was referred to the Senate Finance Committee. Both Sen. Smith and Sen. Breaux are members of the Committee.

More Bills Introduced

11/21. Rep. Vernon Ehlers (R-MI) introduced HR 3577, an untitled bill to authorize appropriations for the Department of Transportation (DOT) for research and development. The bill would authorize appropriations totaling $2,096,000,000 for fiscal years 2004 through 2009. Section 108 of the bill, which is subtitled the "Intelligent Transportation Systems Act of 2003", pertains to the DOT's Intelligent Transportations Systems (ITS), which the bill defines as "electronics, communications, or information processing used singly or in combination to improve the efficiency or safety of a surface transportation system". The bill was referred to the House Science Committee, of which Rep. Ehlers is a member.

11/20. Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT) introduced S 1911, a bill containing several amendments to the Trade Act of 1974, the Andean Trade Preference Act, and the Caribbean Basin Economic Recovery Act, relating to violations of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Section 1 of the bill contains language that is also in Section 3751 of HR 3521, the "Tax Relief Extension Act of 2003", which the House passed by voice vote on November 20. See, story titled "House Tax Bill Amends Special 301 Provisions" in TLJ Daily E-Mail Alert No. 785, November 24, 2003. The bill was referred to the Senate Finance Committee. Sen. Hatch is a member.

About Tech Law Journal
Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for subscribers with multiple recipients. Free one month trial subscriptions are available. Also, free subscriptions are available for journalists, federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2003 David Carney, dba Tech Law Journal. All rights reserved.