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January 12, 2004, 9:00 AM ET, Alert No. 813.
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Supreme Court Grants Cert in Trademark Case

1/9. The Supreme Court granted certiorari in KP Permanent Make-Up v. Lasting Impressions. See, Order List [PDF]. This is a a trademark dispute involving companies that sell permanent makeup.

KP Permanent Make-Up and Lasting Impressions are competitors in the permanent make-up business. Permanent make-up involves injecting pigment into the skin. Lasting Impressions registered a trademark with the U.S. Patent and Trademark Office that consists of the term "micro colors" set in white within a black box. This is Registration No. 1,769,592. KP also uses the term "micro colors" on its products and brochures.

KP filed a complaint in U.S. District Court (CDCal) against Lasting Impressions seeking a declaratory judgment that it did not infringe. Lasting Impressions counterclaimed alleging trademark infringement. The District Court concluded that the term "micro colors" is generic, or if not generic, descriptive. It further held that neither party had acquired secondary meaning in the term "micro color." Finally, it held that that KP's use was protected under the "fair use" defense, 15 U.S.C. § 1115(b)(4).

On April 30, 2003, the U.S. Court of Appeals (9thCir) issued its opinion [20 pages in PDF] reversing and remanding.

On the genericness issue, the Appeals Court held that "A reasonably minded jury could not conclude from the evidence produced that ``micro colors´´ is a generic term" and "KP's motion for summary judgment cannot be upheld on this ground. Furthermore, Lasting’s motion for summary adjudication on the issue of genericness should be granted."

On the issue of descriptiveness, the Appeals Court held that "Lasting's incontestable registration is conclusive evidence that the mark is non-descriptive or has acquired secondary meaning, and there is no need to require a showing of secondary meaning in the term ``micro colors´´ apart from the mark. Therefore, KP’s motion for summary judgment cannot be upheld on this ground."

Finally, on the fair use issued, the Appeals Court held that "the fair use defense claimed by KP is a classic fair use defense that requires that there not be a likelihood of confusion. Because there are genuine issues of material fact concerning the likelihood of confusion, KP’s motion for summary judgment cannot be upheld on this ground."

This case is KP Permanent Make-Up, Inc. v. Lasting Impressions, Inc. et al, Supreme Court No. 03-409, on petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit, No. 01-56055.

Court of Appeals Dismisses KERM Petition for Review for Lack of Standing

1/9. The U.S. Court of Appeals (DCCir) issued its opinion [8 pages in PDF] in KERM v. FCC, a case regarding standing to challenge enforcement orders of the Federal Communications Commission (FCC). The Appeals Court dismissed KERM's petition for review for lack of standing.

KERM filed a complaint with the FCC alleging that KAYH-FM, a non-commercial educational broadcaster, unlawfully aired 11 announcements that constituted commercial advertisements in violation 47 U.S.C. § 399b(b)(2). The FCC found that 10 of the 11 announcements did not violate the statute, and that no enforcement action was warranted with respect to the single remaining announcement. KERM then filed the present petition for review with the Court of Appeals.

The Court of Appeals did not address the merits of the FCC enforcement decision. Rather, it found that KERM lacked standing to challenge the order under Article III of the Constitution, and therefore dismissed the petition for review.

The Court of Appeals wrote that "KERM describes itself as a ``listener´´ and ``competitor´´ of KAYH, suggesting that it has standing on these bases. There is no doubt that both listeners and competitors may, in appropriate cases, demonstrate standing to challenge actions of the FCC under the Communications Act."

However, the Court wrote that "KERM cannot prevail on a theory of listener standing because it challenges only a discrete, past injury and alleges no continuing violations." Also, "KERM fares no better under a theory of competitor standing. A party seeking to establish standing on this basis must demonstrate that it is ``a direct and current competitor whose bottom line may be adversely affected by the challenged government action.´´" (Citations omitted.)

The Court added that "KERM might have satisfied the requirements of competitor standing if it had introduced evidence that KAYH’s broadcast of the disputed announcements resulted in lost advertising revenues for KERM or otherwise adversely affected KERM's financial interests. KERM offered no such evidence."

This case is KERM, Inc. v. FCC and USA, No. 03-1028, a petition for review of a final order of the FCC.

7th Circuit Addresses Market Power and Distinct Markets

1/9. The U.S. Court of Appeals (7thCir) issued its opinion [10 pages in PDF] in Menasha v. New America Marketing In-Store, an antitrust case involving the question of whether at the shelf coupon dispensers in stores constitute a distinct market.

New America makes at the shelf coupon dispensers, and enters into exclusive contracts with retailers. Menasha, which also dispenses at the shelf coupons, filed a complaint in U.S. District Court (NDIll) against New America alleging violation of federal antitrust laws. The District Court granted summary judgment to New America, and the Appeals Court affirmed. New America does not have market power because at the shelf coupon dispenses are not a distinct market. There are many substitutes for at the shelf dispensers.

This case is Menasha Corporation v. New America Marketing In Store, Inc. and New America Marketing In-Store Services, Inc., U.S. Court of Appeals for the 7th Circuit, No. 03-1302, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 00 C 1895, Judge Harry Leinenweber presiding.

Verizon's Seidenberg Addresses Broadband

1/8. Ivan Seidenberg, Ch/CEO of Verizon Communications, gave a speech at the Consumer Electronics Show in Las Vegas, Nevada. He mostly addressed Verizon's plans, investments, and products. But, he also touched on regulatory issues.

He stated that "Of course, for broadband to reach its full potential, lots of things have to go right. We've gotten it pretty much right in the wireless world, where -- for the most part -- government has stayed out of the way of capital formation and innovation. We've gotten it more or less right for the large business market, where Enterprise customers have lots of competitors vying to deliver the latest technology."

He continued that "And we can get it right in the consumer market, too, if we put the customer in the center of the picture. As the Consumer Electronics Association has noted, Verizon's recent legal victory against the Recording Industry Association of America is one example of ``getting it right´´ by standing up for consumer rights and technological innovation."

That is, on December 19, 2003 the U.S. Court of Appeals (DCCir) issued its opinion [16 pages in PDF] in RIAA v. Verizon, reversing the District Court, and holding that a Section 512(h) subpoena may only be issued to an ISP that is engaged in storing on its servers material that is infringing or the subject of infringing activity. This opinion deprives the RIAA and copyright holders of an expeditious and inexpensive means for acquiring the names of P2P infringers from their ISPs. See, story titled "DC Circuit Reverses in RIAA v. Verizon", also published in TLJ Daily E-Mail Alert No. 804, December 22, 2003.

Seidenberg then added, "And the federal government can take another big step by clearing the path, once and for all, for broadband investment -- as urged by the High-Tech Broadband Coalition and the C.E.A. -- so we can get this vital technology in customers' hands."

The High Tech Broadband Coalition (HTBC), of which the CEA is a member, has filed many comments with the FCC on this subject. See especially, comment [79 pages in PDF] filed on April 5, 2002, and related TLJ story titled "Broadband Coalition Advocates Relief from Unbundling Requirements" in TLJ Daily E-Mail Alert No. 403, April 4, 2002. See also, comment [16 pages in PDF] submitted on November 6, 2003.

IBM Receives Wells Notice from SEC

1/8. IBM stated in a release that "it has received a ``Wells Notice´´ from the staff of the U.S. Securities and Exchange Commission (SEC) in connection with the SEC's investigation of a customer of IBM's Retail Stores Solutions unit, which sells point-of-sale products." IBM added that the IBM customer is Dollar General Corporation.

IBM offered this explanation of a Wells notice. "The Wells Notice notifies IBM that the SEC staff is considering recommending that the SEC bring a civil action against IBM for possible violations of the U.S. securities laws relating to Dollar General's accounting for a specific transaction, by participating in and aiding and abetting Dollar General's misstatement of its 2000 results. In that transaction, IBM paid Dollar General $11M for certain used equipment as part of a sale of IBM replacement equipment in Dollar General's 2000 fourth fiscal quarter."

IBM elaborated that "Under the SEC's procedures, IBM has the opportunity to respond to the SEC staff before the staff makes a formal recommendation regarding whether any action should be brought against IBM by the SEC."

People and Appointments

1/9. Rep. Jim Turner (D-TX) announced that he will not run for re-election. He is currently the ranking Democrat on the House Select Committee on Homeland Security.

1/9. President Bush named Matthew Kirk Deputy Assistant to the President for Legislative Affairs -- Senate. He replaces Ziad Ojakli who will be leaving the White House for the private sector. See, White House release.

1/9. Nancy Jardini was named Chief of Criminal Investigation (CI) at the Internal Revenue Service (IRS). She replaces David Palmer, who just retired. See, IRS release.

1/9. James McCue was named President of Comcast Capital Corporation. He replaces Abram Patlove. See, Comcast release.

1/6. Jan Jaferian was named Intellectual Property Business President of Lucent Technologies, effective immediately. She was previously Vice President and General Manager of Xerox Corporation's Intellectual Property Operations. See, Lucent release.

12/29. The law firm of Wiley Rein & Fielding announced the selection of new partners, including Helgi Walker and Jennifer Hindin. Walker was of counsel to the firm. Before that, she was an Associate Counsel in the Office of White House Counsel. Before that she an election attorney in Florida for the Bush Cheney campaign. Prior to that, she was Senior Legal Advisor and Chief of Staff to former FCC Commissioner Harold Furchtgott-Roth, the FCC's free market economist. Walker's background also includes working as an aide to Sen. Strom Thurmond (R-SC), a clerk to Judge Harvey Wilkerson (USCA, 4th Cir), a clerk to Justice Clarence Thomas, and an associate at Gibson Dunn and Crutcher. Hindin focuses on regulatory, policy and transactional matters before the FCC and International Telecommunication Union (ITU), particularly for satellite.

Washington Tech Calendar
New items are highlighted in red.
Monday, January 12

The House is in adjournment. (It will convene on January 20, 2004.)

The Senate is in adjournment. (It will convene on January 20, 2004.)

The Supreme Court will return from the recess that it began on December 15, 2003.

The Supreme Court will hear oral argument in Nixon v. Missouri Municipal League, and related petitions, regarding 47 U.S.C. § 253(a) and state statutes that prohibit political subdivisions from offering telecommunications services. See, story titled "Supreme Court Grants Certiorari in Nixon v. Missouri Municipal League" in TLJ Daily E-Mail Alert No. 687, June 25, 2003, and "Briefs Filed With Supreme Court in Nixon v. Missouri Municipal League" in TLJ Daily E-Mail Alert No. 776, November 11, 2003. Location: 1 First St., NW.

2:00 PM. The Department of Homeland Security's Information Analysis & Infrastructure Protection (IAIP) Directorate will host a meeting with private sector leaders regarding protective security measures against terrorism. For more information, contact 202 282-8010. Location: Washington Convention Center Ballroom.

Deadline to submit comments to the Department of Commerce's (DOC) Bureau of Industry and Security (BIS), which is also known as the Bureau of Export Administration (BXA), regarding its notice of proposed rulemaking (NPRM) regarding amending the Export Administration Regulations (EAR) to implement a revised version of the BIS's Simplified Network Application Processing (SNAP+) system. This proposed rule also would mandate use of SNAP+ for all filings of Export License applications (except Special Comprehensive Licenses), Reexport Authorization requests, Classification requests, Encryption Review requests, and License Exception AGR notifications, unless the BIS authorizes paper filing for a particular user or transaction. See, notice in the Federal Register, November 12, 2003, Vol. 68, No. 218, at Pages 64009-64023.

Tuesday, January 13

9:00 AM. The North American Numbering Council (NANC) will meet. See, notice in the Federal Register, December 2, 2003, Vol. 68, No. 231, at Page 67441. Location: FCC, 445 12th Street, SW, Room TW-C305.

TO BE DECIDED WITHOUT ORAL ARGUMENT. 9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Carol De La Hunt v. FCC, No. 03-1029. Judges Edwards, Roberts and Williams will preside. Location: 333 Constitution Ave. NW.

3:00 - 6:00 PM. The National Infrastructure Advisory Council (NIAC) will meet. The NIAC advises the President on the security of information systems for critical infrastructure supporting other sectors of the economy, including banking and finance, transportation, energy, manufacturing, and emergency government services. For more information, contact Nancy Wong at 202 482-7488. See, notice in the Federal Register, December 24, 2003, Vol. 68, No. 247, at Pages 74624 - 74625. Location: Room 207, Washington Convention Center, 801 Mount Vernon Place, NW.

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host a Continuing Legal Education (CLE) program titled "FCC Equipment Regulation". The speakers will be Henry Goldberg (Goldberg Godles), Mitchell Lazarus (Fletcher Heald & Hildreth), Richard Fabina (FCC's Office of Engineering and Technology), Cathy Zima (FCC's Wireline Competition Bureau), and Brian Butler (FCC's Enforcement Bureau). The prices to attend range from $50 to $125. For more information, contact Mitchell Lazarus at 703 812-0440 or See, notice. Location: Skadden Arps, 700 14th Street, NW, 11th Floor.

Wednesday, January 14

10:30 AM - 12:00 NOON. The Center for Strategic and International Studies (CSIS) will host a program titled "Trade With China After WTO". The speakers will be Robert Cassidy (former Assistant U.S. Trade Representative) and Tian Jun (Minister Counselor for Economic Policy, Embassy of China). See, notice [PDF]. For more information, contact Mark Schoeff at 202 775-3242 or Location: CSIS, 1800 K Street, NW, B-1 Conference Level.

12:30 PM. Federal Communications Commission (FCC) Chairman Michael Powell will give a luncheon speech. For information about prices and reservations, call 202 662-7501. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Report and Order Further Notice of Proposed Rulemaking [72 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Content Protection". This item is FCC 03-273 in MB Docket 02-230. This FNPRM seeks comment regarding a permanent approval mechanism for content protection and recording technologies to be used in conjunction with device outputs. For more information, contact Rick Chessen or Susan Mort at or 202-418-7200.

EXTENDED TO FEBRUARY 13. Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking regarding digital plug and play compatibility. This item is FCC 03-225 in CS Docket 97-80 and PP Docket 00-67. See, notice in the Federal Register, November 28, 2003, Vol. 68, No. 229, at Pages 66776 - 66781. See, order [PDF] extending deadlines.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding revisions to the FCC's high cost universal service support mechanism. This is FCC 03-249 in CC Docket No. 96-45. This is also known as the "10th Circuit Remand". See, notice in the Federal Register, December 15, 2003, Vol. 68, No. 240, at Pages 69641 - 69647. See also, stories titled "FCC Announces Order on Remand Regarding High Cost Universal Service Support Mechanism" in TLJ Daily E-Mail Alert No. 761, October 20, 2003, and "FCC Publishes Notices Regarding 10th Circuit Universal Service Remand" in TLJ Daily E-Mail Alert No. 800, December 16, 2003.

Thursday, January 15

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

Friday, January 16

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Advanced Communications Corp. v. FCC, No. 03-1082. Judges Rogers, Garland and Williams will preside. Location: 333 Constitution Ave. NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) in response to its Change Notice [2 pages in PDF] regarding Federal Information Processing Standard (FIPS) 180-2, the Secure Hash Standard. Comments should be addressed to See also, FIPS 180-2 [75 pages in PDF], released on August 1, 2002.

More News

1/8. Adrian Lamo pled guilty in U.S. District Court (SDNY) to one count of hacking into a computer system. The Department of Justice stated in a release that the one count information, filed on January 8, alleges that "on February 26, 2002, LAMO hacked into the New York Times' internal computer network and accessed a database containing personal information (including home telephone numbers and Social Security numbers) for more than 3,000 contributors to the New York Times' Op-Ed page." Lamo did not try to conceal his entry. Rather, he added his name and phone number to the database, listing his expertise as "computer hacking, national security, communications intelligence". The previously filed criminal complaint recites the New York Times intrusion. It also alleges intrusions into the computer systems of Yahoo, Microsoft, MCI WorldCom, SBC, and Cingular.

1/9. The Joe Lieberman for President campaign released a campaign statement regarding protecting personal privacy.

1/9. The Progress and Freedom Foundation (PFF) released a paper [18 pages in PDF] titled "Principles for Texas Communications Law". It was written by Raymond Gifford and Adam Peters of the PFF. The paper argues that "In its aims, state law reflects the legacy purposes of regulation: to protect, and then control a franchised monopoly carrier through pervasive oversight of the rates, terms and service packages that are offered. While this legal legacy served its purpose, its remnants now often impede the current aim of communications law: to transition from a regulated monopoly to an open, competitive environment." The paper focuses on the state of Texas. It urges the Texas PUC to allow retail rates to "gravitate towards their true price, with accompanying reductions in intrastate access (and long-distance), vertical service, and business rates."

1/8. The Software and Information Industry Association (SIIA) wrote a letter [3 pages in PDF] to Secretary of Education Ron Paige regarding implementation of the No Child Left Behind Act. The SIIA argues that "many NCLB goals and requirements can not be adequately achieved without technology tools."

1/9. The Recording Industry Association of America (RIAA) announced in a release "a $200,000 settlement of claims involving the unauthorized pressing of vinyl by United Record Pressing LLC that allegedly infringed copyrights owned by RIAA members."

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