1/29. The California Court of Appeal (4/3) issued its divided opinion [42 pages in MS Word] in Thanh Thuy Vo v. City of Garden Grove, a challenge to a municipal ordinance requiring cyber cafes to obtain conditional use permits, and to comply with regulations specific to cyber cafes, such as curfews for minors, minimum numbers of employees, weekend security guards, and video surveillance.

The trial court held that much of the ordinance was unconstitutional under the First Amendment of the U.S. Constitution, and Article I, Sections 1 and 2, of the California Constitution. The Court of Appeal affirmed the injunction of the conditional use permit requirement, but reversed the injunction of the regulations.

One provision of the regulations required video surveillance in cyber cafes (of patrons' activities, but not the content of their internet communications). The majority upheld this. The dissent called this "Orwellian".

The Court of Appeal also upheld regulations setting a daytime curfew for children, setting minimum numbers of employees at cyber cafes, requiring a security guard on Friday and Saturday nights. However, the Court found unconstitutional the requirement that cyber cafes obtain a conditional use permit when the process left some discretion with the permit issuing official.

Background. The City of Garden Grove, in Orange County, in southern California, experienced both a rapid growth in the number of cyber cafes, and in the amount of criminal activity in or near some, but not all, of these cyber cafes. There was a murder in front of one cyber cafe.

The City then passed an ordinance requiring the operators of cyber cafes to obtain a conditional use permit and to comply with certain regulations.

Thanh Thuy Vo, and the owners of four other cyber cafes in Garden Grove, filed a complaint in state court seeking damages pursuant to 42 U.S.C. § 1983 for the deprivation of rights, privileges and immunities secured by the federal and state Constitutions, declaratory relief concerning the validity of the ordinance, and a temporary restraining order (TRO), preliminary injunction and permanent injunction against enforcement of the ordinance.

The trial court granted a TRO. Meanwhile, the city amended its ordinance, and some of the cyber cafe owners settled with the city.

Garden Grove's Ordinance. The ordinance under review by the Court of Appeal in this case includes the following provisions.

First, it requires cyber cafes to apply for a conditional use permit (CUP).

Second, it provides that "Minors may not enter or remain in a CyberCafe establishment on any day after 10 p.m.; or between the hours of 8 a.m. and 3 p.m. during those weekdays when the public school system within the City jurisdiction is open and classes are being conducted." However, it adds that "This time restriction shall not apply when a minor is accompanied by a parent or guardian (with the guardian being able to authenticate guardianship)." (Parentheses in original.) Finally, it provides that "The hours of operation shall be limited to 7 a.m. to 1 a.m., daily; excepting Friday and Saturday nights wherein hours of operation shall be limited to 7 a.m. to 2 a.m."

Third, it provides minimum requirements for the number of employees on the premises (at least one, and two if the cyber cafe has 30 or more computers), and requires licensed, uniformed security guards on Friday and Saturday nights.

Fourth, the ordinance requires video surveillance, with data saved for 72 hours. The ordinance does not require that the city have access to the surveillance data, or that the cyber cafes capture information about the content of internet communications.

Court of Appeal. The trial court issued a preliminary injunction, enjoining both the CUP requirement, and various regulations. This appeal followed. While the complaint pled several claims, the main issue on appeal is application of freedom of speech to the municipal ordinance.

First, the Court of Appeal held that an ordinance affecting cyber cafes does implicate the First Amendment. It wrote that cyber cafes "provide their customers with access to the Internet, allowing users to communicate privately by e-mail, acquire vast amounts of information from the World Wide Web", and like book publishers, video arcades, cabarets and movie theaters, are entitled to First Amendment protection. The Court wrote that "We perceive no rationale by which CyberCafes should be accorded less protection than any of these older or more traditional businesses."

The Court continued that the regulations regarding curfews, employees and videotape surveillance regulate the time, place and manner of speech, while the CUP provision requires the permission of the government before engaging in activity protected by the First Amendment.

The Court of Appeal wrote that "Irreparable harm from enforcement will not be recognized where the time, place and manner restrictions on First Amendment activities are narrowly drawn and adopted for legitimate governmental reasons, and where the restrictions are not otherwise constitutionally infirm."

Conditional Use Permits. The Court of Appeal wrote, citing the Supreme Court of California, that "A long line of decisions has held unconstitutional ordinances governing the issuance of licenses to conduct First Amendment activities where administrative officials were granted excessive discretion in determining whether to grant or deny the license."

The Court continued that "The city also asserts it ``has no control whatsoever over the websites accessed by patrons of cyber cafès.´´ But it does. Under the ordinance, the zoning administrator has unfettered discretion in deciding what conditions to impose when issuing a CUP. The city does not identify how or in what manner that discretion is limited, and without objective standards, the zoning administrator retains the power to require software filters restricting access to any designated website." Hence, the Court affirmed the trial court's injunction of enforcement of the CUP requirement.

Curfews at Cyber Cafes. The Court reasoned that "Because the daytime curfew restricts the ability of minors to communicate on the Internet at CyberCafe locations during seven consecutive hours each school day, we review this regulation to determine whether it is a reasonable time, place, and manner restriction on First Amendment activities."

The Court elaborated that "a reasonable time, place, and manner restriction on First Amendment activities is constitutionally permissible if it is content neutral, is narrowly tailored to serve a significant governmental interest, and ample alternative channels for communication remain open."

It concluded that the daytime curfew "is a content-neutral, narrowly tailored restriction that advances a significant governmental interest, leaving open ample alternative means of communication, and that the restriction does not restrict more speech than is necessary to advance the city’s legitimate interest." The Court reversed the trial court's injunction of the daytime curfew.

Employees and Guards at Cyber Cafes. Here too the Court of Appeal reversed the injunction of the trial court. It wrote that "The impact on First Amendment activities of these staffing and security guard requirements is tenuous at best. Some would say there is no impact at all. But the ordinance does somewhat restrict the manner in which First Amendment activities may be conducted. Thus, communication over the Internet in a CyberCafe is prohibited unless conducted on premises having the required number of employees and, during specified hours, a security guard. We review these requirements to determine whether they are content-neutral, narrowly tailored manner restrictions, which leave open alternative channels for communications."

The Court noted that the staffing requirements make no reference to the content of any communication and are thus content neutral. It concluded that "Given the well-demonstrated criminal activity observed at CyberCafes, and their tendency to attract gang members, the court should not have second-guessed the city council’s judgment and discretion. The staffing requirements are content-neutral and are narrowly tailored to serve a significant governmental interest. Ample alternative means of communication remain open, and the requirements are not substantially broader than necessary. Accordingly, the court abused its discretion by enjoining enforcement of the employee and security guard requirements."

Video Sureveillance at Cyber Cafes. The Court of Appeal reversed the trial court's injunction of the video surveillance requirement of the ordinance. First, the Court reviewed the facts that it found pertinent. "The ordinance does not require the owner to allow inspection of the tape upon demand. For enforcement purposes, the city can assure itself the video surveillance system is operational. That is all the ordinance requires. At the hearing on the preliminary injunction, counsel for the city agreed with this interpretation, and acknowledged the city could not take possession of the video tape without legal process such as a search warrant." It added that "The ordinance does not require video surveillance of e-mail or images from the Internet appearing on the customer's computer screens."

The Court then concluded that "the video surveillance requirement is a content-neutral manner restriction, narrowly tailored to advance the city's legitimate interest in public safety and deterrence of gang violence."

The Court then went on to reject the cyber cafes' state constitution privacy claim. Basically, it wrote that customers do not have an expectation of privacy in a public retail establishment.

Justice Raymond Ikola wrote the 29 page opinion of the Court. Justice William Bedsworth joined.

Dissent. Justice David Sills wrote a 13 page opinion in which he dissented in part. He called the majority ruling "Orwellian".

He wrote that "I respectfully dissent to the most important part of the majority opinion, in which it holds that Garden Grove may require video surveillance in every cybercafe in the city, regardless of whether that cybercafe has experienced any gang-related violence, or, indeed, even any problems of the most minor nature."

He pointed out that the evidence before the trial court demonstrated that the gang violence occurred at only a small subset of the Garden Grove cyber cafes.

He argued that "cybercafes deserve the protection of a strict scrutiny standard when regulations implicating privacy and freedom of speech are imposed upon them. But even if a strict scrutiny standard is not appropriate, a balancing standard certainly is. The majority have not even attempted a balancing of the respective interests. Rather, the essence of their opinion is nothing less than almost slavish deference to an unsupported and illogical conclusion of the city’s police chief and city council."

Judge Sills wrote with wrath. "Do my colleagues not realize the -- there is no other word for it -- Orwellian implications of their ruling today? They approve an ordinance which literally forces a ``Big Brother´´ style telescreen to look over one's shoulder while accessing the Internet."

"Sorry, I can't go along with this emasculation of our state Constitutional right to privacy and with the concomitant infringement on the rights of freedom of speech and press."

He concluded that, "This is the way Constitutional rights are lost. Not in the thunder of a tyrant's edict, but in the soft judicial whispers of deference."

Final Notes. This case is Thanh Thuy Vo, et al. v. City of Garden Grove, Court of Appeal, Fourth Appellate District, Division Three, Appeal No. G032058, an appeal from the Superior Court for Orange County, Super. Ct. No. 02CC13030, Judge Dennis Choate presiding.

Rep. Loretta Sanchez (D-CA) represents Garden Grove in the House of Representatives. She is also a Co-chair of the Congressional Caucus on Vietnam. She is a frequent critic of Vietnam's suppression of freedom of speech, and has condemned the government of Vietnam for it treatment of cyber cafes. (See, October 1, 2003 release.) Perhaps there is some irony, that now, Thanh Thuy Vo and others find their cyber cafes regulated by the government in Rep. Sanchez's home town, albeit, with a lighter regulatory touch than in Vietnam.

2/2. The National Cable Telecommunications Association (NCTA) released a paper [47 pages in PDF] titled "Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition". It proposes a regulatory framework for voice over internet protocol (VOIP). The NCTA finds that much of the regulation of PSTN telecommunications regulation ought to be applied in some manner to certain VOIP services.

The NCTA paper states that "any VoIP service that meets a baseline test as proposed herein can, and should, meet certain public policy responsibilities and requirements".

The paper provides a "baseline test". It states that its "proposed four-prong test requires that a VoIP service (1) use North American Numbering Plan (``NANP´´) resources, (2) receive calls from -- or terminate them to -- the public switched telephone network (``PSTN´´), (3) represent a possible replacement for POTS, and (4) use Internet Protocol transmission between the service provider and the end user customer, including use of an IP terminal adapter and/or IP-based telephone set."

Then, the NCTA paper states that the regulatory regime that should be imposed upon these VOIP services includes "the Communications Assistance for Law Enforcement Act (``CALEA´´), the offering of 911/E911, access for the disabled, and appropriate contributions to universal service."

In addition, it states that "generally applicable consumer protection rules that apply to all businesses should apply to VoIP service providers. These include such requirements as ``do not call´´ and ``do not mail.´´"

The paper also addresses intercarrier compensation. It states that the FCC has issued a notice of proposed rulemaking to revise its intercarrier compensation rules. The NCTA paper states that "the new rules should apply to VoIP-based services that utilize the PSTN as well".

The NCTA also elaborates on universal service in the context of VOIP. It begins by stating that "regulators should expect VoIP services that make use of NANP resources to ultimately contribute to federal and state universal service programs on a par with other contributors."

But it adds that there is a "need to modify the current universal service contribution mechanism, particularly with respect to VoIP services. Under the current contribution mechanism, assessments are based on interstate telecommunications revenues. Applying this mechanism to VoIP service would be fraught with difficulty for several reasons."

"First, because most consumer VoIP services today are offered without regard to interstate and intrastate distinctions, arbitrary judgments would be required as to which portion of VoIP service revenue is interstate and which is intrastate. Second, because the regulatory classification of VoIP service has not been determined, an arbitrary judgment would be required as to what portion of VoIP revenue is telecommunications revenue." The NCTA paper concludes that the "best solution to this problem would be the adoption of a numbers-based contribution mechanism."

The NCTA paper then addresses those regulatory regimes that should not be imposed upon these VOIP services. It states that "there are a number of legacy utility requirements that should not be imposed on VoIP service providers. Most such requirements date from the era of a single provider of phone service and are inappropriate for competitors using nascent technologies that offer alternatives to incumbent providers. In particular, a number of legacy requirements relate to billing, payment, credit and collection, and quality of service standards. Competitive marketplace forces, rather than prescriptive rules, can address these issues much more effectively for non-incumbent providers of VoIP services. Regulators should make a comprehensive effort to review and eliminate such regulatory requirements for VoIP services."

The paper also states the the VOIP regulatory framework should provide certain rights to these VOIP service providers. It states that "VoIP service providers, particularly facilities-based providers, do, however, require certain rights irrespective of whether the provider's service is ultimately determined to be an ``information service,´´ a ``telecommunications service," or another type of service."

It states that "These rights relate generally to interconnection and the exchange of traffic, the right to obtain telephone numbers and have them published in telephone directories, the right to access the facilities and resources necessary to provide VoIP customers with full and efficient 911/E911 services, the right to be compensated fairly for terminating traffic delivered from other entities and the right to non-discriminatory access to universal service support."

And finally, "facilities-based VoIP providers need access to poles, ducts, conduits and rights-of-way, regardless of the ultimate regulatory classification of VoIP services."

See also, NCTA release.

1/30. The U.S. Court of Appeals (11thCir) issued its opinion [PDF] in La Grasta v. First Union Securities, a class action securities fraud case involving the defense that the claim is time barred. The stock at issue is Ask Jeeves, Inc.

Investors who purchased the stock of Ask Jeeves filed a complaint in U.S. District Court (MDFl) against First Union Securities (now Wachovia Securities) alleging securities fraud pursuant to Section 10b of the Securities Exchange Act, and Rule 10b-5 thereunder.

Ask Jeeves is an online research company whose stock soared at the height of the tech boom. First Union Securities' (FUS) analyst issued "strong buy" recommendations. The plaintiff investors allege that the analyst inflated the price of the stock while acting under an undisclosed conflict of interest -- that FUS was trying to obtain investment banking business from Ask Jeeves, while at the same time providing unbiased analysis of the company. Plaintiffs allege that this is fraud within the meaning of Section 10b and Rule 10b-5.

FUS filed a Rule 12(b)(6) motion to dismiss for failure to state a claim. It argued that the claim is time barred -- that is, that the investors waited too long to bring the suit -- and that the plaintiffs did not sufficiently allege loss causation. The District Court ruled that the claim was time barred, and did not reach the causation issue. This appeal followed.

The Court of Appeals wrote that "A cause of action for securities fraud under § 10(b) of the Act and Rule 10b-5 must be brought within one year of ``discovery of the facts constituting the violation.´´ ... In this circuit, discovery occurs ``when a potential plaintiff has inquiry or actual notice of a violation.´´ ... Inquiry notice, in turn, is ``the term used for knowledge of facts that would lead a reasonable person to begin investigating the possibility that his legal rights had been infringed.´´" (Citing Theoharous v. Fong, 256 F.3d 1219 (11th Cir. 2001).)

The plaintiffs filed their complaint in this case on May 14, 2001. The question turns, therefore, on whether the plaintiffs were on inquiry notice before May 14, 2000.

In December of 1999, the lead plaintiffs bought 1,000 shares at $134.88 per share, and 1,000 shares at $124.68 per share. Other investors in the class bought at prices ranging from $78 to $134 per share. As the price later tumbled, FUS's analyst continued to give "strong buy" recommendations.

By April of 2000 the price of Ask Jeeves stock had dropped to $24. The District Court found that this was sufficient to conclude that the plaintiffs were on inquiry notice of the alleged fraud more than one year before the filing of the complaint.

The Court of Appeals disagreed. It held that the complaint was not necessarily time barred on its face, and remanded to the District Court for further discovery on the issue. The Court of Appeals also declined to address the causation issue.

This case is Nicholas La Grasta, et al. v. First Union Securities, Inc., U.S. Court of Appeals for the 11th Circuit, No. 02-16215, an appeal from the U.S. District Court for the Middle District of Florida, D.C. No. 2:01-cv-251-FtM-29DNF.

2/2. The Center for Democracy and Technology (CDT) released a paper [7 pages in PDF] titled "Unlicensed Fraud: How bribery and lax security at state motor vehicle offices nationwide lead to identity theft and illegal driver’s licenses".

The CDT conducted its investigation of fraud in state departments of motor vehicles merely by searching for news stories with the Google search engine, and then reviewing those stories. However, it found "23 cases of publicly reported fraud or lax security in 15 different states".

It found that "Thousands of fraudulent driver's licenses were issued through bribed state employees in 2003." It also found that state officials have sold drivers license data, and that thieves have stolen drivers license data.

The CDT then commented that "Many individuals continue to call for a national ID card or ``strengthened´´ driver's licenses using biometric information such as digital fingerprints to try to better secure the license. Yet, these programs do not even begin to address the most basic issue of rampant fraud in the system. As with many programs, technologies for providing better and more secure licenses are only as strong as the management procedures that utilize them. In fact, creating a nationally linked system without first reducing fraud would only increase pressure and incentives for abuses of the system."

The CDT offered several recommendations. For example, it wrote that the "Congress should require the General Accounting Office (GAO) to build an internal and external fraud and security index and rank the states and their improvements in each area."

It also stated that "It is time for the federal government to get tough and raise the federal offense for a crime that affects nationwide security. This will allow the federal government to bring cases where states have failed to act."

2/2. The European Commission (EC)  issued a release that states that the EC proposes the establishment of a Community Patent Court.

The release states that "The European Commission has presented proposals for two Council Decisions establishing a Community Patent jurisdiction, under the aegis of the European Court of Justice, to allow the resolution of disputes within the future Community Patent system, in particular those on infringements and on the validity of Community Patents. Under the proposals, the jurisdiction of the Court of Justice would be exercised by a new Community Patent Court. The new system would mean that judgements over Community Patent rights would be effective throughout the EU, avoiding the expense, inconvenience and confusion that can occur when judgements in several different national courts are required."

Frits Bolkestein (at right), the Internal Market Commissioner, stated that "To maximise the benefits of the Community Patent, we need a single Community Patent Court, under the ultimate jurisdiction of the European Court of Justice, so that disputes are judged with EU-wide effect. I am confident the Council will adopt the necessary decisions quickly, as broad agreement in principle was already reached at the March Competitiveness Council."

Bolkestein added, "But of course, setting up the jurisdictional arrangements without finalising adoption of the Community Patent Regulation itself is about as useful as a new pair of skis in the desert. So above all I hope the Council will agree on the final points of detail on the Community Patent still at issue and adopt the Regulation. Europe's companies have been crying out for too long for access to pan-European patent protection at reasonable cost with minimum red-tape and maximum legal certainty."

The EC release elaborates that "The first proposal presented by the Commission would confer on the Court of Justice formal jurisdiction concerning certain disputes over Community Patents, in particular those concerning alleged infringements of patents and challenges to the validity of patents."

"The second proposal would establish the Community Patent Court, whose seven judges would be appointed by the Council of Ministers, to exercise the Court of Justice's jurisdiction on its behalf. It also sets up a specialised chamber within the Court of First Instance to hear appeals against the Community Patent Court's judgements. In exceptional cases, a decision of the Court of First Instance could be subject to review by the Court of Justice."

See, document titled "Proposal for a Council Decision conferring jurisdiction on the Court of Justice in disputes relating to the Community patent" and document titled "Proposal for a Council Decision establishing the Community Patent Court and concerning appeals before the Court of First Instance".

See also, the EC's web page titled "Community Patent".

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

Presidential primaries will be held in the states of Arizona, Delaware, Missouri, Oklahoma, and South Carolina. New Mexico will hold presidential caucuses.

9:30 AM. The Senate Armed Services Committee will hold a hearing on President Bush's defense authorization request for FY 2005 and the future years defense program. The witnesses will be Donald Rumsfeld (Secretary of Defense) and Gen. Richard Myers (Chairman of the Joint Chiefs of Staff). See, notice. Location: Room 216, Hart Building.

10:00 AM. The Senate Budget Committee will hold a hearing to examine President Bush's FY 2005 budget proposals. Secretary of the Treasury John Snow will testify. Location: Room 608, Dirksen Building.

1:00 PM. The House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security will hold an oversight hearing titled "Law Enforcement Efforts Within the Department of Homeland Security". The witnesses will include DHS Under Secretary Michael Garcia, Director of the Secret Service Ralph Basham, and Admiral Tom Collins. The hearing will be webcast. Location: Room 2141, Rayburn Building.

2:00 PM. The House Ways and Means Committee will hold a hearing on President Bush's FY 2005 budget proposal. The witness will be Secretary of the Treasury John Snow. Location: Room 1100, Longworth Building.

2:00 PM. The House Budget Committee will hold a hearing on President Bush's FY 2005 budget proposal. The witnesses will be Joshua Bolten (Director of the Office of Management and Budget (OMB), and Gregory Mankiw (Chairman of the President's Council of Economic Advisors). Location: Room 210, Cannon Building.

Day one of a two day Continuing Legal Education (CLE) program titled "Communications Law 101: Everything You Wanted (or Didn't Want) to Know About Communications Technology". The event is sponsored by the Federal Communications Bar Association (FCBA) and the Georgetown University Law Center (GULC). Location: GULC.

The Department of State's (DOS) ITU-T Study Group 13 will meet from February 3 through February 13, 2004. See, notice in the Federal Register, October 31, 2003, Vol. 68, No. 211, at Pages 62158.

Deadline to register to attend the National Institute of Standards and Technology's (NIST) event titled "Spam Technology Workshop". The price to attend is $70. See, notice in the Federal Register, November 25, 2003, Vol. 68, No. 227, at Pages 66075 - 66076.

Deadline to submit comments to the Federal Bureau of Investigation (FBI) regarding its document titled "Final notice of capacity". This pertains to the FBI's implementation of  the Communications Assistance for Law Enforcement Act (CALEA), which is codified at 47 U.S.C. § 1001, et seq. The FBI published this notice in the Federal Register, December 5, 2003, Vol. 68, No. 234, at Pages 68112 - 68121. See also, story titled "FBI Publishes CALEA Final Notice of Capacity" in TLJ Daily E-Mail Alert No.797, December 11, 2003.

Deadline to register for the National Institute of Standards and Technology's (NIST) Computer Security Division's (CSD) and Advanced Network Technologies Division's (ANTD) one day conference titled "Spam Technology Workshop", to be held on February 17. See, notice and conference website.

The House will meet at 10:00 AM. Jose Maria Anzar, President of Spain, will address a joint session of the Congress. The House will then take up HR 3030, the "Improving the Community Services Block Grant Act of 2003". See, Republican Whip Notice.

10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "The Current State of Competition in the Communications Marketplace". The hearing will be webcast. See, notice. Press contact: Ken Johnson or Jon Tripp at 202 225-5735. Location: Room 2322, Rayburn Building.

10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold an oversight hearing on titled "Internet Domain Name Fraud -- New Criminal and Civil Enforcement Tools". The hearing will be webcast. Location: Room 2141, Rayburn Building.

10:00 AM. The House Financial Services Committee's Subcommittee on Capital Markets will hold a hearing titled "The Role of Attorneys in Corporate Governance". Location: Room 2128, Rayburn Building.

10:00 AM. The Senate Budget Committee will hold a hearing to examine President Bush's FY 2005 budget proposals. Secretary of the Treasury John Snow will testify. Location: Room 608, Dirksen Building.

10:00 AM. The Senate Judiciary Committee will hold a hearing on several pending judicial nominations, including William Gerry Myers (to be a Judge of the U.S. Court of Appeals for the 9th Circuit), William Duffey (Northern District of Georgia), Lawrence Stengel (Eastern District Pennsylvania). See, notice. Location: Room 226, Dirksen Building.

10:30 AM. The House Ways and Means Committee will hold a hearing on President Bush's FY 2005 budget proposal. The witness will be Office of Management and Budget (OMB) Director Joshua Bolten. Location: Room 1100, Longworth Building.

10:30 AM - 12:00 NOON. The Department of State's (DOS) U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting to discuss matters related to the International Telecommunications Union's (ITU) World Summit on the Information Society (WSIS), which took place on December 10-12, 2003, in Geneva, Switzerland, including the follow-up to the WSIS. See, notice in the Federal Register, January 16, 2004, Vol. 69, No. 11, at Pages 2643 - 2644. Location: auditorium, Historic National Academy of Science Building, 2100 C St. NW.

1:00 PM. The House Armed Services Committee will hold a hearing on President Bush's FY 2005 defense authorization budget request for the Department of Defense. Location: Room 2118, Rayburn Building.

1:00 PM. The House International Relations Committee will hold a hearing titled "L Visas: Losing Jobs Through Laissez-Faire Policies?" Location: Room 2172, Rayburn Building.

1:30 PM - 3:30 PM. The Federal Communications Commission's (FCC) World Radioconference 2007 (WRC-07) Advisory Committee, Informal Working Group 2: Satellite Services and HAPS, will meet. See, notice [PDF]. Location: Room 6-B516, 6th Floor, South Conference Room, 445 12th Street, SW.

2:00 PM. The House Budget Committee will hold a hearing on President Bush's FY 2005 budget proposal. Secretary of the Treasury John Snow will testify. Location: Room 210, Cannon Building.

Day two of a two day Continuing Legal Education (CLE) program titled "Communications Law 101: Everything You Wanted (or Didn't Want) to Know About Communications Technology". The event is sponsored by the Federal Communications Bar Association (FCBA) and the Georgetown University Law Center (GULC). Location: GULC.

4:00 PM. Stacey Dogan (Northeastern University School of Law) will present a paper titled "The Social Norms of Copyright: Sticky or Stuck". For more information, contact Robert Brauneis at 202 994-6138 or rbraun@law.gwu.edu. Location: George Washington University Law School, Faculty Conference Center, Burns Building, 5th Floor, 716 20th Street, NW.

7:00 PM. Chris Israel (Department of Commerce, Technology Administration, Deputy Assistant Secretary) will speak on "outsourcing as it applies to IT industry and the impact on U.S. competitiveness" at an event hosted by the Technology Management Education Association. Location: George Mason University, Fairfax, VA.

10:30 AM - 12:00 NOON. The Federal Communications Commission's (FCC) World Radioconference 2007 (WRC-07) Advisory Committee, Informal Working Group 1: Terrestrial and Space Science Services, will meet. See, notice [PDF]. Location: Room 8-B516, 8th Floor, South Conference Room, 445 12th Street, SW.

Day one of a two day event hosted by the U.S. Chamber of Commerce titled "Strategic Leadership Forum: Mitigating the Impact of Intellectual Property Theft and Counterfeiting". This is an invitation only event; for more information, contact Aaron Guiterman or Scott Griset at 202 463-5500. See, notice.

12:00 NOON - 1:30 PM. The Cato Institute will host a Capitol Hill briefing titled "Internet Taxation: The State of the Debate". The speakers will be Sen. George Allen (R-VA), Lee Goodman (Wiley Rein & Fielding), and Adam Thierer (Cato). Location: Room 325, Russell Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a luncheon program titled "The Copyright Office Speaks: The Ninth Annual Event with the Honorable Marybeth Peters -- Register of Copyrights". Prices vary. For more information, call 202 626-3463. Location: City Club of Washington, 555 13th Street, NW.

TIME? The Progress and Freedom Foundation (PFF) will host a luncheon on voice over internet protocol (VOIP) technology. The speaker will be Vonage Ch/CEO Jeffrey Citron. To attend, contact Brooke Emmerick at 202 289-8928 or bemmerick@pff.org. See, PFF notice. Location: Salon D, J.W. Marriott Hotel, 1331 Pennsylvania Avenue, NW.

Day two of a two day event hosted by the U.S. Chamber of Commerce titled "Strategic Leadership Forum: Mitigating the Impact of Intellectual Property Theft and Counterfeiting". This is an invitation only event; for more information, contact Aaron Guiterman or Scott Griset at 202 463-5500. See, notice.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking [35 pages in PDF] regarding unlicensed devices. See, notice in the Federal Register, December 10, 2003, Vol. 68, No. 237, at Pages 68823 - 68831. The FCC adopted this NPRM on September 10, 2003. See, FCC release [PDF]. The FCC released the NPRM [35 pages in PDF] on September 17, 2003. This NPRM is FCC 03-223 in ET Docket No. 03-201. See also, stories titled "FCC Announces NPRM Regarding Unlicensed Devices" in TLJ Daily E-Mail Alert No. 739, September 15, 2003, and "FCC Announces Deadlines for Comments on Unlicensed Devices NPRM" in TLJ Daily E-Mail Alert No. 800, December 16, 2003. See also, FCC order [PDF] extending the deadline for reply comments from January 26 to February 7.

10:00 AM. The Senate Governmental Affairs Committee will hold a hearing to examine the Department of Homeland Security's budget for FY 2005. Location: Room 342, Dirksen Building.

Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST) titled "Knowledge Based Authentication: Is it Quantifiable?". See, notice and event web site. Location: NIST, Administration Building, Green Auditorium, Gaithersburg, MD.

12:15 PM. The Federal Communications Bar Association (FCBA) Cable and Legislative Practice Committees will host a brown bag lunch. The speakers Bill Bailey (Majority Counsel for the Senate Commerce Committee) and James Assey (Minority Counsel for the Senate Commerce Committee). For more information, contact Catherine Bohigian at Catherine.Bohigian@fcc.gov. RSVP to Wendy Parish at wendy@fcba.org. Location: Willkie Farr & Gallagher, 1875 K Street, NW.

2/2. The Electronic Privacy Information Center (EPIC) published in its web site copies of two documents pertaining to Microsoft's program titled "Governmental Security Program", or GSP.

The first document is a presentation outline [20 page PDF scan] titled "Microsoft Government Security Program", dated March 17, 2003. The second is a Microsoft document [PDF] is titled "Microsoft's Government Security Program: Participants Procedure Guide: Microsoft Confidential".

The second item states that the GSP is "a global initiative that provides national governments and international organizations with access to Windows source code and other technical information they need to be confident in the security of the Microsoft Windows platform."

The EPIC obtained the documents from the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) in response to a request made pursuant to the Freedom of Information Act (FOIA), which is codified at 5 U.S.C. § 552.

1/30. The U.S. Court of Appeals (6thCir) issued its opinion in In Re Trantham, a case regarding the dischargability in bankruptcy of a pre-petition willful patent infringement judgment. The Bankruptcy Court held that the judgment is dischargable. The Court of Appeals reversed.

William Trantham is a bankrupt farmer in the state of Tennessee. Monsanto Company holds patents for genetically modified seeds.

Trantham used Monsanto seeds, without license, and knowing that he had no license, on his farm for two years. Monsanto caught him. Monsanto filed a complaint in U.S. District Court for patent infringement. It obtained a judgment against Trantham for patent infringement in the amount of $592,677.89.

Actually, the jury returned a verdict for $34,392, but the judge increased the base award to $87,022.50, and then added to this treble damages for willful conduct, as well as some attorneys fees and costs, bringing the total judgment to $592,677.89.

Trantham then filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court (WDTenn). Monsanto filed a complaint objecting to the discharge of its patent infringement judgment pursuant to 11 U.S.C. § 523(a)(6). The Bankruptcy Court held that the judgment is dischargable because Monsanto did not met its burden of showing a willful and malicious injury under § 523(a)(6). Monsanto appealed.

Section 523 provides, in part, that "(a) A discharge ... does not discharge an individual debtor from any debt -- for willful and malicious injury by the debtor to another entity or to the property of another entity".

The Bankruptcy Court reasoned that while Trantham knew he had no license to use the seeds, his intent in doing so was to save his struggling farm, and not to injure Monsanto.

The Court of Appeals reasoned differently. It wrote that "Trantham must have believed that the consequences of his refusal to pay the license fee would be financial injury to Monsanto because, in the zero-sum situation inherent wherever something is reserved to the use of a particular entity, Trantham could only profit if Monsanto lost its reservation without proper compensation, i.e., the gain he sought could come only at Monsanto's expense."

The Court, citing various 6th Circuit cases, held that the standard of willful injury is met. The Court continued that "because Trantham acted in conscious disregard of his duty to Monsanto, the requirement of a ``malicious´´ injury is also met."

Moreover, the Appeals Court added, "patent infringement, being the invasion of a protected interest, is a tort. Here, according to the district court's finding of willfulness, it was an intentional tort. Since the Supreme Court observed that § 523(a)(6) was probably focused on intentional torts, Trantham's infringement in this case would pass muster" under 6th Circuit precedent. Hence, the Appeals Court reversed.

Trantham, a failed farmer from Tipton County, Tennessee, is now stuck with a nondischarged debt of $592,677.89 to Monsanto for planting unlicensed seeds on his farm.

And the peer to peer music copying enthusiasts think that the RIAA is a rough bunch.

This case is In Re William Harris Trantham, No. 03-8010, an appeal from the U.S. Bankruptcy Court for the Western District of Tennessee, at Memphis, No. 02-27859-K