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June 28, 2004, 9:00 AM ET, Alert No. 927.
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Bush Addresses Technology Issues

6/24. President Bush gave a long speech in which he addressed innovation, information technology, broadband deployment, fiber optic networks, broadband over powerline, taxation of internet access, electronic medical records, Federal Communications Commission regulation, spectrum management, and other tech issues.

He said that "the proper role of government is not to try to be the generator of wealth. The proper role of government is to create the environment so that the entrepreneurial spirit is strong and vibrant and alive and well in America."

Internet Access Taxes. Bush stated that "good tax policy helps innovation. See, if we want to be a nation of innovators, we don't want to over-tax industry and commerce and the entrepreneurial spirit."

He reiterated his opposition to taxes on internet access. He said that "we've got to make sure that broadband access is affordable and, therefore, it should not be taxed. It's essential that we not tax. There has been a federal ban on Internet access taxes."

He added that "the ban has expired, states have started taxing broadband access. And that's going to make access less affordable. If the goal is to spread broadband, it doesn't make any sense to tax it as we're spreading it."

George Bush Bush (at left) concluded that "I support -- strongly support reestablishing the ban on Internet access taxes. The Congress needs to act on this."

The original Internet Tax Freedom Act (ITFA) imposed a temporary ban on taxes on internet access, and multiple or discriminatory taxes on e-commerce, subject to a grandfather clause. It expired in 2001. But, the Congress passed the Internet Non-Discrimination Act (INDA) in late 2001. It extended the ban of the ITFA through November 1, 2003. This extension has expired.

The House has passed legislation to extend the ban. Rep. Chris Cox (R-CA) introduced the House bill, HR 49, the "Internet Tax Nondiscrimination Act", on January 7, 2003. See, story titled "Rep. Cox and Sen. Wyden Introduce Bill to Make Permanent Net Tax Ban" in TLJ Daily E-Mail Alert No. 580, January 10, 2003. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law held a hearing on April 1, 2003. See, story titled "House Subcommittee Holds Hearing on Bill to Make Internet Tax Moratorium Permanent" in TLJ Daily E-Mail Alert No. 635, April 2, 2003. The Subcommittee approved the bill on May 22, 2003. The full Committee amended and approved the bill on July 16, 2003. See, story titled "House Judiciary Committee Approves Internet Tax Bill", also published in TLJ Daily E-Mail Alert No. 700, July 17, 2003. The full House passed the bill on September 17, 2003.

The Senate passed a bill, S 150, on April 29, 2004 that would nominally extend the ban through November 1, 2005. However, it would also allow a range of new taxes that could be imposed by state and local governments.

Regulatory Proceedings: FTTH. Bush said that "Taxes can stop the spread of broadband, and so can burdensome regulations. And sometimes government has a way of imposing burdensome regulations. And we look forward to working with industry, investors and entrepreneurs as to how to get rid of those burdensome regulations that defeat the goal of spreading broadband."

For example, Bush stated that "our regulations for the telephone were established years ago. And I don't think those regulations should apply to a 21st century technology. I thought the Federal Communications Commission did a smart thing, in a recent decision, by telling communications companies they don't have to give away use of their fiberoptic broadband lines. I thought that was a smart thing."

"In this case, the FCC provided regulatory certainty, and by doing so created incentives for communication companies to build out their fiberoptic broadband lines to more homes. It's a good decision. I think the decision will benefit American consumers, as well."

Bush referred to the Federal Communications Commission's (FCC) triennial review order [576 pages in PDF], which was announced on February 20, 2003, and released on August 21, 2003.

The FCC adopted a rule that provides that for new builds, "An incumbent LEC is not required to provide nondiscriminatory access to a fiber-to-the-home loop on an unbundled basis when the incumbent LEC deploys such a loop to a residential unit that previously has not been served by any loop facility."

For overbuilds, the rule provides that "An incumbent LEC is not required to provide nondiscriminatory access to a fiber-to-the-home loop on an unbundled basis when the incumbent LEC has deployed such a loop parallel to, or in replacement of, an existing copper loop facility," with certain exceptions.

The ILEC must maintain the existing copper loop connected to the particular customer premises after deploying the FTTH loop and provide nondiscriminatory access to that copper loop on an unbundled basis unless the ILEC retires the copper loop, in which case, the ILEC must "provide nondiscriminatory access to a 64 kilobits per second transmission path capable of voice grade service over the fiber-to-the-home loop on an unbundled basis."

See also, stories titled "FCC Announces UNE Report and Order", "FCC Order Offers Broadband Regulatory Relief", "FCC Announces Decision on Switching", "Commentary: Republicans Split On FCC UNE Order", and "Congressional Reaction To FCC UNE Order" in TLJ Daily E-Mail Alert No. 609, February 21, 2003; and story titled "Summary of FCC Triennial Review Order" in TLJ Daily E-Mail Alert No. 725, August 25, 2003.

Regulatory Proceedings: Rights of Way. Next, Bush stated that "Another issue we face is that broadband providers have trouble getting across federal lands. And that's why I signed an order to reduce the regulatory red tape for laying fiberoptic cables and putting up transmission towers on federal lands. You see, if you can't put up towers and lay cable, you can't get broadband to all corners of America by 2007. And so hopefully we've reduced that regulatory burden. If we haven't reduced the regulatory burden enough, we need to hear from those who are stymied. We want to meet the goal. There's a practical reason why we want to meet the goal: It'll improve the lives of our fellow citizens."

The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) released a report titled "Improving Rights-of-Way Management Across Federal Lands: A Roadmap for Greater Broadband Deployment Report by the Federal Rights-of-Way Working Group" on April 26.

It contains numerous recommendations regarding the application and permitting process. These recommendations pertain to access to information, application procedures, timeliness of reviews, review procedures, and assessment of fees. However, nothing in this report proposes guaranteeing any broadband service provider access to any federal land, limiting fees that can be charged, or setting fixed decision making deadlines.

Bush also released a memorandum for the heads of executive departments and agencies on April 26, 2004 titled "Improving Rights-of-Way Management Across Federal Lands to Spur Greater Broadband Deployment". It directs federal entities to follow the recommendations of the NTIA report.

Also, in his June 24 speech, Bush did not address the larger issue of the rights of way related obstacles to broadband deployment presented by state and local governmental authorities.

Regulatory Proceedings: Broadband Over Powerline. Bush continued that "we want to help consumers find more ways to obtain affordable broadband access."

"Most people who have broadband access now obtain it through a cable wire or telephone wire. A small percentage obtain it through a satellite", said Bush. "We need to get broadband to more Americans and so, therefore, I want to talk about two other ways to get broadband to the consumer. We need to use our power lines better. They go everywhere. It seems to make sense, doesn't it, if what you're looking for is avenues into the home. Well, electricity goes into the home. And so one great opportunity is to spread broadband throughout America via our power lines."

He continued. "And one of the problems we've got here is that the Commerce Department has had to develop technical standards that will make sure that our broadband can go across power lines without unnecessary interference. So it's a technological problem. It's a technological issue. It turns out that sometimes the competition of broadband and electricity just doesn't go too good across one line. And so -- if I could put it in simple vernacular. And so, therefore, the Commerce Department is helping to sort through these issues so that broadband access will be available through -- by our power companies."

Bush said that "our job in government is to help facilitate the use of electricity lines by helping with the technological standards that will make this more possible. And I want to thank those in the Commerce Department who have worked hard to do this."

In addition to the Commerce Department's activity on this issue, the FCC, on February 12, 2004, adopted a NPRM regarding BPL. See, story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004.

Regulatory Proceedings: Wireless Broadband. Bush next stated that "The other promising new broadband technology is wireless. The spectrum that allows for wireless technology is a limited resource.

He elaborated that "one of things we need to do is unlock the spectrum's value -- economic value and entrepreneurial potential without -- without, by the way, crowding out important government functions. And we can do both. ... And so we're helping to promote new wireless technologies without crowding out the Defense Department's capacity to defend America."

"There are two kinds of wireless technology. One is called wi-fi. It works with a regular broadband connection. If you use that kind of connection, someone from their home or their office can set up a wireless network that covers the home or the office."

He continued that "the problem with this kind of technology is that we can actually interfere with government uses, like radar. We want to make sure our radars work well. And so we took the necessary steps to make sure these wireless broadband applications could work within the same spectrum as the government functions, without interference. It took some awfully smart people to figure that out. But you know something? Our government employs awfully smart people. And for those of you who have been working on this project, I want to thank you very much. It took some innovation."

"Another kind of wireless broadband would be more wide-ranging. It would be based on mobile wireless. It wouldn't depend on a physical connection to an existing cable or telephone modem as wi-fi does."

"The problem is, it requires a spectrum that is not now available. And so Congress needs to make the spectrum available. If we want to -- if we want to achieve the goal of broadband in every corner of the country by 2007, and shortly thereafter, people will have more options and more choice, we need to -- we need to make more spectrum available", said Bush.

He added that "There's a bill called the Commercial Spectrum Enhancement Act. It is a bill where we can take spectrum that is currently allocated to the government and auction it off to the private sector without diminishing our responsibilities in government. In other words, it will be an auction process. Taxpayers will not only benefit because broadband has been expanded, the taxpayers will benefit because we're not going to give the spectrum away. We'll let them pay."

This bill is HR 1320. The House passed its version of HR 1320 on June 11, 2003. See, stories titled "House Subcommittee Holds Hearing On Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 631, March 26, 2003; "House Subcommittee Approves Spectrum Relocation Fund Bill" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; "House Commerce Committee Passes Spectrum Relocation Bill" in TLJ Daily E-Mail Alert No. 653, May 1, 2003; and "House Passes Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 679, June 12, 2003.

The Senate Commerce Committee passed its version of HR 1320 on June 26, 2003. However, the full Senate has yet to pass a bill. See, story titled "Senate Commerce Committee Approves Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 689, June 27, 2003.

Litigation Reform. Bush said that "we've got to have good legal policy. Frivolous and junk lawsuits make it awfully hard for people to feel comfortable risking capital."

He said that "We need tort reform. And Washington, D.C. is a good place to start with tort reform. We need class-action reform, asbestos reform, and medical liability reform now."

Electronic Medical Records. "But one of the things we can do is use our technology in a better way to promote cost savings and quality of health care by the utilization of personal electronic medical records.

"And so, therefore, I laid out a plan to ensure that most Americans have got electronic health records within the next 10 years so that our system is more cost effective, so we take out needless overhead costs and, at the same time, promote better quality medicine in America."

"To achieve the goal of Tommy Thompson's outfit, the Health and Human Services has developed a language, a common language, so that health care providers can now speak more clearly across the Internet. We've developed new standards. We're funding demonstration projects. We're using programs such as Medicare and the veterans health -- the veterans hospitals to promote a better use of information technology to make sure that health care is a -- adopts the habits of the 21st century."

Senate Passes PIRATE Act to Enable DOJ to Bring Civil Actions for Copyright Infringement

6/25. The Senate passed S 2237, the "Protecting Intellectual Rights Against Theft and Expropriation Act of 2004" or "PIRATE Act".

This bill would authorize the Department of Justice (DOJ) to bring civil actions for copyright infringement for conduct that already constitutes criminal copyright infringement under 17 U.S.C. § 506. This serves two purposes. First, it would make it easier for the DOJ to prevail, because, among other things, the civil action would have a lower burden of proof. Second, it would provide a less punitive action for youthful peer to peer music pirates.

Specifically, the bill provides that "The Attorney General may commence a civil action in the appropriate United States district court against any person who engages in conduct constituting an offense under section 506. Upon proof of such conduct by a preponderance of the evidence, such person shall be subject to a civil penalty under section 504 which shall be in an amount equal to the amount which would be awarded under section 3663(a)(1)(B) of title 18 and restitution to the copyright owner aggrieved by the conduct."

The bill would also establish a training program (and authorize funding of $2,000,000) to educate DOJ and U.S. Attorneys Office personnel in copyright enforcement matters.

Sen. Patrick Leahy (D-VT) and Sen. Orrin Hatch (R-UT) introduced the PIRATE Act on March 25, 2004. See, story titled "Leahy and Hatch Introduce Bill to Give DOJ Authority to Bring Civil Actions for Copyright Infringement" in TLJ Daily E-Mail Alert No. 866, March 30, 2004. The Senate Judiciary Committee unanimously approved the bill on April 29, 2004. See, story titled "Senate Judiciary Committee Approves Four Intellectual Property Bills" in TLJ Daily E-Mail Alert No. 888, April 30, 2004.

Sen. Leahy stated that "The availability of civil penalties allows prosecutors to help curtail widespread piracy, and at the same time recognizes that handcuffs for infringers is often not the appropriate response." See, Congressional Record, June 25, 2004, at S7522.

There is no companion bill in the House.

Senate Passes ART Act

6/25. The Senate passed S 1932 the "Artists' Rights and Theft Prevention Act of 2003" or "ART Act" by unanimous consent. This bill criminalizes unauthorized recording of motion pictures in a motion picture exhibition facility, such as by sneaking camcorders into theatres. This bill provides for pre-registration of works being prepared for commercial distribution, and allows for infringement actions to be based upon such pre-registrations. This bill makes it easier to prosecute people who put copyrighted works on computer servers where anyone can download them. This bill also authorizes the appropriation of funds to prosecute violations of intellectual property rights.

This bill primarily addresses concerns raised by the movie industry. Indeed, the camcorder provision applies only to audiovisual works. However, the bill would also offer enhanced protections to other copyright industries, including music and software.

Sen. John Cornyn (R-TX), Sen. Dianne Feinstein (D-CA) and others introduced this bill on November 22, 2003. See, story titled "Senators Introduce Bill to Increase Protection of Pre-Released Movies and Other Unpublished Works" in TLJ Daily E-Mail Alert No. 786, November 25, 2003.

The Senate Judiciary Committee (SJC) amended and approved the bill on April 29, 2004. See, story titled "Senate Judiciary Committee Approves Four Intellectual Property Bills" in TLJ Daily E-Mail Alert No. 888, April 30, 2004.

Sen. John CornynSen. Cornyn (at right) stated in a release after passage of the bill that "Today, high quality, yet illegal, copies of copyrighted material can be and are distributed easily -- and almost instantly -- via email, peer-to-peer networks and other means to millions of users on a regular basis ... We are now one step closer to making thefts far more difficult, prosecution of criminals much easier, and the protection of consumers and artists much stronger."

Sen. Leahy stated during Senate consideration of this bill that "This legislation will provide law enforcement with another important tool in fighting the harms wreaked by intellectual property theft, which robs our innovators -- not to mention all those working behind the scenes -- of compensation owed to them for producing films that carry American culture around the globe. The Motion Picture Association of America estimates that the movie industry loses $3 billion worldwide to piracy each and every year." See, Congressional Record, June 25, 2004, at S7524.

Statutory provisions relating to criminal copyright infringement are found in both Title 18 (criminal code) and Title 17 (copyright act). 17 U.S.C. § 506 contains the criminal prohibition on certain acts of copyright infringement. 18 U.S.C. § 2319 provides penalties for violations of 17 U.S.C. § 506.

The bill would revise both 18 U.S.C. § 2319 and 17 U.S.C. § 506 to make it easier to prosecute, and obtain civil remedies for, certain acts of copyright infringement. This bill especially makes it easier to prosecute and sue pirates who place commercial works on internet servers for anyone to download.

Ban on Movie Theatre Camcorders. This bill would add a new § 2319B that provides, in part, that "Any person who, without the authorization of the copyright owner, knowingly uses or attempts to use an audiovisual recording device to transmit or make a copy of a motion picture or other audiovisual work protected under title 17, or any part thereof, from a performance of such work in a motion picture exhibition facility, shall" be imprisoned and or fined.

The bill recites in its findings that "The use of camcorders and other audiovisual recording devices in movie theaters to make illegal copies of films is posing a serious threat to the motion picture industry."

Changes to 17 U.S.C. § 506. The bill would revise § 506(a), which currently provides that criminal infringement may be based upon either infringement "for purposes of commercial advantage or private financial gain" or "by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000".

The bill would add a third basis for criminal infringement: "by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution".

Changes to 18 U.S.C. § 2319. The bill would amend the criminal penalties provision of 18 U.S.C. § 2319. That is, § 506(a) contains the criminal prohibition. § 2319 contains the criminal penalties for violation of § 506(a)

Currently, § 2319(b) provides that for the top level of penalties to apply, the prosecution must also show that "the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, which have a total retail value of more than $2,500".

The problem with the current wording, the bill's sponsors have argued, is that it is difficult to prove distribution of 10 copies of an item placed on an internet server for downloading.

The bill as approved by the Senate, which on this matter is different from the bill as originally introduced, imposes no "10 copies" requirement for imposing penalties for violation for the new third basis for criminal infringement -- placing a work on a computer network.

Pre-Registration of Copyrights. This bill would amend 17 U.S.C. § 408, which provides for the registration of copyrights with the Copyright Office, to allow for the pre-registration of a work that is being prepared for commercial distribution and has not been published, and to allow for a copyright infringement action to be maintained on the basis of that pre-registration.

The reason for this is that 17 U.S.C. § 411(a) currently provides that "no action for infringement of the copyright in any United States work shall be instituted until registration of the copyright claim has been made" and 17 U.S.C. § 412 provides that "no award of statutory damages or of attorney's fees, as provided by sections 504 and 505, shall be made for -- (1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or (2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work".

The problem addressed by the statute is that pirates are stealing pre-release versions of digital works, such as movies, uploading them to an internet server, and causing substantial harm to those involved in the production of those movies. All of this occurs before the work is complete, and a registration is made. Hence, this bill amends §§ 411(a) and 412 to reference both registration and pre-registration.

Currently, the courts extend full copyright protection to unpublished works not intended for publication. See, Salinger v. Random House, 811 F.2d 90 (2nd Cir. 1989) and New Age Publications v. Henry Holt, 873 F.2d 576 (2nd Cir. 1989). The law draws no distinction between unpublished works not intended for publication, and not yet published works that are intended for publication. In contrast, this bill does make a distinction. The pre-registration provisions apply only to works "being prepared for commercial distribution".

House. The bill has not passed the House. There is a related, but not identical, bill in the House, HR 4077, the "Piracy Deterrence and Education Act of 2004". HR 4077 contains a ban on movie theatre camcorders, and similar amendments to 18 U.S.C. § 2319 and 17 U.S.C. § 506.

HR 4077 was introduced on March 31, 2004 by Rep. Lamar Smith (R-TX) and others. It was approved by the Subcommittee on Courts, the Internet and Intellectual Property on March 31, 2004.

Senate Passes CREATE Act to Promote Collaborative Research

6/25. The Senate passed S 2192, the "Cooperative Research and Technology Enhancement Act" or "CREATE Act" by unanimous consent. This is a substantially non-controversial bill to promote collaborative research.

See, Congressional Record, June 25, 2004, at page S7520.

The House passed its version of the bill, HR 2391, on March 10, 2004 by a voice vote. See, story titled "House Passes CREATE Act" in TLJ Daily E-Mail Alert No. 854, March 11, 2004.

Sen. Orrin Hatch (R-UT), the Chairman of the Senate Judiciary Committee (SJC), Sen. Patrick Leahy (D-VT), the ranking Democrat on the SJC, and others, introduced the Senate version of this bill on March 10, 2004.

The SJC unanimously approved the bill on April 29, 2004. See, story titled "Senate Judiciary Committee Approves Four Intellectual Property Bills" in TLJ Daily E-Mail Alert No. 888, April 30, 2004.

The bill would amend Section 103(c) of the Patent Act, which is codified at 35 U.S.C. § 103, to address the August 8, 1997 opinion of the U.S. Court of Appeals for the Federal Circuit in OddzOn Products, Inc. v. Just Toys, Inc., which ruled that derived prior art may serve as evidence of obviousness. This opinion is also reported at 122 F.3d 1396.

§ 103(c) currently provides a safe harbor for inventions that are the product of collaboration involving co-inventors within a single company.

However, scientific research is increasingly being conducted jointly by multiple companies, universities, government labs, and/or other entities. The holding in the OddzOn case threatens to discourage collaborative research where the scientists involved are not employed by the same company or entity.

The Court in OddzOn interpreted § 103(c) to mean that prior art under §§ 102(f) or 102(g) could be used to determine the obviousness of an invention where there is no common ownership or assignment of the invention and information being shared among the collaborators, and the information exchanged is not publicly known.

The CREATE Act amends § 103 to provide that patentability is not precluded in the case of research conducted across entities pursuant to a joint research agreement.

The House Judiciary Committee (HJC) wrote in its report that "Many view the court's ruling as far-reaching. In essence, the court found that secret information that qualifies only under Sec. 102(f) could be combined with other information to make an invention obvious and nonpatentable where there was no common ownership or assignment of the invention and `subject matter' at issue. The court found this even though the information being exchanged was neither publicly known nor publicly available. The court's ruling was arguably required by the language of the statute. Nevertheless, Oddzon represents a significant potential threat to inventors who engage in collaborative research and development projects." See, House Report No. 108-425.

The HJC report continues, "Put another way, the decision created a situation where an otherwise patentable invention may be rendered nonpatentable on the basis of confidential information routinely exchanged between research partners. Thus, parties who enter into a clearly defined and structured research relationship, but who do not (or cannot) elect to define a common ownership interest in or a common assignment of inventions jointly developed, can unwittingly create an obstacle to patent protection by simply exchanging secret information among themselves."

The HJC Report elaborates that "Congress intends to enhance the effectiveness and security of patent protection for inventions that arise from collaborative arrangements between multiple organizations. Specifically, Congress intends that subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of title 35, and a claimed invention shall be deemed to be owned by the same person, or subject to an obligation of assignment to the same person, where specific conditions are satisfied. The Act achieves this by eliminating the use of certain information and prior art in obviousness determinations in the circumstances addressed in the legislation."

See also, story titled "Representatives Introduce Patent Bill to Encourage Collaborative Research" in TLJ Daily E-Mail Alert No. 680, June 13, 2003; and story titled "House Judiciary Committee Approves CREATE Act to Promote Collaborative Research" also published in TLJ Daily E-Mail Alert No. 821, January 22, 2004.

OMB Issues Memorandum Re Executive Branch Entity Critical Infrastructure Plans

6/17. Joshua Bolten, Director of the Office of Management and Budget (OMB), wrote a memorandum [14 pages in PDF] to the heads of all executive departments and agencies regarding "Development of Homeland Security Presidential Directive (HSPD) - 7 Critical Infrastructure Protection Plans to Protect Federal Critical Infrastructures and Key Resources".

This memorandum specifies "the required format for agencies to use when submitting internal critical infrastructure protection (CIP) plans." It provides that "these plans must address identification, prioritization, protection, and contingency planning, including the recovery and reconstitution of essential capabilities. In particular, planning must include protection priorities, the agency’s ability to ensure continuity of business operations during a physical or cyber attack, and, where current capabilities are lacking, plans of action and milestones to achieve the necessary level of performance."

On December 17, 2003, President Bush signed a directive titled "Homeland Security Presidential Directive/Hspd-7". It pertains to "Critical Infrastructure Identification, Prioritization, and Protection". It replaces former President Clinton's directive on this subject, titled "Presidential Decision Directive/NSC-63", and dated May 22, 1998. The Clinton directive is also know as "PDD 63". See, story titled "Bush Signs Critical Infrastructure Protection Directive" in TLJ Daily E-Mail Alert No. 802, December 12, 2004.

HSPD-7 required the CIP plans addressed in Bolten's June 17 memorandum. HSPD-7 required that "By July 2004, the heads of all Federal departments and agencies shall develop and submit to the Director of the OMB for approval plans for protecting the physical and cyber critical infrastructure and key resources that they own or operate. These plans shall address identification, prioritization, protection, and contingency planning, including the recovery and reconstitution of essential capabilities."

Kerry Addresses Tech Issues

6/24. Sen. John Kerry's (D-MA) presidential campaign office released a campaign position paper [9 pages in PDF] that addresses many issues related to innovation, science and technology.

R&D Tax Credit. The paper states that "John Kerry will work with the Congress to find a way to pay for extending the Research and Experimentation tax credit with the goal of making it permanent."

The R&D tax credit is scheduled to expire at the end of this month. The ETI repeal bills currently being considered by the Congress would extend the credit through the end of 2005.

Broadband Tax Credits. The paper states that Sen. Kerry "will provide a 10 percent tax credit for investments in today’s broadband technology in rural and inner city areas. Investments in the next-generation of high-speed broadband anywhere in the country would be eligible for a 20 percent tax credit ..." It adds that "These tax credits would be in effect for five years ..."

USPTO Funding. The paper states that Sen. Kerry supports "Ensuring that the Patent and Trademark Office (PTO) has the resources it needs to review a growing number of new patent applications and issue high-quality patents by ending the diversion of patent fees."

Sen. John KerryThe paper does not identify whether or not Sen. Kerry (at right) supports HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2004", which is also known as the USPTO fee bill.

The bill contains increases in user fees that implement the U.S. Patent and Trademark Office's (USPTO) 21st Century Strategic Plan. It also provides for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs.

The House passed the bill on March 3, 2004 by a vote of 379-28. See, Roll Call No. 38. See also, story tiled "House Passes USPTO Fee Bill" in TLJ Daily E-Mail Alert No. 849, March 4, 2004. The Senate Judiciary Committee approved this bill, without amendment, on April 29, 2004. See, story titled "Senate Judiciary Committee Approves Four Intellectual Property Bills" in TLJ Daily E-Mail Alert No. 888, April 30, 2004. The full Senate has yet to vote on the bill.

PR China and Intellectual Property. The paper states that Sen. Kerry "will vigorously crack down on unfair trade practices, such as piracy of our intellectual property and China's discriminatory policies towards semiconductors and other technological products. In addition, he will work to ensure that China honors its World Trade Organization (WTO) accession agreement to stop forced technology transfers as a prerequisite for doing business in China."

Export Controls. The paper states that Sen. Kerry supports "Shifting the emphasis of computer export controls from attempting to control widely available business computers, to controlling the availability of classified software created for applications such as weapons development."

Communications Law and FCC Proceeding. The Kerry paper also touches on several communications issues and proceedings at the Federal Communications Commission (FCC). For example, the paper states that "The Kerry plan will complete the transition to digital television ..." However, it does not identify what the "Kerry plan" is.

It also states that Sen. Kerry "will also provide shared access to unassigned TV channels where this will not interfere with television reception."

On May 13, 2004, the FCC adopted a Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by unlicensed devices of broadcast television spectrum where that spectrum is not in use by broadcasters. See, story titled "FCC Adopts NPRM Regarding Unlicensed Use of Broadcast TV Spectrum" in TLJ Daily E-Mail Alert No. 898, May 14, 2004; and story titled "FCC Releases NPRM Regarding Unlicensed Use of TV Spectrum" in TLJ Daily E-Mail Alert No. 905, May 26, 2004.

The paper also contains this statement. "Competition will also help promote an ``open´´ Internet -- an Internet in which individuals can be producers as well as consumers of information, an Internet in which new ideas for content and applications can emerge from individuals and small companies and spread rapidly, and an Internet that allows ``many to many´´ communication." (Internal quotes in original.)

This is a vague statement. Also, the paper does not attribute the quotations, "open" and "many to many". However, recently FCC Commissioner Michael Copps has used the term "open" in advocating network neutrality. See, Copps speech of March 26, 2004. Similarly, law professors Lawrence Lessig (Stanford) and Timothy Wu (University of Virginia) submitted a comment [17 pages in PDF] to the FCC on August 22, 2003 urging that it adopt a network neutrality rule.

Federal Spending. The paper states that "John Kerry will boost support for the physical sciences and engineering by increasing research investments in agencies such as the National Science Foundation (NSF), the National Institutes of Health (NIH), the Department of Energy, the National Institute of Standards and Technology (NIST), and the National Aeronautics and Space Administration (NASA)."

It also states that "John Kerry believes IT research can lead to the jobs and industries of the future and therefore supports recommendations of the President’s Information Technology Advisory Committee that call for an increase in long-term IT research. More research is needed, for example, to make high-productivity information systems that are dependable, reliable, and resistant to cyber-attacks."

Bush Signs Standards Development Organization Advancement Act

6/22. President Bush signed HR 1086. Title I of this bill is the "Standards Development Organization Advancement Act of 2004'". See, White House release.

This bill amends the National Cooperative Research and Production Act of 1993 (NCRPA), which is codified at 15 U.S.C. § 4301, et seq.

Government standards setting bodies are not subject to antitrust lawsuits. Also, the NCRPA already affords certain protections to joint ventures.

HR 1086 recites in its findings antitrust litigation is a threat to private bodies that develop voluntary consensus standards. It states that "Private developers of the technical standards that are used as Government standards are often not similarly protected, leaving such developers vulnerable to being named as codefendants in lawsuits even though the likelihood of their being held liable is remote in most cases, and they generally have limited resources to defend themselves in such lawsuits."

It further states that "if relief from the threat of liability under the antitrust laws is not granted to voluntary consensus standards bodies, both regarding the development of new standards and efforts to keep existing standards current, such bodies could be forced to cut back on standards development activities at great financial cost both to the Government and to the national economy."

HR 1086 extends certain protections to a "standards development organization", which it defines as "a domestic or international organization that plans, develops, establishes, or coordinates voluntary consensus standards using procedures that incorporate the attributes of openness, balance of interests, due process, an appeals process, and consensus .." However, the definition excludes "the parties participating in the standards development organization".

HR 1086 is now Public Law No. 108-237.

In addition, on June 24, 2004, the Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division issued a joint release.

Hewitt PateHew Pate (at right), the Assistant Attorney General in charge of the Antitrust Division, stated in this release that "Standards development organizations develop technical standards that are essential to the efficient functioning of our national economy. Congress has determined that the threat of treble damages pressures SDOs to restrict their standards development activities at a great cost to the United States. The Standards Development Organization Advancement Act of 2004 relieves SDOs from certain antitrust concerns and facilitates the development of pro-competitive standards

This release also summarizes the bill, and addresses the proper way for standards development organizations to submit their notices to the FTC and DOJ.

Bush Signs Antitrust Criminal Penalty Enhancement and Reform Act

6/22. President Bush signed HR 1086. Title II of this bill is the "Antitrust Criminal Penalty Enhancement and Reform Act of 2004". See, White House release.

Subtitle A of this act, among other things, increases the maximum penalties for antitrust violations under Sections 1, 2 and 3 of the Sherman Act, which are codified at 15 U.S.C. §§ 1, 2, and 3.

Subtitle B amends the Tunney Act, which addresses public notice of consent decrees in antitrust proceedings, competitive impact statements, public comments, and public interest determinations by the Court. It is codified at 15 U.S.C. § 16.

HR 1086 provides that "Nothing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene". It also provides that the DOJ does not need to publish all of the comments in the Federal Register in all matters.

HR 1086 also revises Subsection 16(e), regarding public interest determinations by the Court. The statute previously listed two categories of items that the Court "may" consider. HR 1086 provides that the Court "shall" consider these items.

HR 1086 also revises these two items. For example, the second item to be considered in the public interest determination previously was "the impact of entry of such judgment upon the public generally and individuals alleging specific injury ...". HR 1086 changes this to the "impact of entry of such judgment upon competition in the relevant market or markets ..."

HR 1086 is now Public Law No. 108-237.

House Commerce Committee Approves Junk Fax Bill

6/24. The House Commerce Committee amended and approved HR 4600, the "Junk Fax Prevention Act of 2004". This bill would amend 47 U.S.C. § 227 to preserve the "established business relationship" exception to the general ban on unsolicited faxes.

Rep. Fred Upton (R-MI), Rep. Ed Markey (D-MA), and others introduced the bill on June 16, 2004. The Subcommittee on Telecommunications and the Internet held a hearing on the bill on June 15, 2004. See, prepared testimony [PDF] of Dane Snowden, Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau.

The Committee approved an amendment in the nature of a substitute offered by Rep. Upton, Rep. Markey, and Rep. John Dingell (D-MI), by a unanimous voice vote. Rep. Dingell, who is the ranking Democrat on the full Committee, stated that the amendment "strikes the proper balance between protecting consumers from unwanted faxes and permitting legitimate business communications". The Committee then approved the bill, as amended, by a unanimous voice vote.

Also, on June 23, Sen. Olympia Snowe (R-ME) introduced a related bill in the Senate, S 2569, the "Junk Fax Prevention Act of 2004", in the Senate. It was referred to the Senate Commerce Committee.

The Congress passed its original junk fax bill in 1991. The statute gave the FCC rule making and enforcement authority.

Sen. Snowe explained the reason for the legislation. She stated that "the FCC has long recognized an exception to this general ban on unsolicited faxes when the parties sending and receiving the fax have an established business relationship. Businesses of all shapes and sizes regularly conduct their transactions via facsimile, such as real estate agents, wholesalers and distributors, travel agents, and those in the convention industry. In our modern economy, companies that are often hundreds or thousands of miles away from each other do business together, often with the same or greater frequency as with those just up the street. And the reality of business is that sometimes you need to communicate in writing, and it needs to get there right away."

She continued that "The established business relationship exemption recognized this reality, and ensured that government was not placing an undue hardship on business owners. Yet inexplicably, on June 26, 2003 the FCC issued a new rule that eliminated the established business relationship. Under this new rule--which is set to take effect on January 1, 2005--the sender of a fax would have to acquire, in writing, the permission of the recipient to receive an unsolicited fax before the fax could be sent, even if the recipient made a verbal request that the information be faxed."

Rep. Kleczka Introduces RFID Bill

6/23. Rep. Jerry Kleczka (D-WI) introduced HR 4673, the "Opt Out of ID Chips Act".

This bill pertains to the use of radio frequency identification (RFID) tags used on products that are sold at retail. The bill does not prohibit the use of RFID tags. It provides that products sold at retail with RFID tags must contain warning labels, and that the purchasers have the right to have the RFID tags removed or disabled at the time of purchase.

The bill defines an RFID tag as "a device that acts as a transponder and enables data to be transmitted through a radio signal to a receiver and that is placed in a product to provide identification, tracking, or other information about the product or the consumer of the product."

The bill was referred to the House Commerce Committee.

Rep. Kleczka stated in a release that "RFIDs are valuable tools for businesses, enabling them to keep the most in-demand products on the shelves and reducing costs due to loss or theft ... However, the possibility for abuse of this technology is great, especially when consumers are not informed of its presence.  This bill will require that consumers are well-informed before purchasing a product that contains an RFID, and are able to have it disabled or removed."

The bill would give rulemaking and civil enforcement authority to the Federal Trade Commission (FTC). The FTC held a one day workshop on RFID technology on June 21, 2004. See, FTC web page with hyperlinks to prepared statements of speakers.

US EU Summit in Ireland Addresses Tech Related Issues

6/26. The US and the EU held an economic summit in Ireland. Upon completion, government leaders made announcements regarding several technology related topics, including innovation and intellectual property protection, pursuing the Doha agenda, FSC/ETI repeal by the US, regulation, and GPS/Galileo.

Innovation and Intellectual Property Protection. The US and the EU issued a joint statement which provides that "We are committed to policies producing strong and sustained economic growth to the mutual benefit of our citizens and the wider world. Innovation will bring improvements in productivity and stimulate more growth and higher levels of prosperity for our countries as well as other countries that rely on our markets. Innovative technologies in areas such as information, communication, hydrogen energy, pharmaceuticals, and other health-related products, can provide impetus to our economic partnership. We will reinforce our commitment to the protection of intellectual property rights, recognising their fundamental and growing importance to the creation of innovative products, services, and technologies in our economies."

Doha Agenda. The US and the EU joint statement provides that "We will continue to cooperate to reach a successful conclusion of the Doha Development Agenda negotiations as quickly as possible".

The US also issued a release that states that "President Bush believes that trade liberalization is critical to boosting global prosperity, generating sustained economic growth, and raising living standards. Emphasizing the need to seek an ambitious outcome in the WTO's Doha negotiations, President Bush and his EU counterparts reaffirmed their commitment to cooperate with other WTO members to finalize framework agreements in the Doha trade negotiations by the end of July in order to expeditiously complete these negotiations and further enhance the conditions for sustained global economic growth."

Bush also addressed this at press conference with other national leaders. He said that "Lowering trade barrier increases the -- trade barriers increases the prosperity of all our nations. And so we're looking at new ways to open markets on both sides of the Atlantic. Free and fair trade has the power to lift nations out of poverty. So we reaffirmed our commitment to the Doha Development Agenda, which seeks to remove obstacles to global trade and growth in the developing world." See, transcript.

FSC/ETI Repeal. The US release states that "While the United States and the EU are working to advance WTO negotiations, both the United States and the EU have had laws and other measures challenged under WTO dispute settlement procedures. President Bush intends to comply with final WTO rulings against U.S. measures, such as in the FSC/ETI case where the Bush Administration continues to work closely with the U.S. Congress. The United States is currently awaiting EU action to comply with the WTO ruling in the beef hormone case, as well as awaiting a WTO ruling against the EU moratorium on biotech approvals."

See also, EU release [PDF] on FSC.

Regulation. The US release states that "Recognizing that regulatory differences, not tariffs, comprise the most significant remaining transatlantic trade barriers, President Bush and his EU counterparts welcomed the U.S.-EU Regulatory Cooperation Roadmap. This Roadmap builds on the 2002 U.S.-EU Guidelines for Regulatory Cooperation in which the European Commission undertook to make its regulatory process more transparent. The Regulatory Cooperation Roadmap provides a framework for U.S. and EU officials to cooperate on a broad range of important areas such as pharmaceuticals, auto safety, information and communications technology, cosmetics, consumer product safety, chemicals, nutritional labeling, and eco-design of electrical/electronic products. Through targeted U.S.-EU regulatory consultations, we aim to promote better quality regulation, minimize regulatory divergences, and facilitate transatlantic commerce."

GPS Galileo. The US issued another release that addresses GPS and Galileo. It states that "U.S. Secretary of State Colin Powell, European Commission Vice-President Loyola de Palacio, and Irish Foreign Minister Brian Cowen signed the Agreement on the Promotion, Provision, and Use of Galileo and GPS Satellite-Based Navigation Systems and Related Applications."

It adds that "The agreement ensures that Galileo's signals will not harm the navigation warfare capabilities of the United States and the North Atlantic Treaty Organization military forces, ensures that both the United States and the European Union can address individual and mutual security concerns, and calls for non-discrimination and open markets in terms of trade in civil satellite navigation-related goods and services."

Bush also addressed this topic at the joint press conference. He said that "Earlier today, we also signed an agreement that ensures compatibility between America's global positioning system and its future European counterpart, Galileo. This agreement will protect our common security, improve the delivery of emergency services, and further our economic cooperation. This was a hard agreement to make, and because we worked together, we now have an agreement. The two systems will be compatible and interoperable. And users from business to science to government in America and Europe will benefit." See, transcript.

See also, EU release [PDF] on GPS and Galileo.

Washington Tech Calendar
New items are highlighted in red.
Monday, June 28

The House and Senate will not meet on June 28 through July 5.

The Supreme Court will return from the recess that it began on June 21.

1:00 PM. The Center for Democracy and Technology (CDT) will host a telephone press conference to discuss the Supreme Court's opinion in Ashcroft v. ACLU, a challenge to the constitutionality of the Child Online Protection Act (COPA). If the Supreme Court does not issue the opinion on this date, then the CDT will reschedule this conference. To participate, call 334 260-2557 and provide security code 36991.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) [97 pages in PDF] regarding issues relating to services and applications utilizing internet protocol (IP). This NPRM is FCC 04-28 in WC Docket No. 04-36. See, notice in the Federal Register, March 29, 2004, Vol. 69, No. 60, at Pages 16193 - 16202. See also, story titled "FCC Adopts NPRM Regarding Regulation of Internet Protocol Services" in TLJ Daily E-Mail Alert No. 837, February 16, 2004.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding changes to the FCC Form 477 local competition and broadband data gathering program. This NPRM is FCC 04-81 in WC Docket No. 04-141. See, notice in the Federal Register, May 27, 2004, Vol. 69, No. 103, at Pages 30252 - 30277.

Tuesday, June 29

2:00 - 4:00 PM. There will be a meeting of the WRC-07 Advisory Committee, Informal Working Group 5: Regulatory Issues. See, FCC notice [PDF]. Location: The Boeing Company, 1200 Wilson Blvd., Arlington, VA.

3:00 - 5:00 PM. The American Enterprise Institute (AEI) will host a panel discussion titled "Terror, Torts, and Teleco: The Supreme Court's 2003-2004 Term". The speakers will be Viet Dinh (Georgetown University Law Center), Richard Garnett (Notre Dame Law School), Edward Warren (Kirkland & Ellis), and Michael Greve (AEI). See, notice and registration page. Location: AEI, Twelfth floor, 1150 17th St., NW.

The Defense Science Board Task Force on Global Positioning System will hold a closed meeting to discuss Galileo and other future radio navigation satellite systems. See, notice in the Federal Register, May 18, 2004, Vol. 69, No. 96, at Pages 28125 - 28126. Location: Strategic Analysis Inc., 3601 Wilson Boulevard, Arlington, VA.

Wednesday, June 30

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The speaker will be Ken Ferree, Chief of the Federal Communications Commission's (FCC) Media Bureau. Location: 8th Floor Conference Room, Dow Lohnes & Albertson, 1200 New Hampshire Ave., NW.

2:00 PM. The Japan International Transport Institute and the Ministry of Land, Infrastructure and Transport will host a conference titled "Aviation Security of Tomorrow". There will be a technology demonstration from 1:00 - 7:00 PM that will feature an IPv6-based secure peer-to-peer communication service platform, information secrecy management solutions using a multi-purpose smartcard, and radio frequency tags. The speakers will include Asa Hutchinson, Under Secretary for Border and Transportation Security at the U.S. Department of Homeland Security. Masayuki Nomura (NTT Communications Corporation) will give a technology demonstration. There will be a reception from 5:30 - 7:00 PM. See, notice and registration page. Registration is required by June 25. Location: Grand Hyatt Washington, 1000 H Street, NW.

Deadline to submit comments to the Financial Accounting Standards Board (FASB) regarding its document titled "Exposure Draft, Share-Based Payment, an Amendment of FASB Statements No. 123 and 95", in which it proposes to that companies must expense employee stock option plans.

Deadline to submit applications to the Department of Homeland Security (DHS) for grants for homeland security related information technology demonstration projects. See, DHS release.

The research and development tax credit provision of the Internal Revenue Code expires. Both the House and Senate bills to repeal the ETI tax regime would extend the R&D credit through December 31, 2005. The House has passed its bill, HR 4520, the "American Jobs Creation Act of 2004". The Senate has passed its bill, S 1637, the "Jumpstart Our Business Strength (JOBS) Act". However, the two bills have not been reconciled.

Thursday, July 1

10:30 AM. The Heritage Foundation will host a panel discussion titled "Homeland Security Office for Civil Rights and Civil Liberties: A One-Year Review". The speakers will be Daniel Sutherland (Department of Homeland Security), Daniel Edgar (ACLU), and Paul Rosenzweig (Heritage). See, notice. For more information, contact Clayton Callen at 202 608-6052. Location: Heritage, 214 Massachusetts Ave., NE.

Deadline to submit to the Copyright Office (CO) updated notices of intent to use the statutory licenses under 17 U.S.C. §§ 112 and 114. On March 11, 2004, the CO published a notice in the Federal Register regarding its "interim regulations specifying notice and recordkeeping requirements for use of sound recordings under two statutory licenses under the Copyright Act." The CO further announced that "Electronic data format and delivery requirements for records of use as well as regulations governing prior records of use shall be announced in future Federal Register documents." The interim notice and recordkeeping regulations took effect on April 12, 2004. See, Federal Register, March 11, 2004, Vol. 69, No. 48, at Page 11515-11531.

Sunday, July 4

Independence Day.

Monday, July 5

The House and Senate will return from the Independence Day recess.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays.

More Capitol Hill News

6/24. The Senate Judiciary Committee held a business meeting at which it began consideration of the nomination of Claude Allen to be a Judge of the U.S. Court of Appeals for the 4th Circuit. During the course of its consideration, the Committee lost a quorum of members. Further consideration of this nomination was continued until the next business meeting, on July 8 at 9:30 AM.

6/24. The Senate Judiciary Committee held over its consideration of S 1635, the "L-1 Visa (Intracompany Transferee) Reform Act of 2003".

People and Appointments

6/25. Jay Keithley was named Deputy Chief for Policy of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau. He was previously Director of Government Relations and Regulatory Counsel for the Personal Communications Industry Association (PCIA). The FCC stated in a release that his "responsibilities will include oversight of the consumer policy division, the disability rights office and the reference information center. Among the issues those groups deal with are telemarketing rules, slamming rules enforcement, implementation of the Americans with Disabilities Act and ensuring the public has convenient and reliable access to all Commission public documents."

6/24. The Senate confirmed Dora Irizarry to be a Judge of the U.S. District Court for the Eastern District of New York.

6/24. The Senate confirmed Peter Hall to be a Judge of the U.S. Court of Appeals for the 2nd Circuit.

6/24. The Senate confirmed William Benton to be a Judge of the U.S. Court of Appeals for the 8th Circuit.

6/24. The Senate confirmed George Schiavelli to be a Judge of the U.S. District Court for the Central District of California.

6/24. The Senate confirmed Robert Bryan Harwell to be a Judge of the U.S. District Court for the District of South Carolina.

More News

6/25. Microsoft filed a request for a suspension of the European Commission's remedies with the European Court of First Instance in the EC's antitrust action against Microsoft. See, Microsoft release.

6/23. Pascal Lamy, the EC Commissioner for Trade, gave a speech in Brussels, Belgium at a conference on the 10th anniversary of the World Trade Organization (WTO) Trade Related Aspects of Intellectual Property Agreement (TRIPs).

6/23. The Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court (CDCal) against Gemstar-TV Guide International, Inc. alleging violation of federal securities law in connection with its alleged material overstatement of its revenues by nearly $250 Million. The SEC and Gemstar also announced that they settled the case. Gemstar did not admit the allegations, but agreed to pay a $10 Million fine. See, SEC release. This case is SEC v. Gemstar-TV Guide International, Inc., Case No. CV 04- 04-4506 RGK (CTx).

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