Tech Law Journal Daily E-Mail Alert
June 29, 2004, 9:00 AM ET, Alert No. 928.
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Supreme Court Affirms Preliminary Injunction of COPA
6/29. The Supreme Court issued its opinion [41 pages in PDF] Ashcroft v. ACLU, No. 03-218, a constitutional challenge to the Child Online Protection Act (COPA). The District Court issued a preliminary injunction of the COPA. The U.S. Court of Appeals (3rdCir) affirmed. And now, the Supreme Court affirmed the issuance of the preliminary injunction, and remanded.

The Supreme Court held that the COPA is a content based restriction of speech, and that the government has not met is burden of showing that the COPA is the least restrictive alternative available to accomplish the goals of the Congress in protecting minors from web based material that is harmful to minors.

It is a hypothetical, but unlikely, possibility that on remand the District Court will find, after trial on the merits, that the COPA is the least restrictive alternative available to the Congress, and uphold the COPA.

The COPA provides, in part, that "Whoever knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors shall be fined not more than $50,000, imprisoned not more than 6 months, or both."

The COPA further provides that "It is an affirmative defense to prosecution under this section that the defendant, in good faith, has restricted access by minors to material that is harmful to minors ... by requiring use of a credit card, debit account, adult access code, or adult personal identification number ... by accepting a digital certificate that verifies age; or ... by any other reasonable measures that are feasible under available technology."

The COPA is now codified at 47 U.S.C. 231.

The COPA was enacted into law in 1998. It was a reaction to the Supreme Court decision holding unconstitutional the Communications Decency Act (CDA). Unlike the CDA, which banned all internet indecency, the COPA only affects the web, only affects commercial communications, and only restricts material that is harmful to minors. The majority of the Justices of the Supreme Court, however, were unimpressed by these distinctions.

See also, March 6, 2003 opinion [59 pages in PDF] of the U.S. Court of Appeals (3rdCir).

Supreme Court Grants Certiorari in Securities Fraud Case

6/28. The Supreme Court granted certiorari in Dura Pharmaceuticals v. Broudo, a 10b-5 securities fraud case involving the question of whether a securities fraud plaintiff invoking the fraud on the market theory must demonstrate loss causation by pleading and proving a causal connection between the alleged fraud and the investment's subsequent decline in price.

The Supreme Court wrote that "The motion of Securities Industry Association for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted." See, Order List [11 pages in PDF] at page 4.

See also, August 5, 2003 opinion [16 pages in PDF] of the U.S. Court of Appeals (9thCir).

The Solicitor General filed an amicus curiae brief urging the Supreme Court to grant certiorari. He wrote that "There is an acknowledged circuit conflict regarding the nature and scope of the plaintiff's burden to plead and prove loss causation in a fraud-on-the-market case under Rule 10b-5; the court of appeals decided that question incorrectly; the question is one of recurring importance; and this case is a suitable vehicle for resolving it."

This case is Dura Pharmaceuticals, Inc. v. Michael Broudo, et al., No. 03-932, a petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit.

More Supreme Court News

6/28. The Supreme Court issued an order in three proceedings pertaining to internet wine sales: Granholm v. Heald, No. 03-1116, Michigan Beer & Wine Wholesalers v. Heald, No. 03-1120, and Swedenburg v. Kelly, No. 03-1274. The Court ordered that "The motion for realignment of the parties and to set a briefing schedule is denied. See, Order List [11 pages in PDF] at page 3. On November 12, 2002, the District Court issued its opinion [32 page PDF scan] holding that the NY statute prohibiting out of state wineries from selling directly to NY residents, such as via the internet, violates the Commerce Clause of the Constitution. See, story titled "Court Holds New York's Ban on Internet Wine Sales Is Unconstitutional" in TLJ Daily E-Mail Alert No. 551, November 18, 2002. Then, on February 12, 2004 the U.S. Court of Appeals (2ndCir) issued its opinion [28 pages in PDF] reversing the District Court, and holding that NY's statute is a permissible exercise of authority granted to states under the 21st Amendment. See, story titled "2nd Circuit Rules in Internet Wines Sales Case" in TLJ Daily E-Mail Alert No. 840, February 19, 2004. The U.S. Court of Appeals (6thCir) issued its opinion in Heald v. Engler on August 28, 2003. The Court held that Michigan's alcohol sales statute violates the dormant commerce clause. On May 24, 2004 the Supreme Court granted certiorari. See, story titled "Supreme Court Grants Certiorari in Internet Wine Sales Cases" in TLJ Daily E-Mail Alert No. 905, May 26, 2004.

6/28. The Supreme Court issued an order in Hewlett-Packard v. Jebian, No. 03-1202, and Hill v. Lockheed Martin, No. 03-1443. It wrote that "The Solicitor General is invited to file briefs in these cases expressing the views of the United States." See, Order List [11 pages in PDF] at page 3. HP v. Jebian is a proceeding on a petition for writ of certiorari to the U.S. Court of Appeals (9thCir) is an ERISA case involving denial of benefits to a former programmer for HP who suffered back troubles.

6/28. The Supreme Court denied certiorari in Orloff v. FCC, No. 03-1347  See, Order List [11 pages in PDF] at page 5.

8th Circuit Affirms in Leach v. Mediacom

6/28. The U.S. Court of Appeals (8thCir) issued its per curium opinion [2 pages in PDF] in Leach v. Mediacom, holding that there is no implied private right of action under 47 U.S.C. 531(e).

This subsection, which is part of the Cable Communications Policy Act, provides, in part, that "a cable operator shall not exercise any editorial control over any public, educational, or governmental use of channel capacity provided pursuant to this section, except a cable operator may refuse to transmit any public access program or portion of a public access program which contains obscenity, indecency, or nudity."

The Court held that there is no implied private right of action because the Congress expressly gave the franchiser enforcement authority, and where a statute provides a method of enforcement, it thereby precludes other methods of enforcement. The District Court dismissed the complaint. The Appeals Court affirmed.

This case is David Leach v. Mediacom, Inc., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 03-1447, an appeal from the U.S. District Court for the Southern District of Iowa.

Judiciary Committee Members Introduce Spyware Bill

6/23. Rep. Bob Goodlatte (R-VA), Rep. Zoe Lofgren (D-CA), and Rep. Lamar Smith (R-TX) introduced HR 4661 the "Internet Spyware (I-SPY) Prevention Act of 2004". It would add a new Section 1030A to the Criminal Code titled "Illicit indirect use of protected computers" to create two narrow criminal prohibitions related to some of the more egregious forms of spyware.

The bill was referred to the House Judiciary Committee. Rep. Smith is the Chairman of the Subcommittee on Courts, the Internet and Intellectual Property (CIIP). Rep. Goodlatte and Rep. Lofgren are also members of the CIIP Subcommittee.

Summary of HR 4661. It would add a new Section 1030A to the Criminal Code titled "Illicit indirect use of protected computers". Currently, 18 U.S.C. 1030 is titled "Fraud and related activity in connection with computers".

This bill provides two prohibitions. First, it provides that "Whoever intentionally accesses a protected computer without authorization, or exceeds authorized access to a protected computer, by causing a computer program or code to be copied onto the protected computer, and intentionally uses that program or code in furtherance of another Federal criminal offense shall be fined under this title or imprisoned 5 years, or both."

Second, it provides that "Whoever intentionally accesses a protected computer without authorization, or exceeds authorized access to a protected computer, by causing a computer program or code to be copied onto the protected computer, and by means of that program or code---
   (1) intentionally obtains, or transmits to another, personal information with the intent to defraud or injure a person or cause damage to a protected computer; or
   (2) intentionally impairs the security protection of the protected computer;
shall be fined under this title or imprisoned not more than 2 years, or both."

The bill also includes a broad preemption of state laws that create a private right of action. However, it contains no provision that preempts actions by states or state attorneys general.

Finally, the bill contains a definitional section. The definitions of "protected computer" and "exceeds authorized access" for the purposes of interpretation of the new  1030A would be the same as those currently in  1030.

The definition of "personal information" includes a "first and last name", "home or other physical address", "electronic mail address", "telephone number", "Social Security number, tax identification number, drivers licence number, passport number, or any other government-issued identification number" and "a credit card or bank account number or any password or access code associated with a credit card or bank account".

However, this definition includes less information than does the definition of "personally identifying information" found in the House Commerce Committee bill, HR 2929. That bill also adds "Any access code or password ..."

Comparison to HR 2929. The House Commerce Committee (HCC) has already passed a different spyware bill. On June 24, the HCC amended and approved HR 2929, the "Safeguard Against Privacy Invasions Act" or "SPY Act" on a roll call vote of 45-4. See, story titled "House Commerce Committee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 926, June 25, 2004; and story titled "House Subcommittee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 922, June 21, 2004.

The two bills contain different provisions. The Commerce Committee bill only creates prohibitions that are civilly enforceable by the Federal Trade Commission (FTC). The Judiciary Committee bill only creates criminal prohibitions that are enforceable by Department of Justice (DOJ).

The Commerce Committee bill creates a long and broad list of prohibited activities. The Judiciary Committee bill contains only a few narrow prohibitions of some of the most egregious types of conduct.

The Judiciary Committee bill does not contain the broad prohibitions that some critics of the Judiciary Committee's bill assert might affect practices currently being followed by Microsoft, eBay, and Yahoo. In this perspective, the Judiciary Committee bill is a much more limited alternative to the Commerce Committee bill.

In another perspective, the two bills are complimentary. The Commerce Committee bill addresses consumer protection issues within the jurisdiction of that Committee, and the Judiciary Committee bill addresses criminal issues within the jurisdiction of that Committee. Members of each Committee are reluctant to put in their bills provisions that would also give the other Committee jurisdiction over their bills. The two bills could ultimately be combined.

Rep. Zoe LofgrenRep. Lofgren (at right) stated in a release that "Spyware is quickly becoming one of the biggest threats to consumers on the information superhighway. Among other things, criminals can use spyware to track every keystroke an individual makes, including credit card and social security numbers ... This bill is a good starting point to target the worst offenders while allowing legitimate applications to flourish."

Rep. Goodlatte stated in the same release that "By imposing criminal penalties on these bad actors, this legislation will help deter the use of spyware, and will thus help protect consumers from these aggressive attacks ... At the same time the legislation leaves the door open for innovative technology development to continue to combat spyware programs."

People and Appointments
6/25. Erin McGrath was named Assistant Division Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau's (WTB) Mobility Division. The FCC stated in a release [PDF] that she will be responsible for "the post-auction review process and secondary market transactions". She has worked for the FCC since 2000.

6/25. Dorothy Conway was named Associate Division Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau's (WTB) Spectrum Management Resources & Technologies Division. The FCC stated in a release [PDF] that she will be responsible for customer support, public forums, trade shows and booth, graphics development, and training for WTB system users. She joined the FCC in 1997.

Correction

6/29. The story titled "Kerry Addresses Tech Issues" in yesterday's issue, TLJ Daily E-Mail Alert No. 927, June 28, 2004, incorrectly described Sen. John Kerry's (D-MA) campaign position paper statements regarding U.S. Patent and Trademark Office (USPTO) funding and diversion of USPTO user fees.

The first two paragraphs of this section of the story should have been as follows:

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."

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

Notice of Change of E-Mail Address

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Notice of Publication Schedule
The TLJ Daily E-Mail Alert will not be published on Friday, July 2 or Monday, July 5.
Washington Tech Calendar
New items are highlighted in red.
Tuesday, June 29

The House and Senate will not meet the week of June 28 through July 5.

1:00 PM. The Center for Democracy and Technology (CDT) will host a telephone press conference to discuss the Supreme Court's opinion [PDF] in Ashcroft v. ACLU, a challenge to the constitutionality of the Child Online Protection Act (COPA). The participants will be Jerry Berman (CDT), Robert Corn-Revere (Davis Wright Tremaine), Elliot Mincberg (People for the American Way), and John Morris (CDT). To participate, call 334 260-2557 and provide security code 36991.

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.

Tuesday, July 7

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Sony Electronics v. Soundview Technologies. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The Senate Judiciary Committee will hold a hearing on judicial nominees. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

10:00 AM. The House Ways and Means Committee will hold a hearing titled "Implementation of the United States-Morocco Free Trade Agreement". Location: Room 1100, Longworth Building.

12:15 - 1:45 PM. The New America Foundation (NAF) will host a brown bag lunch titled "Cyberterrorism: How Modern Terrorism Uses the Internet". The speakers be Gabriel Weimann (Haifa University) and James Fallows (Atlantic Monthly). RSVP to Jennifer Buntman at 202 986-4901 or buntman@newamerica.net. Location: NAF, 1630 Connecticut Ave, NW, 7th Floor.

FCC Issues Public Notice on Use of Small Antennas for Unlicensed Wi-Fi and Other Devices

6/24. The Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) issued a public notice [3 pages in PDF] regarding "the use of unlicensed devices, including customer antennas, especially in the context of a variety of multi-tenant environments (MTEs). MT environments encompass venues such as hotels, conference and convention centers, airports, and colleges and universities."

This notice states that questions have arisen about the role of the FCC in addressing and resolving radio interference (RFI) issues. In addition, "questions have arisen about the ability of homeowners associations, landlords, and other third parties to prohibit customer use of small antennas when consumers install and operate them as unlicensed devices."

This public notice states that "the FCC has exclusive authority to resolve matters involving radio frequency interference [RFI] when unlicensed devices are being used, regardless of venue. We also affirm that the rights that consumers have under our rules to install and operate customer antennas one meter or less in size apply to the operation of unlicensed equipment, such as Wi-Fi access points -- just as they do to the use of equipment in connection with fixed wireless services licensed by the FCC."

This public notice is DA 04-1844.

More News

6/28. The Federal Communications Commission (FCC) published in the Federal Register its Unified Agenda of Federal Regulatory and Deregulatory Actions, a list of significant proceedings. See, Federal Register, June 28, 2004, Vol. 69, No. 123, at Pages 38504 - 38559.

6/28. The Federal Trade Commission (FCC) published in the Federal Register its Unified Agenda of Federal Regulatory and Deregulatory Actions, a list of significant proceedings. See, Federal Register, June 28, 2004, Vol. 69, No. 123, at Pages 38598 - 38609.

6/28. The Department of Commerce (DOC) published in the Federal Register its Unified Agenda of Federal Regulatory and Deregulatory Actions, a list of significant proceedings. See, Federal Register, June 28, 2004, Vol. 69, No. 123, at Pages 37264 - 37356. See especially, sections for the Bureau of Industry and Security (BIS) and the U.S. Patent and Trademark Office.

6/28. The Center for Internet and Society (CIS) at Stanford Law School published a book titled Open Architecture as Communications Policy. It is a collection of articles, edited by Mark Cooper of the Consumer Federation of America. The other contributors include John Butler, Vinton Cerf, Earl Comstock, Mark Cooper, Michael Copps, Robert Kahn, Mark Lemley, Lawrence Lessig, Richard Whitt, and Timothy Wu. It includes articles titled "The End of End to End", by Lemley and Lessig, "Network Neutrality, Broadband Discrimination" by Wu, and "Formulating a New Public Policy Framework Based on the Network Layers Model" by Whitt. The book is available in electronic format [472 pages in PDF]. This is a free download.

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