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August 4, 2004, 9:00 AM ET, Alert No. 952.
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Bush Signs US Australia FTA Implementation Act

8/3. President Bush signed HR 4759, the "United States-Australia Free Trade Agreement Implementation Act" at a White House signing ceremony. See also, final text of the agreement.

Bush stated that "Free and fair trade means more than eliminating tariffs on existing trade. We must also work to open up new sectors of our economy to competition and trade. This agreement opens important sectors of Australia's economy, such as telecommunications, government procurement, express delivery, computers, tourism, energy, construction, financial services and entertainment. And the agreement strengthens protections for intellectual property and promotes electronic commerce." See, transcript.

He also spoke about the other trade agreements, and the benefits of free trade generally. He said that "I support free and fair trade, because it has the power to create new wealth for whole nations and new opportunities for millions of people. Sound policy can help unleash the initiative and talent of free people. Open trade is sound policy. It has a record for creating jobs and raising living standards and lowering consumer prices."

The Senate passed the bill on July 15, 2004. See, story titled "Senate Passes US Australia FTA" in TLJ Daily E-Mail Alert No. 940, July 19, 2004. The House passed the bill on July 14, 2004. See, story titled "House Passes US Australia FTA" in TLJ Daily E-Mail Alert No. 938, July 15, 2004.

See also, stories titled "U.S. and Australia Sign FTA" in TLJ Daily E-Mail Alert No. 901, May 19, 2004, and "US and Australia Conclude FTA with Extensive Info Tech Provisions" in TLJ Daily E-Mail Alert No. 833, February 10, 2004.

Class Action Lawyers Sue Yahoo, Google and Others for Serving Targeted Ads of Gambling Web Sites

8/3. Two individuals filed a complaint [62 pages in PDF] in state court in California against Yahoo, Google, and other companies that operate web sites with search capabilities that advertise illegal internet gambling in the state of California. The plaintiffs, who are represented by law firms that specialize in plaintiff's class action litigation against technology companies, seek class action status. The plaintiffs seek restitution, forefeiture, and disgorgement pursuant to the California Unfair Business Practices Statute, Cal. Bus. & Prof. Code §§17200, et seq., and Cal. Civ. Code §§17500, et seq.

The complaint also names as defendants Overture, Ask Jeeves, Looksmart, Alta Vista, Lycos, Juniper Networks, and other companies that "are Internet content providers who create, co-create, target, position, format, publish, distribute and give premium placement of paid advertisements to other websites in conjunction with Internet search engine results requested by persons in California".

The complaint alleges that "Each of the defendants actively and knowingly accepts payment to produce advertisements and paid links for websites of unlicensed Internet gambling businesses. This advertising revenue is determined by the search term input by the user." It further alleges that "each of the defendants either expressly uses, or has access to, geo-tracking software which permits defendants to be able to target illegal gambling advertisements to particular locations such as California."

The complaint anticipates the defendants will raise the defense of interactive computer service liability, pursuant to 47 U.S.C. § 230. It argues that the defendants are not entitled to Section 230 immunity.

The case is Michael Cisneros and Michael Voight v. Yahoo, Inc., et al., Superior Court for the State of California, San Francisco County. The plaintiffs are represented by, among others, Bill Lerach.

GAO Testifies on Information Technology and Homeland Security

8/3. David Walker, head of the General Accounting Office (GAO), submitted prepared testimony [28 pages in PDF] for the House Government Reform Committee hearing titled "Moving from `Need to Know’ to `Need to Share´: A Review of the 9-11 Commission’s Recommendations".

He reviewed the 9-11 Commission report's recommendations to create a National Counterterrorism Center (NCTC) for joint operational planning and joint intelligence and to replace the current Director of Central Intelligence with a National Intelligence Director (NID) to oversee national intelligence centers across the federal government. He also reviewed President's Bush's proposal.

He also discussed the use of information technology. He wrote that "With regard to the process and technology dimensions, steps need to be taken to streamline and expedite the processes used to analyze and disseminate the tremendous amount of intelligence and other information available to the intelligence community. This will require extensive use of technology to sort and distribute information both within agencies and between agencies and other key players in various sectors both domestically and internationally, as appropriate. The 9/11 Commission and others have noted various deficiencies in this area, such as the FBI’s information technology development and implementation challenges. At the same time, some successes have occurred during the past 2 years that address process and technology concerns."

District Court Issues Opinion in FOIA Action Seeking Draft of CAPPS II Privacy Impact Assessment

8/2. The U.S. District Court (DC) issued an opinion [22 pages in PDF] in EPIC v. TSA, a FOIA case regarding access to records regarding the CAPPS II program. The District Court granted in part, and denied in part, the TSA's motion for summary judgment.

CAPPS is an acronym for "Computer Assisted Passenger Prescreening System". It involves using computer database technology to increase the security on passenger airlines. At issue in the case is whether the government must produce drafts of a privacy impact assessment of the next generation CAPPS. The District Court held that the documents are covered by a FOIA exemption for predecisional and deliberative materials.

However, the Court also held that it remains possible that the documents contain some factual material that is not exempt and may be segregable, and hence, produced under the FOIA. The Court wrote that it needs more information on this issue. The EPIC may yet obtain parts of the privacy impact assessment that it seeks.

Background. On August 22, 2003, the Electronic Privacy Information Center (EPIC) submitted a request for records to the Transportation Security Administration (TSA) pursuant to the Freedom of Information Act (FOIA). The EPIC requested any "Capital Asset Plan and Business Case" materials submitted to the Office of Management and Budget (OMB), and any "Privacy Impact Assessments" prepared for the CAPPS II project.

On September 4, the EPIC filed a complaint in the District Court against the TSA and DHS under the FOIA, which is codified at 5 U.S.C. § 552, seeking the expedited processing and release of records. (On October 9, 2003, the EPIC filed an amended complaint, stating that it seeks on the privacy impact assessment of the CAPPS II.) The EPIC also filed a motion for a temporary restraining order seeking immediate release of documents. See, the EPIC's Memorandum in Support of Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction [16 pages in PDF].

See, stories titled "EPIC Files FOIA Suit For CAPPS II Records" in TLJ Daily E-Mail Alert No. 733, September 5, 2003, and "TSA and EPIC Reach Agreement Regarding Production of Documents Regarding CAPPS II" in TLJ Daily E-Mail Alert No. 734, September 8, 2003.

Before the terrorist attacks of September 11, 2001, the airlines conducted passenger screening, and administered the Computer Assisted Passenger Prescreening System (CAPPS I), subject to federal guidelines. In late 2001, the Congress passed the Aviation and Transportation Security Act, which created the TSA as a unit of the Department of Transportation (DOT). This Act gave the TSA responsibility for airport passenger screening. In late 2002, the Congress passed the Homeland Security Act, which, among other things, created the Department of Homeland Security (DHS), and transferred the TSA from the DOT to the new DHS. The new CAPPS II, the next generation passenger screening system, will be a government (TSA) run system that replaces CAPPS I. Although, the DHS may or may not still title the system "CAPPS".

The TSA states that it has drafts of the privacy impact assessment that the EPIC requests, but asserts that it does not have to produce them under the FOIA.

It refused to produce these, asserting that they are predecisional and part of an agency's deliberative process, and hence, exempt under exemption 5 of the FOIA. The TSA further argued that it cannot segregate non-exempt portions, and produce those. The EPIC disputes these assertions.

5 U.S.C. § 552(b)(5) provides that the disclosure requirements of the FOIA do not apply to "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency".

District Court Holding. The District Court wrote that this exemption has been construed to incorporate the deliberative process privilege, and that it exists to facilitate a frank exchange of ideas and opinions within agencies.

The Court held that "For material to be protected from disclosure by the deliberative process privilege, it must be both predecisional and deliberative." First, the Court held the drafts to be deliberative.

Second, the Court addressed whether the drafts are predecisional. The EPIC argued that since the TSA published a Privacy Act notice in the Federal Register that indicates that some of the privacy related details of CAPPS II had been decided, portions of some of the drafts are not predecisional.

The TSA published a Privacy Act notice and request for comments in the Federal Register on January 15, 2003 in which it proposed to establish a new system of records to support the development of the new version of the CAPPS. See, Federal Register, January 15, 2003, January 15, 2003, Vol. 68, No. 10, at Pages 2101 - 2103.

The TSA later published a second Privacy Act notice and request for comments in the Federal Register on August 1, 2003, in which it announced that it received "substantial comments ... in response to the prior notice", and that "significant changes have been made to date to the proposed CAPPS II system and to the CAPPS II Privacy Act notice in light of these comments". This second Privacy Act notice contains perhaps the most detailed description of the CAPPS II that the DHS and TSA have published.

The Court held that the "drafts themselves, as documents, are predecisional". And hence, since the documents are both deliberative and predecisional, they are therefore protected from disclosure by Exemption 5.

However, the Court continued that the focus of the FOIA in information, and not documents. It wrote that the TSA's "claim that the documents in question contain some non-exempt material does not preclude the agency from withholding the documents under FOIA Exemption 5; rather, it would require the agency to release the non-exempt information, if reasonably segregable, from the exempt material."

The Court concluded that "Defendants are required to provide Plaintiff with any reasonably segregable information that does not meet the dual Exemption 5 requirements of being deliberative in nature and predecisional. Accordingly, Defendants, in their affidavits and/or Vaughn index, must address segregability of any non-exempt information both in terms of “factual” information and also “settled” decisions that were not “predecisional” as of the date of the draft. Defendants have not met this burden as set established by the law of this Circuit, detailed supra. The Court shall therefore order Defendants to conduct another segregability review and release the reasonably segregable, non-exempt material to Plaintiff, or file another motion with the Court addressing the segregability issue, supported by affidavits and a Vaughn index."

More Information. On February 12, 2004 the General Accounting Office (GAO) released a report [53 pages in PDF] titled "Aviation Security: Computer-Assisted Passenger Prescreening System Faces Significant Implementation Challenges". The appropriations bill for the DHS for FY 2004 established criteria for CAPPS II, and required that the GAO report on the program's compliance with these criteria. The report finds that most of the criteria have not been met. See, story titled "GAO Report Finds CAPPS II Fails to Meet Congressional Criteria" in TLJ Daily E-Mail Alert No. 836, February 13, 2004.

See also, stories titled "Democratic Representatives Write Bush Re CAPPS II" in TLJ Daily E-Mail Alert No. 836, February 13, 2003; "Bush Signs Homeland Security Appropriations Bill", "TSA Receives Comments In CAPPS II Privacy Proceeding", and "Homeland Security Appropriations Bill Purports to Restrict Use of Funds for CAPPS II" in TLJ Daily E-Mail Alert No. 751, October 2, 2003; and "Senate Commerce Committee Holds Hearing on Transportation Security" in TLJ Daily E-Mail Alert No. 736, September 10, 2003.

The report of the National Commission on Terrorist Attacks Upon the United States, which is also known as the 9-11 Commission, discusses and makes recommendations regarding the next generation CAPPS, and a broader network of screening. See, story titled "President Bush Responds to 9-11 Report" in TLJ Daily E-Mail Alert No. 951, August 3, 2004.

The case is numbered 03-1846.


Yesterday's issue, TLJ Daily E-Mail Alert No. 951, August 3, 2004, incorrectly referred to the "Computer Assisted Passenger Prescreening System" as the "Computer Assisted Passenger Profiling System". See, story titled "President Bush Responds to 9-11 Report" at paragraph 6.

Washington Tech Calendar
New items are highlighted in red.
Wednesday, August 4

The House and Senate will not meet from July 26 through September 6.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The agenda [PDF] includes The agenda includes a Notice of Proposed Rulemaking (NPRM) and Declaratory Ruling (DR) regarding the Department of Justice's (DOJ) request that the FCC administratively amend the CALEA statute to cover information services, such as VOIP. It also includes consideration of various applications for certification of digital output protection technologies and recording methods under the FCC's broadcast flag rule. The event will be webcast. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

Thursday, August 5

POSTPONED. 9:30 AM. The Senate Commerce Committee (SCC) will hold a hearing on the National Commission on Terrorist Attacks Upon the United States's (9-11 Commission) recommendations regarding transportation security. See, 9-11 Commission report and SCC notice. Press contact: Rebecca Fisher at 202 224-2670. Location: Room 253, Russell Building.

Friday, August 6

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Sony Electronics, Inc., et al. v. Soundview Technologies, Inc., a patent infringement and antitrust case involving V-Chip parental television control technology. This is App. Ct. No. 04-1057, an appeal from the U.S. District Court for the District of Connecticut, No. 3:00cv754(JBA), Judge Janet Arterton presiding. See, opinion published at 157 F. Supp. 2d 180 (2001), opinion granting summary judgment of non-infringement in favor of Sony and other television manufacturers, published at 225 F. Supp. 2d 164 (2002), and August 28, 2003 opinion [8 pages in PDF] granting plaintiffs' motion for summary judgment on Soundview's antitrust and unfair trade practices counterclaims. Location: Courtroom 402, 717 Madison Place, NW.

2:30 PM. The U.S. Court of Appeals (FedCir) will hear oral argument in Irdeto Access v. Echostar, No. 04-1154. Location: Courtroom 402, 717 Madison Place, NW.

1:00 - 4:00 PM. The DC Bar Association will host a continuing legal education (CLE) program titled "USA PATRIOT Act Primer". The speakers will include Sharie Brown (Foley & Lardner). See, notice. Prices vary from $80 to $95. For more information, call 202 626-3488. Location: D.C. Bar Conference Center, B-1 Level, 1250 H Street, NW.

EXTENDED TO OCTOBER 8. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its public notice (DA 04-1690) requesting public comments on constitutionally permissible ways for the FCC to identify and eliminate market entry barriers for small telecommunications businesses and to further opportunities in the allocation of spectrum based services for small businesses and businesses owned by women and minorities. See, notice in the Federal Register, June 22, 2004, Vol. 69, No. 119, at Pages 34672 - 34673. See also, notice of extension [PDF].

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding the process for designation of eligible telecommunications carriers (ETCs) and the FCC's rules regarding high-cost universal service support. This NPRM is FCC 04-127 in Docket No. 96-45. See, notice in the Federal Register, July 7, 2004, Vol. 69, No. 129, at Pages 40839 - 40843.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding the rechannelization of portions of the 17.7-19.7 GHz band. This NPRM is FCC 04-77 in WT Docket No. 04-143. See, notice in the Federal Register, July 7, 2004, Vol. 69, No. 129, at Pages 40843 - 40850.

Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its Special 301 out of cycle review of Israel and other nations. Section 182 of the Trade Act of 1974, which is codified at 19 U.S.C. § 2242, requires the USTR to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. This is also referred to as the Special 301 provision. See, notice in the Federal Register, July 13, 2004, Vol. 69, No. 133, at Pages 42077-42078.

Monday, August 9

10:00 AM. 2:30 PM. The U.S. Court of Appeals (FedCir) will hear oral argument in Business Object v. Microstrategy, No. 04-1009. Location: Courtroom 203, 717 Madison Place, NW.

Extended deadline to submit comments to the Federal Communications Commission (FCC) regarding its proceeding titled "In the Matter of Review of the Commission's Broadcast and Cable Equal Employment Opportunity Rules and Policies". This is MM Docket No. 98-204. See, notice of extension [PDF].

Tuesday, August 10

9:30 AM - 12:00 NOON. The Federal Communications Commission's (FCC) WRC 07 Advisory Committee, Informal Working Group 4: Broadcasting and Amateur Issues. See, notice [PDF]. Location: Shaw Pittman, 2300 N St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its further notice of proposed rulemaking (FNPRM) regarding Aviation Radio Service. This FNPRM is FCC 03-238 in WT Docket No. 01-289. See, notice in the Federal Register, April 12, 2004, Vol. 69, No. 70, at Pages 19140 - 19147.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding reserve prices, minimum opening bids, and other auction procedures for the FCC's broadband PCS spectrum auction (Auction No. 58), which is scheduled to commence on January 12, 2005. See, FCC Public Notice [PDF] (DA 04-2451).

More News

8/3. The Internal Revenue Service (IRS) issued a release regarding phishing for taxpayer information with fraudulent IRS correspondence, for the purpose of engaging in identity theft and theft of financial assets. The IRS wrote that "The scheme uses fictitious IRS correspondence and an altered IRS form in an attempt to trick the foreign persons into disclosing their personal and financial data." It elaborates that "In this particular scam, an altered IRS Form W-8BEN, ``Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding,´´ is sent with correspondence purportedly from the IRS to non-resident aliens who have invested in U.S. property, such as securities or bonds, and therefore have U.S.-sourced income. The correspondence claims that the recipient will be taxed at the maximum rate unless the requested personal and financial data is entered onto the form and the form is faxed to the phone number contained in the correspondence." IRS Commissioner Mark Everson said that "Taxpayers should be wary of strangers trying to obtain sensitive personal information, whether it's in person, over the phone, through the mail or over the Internet."

8/3. The U.S. Court of Appeals (4thCir) issued its opinion [PDF] in Esposito v. VeriSign and AOL, an appeal from the U.S. District Court (EDVa) in a domain name dispute. The Court of Appeals did not address the merits of the appeal, because Esposito failed to file his notice of appeal within thirty days of entry of final judgment by the District Court. It dismissed the appeal. The District Court enjoined the plaintiff, Mark Anthony Esposito, from using a domain name likely to cause confusion. This case is Mark Anthony Esposito and America Online Latino v. VeriSign, Inc., America Online, Inc. et al., No. 04-1248, an appeal from the U.S. District Court for the Eastern District of Virginia, at Alexandria, D.C. No. CA-03-362-A.

8/3. The U.S. Court of Appeals (2ndCir) issued its opinion [PDF] in Lucent v. Tatung, an appeal from a District Court judgment confirming an arbitration award in a dispute regarding the payment of royalties pursuant to a patent licensing agreement. Lucent, the patent holder, and licensor, initiated an arbitration to collect unpaid royalties from Tatung. The arbitration panel awarded Lucent over $12 Million. The District Court confirmed the award. On appeal, Tatung argued arbitrator bias. The Appeals Court held for Lucent. This case is Lucent Technologies, Inc., et al. v. Tatung Co., No. 03-7741, an appeal from the U.S. District Court for the Southern District of New York.

8/2. The U.S. Patent and Trademark Office (USPTO) announced that web users can now use the UPSTO's Public PAIR (patent application and information retrieval) "to track the status of a public patent application as it moves from publication to final disposition, and review documents in the official application file, including all decisions made by patent examiners and their reasons for making them". The USPTO currently has documents available for about 500,000 applications. New documents will be made available for about 300,000 applications each year. See, USPTO release. Patent applications generally become available 18 months after they are filed. See, 35 U.S.C. § 122(b).

7/29. The Federal Trade Commission (FTC) wrote a letter [PDF] to Privo, Inc. informing Privo that the FTC has approved its application [1.9 MB in PDF] "to serve as a safe harbor program for purposes of implementing the protections of the Children's Online Privacy Protection Rule", which is codified at 16 C.F.R. Part 312. See also, FTC release.

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