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April 18, 2005, 9:00 AM ET, Alert No. 1,117.
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House to Take Up Intellectual Property Bills

4/18. The House of Representatives is scheduled to consider two intellectual property bills on Tuesday, April 19, under suspension of the rules. The House will consider S 167, the "Family Entertainment and Copyright Act of 2005", and HR 683, the "Trademark Dilution Revision Act of 2005". See, Republican Whip Notice.

S 167, which is also known as the FECA, contains four separate copyright related parts. It includes the ART Act, which includes a provision that criminalizes certain uses of camcorders in movie theaters. It includes the Family Movie Act, which pertains to ClearPlay type content skipping technology. It also contains the Film Preservation Act and the Orphan Works Act.

The House Judiciary Committee approved S 167 on March 9, 2005. See, story titled "House Judiciary Committee Approves Copyright Bill" in TLJ Daily E-Mail Alert No. 1,093, March 11, 2005.

The Senate approved this bill on February 1, 2005. See, story titled "Senate Approves Copyright Bill" in TLJ Daily E-Mail Alert No. 1,069, February 3, 2005. That story contains a more detailed summary of its contents.

HR 683 is a reaction to the Supreme Court's March 4, 2003 opinion [21 pages in PDF] in Moseley v. V Secret. See, story titled "Supreme Court Rules in Trademark Dilution Case" in TLJ Daily E-Mail Alert No. 618, March 6, 2003.

The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property (CIIP) held a hearing on February 17, 2005. See, story titled "CIIP Subcommittee Holds Hearing On Trademark Dilution Revision Act" in TLJ Daily E-Mail Alert No. 1,081, February 23, 2005. The CIIP Subcommittee amended and approved this bill on March 3, 2005. See, story titled "House CIIP Subcommittee Amends and Approves Trademark Dilution Revision Act" in TLJ Daily E-Mail Alert No. 1,088, March 4, 2005. The House Judiciary Committee approved HR 683 on March 9, 2005. See, story titled "House Judiciary Committee Approves Trademark Dilution Bill" in TLJ Daily E-Mail Alert No. 1,093, March 11, 2005.

The Senate has not taken action on this bill.

S 167 and HR 683 are listed as the 2nd and 4th items on the agenda, respectively. The House will meet at 12:30 PM for morning hour, and at 2:00 PM for legislative business. Votes will be postponed until 6:30 PM. Items considered under suspension of the rules cannot be amended. However, these items also require a two-thirds majority. Almost all items considered under suspension of the rules have widespread support.

There is a third intellectual property related item on the agenda, HConRes 53. This is a non-controversial resolution expressing the sense of the Congress regarding the issuance of the 500,000th design patent by the U.S. Patent and Trademark Office (USPTO) to DaimlerChrysler Corporation, which has operations in the state of Michigan. The sponsor is Rep. John Conyers (D-MI). The new Secretary of Commerce, Carlos Gutierrez is also from Michigan.

The agenda for April 19 also includes HR 1038, the "Multidistrict Litigation Restoration Act of 2005". This bill would amend 28 U.S.C. § 1407, which pertains to multidistrict litigation, to allow a designated U.S. district court, known in the statute as the "transferee" court, to retain jurisdiction over referred cases arising from the same fact scenario for purposes of determining liability and punitive damages, or to send them back to the respective courts from which they were transferred.

This bill responds to the 1998 opinion of the Supreme Court in Lexecon v. Milberg Weiss, which is also reported at 523 U.S. 26. See also, House Report 109-024.

In addition, both the House and Senate will hold hearings this week on patent issues. On Wednesday, April 20, the House Judiciary Committee's CIIP Subcommittee will hold a hearing titled "Oversight Hearing on Committee Print Regarding Patent Quality Improvement". On Thursday, April 21, the Senate Judiciary Committee's Subcommittee on Intellectual Property will hold a hearing titled "The Patent System Today and Tomorrow".

IRS Information Security Weaknesses Put Taxpayer Data at Risk

4/15. The Government Accountability Office (GAO) released a report [30 pages in PDF] titled "Information Security: Internal Revenue Service Needs to Remedy Serious Weaknesses over Taxpayer and Bank Secrecy Act Data".

This report finds that the Internal Revenue Service (IRS) "has not effectively implemented controls over key financial and tax processing systems", and that these "weaknesses impair IRS’s ability to ensure the confidentiality, integrity, and availability of its sensitive financial and taxpayer data and FinCEN’s Bank Secrecy Act data".

The report finds that the "IRS has not implemented effective electronic access controls to prevent, limit, or detect unauthorized access to computing resources from the internal IRS computer network."

The report also finds that the IRS has not "effectively implemented certain other information security controls relating to physical security, segregation of duties, and service continuity".

The report concludes that "These information security control weaknesses exist primarily because IRS has not fully implemented an agency-wide information security program to effectively protect the information and information systems that support the operations and assets of the agency."

The IRS has a long history of information security weakness. See for example, story titled "Sen. Grassley Condemns IRS for 2,300 Missing Computers" in TLJ Daily E-Mail Alert No. 342, January 9, 2002; story titled "IRS Loses More Computers, Jeopardizes Taxpayer Info" in TLJ Daily E-Mail Alert No. 493, August 16, 2002; story titled "GAO Report Finds That Computer Weaknesses At IRS Put Taxpayer Data At Risk" in TLJ Daily E-Mail Alert No. 673, June 4, 2003; and story titled "IRS Data Vulnerable" in TLJ Daily E-Mail Alert No. 145, March 16, 2001.

The just released GAO report states that the "IRS has made progress".

4th Circuit Rules DBS Providers Can Sue Pirates for Damages

4/13. The U.S. Court of Appeals (4thCir) issued its opinion [9 pages in PDF] in Directv v. Nicholas, a case regarding civil actions by satellite television providers against individuals who use pirate access devices to avoid paying for service. The Court of Appeals held that a satellite company may maintain an action for damages under 18 U.S.C. § 2520 against someone who has violated 18 U.S.C. § 2511.

Directv provides satellite television programming. It encrypts its transmissions to prevent unauthorized viewing of pay per view and premium programs. Its customers purchase access devices from it to decrypt the satellite transmissions.

Directv asserts that Dennis Nicholas used a pirate access devices to decrypt Directv signals, without paying Directv.

Directv filed a civil complaint in U.S. District Court (EDNC) against Nicholas alleging, among other things, that it is entitled to damages under 18 U.S.C. § 2511 and 18 U.S.C. § 2520. (The other counts are not at issue in the present appeal.)

18 U.S.C. § 2511(1) criminalizes pirate access. It provides, in part, that "any person who -- (a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication ... shall be punished ..."

18 U.S.C. § 2520, among other things, creates a private right of action for violation of § 2511. It provides, in part, that "Except as provided in section 2511(2)(a)(ii), any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter may in a civil action recover from the person or entity, other than the United States, which engaged in that violation such relief as may be appropriate."

The Court of Appeals wrote that there is no dispute that "the government could criminally proceed against Nicholas for his alleged conduct". Moreover, it is undisputed that "satellite television transmissions constitute electronic communications under § 2510(12)", and that "the act of using a device to decrypt encrypted satellite television transmissions unquestionably falls under the definition of ``interception´´ as defined in § 2510(4). Thus, the Court of Appeals wrote that "under the plain language of the statutes, using a pirate access device to intercept the encrypted satellite transmissions of a satellite television provider constitutes a violation of § 2511(1)(a)".

The issue in this case is whether satellite company can recover damages under 18 U.S.C. § 2520 against the person who access its signal in violation of 18 U.S.C. § 2511(1)(a).

The Court of Appeals concluded that "the plain language of the statutes decidedly favors DIRECTV and provides it a cause of action. As evinced by the plain language of the section, § 2520(c) provides two methods of computing damages. One method is applicable to interceptions of transmissions that are not encrypted. The other method is applicable to all other actions, including those that intercept encrypted satellite transmissions. Because DIRECTV alleges that Nicholas intercepted its encrypted satellite transmissions, DIRECTV may maintain its private cause of action against Nicholas."

It should also be recalled that on June 16, 2004, the U.S. Court of Appeals (11thCir) issued its opinion [12 pages in PDF] in Directv v. Treworgy, holding that 18 U.S.C. § 2520 does not provide a private right of action against persons who possess devices used to intercept satellite transmissions in violation of 18 U.S.C. § 2512(1)(b). Section 2512 criminalizes manufacturing, assembling, possessing, and selling pirate access devices, while Section 2511 criminalizes using those devices to actually intercept signals.

See, story titled "11th Circuit Limits Private Suits by DBS Providers Against Pirates" in TLJ Daily E-Mail Alert No. 922, June, 21, 2004.

This case is Directv Incorporated v. Dennis Nicholas, U.S. Court of Appeals for the 4th Circuit, No. 04-1845, an appeal from the U.S. District Court for the Eastern District of North Carolina, at Raleigh, D.C. No. CA-03-697-5-BO, Judge Terrence Boyle presiding.

In the present case the Court of Appeals reversed the District Court. President Bush has nominated the reversed Judge, Terrence Boyle, for a seat on the U.S. Court of Appeals for the 4th Circuit. He is one of many judicial nominees being blocked by Senate Democrats.

Martin Named Defense Commissioner

4/15. The Federal Communications Commission (FCC) released an order [PDF] that names Kevin Martin the "Defense Commissioner".

This order states that the responsibilities include "(1) representing the Commission in interagency matters pertaining to homeland security, national security and emergency preparedness, and defense matters, including matters pertaining to continuity of government during national emergencies; (2) serving as the principal point of contact for the Commission on all matters pertaining to the Department of Homeland Security; (3) developing emergency programs covering service provision by wireless and wireline telecommunications carriers, broadcast, cable, and satellite facilities, as well as radio frequency assignment, investigation, and enforcement; and (4) assuming the duties of the Commission under certain emergencies."

The emergency powers of the Defense Commissioner are set forth in 47 C.F.R. § 0.181. This rule provides, in part, that the Defense Commissioner has the authority, "In the event of enemy attack, or the imminent threat thereof, or other disaster resulting in the inability of the Commission to function at its offices in Washington, D.C., to assume all of the duties and responsibilities of the Commission and the Chairman ..."

This order is FCC 05-85. It was adopted on April 13, and released on April 15, 2005.

People and Appointments

4/15. Michael Benson was named EVP and CIO of Directv. He previously worked for Businessedge Solutions, Inc. See, Directv release.

More News

4/14. The House Appropriation's Committee's Subcommittee on Science, State, Justice, and Commerce, and Related Agencies postponed its hearing on the Federal Communications Commission. This hearing had been scheduled for April 14. It has been rescheduled for April 26.

4/14. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled "The ORBIT Act: An Examination of Progress Made in Privatizing the Satellite Communications Marketplace".  See, prepared testimony [9 pages in PDF] of Donald Abelson (Chief of the Federal Communications Commission's International Bureau), prepared testimony [7 pages in PDF] of Phillip Spector (Intelsat Global Service Corporation), prepared testimony [14 pages in PDF] of JayEtta Hecker (Government Accountability Office), prepared testimony [16 pages in PDF] of Daniel Goldberg (New Skies Satellites B.V.), and prepared testimony [6 pages in PDF] of Alan Auckenthaler (Inmarsat Ventures Limited).

4/14. The House Armed Services Committee and the House International Relations Committee held a joint hearing titled "EU Arms Embargo Against China". One of the witnesses was Peter Lichtenbaum, the acting Under Secretary for Industry and Security at the Department of Commerce. He discussed the U.S. export control regime on dual use technologies, including electronics. See, prepared testimony of Lichtenbaum.

4/14. The European Commission announced in a release that it "launched legal proceedings against ten EU Member States to remedy infringements of EU rules on electronic communications. It points to defects in national laws, and incorrect practical application of EU rules, in Germany, Italy, Latvia, Malta, the Netherlands, Austria, Poland, Portugal, Slovakia and Finland. The opening of these proceedings follows concerns identified in the Commission’s Implementation Reports on the electronic communications sector, the most recent of which was published at the end of 2004."

Washington Tech Calendar
New items are highlighted in red.
Monday, April 18

The House will meet at 2:00 PM in pro forma session only. See, Republican Whip Notice.

The Senate will meet at 1:00 PM for morning business. At 2:00 PM it will resume consideration of HR 1268, the Iraq/Afghanistan Supplemental Appropriations bill.

The Supreme Court will return on from the recess that it began on Monday, April 4. See, Order List [12 pages in PDF] at page 12.

Deadline to submit to the Federal Communications Commission (FCC) replies to oppositions to petitions to deny Nextel's and Sprint's joint applications for FCC approval of the transfer of control to Sprint of the licenses and authorizations held both by Nextel. That is, this is a merger review proceeding. See, FCC Public Notice [7 pages in PDF], No. DA 05-502, in WT Docket No. 05-63. On December 15, 2004, the two companies announced a "definitive agreement for a merger of equals". See, Nextel release and release.

Tuesday, April 19

The House will meet at 12:30 PM for morning hour, and at 2:00 PM for legislative business. The House will consider S 167, the "Family Entertainment and Copyright Act of 2005", and HR 683, the "Trademark Dilution Revision Act of 2005", under suspension of the rules. Votes will be postponed until 6:30 PM. See, Republican Whip Notice.

9:30 AM - 11:00 PM. The Advisory Committee to the Congressional Internet Caucus will host a panel discussion titled "Blocking VoIP Calls: Foreboding Harbinger or Benign Fluke?" The speakers will be Dan Brenner (National Cable & Telecommunications Association), Jeffrey Citron (Vonage), James Speta (Northwestern University Law School), Timothy Wu (Virginia Law School), and Jessica Zufolo (Medley Global Advisors). RSVP to 202 638-4370 ext 288, or rsvp at netcaucus dot org. See, notice. Location: Room HC-5, Capitol Building.

10:00 AM - 2:00 PM. The American Enterprise Institute (AEI) will host an event titled "Managing Spectrum: Why Economics Matters". The speakers will include William Baumol (New York University), Gerald Faulhaber (University of Pennsylvania), and Robert Hahn (AEI-Brookings Joint Center for Regulatory Studies). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

11:00 AM. The House Homeland Security Committee's Subcommittee on Economic Security, Infrastructure Protection, and Cybersecurity will meet. The agenda contains one item, HR 285, the "Department of Homeland Security Cybersecurity Enhancement Act of 2005". Location: Room 210, Cannon Building.

2:00 PM. The House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security will hold a hearing titled "Oversight Hearing on Implementation of the USA PATRIOT Act: Effect of Sections 203 (b) and (d) on Information Sharing". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

2:30 PM. The Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights will hold a hearing to examine the SBC/ATT and Verizon/MCI mergers, focusing on remaking the telecommunication industry. The witnesses will be Carl Grivner (XO Communication), Jeffrey Citron (Vonage), Scott Cleland (Precursor Group), and Gene Kimmelman (Consumers Union). See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee will hold a hearing on the USA PATRIOT Act. Location: Room 216, Hart Building.

6:00 - 815 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) seminar titled "Telecom Act Re-write". Location: Wiley Rein & Fielding Conference Center, 1776 K St., NW.

Day one of a three day conference hosted by the National Institute of Standards and Technology (NIST), National Institute of Health (NIH), and Internet2 titled "4th Annual PKI R&D Workshop: Multiple Paths to Trust". See, NIST notice, registration page, and conference website. Location: NIST, Gaithersburg, MD.

Wednesday, April 20

The House will meet at 10:00 AM for legislative business. It will consider several non-technology related items under suspension of the rules. See, Republican Whip Notice.

9:30 AM - 12:00 NOON. The House Science Committee's Subcommittee on Space and Aeronautics will hold a hearing titled "Future Market for Commercial Space". The witnesses will be Burt Rutan (Scaled Composites), Will Whitehorn (Virgin Galactic), Elon Musk (Space Exploration Technologies), John Vinter (International Space Brokers Group), Molly Macauley (Resources for the Future), and Wolfgang Demisch (Demisch Associates). Press contact: Joe Pouliot at 202 225-0581 or joe.pouliot at mail dot house dot gov. Location: Room 2318 Rayburn Building.

10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet "How Internet Protocol-Enabled Services Are Changing the Face of Communications: A Look at Video and Data Services". The hearing will be webcast by the Committee. See, notice. Press contact: Larry Neal or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn Building.

10:30 AM. The Senate Appropriations Committee's Subcommittee on Homeland Security will hold a hearing on the FY 2006 budget for the Department of Homeland Security (DHS). Secretary Michael Chertoff will testify. Location: Room 124, Dirksen Building.

10:30 AM. The House International Relations Committee's Subcommittee on Asia and the Pacific will hold a hearing titled "Focus on a Changing Japan". See, notice. Location: Room 2172, Rayburn Building.

2:00 PM. The House Judiciary Committee will hold a hearing titled "Oversight Hearing on the Industry Competition and Consolidation: The Telecom Marketplace Nine Years After the Telecom Act". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

4:30 PM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing titled "Oversight Hearing on Committee Print Regarding Patent Quality Improvement". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

Day two of a three day conference hosted by the National Institute of Standards and Technology (NIST), National Institute of Health (NIH), and Internet2 titled "4th Annual PKI R&D Workshop: Multiple Paths to Trust". See, NIST notice, registration page, and conference website. Location: NIST, Gaithersburg, MD.

Thursday, April 21

The House will meet at 10:00 AM for legislative business. It will consider several non-technology related items under suspension of the rules. See, Republican Whip Notice.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

9:30 AM - 3:30 PM. The Federal Communications Commission (FCC) will hold an orientation session for the new Integrated Spectrum Auction System (ISAS). See, FCC notice [PDF]. Preregistration is requested; call 888 225-5322. Location: FCC, 445 12th Street, SW.

10:00 AM. The Senate Finance Committee will hold a hearing on the nomination of Rep. Robert Portman (R-OH) to be the U.S. Trade Representative (USTR). Location: Room 628, Dirksen Building.

10:00 AM. The House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security will hold hearing titled "Oversight Hearing on the Implementation of the USA PATRIOT Act: Sections of the Act that Address -- Crime, Terrorism, and the Age of Technology". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

10:00 AM. The House Ways and Means Committee will hold a hearing titled "Hearing on Implementation of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)". See, notice. Location: Room 1100, Longworth Building.

12:00 NOON - 1:30 PM. The DC Bar Association will host a panel discussion titled "Wireless Mobile Content: A Snapshot of Content Issues in a Wireless World". The scheduled speakers are Mark Desautels (CTIA), Adam Zawel (Yankee Group), Fabrice Grinda (Zingy Inc.), Scott Delacourt (Deputy Bureau Chief, Wireless Telecommunications Bureau, Federal Communications Commission). See, notice. Prices vary from $15 to $25. For more information, call 202-626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

RESCHEDULED FROM APRIL 7. 2:30 PM. The Senate Judiciary Committee's Subcommittee on Intellectual Property will hold a hearing titled "The Patent System Today and Tomorrow". Sen. Orrin Hatch (R-UT) will preside. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

Day three of a three day conference hosted by the National Institute of Standards and Technology (NIST), National Institute of Health (NIH), and Internet2 titled "4th Annual PKI R&D Workshop: Multiple Paths to Trust". See, NIST notice, registration page, and conference website. Location: NIST, Gaithersburg, MD.

Friday, April 22

12:00 NOON. Maureen O'Rourke (Boston University School of Law) will give a lecture titled "The Economics of Preemption". This is a part of the Georgetown Law Colloquium on Intellectual Property & Technology Law. For more information, contact Julie Cohen at 202 662-9871 or jec at law dot georgetown dot edu. Location: Faculty Lounge, Fifth Floor, Georgetown University Law Center, 600 New Jersey Ave., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) to assist it in preparing its annual report to the Congress regarding progress made to achieve the objectives and carry out the purposes and provisions of Open-Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act). See, FCC notice [PDF]. This proceeding is IB Docket No. 04-158.

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