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April 22, 2005, 9:00 AM ET, Alert No. 1,121.
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DOJ Charges Hynix with DRAM Price Fixing

4/21. The Department of Justice (DOJ) filed a criminal information [pages in PDF] in U.S. District Court (NDCal) that charges Hynix Semiconductor, Inc. with price fixing in violation of Section 1 of the Sherman Act. The information alleges that Hynix conspired with others to fix the prices for Dynamic Random Access Memory (DRAM) semiconductor memory products sold to original equipment manufacturers (OEMs). The DOJ also announced that Hynix "has agreed to plead guilty and to pay a $185 million fine".

The information alleges the following acts: "(a) participating in meetings, conversations, and communications in the United States and elsewhere to discuss the prices of DRAM to be sold to certain OEMs; (b) agreeing, during those meetings, conversations, and communications, to charge prices of DRAM at certain levels to be sold to certain OEMs; (c) issuing price quotations in accordance with the agreements reached; and (d) exchanging information on sales of DRAM to certain OEM customers, for the purpose of monitoring and enforcing adherence to the agreed-upon prices."

Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1, provides, in part, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine ..."

The complaint alleges that the OEMs affected by this conspiracy were Dell, Compaq, Hewlett-Packard, Apple, IBM, and Gateway.

Attorney General Alberto Gonzales stated in a release that "Price fixing imperils free markets, impairs innovation, and harms American consumers ... Today's charge and its resulting guilty plea are another significant step forward in the Department's ongoing fight to break up and prosecute international cartels that harm American consumers. This case shows that high-tech price-fixing cartels will not be tolerated."

This is another in a series of DOJ DRAM price fixing prosecutions. On December 2, 2004, the DOJ charged four are executives of Infineon Technologies AG, and its subsidiary, Infineon Technologies North America Corporation. See, story titled "DOJ Brings More DRAM Price Fixing Charges" in TLJ Daily E-Mail Alert No.1,030, December 3, 2004.

On September 15, 2004, the DOJ filed a criminal information in the U.S. District Court (NDCal) against Infineon Technologies AG, charging price fixing in violation of 15 U.S.C. § 1. Simultaneous, Infineon agreed to plead guilty and to pay a $160 Million fine. See also, DOJ release and Infineon release. On October 20, 2004, Infineon plead guilty. See also, story titled "DOJ Charges Infineon With Felony Price Fixing; Infineon Pleads Guilty" in TLJ Daily E-Mail Alert No. 978, September 16, 2004.

Also, on December 17, 2003, the DOJ announced that it charged Alfred P. Censullo, a former employee of Micron Technology Inc., with violation of 18 U.S.C. § 1503 in connection with his "altering and concealing documents containing competitor pricing information, which were requested in a federal grand jury subpoena". See, DOJ release.

These DRAM related prosecutions have been filed in the U.S. District Court for the Northern District of California. Scott Hammond, Director of Criminal Enforcement in the DOJ's Antitrust Division, and other DOJ attorneys are handling these prosecutions.

USTR Nominee Discusses IPR Theft in PR China

4/21. The Senate Finance Committee held a hearing on the nomination of Rep. Robert Portman (R-OH) to be the U.S. Trade Representative (USTR).

Portman wrote in his prepared testimony [PDF] that "we have ongoing trade disputes with the European Union, with our neighbors to the south and north, and a number of other countries. But here, China deserves special mention."

He wrote that "By becoming part of the WTO, China has also been brought into a rules-based system of international trade". But, he added, "the Chinese do not always play by the rules."

"Specifically, I will focus on stopping Chinese pirating of U.S. intellectual property, rolling back China’s industrial policies that exclude our products, expanding market access for our goods and services, and realizing China’s full implementation of its commitments on transparency and distribution rights for American products."

Sen. Charles Grassley (R-IA), the Chairman of the Committee, praised Portman in his opening statement [PDF], and urged his confirmation.

Sen. Max Baucus (D-MT), the ranking Democrat on the Committee, wrote in his opening statement [PDF] that "we have to do a better job enforcing the trade agreements we already have. I believe Congress is losing its appetite for further trade deals because it is not confident the administration is holding our trading partners to their obligations. There are reports almost daily about China’s failure to comply with the WTO’s provisions on intellectual property rights. China also maintains burdensome restrictions in the agriculture and services sectors.

Sen. Baucus added that "If the administration wants Congress to continue passing new trade agreements, it must do a better job convincing Congress it’s doing all it can to enforce the agreements we already have."

Sen. Baucus stated that "One way to do that is to create a new senior-level position at USTR responsible for enforcing trade agreements. A Chief Enforcement Officer could be confirmed by the Senate, and therefore held accountable directly to the Congress. I hope that we can work together on this important issue."

See, S 817, and story titled "Sen. Stabenow Introduces Bill to Create Position of Special Trade Prosecutor" in TLJ Daily E-Mail Alert No. 1,118, April 19, 2005.

Sen. Baucus also stated that "trade agreements are becoming less relevant to U.S. commercial interests. We have been choosing free trade agreement partners based on foreign policy and using the scarce resources at USTR to negotiate agreements without much commercial relevance to our economy."

Portman pointed out that one of the objectives of the USTR was to promote freedom around the world.

Sen. Baucus added that "It's hard to muster the enthusiasm necessary to get a trade agreement through Congress when that agreement offers negligible benefits to the U.S. economy. We need to start targeting our resources toward economies -- like Korea and Taiwan".

FCC Announces Agenda for April 28 Meeting

4/22. The Federal Communications Commission (FCC) announced the agenda [PDF] for its Thursday, April 28, 2005 event titled "Open Meeting".

The agenda includes four items. The FCC will consider a report and order regarding the Mandatory Electronic Filing for International Telecommunications Services. This is IB Docket No. 04-426.

The FCC will consider an order addressing petitions for clarification and/or reconsideration of the Subscriber List Information (SLI)/Directory Assistance (DA) First Report and Order, and SLI/DA Order on Reconsideration and Notice. This is CC Docket Nos. 96-115, 96-98, and 99-273.

The FCC will consider a notice of inquiry (NOI) regarding standards that allow viewers that are unserved by a digital television broadcast station to receive network programming via satellite.

The FCC will also consider a notice of proposed rulemaking (NPRM) to implement satellite broadcast carriage requirements in the noncontiguous states, as required by Section 210 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA).

The Congress included the SHVERA in the huge omnibus appropriations bill, HR 4818 (108th Congress), that it enacted late last year. Section 210 amended 47 U.S.C. § 338(a) by adding the following paragraph:

"(4) CARRIAGE OF SIGNALS OF LOCAL STATIONS IN CERTAIN MARKETS- A satellite carrier that offers multichannel video programming distribution service in the United States to more than 5,000,000 subscribers shall (A) within 1 year after the date of the enactment of the Satellite Home Viewer Extension and Reauthorization Act of 2004, retransmit the signals originating as analog signals of each television broadcast station located in any local market within a State that is not part of the contiguous United States, and (B) within 30 months after such date of enactment retransmit the signals originating as digital signals of each such station. The retransmissions of such stations shall be made available to substantially all of the satellite carrier's subscribers in each station's local market, and the retransmissions of the stations in at least one market in the State shall be made available to substantially all of the satellite carrier's subscribers in areas of the State that are not within a designated market area. The cost to subscribers of such retransmissions shall not exceed the cost of retransmissions of local television stations in other States. Within 1 year after the date of enactment of that Act, the Commission shall promulgate regulations concerning elections by television stations in such State between mandatory carriage pursuant to this section and retransmission consent pursuant to section 325(b), which shall take into account the schedule on which local television stations are made available to viewers in such State."

This event is scheduled for 9:30 AM on Thursday, April 28, 2005 in the Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always take up all of the items on its agenda. The FCC does not always start its monthly meetings at the scheduled time.

9th Circuit Rules on Warrant Requirement for Searching Laptops

4/21. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in US v. Caymen, a criminal case involving a warrantless search by police of the contents of the hard drive of a laptop computer. The defendant acquired a laptop by credit card fraud. The Court of Appeals affirmed the holding of the District Court that a warrant was not required.

Nicolai Caymen, a resident of the small town of Ketchikan, Alaska, ordered a computer online using the credit card information of another person. The credit card holder reported the fraud. In this small, insular town, Caymen's crime unraveled quickly. Police seized the laptop. Then, with the permission of the credit card holder, but not Caymen, the police searched the contents of the laptop for evidence of credit card fraud. The search led them to evidence of another crime, for which Caymen was prosecuted.

Caymen filed a motion to suppress evidence of the crime obtained as a result of the search of the laptop, on Fourth Amendment grounds. He argued that the laptop was his, and could not be searched without either his permission, or a search warrant. The District Court denied the motion to suppress.

The Court of Appeals affirmed.

The Court wrote that the Fourth Amendment requirement for a search warrant depends upon whether the individual by his conduct has exhibited a subjective expectation of privacy, and further whether the individual's subjective expectation of privacy is one that society is prepared to accept as reasonable.

The Court reasoned that while Caymen may have possessed an expectation of privacy in the contents of the laptop, his expectation was not reasonable, because of how he came to possess the laptop. The Court added that this is not a question of legal title to the laptop. Rather, it is a matter of the reasonableness of the expectation of privacy.

The Court wrote that "The Fourth Amendment does not protect a defendant from a warrantless search of property that he stole, because regardless of whether he expects to maintain privacy in the contents of the stolen property, such an expectation is not one that ``society is prepared to accept as reasonable.´´ A legitimate expectation of privacy means more than a subjective expectation of not being discovered. ... Whatever possessory interest a thief may have, that interest is subordinate to the rights of the owner ... We see no ground on which to distinguish property obtained by fraud from property that was stolen by robbery or trespass".

It added that "What matters is a reasonable expectation of privacy that society is prepared to accept as reasonable, and one who takes property by theft or fraud cannot reasonably expect to retain possession and exclude others from it once he is caught."

This case is U.S.A. v. Nicolai Caymen, U.S. Court of Appeals for the 9th Circuit, No. 03-30365, an appeal from the U.S. District Court for the District of Alaska, D.C. No. CR-03-00002-RRB.

More News

4/21. The Senate Judiciary Committee's Subcommittee on Intellectual Property cancelled, without notice, again, its hearing titled "The Patent System Today and Tomorrow". Committee staff states that there will be a hearing on Monday, April 25, at 1:30 PM.

4/21. The Senate Appropriations Committee's Subcommittee on Homeland Security held a hearing on the FY 2006 budget for the Department of Homeland Security (DHS). Secretary Michael Chertoff testified. See, transcript.

Washington Tech Calendar
New items are highlighted in red.
Friday, April 22

The House will not meet.

The Senate will meet at 9:30 AM.

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.

Sunday, April 24

Passover.

Monday, April 25

The House will meet at 12:00 NOON.

1:30 PM. The Senate Judiciary Committee's (SJC) Intellectual Property Committee has scheduled hearing on patents. The SJC frequently cancels hearings without 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.

The voluntary negotiation period for the purpose of determining the royalty fees for the retransmission of digital over the air television broadcast signals by satellite carriers under the statutory license ends. See, Copyright Office's (CO) notice in the Federal Register, March 25, 2005, Vol. 70, No. 57, at Pages 15368 - 15369.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding implementation of Section 207 of the Satellite Home Viewer Extension and Reauthorization Act of 2004, extends Section 325(b)(3)(C) of the Communications Act until 2010 and amends that section to impose reciprocal good faith retransmission consent bargaining obligations on multichannel video programming distributors. This proceeding is MB Docket No. 05-89. See, FCC Public Notice DA 05-772, and notice in the Federal Register, March 24, 2005, Vol. 70, No. 56, at Pages 15048 - 15051. See also, story titled "FCC Adopts and Releases NPRM Implementing § 207 of SHVERA" in TLJ Daily E-Mail Alert No. 1,090, March 8, 2005.

Tuesday, April 26

TIME? The House Appropriation's Committee's Subcommittee on Science, State, Justice, and Commerce, and Related Agencies will hold a hearing on the Federal Communications Commission. See, notice. This hearing was previously scheduled for April 14. Location: Room H-309, Capitol Building. (This is a small hearing room with very few public seats.)

12:00 NOON -1:30 PM. The Electronics Industry Alliance (EIA) will host a luncheon. The speaker will be Chang-Gyu Hwang, P/CEO of Samsung Electronics Semiconductor Business. See, notice. For more information, contact Gail Tannenbaum at gtannenbaum at eia dot org. Location: Room 325, Russell Building, Capitol Hill.

12:00 NOON - 1:30 PM. The DC Bar Association will host a program titled "Patent Law Update: What The Federal Circuit Would Like To See In Litigated Patents". The scheduled speaker is Paul Hickman (Perkins Coie). See, notice. Prices vary from $10 to $30. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch. The topic will be "The Urge to Merge: A Procedural Primer on Supporting, Opposing, or Monitoring Telecommunications Mergers Considered Before the FCC, Congress, and Other Government Agencies". For more information, contact Natalie Roisman at  natalie.roisman@fcc.gov or 202 418-1655 or Phil Marchesiello at pmarchesiello at akingump dot com or 202 887-4348. No RSVP. Location: Akin Gump, 1333 New Hampshire Ave., NW, 10th Floor.

The Federal Communications Commission (FCC) will begin the auction of 4,226 Multiple Address Systems (MAS) licenses in the Fixed Microwave Services from the 928/959 and 932/941 MHz bands. This is Auction No. 59. See, Public Notice (DA 04-3198) dated November 15, 2004. See also, Public Notice (DA 04-3985) dated December 21, 2004 regarding notice and filing requirements, minimum opening bids, upfront payments and other auction procedures.

Wednesday, April 27

9:30 AM. The Senate Judiciary Committee (SJC) has scheduled a hearing on the nomination of Paul Clement to be Solicitor General. The SJC frequently cancels hearings without 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.

12:00 NOON - 1:30 PM. The DC Bar Association will host a program titled "Who, What, Where, and When: An E-Commerce Taxation Update". The scheduled speaker is Stephen Kranz (Council On State Taxation). See, notice. Prices vary from $15 to $27. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Online Communications Practice Committee will host a brown bag lunch titled "Cable Broadband: Brand X Round Two". The speakers will be John Butler (Sher & Blackwell, counsel for Earthlink) and a representative of the Federal Communications Commission's (FCC) Office of General Counsel. RSVP to Wendy Parish at wendy@fcba.org. Location: Sidley Austin, 1501 K Street, NW, 6th Floor.

1:30 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "How Internet Protocol-Enabled Services Are Changing the Face of Communications: A View from Government Officials". See, notice. The hearing will be webcast by the Committee. Press contact: Kevin Schweers (Barton) at 202 225-5735 or Sean Bonyun (Upton) at 202 225-3761. Location: Room 2322, Rayburn Building.

Deadline to submit nominations to the Department of Commerce's (DOC) Technology Administration (TA) for the 2006 National Medal of Technology awards. See, TA notice. For more information, contact Mildred Porter at 202 482-5572 or nmt@technology.gov.

Thursday, April 28

TIME? The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold its second hearing on the Committee Print of HR __ [52 pages in PDF], the "Patent Act of 2005". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM. The Senate Judiciary Committee's (SJC) has scheduled an executive business meeting. The SJC frequently cancels meetings without notice. 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.

11:00 AM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "Dominican Republic-Central America Free Trade Agreement". See, notice. The hearing will be webcast by the Committee. Location: Room 2322, Rayburn Building.

12:00 NOON - 1:30 PM. The DC Bar Association will host a panel discussion titled "Open Source & Public Domain Software: The Future of Health Care InfoTech Is Now!". The scheduled speakers are Cynthia Wark (USPHS), Rita Shapiro (USPHS), Suniti Ponkshe (Ponkshe Consulting Group), and Alan Goldberg (Goulston & Storrs). See, notice. Prices vary from $25 to $35. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

Friday, April 29

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) [460 pages in PDF] in its proceeding titled "In the Matter of: Implementation of the Satellite Home Viewer Extension and Reauthorization Act of 2004 Implementation of Section 340 of the Communications Act". See also, FCC release [PDF]. This NPRM is FCC 05-24 in MB Docket No. 05-49. The FCC adopted this NPRM on February 4, 2005, and released it on February 7, 2005. See, story titled "FCC Releases SHVERA NPRM Regarding Significantly Viewed Signals" in TLJ Daily E-Mail Alert No. 1,073, February 9, 2005.

Deadline to submit nomination to the Internal Revenue Service (IRS) for membership on its Electronic Tax Administration Advisory Committee (ETAAC). See, IRS release and notice in the Federal Register, February 28, 2005, Vol. 70, No. 38, at Page 9701-9702.

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