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April 26, 2005, 9:00 AM ET, Alert No. 1,123.
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9th Circuit Affirms Dismissal of Trademark Infringement Case Regarding Parallel Imports

4/25. The U.S. Court of Appeals (9thCir) issued its opinion [17 pages in PDF] in American Circuit Breaker v. Oregon Breakers, a trademark case involving parallel imports and gray markets.

American Circuit Breaker Corporation (ACBC) holds the U.S. trademark for "STAB-LOK". Schneider Canada holds the Canada trademark for "STAB-LOK". One company manufactures circuit breakers for both ACBC and Schneider. The only difference is that those made for ACBC have black casing, while those made for Schneider have gray casing. All bear the "STAB-LOK" trademark. Oregon Breakers bought, imported into the U.S., and sold in the U.S., gray circuit breakers.

ACBC filed a complaint in the U.S. District Court (DOre) against Oregon Breakers alleging trademark infringement, unfair competition, and trademark dilution. The District Court dismissed the complaint.

The Court of Appeals affirmed. The Court wrote a substantial review of the concepts of territoriality and universiality in trademark law, the history of the applicable portions of U.S. trademark statutory and case law, and the different kinds of gray markets.

The present case is about circuit breakers. However, the Court of Appeals noted that "More recently, the principle of territoriality ``has been criticized as obsolete in a world market where information products like computer programs cannot be located at a particular spot on the globe", quoting from J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, (4th ed. West 2005).

The Court of Appeals wrote that "It is now generally agreed and understood that trademark protection encompasses the notion of territoriality." However, it also held that "Ultimately, what is at issue is whether there is a likelihood of confusion as to source under the well established precedent of 32 and 4B(a) of the Lanham Act."

It held that this likelihood of confusion is lacking in this case. It wrote that "consumers purchasing circuit breakers from Oregon Breakers are getting exactly the same circuit breaker, both in specification and quality, as they would purchase from ACBC. In other words, the goods are genuine. Rather than being confused, customers who purchase the gray STAB-LOK circuit breakers from Oregon Breakers get exactly what they expect."

The Court of Appeals concluded, "In short, because there is no material fact as to infringement, ACBCs claims of trademark infringement and unfair competition must fail. What is missing here is evidence of infringement that undermines ACBCs goodwill or leaves consumers in a state of ``legal confusion." Hence, the Court of Appeals affirmed the judgment of the District Court in its entirety.

This case is American Circuit Breaker Corporation v. Oregon Breakers, Inc. and Stephen Reames, No. 03-35375, an appeal from the U.S. District Court for the District of Oregon, D.C. No. CV-01-00308-DCA, Judge Donald Ashmanskas presiding. Judge Margaret McKeown wrote the opinion of the Court of Appeals, in which Judges Melvin Brunetti and Ronald Gould joined.

GAO Releases Report on LOCAL TV Act

4/25. The Government Accountability Office (GAO) released a report [21 pages in PDF] titled "LOCAL TV ACT: Administrative Funds May No Longer Be Necessary".

This is another in a series of GAO reports on the Launching Our Communities' Access to Local Television Act of 2000, or LOCAL TV Act, which was Public Law No. 106-553, and is codified at 47 U.S.C. 1101-1110. The purpose of the LOCAL TV Act is to facilitate access to signals of local television stations for households located in nonserved and underserved areas.

The report states that the act "created the LOCAL Television Loan Guarantee Program (LOCAL TV Program), which provides for loan guarantees of up to 80 percent of loans totaling no more than $1.25 billion in the aggregate to finance projects to enable local television signal access to communities where distance and topography limit access to over-the-air television broadcast signals or cable service."

The report states that the omnibus appropriations bill enacted in December 2004 (Public Law No. 108-447) "rescinded the unobligated balances of prior year appropriations that were available for guaranteeing loans under the LOCAL TV Program." It also points out that President Bush's fiscal year 2006 budget proposal states that unobligated budget authority for this program had been rescinded and that the Bush administration does not propose additional funds for this program.

The report recommends that "Given the congressional rescission of funding to support loan guarantees under this program, we are submitting a matter for congressional consideration to rescind the balance of the $2 million appropriated for administrative expenses to carry out the LOCAL TV Program and transferred to GovWorks, that remains unobligated by contracts in that account, if the Congress decides not to provide future loan guarantee funding."

Comcast and Time Warner to Buy Adelphia

4/25. Comcast announced in a release on April 21, 2005, that Time Warner and Comcast "have reached definitive agreements to acquire substantially all the assets of Adelphia Communications Corporation (OTC: ADELQ) for a total of $12.7 billion in cash and 16% of the common stock of Time Warner's cable subsidiary, Time Warner Cable Inc. Time Warner Cable and Comcast also will swap certain cable systems. In addition, Time Warner Cable will redeem Comcast's interests of 17.9% in Time Warner Cable and 4.7% in Time Warner Entertainment Company, L.P. (TWE) (together an effective 21% economic ownership of Time Warner Cable) ..." (Parentheses in original.) See also, Time Warner release and Adelphia release [PDF].

On April 25, 2005, the Securities and Exchange Commission (SEC) announced that the SEC and the Department of Justice "reached an agreement to settle a civil enforcement action and resolve criminal charges against Adelphia Communications Corporation, its founder John J. Rigas, and his three sons, Timothy J. Rigas, Michael J. Rigas and James P. Rigas". See, SEC release.

Adelphia filed a Chapter 11 bankruptcy petition back in 2002 in the U.S. Bankruptcy Court for the Southern District of New York.

This transaction will require numerous regulatory and judicial approvals, including Hart Scott Rodino review, Federal Communications Commission (FCC) review, local franchising approvals, and bankruptcy court approval.

Comcast further stated that following upon completion of the transaction, both Comcast and Time Warner Cable will gain customers and improve the geographic clusters of customers. Comcast stated that it will have a net gain of 1.8 Million customers, bringing its total to 23.3 Million.

Comcast elaborated in its release that "Taking into account the proposed acquisition, swaps and redemptions, on a net basis, Time Warner Cable will gain approximately 3.5 million basic video subscribers. Specifically, Time Warner Cable will add around 3 million Adelphia subscribers and more than 1 million Comcast subscribers, and will give Comcast approximately 750,000 current Time Warner Cable subscribers. It will then manage a total of approximately 14.4 million basic subscribers --12.9 million consolidated and 1.5 million in 50%-owned continuing joint ventures with Comcast. That will make Time Warner Cable the second-largest multi-channel video provider in the U.S. -- ahead of all other cable operators, except for Comcast, and ahead of both major satellite companies."

The SEC stated in its release that it charged "that Adelphia, at the direction of the individual defendants: (1) fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates; (2) falsified operating statistics and inflated earnings to meet Wall Street estimates; and (3) concealed rampant self-dealing by the Rigas family, including the undisclosed use of corporate funds for purchases of Adelphia stock and luxury condominiums. The USAO also announced that it had entered into a Non-Prosecution Agreement with Adelphia and had settled forfeiture claims against Rigas family members."

The SEC added that "Under the settlement agreement, which is subject to the approval of the District and Bankruptcy Courts for the Southern District of New York, the Rigas family members will forfeit in excess of $1.5 billion in assets that they derived from the fraud, including the Rigas family's interests in certain cable properties. Upon the forfeiture of these assets, Adelphia will obtain title to those cable properties and will pay $715 million into a victim fund to be established in the District Court in accordance with the Non-Prosecution Agreement. Under the Non-Prosecution Agreement, payment to the victim fund must occur at or around the time of Adelphia's emergence from chapter 11."

People and Appointments

4/22. President Bush announced his intent to nominate General Peter Pace of the U.S. Marine Corps, to be Chairman of the Joint Chiefs of Staff. President Bush also announced his intent to nominate Admiral Edmund Giambastiani, of the U.S. Navy, to be Vice Chairman of the Joint Chiefs of Staff. See, White House release.

4/25. Peter Lesser was named Industry Executive Advisor to the Consumer Electronics Association (CEA). He is the P/CEO of X-10. The CEA stated in a release that he will be a "liaison between association staff and its Board of Industry Leaders, assisting with governance, staffing and other issues as requested by the Board Chairman or CEA's President and CEO. Lesser succeeds long-time consumer electronics industry executive Jerry Kalov, who recently passed away."

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Washington Tech Calendar
New items are highlighted in red.
Tuesday, April 26

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. The House will consider several items under suspension of the rules, including HR 28, the "High-Performance Computing Revitalization Act of 2005". See, Republican Whip Notice.

The Senate will meet at 9:45 AM for morning business. It will then resume consideration of the motion to proceed to HR 3, the highway bill.

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.)

10:00 AM. The House Judiciary Committee's Subcommittee on Crime Terrorism, and Homeland Security will hold another in its series of oversight hearings on the implementation of the USA PATRIOT Act. This hearing will focus on several provisions related to electronic surveillance and the Foreign Intelligence Surveillance Act (FISA), including  204, titled "Clarification of Intelligence Exceptions from Limitations on Interception & Disclosure of Wire, Oral & Electronic Communications",  207, titled "Duration of FISA Surveillance of Non-United States persons who are Agents of a Foreign Power",  214, titled "Pen Register and Trap and Trace Authority Under FISA", and  225, titled "Immunity for Compliance with FISA Wiretap. The notice of the hearing also references "Lone Wolf". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141 Rayburn Building.

10:00 AM. The Senate Banking Committee will hold a hearing on money services businesses under bank secrecy and USA PATRIOT Act regulation. See, notice. Location: Room 538, Dirksen Building.

10:00 AM. The Senate Finance Committee will hold a hearing titled "Proposals to Achieve Sustainable Solvency, With and Without Personal Accounts". In addition, the Committee will vote on the nomination of Rep. Bob Portman (R-OH) to be the U.S. Trade Representative (USTR). Location: Room 216, Hart Building.

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". The speakers will be James Bird (FCC, Office of the General Counsel), Scott Delacourt (FCC, Wireless Telecommunications Bureau), Michael Altschul (CTIA), and Susanna Montezemolo (Consumers Union). 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.

1:00 PM. The House Appropriations Committee's Subcommittee on Science, State, Justice, and Commerce, and Related Agencies  will hold its rescheduled hearing on the Federal Communications Commission (FCC). Location: Room H-309, Capitol Building. (This is a very small room.)

2:30 PM. The House Homeland Security Committee's Subcommittee on Intelligence, Information Sharing, and Terrorism Risk Assessment will hold a hearing on the committee print of a bill titled "The Homeland Security Information Sharing and Enhancement Act of 2005". Location: Room 2128, Rayburn Building.

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

The House will meet at 10:00 AM for legislative business. It may consider HRes 210, a resolution supporting the goals of World Intellectual Property Day. See, Republican Whip Notice.

9:30 AM. The High Tech DTV Coalition will hold a news conference to announce its formation and discuss its goals. For more information, contact Mary Greczyn, at mg at ftidc dot com or 202 393-4531 or John Alden at ja at ftidc dot com or 202 371-6793. A light breakfast will be served. Location: Information Technology Industry Council, 1250 I Street, NW, Suite 200.

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.

9:30 AM. The Senate Intelligence Committee will hold another hearing on the USA PATRIOT Act. Location: Room 216, Hart Building.

10:00 AM. The House Homeland Security Committee will meet to mark up HR __, the "Department of Homeland Security Authorization Act of FY 2006". Location: Room 2118, Rayburn 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 Nadan Joshi ( Federal Communications Commission's 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.

2:00 PM. The National Cable & Telecommunications Association (NCTA) will hold a news conference. For more information, contact Pam Ford at 202 775-3629. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor.

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

The House will meet at 10:00 AM for legislative business. It may consider HRes 210, a resolution supporting the goals of World Intellectual Property Day. See, Republican Whip Notice.

9:30 AM. The House Judiciary Committee's Subcommittee on Crime Terrorism, and Homeland Security will hold another in its series of oversight hearings on the implementation of the USA PATRIOT Act. This hearing will focus on several provisions related to electronic surveillance and the Foreign Intelligence Surveillance Act (FISA), including  206, title "Roving Surveillance Authority Under the Foreign Intelligence Surveillance Act of 1978", and  215, titled "Access to Records and Other Items Under the Foreign Intelligence Surveillance Act". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

RESCHEDULED FOR APRIL 29. 9:30 AM. The Federal Communications Commission (FCC) will hold an event titled "Open Meeting". See, agenda [PDF]. 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. The SJC rarely follows its published agendas. 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.

10:00 AM. The Senate Commerce Committee will hold a public hearing on S __, a bill pertaining to the use of video news releases (VNRs) by government agencies. See, notice. Press contact: Melanie Alvord (Stevens) (202) 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov Location: Room 253, Russell 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.

11:00 AM - 12:00 NOON. Microsoft will host a panel discussion. The speakers will be Bill Gates (Microsoft), Rick Rashid (SVP Microsoft Research), Sen. Patrick Leahy (D-VT), Rep. David Dreier (R-CA), and Shirley Tilghman (President of Princeton University). See, notice. Location: Montpelier Room, 6th floor, Madison Building, Library of Congress.

12:00 NOON. 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.

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.

2:30 PM. The House Judiciary Committee's Subcommittee on Crime Terrorism, and Homeland Security will hold another in its series of oversight hearings on the implementation of the USA PATRIOT Act. This hearing will focus on  218, titled "Foreign Intelligence Information". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

3:00 PM. The Senate Judiciary Committee's Subcommittee on Immigration, Border Security and Citizenship and Subcommittee on Terrorism, Technology and Homeland Security have scheduled a joint hearing titled "Strengthening Border Security Between The Ports of Entry: The Use of Technology to Protect the Borders". The Senate Judiciary Committee frequently cancels hearings without notice. Sen. John Cornyn (R-TX) and Sen. Jon Kyl (R-AZ) will preside. Location: Room 138, Dirksen Building.

Friday, April 29

RESCHEDULED FROM APRIL 28. 9:30 AM. The Federal Communications Commission (FCC) will hold an event titled "Open Meeting". See, agenda [PDF]. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

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.

Monday, May 2

The Senate will not meet on Monday, May 21 through Friday, May 6. See, Senate calendar.

Day one of a three day event hosted by Internet2 and titled "Spring 2005 Internet2 Member Meeting". See, notice. Location: Crystal Gateway Marriott, 1700 Jefferson Davis Highway, Arlington, VA.

Tuesday, May 3

12:00 NOON - 2:00 PM. The DC Bar Association will host a panel discussion titled "KP Permanent Make-Up v. Lasting Impression, Inc.: Fair Use and Likelihood of Confusion". The scheduled speakers are Beth Brinkmann (Morrison & Foerster, counsel for Lasting Impression), Patricia Millett (Assistant to the Solicitor General), Christine Farley (American University Washington law school). 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.

2:00 PM. The U.S. Court of Appeals (FedCir) will hear oral argument in Aptix v. Quickturn Design. This is an appeal from the U.S. District Court (NDCal) in a patent case. This case is D.C. No. C 98-00762 WHA (EDL) and App. Ct. No. 04-1368. Location: Courtroom 402, 717 Madison Place, NW.

Day two of a three day event hosted by Internet2 and titled "Spring 2005 Internet2 Member Meeting". See, notice. Location: Crystal Gateway Marriott, 1700 Jefferson Davis Highway, Arlington, VA.