10/11. Microsoft and RealNetworks announced that they have settled their antitrust litigation in U.S. District Court, as well as other antitrust disputes. They also announced two agreements to collaborate on digital music and electronic games. See, Microsoft release and substantially identical RealNetworks release.

Bill Gates, Chief Software Engineer of Microsoft, and Rob Glasser, CEO of RealNetworks, and other senior executives of the two companies held a joint news conference on October 11 to discuss the settlement and agreements. See, transcript.

On December 18, 2003, RealNetworks filed a complaint in U.S. District Court (NDCal) against Microsoft alleging violation of federal and state antitrust laws. RealNetworks stated in a release at that time that Microsoft has "illegally used its monopoly power to restrict competition, limit consumer choice and attempt to monopolize the growing field of digital media". Microsoft responded in its own release that "this is a case where a leading firm is seeking to use the antitrust laws to protect and increase its marketplace share and to limit the competition it must face". Microsoft added that "These issues are a rehash of the same issues that have already been the subject of extensive litigation and a tough but fair resolution of the government antitrust lawsuit." See also, Microsoft's answer [31 pages in PDF].

This case is RealNetworks, Inc. v. Microsoft Corporation, U.S. District Court for the Northern District of California, D.C. No. C 03-5717 (JW) (EAI).

The companies' releases state that "The antitrust and technology assurance agreement resolves all antitrust disputes worldwide, based on a $460 million up-front cash payment to resolve all damages claims and a series of technology licenses and commitments under which Real will obtain long-term access to important Windows Media technologies that will enhance Real's media software solutions."

It elaborates that "Today's agreement includes a global settlement of all antitrust disputes, including the lawsuit brought by Real against Microsoft nearly two years ago in the United States and Real's participation in the proceedings initiated by the European Union and Korea. The agreement includes a variety of assurances regarding the design of the Windows operating system, including Windows Media Player, and access for Real to a broad range of Windows platform technologies. Among other things, Microsoft will provide Real expanded access and long-term licenses to a wide range of Windows Media and security technologies, that will enable Real to build services and software that enhance consumer's experience with Real's products and services and take advantage of innovations in Windows Vista."

The two companies also entered into an agreement regarding digital music technology and products, and an agreement pertaining to games.

The companies' releases state that "Under the music and games agreements, Microsoft is scheduled to pay Real $301 million in cash and provide services over 18 months in support of Real's product development, distribution, and promotional activities. Microsoft will earn credits at predetermined market rates to be applied to the $301 million for subscribers delivered to Real through MSN. Additionally, Real will take steps to support MSN Search, and Real and Microsoft will jointly promote use of Windows Media technologies with Rhapsody to Go."

10/11. The Supreme Court issued an order in Texaco v. Dagher that grants leave to file several amicus curiae briefs. The amici covered by this order are Verizon, American Bankers Association, Northwest Ohio Physician Specialist Cooperative, Parker Hannifin Corporation, Visa USA, American Petroleum Institute, and Washington Legal Foundation. See, Order List [19 pages in PDF], at page 3. See also, Supreme Court docket.

Verizon argues in its brief that the Court of Appeals decision under review threatens lawful and beneficial joint ventures in the telecommunications industry.

The Supreme Court has not yet scheduled oral argument. However, this case is not on the argument calendars for the sessions beginning October 3, October 31, or November 28.

The Supreme Court granted certiorari back on June 27, 2005. At that time it granted motions for leave to file amicus curiae briefs on the issue of granting certiorari.

This case arises out of an oil industry agreement. Texaco and Shell formed a lawful joint venture. This included a unified price for gasoline produced and sold by the joint venture. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] on June 1, 2004. It held that Texaco and Shell may have committed a per se violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1. The Court of Appeals opinion is reported at 369 F.3d 1108.

This case reaches far beyond the oil industry. Lawful joint venture agreements are common in many sectors, including telecommunications and technology. The Court of Appeals opinion has generated wide criticism on the grounds that it puts at risk a wide range of agreements, that are beneficial to the economy, and that deal with many subjects other that product pricing. Many have argued that these lawful joint venture agreements should be subject to the rule of reason, rather than treated as per se violations.

The Department of Justice's (DOJ) Office of the Solicitor General and the Federal Trade Commission (FTC) wrote in their amicus brief [PDF] on the merits, filed in September, that the issue is "Whether an agreement between the owners of a lawful joint venture with respect to the pricing of the joint venture's products may be treated as a per se violation of Section 1 of the Sherman Act, 15 U.S.C. 1, when the joint venture's owners do not compete in the market for those products." They argue that the agreement should not be so treated, and that the judgment of the Court of Appeals should be reversed.

Verizon also argues for reversal. Verizon wrote in its motion and amicus brief [37 pages in PDF], filed in September, that joint venture agreements are common in the telecommunications industry. It states that "Verizon and other telecommunications companies rely on many forms of cooperative arrangements to bring new services to the market and to reduce the cost and improve the quality of existing services. In this respect, Verizon's interest in appropriate antitrust rules for restraints ancillary to legitimate productive cooperation is similar in kind to the interest of countless other businesses in all sectors of the economy. Verizon's interest differs in degree, however, because productive cooperation is especially common and useful in the telecommunications industry.

For example, Verizon states that "high-risk investments that require large amounts of capital are often undertaken through joint ventures or other cooperative arrangements. Cooperation between potential competitors played a major role in the deployment of transoceanic fiber optic cables to carry telephone and internet traffic between the United States and Europe, Asia, South America, and other parts of the world."

Verizon stated that "Cooperative arrangements are also commonly used for research and development projects, where they allow the partners to share costs and risks, and also bring together the partners’ complementary skills and knowledge. Consumers of telecommunications services often have communications needs that extend beyond the boundaries of any single carrier’s network. Joint ventures and other cooperative arrangements have been a valuable mechanism for serving such customers. For example, MCI partnered with British Telecom to provide complex services to multinational corporations with facilities throughout the world."

Finally, Verizon argued that "The importance of coordination and standard setting motivated the creation of another joint venture, Bellcore, in connection with the breakup of AT&T pursuant to an antitrust decree. That joint venture, financed and controlled by the seven regional Bell companies, was created to ``perform the coordination for national defense and other emergency purposes that is vital to the nation’s security´´ and to ``set the standards which will permit telecommunications to continue to operate in an engineering sense as one national network.´´ ... The decree court explained, ``It seems beyond debate that uniform standards are necessary to ensure high quality in the telephone system, indeed its very survival as a nationwide network. Nor are such standards incompatible with competition.´´" (Citing United States v. Western Elec. Co., 569 F. Supp. 1057  (D.D.C. 1983).

Verizon is represented by Roy Englert of the Washington DC law firm of Robbins Russell.

See also, the January 14, 2005 joint amicus brief [30 pages in PDF] of the U.S. Chamber of Commerce and the National Association of Manufacturers urging the Supreme Court to grant certiorari. They argued that the Court of Appeals decision threatens all joint venture agreements, and the innovation, investment, jobs, and other economic benefits that they create.

This case is Texaco, Inc. v. Fouad N. Dagher, et al., Sup. Ct. No. 04-805, and Shell Oil Company v. Fouad N. Dagher, et al., No. 04-814, petitions for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 02-56509. The Court of Appeals heard an appeal from the U.S. District Court (CDCal), D.C. No. CV-99-06114-GHK.

10/11. The Supreme Court denied certiorari in John Lentell v. Merrill Lynch, a class action securities fraud case in which the District Court dismissed the complaint, and the Court of Appeals affirmed. See, Order List [19 pages in PDF], at page at 5. See also, Supreme Court docket.

This lets stand the January 20, 2005, opinion [45 pages in PDF] of the U.S. Court of Appeals (2ndCir).

The plaintiffs are John Lentell and others. They sought to represent a class of purchasers of stock in 24/7 Real Media, Inc. and Interliant, Inc. Merrill Lynch is a financial institution. Henry Blodget was a research analyst for Merrill Lynch who issued reports recommending that investors purchase stock in 24/7 and Interliant. Merrill Lynch was also a lead underwriter or co-lead underwriter for several securities offerings of 24/7 and Interliant.

The plaintiffs filed a complaint in U.S. District Court (SDNY) alleging Section 10b5 securities fraud. They asserted that Merrill Lynch both conducted market research and analysis, and underwrote public offerings of securities. They alleged that to attract investment banking business, it deliberately published market research that was falsely optimistic, and that this amounts to securities fraud.

The Court of Appeals affirmed the District Court's dismissal for failure to satisfy the pleading requirements of Section 10b5 and the PSLRA. It held that the complaint failed to plead loss causation.

See also, story titled "2nd Circuit Affirms Dismissal of 10b5 Complaint Against Merrill Lynch for Hyping Internet Stocks" in TLJ Daily E-Mail Alert No. 1,060, January 21, 2005.

The Supreme Court number is 05-24. This is a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 03-7948, an appeal from the U.S. District Court for the Southern District of New York. Judge Dennis Jacobs wrote the opinion of the Court Court of Appeals, in which Judges Sotomayor and B.D. Parker joined.

10/11. The Supreme Court denied certiorari in Robert Gordon v. U.S., No. 04-1632. See, Order List [19 pages in PDF], at page at 17. See also, Supreme Court docket.

This is a criminal case from the U.S. District Court (NDCal) and the U.S. Court of Appeals (9thCir). This lets stand the judgment of the Court of Appeals. See, December 30, 2004 opinion [PDF].

The defendant is Robert Gordon, a former Cisco Systems employee, who was charged with wire fraud in violation of 18 U.S.C. § 1343. Gordon, who is a former Vice President and Director of Business Development, was charged with transferring stock owned by Cisco to himself, and to fraudulently inducing Cisco to provide $15 Million to Spanlink, a Cisco affiliated start-up company, so that he could fraudulently obtain $5 Million from Spanlink.

Gordon plead guilty. The District Court imposed an order for restitution in the amount of $27,397,206.84. He challenged the restitution order. The Court of Appeals affirmed in part, and reversed in part. However, it only reversed as to certain prejudgment interest.

Gordon is a graduate of Stanford Law School. He clerked for a Judge of the U.S. Court of Appeals (7thCir).

10/11. The Supreme Court denied certiorari in Teva Pharmaceuticals v. Pfizer, a case involving patents, generic drugs, abbreviated new drug applications, and the Hatch Waxman Act. See, Order List [19 pages in PDF], at pages at 17-18. See also, Supreme Court docket. This is a petition for writ of certiorari to the U.S. Court of Appeals (FedCir), App. Ct. No. 04-1186. The three judge panel of the Court of Appeals issued its divided opinion [36 pages in PDF] on January 21, 2005. Judge Schall wrote the opinion of the Court, in which Judge Clevenger joined. Judge Mayer dissented. This opinion is also reported at 395 F.3d 1324. The Court of Appeals issued its order [20 pages in PDF], with a long dissent by Judges Gajarsa and Dyk, denying en banc rehearing, on April 4, 2005. See also, amicus curiae brief [15 pages in PDF] filed by the Federal Trade Commission (FTC) with the Court of Appeals in support of en banc rehearing. The Court of Appeals heard an appeal from the U.S. District Court (DMass).

10/11. The Supreme Court denied certiorari in Harry Keane v. Fox Television Stations, No. 05-202. See, Order List [19 pages in PDF], at page at 7. See also, Supreme Court docket. This is a petition for writ of certiorari to the U.S. Court of Appeals (5thCir). Keane asserted, without success, that Fox stole his idea for creating a television program titled "American Idol".

The House will not meet the week of October 10-14. See, Republican Whip Notice.

The Senate will not meet the week of October 10-14. It will next meet on October 17 at 2:00 PM.

Day two of a two day conference hosted by the National Institute of Standards and Technology (NIST) and the Open Web Application Security Project regarding the OWASP. See, notice and conference web site. Location: NIST, Green Auditorium, 100 Bureau Drive, Gaithersburg, MD.

5:30 - 7:30 PM. The Business Software Alliance (BSA) and the National Cyber Security Alliance will host a reception to promote "National Cyber Security Awareness Month". The participants will include Arnold Bell of the Federal Bureau of Investigation's (FBI) Cybersecurity Division. RSVP to Emily Huie at emilyh at bsa dot org. Location: Lounge 201, 201 Massachussetts Ave., NE.

Yom Kippur.

11:00 AM - 12:00 PM. The President's National Security Telecommunications Advisory Committee (NSTAC) will hold a meeting by teleconference. The first part of the meeting, which will be open to the public, will be a discussion of issues related to Hurricane Katrina. The second part of the meeting, which will be closed to the public, will be a discussion of the shutdown of cellular services in the tunnels into and out of Manhattan following the terrorist attacks in London on July 7, 2005. To participate, contact Elizabeth Hart at 703 289-5948 or hart_elizabeth at bah dot com by 5:00 PM on Tuesday, October 11, 2005. See, notice in the Federal Register, September 28, 2005, Vol. 70, No. 187, at Page 56731.

12:00 NOON - 2:00 PM. The DC Bar Association will host a program titled "New SEC Enforcement Director Speaks: Stay the Course or New Directions in SEC Enforcement?". The speaker will be Linda Thomsen (Director of the SEC's Enforcement Division). Larry Ellsworth (Jenner & Block) will moderate. The price to attend ranges from $5-$10. For more information, call 202 626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

2:00 - 4:00 PM. The Department of States' (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for ITU-T Advisory Group. See, notice in the Federal Register, July 13, 2005, Vol. 70, No. 133, at Page 40414. Location: undisclosed. The DOS states that "Access to these meetings may be arranged by contacting Julian Minard at minardje at state dot gov.

Deadline to submit comments to the Interim Chief Copyright Royalty Judge, on behalf of the Copyright Royalty Board, on the existence of controversies to the distribution of the 2003 cable royalty fund. See, notice in the Federal Register, September 13, 2005, Vol. 70, No. 176, at Pages 53973 - 53974.

5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its out of cycle reviews of Ukraine and Saudi Arabia. Section 182 of the Trade Act of 1974 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. See, notice in the Federal Register, September 8, 2005, Vol. 70, No. 173, at Pages 53410 - 53412. See also, story titled "USTR Lifts Trade Sanctions on Ukraine and Announces Special 301 Out of Cycle Review" in TLJ Daily E-Mail Alert No. 1,205, September 1, 2005. See also, notice in the Federal Register, September 14, 2005, Vol. 70, No. 177, at Pages 54436 - 54437.

12:00 NOON. Andrew Chin ( University of North Carolina Law School) will deliver a paper titled "Artful Prior Art and the Quality of DNA Patents". This event is a part of the George Washington University Law School's (GWULS) intellectual property workshop series. RSVP by Tuesday, October 11, to Rosalie Kouassi at rkouassi at law dot gwu dot edu. Location: GWULS, Faculty Conference Center, 5th Floor Burns, 716 20th St., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The topic will be "Meet the Media Bureau Chief -- Donna Gregg". No RSVP is requested. For more information, contact Ann Bobeck at abobeck at nab dot org. Location: National Association of Broadcasters (NAB), 1771 N Street, NW.

2:00 PM. The Cato Institute will host a panel discussion titled "Restoring Property Rights After Kelo v. New London". The speakers will be Sen. John Cornyn (R-TX), Roger Pilon (Cato), and John Echeverria (Georgetown Environmental Law and Policy Institute). See, notice and registration page. Cato will webcast the event. Lunch will be served after the program. Location: Cato, 1000 Massachusetts Ave., NW.

8:00 AM. The Federal Communications Bar Association (FCBA) will host a breakfast. The speaker will be Sen. John Ensign (R-NV). See, registration form [PDF]. Registrations and cancellations are due by 12:00 NOON on October 14. The price to attend ranges from $30 to $55. Location: J.W. Marriott, 1331 Pennsylvania Ave., NW, bottom level.

9:00 AM - 1:00 PM. The U.S. Chamber of Commerce will host an event titled "Comprehensive Immigration Reform: Fixing a Broken System". The price to attend ranges from free to $145. For more information, contact Winsome Walker at 202 463-5500. See, notice. Location: __.

10:00 AM. The Senate Finance Committee will hold a hearing on several pending nominations, including Susan Schwab (to be Deputy U.S. Trade Representative), Karan Bhatia (to be Deputy USTR), Franklin Lavin (to be Under Secretary of Commerce for International Trade), and Clay Lowery (to be Deputy Under Secretary of the Treasury). Location: Room 219, Dirksen Building.

2:30 PM. The Senate Judiciary Committee (SJC) may hold a hearing on pending judicial nominations. The SJC frequently cancels of postpones 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. See, notice. Location: Room 226, Dirksen Building.

6:00 - 9:00 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "What Every Lawyer Needs to Know About Antitrust Law". The speakers will include William Kovacic (George Washington University Law School), Michael Brockmeyer (DLA Piper Rudnick Gray Cary), and Laura Wilkinson (Weil Gotshal & Manges). The price to attend ranges from $70-$125. For more information, call 202 626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

9:30 AM. The Senate Judiciary Committee (SJC) may hold a hearing on reporters' privilege legislation. The SJC frequently cancels of postpones 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. See, notice. Location: Room 226, Dirksen Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) State and Local Practice Committee will host a brown bag lunch. The speaker will be Monica Desai, Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau. RSVP to ann at fcba dot org. Location: FCC, 445 12th St., SW, Conference Room 4-B516.

2:00 - 5:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will meet. The agenda includes "E911 implementation and evolution, network security, network reliability, and broadband". See, FCC notice [PDF] and notice in the Federal Register, September 28, 2005, Vol. 70, No. 187, at Page 56690. Location: FCC, Commission Meeting Room, 445 12th Street, SW.

2:30 PM. The Senate Commerce Committee will meet to mark up four bills: S __, a DTV bill, S 1753, the "Warning, Alert, and Response Network Act", S 967, the "Truth in Broadcasting Act of 2005", and S 1063, the "IP-Enabled Voice Communications and Public Safety Act of 2005". See, notice. Location: Room SDG-50, Dirksen Building.

6:00 - 8:15 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "Introduction to Export Controls". The speakers will include Thomas Scott (Weadon & Associates). The price to attend ranges from $80-$125. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

TIME? The Federal Communications Bar Association's (FCBA) Young Lawyers' Committee will host an event titled "Happy Hour". Location: __.

10/7. The Senate confirmed David McCormick to be Under Secretary of Commerce for Export Administration, and Darryl Jackson to be Assistant Secretary of Commerce. McCormick now leads the Department of Commerce's (DOC) Bureau of Industry and Security (BIS), which was previously named the Bureau of Export Administration (BXA). See, story titled "Bush Nominates McCormick and Jackson for Export Control Office" in TLJ Daily E-Mail Alert No. 1,165, June 30, 2005.

10/11. Robert Portman, the U.S. Trade Representative (USTR), and Mike Johanns, the Secretary of Agriculture, held a news conference in Geneva, Switzerland, at which they discussed progress in the Doha round discussions. See, transcript.

10/11. The Office of the U.S. Trade Representative (USTR) stated in a release that U.S. and Malaysian officials met in Kuala Lumpur, Malaysia, on October 10. The USTR stated that the agenda included a variety of issues, including "strengthening the protection and enforcement of intellectual property rights, upgrading customs procedures, and addressing investment concerns."

10/11. The Government Accountability Office (GAO) released its report [50 pages in PDF] titled "Chief Information Officers: Responsibilities and Information and Technology Governance at Leading Private-Sector Companies".

10/11. The Government Accountability Office (GAO) released its report [32 pages in PDF] titled "Electronic Rulemaking: Progress Made in Developing Centralized E-Rulemaking System".

10/11. The Government Accountability Office (GAO) released its report [36 pages in PDF] titled "Information Security: The Defense Logistics Agency Needs to Fully Implement Its Security Program".

10/6. The Federal Communications Commission (FCC) and Department of Justice (DOJ) filed their brief [56 pages in PDF] with the U.S. Court of Appeals (DCCir) in Mobile Relay Associates v. FCC. This is s petition for review of the FCC's orders that reorganized the 800 MHz spectrum band. This case is App. Ct. No. 04-1413.

10/6. The Department of Justice (DOJ) filed its brief [37 pages in PDF] with the U.S. Court of Appeals (9thCir) in U.S. v. San Francisco Liberation Radio. The U.S. filed a sealed complaint in U.S. District Court (NDCal) seeking writs and warrants for the seizure of the radio broadcasting equipment of San Francisco Liberation Radio, which operated without license from the Federal Communications Commission (FCC). The District Court issued writs and warrants, and U.S. Marshals seized the equipment. The District Court then granted summary judgment of forfeiture to the U.S. This appeal followed. The U.S. argues that the procedure followed comports with the requirements of due process.

10/3. The Federal Communications Commission (FCC) and Department of Justice (DOJ) filed their brief [PDF] with the U.S. Court of Appeals (DCCir) in AT&T v. FCC. This is AT&T's petition for review of the FCC's declaratory order holding that AT&T’s enhanced prepaid calling card (EPPC) service is a regulated basic service, or telecommunications service. The Court of Appeals has not yet scheduled oral argument. This case is App. Ct. No. 05-1096.

Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for subscribers with multiple recipients. Free one month trial subscriptions are available. Also, free subscriptions are available for journalists, federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882.
P.O. Box 4851, Washington DC, 20008.

Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2005 David Carney, dba Tech Law Journal. All rights reserved.