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July 31, 2006, Alert No. 1,421.
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7th Circuit Upholds Indiana Ban on Certain Charitable Telemarketing

7/28. The U.S. Court of Appeals (7thCir) issued its opinion [32 pages in PDF] in National Coalition of Prayer v. Carter, a First Amendment challenge to a state ban on telemarketing. The Court of Appeals affirmed the District Court's summary judgment for the state of Indiana. Notably, two of the three Judges concluded that the Rowan case, which provides for a mere balancing test when the restraint is based upon a consumer opt in, is applicable, even in the case of non-commercial speech. Other Courts have concluded otherwise.

The Indiana Telephone Privacy Act, which is codified at Indiana Code § 24-4.7, creates a state do not call list, and then prohibits "telephone solicitors" from placing a "telephone sales call" to anyone on the list, including for a "charitable contribution".

However, the Act exempts "telephone call[s] made on behalf of a charitable organization that is exempt from federal income taxation under Section 501 of the Internal Revenue Code, but only if ... [t]he telephone call is made by a volunteer or an employee of the charitable organization[, and] the telephone solicitor who makes the telephone call immediately discloses ... [his or her] true first and last name [and t]he name, address, and telephone number of the charitable organization."

The Act also exempts calls soliciting newspaper sales if made by an employee of or volunteer of the newspaper, certain real estate related calls, and calls soliciting political contributions.

The National Coalition of Prayer, Inc., and the other plaintiffs, are tax exempt entities that use telemarketers to solicit charitable contributions.

The plaintiffs filed a complaint in U.S. District Court (SDInd) against Steve Carter, in his capacity as Attorney General of the state of Indiana, seeking declaratory and injunctive relief that the statute is content based, underbroad, and a prior restraint on speech, under the First Amendment of the U.S. Constitution.

The District Court granted summary judgment to the state of Indiana. This appeal followed.

The Court of Appeals affirmed.

The plaintiffs argued that the statute imposed a content based regulation that is subject to strict scrutiny analysis. Indiana argued that since the statute only affected calls to those who have opted in, Rowan v. United States Postal Service, 397 U.S. 728 (1970), controls, and the Court must only determine whether the state's interest in maintaining its citizens' privacy outweighs the speakers' rights to communicate their messages to private homes.

The Court of Appeals noted that other courts have held that Rowan is not applicable to do not call lists. However, it concluded that "We find the State’s Rowan analogy persuasive, and choose to adopt it here."

Rowan is a case involving commercial speech which upheld a law that allowed customers of the U.S. Postal Service to prohibit delivery of sales literature for items "which the addressee in his sole discretion believes to be erotically arousing or sexually provocative." The Supreme Court reasoned that since the citizen, not the government, imposed the ban, the First Amendment challenge fails. The Supreme Court wrote that "Nothing in the Constitution compels us to listen to or view any unwanted communication, whatever its merit". It applied a simple balancing test.

Once the Court determined that Rowan is applicable, it had little difficulty in finding the the Indiana statute survives a Rowan balancing test.

The Court of Appeals concluded that "Because the Act sharply curtails telemarketing -- the speech that was most injurious to residential privacy -- while excluding speech that historically enjoys greater First Amendment protection, we are satisfied that the Act is not underbroad. Therefore, applying Rowan, we believe that the state’s interest in protecting residents’ right not to endure unwanted speech in their own homes outweighs any First Amendment interests the Plaintiffs possess."

Judge Williams concurred. He wrote that the Court should not have followed Rowan. He argued that "a regulation affecting charitable speech must be narrowly tailored to advance a substantial governmental interest", and that Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980), is controlling. However, he argued that the Indiana statute survives Schaumburg scrutiny. Hence, he concurred in the result, but not in the reasoning.

This case is National Coalition of Prayer, Inc., et al. v. Steve Carter, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 05-3995, an appeal from the U.S. District Court for the Southern District of Indiana, Indianapolis Division, D.C. No. IP02-C-0536-B/S, Judge Sarah Barker presiding. Judge Flaum wrote the opinion of the Court of Appeals, in which Judges Evans and Williams joined. Judge Williams also wrote a concurring opinion.

House Votes for Two Year Extension of the R&D Tax Credit

7/29. The House approved HR 5970, the "Estate Tax and Extension of Tax Relief Act of 2006 ", by a vote of 230-180, just before adjourning early on July 29 for its August recess. See, Roll Call No. 425.

This bill is a huge bill that contains numerous tax provisions, including some that are technology related. This bill also includes an increase in the minimum wage, as well as amendments to surface mining law. The Senate has not yet approved this bill.

This bill provides, at Section 204, a two year extension of the research and development tax credit. It also increases the rates of the Alternative Incremental Credit. The R&D tax credit is codified at 26 U.S.C. § 41.

The bill also provides, at Section 216, an extension of, and amendments to, the deduction for contributions of computer technology and equipment for educational purposes. This deduction is codified at 26 U.S.C. § 170(e)(6)(G).

The bill also provides, at Section 223, an extension of the exception to the general rule that tax returns and return information are confidential, where the data is disclosed to the Department of Justice (DOJ) or other federal agency in connection with terrorist threats. This exception is codified at 26 U.S.C. § 6103(i)(3)(c).

DOJ Obtains Grand Jury Subpoena for Critic of NSA Surveillance

7/20. The U.S. District Court (EDVa) issued a subpoena to Russell Tice to testify on August 2, 2006, before a grand jury of the U.S. District Court. The subpoena was issued upon the application of the Kenneth Melson of the Department of Justice (DOJ). The subpoena does not request any records. It does not identify the subject matter of the testimony sought, the matter being investigated, or what federal criminal statutes may have been violated.

The National Security Whistle Blowers Coalition (NSWBC) issued a release in which it states that Tice is a former National Security Agency (NSA) intelligence analyst and a member of the NSWBC.

This release also states that this subpoena relates to the New York Times' disclosure of an NSA electronic surveillance program.

The New York Times published a story by James Risen and Eric Lichtblau titled "Bush Lets U.S. Spy on Callers Without Courts" on December 16, 2005. It states that "President Bush secretly authorized the National Security Agency to eavesdrop on Americans and others inside the United States to search for evidence of terrorist activity without the court-approved warrants ordinarily required for domestic spying, according to government officials."

See also, stories titled "President Bush Discloses Interception of Communications Without Court Approval" in TLJ Daily E-Mail Alert No. 1,275, December 19, 2005; and "Bush, Gonzales & Hayden Discuss Presidential Intercepts and PATRIOT Act" in TLJ Daily E-Mail Alert No. 1,276, December 20, 2005.

And see, May 11, 2006, article in USA Today by Leslie Cauley titled "NSA has massive database of Americans' phone calls". See also, story titled "Bush Responds to USA Today Story Regarding NSA Database of Phone Calls" in TLJ Daily E-Mail Alert No. 1,369, May 12, 2006.

The NSWBC release quotes Tice as saying that "This latest action by the government is designed only for one purpose: to ensure that people who witness criminal action being committed by the government are intimidated into remaining silent."

See also, May 12, 2006, story in titled "Former NSA officer alleges illegal activities under Hayden" by Chris Strohm.

People and Appointments

7/31. David Unterhalter was appointed to the World Trade Organization's (WTO) Dispute Settlement Body (DSB) for the remainder of a term that expires on December 11, 2009. He replaces John Lockhart, who died in January. See, WTO release.

Trade News

Peter Mandelson7/31. Peter Mandelson, the European Commission for Trade, wrote a piece on the collapse of Doha talks, which is published in his web site, and in Financial Times. He wrote that "Doha is now losing the race against time. It cannot now be concluded by the end of 2006. This means that the fast-track negotiating authority granted to the US president by Congress will probably expire before a final deal can be approved. As things stand, unless George W.Bush persuades Congress to renew his negotiators' mandate, the talks have little prospect of concluding for some years." He continued that "There are reasons -- partly economic and partly political -- why President Bush may choose to put this to Congress. He is a free trader. He believes in expanding trade and opening markets as the best way to generate and distribute wealth in the global economy. He is not ideologically committed to subsidies, nor is his pro-reform agriculture secretary." He added that "A failure of Doha would strengthen those who want to turn their backs on globalisation and retreat into protectionism. It would undermine the WTO system, which has brought stability and predictability to the global economy. It would make it much harder to anchor China, India and other growing economies into an open, fair and multilateral trade system."

7/28. The U.S. International Trade Administration (ITA) published a notice in the Federal Register that announces that its will extend from August 1, 2006, to October 30, 2006, its deadline to release the preliminary results of its reconsideration of the sunset review of its antidumping duty order for large newspaper printing presses and components thereof, whether assembled or unassembled, from Japan. The notice also announces an extension of the release of the final results until March 9, 2007. See, Federal Register, July 28, 2006, Vol. 71, No. 145, at Page 42801.

7/28. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register that announces that it will hold a hearing on its preparation of its annual report to the Congress on China's compliance with the commitments made in connection with its accession to the World Trade Organization (WTO). The notice states that the hearing will be on "Wednesday, September 28". TLJ spoke with a representative of the OUSTR who stated that the notice should have stated "Thursday, September 28". The deadline to submit comments is Monday, September 18, 2006. The notice states that the deadline to submit written requests to testify is "Wednesday, September 14". This should have stated "Thursday, September 14". See, Federal Register, July 28, 2006, Vol. 71, No. 145, at Pages 42886-42887.

7/21. The Department of Commerce's Bureau of Industry and Security (BIS) published a notice in the Federal Register soliciting applications for membership on the BIS's six Technical Advisory committees (TACs). One of these six TACs, titled "Information Systems TAC", advises the BIS on the regulation of exports of electronics, computers, telecommunications, and information security. The notice states that "This Notice of Recruitment will be open for one year from its date of publication in the Federal Register." See, Federal Register, July 21, 2006, Vol. 71, No. 140, at Page 41418.

Washington Tech Calendar
New items are highlighted in red.
Monday, July 31

The House will not meet from Monday, July 31, through Tuesday, September 5. The House will next meet at 2:00 PM on Wednesday, September 6. See, Republican Whip Notice.

The Senate will meet at 2:00 PM. It will resume consideration of S 3711, the Gulf of Mexico energy security bill.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding NIST Special Publication 800-53A [305 pages in PDF], titled "Guide for Assessing the Security Controls in Federal Information Systems".

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding on whether and how an open global database of proxy numbers of Video Relay Service (VRS) users may be created so that a hearing person may call a VRS user through any VRS provider without having to ascertain the first VRS user's current internet protocol address. See, notice in the Federal Register, May 31, 2006, Vol. 71, No. 104, at Pages 30848-30856. This FNPRM is FCC 06-57 in CG Docket No. 03-123.

Extended deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice in the Federal Register regarding revisions to guidelines used by USPTO personnel in their review of patent applications to determine whether the claims in a patent application are directed to patent eligible subject matter. The USPTO seeks comments on, among other topics, "claims that perform data transformation" and "claims directed to a signal per se". With respect to the later, the USPTO asks "If claims directed to a signal per se are determined to be statutory subject matter, what is the potential impact on internet service providers, satellites, wireless fidelity (WiFi [reg]), and other carriers of signals?" See, Federal Register, December 20, 2005, Vol. 70, No. 243, at Pages 75451 - 75452. See also, story titled "USPTO Seeks Comments on Subject Matter Eligible for Patents" in TLJ Daily E-Mail Alert No. 1,278, December 22, 2005. See also, notice in the Federal Register (June 14, 2006, Vol. 71, No. 114, at Pages 34307-34308) extending deadline, and story titled "USPTO Seeks Further Comments on Patentable Subject Matter" in TLJ Daily E-Mail Alert No. 1,391, June 14, 2006.

Tuesday, August 1

LOCATION CHANGE. 9:00 AM. The Senate Homeland Security and Governmental Affairs Committee's Subcommittee on Investigations will hold a hearing titled "Offshore Abuses: The Enablers, The Tools & Offshore Secrecy". This hearing will focus on the use of foreign financial services companies by U.S. citizens, but not the use of U.S. financial services companies by foreign citizens. See, notice. Location: Room 106, Dirksen Building.

10:00 AM. The National Association of Manufacturers (NAM) will host an event to release a report on supply chain security. The speakers will include Jerry Jasinowski (NAM), Theo Fletcher (IBM), Lesley Sept (Stanford University), and Arnold Allemang (Dow Chemical Company). For more information, contact Laura Narvaiz at 202-637-3104 or lnarvaiz at nam dot org. Coffee and doughnuts will be served. Location: NAM, 1331 Pennsylvania Ave., NW, Suite 600.

2:00 PM. The Senate Judiciary Committee (SJC) may hold a hearing on judicial nominations. See, notice. The agenda includes consideration of Peter Keisler to be a Judge of the U.S. Court of Appeals (DCCir), and Valerie Baker and Philip Gutierrezto be a Judges of the U.S. District Court (CDCal). Location: Room 226, Dirksen Building.

Wednesday, August 2

9:45 AM - 12:00 NOON and 2:00 - 3:30 PM. The DC Bar Association will host two events titled "Visits to the U.S. Copyright Office". The price to attend ranges from $15-$25. For more information, call 202-626-3463. See, notice and notice. Location: Copyright Office, Room 401, James Madison Memorial Building, 1st Street & Independence Ave., SE.

Thursday, August 3

8:30 AM - 5:00 PM. The U.S.-China Economic and Security Review Commission will hold a hearing titled "China's Role in the World: Is China a Responsible Stakeholder?". See, notice in the Federal Register, July 20, 2006, Vol. 71, No. 139, at Pages 41316-41317. Location: Room 385, Russell Building, Capitol Hill.

2:00 PM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. Location: Room 226, Dirksen Building.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF], and story titled "FCC Releases Agenda for August 3 Meeting" in TLJ Daily E-Mail Alert No. 1,420, July 28, 2006. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

10:00 AM. The Center for Democracy & Technology (CDT) will hold a news briefing pending bills that would mandate internet filtering and web site labelling. The speakers will be Leslie Harris and John Morris of the CDT. Breakfast will be served. For more information, contact David McGuire at 202-637-9800 x106. Location: ___.

Friday, August 4

8:30 AM - 12:30 PM. The U.S.-China Economic and Security Review Commission will hold a hearing titled "China's Energy Security". See, notice in the Federal Register, July 20, 2006, Vol. 71, No. 139, at Pages 41316-41317. Location: Room 385, Russell Building, Capitol Hill.

Monday, August 7

The Senate will not meet from Monday, August 7 (tentative), through Monday, September 4. See, 2006 Senate calendar.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in, Inc. v. Furnace Brook, LLC, a patent case involving personal jurisdiction. Furnace Brook bought a patent at a bankruptcy auction. It did not practice it. It sent cease and desist letters to other companies, alleging infringement, and seeking licensing fees. One recipient,, filed a complaint in U.S. District Court (DUtah) seeking a declaration that it did not infringe the patent. The Federal Circuit has held that sending a cease and desist letter into a state does not give rise to personal jurisdiction over the sender in that state. The District Court dismissed for lack of personal jurisdiction. However, the District Court also held that Furnace Brook is a "patent troll". See, opinion [PDF]. This is App. Ct. No. 2006-1121, and D.C. No. 2:05-CV-00679 PGC. Location: Courtroom 201, 717 Madison Place, NW.

The Federal Communications Commission (FCC) will conduct a mock auction for Auction 66. This is the auction of Advance Wireless Services (AWS) licenses in the 1710-1755 MHz and 2110-2155 MHz (AWS-1) bands. See also, notice in the Federal Register, June 2, 2006, Vol. 71, No. 106, at Pages 32089-32091.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its Draft Special Publication 800-100 [huge Zipped PDF] titled "Information Security Handbook: A Guide for Managers".

More News

7/31. The Department of Justice (DOJ) announced in a release that the Antitrust Division's Premerger Notification Unit is returning to the DOJ main building (Robert F. Kennedy Building). Hence, effective Tuesday, August 1, 2006, all premerger filings should be directed to:
   Department of Justice
   Antitrust Division
   Office of Operations
   Premerger Notification Unit
   950 Pennsylvania Avenue, N.W.
   Room 3335
   Washington, D.C. 20530

7/31. The Federal Trade Commission (FTC) published a notice in the Federal Register that describes, recites, and sets the effective date (September 1, 2006) for its final rule amending Section 310.8 of its Telemarketing Sales Rule (TSR) by revising the fees charged to entities for accessing the National Do Not Call Registry. See, Federal Register, July 31, 2006, Vol. 71, No. 146, at Pages 43048-43054.

7/28. The Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS) announced in a release [PDF] that "it has received enough H-1B petitions requesting ``foreign workers who have earned a master's degree or higher from a U.S. institution of higher education´´ to meet the exemption limit of 20,000 established by Congress for fiscal year (FY) 2007. Consequently, USCIS has determined that the ``final receipt date´´ for these exempt H-1B petitions is July 26, 2006." The DHS release adds that "USCIS received enough H-1B petitions to meet the general population H-1B cap of 65,000 for fiscal year 2007 on May 26, 2006."

7/25. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register regarding its proposed rules for the administration of the program to provide $40 coupons to consumers for use towards the purchase of digital to analog converter boxes. The deadline to submit comments is 5:00 PM on September 25, 2005. See, NTIA release [PDF] and notice in the Federal Register, July 25, 2006, Vol. 71, No. 142, at Pages 42067-42074.

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