|Bush's Press Office Criticizes District
Court Opinion on NSA Surveillance Program
8/17. The White House press office released a
criticizes the August 17, 2006,
opinion [44 pages
in PDF] of the U.S. District Court (EDMich) in
ACLU v. NSA.
The District Court held that the
National Security Agency's (NSA) extrajudicial electronic
intercepts where one party is within the U.S. and the other is outside violates the
separation of powers doctrine, the First and Fourth Amendments, and federal statutes. The
District Court also enjoined the program.
The District Court enjoined the NSA from "conducting warrantless wiretaps of
telephone and internet communications, in contravention of the Foreign Intelligence
Surveillance Act" and Title III.
The White House press office wrote that "Last week America and the world received
a stark reminder that terrorists are still plotting to attack our country and kill innocent
people. Today a federal judge in Michigan has ruled that the Terrorist Surveillance Program
ordered by the President to detect and prevent terrorist attacks against the American
people is unconstitutional and otherwise illegal. We couldn't disagree more with this ruling,
and the Justice Department will seek an immediate stay of the opinion and appeal."
Its statement adds that "Until the Court has the opportunity to rule on a stay of the
Court's ruling in a hearing now set for September 7, 2006, the parties have
agreed that enforcement of the ruling will be stayed."
The statement continues that "United States intelligence officials have confirmed
that the program has helped stop terrorist attacks and saved American lives. The program is
carefully administered, and only targets international phone calls coming into or out of
the United States where one of the parties on the call is a suspected Al Qaeda or affiliated
terrorist. The whole point is to detect and prevent terrorist attacks before they can be
carried out. That's what the American people expect from their government, and it is the
President's most solemn duty to ensure their protection."
It concludes that "The Terrorist Surveillance Program is firmly grounded in law and
regularly reviewed to make sure steps are taken to protect civil liberties. The Terrorist
Surveillance Program has proven to be one of our most critical and effective tools in the
war against terrorism, and we look forward to demonstrating on appeal the validity of this
This statement was issued by the White House press office. It does not identify authorship.
Anthony Romero, Executive Director of the ACLU, stated in a
that "Today's ruling is a landmark victory against the abuse of power that has
become the hallmark of the Bush administration ... Government spying on innocent
Americans without any kind of warrant and without Congressional approval runs
counter to the very foundations of our democracy. Now Congress needs to do its
job and stop the president from violating the law."
Former Rep. Bob Barr (R-GA) praised the District Court opinion. He wrote in a
release that "This
is a win for all Americans -- Judge Taylor has upheld the Constitution in her ruling and has
defended the privacy rights of all Americans against overreaching federal power."
He added that "while we all support the Administration in its efforts to discover
and thwart possible terrorist acts, including listening in on al Qaeda communications, our
laws provide for a legal way for the government to proceed, and perhaps in light of this
ruling the Administration will actually follow those laws."
|Federal Circuit Addresses Patent
8/16. The U.S. Court of Appeals (FedCir)
issued its divided opinion [27
pages in PDF] in Monsanto v. Scruggs [PDF], a case involving plant
seed patents. The Court of Appeals affirmed the District Court's judgment of
validity and infringement, but vacated the injunction for consideration in light
of eBay v. MercExchange.
The Court of Appeals also affirmed the District Court's rejection of counterclaims and
affirmative defense based upon alleged antitrust violations and patent misuse. However,
Judge Dyk dissented on one aspect of the patent misuse defense, arguing that Monsanto's
tying of its patented technology to another product may have constituted misuse.
Background. Monsanto owns
U.S. Patent No. 5,352,605, titled "Chimeric genes for transforming plant
cells using viral promoters". Monsanto used the technology in this patent to
develop glyphosate herbicide resistant soybeans and cotton. Monsanto licenses
its biotechnology to seed companies, which grow and sell seeds. (Monsanto uses
the mark "Roundup Ready" for seeds and herbicides.)
Monsanto's licenses provide that the seed companies may not sell seeds
containing Monsanto's technology to growers unless the growers sign one of Monsanto's
license agreements. The licenses further provide that the seeds sold may be used
to grow only a single commercial crop.
The majority opinion of the Court of Appeals summarized the agreements as
follows: "Monsanto's restrictions on seed growers include: (1) requiring growers
to use only seed containing Monsanto's biotechnology for planting a single crop
(``exclusivity provision´´); (2) prohibiting transfer or re-use of seed
containing the biotechnology for replanting (``no replant policy´´); (3)
prohibiting research or experimentation (``no research policy´´); and (4)
requiring payment of a ``technology fee.´´"
The dissenting opinion states that one provision
is material to the dissent. Monsanto tied the purchase of Roundup herbicide to
the purchase of Roundup ready seeds.
Mitchell Scruggs, Eddie Scruggs, and various Scruggs entities grow soybeans
and cotton. Scruggs purchased soybeen and cotton seeds from a seed company that licensed
Monsanto technology. However, Scruggs never signed a licensing agreement.
Moreover, Scruggs planted these seeds, and after harvesting, retained the new
generation of seeds. Scruggs planted these retained seeds, on so on.
District Court. Monsanto filed a complaint in U.S. District Court (NDMiss)
against Scruggs alleging patent infringement.
Scruggs denied infringement. Scruggs also plead the affirmative defense of patent misuse.
Scruggs also counterclaimed that Monsanto violated Sections 1 and 2 of the Sherman Act by
tying the purchase of seeds to the purchase of Roundup through grower license agreements,
grower incentive agreements, and seed partner license agreements, as well as by tying the
Roundup and Bollgard traits in cotton seeds. Scruggs also asserted that Monsanto violated
Section 2 of the Sherman Act by unlawfully monopolizing or attempting to monopolize a
Scruggs also asserted common law counterclaims of invasion of privacy, trespass, tortious
interference with contract and/or business relations, abuse of process, conversion, nuisance,
strict liability in tort, negligence, and unfair competition.
Scruggs sought a declaration of patent invalidity.
The parties filed cross motions for summary judgment.
The District Court granted summary judgment of infringement, and enjoined Scruggs from
further use of the seeds containing Monsanto's patented biotechnology. The District Court also
granted summary judgment for Monsanto on the patent misuse, antitrust, and other
defenses and counterclaims.
The District Court made no finding regarding market power.
On March 1, 2006, the Supreme Court
opinion [20 pages in PDF] in Illinois Tool Works v. Independent Ink,
a patent tying antitrust case in which the Supreme Court vacated the judgment of
the Federal Circuit and remanded. The Federal Circuit held in January of 2005
that "a rebuttable presumption of market power arises from the possession of a
patent over a tying product". The Supreme Court concluded that "Congress, the
antitrust enforcement agencies, and most economists have all reached the
conclusion that a patent does not necessarily confer market power upon the
patentee. Today, we reach the same conclusion, and therefore hold that, in all
cases involving a tying arrangement, the plaintiff must prove that the defendant
has market power in the tying product." See also,
titled "Supreme Court Vacates in Patent Tying Antitrust Case" in
TLJ Daily E-Mail
Alert No. 1,321, March 2, 2006.
Scruggs brought this appeal.
Majority Opinion of the Court of Appeals. The Court of Appeals
affirmed, but vacated the injunction, and remanded, because of the Supreme
Court's recent opinion in eBay v. MercExchange.
The majority reasoned that all of the licensing restrictions are legitimate
uses of a patent. It wrote that "Field of use licensing restrictions, i.e.,
permitting the use of inventions in one field and excluding it in others, are
also within the scope of the patent grant."
It continued that "Monsanto has a right to exclude others from making, using,
or selling its patented plant technology, ... and its no replant policy simply
prevents purchasers of the seeds from using the patented biotechnology when that
biotechnology makes a copy of itself. This restriction therefore is a valid
exercise of its rights under the patent laws. Furthermore, Monsanto's uniform
technology fee is essentially a royalty fee, the charging of which is also
within the scope of the patent grant. Lastly, the no research policy is a field
of use restriction and is also within the protection of the patent laws."
The majority further found no patent misuse arising out of unlawful tying.
The majority pointed out that the tied product cited by the dissent was the only
product approved for sale by the Environmental Protection Agency (EPA), so a licensing
clause requiring the use of that product could not be anticompetitive.
The Court of Appeals vacated the injunction, and remanded for consideration
of the request for an injunction in light of the Supreme Court's May 15, 2006,
[12 pages in PDF] in eBay v. MercExchange. The Supreme Court held that
the traditional four factor framework that guides a court's decision whether to
grant an injunction applies in patent cases. See,
"Supreme Court Rules on Availability of Injunctive Relief in Patent Cases" in
TLJ Daily E-Mail
Alert No. 1,371, May 17, 2006.
The Supreme Court wrote that "a plaintiff seeking a permanent injunction must
satisfy a four-factor test before a court may grant such relief. A plaintiff
must demonstrate: (1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages, are inadequate to
compensate for that injury; (3) that, considering the balance of hardships
between the plaintiff and defendant, a remedy in equity is warranted; and (4)
that the public interest would not be disserved by a permanent injunction."
Dissenting Opinion. Judge Dyke dissented solely on the patent misuse
issue. He wrote that "Scruggs argues that Monsanto's grower license agreements
between 1996 and 1998 unlawfully tied the purchase of Roundup herbicide to the
purchase of Roundup ready seeds, and that this constituted patent misuse,
rendering the patent unenforceable. The district court rejected this argument.
... the majority also rejects this contention, on the ground that the
agreements, in essence, merely enforced then-existing EPA regulations. ... With
respect, I think that the district court’s decision in this respect, approved by
the majority, is contrary to Supreme Court precedent."
He concluded that "I would vacate the judgment as to the alleged tie in the
1996-1998 grower agreements, and remand for the district court to determine
whether the relevant contract provision in fact constituted patent misuse and,
if misuse occurred, whether it was purged."
This case is Monsanto Company v. Mitchell Scruggs, et al., U.S. Court
of Appeals for the Federal Circuit, App. Ct. Nos. 04-1532, 05-1120, and 05-1121,
appeals from the U.S. District Court for the Northern District of Mississippi,
D.C. No. 3:00CV161-P-D, Judge Allen Pepper presiding. Judge Mayer wrote the
opinion of the Court of Appeals, in which Judge Bryson joined. Judge Dyk wrote a
separate opinion concurring in part and dissenting in part.
|DC Circuit Upholds FCC Order Re
Separable Security for Cable Set-Top Boxes
8/18. The U.S. Court of Appeals
(DCCir) issued its
[22 pages in PDF] in Charter Communications v. FCC, denying a
petition for review of a Federal Communications Commission's (FCC)
order that, among other things, declined to rescind a rule that will preclude cable operators
from offering set-top converter boxes that bundle both security functions, such as
descrambling, and non-security functions, such as channel selection, in a single device.
Cable companies Charter and Advance/Newhouse, along with their trade association, the
National Cable and Telecommunications Association (NCTA),
challenged the FCC's
Second Report and
Order [37 pages in PDF], adopted and released on March 17, 2005. This proceeding is titled
"In the Matter of: Implementation of Section 304 of the Telecommunications Act of 1996
Commercial Availability of Navigation Devices". This order is FCC 05-76 in CS Docket No.
See also, Section 304 of the Telecommunications Act of 1996, which is codified at
47 U.S.C. § 549, FCC
release [PDF] summarizing this 2nd R&O, and story titled "FCC Again Delays
Deadline for Integrating Navigation and Security Functionalities in Cable Set
Top Boxes" in TLJ
Daily E-Mail Alert No. 1,099, March 21, 2005.
The cable industry has argued that market conditions have
changed since the FCC adopted it original ban on integration, and hence, it
should be repealed. The Consumer Electronics
Association (CEA) has argued that the ban should be continued, and that
there should be no extensions of the implementation deadline. Some of the CEA's
member companies want to compete in the market for the sale of set top boxes.
The FCC's March 17, 2005, 2nd R&O extended from July 1, 2006 to July 1, 2007,
the deadline for cable companies to provide separable security for cable set-top
boxes, and instructed the NCTA and CEA to submit further reports to the FCC.
The industries are developing downloadable security for set-top boxes.
The cable industry petitioned for review to challenge the FCC's decision to
maintain the integration ban. The Court of Appeals rejected the petition.
Gary Shapiro, head of the CEA, stated in a release that "the District Court
finally said 'enough is enough.' Cable has waged a nonstop campaign to thwart
the will of Congress and the FCC since these rules were enacted in 1998. In
fact, the opinion cites overwhelming evidence of cable's refusal to support consumers with
CableCARDs." (Shapiro's reference to the District Court is an error.)
He added that "Today's opinion sets the record straight: consumers are
entitled to a broad array of products that can connect to cable systems
featuring innovative new features for competitive prices. In the wake of the
Court's decision, we are hopeful that cable will stop its foot-dragging and
comply with the law for the benefit of consumers."
Neal Goldberg, General Counsel for the NCTA, stated in a
release that "While we are disappointed, it is always difficult to reverse an FCC
decision given the deference courts must afford government agencies. We are encouraged by
the court's observation that cable's progress on downloadable security 'may moot this entire
controversy' and that the FCC was reasonable to delay the integration ban in light of the
'evolving nature of that technology.' Cable's progress on a downloadable
security solution is the exact basis of the deferral request NCTA filed earlier
this week with the Commission which, if granted, would save consumers millions
of dollars every year."
On August 18, 2006, the NCTA filed a
Request for Waiver [41 pages in
PDF] with the FCC that requests a further extension of time until cable industry "deployment of
downloadable security or December 31, 2009, whichever is earlier". See also,
cover letter [PDF] to FCC.
This case is Charter Communications, Inc. and Advance/Newhouse Communications,
petitioners v. FCC and USA, respondents, and CEA and NCTA, respondents, U.S. Court of
Appeals for the District of Columbia, App. Ct. No. 05-1237, a petition for review of a final
order of the FCC. Judge Garland wrote the opinion of the Court of Appeals, in which Judges
Ginsburg and Tatel joined.
8/18. The Government Accountability Office
(GAO) released a report
[40 pages in PDF] titled "Electronic Records Archives: The National Archives
and Records Administration's Fiscal Year 2006 Expenditure Plan".
8/17. The U.S. Court of Appeals (9thCir) issued an
amended opinion [PDF] in Davel Communications v. Qwest, a dispute between
pay phone service providers and Qwest regarding payment for access. This opinion
addresses the payphone industry provisions of 47 U.S.C. § 276, the Federal Communications
Commission's (FCC) payphone orders, the filing of tariffs, the primary jurisdiction doctrine,
the filed rate doctrine, and the statute of limitations contained in 47 U.S.C. § 415. This
case is Davel Communications, Inc., et al. v. Qwest Corporation, U.S. Court of
Appeals for the 9th Circuit, App. Ct. No. 04-35677, an appeal from the U.S. District Court
for the Western District of Washington, D.C. No. CV-03-03680-MJP, Judge Marsha Pechman
|Washington Tech Calendar
New items are highlighted in red.
|Monday, August 21
12:00 NOON - 1:00 PM. The
U.S. Chamber of Commerce will host a
lunch briefing for reporters to discuss its "Global Anti-Counterfeiting and
Piracy Initiative". The speakers will be Caroline Joiner, Brad Huther,
Michael Considine, and Jennifer Osika. For more information, or to register,
e-mail press at uschamber dot com or call 202 463-5682. Location: U.S.
Chamber, 1615 H St., NW.
|Tuesday, August 22
8:30 AM - 4:30 PM. The U.S.-China Economic and Security
Review Commission. will hold a hearing titled "China's Financial System and Monetary
Policies: The Impact on U.S. Exchange Rates, Capital Markets, and Interest Rates''. See,
notice in the Federal Register,
August 15, 2006, Vol. 71, No. 157, at Pages 46978-46979. Location: Room 385,
Russell Senate Office Building, Capitol Hill.
Deadline to submit comments to the
U.S. Patent and Trademark Office (USPTO)
regarding its "modified plan to remove the paper search collection of marks
that include design elements from the USPTO's Trademark Search Facility and
replace them with electronic documents. The USPTO has determined that the
paper search collection is no longer necessary due to the availability and
reliability of the USPTO's electronic search system." See,
notice in the Federal Register, June 23, 2006, Vol. 71, No. 121, at Pages
|Wednesday, August 23
8:30 AM - 2:30 PM. The
American Electronics Association (AeA) will host an
event titled "AeA Annual Government - Industry Executive Interchange". See,
Prices to attend range from $195-$295. Location: The Spy Museum, 800 F St., NW.
9:30 AM - 4:30 PM. Day one of a two day
meeting of the U.S.-China Economic and Security Review Commission to
consider drafts of material for the 2006 Annual Report. The
agenda includes discussion of export controls and China's WTO compliance. See,
notice in the Federal Register, August 16, 2006, Vol. 71, No. 158, at Page 47328.
Location: Conference Room 381, Hall of The States, 444 North Capitol St., NW.
12:00 NOON - 3:00 PM. The
DC Bar Association will host a panel discussion titled
"DR-CAFTA: The United States-Dominican Republic-Central America Free Trade Agreement
A Roundtable with the Ambassadors". The speakers will include ambassadors to the
U.S. from Dominican Republic, Guatemala, Honduras, Nicaragua, El Salvador, and Costa Rica.
The price to attend ranges from $15-40. For more information, call 202-626-3488. See,
Location: Arnold & Porter, 555 12th St., NW.
1:30 - 3:30 PM. The Department of State will host a meeting to hear
public views on issues related to the possible expansion of the mandate of the
International Mobile Satellite Organization (IMSO) to
include new oversight and regulatory responsibilities that may affect U.S. and non-U.S.
mobile satellite services providers. See,
notice in the Federal Register, August 10, 2006, Vol. 71, No. 154, at
Pages 45897-45898. Location: Harry S. Truman building, 2201 C St., NW.
Federal Communications Commission (FCC)
67 is scheduled to begin. This is the 400 MHz Air-Ground Radiotelephone Service
auction. See, FCC
notice of cancellation [PDF] and
notice of cancellation in the Federal Register, May 17, 2006, Vol. 71, No. 95, at
|Thursday, August 24
9:30 AM - 4:30 PM. Day two of a two day
meeting of the U.S.-China Economic and Security Review Commission to consider drafts
of material for the 2006 Annual Report. The agenda includes discussion of export controls
and China's WTO compliance. See,
notice in the Federal Register, August 16, 2006, Vol. 71, No. 158, at Page 47328.
Location: Conference Room 381, Hall of The States, 444 North Capitol St., NW.
|Friday, August 25
Deadline to submit comments to the National Institute of Standards and
Technology's (NIST) Computer Security Division
draft [159 pages in PDF] of Special Publication 800-53, Revision 1 (Second
Public Draft), titled "Recommended Security Controls for Federal Information
|About Tech Law Journal
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
P.O. Box 4851, Washington DC, 20008.
Copyright 1998 - 2006 David Carney, dba Tech Law Journal. All