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November 17, 2006, Alert No. 1,491.
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Movie Companies Sue Company that Copies CSS Protected DVD Content onto PVPs

11/3. Paramount Pictures Corporation, and other movie companies, filed a complaint [2 MB PDF scan] in U.S. District Court (SDNY) against Load 'N Go Video, Inc. alleging violation of 17 U.S.C. Ё 501 and 1201 in connection with copying movies and TV programs from CSS protected DVDs to its customers' portable video players.

The plaintiffs are Paramount, 20th Century Fox, Universal, Warner Brothers, Disney, and Columbia.

The sole defendant is Load 'N Go Video, Inc. The web site with the URL of www.loadngovideo.com was not operational at the time of publication of this story. However, cached copies of its pages were available via Google.

One cached web page states that "Load 慛 Go Video was founded by technology professionals in Boston, Massachusetts with a great enthusiasm for the exploding portable video industry. After discovering the difficulty and tedium involved in converting and loading video content to view on Portable Video Players, the founders decided to create a value-added service to save both the time and effort of its consumers."

It adds that "Our mission is to help our customers enjoy the advantages of the portable video player revolution without being overwhelmed by the technology", and that its service is to "load video content on to portable video players".

The movie companies' complaint alleges "unauthorized and unlawful copying, distribution and exploitation of numerous motion pictures and/or television programs in which Plaintiffs own the copyrights or exclusive distribution rights ... and ... unauthorized and unlawful circumvention of an encryption-based DVD access control and copy prevention system that provides protection for Plaintiffs' copyrighted content."

The complaint states that "In exchange for payment from its customers, Defendant copies Plaintiffs' copyrighted works from DVDs and then ultimately loads said copyrighted material onto the customer's portable video player (``PVP创) -- an example of which is Apple's ``iPod.创 Through the practice, Defendant illegally copies and distributes Plaintiffs' copyrighted works ..."

The complaint continues that "Before releasing Plaintiffs' copyrighted works in DVD format, Plaintiffs employ the Content Scramble System (``CSS创) -- an encryption-based DVD access control and copy prevention system that provides protection for their copyrighted content. Upon information and belief, Defendant's service of copying Plaintiffs' protected DVD content and then loading said content onto the customer's PVP involves the circumvention of CSS, in violation of the anti-circumvention provisions of the Digital Millennium Copyright Act ..."

The complaint elaborates that "Defendant engages in an enterprise in which it, unlawfully and without authorization, circumvents the CSS access control and copy prevention system that protects Plaintiffs' DVDs and then copies Plaintiffs' copyrighted works contained on said DVDs and ultimately loads said copyrighted material onto the customer's PVP. Specifically, Defendant's customers select from a wide variety of commercially available DVDs that are offered for sale and for ``loading创 by Defendant and that contain Plaintiff's copyrighted works ..."

"Defendant's customers either purchase one of three models of PVPs that Defendant offers for sale or send to Defendant their own PVPs. Using DVDs ordered by its customers, Defendant, among other activities, circumvents the CSS protecting the DVDs and then copies and loads Plaintiffs' copyrighted material onto the customer's PVP. Defendant then sends the ``loaded创 PVPs back to its customers, along with copies of the DVDs. In exchange for this service, Defendant receives payment from its customers at a price that includes a charge for the costs associated with copying videos from the DVDs and ``loading创 the PVPs."

The first count alleges that this is infringement, under 17 U.S.C. 501, of exclusive rights provided under 17 U.S.C. 106.

There are numerous limitations on the exclusive rights of copyright, including fair use, which is codified at 17 U.S.C. 107.

The complaint further pleads that the defendants' infringement is willful, and hence, plaintiffs are entitled to recover attorneys fees under 17 U.S.C. 505.

The second count alleges circumvention in violation of 17 U.S.C. Ё 1201(a)(1)(A), 1201(a)(2) and 1201(b).

 1201(a)(1)(A) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title."

 1201(a)(2) provides, in full, that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -- (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or (C) is marketed by that person or another acting in concert with that person with that person抯 knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title."

 1201(b) provides, in part, that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -- (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof ..."

There is no fair use exception to the ban on circumvention. Although, bills are introduced in each Congress that would create such an exception.

The complaint further pleads that the plaintiffs are entitled to maximum statutory damages, and attorneys fees, under 17 U.S.C. Ё 1203.

The complaint requests broad injunctive relief, damages, costs and attorneys fees.

The plaintiffs are represented by Christine Pepe, Robert Rotstein, and Lisa Stone of the law firm of McDermott Will & Emery.

Art Brodsky, of the Public Knowledge, stated in a release that "The movie studios charge copyright infringement. In essence, they are saying that it's illegal for a consumer to copy a DVD onto another device for personal use. This argument is simply wrong, and if allowed to stand, will further weaken yet again whatever rights consumers have left to use their own, legally purchased media, as they see fit."

TLJ spoke with Don Goldberg of the Digital Freedom Campaign (DFC). He argued that there is no infringement because consumers have the right to use lawfully obtained content as they choose, including making copies for their own personal use.

As for the circumvention claim, he said that the DFC does "support a fair use exemption for the DMCA".

This case is Paramount Pictures Corporation, et al. v. Load 'N Go Video, Inc., U.S. District Court for the Southern District of New York, D.C. No. 06-CV-12931, Judge Paul Crotty presiding.

Judge Croty previously worked for Verizon. See, story titled "Bush Nominates Verizon's Crotty for Federal Judgeship" in TLJ Daily E-Mail Alert No. 972, September 8, 2004.

Gutierrez Discusses IPR in PR China

11/15. Secretary of Commerce Carlos Gutierrez gave a speech on November 15 to the Shanghai American Chamber of Commerce in Shanghai, Peoples Republic of China, in which he discussed a range of topics, including trade, intellectual property rights (IPR), and IPR enforcement. He also gave a speech on November 14 in Beijing in which he focused on IPR enforcement.

Wen JiabaoGutierrez said that met with Vice Premier Wu Yi and PM Wen Jiabao (at left) during this visit.

Gutierrez discussed the US China Joint Commission on Commerce and Trade (JCCT) in his November 15 speech. He said, "As you know, in April we had a very successful meeting. The Chinese made a number of important commitments."

See, stories titled "Hu Says PR China Will Strengthen Intellectual Property Rights and Increase Market Access" in TLJ Daily E-Mail Alert No. 1,355, April 21, 2006, and "PR China's Vice Premier Offers Minimal Assurances Regarding IPR Theft" in TLJ Daily E-Mail Alert No. 1,349, April 13, 2006.

Carlos GutierrzGutierrez (at right) continued that "On their own initiative, the Chinese government agreed to require that all PCs made in China, or imported into China, be pre-loaded with legitimate software. Additionally, government agencies are now required to buy computers with pre-loaded, licensed software."

He added that "These are significant results that came out of the talks. In the six months since the JCCT meetings, we've seen important progress on each of these fronts, and we've heard anecdotal evidence that software companies are seeing higher sales. But we must continue to press for decisive and specific action.

Gutierrez also said that on November 14 he announced in Beijing "three specific challenges facing China that need to be addressed in the very near term. They include: 1. Lowering criminal thresholds for prosecuting those involved in commercial piracy and counterfeiting; 2. Allowing greater market access for audiovisual products, and 3. Sharing factories' pirated disc exemplars with the international laboratories that trace pirated optical discs to their source."

He commented that "These are important improvements in IPR that have gone unaddressed by the Chinese for too long."

Gutierrez commented later in his speech on the 15th on the consequences of the November 7, 2006, House and Senate elections. He said that "we are encouraged by initial signs that the new Congress is willing to work with the Administration to advance a positive trade agenda."

But he also cautioned about a "rising tide" of protectionism.

Specifically, he said that "America and China must work together to stem the rising tide of protectionist sentiment in our nations. We must demonstrate to our citizens the benefits that free and fair trade can bring to our economies. We must also show our citizens that we will hold our trading partners accountable on their commitments to open their markets. Promises to open markets must be kept."

He made a similar point in his speech on November 14. He said that "Another victim of widespread IP theft in China is American support for expanding our trade relationship. Those who espouse protectionism as a legitimate economic policy have a loud voice. They cite specific imbalances. And they point to the lack of robust IP protection in China as a top reason why we should put protectionist policies in place. This would be the wrong course. However, we can't disprove the critics with rhetoric. We need results."

He also used his November 14 speech to review recent progress in PR China on IPR enforcement. He then outlined three areas that remain to be addressed.

First, he said that "China should lower its criminal thresholds for prosecuting those involved in commercial piracy and counterfeiting. Allowing criminal operations to exist safe from prosecution because of unreasonable legal thresholds does not fulfill China's WTO commitment. It does not provide real remedies and meaningful deterrents to IP theft."

Second, he said that "China should allow greater market access for audiovisual products. The current barriers to entry for legitimate goods in the Chinese market create a haven for pirates."

Third, he said that "China should join those countries that share their factories' optical disc exemplars with the international laboratories that trace pirated discs to their source. This will greatly enhance the ability of forensic examiners, rights holders, and law enforcement to eliminate piracy at its source."

He also stated in his November 15 speech that "over-regulation ... burdens the economy and costs jobs", and that China should embrace "rule of law, transparency, fairness and open competition ..."

People and Appointments

Rep. John Boehner11/17. House Republicans selected Rep. John Boehner (R-OH) (at right) to be the Minority Leader in the 110th Congress. He defeated Rep. Mike Pence (R-IN) by a vote of 168-27. See, Rep. Boehner's release. Rep. Roy Blunt (R-MO) was elected Minority Whip. He defeated Rep. John Shadegg (R-AZ) by a vote of 137-57. See, statement by Rep. Blunt. Rep. Eric Cantor (R-VA) will be the Chief Deputy Whip. Rep. Adam Putnam (R-FL) was elected Conference Chairman. Rep. Thaddeus McCotter (R-MI) was elected Policy Committee Chairman. Rep. Kay Granger (R-TX) was elected Conference Vice-Chair. Rep. John Carter (R-TX) was elected Conference Secretary. Rep. Tom Cole (R-OK) was elected NRCC Chairman.

11/16. The Senate confirmed Kevin Martin to be a Commissioner of the Federal Communications Commission (FCC). Martin released a statement [PDF] in which he thanked President Bush and the Senate. He also stated that "I look forward to working with the Administration and Congress, as well as with my fellow Commissioners and the incredibly able staff at the FCC to ensure that all Americans share in the benefits and opportunities offered by the best communications system in the world. I will continue to work to provide a regulatory environment that promotes competition and drives investment and innovation while protecting consumers and promoting public safety." See also, statement [PDF] by Commissioner Michael Copps, statement [PDF] by Commissioner Jonathan Adelstein, and statement [PDF] by Commissioner Robert McDowell. Sen. Ted Stevens (R-AK) stated in a release that Martin "is a fine chairman, and I am delighted that he will have another term to continue his work at the FCC."

Washington Tech Calendar
New items are highlighted in red.
Friday, November 17

The House will next meet on Tuesday, December 5, 2006, at 10:00 AM. See, Republican Whip Notice. See also, HConRes 496.

The Senate will next meet on Monday, December 4, 2006. See also, HConRes 496.

8:00 AM - 12:00 NOON Day two of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Engineering. The agenda includes "Critical Infrastructure Systems", "New Frontiers in Nanotechnology", and "Update on Cyberinfrastructure and Simulation-Based Engineering Science". See, notice in the Federal Register, October 17, 2006, Vol. 71, No. 200, at Page 61073. Location: NSF, 4201 Wilson Blvd., Room 1235, Arlington, VA.

Day two of a three day convention hosted by the Federal Society. At 3:30 - 4:45 PM there will be a panel discussion titled "Intellectual Property: Does IP Harm or Help Developing Countries?" The speakers will be Alex Azar (Deputy Secretary, Department of Health and Human Services), Graeme Dinwoodie (Chicago-Kent College of Law), Jerome Reichman (Duke University School of Law), Robert Sherwood (Intellectual Property Practice Group), and Bruce Lehman (Akin Gump). This panel will be in the Colonial Room. See, notice and schedule. Location: Mayflower Hotel, 1127 Connecticut Ave., NW.

Day five of a five day meeting of the Department of Commerce's Judges Panel of the Malcolm Baldrige National Quality Award. See, notice in the Federal Register, October 20, 2006, Vol. 71, No. 203, Pages 61958-61959. Location: National Institute of Standards and Technology, Building 222, Room A230, Gaithersburg, MD.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its Draft Special Publication 800-53 [176 pages in PDF] titled "Recommended Security Controls for Federal Information Systems". This is Revision 1, Final Public Draft. See also, mark up copy [186 pages in PDF].

Sunday, November 19

? Deadline to submit comments to the Department of Justice's (DOJ) Antitrust Division's Telecommunications & Media Enforcement Section, regarding the Complaint, proposed Final Judgment, Preservation of Assets Stipulation, or Competitive Impact Statement in U.S. v. ALLTEL. This is the Antitrust Division's action, brought pursuant to Section 7 of the Clayton Act, which is codified at 15 U.S.C. 18, and proposed settlement, regarding ALLTEL's acquisition of Midwest Wireless. The Antitrust Procedures and Penalties Act, which is codified at 15 U.S.C. 16, requires publication of a notice in the Federal Register, and a sixty day public comment period. The notice does not state the deadline. However, November 19 is 60 days after September 20. See, notice in the Federal Register, September 20, 2006, Vol. 71, No. 182, Pages 55015-55028.

Monday, November 20

10:00 AM. The Center for Democracy and Technology (CDT) will hold a news conference to identify bills that threaten the internet and civil liberties during the final days of the 109th Congress. To participate by teleconference, call 800-377-8846. The passcode is 92713123#. For more information, contact David McGuire at 202- 637-9800x106. Location: CDT, 11th Floor, 1634 I St., NW.

5:00 PDT. Deadline to submit comments to the Internet Corporation for Assigned Names and Numbers (ICANN) regarding Global Name Registry Ltd.'s (GNR) proposal for the limited release of two character names. See, notice.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding Autotel's petition for preemption of the jurisdiction of the Arizona Corporation Commission with respect to its decisions to dismiss Autotel抯 request for arbitration of an interconnection agreement with Citizens Utilities Rural Company, Inc. and Autotel抯 request for termination of the rural exemption under section 251(f) of the Act. See, FCC Public Notice [PDF] (DA 06-2083). This proceeding is WT Docket No. 06-194.

Tuesday, November 21

12:00 NOON - 1:15 PM. The DC Bar Association will host a seminar titled "50 Hot Technology Tips, Tricks & Web Sites for Lawyers". The speaker will be Reid Trautz. The price to attend ranges from $15 to $20. For more information, call 202-626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Committee will host a brown bag lunch. This is a planning meeting. RSVP to Myra Creeks at Myra dot Creeks at att dot com. Location: AT&T, 2nd floor, 1133 21st Street, NW.

EXTENDED TO DECEMBER 21. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding its media ownership rules. The FCC adopted this FNPRM on July 21, 2006, and released the text [36 pages in PDF] on July 24, 2006. See also, story titled "FCC Adopts FNPRM on Rules Regulating Ownership of Media" in TLJ Daily E-Mail Alert No. 1,397, June 22, 2006. This FNPRM is FCC 06-93 in MB Docket No. 02-277, MM Docket No. 01-235, MM Docket No. 01-317, MM Docket No. 00-244, and MB Docket Nos. 06-121. See, order [PDF] extending deadlines.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to National LambdaRail's petition for reconsideration or clarification of the FCC's Order establishing a rural telehealth and telemedicine pilot subsidy program. See, FCC Public Notice (DA 06-2279). The FCC's order is FCC 06-144 in WC Docket No. 02-60.

Wednesday, November 22

Deadline to submit comments to the Department of Commerce's Bureau of Industry and Security (BIS) regarding its annual review of the foreign policy based controls in its Export Administration Regulations (EAR), which are implemented pursuant to section 6 of the Export Administration Act of 1979, as expired. These rules regulate, among other things, the export of certain encryption and software products. The BIS states that it seeks comments on many topics, including "The likelihood that such controls will achieve the intended foreign policy purpose, in light of other factors, including the availability from other countries of the goods, software or technology proposed for such controls". See, notice in the Federal Register, October 23, 2006, Vol. 71, No. 204, at Pages 62065-62067.

Thursday, November 23

Thanksgiving Day.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays.

Monday, November 27

10:00 AM. The Supreme Court will hear oral argument in Bell Atlantic v. Twombly, Sup. Ct. No. 05-1126. This case pertains to whether a complaint against a regional bell operating company (RBOC) that alleges parallel or similar behavior, and conspiracy to limit competition, but includes no allegations in support other than the similar or parallel conduct, is sufficient to survive a motion to dismiss. See also, amicus brief of the Office of the Solicitor General and story titled "Supreme Court Grants Cert in Bell Atlantic v. Twombly" in TLJ Daily E-Mail Alert No. 1,399, June 26, 2006. See also, Supreme Court docket. Location: 1 First St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to it further notice of proposed rulemaking (FNPRM) regarding maritime Automatic Identification Systems (AIS). The FCC adopted this item on July 20, 2006, and released it on July 24, 2006. It is FCC 06-108 in WT Docket No. 04-344. See, notice in the Federal Register, October 12, 2006, Vol. 71, No. 197, at Pages 60102-60106.

More News

11/17. President Bush traveled to Hanoi, Vietnam for the Asia Pacific Economic Cooperation (APEC) conference. In an exchange of toasts, he stated that "We strongly support Vietnam in the World Trade Organization."

11/16. The Department of Justice's (DOJ) Antitrust Division took another action in its long running effort against participants in price fixing in the dynamic random access memory (DRAM) industry. The DOJ filed a one count criminal complaint in U.S. District Court (NDCal) against James Sogas, a former executive of Elpida Memory, alleging violation of the Sherman Act in connection with his involvement in DRAM price fixing. The DOJ also also announced in a release that Sogas has entered into a plea agreement in which he "has agreed to plead guilty, pay a $250,000 criminal fine, and serve prison time", as well as cooperate with the DOJ.

11/16. The US Patent and Trademark Office (USPTO) and the European Patent Office (EPO) announced that they "are preparing to launch a new service that will allow patent application priority documents to be exchanged between the two offices electronically. Priority documents have to be filed when applicants wish to claim an earlier application filing date in one patent office based on a prior filing in another. Claiming priority is a valuable tool for businesses wanting to pursue patent rights globally." See, USPTO release.

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