5/1. The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism, and Homeland Security held a hearing on HR 1525, the "Internet Spyware (I-SPY) Prevention Act of 2007". The Subcommittee then approved the bill by unanimous voice vote without amendment.

The full HJC is scheduled to hold a mark up session on Wednesday, May 2, at 10:15 AM. HR 1525 is the third of four bills on the agenda.

Rep. Zoe Lofgren (D-CA) introduced this bill on March 14, 2007. The original cosponsors are Rep. Bob Goodlatte (R-VA), Rep. Linda Sanchez (D-CA), Rep. Lamar Smith (R-TX), and Rep. Sheila Lee (D-TX).

Summary of HR 1525. This bill would amend the criminal code by adding a new section 1030A titled "Illicit indirect use of protected computers". 18 U.S.C. § 1030 is titled "Fraud and related activity in connection with computers".

The new § 1030A would contain two criminal prohibitions. First, the bill provides that "Whoever intentionally accesses a protected computer without authorization, or exceeds authorized access to a protected computer, by causing a computer program or code to be copied onto the protected computer, and intentionally uses that program or code in furtherance of another Federal criminal offense shall be fined under this title or imprisoned not more than 5 years, or both."

Second, the bill provides that,

"Whoever intentionally accesses a protected computer without authorization, or exceeds authorized access to a protected computer, by causing a computer program or code to be copied onto the protected computer, and by means of that program or code--
   (1) intentionally obtains, or transmits to another, personal information with the intent to defraud or injure a person or cause damage to a protected computer; or
   (2) intentionally impairs the security protection of the protected computer with the intent to defraud or injure a person or damage a protected computer;
shall be fined under this title or imprisoned not more than 2 years, or both."

Unlike § 1030, the new § 1030A that would be created by HR 1525 contains no language creating a private right of action. See, 18 U.S.C. § 1030(g). TLJ spoke with Rep. Lofgren after the markup. She stated that violations of federal criminal statutes generally give rise to private causes of action. In contrast, a staff member for a cosponsor of the bill told TLJ after the hearing that the bill would create no private right of action in U.S. District Court.

However, this bill does contain language that limits actions in state courts. It provides that "No person may bring a civil action under the law of any State if such action is premised in whole or in part upon the defendant's violating this section." Rep. Lofgren stated at the hearing that the purpose of this clause is to not create a "litigation bonanza in fifty states".

The bill would also authorize the appropriation of $10 Million per year to the Department of Justice (DOJ) "for prosecutions needed to discourage the use of spyware and the practices commonly called phishing and pharming".

Rep. Goodlatte (at right) explained the terms "phishing" and "pharming". He testified that "Phishing scams occur when criminals send fake e-mail messages to consumers on behalf of famous companies and request account information that is later used to conduct criminal activities."

Rep. Goodlatte said that "Pharming scams occur when hackers re-direct Internet traffic to fake sites in order to steal personal information such as credit card numbers, passwords and account information. This form of online fraud is particularly egregious because it is not as easily discernable by consumers. With pharming scams, innocent Internet users simply type the domain name into their web browsers, and the signal is re-routed to the devious website."

The bill would also create an exemption for law enforcement and intelligence activities of any federal or state agency. It provides that "This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States."

Finally, the bill enumerates several findings, and includes a "Sense of the Congress" that "the Department of Justice should use the amendments made by this Act, and all other available tools, vigorously to prosecute those who use spyware to commit crimes and those that conduct phishing and pharming scams."

Rep. Lofgren and Rep. Goodlatte testified as witnesses for HR 1525 at the hearing.

Rep. Goodlatte stated in his testimony that "the Internet will never reach its full potential until consumers feel safe to conduct transaction online. One enormous  hurdle to consumer confidence in the Internet is the purveyance of spyware. Unfortunately, similar types of software to what legitimate businesses use to deliver new and innovative services can also be used by bad actors to break into computers, steal personal information and commit identity theft and other crimes."

Rep. Lofgren (at left) testified that "The central feature of the Act is that it targets bad actors and bad behavior without unduly restricting innovation in the online universe." She added that "one of the greatest difficulties in solving the spyware problem is that many legitimate and beneficial tools for making a user's Internet experience more enjoyable and productive are technologically indistinguishable from spyware that is used to harm users and computers."

No members present at the hearing expressed opposition to the bill, or any part of it.

HR 964, the House Commerce Committee Bill. As in prior Congresses, there are two competing spyware related bills. On April 19, 2007, the House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection amended and approved HR 964, the "Securely Protect Yourself Against Cyber Trespass Act", or SPY ACT. The Subcommittee approved a manager's amendment [4 pages in PDF] offered by Rep. Bobby Rush (D-IL) that makes 26 changes to HR 964 IH [31 pages in PDF] (as introduced on February 8, 2007).

First, the HCC prohibits deceptive acts or practices related to spyware. Second, it prohibits collection of certain information without notice and consent. It gives enforcement and rulemaking authority to the Federal Trade Commission (FTC). It also preempts certain state spyware related laws.

See, stories titled "House Subcommittee Approves SPY ACT" and "Summary of HR 964, the SPY ACT" in TLJ Daily E-Mail Alert No. 1,568, April 23, 2007.

TLJ spoke with Rep. Lofgren after the May 1, 2007, markup. She said that the HCC bill is "well intentioned", but a "real mistake in terms of approach". She said that the HJC bill does not "regulate technology".

Rep. Goodlatte testified at the hearing that the HCC bill takes "a much more regulatory approach", whereas the HJC bill is only directed at "intent" and "action", without "stifling technology on the internet".

Rep. Lofgren, who represents a Silicon Valley district, added that "the tech community ... much prefers this approach".

Bills in Prior Congresses. October 5, 2004, the House passed HR 2929 (108th Congress), also titled the "Securely Protect Yourself Against Cyber Trespass Act", or SPY ACT, on a roll call vote of 399-1. See, Roll Call No. 495. HR 2929 was the HCC's spyware bill, and a predecessor to the present bill, HR 964. However, the Senate did not approve HR 2929 (108th). See, story titled "House Passes First Spyware Bill" in TLJ Daily E-Mail Alert No. 991, October 6, 2004.

On January 4, 2005, Rep. Bono and Rep. Towns reintroduced their legislation as HR 29 (109th). This too was titled "Securely Protect Yourself Against Cyber Trespass Act", or SPY ACT.  See also, story titled "House to Vote on Spyware Bills" in TLJ Daily E-Mail Alert No. 1,140, May 23, 2005; story titled "House Commerce Committee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,092, March 10, 2005; story titled "House Subcommittee Marks Up Spyware Bill" in TLJ Daily E-Mail Alert No. 1,080, February 22, 2004; and story titled "House Commerce Committee Holds Hearing on Spyware Bill" in TLJ Daily E-Mail Alert No. 1,064, January 27, 2005. The House approved the bill on May 23, 2005, by a vote of 393-4. (Rep. Lofgren voted against.) See, Roll Call No. 201. However, the Senate did not approve it.

The predecessor of HR 1525 (110th) in the 109th Congress was HR 744 (109th), the "Internet Spyware (I-SPY) Prevention Act of 2005". See also, story titled "Rep. Goodlatte Reintroduces Criminal Spyware Bill" in TLJ Daily E-Mail Alert No. 1,075, February 11, 2005, and story titled "House to Vote on Spyware Bills" in TLJ Daily E-Mail Alert No. 1,140, May 23, 2005. The House approved the bill on May 23, 2005 by a vote of 395-1. See, Roll Call No. 200. However, the Senate did not approve it.

HR 744 (109th) was similar to HR 4661 (108th), titled the "Internet Spyware (I-SPY) Prevention Act of 2004". The full House approved HR 4661 by a vote of 415-0 on October 6, 2004. See, Roll Call No. 503 and story titled "House Approves Second Spyware Bill" in TLJ Daily E-Mail Alert No. 993, October 8, 2004.

4/30. The Department of Justice's (DOJ) Antitrust Division issued a business review letter (BRL) stating that it will not oppose a proposal by the Institute of Electrical and Electronics Engineers (IEEE) and its Standards Association (IEEE-SA) to implement a policy on the disclosure and licensing of patents in IEEE’s standards setting process.

The letter, addressed to Michael Lindsay of the law firm of Dorsey & Whitney, states that the Antitrust Division "has no present intention to take antitrust enforcement action" with respect to the IEEE-SA's "proposed patent information policy that will allow patent holders to publicly commit to specific restrictions on their future licensing terms and conditions for the use of patents that are essential to IEEE standards."

The Antitrust Division issued another BRL to another standards development organization (SDO) on October 30, 2006. See, letter to legal counsel for the VMEbus International Trade Association (VITA) stating that the Antitrust Division will not oppose a proposal by the VITA to implement a policy on the disclosure and licensing of patents. See also, story titled "DOJ Approves VITA Patent Policy" in TLJ Daily E-Mail Alert No. 1,479, October 31, 2006.

Thomas Barnett (at right), the Assistant Attorney General in charge of the Antitrust Division, stated in a release that "The requests from VITA and IEEE show that individual SDOs are working to find patent disclosure and licensing policies that will improve the efficiency of their standard-setting activities ... The antitrust laws permit reasonable efforts to enhance the effectiveness of such beneficial collaborative activities."

Judy Gorman, Managing Director of the IEEE-SA, stated in a release that "IEEE standards policies and procedures must change as the world changes to ensure our standards serve those who create and use them ... Our new patent policy is a good example of this. We spent several years creating this policy and had strong participation from industry in doing so. Our new policy encourages voluntary disclosure of maximum royalty rates and other licensing terms and allows IEEE standards working groups to include these in their comparison of relative costs for the technology alternatives they consider for a standard. As a result, our working groups will make choices based on more informed cost-performance evaluations. This should encourage competition and benefit anyone who seeks to comply with IEEE standards."

The letter states that the Antitrust Division "analyzes the competitive effects of standard-setting activities under the rule of reason unless the standard-setting process is being ``used as a sham to cloak naked price fixing or bid rigging.´´ We examine both the expected competitive benefits of IEEE's proposed patent policy and its potential to restrain competition." (Footnotes omitted from quotations of letter.)

The release offers this summary of the patent policy. It would give "holders of patents essential to IEEE standards the option of publicly committing to the most restrictive licensing terms they would offer. Under the policy, the patent holder could also choose a number of other options. It could: choose not to provide any licensing information; state that it does not believe its patents are essential to the IEEE standard; state that it will not assert its essential patent claims against implementors of the standard; or commit to license its essential patent claims on reasonable and nondiscriminatory terms. The policy also clarifies that these types of assurances about future patent licenses are irrevocable, and that they are binding on affiliates of the patent holder. IEEE-SA implementation of the patent policy should permit IEEE "standard-setters" to access the relative costs of competing technologies."

Commitments to licensing terms for potentially essential patent claims would be made using an IEEE-SA Letter of Assurance (LOA) form.

The letter reasons that "Although the proposed IEEE-SA policy does not require patent holders to publicly commit to their most restrictive licensing terms during the standard-setting process, the ability to make such commitments could generate similar benefits as patent holders may compete to offer the most attractive combination of technology and licensing terms."

It adds that "IEEE-SA working group members may make better informed decisions by considering potential licensing fees when weighing the relative costs of technological alternatives in addition to their technical merits. Moreover, the increased predictability of licensing terms, created by LOA commitments and the knowledge that such commitments bind the patent holder's affiliates and any future patent assignees, could lead to faster development, implementation, and adoption of a standard as well as fewer litigated disputes after a standard is set."

It continues that "The proposed patent information policy permits voluntary commitments to most restrictive licensing terms, but prohibits discussion of specific licensing terms within IEEE-SA standards development meetings. Based on your statements, we understand that this prohibition extends to joint negotiations of licensing terms within standards development meetings."

However, the letter also states that the Antitrust Division "observes in this regard that IEEE's current policies permit limited discussions of costs related to proposed standards. Such discussion, could, in certain circumstances, rise to the level of joint negotiation of licensing terms. You have not requested, and we are not providing, the Department's views on joint negotiations that might take place inside or outside such standards development meetings or IEEE sponsored meetings."

Moreover, it adds that the proposed patent policy "will prohibit standard setters from discussing the prices at which standardized products would be sold. The Department likely would challenge under section 1 of the Sherman Act any activities that reduced competition by using IEEE-SA's proposed patent policy as a cover to fix the prices of downstream standardized products."

Also, "The Department would also be likely to challenge efforts by patent holders to rig their LOAs by agreeing on the licensing terms they will disclose to IEEE-SA. IEEE-SA should continue its efforts to educate those who set standards under its auspices about the consequences of such activities."

5/1. The Senate Judiciary Committee (SJC) held a hearing titled "Process Patents". The issue concerns whether the exceptions contained in § 271(g) should apply to proceedings under § 337.

On April 18, 2007, Sen. Patrick Leahy (D-VT) and others introduced S 1145, the "Patent Reform Act of 2007". On the same day, Rep. Howard Berman (D-CA) and others introduced HR 1908, the companion bill in the House. However, these bills do not address process patents and the § 271(g) issue.

See, also, Patent Reform Act of 2007 [50 pages in PDF]. And see, stories titled "Patent Reform Act of 2007 Introduced", "Summary of Patent Reform Act of 2007", and "Reaction to the Patent Reform Act of 2007" in TLJ Daily E-Mail Alert No. 1,567, April 19, 2007.

Sen. Leahy spoke with reporters after the hearing. He was asked about when the SJC might mark up S 1145. He had no answer. He was also asked whether the bill would be amended to include language regarding the § 271(g) issue. He said, "don't know". However, he did say that other Democratic Senators have approached him to ask about the bill.

Summary of the 271(g) Issue. This issue pertains to the unauthorized importation and sale in the U.S. of products made outside of the U.S. by a process that is covered by claims of a U.S. patent. Holders of U.S. patents have two general remedies -- an action in U.S. District Court for patent infringement under the Patent Act, and a proceeding in the U.S. International Trade Commission (USITC) for imports that infringe patents under the Tariff Act of 1930. The Patent Act now allows an action for importation of products made by a patented process, and provides two exceptions. A recent Court of Appeals opinion states that these two exceptions are not applicable in USITC proceedings under the Tariff Act. Hence, there exist the arguments that U.S. laws are being applied inconsistently, that this favors U.S. producers, and hence, that this violates treaty obligations

The patent infringement statute is codified at 35 U.S.C. § 271. Subsection (a) provides that "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent."

The Patent Act protects process patents, for which claims are expressed as a series of steps.

Previously, the Patent Act did not protect patent holders from infringement of their patents that occurred outside of the U.S. In the case of process patents, there was no protection under the Patent Act if the performance of the series of steps occurred outside of the U.S., and the goods produced thereby were then imported into the U.S.

The Congress made changes now codified at §§ 271(f) and (g). § 271(f) was not the subject of the SJC hearing. § 271(g), which was the subject of the hearing, was added to the Patent Act by the Process Patent Amendments Act (PPAA) in 1988. It is Public Law 100-418.

35 U.S.C. § 271(g) now provides, in part, that "Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product."

Moreover, § 271(g) contains two exceptions. It provides that "A product which is made by a patented process will, for purposes of this title, not be considered to be so made after -- (1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product".

Patent holders can enforce their rights under the Patent Act by bringing an action in a U.S. District Court. Appeals of final judgments in District Court actions brought under the Patent Act lie in the U.S. Court of Appeals for Federal Circuit.

In addition to remedies under the Patent Act, patent holders are protected by the Tariff Act of 1930.

The PPAA in 1988 also revised the Tariff Act to protect process patent holders from importation of products made by the patented process. 19 U.S.C. § 1337(a)(1)(B) now makes "unlawful" the "importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that -- (1) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or (2) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent".

The issue now is the applicability of the two § 271(g) exceptions (i.e., "materially changed by subsequent processes" and "becomes a trivial and nonessential component of another product") in proceedings before the USITC for enforcement of 19 U.S.C. § 1337(a)(1)(B)(ii).

In 2002 the USITC concluded that the Kinik Company imported into the U.S. products made in Taiwan that infringed a process patent held by 3M. The USITC also concluded that the two § 271(g) exceptions do not apply in § 337 proceedings. This ruling came in what is sometimes referred to as the "Abrasive Products" proceeding. (See, USITC Inv. No. 337-TA-449.)

Then, in an appeal to the U.S. Court of Appeals (FedCir), the Court reversed on other grounds. However, it wrote, in dicta, that the § 271(g) exceptions are not applicable in § 337 proceedings. See, March 25, 2004, opinion in Kinik Co. v. International Trade Commission, 362 F.3d 1359.

The Court of Appeals wrote that the § 271(g) exceptions did not apply to § 1337(a)(1)(B)(ii) actions.

The Court of Appeals cited the Senate Report on the PPAA, which states that "There is no intention to impose any of these limitations on owners of products or on owners of process patents in suits they are able to bring under existing law.  Neither is there any intention for these provisions to limit in any way the ability of process patent owners to obtain relief from the U.S. International Trade Commission."

While Judge Randall Rader did not sit on the three judge panel in Kinik, he was a member of the staff of the Senate Judiciary Committee when the PPAA was drafted.

May 1 Hearing. Sen. Patrick Leahy (D-VT) read an opening statement at the start of the hearing. He stated that "If we permit products to enter the United States that were made abroad by a process patented here -- where creation of the product would itself be an act of infringement if it occurred here -- we are doing nothing less than outsourcing infringement and offshoring jobs." He made the same point during his questioning of witnesses.

Sen. Arlen Specter (R-PA), the ranking Republican on the SJC, stated at the outset that the §  271(g) issue is part of the bigger issue of patent reform, which will be "a Herculean struggle". He then left for another meeting.

Sen. Tom Coburn (R-OK), who is also a physician, complained that U.S. drug companies are getting the "short end" on intellectual property protection "throughout the world". He added that "if we have true intellectual property, we ought to protect it".

Sen. Ben Carden (D-MD) said that "I want to make our IP rights are enforceable".

The witnesses were Wayne Herrington (Assistant General Counsel, U.S. International Trade Commission), John Thomas (Georgetown University Law Center), Mike Kirk (Executive Director, American Intellectual Property Law Association), and Christopher Cotropia (Richmond School of Law).

Herrington summarized the issue and the proceeding in Abrasive Products and Kinik in his prepared testimony.

Thomas argued that the Federal Circuit "arguably misinterpreted" the statute. He said that § 271(g) defenses should apply in both District Court cases and in USITC proceedings. See also, prepared testimony.

Kirk argued that the § 271(g) defenses are inappropriate for § 337 proceedings. He said that "the Federal Circuit got it right". He therefore opposed any amendment to existing law.

He also said that this this issue impacts semiconductor manufacturing. He wrote in his prepared testimony (and read aloud at the hearing) that "a company in South Korea might employ a patented method for forming conductive lines on semiconductor wafers as an initial step in manufacturing integrated circuits for use in cell phones that could be imported into the United States under either defense."

Kirk also wrote that amending the law "would create a perverse incentive to offshore domestic manufacturing and jobs".

Cotropia wrote in his prepared testimony that "there is reason to think that Congress should not be distracted by the § 271(g) exceptions issue." He suggested that it would complicate the legislative debate, consume the energy of the Congress, and perhaps "negatively impact the likelihood of passage of any broader reaching patent reforms currently before Congress".

Six Senators participated in at least part of the hearing (Sen. Leahy, Sen. Specter, Sen. Whitehouse, Sen. Carden, Sen. Grahm, and Sen. Coburn). The audience section of the hearing room (Room 226 of the Dirksen Building) was full.

5/1. The U.S. Patent and Trademark Office (USPTO) issued a release regarding the status of its EFS-Web, its web based filing system for patent applications. This release states that "more new patent applications are being filed electronically each week than through the traditional paper application process".

5/1. The World Intellectual Property Organization (WIPO) published in its web site its latest draft [10 pages in PDF] of its broadcast treaty. This is titled "Non-paper on the WIPO Treaty on the Protection of Broadcasting Organizations". See also, story titled "Copyright Office and USPTO to Hold Roundtable on Draft WIPO Broadcast Treaty" in TLJ Daily E-Mail Alert No. 1,564, April 11, 2007. The Copyright Office (CO) and the U.S. Patent and Trademark Office (USPTO) will hold a public roundtable on May 9, 2007. See, notice in the Federal Register, April 12, 2007, Vol. 72, No. 70, at Pages 18493-18494.

4/30. The U.S. Court of Appeals (7thCir) issued its opinion in Vincent v. City Colleges of Chicago, a copyright case. The Court of Appeals affirmed in part, reversed in part, and remanded. The Court of Appeals held, among other things, that a withdrawal of consent to make copies of a copyrighted book need not be in writing. This case is Veronica Vincent v. City Colleges of Chicago, et al., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 06-3082, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 04 C 7641, Judge Harry Leinenweber presiding.

4/30. The U.S. Court of Appeals (9thCir) issued its opinion [22 pages in PDF] in Jarvis v. K2, a copyright case involving photographs, the collective works privilege codified at 17 U.S.C. § 201(c), and damages for copyright infringement. The Court of Appeals affirmed in part, reversed in part, and remanded. It reversed the finding that certain collage advertisements were privileged under § 201(c). This case is Chase Jarvis and Chase Jarvis, Inc. v. K2, Inc. and K-2 Corporation, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 05-35609, an appeal from the U.S. District Court for the Western District of Washington, D.C. No. CV-03-01265-TSZ, Judge Thomas Zilly presiding.

4/30. The Office of the U.S. Trade Representative (OUSTR) released in annual Special 301 report [52 pages in PDF] regarding countries that deny adequate and effective protection of intellectual property or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property protection. See also, OUSTR release.

5/1. The en banc panel of the U.S. Court of Appeals (DCCir) issued its divided opinion [32 pages in PDF] in Boehner v. McDermott. It affirmed the judgment of the District Court, as did a divided three judge panel. The District Court ruled on summary judgment that Rep. Jim McDermott (D-WA) violated the wiretap statute,18 U.S.C. § 2511, and can be held civilly liable for damages.

In the en banc opinion, there was a correlation between the party of the President who appointed the judges, and how they voted in this en banc opinion. All five members of the majority were appointed by Republican Presidents: Randolph (Bush 1) Ginsburg (Reagan), Henderson (Bush 1), Brown (Bush 2), and Griffith (Bush 2). Moreover, the majority opinion supports the position of the appellee, Rep. John Boehner, who is a Republican.

Three of the four judges who dissented were appointed by Democratic President Clinton: Sentelle (Reagan), Rogers (Clinton), Tatel (Clinton), and Garland (Clinton). The minority opinion supports the position of the appellant, Rep. Jim McDermott, who is a Democrat.

Judge Kavanagh (Bush 2) did not participate. Senior judges do not participate in en banc panels.

On March 28, 2006, a three judge panel reached the same conclusion in its divided opinion [23 pages in PDF]. Judge Randolph wrote for the majority in both opinions. Judge Sentelle wrote the dissent in both opinions.

Statute. The Wiretap Act, which was enacted as Title III of the Omnibus Crime Control and Safe Streets Act of 1968, is the principal federal wiretapping statute. It is codified at 18 U.S.C. § 2510 et seq. It prohibits the interception of wire, oral, and electronic communications, without a court order.

18 U.S.C. § 2511 provides, in relevant part, that "(1) Except as otherwise specifically provided in this chapter any person who ... (c) provides that "intentionally discloses, or endeavors to disclose, to any other person the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subsection ... shall be subject to suit as provided in subsection (5)."

Facts. The plaintiff is Rep. John Boehner (R-OH). He is the House Republican Leader. The defendant is Rep. McDermott. He is a member of the House Ways and Means Committee. Moreover, at the relevant time, he was a member of the House ethics committee.

Rep. Boehner participated in a telephone conference call, by cell phone, with several House Republican leaders in December of 1996. He was in the state of Florida at the time.

John and Alice Martin, residents of Florida, used a radio scanner to intercept the conversation. They also made an audio recording of the conversation. They delivered a copy of the recording to Rep. Karen Thurman (D-FL), who advised them to delivery it to Rep. McDermott. The Martins then traveled to Washington DC, and delivered the recording to Rep. McDermott, along with a cover letter that stated that the recording contained "a conference call heard over a scanner", and that they understand that they "will be granted immunity."

Rep. McDermott disclosed the contents of the recording to the New York Times (NYT), and the Atlanta Constitution Journal. The NYT then published a news story based upon the contents of the recorded telephone conversation.

The Martins were promptly charged with, and pled guilty to, criminal violation of the Wiretap Act, and in particular, 18 U.S.C. § 2511.

Litigation History. Rep. Boehner filed a complaint in U.S. District Court (DC) against Rep. McDermott alleging violation of 18 U.S.C. § 2511, as well as violation of similar provisions of Florida and District of Columbia law.

Rep. McDermott moved to dismiss on First Amendment grounds. In a previous ruling, the District Court granted the motion to dismiss. The U.S. Court of Appeals (DCCir) reversed in an opinion published at 191 F.3d 463 (1999). The Supreme Court of the U.S. (SCUS) granted a petition for writ of certiorari, and vacated the judgment of the Court of Appeals, and remanded the case to the Court of Appeals in light of its decision in Bartnicki v. Vopper, 532 U.S. 514 (2001). The Court of Appeals then remanded the case to the District Court.

On May 21, 2001, the SCUS issued its opinion in Bartnicki v. Vopper, holding that a radio host (Vopper) cannot be sued under 18 U.S.C. § 2511 for playing an audio recording of a cellular telephone conversation, despite the federal statute that makes illegal both the interception of the conversation, and its disclosure. The majority reasoned that the case pitted statutes banning disclosure of illegally obtained electronic communications against the First Amendment freedom of speech claims of persons with illegally obtained recordings to disclose them if their content pertains to a public issue.

The SCUS wrote that the recording violated federal wiretapping law, that Vopper knew this, but that he did not make the illegal intercept. It reasoned that the statute's application in this situation would violate Vopper's free speech rights under the First Amendment. See also, story titled "Supreme Court Diminishes Electronic Privacy" in TLJ Daily E-Mail Alert No. 192, May 22, 2001.

The District Court held on remand that the facts of this case are distinguishable from those in Bartnicki. In particular, Rep. McDermott's receipt of the tape from the Martins was so closely tied by knowledge and action to the Martins' illegal disclosure that he obtained the information unlawfully. And, since he obtained the illegal recording unlawfully, unlike the defendants in Bartnicki, who received an anonymous package in a mailbox, Rep. McDermott is not shielded by the holding in Bartnicki.

The District Court awarded Rep. Boehner $10,000 in statutory damages, $50,000 in punitive damages, and reasonable attorney fees and costs.

See also, story titled "The District Court District Court Holds Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 964, August 23, 2004.

Rep. McDermott appealed. A three judge panel of Court of Appeals issued its divided opinion [23 pages in PDF] on March 28, 2006, affirming the judgment of the District Court. Judge Randolph wrote the opinion of the Court of Appeals, in which Judge Ginsburg joined. Judge Sentelle dissented.

See also, story titled "Court of Appeals Holds that Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 1,339, March 30, 2006.

En Banc Opinion. The divided en banc panel, which released its opinion on May 1, 2007, also affirmed the judgment of the District Court. Judge Randolph again wrote the opinion. Judges Ginsburg, Henderson, Brown, and Griffith joined. Judge Sentelle again wrote a dissent. Judges Rogers, Tatel, and Garland joined.

Judge Randolph wrote in the majority opinion that the question is "whether Representative McDermott had a First Amendment right to disclose to the media this particular tape at this particular time given the circumstances of his receipt of the tape, the ongoing proceedings before the Ethics Committee, and his position as a member of the Committee." He concluded that he did not.

Judge Randolph wrote that the Bartnicki opinion "does not stand for the proposition that anyone who has lawfully obtained truthful information of public importance has a First Amendment right to disclose that information."

He elaborated that "There are many federal provisions that forbid individuals from disclosing information they have lawfully obtained." He cited the Privacy Act (which prohibits government employees from disclosing certain records), the Espionage Age, the Intelligence Identities Protection Act, and the federal tax laws (which prohibit IRS employees from disclosing the contents of tax returns).

He continued that "All members of the Ethics Committee, including Representative McDermott, were subject to Committee Rule 9, which stated that ``Committee members and staff shall not disclose any evidence relating to an investigation to any person or organization outside the Committee unless authorized by the Committee.´´"

He also wrote that "When Representative McDermott became a member of the Ethics Committee, he voluntarily accepted a duty of confidentiality that covered his receipt and handling of the Martins’ illegal recording. He therefore had no First Amendment right to disclose the tape to the media."

The majority opinion of the three judge panel, also written by Judge Randolph, stated that "The difference between this case and Bartnicki is plain to see. It is the difference between someone who discovers a bag containing a diamond ring on the sidewalk and someone who accepts the same bag from a thief, knowing the ring inside to have been stolen. The former has committed no offense; the latter is guilty of receiving stolen property, even if the ring was intended only as a gift." (Footnotes omitted.) However, this language is not present in Judge Randolph's en banc opinion.

The District Court and the majority of the three judge panel concluded that Rep. McDermott did not obtain the tape lawfully. Four of the five members of the en banc majority concluded that Rep. McDermott did not obtain the tape lawfully. However, they assumed for the sake of argument that he did obtain it lawfully. (See, footnote 1, at page 8.) The dissent concludes that he obtained it lawfully.

Judge Griffith also wrote a concurring opinion. He wrote that "Although I agree that Representative McDermott’s actions were not protected by the First Amendment and for that reason join Judge Randolph’s opinion, I write separately to explain that I would have found the disclosure of the tape recording protected by the First Amendment under Bartnicki v. Vopper, 532 U.S. 514 (2001), had it not also been a violation of House Ethics Committee Rule 9, which imposed on Representative McDermott a duty not to ``disclose any evidence relating to an investigation to any person or organization outside the Committee unless authorized by the Committee.´´"

That is, to reach a majority of five, the Court of Appeals jettisoned the argument that Rep. Boehner lacked a First Amendment right under the Bartnicki opinion because he unlawfully obtained the tape, and instead relied upon the argument that he lacked a First Amendment right because of his ethics committee obligation.

Judge Sentelle wrote in his dissent that the question is "Where the punished publisher of information has obtained the information in question in a manner lawful in itself but from a source who has obtained it unlawfully, may the government punish the ensuing publication of that information based on the defect in a chain?". He responded that the government may not.

He concluded that "There is no distinction of legal, let alone constitutional, significance between our facts and those before the Court in Bartnicki." He argued that the majority's basis for distinguishing Bartnicki from the present case, the communicator's knowledge that the interception was illegal, is constitutionally insignificant.

This case is Boehner v. McDermott, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 04-7203, an appeal from the U.S. District Court for the District of Columbia, D.C. No. 98cv00594.

The House will meet at 10:00 AM for legislative business. It will consider HR 1867, the "National Science Foundation Authorization Act of 2007", and HR 1868, the "Technology Innovation and Manufacturing Stimulation Act of 2007", subject to rules. See, Rep. Hoyer's weekly calendar [PDF].

The Senate will meet at 9:30 AM. It will resume consideration of of S 1082, the Food and Drug Administration authorization bill.

9:00 AM. Leslie Burger, President of the American Library Association (ALA), will give a speech titled "Libraries, Politics and National Security". For more information, contact Michael Doyle at 202-383-0006 or mdoyle at mcclatchydc dot com, or Andy Bridges at 202-628-8410 x 8208 or abridges at alawash dot org. Location: Zenger Room, National Press Club, 529 14th St. NW.

9:15 AM. The European Institute's Roundtable on Telecommunications, Information Technology and Media Policies will host a breakfast meeting titled "Transatlantic Cooperation on Cyber Security". The speaker will be Hugo Teufel, Chief Privacy Officer of the Department of Homeland Security. Location: Cosmopolitan Club, Powell Room, 2121 Massachusetts Ave., NW.

TIME CHANGE. 9:15 AM. The Senate Commerce Committee's Subcommittee on Interstate Commerce, Trade, and Tourism will hold a hearing titled "U.S. Trade Relations with China". See, notice. The witnesses will be Jim Hightower (President of Hightower and Associates), Malcolm Bricklin (CEO of Visionary Vehicles), Brian O’Shaughnessy (P/CEO of Revere Copper Products), and Scott Paul (Alliance for American Manufacturing). Location: Room 253, Russell Building.

10:15 AM. The House Judiciary Committee (HJC) will meet to mark up four bills, including HR 1525, the "Internet Spyware (I-SPY) Prevention Act of 2007". See, notice. Location: Room 2141, Rayburn Building.

11:00 AM. Secretary of the Treasury Henry Paulson will give a speech on the U.S. China economic relationship. See, notice. Location: Peterson Institute of International Economics, Bergsten Auditorium, 1st Floor, 1750 Massachusetts Ave., NW.

4:00 PM. The Senate Commerce Committee's (SCC) Subcommittee on Science, Technology and Innovation will hold a hearing titled "2006 Nobel Laureates". See, notice. The witnesses will be Andrew Fire (Professor of Pathology and Genetics at Stanford University School of Medicine), Roger Kornberg (Professor of Medicine at Stanford University School of Medicine), John Mather (National Aeronautics and Space Administration), Craig Mello (University of Massachusetts Medical School), and George Smoot (Lawrence Berkeley National Laboratory). Location: Room 253, Russell Building.

The House will meet at 10:00 AM for legislative business. It may consider HR 1867, the "National Science Foundation Authorization Act of 2007", and HR 1868, the "Technology Innovation and Manufacturing Stimulation Act of 2007", subject to rules. See, Rep. Hoyer's weekly calendar [PDF].

10:00 AM. The Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled "The Internet: A Portal to Violent Islamist Extremism". See, notice. Location: Room 342, Dirksen Building.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of S 495, the "Personal Data Privacy and Security Act of 2007", S 239, the "Notification of Risk to Personal Data Act of 2007", and S 1202, a bill to require agencies and persons in possession of computerized data containing sensitive personal information to disclose security breaches where such breach poses a significant risk of identity theft. The agenda also includes consideration of several judicial nominees: Debra Ann Livingston (to be a Judge of the U.S. Court of Appeals for the 2nd Circiut), Roslynn Renee Mauskopf (U.S.D.C., Eastern District of New York), Richard Joseph Sullivan (U.S.D.C. Southern District of New York), and Joseph Van Bokkelen (U.S.D.C., Northern District of Indiana). The SJC rarely follows its published agenda. See, notice. Press contact: Tracy Schmaler at 202-224-2154 or Tracy_Schmaler at judiciary dot senate dot gov. Location: Room 226, Dirksen Building.

10:00 AM - 5:00 PM. The National Science Foundation's (NDF) Advisory Committee for Cyberinfrastructure will meet.. See, notice in the Federal Register, March 30, 2007, Vol. 72, No. 61, at Page 15170. Location: 4201 Wilson Boulevard, Room 1235, Arlington, VA.

2:00 - 4:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the first of a series of three meeting to prepare advice for the next meetings of the Organization for Economic Co-operation and Development Working Parties on the Information Economy (WPIE) and Communications and Infrastructure Services Policy (CISP). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868. Location: Room 2533a, Harry Truman Building, 2201 C St., NW.

? 2:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the first of a series of three teleconferences to prepare advice for the next meeting of the International Telecommunication Union's Study Group 9 (Integrated broadband cable networks and television and sound transmission). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868.

3:00 PM. The House Commerce Committee (HCC) Subcommittee on Commerce, Trade and Consumer Protection will hold a hearing on HR  1902, the "Protecting Consumer Access to Generic Drugs Act of 2007". Location: Room 2123, Rayburn Building.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [53 pages in PDF] in its proceeding titled "In the Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 2007". This NPRM is FCC 07-55 in MD Docket No. 07-81.

Rep. Hoyer's weekly calendar [PDF] states that "No votes are expected in the House."

9:00 AM. The National Institute of Standards and Technology's (NIST) Information Technology Laboratory (ITL) will host a meeting titled "Internet Protocol version 6 (IPv6) Test Materials for the United States Government". See, notice in the Federal Register, April 17, 2007, Vol. 72, No. 73, at Pages 19178-19179. Location: NIST Administration Building, 100 Bureau Drive, Lecture Room B, Gaithersburg, MD.

POSTPONED. 9:30 AM - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a convention titled "2nd Annual Internet Security Summit". See, PFF notice, and agenda and registration page. For more information, contact Amy Smorodin at 202-289-8928. A continental breakfast and lunch will be served. Location: Ronald Reagan Building & International Trade Center, 1300 Pennsylvania Ave., NW.

10:00 AM - 2:00 PM. The National Science Foundation's (NDF) Advisory Committee for Cyberinfrastructure will meet.. See, notice in the Federal Register, March 30, 2007, Vol. 72, No. 61, at Page 15170. Location: 4201 Wilson Boulevard, Room 1235, Arlington, VA.

3:00 - 5:00 PM. The National Science Foundation's (NSF) Advisory Committee of International Science and Engineering will meet to provide advice concerning the NSF programs in international science and engineering. See, notice in the Federal Register, April 13, 2007, Vol. 72, No. 71, at Pages 18690-18691. Location: NSF, 4201 Wilson Boulevard, Room 950, Arlington, VA.

Deadline to submit comments to the Copyright Office regarding its proposed rules changes regarding applications for registration of claims to the renewal term of copyright. See, notice in the Federal Register, April 4, 2007, Vol. 72, No. 64, at Pages 16306-16311.

TIME? The Department of Defense's (DOD) Defense Science Board Task Force on Integrating Sensor-Collected Intelligence will hold another of its closed sessions regarding intelligence, surveillance and reconnaissance systems. See, notice in the Federal Register, April 2, 2007, Vol. 72, No. 62, at Page 15659. Location: Science Applications International Corporation, 4001 N. Fairfax Drive, Arlington, VA.

Deadline to submit applications to the Federal Communications Commission (FCC) to participate in its rural health care pilot subsidy program. See, FCC Public Notice [PDF] (DA 07-1188).

Deadlines to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding its complaint filed with the World Trade Organization (WTO) regarding the People's Republic of China's (PRC) failure to fulfill its treaty obligations regarding the protection of intellectual property rights. See, notice in the Federal Register, April 23, 2007, Vol. 72, No. 77, at Pages 20144-20146, and notice in the Federal Register, April 23, 2007, Vol. 72, No. 77, at Pages 20143-20144.

TIME? The Department of Defense's (DOD) Defense Science Board Task Force on Integrating Sensor-Collected Intelligence will hold another of its closed sessions regarding intelligence, surveillance and reconnaissance systems. See, notice in the Federal Register, April 2, 2007, Vol. 72, No. 62, at Page 15659. Location: Science Applications International Corporation, 4001 N. Fairfax Drive, Arlington, VA.

2:00 - 4:00 PM. The Copyright Office (CO) and the U.S. Patent and Trademark Office (USPTO) will hold a "public roundtable discussion concerning the work at the World Intellectual Property Organization (WIPO) in the Standing Committee on Copyright and Related Rights (SCCR) on a proposed Treaty on the Protection of the Rights of Broadcasting Organizations". The CO and USPTO add that "The deadline for receipt of requests to observe or participate in the roundtable is 5:00 p.m. on Friday, May 4, 2007." See, notice in the Federal Register, April 12, 2007, Vol. 72, No. 70, at Pages 18493-18494. See also, WIPO's March 8, 2007, paper [MS Word] titled "Draft Non-paper on the WIPO Treaty on the Protection of Broadcasting Organizations", which includes draft treaty language. Location: Mumford Room, 6th floor, Madison Building, Library of Congress, 101 Independence Ave., SE.

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