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June 25, 2007, Alert No. 1,600.
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Four Party Doha Talks In Potsdam Fail

6/22. On June 21, 2007, the Office of the U.S. Trade Representative (USTR) and the Department of Agriculture issued a joint release regarding Doha round negotiations that took place in Potsdam, Germany, between representatives of the US, EU, India and Brazil.

This release states that "this week's negotiations could not generate political consensus to meaningfully open markets to new trade -- particularly in manufactured goods." See also, transcript of joint news conference.

EU Trade Commissioner Peter Mandelson stated that this "places a very major question mark over the ability of the wider membership of the WTO to complete this round. But it does not in itself mean that the negotiations cannot be put back on track." See, transcript.

Sen. Charles Grassley (R-IA) stated in a release that "I understand that there was improved dialogue in the agriculture negotiations. But when it came to tariffs on manufactured goods, the talks broke down. Brazil and India need to recognize that the Doha Round won't succeed without meaningful tariff cuts. By that I mean cuts that will reduce applied rates, not just bound rates. We've been clear all along that the Doha negotiations must result in new market access across the board -- for agriculture, for manufactured goods, and for services. I commend Ambassador Schwab for holding the line. Brazil and India better understand. No new market access means no deal."

Susan Schwab stated at a news conference in Geneva, Switzerland, on June 22 that "We have not by any means given up on the Doha Round. " See, transcript.

WTO Director General Pascal Lamy stated in a speech in Geneva on June 22 that "I have spoken to all four Ministers separately and that all four have told me that they want the process to continue here in Geneva."

Supreme Court Rules in Tellabs v. Makor

6/21. The Supreme Court issued its opinion [33 pages in PDF] in Tellabs v. Makor, a case regarding the heightened pleading requirements of the Private Securities Litigation Reform Act (PSLRA). The opinion gives a meaning to the term "strong inference" that will make it harder for class action securities complaints to survive motions to dismiss. The Court vacated the opinion of the Court of Appeals. However, it did not adopt the even higher standard sought by Justice Scalia and critics of class action securities fraud litigation. To the extent that many of these suits are brought against tech companies, this is a modest victory for the tech sector.

Summary. The 106th Congress passed the PSLRA, which is codified at 15 U.S.C. § 78u-4 and § 78u-5, to insulate defendants, and especially information and biotech companies, from abusive class action law suits.

The PSLRA creates both a safe harbor for forward looking statements, and a heightened pleading requirement. Plaintiffs must "state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind." However, this language is vague, and its meaning has perplexed lower courts, which offered divergent interpretations. In particular, there is no definition of the term "strong inference".

This opinion, written by Justice Ruth Ginsberg, vacates and remands to the Court of Appeals. It reduces the uncertainty regarding the pleading standard. The opinion will make it harder for plaintiffs' class action lawyers' complaints to survive Rule 12(b)(6) motions to dismiss for failure to state a claim.

Justice Antonin Scalia indicated at oral argument, and in his concurring opinion, that he favored a stricter pleading standard. However, he only partially won over one other Justice, Alito, who wrote a separate concurring opinion.

Proceedings Below. Tellabs makes equipment used in fiber optic cable networks. It is a publicly traded company. The plaintiffs are nominally Makor Issues & Rights, Ltd. and others. However, this is a class action lawsuit brought by Milberg Weiss.

The plaintiffs filed a complaint in U.S. District Court (NDIll) against Tellabs, Richard Notebaert and others alleging securities fraud in violation of § 10(b) of the Securities Exchange Act of 1934, which is codified in 15 U.S.C. § 78j, and Rule 10(b)(5) thereunder, and control person liability by Tellabs executives.

The District Court dismissed the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (FRCP) for failure to state a claim upon which relief can be granted. It held that the complaint failed to satisfy the scienter requirements established by the PSLRA.

The Court of Appeals reversed in part. A three judge panel of the U.S. Court of Appeals (7thCir) issued its initial opinion [28 pages in PDF] on January 25, 2006. It held that the "strong inference" standard is met if the complaint alleges facts from which, if true, a reasonable person could infer that the defendant acted with the required intent.

In contrast, other courts, such as the U.S. Court of Appeals (6thCir), held that plaintiffs are entitled only to the most plausible of competing inferences. See, for example, Fidel v. Farley, 392 F.3d 220 (6thCir, 2004).

The same panel of the Court of Appeals issued its Order on Petition for Rehearing [2 pages in PDF] on July 10, 2006, in which it denied rehearing, and modified one paragraph in the original opinion regarding control person liability.

The Supreme Court granted certiorari on January 5, 2007. See, story titled "Supreme Court Grants Certiorari in PSLRA Case Regarding Pleading of Scienter" in TLJ Daily E-Mail Alert No. 1,515, January 8, 2007.

Statute and Rules. Section 10(b) of the Securities Exchange Act of 1934, which is codified at 15 U. S. C. §78j(b), provides in part that "It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors".

Then, SEC rules 10b-5 provides in part that it is unlawful "(a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made ... not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security."

The key language of the PSLRA (Public Law No. 104-67) is codified in 15 U.S.C. § 78u-4.

Subsection (b)(2) provides that "In any private action arising under this chapter in which the plaintiff may recover money damages only on proof that the defendant acted with a particular state of mind, the complaint shall, with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind." (This was contained in Section 21D(b)(2) of the PSLRA.)

This eliminates notice pleading in certain cases. The general pleading rule is set out in Rule 8 of the FRCP. Rule 8(a) provides that "A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks. Relief in the alternative or of several different types may be demanded." Rule 8(e) adds that "Each averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required."

There is, however, a heightened general rule for pleading fraud. Rule 9(b) provides that "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally."

This rule governed securities fraud litigation prior to the PSLRA. The PSLRA raised the pleading bar still higher.

However, while the PSLRA provides special rules for pleading securities fraud, it does not provide an explanation or definition of keys concepts, such as the meaning of "strong inference".

Supreme Court Holding. The Supreme Court vacated the judgment of the Court of Appeals, and remanded. Justice Ginsburg wrote the opinion of the Supreme Court.

She wrote that the District Court "must engage in a comparative evaluation; it must consider, not only inferences urged by the plaintiff, as the Seventh Circuit did, but also competing inferences rationally drawn from the facts alleged. An inference of fraudulent intent may be plausible, yet less cogent than other, nonculpable explanations for the defendant’s conduct. To qualify as ``strong´´ within the intendment of §21D(b)(2), we hold, an inference of scienter must be more than merely plausible or reasonable -- it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent."

Ginsburg elaborated. "We establish the following prescriptions: First, faced with a Rule 12(b)(6) motion to dismiss a §10(b) action, courts must, as with any motion to dismiss for failure to plead a claim on which relief can be granted, accept all factual allegations in the complaint as true."

"Second", wrote Ginsburg, "courts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice."

"Third, in determining whether the pleaded facts giverise to a ``strong´´ inference of scienter, the court must take into account plausible opposing inferences."

She added that "The strength of an inference cannot be decided in a vacuum. The inquiry is inherently comparative: How likely is it that one conclusion, as compared to others, follows from the underlying facts? To determine whether the plaintiff has alleged facts that give rise to the requisite ``strong inference´´ of scienter, a court must consider plausible nonculpable explanations for the defendant’s conduct, as well as inferences favoring the plaintiff. The inference that the defendant acted with scienter need not be irrefutable, i.e., of the ``smoking-gun´´ genre, or even the ``most plausible of competing inferences,´´".

Scalia wrote a concurring opinion. He too favored vacating the Court of Appeals. However, he would have set an even higher standard. He wrote, "I fail to see how an inference that is merely ``at least as compelling as any opposing inference,´´ ... can conceivably be called what the statute here at issue requires: a ``strong inference,´´".

Finally, Ginsburg wrote, "Yet the inference of scienter must be more than merely ``reasonable´´ or ``permissible´´ -- it must be cogent and compelling, thus strong in light of other explanations. A complaint will survive, we hold, only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one could draw from the facts alleged."

7th Amendment Right to Jury Trial. Justice Ginsburg wrote that setting a different standard (strong inference) at the pleading stage than at the jury verdict stage (preponderance of the evidence) does not violate the 7th Amendment right to trial by jury. Plaintiff's counsel had raised this argument, and several Justices asked questions about, and debated, this issue at oral argument in March.

The 7th Amendment to the Constitution provides, in full, that "In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any Court of the United States, than according to the rules of common law."

Ginsburg wrote in the Court's opinion that "A court's comparative assessment of plausible inferences, while constantly assuming the plaintiff's allegations to be true, we think it plain, does not impinge upon the Seventh Amendment right to jury trial."

She continued that "Congress, as creator of federal statutory claims, has power to prescribe what must be pleaded to state the claim, just as it has power to determine what must be proved to prevail on the merits. It is the federal lawmaker’s prerogative, therefore, to allow, disallow, or shape the contours of -- including the pleading and proof requirements for -- §10(b) private actions. No decision of this Court questions that authority in general, or suggests, in particular, that the Seventh Amendment inhibits Congress from establishing whatever pleading requirements it finds appropriate for federal statutory claims."

She also wrote that "under our construction of the ``strong inference´´ standard, a plaintiff is not forced to plead more than she would be required to prove at trial."

Justice Breyer argued at oral argument in March that "I don't see a way of avoiding this 7th Amendment problem". Ginsburg argued in March that the PSLRA requires "stating two different claims" -- one for pleading, and the other for the jury. She said she knew of no other type of case where this exists. In the end, Justices Ginsburg and Breyer overcame their 7th Amendment scruples.

Delegation of Legislative Authority to the Judiciary. When faced with opposing alternatives for statutory language, neither of which can garner enough votes for enactment, members of Congress sometimes compromise by drafting vague intermediate language that inevitably leads to protracted litigation, and a court made law. Arguably, such was the case with the "strong inference" language of the PSLRA.

Even if this was not clear to the members and staff who negotiated the PSLRA, it was apparent when the Congress again took up securities litigation reform when it debated and enacted the Securities Litigation Uniform Standards Act (SLUSA) in 1998. Nevertheless, the Congress did nothing to clarify the meaning of the statute. Any resolution of the uncertainty would have risked preventing the SLUSA from passing.

Justice Ginsburg wrote that the PSLRA left "undefined" the term "strong inference". She did not elaborate on the nature of the legislative process.

Justice Stevens wrote a dissenting opinion in which he commented that the Congress "thus implicitly delegated significant lawmaking authority to the Judiciary in determining how that standard should operate in practice. Today the majority crafts a perfectly workable definition of the term ..."

Merits of Class Action Securities Litigation. Class action securities litigation enables a class of shareholders to recover from a publicly traded company. However, since companies are owned by shareholders, the litigation works a transfer from one group of innocent shareholders to another. Moreover, these shareholders ultimately bear the cost of defense legal fees and expenses. Also, much of any recovery is consumed by the plaintiffs' class action lawyers.

The rationale that class action litigation serves as a deterrent to corporate wrongdoing is blunted by the presence of both criminal prosecutions by the Department of Justice (DOJ) and the civil enforcement by the Securities and Exchange Commission (SEC).

There is also the matter that class action litigation disrupts the operation of some defendant companies.

Nevertheless, in briefing and at oral argument, neither the parties, the U.S. as amicus curiae, nor any of the nine Justices, suggested that securities class action litigation is unnecessary.

The Supreme Court wrote in its opinion that "This Court has long recognized that meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought, respectively, by the" DOJ and SEC.

Although, the Court added that "Private securities fraud actions, however, if not adequately contained, can be employed abusively to impose substantial costs on companies and individuals whose conduct conforms to the law."

The plaintiffs bar is a highly effective lobbying group, and hence, it is highly unlikely that the Congress, especially a Democratic Congress, would eliminate, or further limit class action securities litigation.

There is, however, the possibility of public traded companies amending their charters to provide for mandatory arbitration, as opposed to litigation, of shareholder disputes. Historically, the SEC has not allowed this practice. However, the SEC could change.

The House Financial Services Committee (HFSC) will hold a hearing on Tuesday, June 26, at 2:00 PM. The five SEC Commissioners are scheduled to testify. See, notice. The subject of arbitration of shareholder disputes may be discussed.

Rep. Barney Frank (D-MA), the Chairman of the HFSC, is supportive of the plaintiffs' bar. SEC Chairman Chris Cox, who previously represented a California district in the House of Representatives, was supportive of technology companies and shareholders when he served in the House.

Case Information. This case is Tellabs, Inc. and Richard Notebaert v. Makor Issues & Rights, Ltd., et al., Sup. Ct. No. 06-484, a petition for writ of certiorari to the U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 04-1687. See also, Supreme Court docket.

Arthur Miller, a professor at Harvard law school, and author of leading works on civil procedure, argued the case for the plaintiffs. The plaintiffs have also been represented by Richard Weiss of the law firm of Milberg Weiss Bershad & Schulman.

Carter Phillips, of the Washington DC office of the law firm of Sidley Austin, argued the case for the defendants.

Kannon Shanmugam argued the case for the Office of the Solicitor General.

Washington Tech Calendar
New items are highlighted in red.
Monday, June 25

The House will meet at 12:30 AM for morning hour, and at 2:00 PM for legislative business. It will consider numerous non-technology related items under suspension of the rules. See, Rep. Hoyer's weekly calendar [PDF]. Votes will be postponed until 6:00 PM.

The Senate will meet at 1:00 PM. It will resume consideration of the motion to proceed to HR 800 [LOC | WW], a union bill.

9:00 AM - 5:00 PM. The President's Council of Advisors on Science and Technology (PCAST) will meet. The agenda includes "presentations on applications of nanotechnology, with specific examples of nanotechnology-based innovation and commercialization across a range of products and industries". See, notice in the Federal Register, June 6, 2007, Vol. 72, No. 108, at Pages 31326-31327. Location: Room 1235, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Verizon v. Vonage, App. Ct. No. 2006-M830. See, story titled "Federal Circuit Issues Stay of Injunction in Verizon v. Vonage" in TLJ Daily E-Mail Alert No. 1,569, April 24, 2007. Location: Courtroom 203.

11:00 AM. The National Cable & Telecommunications Association (NCTA) will host a technology demonstration event titled "OpenCable Showcase". Kyle McSlarrow (head of the NCTA) will speak. Lunch will be served afterwards. For more information, contact Brian Dietz at 202-222-2358 or bdietz at ncta dot com. Location: NCTA, 25 Massachusetts Ave., NW.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch titled "Introduction to Satellite Regulation". The speakers will be Jennifer Manner (Mobile Satellite Ventures), Diane Cornell (Inmarsat), Susan Eid (DirecTV), Joslyn Read (SES New Skies), Jennifer Warren (Lockheed Martin), and Tony Lin (Pillsbury Winthrop Shaw Pittman). For more information, conntact Chris Fedeli at chrisfedeli at dwt dot com or Carolyn Roddy at croddy at sia dot org. Location: Wiley Rein, 1776 K St., NW.

Tuesday, June 26

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Impact of Media Violence on Children". See, notice. Location: Room 253, Russell Building.

CANCELLED. 10:00 AM. The Senate Judiciary Committee (SJC) may hold a hearing on the nomination of William Mercer to be Associate Attorney General. See, notice. Location: Room 226, Dirksen Building.

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet regarding U.S. positions for a meeting of the Organization of American States Inter American Telecommunication Commission (CITEL) Permanent Consultative Committee II (Radiocommunication) which will prepare for the International Telecommunication Union World Radiocommunication Conference (WRC07). See, notice in the Federal Register, May 30, 2007, Vol. 72, No. 103, at Page 30045. Location: undisclosed.

10:30 AM. The U.S. District Court (DC) will hold a status conference in U.S. v. Microsoft, D.C. No. 98-1232 (CKK). Location: Courtroom 28A, Prettyman Federal Courthouse, 333 Constitution Ave., NW.

2:00 PM. The House Financial Services Committee (HFSC) will hold a hearing at which the five Commissioners of the Securities and Exchange Commission (SEC) will testify. See, notice. The hearing will be webcast by the HFSC. Location: Room 2128, Rayburn Building.

2:00 - 4:00 PM. The House Science Committee's (HSC) Subcommittee on Technology and Innovation will hold a hearing on the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. See, notice [PDF]. Location: Room 2318, Rayburn Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its request to update the record in its equal access and nondiscrimination proceeding. The FCC issued its original Notice of Inquiry (NOI) in February of 2002. See, notice in the Federal Register, March 28, 2007, Vol. 72, No. 59, at Pages 14554-14555. This proceeding is CC Docket No. 02-39. See also, Public Notice (DA 07-1071) [PDF] released on March 7, 2007.

Wednesday, June 27

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

12:00 NOON. The Federal Communications Bar Association (FCBA) will host its annual luncheon. The speaker will be Federal Trade Commission (FTC) Chairman Deborah Majoras. The price to attend ranges from $50 to $125. Registrations and cancellations are due by 12:00 NOON on Friday, June 22. See, registration form [PDF]. Location: Mayflower Hotel, 1127 Connecticut Ave., NW.

2:00 PM. The American Enterprise Institute (AEI) will host an event titled "The Bipartisan Trade Bargain: Is the Deal Worth It?" The keynote speaker will be John Veroneau (Assistant U.S. Trade Representative). The other speakers will be Kimberly Ann Elliott (Peter G. Peterson Institute for International Economics), Philip Levy (AEI), Warren Murayama (Office of the U.S. Trade Representative), Arvind Panagariya (Columbia University), and Claude Barfield (AEI). See, notice. Location: AEI.

2:30 PM. The Senate Commerce Committee (SCC) will meet to mark up several bills, including S 704 [LOC | WW] the "Truth in Caller ID Act of 2007", and S 1650 [LOC | WW], the "Max Cleland Minority Serving Institution Digital and Wireless Technology Opportunity Act". See, notice. For more information, contact Jenilee Keefe at 202-224-7824. Location: Room 253, Russell Building.

Thursday, June 28

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

9:30 AM - 12:00 NOON. The Center for Public Integrity (CPI) and Progress & Freedom Foundation (PFF) will host an event titled "Conference on Broadband Statistics". The first panel is titled "What Do We Know About Availability and Use of Broadband in the United States?". The speakers will be Joseph Waz (Comcast), Derek Turner (Free Press), Robert Atkinson (Information Technology & Innovation Foundation), John Horrigan (Pew Internet & American Life Project), Kenneth Flamm (University of Texas at Austin), and Dennis Weller (Verizon Communications). The moderator will be Drew Clark (CIP). The second panel is titled "What Kinds of Broadband Data Collection Policies Should the U.S. Employ?" The speakers will be Beth Shiroishi (AT&T), Mark Lloyd (Center for American Progress), Drew Clark (CPI), Laura Taylor (ConnectKentucky), Clair Kaye (Cumberland Internet Inc.), and Colin Crowell (office of Rep. Ed Markey (D-MA)). The moderator will be Scott Wallsten (PFF). For more information, contact Steve Carpinelli (CPI) at 202-481-1225 or Brooke Glass (PFF) at 202-969-2952. Location: National Academy of Sciences, 2100 C St., NW.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda again includes consideration of S 1145 [PDF | LOC | WW], the "Patent Reform Act of 2007". The SJC rarely follows its published agenda. See, notice. Location: Room 226, Dirksen Building.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Wireless Committee will host a lunch titled "CPNI Compliance". The speakers will be Bennett Ross (Wiley Rein), Marcus Maher (Associate Bureau Chief of the FCC's Wireline Competition Bureau), and Melissa Ngo (EPIC). See, notice [PDF]. Reservations and cancellations are due by 12:00 NOON on June 26. Location: Latham & Watkins, 10th floor, 555 11th St., NW.

1:00 PM. The Fiber to the Home Council (FTTH) will host a web seminar titled "Content and the Future of Broadband".

6:00 - 8:00 PM. The DC Bar Association will host a panel discussion titled "Meet the FTC and FCC Legal Advisors". See, notice. For more information, call 202-626-3463. The price to attend ranges from $10-$15. Location: City Club of Washington at Franklin, 1300 I St., NW, McPherson Square.

Friday, June 29

The House will meet at 9:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

9:30 AM. Subcommittees of the House Foreign Affairs Committee will hold a hearing titled "International Students and Visiting Scholars: Trends, Barriers, and Implications for American Universities and U.S. Foreign Policy". See, notice. Location: Room 2172, Rayburn Building.

Saturday, June 30

Trade promotion authority expires.

Sunday, July 1

Opening date for sending a Notice of Internet Availability of Proxy Materials to shareholders. See, the Securities and Exchange Commission's (SEC) rule [119 pages in PDF] regarding voluntary internet availability of proxy materials. See also, notice in the Federal Register, January 29, 2007, Vol. 72, No. 18, at Pages 4147-4173. And see, story titled "SEC Adopts E-Proxy Rule Changes" in TLJ Daily E-Mail Alert No. 1,506, December 15, 2006.

Monday, July 2

The House will not meet on July 2-6 due to the Independence Day District Work Period. See, House 2007 calendar.

The Senate will not meet on July 2-6 due to the Independence Day District Work Period. See, Senate 2007 calendar.

Deadline to submit initial comments to the Copyright Office (CO) in response to its Notice of Inquiry (NOI) regarding the operation of, and continued necessity for, the cable and satellite statutory licenses under the Copyright Act.. See, notice in the Federal Register, April 16, 2007, Vol. 72, No. 72, at Pages 19039-19055. See also, technical correction notice in the Federal Register, April 24, 2007, Vol. 72, No. 78, at Page 20374.

Deadline for those persons who are scheduled to testify at the Copyright Office's (CO) hearings on July 23 through July 26, 2007, regarding the operation of, and continued necessity for, the cable and satellite statutory licenses to submit to the CO copies of their prepared testimony. See, notice in the Federal Register, May 23, 2007, Vol. 72, No. 99, at Pages 28998-29000.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its request for comments updating its record on the Center for the Study of Commercialism's (CSC) Petition for Reconsideration regarding stations that air home shopping programming and their status. See, notice in the Federal Register, May 17, 2007, Vol. 72, No. 95, at Pages 27811-27813.

People and Appointments

6/22. The Senate Judiciary Committee (SJC) cancelled its hearing on the nomination of William Mercer to be Associate Attorney General. It had been scheduled for 10:00 AM on Tuesday, June 26, 2007. The SJC issued a release that states that "the President is withdrawing Mr. Mercer’s nomination."

More News

6/21. Attorney General Alberto Gonzales gave another speech in which he darkly portrayed the internet, and advocated that a data retention mandate be imposed upon internet service providers. He described cyberspace as a "threat posed to our children". He continued that "We have heard time and time again from state and local investigators and prosecutors that investigations of these crimes would be greatly aided by increased data retention by Internet Service Providers. That’s why I asked a working group within the Department to look at this issue, and we're working hard on ways to remedy this problem. I appreciate your support on the issue of data retention; I hope we can continue to make significant strides in investigative practices in the future."

6/21. The European Union's (EU) Article 29 Data Protection Working Party issued a release [2 pages in PDF] regarding its meeting in Brussels, Belgium, on June 19 and 20, 2007. The release states that the group "continued its deliberations on the SWIFT case, issued a first report on investigations into the health insurance sector, adopted an important document on the definition of personal data, developed a common position on data protection and the rights of children, and engaged in a discussion on the transfer of passenger data to the US." The release also addresses Google's data retention periods for server logs. Article 29 is a reference to Data Protection Directive 95/46/EC. The full title of this advisory group is "Article 29 Working Party on the Protection of Individuals with regard to the Processing of Personal Data".

6/22. Sherwin Siy of the Public Knowledge (PK) wrote in a short piece in the PK website that the World Intellectual Property Organization (WIPO) "Broadcast Treaty isn't likely to go anywhere this year". See also, story titled "CO and USPTO Hold Roundtable on Proposed WIPO Broadcast Treaty" in TLJ Daily E-Mail Alert No. 1,580, May 14, 2007.

6/22. The U.S. District Court (EDVa) sentenced Hew Raymond Griffiths to serve 51 months in prison following his guilty plea on April 20, 2007, to one count of conspiracy to commit criminal copyright infringement. The Department of Justice (DOJ) stated in a release that Griffiths "was a longtime leader of DrinkOrDie and an elder in the highest echelons of the underground Internet piracy community, also known as the warez scene" This case is U.S. v. Griffiths, U.S. District Court for the Eastern District of Virginia, Judge Claude Hilton presiding. See also, April 20, 2007, release.

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