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January 8, 2008, Alert No. 1,697.
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House Commerce Committee Announces Investigation of FCC

1/8. Rep. John Dingell (D-MI) and Rep. Joe Barton (R-TX), the Chairman and ranking Republican on the House Commerce Committee (HCC), and Rep. Bart Stupak (D-MI) and Rep. John Shimkus (R-IL), the Chairman and ranking Republican of the HCC's Subcommittee on Oversight and Investigations (SOI), sent a letter [PDF] to Kevin Martin, Chairman of the Federal Communications Commission (FCC), stating that the HCC and SOI have "initiated a formal investigation into" the FCC's "regulatory procedures to determine if they are being conducted in a fair, open, efficient, and transparent manner".

The letter adds that "This investigation will also address a growing number of allegations received by the Committee relating to management practices that may adversely affect the agency’s operation."

The letter states that HCC "investigators will interview FCC employees and other witnesses in preparation for an oversight hearing this year". It does not set a hearing date.

The letter then proceeds to make a series of blunt and unusual statements. First, the letter requests that Martin "immediately notify all FCC employees of their right to communicate with Congress and that it is against the law to deny or interfere with their rights to furnish information to Congress". (Emphasis in original.)

Second, the letter requests that Martin inform FCC officials that "it is a violation of Federal law to retaliate against whistleblowers".

Third, it requests that Martin "immediately preserve all electronic records, including work e-mail and personal e-mail communications relating to official work of the Commission, and calendars and schedules of all employees".

Finally, it requests that Martin provide "unedited and unredacted copies of this letter to all employees and contractors of the FCC".

See also, December 3, 2007, letter [3 pages in PDF] from Rep. Dingell to Martin, and story titled "Martin Responds to Dingell's Questions About Lack of Transparency at the FCC" in TLJ Daily E-Mail Alert No. 1,686, December 11, 2007.

5th Circuit Denies Attorneys Fees to Prevailing Defendant in P2P Music Case

1/4. The U.S. Court of Appeals (5thCir) issued its opinion [5 pages in PDF] in Virgin Records v. Cliff Thompson, affirming the judgment of the District Court, which denied attorneys fees to the prevailing defendant in an improvidently filed peer to peer music copyright infringement action.

Background. The plaintiffs, Virgin Records, Sony BMG Music Entertainment, Arista Records, and UMG Recordings, are record companies. The copyrights of these and other record companies are infringed by users of peer to peer systems who download or upload copyrighted songs without authorization.

The Office of the U.S. Trade Representative (OUSTR) wrote in its report [52 pages in PDF] titled "2007 Special 301 Report" that "The increased availability of broadband Internet connections around the world has made the Internet an extremely efficient vehicle for disseminating pirated products." It added that the "copyright industries report growing problems with piracy not only on the Internet, but also using cellular telephones, palm devices, flash drives, and other mobile technologies."

Stephen Siwek estimated in an August 21, 2007, report [28 pages in PDF] titled "The True Cost of Sound Recording Piracy to the U.S. Economy" that total annual worldwide losses to all types of piracy by U.S. record and related companies is $4.068 Billion. Siwek further wrote that "As a consequence of global and U.S.-based piracy of sound recordings, the U.S. economy loses $12.5 billion in total output annually."

See also, International Intellectual Property Alliance (IIPA) release that estimates that total losses due to copyright piracy in the record and music industry outside of the U.S. in 2006 was $2.25 Billion.

One anti-piracy strategy of U.S. record companies is to sue persons who upload copyrighted songs via peer to peer networks. The present action is one such suit. The Recording Industry Association of America (RIAA) stated that "Since the onset of our lawsuits in 2003, we have brought some 28,000 legal actions against individuals."

In the present case, the record companies filed a complaint in U.S. District Court (WDTex) against Cliff Thompson. The record companies then moved to dismiss. The District Court dismissed the complaint. Thus, Cliff Thompson is the prevailing party. Thompson moved for an award of attorneys fees. The District Court denied Thompson's motion.

The opinion states that the record companies moved to dismiss following Cliff Thompson's assertion that any infringement would have been done by his adult daughter.

The record companies filed a second complaint against Brigette Thompson, and obtained a default judgment against her, although the opinion does not relate this.

The plaintiff record companies were on notice at the time of filing the complaint against Cliff Thompson that they were suing the wrong person. They sued a "Cliff Thompson", a name usually used by a man. In contrast, their information was that the infringer went by the online name of "gigette", which is neither a variation of Cliff or Thompson, nor a name usually used by a man. The "ette" ending to a name connotes feminine and/or diminutive attributes.

Thompson brought the present appeal of the District Court's denial of attorney's fees. The underlying dismissal of the complaint against him is not at issue.

Is This Case Significant? This case involves no substantive issues of copyright law. It only goes to attorneys fees. Moreover, the District Court proceeding was brief, and the defendant's attorneys fees would likely have been modest. (The opinion does not disclose the amount of the request.) If this case does have significance to other litigants, and litigants in non-copyright cases, the reasons might be as follows.

Online transactions are inherently conducted with varying degrees of anonymity. The identity of the ownership of a computer, a cell phone, an internet account, or a wireless account is not necessarily the same thing as the identity of the user of that device or account for any particular transaction. Devices and accounts are used by persons other than their owners, sometimes without the owner's knowledge. Identities are stolen, and used to purchase computers and to open accounts. Computers and accounts are surreptitiously taken over by hackers, spammers, botnet herders, and others.

Criminal and/or civil liability attaches to various actions involving the use of devices and accounts. These include not only peer to peer music infringement, but also violations of the Computer Fraud and Abuse Act (CFAA), the CAN-SPAM Act, other federal statutes, as well as contract and tort claims.

(The CAN-SPAM Act, Public Law No. 108-187, creates a private right of action for ISPs, and provides that "the court may" award attorneys fees "against any party". The CFAA, at 18 U.S.C. § 1030(g), creates a general private right of action.)

Different statutes and principles regarding the award of attorneys fees apply in different types of cases. Nevertheless, litigants and courts might cite the present opinion, or similar opinions, as authority for the proposition that when complaints are filed against the wrong person, based upon their ownership of a device or internet account used in actionable conduct, these complaints can be dismissed without an award of attorneys fees to the prevailing defendant.

Moreover, since copyright litigation is often inherently factual dense, procedurally complex, and within the exclusive jurisdiction of the federal courts, actual attorneys fees can easily run into the hundreds of thousands of dollars. Actual attorneys fees often exceed actual damages. Hence, the issue of whether or not actual attorneys fees are awarded takes on greater importance in copyright litigation than in many other types of litigation.

Furthermore, peer to peer music infringement cases are brought almost exclusively against individuals, many of whom are of modest means. Other incorrectly named defendants in cases involving use of devices or accounts are also likely to be ordinary individuals. Some will not be able to retain counsel, and will therefore settle and pay damages for claims for which they are not liable, or allow a default judgment to be taken against them. Denying the recovery of attorneys fees to incorrectly named defendants will increase the likelihood that they will not be able to retain counsel, and thereby increase the number of persons whose finances and reputations are harmed by judicial process in the absence of any liability or wrongful conduct. The law sometimes abhors such outcomes.

Statute and Precedent. The Copyright Act, at 17 U.S.C. § 505, provides that "In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs."

Notably, the award of attorneys fees is not mandatory. The statute uses the word "may" rather than "shall".

This, combined with various courts' application of this section, has resulted in uncertainty regarding whether or not attorneys fees will be awarded.

The leading Supreme Court precedent is Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). The Supreme Court held that under Section 505, "Prevailing plaintiffs and prevailing defendants are to be treated alike, but attorney's fees are to be awarded to prevailing parties only as a matter of the court's discretion."

One of the leading 5th Circuit cases is Hogan Sys., Inc. v. Cybresource Int’l, Inc., 158 F.3d 319, which held that "the award of attorneys' fees in copyright cases is the rule rather than the exception, and should be awarded routinely".

Another pertinent 5th Circuit case is Ergonome v. Compaq Computer (2004). In that case Compaq copied, for commercial purposes, from a copyrighted work, without authorization. The plaintiffs filed the complaint against the correct defendant. The defendant had engaged in unauthorized copying. However, the defendants escaped liability on a fair use defense. The District Court awarded Compaq $2,765,026.90 attorneys fees. The Court of Appeals affirmed. The award drove the plaintiffs into bankruptcy.

See also, stories titled "5th Circuit Rules on Copyright, Fair Use, Attorneys Fees, and Alter Egos" in TLJ Daily E-Mail Alert No. 991, October 6, 2004, and "Supreme Court Denies Certiorari in Copyright Fair Use and Attorneys Fees Case" in TLJ Daily E-Mail Alert No. 1,109, April 5, 2005.

Court of Appeals. In the present case the Court of Appeals affirmed the judgment of the District Court.

It departed from its strict preference for awarding attorneys fees evidenced by its opinions in Hogan and Ergonome. It wrote that the "recovery of attorney’s fees is not automatic"

The Court of Appeals analysis consists largely of quoting with approval the opinion of the District Court. First, it wrote that the District Court "determined that Plaintiffs’ lawsuit was not frivolous or objectively unreasonable, citing several reasons for this conclusion. The court found that ``Plaintiffs discovered substantial copyright infringement of their songs by a file-sharing program attached to an internet [sic] account registered to Thompson.´´ The court also found that the Plaintiffs attempted to contact Thompson to resolve this matter for six months prior to filing this lawsuit." (Internal quotations and brackets in Court of Appeals opinionl.)

Second, it wrote that the District Court "concluded that Plaintiffs’ ``motivation in bringing the suit was proper.´´ The court found no indication that Plaintiffs ``prosecuted this suit with malevolent intent.´´ Instead, the court determined that Plaintiffs acted properly to protect their copyrights after they discovered copyright infringement of their songs. The court also found that Plaintiffs ``immediately moved to dismiss´´ their suit against Thompson after they identified the adult daughter that Thompson acknowledged might be responsible for the copyright infringement."

Third, it wrote that the District Court "concluded that awarding Thompson attorney’s fees would not advance considerations of compensation and deterrence. These Plaintiffs should not be deterred from bringing future suits to protect their copyrights because they brought an objectively reasonable suit. Thompson, however, ``delayed the prompt resolution´´ of this litigation by failing to respond to Plaintiffs’ pre-suit communications and to disclose the identify of the true copyright infringer."

The Court of Appeals relied upon Section 505, Fogerty, and Hogan. It did not site Ergonome. It should also be noted that the Court of Appeals did not site any other rules that might give rise to a duty to negotiate or communicate in copyright actions prior to the filing of the complaint. For example, the opinion does not discuss any applicable code of professional responsibility. The opinion does not state that either Thompson or whoever wrote to him are licensed by any state bar association. Nor does the opinion discuss any applicable provisions of the local rules of any district court.

The denial of attorneys fess by the District Court and Court of Appeals in this case resembles discovery sanctions. Thompson was denied attorneys fees for failure to respond to discovery requests. However, pre-litigation letters are not discovery requests within the meaning of the FRCP.

Moreover, there are numerous legal procedures for conducting discovery available to record companies in various situations. They could have filed a copyright infringement action against a John Doe defendant, alleging infringement, and that the identity of the infringer was unknown, and then proceeded with discovery, pursuant to the FRCP, from witnesses. They could have conducted an oral deposition of Cliff Thompson, and asked him his knowledge of the identity of the infringer. They could have proceeded in this John Doe action to obtain records from service providers pursuant to a Rule 45 subpoena. Under some circumstances, record companies can avail themselves of the discovery procedure allowed by 17 U.S.C. § 512(h).

Finally, perhaps it should be noted that the Court of Appeals issued a per curiam opinion of a three judge panel comprised of Edith Jones, Jacques Wiener and Edith Clement. Judge Jones also wrote the opinion of the Court of Appeals in Ergonome. It may be difficult to reconcile her two opinions.

This case is Virgin Records, et al. v. Cliff Thompson, U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 07-50067, an appeal from the U.S. District Court for the Western District of Texas, D.C. No. 5:06-CV-592.

Bush Signs Bill Regarding Court Security and Federal Judgeships

1/8. President Bush signed into law HR 660 [LOC | WW], the "Court Security Improvement Act of 2007". See, White House release. This bill contains numerous provisions related to court security.

It also contains a provision that allows for increased participation in District Court administration by senior status District Court Judges who perform at least one half of the work of active status Judges.

The bill also amends 28 U.S.C. § 44(a) to increase the number of Judges of the U.S. Court of Appeals (9thCir) from 28 to 29, effective January 21, 2009. That is, it will be left to the next President to appoint someone for this new judgeship.

The bill also decreases the number of Judges of the U.S. Court of Appeals (DCCir) from 12 to 11. The bill does not specify an effective date for this provision.

Peter KeislerPresident Bush first nominated Peter Keisler (at right) to be a Judge of the DC Circuit in 2006. He renominated him at the beginning of the current Congress.

A spokesman for the Senate Judiciary Committee (SJC) stated to TLJ that the Keisler nomination is unaffected by HR 660 because he has been nominated for the 11th seat.

There are currently ten active status Judges, and three senior status Judges, on the DC Circuit. See, list.

Washington Tech Calendar
New items are highlighted in red.
Wednesday, January 9

The House will not meet.

The Senate will meet momentarily at 11:00 AM in pro forma session.

8:30 AM - 6:00 PM. Day three of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). See, notice in the Federal Register, December 18, 2007, Vol. 72, No. 242, at Pages 71613-71614. Location: National Science Foundation (NSF), 4121 Wilson Boulevard, Arlington, VA.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Dominant Semiconductor v. Osram, a patent infringement case, App. Ct. No. 2007-1456. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Fuji America v. U.S., App. Ct. No. 2007-1653, an appeal from the Court of International Trade. Location: Courtroom 203, 717 Madison Place, NW

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Zenith Electronics v. PDI, App. Ct. No. 2007-1288. Location: Courtroom 203, 717 Madison Place, NW.

12:00 NOON - 1:30 PM. The Alliance for Public Technology (APT) will host a program titled "Bringing Educational Opportunities to Rural & Urban America". The speakers will include Robert Atkinson (head of the Information Technology and Innovation Foundation). This is part of a series of events on Capitol Hill at which the APT gives broadband related awards. A box lunch will be served. RSVP to apt at apt dot org or 202-263-2970. Location: Room HC-6, Capitol Building.

Thursday, January 10

11:00 AM. The National Science Foundation's (NSF) National Science Board's (NSB) Committee on Programs and Plans will hold a teleconferenced public meeting. See, notice in the Federal Register, December 31, 2007, Vol. 72, No. 249, at Page 74347. Location: 4201 Wilson Blvd., Arlington, VA.

12:30 - 1:30 PM. The DC Bar Association will host a closed event titled "2008: Washington’s View of the Year for Telecom, Media and IT". The speakers will be Carolyn Brandon (CTIA), Jessica Rosenworcel (Senate Commerce Committee staff), Brian Huseman (FTC Chief of Staff), Jessica Zufolo (Medley Global Advisors), David Murray (NTIA Senior Advisor), Bruce Gottleib (advisor to FCC Commissioner Michael Copps). The price to attend ranges from $15 to $30. For more information, call 202-626-3463. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

Friday, January 11

No events.

Monday, January 14

8:15 AM - 5:00 PM. Day one of a two day conference hosted by the Utilities Telecom Council (UTC) titled "2008 Pole Attachment Meeting". On January 14, there will be programs titled "Overview of the FCC Notice of Proposed Rulemaking", "Access Issues: Application Processing", "Access Issues: Make Ready", "Access Issues: NESC Interpretation", "Access Issues: Audits and Inspections", "Rate Issues: Broadband Rate -- What should it be?", and "Rate Issues: Legal/Regulatory Strategies". See, notice. Location: Marriott Washington, 1221 22nd St.,  NW.

CANCELLED. 12:00 NOON - 2:00 PM. The DC Bar Association will host a program titled "The Foreign Corrupt Practices Act: Part I". For more information, call 202-626-3463. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) in which it proposes to extend the current five year registration period for the Do Not Call Registry. This NPRM is FCC 07-203 in CG Docket No. 02-278. See, notice in the Federal Register, December 14, 2007, Vol. 72, No. 240, at Pages 71099-71102. See also, story titled "FCC Adopts NPRM Regarding Extending Do Not Call Registrations" in TLJ Daily E-Mail Alert No. 1,680, November 30, 2007.

Tuesday, January 15

The House is scheduled to return from recess. Votes will be postponed at least until 6:30 PM. See, Rep. Hoyer's 2008 calendar [4.25 MB PDF].

8:15 AM - 12:45 PM. Day two of a two day conference hosted by the Utilities Telecom Council (UTC) titled "2008 Pole Attachment Meeting". On January 15, there will be programs titled "Rate Issues: What Happens to Joint Use?", "Case Study: Arkansas State Certification", "Case Study: Unauthorized Attachments and Code Compliance", and "Case Study: Muni Wireless". See, notice. Location: Marriott Washington, 1221 22nd St., NW.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Wireline Committee will host a closed brown bag lunch titled "Forbearance". The speakers will be John Nakahata (Harris Wiltshire & Grannis), Neil Fried (Republican Senior Counsel, House Commerce Committee), Amy Levine (Democratic Legislative Counsel, House Commerce Committee), Genny Morelli (Kelley Drye & Warren), and Bennett Ross (Wiley Rein). See, notice. Location: Wilmer Hale, 1875 Pennsylvania Ave., NW.

3:30 - 5:00 PM. The National Association of Broadcasters (NAB) will host a closed webcast seminar titled "What Every Station Should Know about Political Advertising". The speakers will include Bobby Baker (head of the FCC's Office of Political Programming). See, notice. This event is closed to all but NAB members.

Wednesday, January 16

The House is scheduled to be in session. See, Rep. Hoyer's 2008 calendar [4.25 MB PDF].

8:00 - 9:30 AM. The Northern Virginia Technology Council (NVTC) will host a breakfast program titled "Old Media Meets New Media: Advertising Sales and the Internet". See, notice. The price to attend ranges from $45-$85. Location: Oracle, 1910 Oracle Way, Reston, VA.

10:00 AM. The Supreme Court will hear oral argument in Quanta Computer v. LG Electronics. See also, story titled "Supreme Court to Hear Case Regarding Patent Exhaustion Doctrine" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2007.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers and Access to Records Committees will host a brown bag lunch titled "FCCdotgov -- Tips and Tricks to Navigating and Using the FCC Website and Online Databases". For more information, contact Chris Bjornson at crbjornson at mintz dot com, Chris Fedeli at chrisfedeli at dwt dot com or Tarah Grant at tsgrant at hhlaw dot com. Location: Mintz Levin, 701 Pennsylvania Ave., NW.

2:30 - 4:30 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold a public meeting to prepare advice for the U.S. on positions for the February 2008 meeting of the working groups of the International Telecommunication Union Council. See, notice in the Federal Register, December 31, 2007, Vol. 72, No. 249, at Page 74402. Location: undislcosed.

The Federal Communications Commission's (FCC) 700 MHz auction (Auction Number 73) is scheduled to commence. See, Public Notice [PDF] (DA 07-3415).

The Information Technology Association of America (ITAA), INPUT, and the Software and Information Industry Association (SIIA) will host an event titled "SaaS/Gov '08". See, ITAA notice. For more information, contact Madeleine Rial at mrial at itaa dot org. Location: Ritz Carlton Hotel.

Highlights of State of the Net Conference
(Hyatt Regency, Washington DC,
January 30)

8:30 AM. Opening speeches.
9:20 AM. Panel titled "Measuring Broadband: What Metrics Really Matter?" The speakers will be Rob Atkinson (Information Technology and Innovation Foundation), Jonathan Adelstein (FCC Commissioner), George Ford (Phoenix Center for Advanced Legal & Economic Public Policy Studies), Link Hoewing (Verizon Communications), John Horrigan (Pew Internet & American Life Project), and Taylor Reynolds (OECD).
10:30 AM. Panel titled "Internet Copyright Filters: Finding the Balance". The speakers will be Greg Jackson (University of Chicago) and Gigi Sohn (Public Knowledge).
11:30 AM. There will be three concurrent panels. (1) "Opening Up 700 mHz &: White Spaces: What Hath the FCC Wrought?" The speakers will be Scott Cleland (Precursor), Jason Devitt (Skydeck), and Blair Levin (Stifel Nicolaus). (2) "Info Tech: Aid to Energy Conservation or Culprit in Consumption?". The speakers will be Eric Masanet (Lawrence Berkeley National Laboratory), Kurt Roth (TIAX), and Bill Weihl (Google). (3) "Online Video and Content Controls". The speakers have not yet been named.
12:30 Lunch. The speaker has not yet been named.
1:30 PM. Panel titled "Social Networking Privacy: An Oxymoron". The speakers will be Danah Boyd (UC Berkeley student), Eric Goldman (Santa Clara University law school), Chris Kelly (Facebook), Jon Leibowitz (FTC Commissioner), and Daniel Solove (GWU law school).
2:30 PM. There will be two concurrent panels. (1) "Get A Virtual Life: Policy Issues Facing Online Worlds &: Game Spaces?" The speakers will be Edward Castronova (Indiana University), Ken Dreifach (Linden Labs/Second Life), Sean Kane (Drakeford & Kane), and Larry Magid ( (2) "What's Congress' Role in the Health IT Revolution?". The speakers will include Leslie Harris (CDT).
3:30 PM. Panel titled "International Content Control: Are the Days of the Borderless Internet Over?" The speakers will be Sean Garrett (463 Communications) and David Gross (Department of State).
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