Tech Law Journal Daily E-Mail Alert
August 28, 2008, Alert No. 1,819.
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FTC To Hold Public Workshop on Section 5 and Unfair Methods of Competition

8/28. The Federal Trade Commission (FTC) published a notice in the Federal Register announcing that it will hold a public workshop in Washington DC on October 17, 2008, titled "Prohibition of Unfair Methods of Competition In Section 5 of the Federal Trade Commission Act".

This workshop will address the scope of Section 5 of the FTCA, which is codified at 15 U.S.C. 45, its relation to antitrust statutes, and its application to technology companies.

The FTC proceeded in part under Section 5 in its ill fated JEDEC proceeding against Rambus. See, story titled "Court of Appeals Rules in Rambus v. FTC" in TLJ Daily E-Mail Alert No. 1,752, April 23, 2008.

The FTC also reached consent agreements with Dell in 1996, and with various record industry companies in 2000, based upon its application of Section 5 to competition practices.

Section 5 is a broad and vague statute. It provides in part that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful." It also contains an exemption for "common carriers".

The FTC also seeks public comments, by October 24, on the following 11 issues:
  "1. What principles concerning the scope of Section 5 can be garnered from Supreme Court and appellate court decisions?
  2. What legal, economic, and policy concerns are important when interpreting Section 5's prohibition against ``unfair methods of competition?'' What is the role of Section 5 in protecting nonprice competition?
  3. Is Section 5 coterminous with the Sherman Act? How has the courts' development of the Sherman Act over time altered its relationship to Section 5? Does the Sherman Act encompass all conduct that is truly harmful to competition?
  4. Does Section 5 authorize the FTC to fill technical gaps in the coverage of the other antitrust statutes?
  5. Can Section 5 reach externally-defined business torts where they threaten to bring about a future lessening of competition?
  6. Should Section 5 be interpreted to reach practices that pose at least a moderate threat to competition and few offsetting benefits to consumers, (e.g., reduced costs, improved products, or other efficiencies), where enforcement is limited to the FTC and relief is limited to an injunction prohibiting or undoing the challenged conduct?
  7. Does the FTC's use of Section 5, independent of the Sherman Act, make it less likely that treble damages could be assessed in follow-on actions? If so, should that fact influence the interpretation of Section 5's scope, or its application?
  8. What limiting principles should be applied to the definition of ``unfair methods of competition?'' How can ``unfair methods of competition'' under Section 5 be defined to avoid capturing benign or procompetitive conduct while allowing for sufficient guidance and predictability for business?
  9. If Section 5 captures conduct falling outside the Sherman Act, what economic evidence and analysis would be useful in identifying violations? What economic evidence and analysis would be useful in identifying the proper limiting principles for the enforcement of Section 5?
  10. Was the Commission's use during the last two decades of Section 5 claims in settled complaints that did not allege all the elements of a Sherman Act violation beneficial and principled or harmful and unbounded? How might courts have evaluated these claims?
  11. What are examples of business conduct that may be unfair methods of competition addressable by Section 5? How does that conduct harm competition and consumers?"

See, Federal Register, August 28, 2008, Vol. 73, No. 168, at Pages 50818-50819.

Department of Commerce Announces National Medal of Technology Awards

8/25. The Department of Commerce (DOC) announced the 2007 winners of the National Medal of Technology and Innovation (NMTI). See, release.

One half of these awards involve information technology. One winner is Paul Baran, for his joint invention of packet switched networks, while at the RAND Corporation, beginning in the 1960s.

Another is David Cutler, a software engineer who has long worked on operating systems for Microsoft.

Another winner is Grant Willson of the University of Texas at Austin, whose web site biography states that his work has focused on "the design and synthesis of functional organic materials with emphasis on materials for microelectronics".

Another NMTI award is for the eBay corporation.

The DOC also announced NMTI awards for Roscoe Brady, for his work on enzymatic defects in hereditary metabolic disorders, Armand Feigenbaum, for his work on economic relationship of quality costs, productivity improvement, and profitability, and Adam Heller, for his work in electrochemistry and bioelectrochemistry. Finally, the DOC awarded a NMT to the Skunk Works division of Lockheed, for its development of aircraft technology.

President Bush will present the NMTI winners with medals at a White House ceremony on September 29, 2008.

The NMTI program was instituted by the Stevenson-Wydler Technology Innovation Act of 1980. This was Public Law No. 96-180. It is now codified, along with amendments, at 15 U.S.C. 3711.

The NMTI program is now administered by the U.S. Patent and Trademark Office (USPTO).

See also, TLJ coverage of awards in 2005, published in TLJ Daily E-Mail Alert No. 1,312, February 17, 2006.

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Notices & Disclaimers
Copyright 1998-2008 David Carney, dba Tech Law Journal. All rights reserved.

Washington Tech Calendar
New items are highlighted in red.
Thursday, August 28

The House will not meet. It will return from its August recess on September 8.

The Senate will not meet. It will return from its August recess on September 8. It will hold momentary pro forma sessions until then to prevent President Bush from making recess appointments.

The Supreme Court will return on September 29, 2008. See, October Term 2008 calendar.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to request for comments regarding regarding the treatment under its hearing aid compatibility rules of multi-mode and multi-band handsets and regarding the application of the de minimis exception to those rules. This request is FCC 08-68 in WT Docket No. 07-250. See, notice in the Federal Register, June 12, 2008, Vol. 73, No. 114, at Pages 33324-33326.

5:00 PM. Extended deadline to submit initial comments to the Copyright Office in response to its notice of proposed rulemaking regarding the scope and application of the Section 115 compulsory license to make and distribute phonorecords of a musical work by means of digital phonorecord deliveries. See, original notice in the Federal Register, July 16, 2008, Vol. 73, No. 137, at Pages 40802-40813. See also, extension notice in the Federal Register, August 13, 2008, Vol. 73, No. 157, at Pages 47113-47114.

Friday, August 29

The Senate will meet briefly in pro forma session at 2:00 PM.

Deadline to submit comments to the Securities and Exchange Commission (SEC) in response to its proposed rule that would, among other things, revise the mutual fund prospectus delivery obligations under  5(b)(2) of the Securities Act of 1933 to permit sending or giving the key information directly to investors in the form of a summary prospectus and providing the statutory prospectus on a web site. See, notice in the Federal Register, August 6, 2008, Vol. 73, No. 152, at Page 45646.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its SP 800-68 Rev. 1 [125 pages in PDF] titled "Guide to Securing Microsoft Windows XP Systems for IT Professionals: A NIST Security Configuration Checklist (DRAFT)".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its document [22 MB .zip file] titled "NIST Windows Security Baseline Database Application v0.2.7 (Beta)".

Monday, September 1

Labor Day. See, Office of Personnel Management's (OPM) list of 2008 federal holidays.

Deadline for first time manufacturers of digital to analog converter boxes to submit to the National Telecommunications and Information Administration (NTIA) notices of intent to participate in the NTIA's TV Converter Box Coupon Program. See, notice in the Federal Register, July 24, 2008, Vol. 73, No. 143, at Pages 43211-43212.

Tuesday, September 2

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in IMX v. E-Loan, App. Ct. No. 2007-1175. Location: Courtroom 402.

Deadline for intergrovernmental review of applications for awards for Fiscal Year 2009 from the Department of Education's (DOE) Technology and Media Services for Individuals with Disabilities program. This program provides awards to "support educational media services activities designed to be of educational value in the classroom setting to children with disabilities" and to "provide support for captioning and video description of educational materials that are appropriate for use in the classroom setting". See, notice in the Federal Register, June 2, 2008, Vol. 73, No. 106, at Pages 31442-31448.

Deadline to submit reply comments regarding issues other than broadband availability mapping (BAM) to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding BAM and modifications to the FCC Form 477 data collection. The FCC adopted this FNPRM on March 19, 2008, but did not release the text [81 pages in PDF] until June 12, 2008. It is FCC 08-89 in WC Docket No. 07-38.See, notice in the Federal Register, July 2, 2008, Vol. 73, No. 128, at Pages 37911-37922. See also, story titled "FCC Adopts Order Regarding Broadband Data Collection" in TLJ Daily E-Mail Alert No. 1,734, March 20, 2008.

EXTENDED TO SEPTEMBER 15. Deadline to submit reply comments to the Copyright Office in response to its notice of proposed rulemaking regarding the scope and application of the Section 115 compulsory license to make and distribute phonorecords of a musical work by means of digital phonorecord deliveries. See, original notice in the Federal Register, July 16, 2008, Vol. 73, No. 137, at Page 40802-40813. See also, extension notice in the Federal Register, August 13, 2008, Vol. 73, No. 157, at Pages 47113-47114.

Deadline to submit to the National Telecommunications and Information Administration (NTIA) applications for membership on the NTIA's Commerce Spectrum Management Advisory Committee (CSMAC). The applicable positions have two year terms that commence in in December of 2008. See, notice in the Federal Register, August 1, 2008, Vol. 73, No. 149, at Pages 44972-44973.

Wednesday, September 3

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Rentrop v. Spectranetics, App. Ct. No. 2007-1560. Location: Courtroom 402.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Commonwealth Scientific v. Toshiba, App. Ct. No. 2008-1108. Location: Courtroom 203.

1:00 PM. The Department of Health and Human Services' (DHHS) American Health Information Community's (AHIC) Electronic Health Records Workgroup may meet. AHIC meetings are often noticed, but cancelled. Location: Switzer Building, 330 C St., SW.

Thursday, September 4

8:30 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB) will meet. See, notice in the Federal Register, August 12, 2008, Vol. 73, No. 156, at Pages 46871-46872. Location: George Washington University, Cafritz Conference Center, Room 405, 800 21st St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Ricoh v. Pitney Bowes, App. Ct. No. 2007-1479. Location: Courtroom 402.

3:00 PM. Deadline to submit to the National Institute of Standards and Technology (NIST) proposals for financial assistance under the NIST's Technology Innovation Program (TIP). The NIST states that "Proposals are being sought to create and validate new advanced, robust, network capable, nondestructive evaluation and test sensing systems, or system components, to cost effectively and quantitatively inspect and evaluate the structural integrity of the civil infrastructure." See, notice in the Federal Register, July 15, 2008, Vol. 73, No. 136, at Pages 40507-40511.

Friday, September 5

8:00 AM - 4:30 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB) will meet. See, notice in the Federal Register, August 12, 2008, Vol. 73, No. 156, at Pages 46871-46872. Location: George Washington University, Cafritz Conference Center, Room 405, 800 21st St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Fortunet v. Planet Bingo, App. Ct. No. 2008-1082. Location: Courtroom 402.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its SP 800-106 [17 pages in PDF] titled "Randomized Hashing for Digital Signatures" (2nd draft).

Monday, September 8

The House will return from its August recess.

The Senate will return from its August recess. See, Senate 2008 calendar.

3:30 PM. The U.S. District Court (DC) will hold a settlement conference in Esther Williams v. Universal Music Group, et al., a copyright case, D.C. No. 07-cv-0714. Location: Magistrate Judge Facciola's chambers, 333 Constitution Ave., NW

Tuesday, September 9

9:00 AM. The Bureau of Industry and Security's (BIS) Regulations and Procedures Technical Advisory Committee (RPTAC) will meet. Part of the meeting will be closed to the public. See, notice in the Federal Register, August 21, 2008, Vol. 73, No. 163, at Page 49408. Location: Room 3884, Hoover Building, 14th Street between Constitution and Pennsylvania Avenues, NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in NetworkIP v. FCC, App. Ct. No. 06-1364 and 07-1092. Judges Sentelle, Brown and Kavanaugh will preside. This is petitions for review of a final order of the Federal Communications Commission (FCC) pertaining to payphone compensation. See, FCC's brief [58 pages in PDF]. Location: 333 Constitution Ave., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) in its proceeding titled "In the Matter of Implementation of the NET 911 Improvement Act of 2008". It adopted this item on August 22, and announced it and released the text [34 pages in PDF] on August 25, 2008. This NPRM is FCC 08-195 in WC Docket No. 08-171. See, notice in the Federal Register, August 28, 2008, Vol. 73, No. 168, at Pages 50741-50751.