3/18. Securities and Exchange Commission (SEC) Commissioner Luis Aguilar gave a speech in Washington DC in which he advocated greater use of information technology by the SEC for "surveillance" purposes, and advocated expanding the SEC's powers.

Aguilar (at left) said that "the SEC must make better use of technology to assist its staff in keeping pace with the tremendous growth in the financial sector."

He explained that "Monitoring market activity for manipulation, insider trading, and other misconduct has become much more difficult over the past several years because the location of trading activity is fragmented, trading in the securities markets has become increasingly intermediated, and trading activity has shifted from regulated markets to unregulated markets -- the appropriately named ``dark pools´´ are such an example. These changes are layered on top of an enormous increase in the volume of trading activity."

He also argued that the SEC should revise its "rules for electronic recordkeeping and reporting so we can receive more uniform detailed information about market activity. This information should feed into state-of-the-art surveillance and analysis programs, manned by appropriately trained staff, to monitor for quantitative signals of possible misconduct."

He also advocated use of technology for "market surveillance". He continued that "Although SROs perform some surveillance, the SEC cannot outsource its responsibilities. The SEC's oversight responsibilities cover SROs themselves, and are broader than that of any particular SRO. The SEC's collection and processing of market information capabilities should reflect these responsibilities.

He also argued for broadly expanding the power of the SEC. He wants a larger budget for the SEC.

He also wants the SEC to be able to set its own budget, and collect its own revenues, rather than rely on the Congressional appropriations process.

Few government entities have such authority. This would enable the SEC to increase its budget. It would also remove the primary mechanism for direction and oversight of the SEC by the democratically elected Congress and President.

Finally, Aguilar said that the SEC should have authority to bring criminal prosecutions.

The SEC already has civil and administrative enforcement authority. Moreover, there are criminal prosecutions for violation of federal securities laws. However, as with most federal regulatory regimes, criminal enforcement authority resides with the Department of Justice (DOJ).

Aguilar did not ask for legislative Powers.

3/17. Discovery Communications filed a complaint [101 pages in PDF] in U.S. District Court (DDel) against Amazon alleging infringement of its U.S. Patent No. 7,298,851 titled "Electronic book security and copyright protection system".

The complaint alleges that the infringing activities include the "manufacture, use, importation, sale, and/or offer for sale of products, including but not limited to the Kindle and Kindle 2, and the inducement of others to do the same".

Joseph LaSala, Discovery Communications' General Counsel, stated in a release that "The Kindle and Kindle 2 are important and popular content delivery systems. We believe they infringe our intellectual property rights, and that we are entitled to fair compensation. Legal action is not something Discovery takes lightly. Our tradition as an inventive company has produced considerable intellectual property assets for our shareholders, and today's infringement litigation is part of our effort to protect and defend those assets."

See also, Amazon's Kindle 2 web page.

This case is Discovery Communications, Inc. v. Amazon.com, Inc., U.S. District Court for the District of Delaware.

3/17. The Electronic Privacy Information Center (EPIC) submitted a document [PDF] to the Federal Trade Commission (FTC) titled "Complaint and Request for Injunction, Request for Investigation and for Other Relief". The EPIC captions this proceeding as "In the Matter of Google, Inc. and Cloud Computing Services".

The EPIC alleges in this complaint that "Google does not adequately safeguard the confidential information that it obtains" and that the FTC should "open an investigation into Google's Cloud Computing Services".

This complaint addresses Google, but not other cloud computing services providers (CCSPs).

The EPIC wants the FTC to "determine the adequacy of the privacy and security safeguards, to assess the representations made by the firm regarding these services, to determine whether the firm has engaged in unfair and/or deceptive trade practices, and to take any such measures as are necessary, including to enjoin Google from offering such services until safeguards are verifiably established."

The EPIC also wants the FTC to require Google to "revise its Terms of Service with respect to Cloud Computing Services, including but not limited to Gmail, Google Docs, Google Desktop, Picasa, and Google Calendar, so as to make clear the company’s ongoing, affirmative obligations to safeguard the security and privacy of the data that it obtains."

It also wants the FTC to "Compel Google to contribute $5,000,0000 to a public fund that will help support research concerning privacy enhancing technologies, including encryption, effective data anonymization, and mobile location privacy." [$5,000,0000 in original.]

The EPIC asserts that the FTC has authority to conduct this investigation, and to impose remedies, under Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45(a).

The EPIC complaint addresses threats to privacy resulting from cloud computing security safeguards. The EPIC does not in this complaint discuss threats to privacy resulting from law enforcement and intelligence entity activities under color of law, including obtaining remotely stored data from CCSPs, obtaining transactional data from CCSPs, mandating data retention by CCSPs, or requiring that CCSPs design their systems to facilitate government access to data.

The FTC can in its discretion act upon, or ignore, this complaint. However, the EPIC has a track record of obtaining agency action in privacy related matters.

For example, it filed a complaint [PDF] on July 26, 2001, and an updated complaint [PDF] on August 15, 2001, regarding Microsoft's Passport and other software and services. The FTC acted upon the EPIC's complaints. On August 8, 2002, the FTC brought and settled an administrative complaint against Microsoft.

See, stories titled "EPIC Complains about Microsoft Passport" in TLJ Daily E-Mail Alert No. 250, August 16, 2001; "EPIC Seeks Government Investigations of Microsoft's Passport" in TLJ Daily E-Mail Alert No. 357, January 30, 2002; "EPIC Complains to FTC About Windows XP" in TLJ Daily E-Mail Alert No. 236, July 27, 2002; "FTC Files and Settles Complaint Against Microsoft" in TLJ Daily E-Mail Alert No. 488, August 9, 2002; and "EPIC Comments on FTC's Proposed Consent Order Affecting Microsoft's Privacy Practices" in TLJ Daily E-Mail Alert No. 505, September 10, 2002.

As another example, the EPIC filed the petition for rulemaking with the Federal Communications Commission (FCC) on August 30, 2005, that resulted in the FCC's 2007 customer proprietary network information (CPNI) order [101 pages in PDF]. It is FCC 07-22 in CC Docket No. 96-115 and WC Docket No. 04-36. See also, story titled "FCC Adopts NPRM Regarding Privacy of Consumer Phone Records" in TLJ Daily E-Mail Alert No. 1,308, February 13, 2006.

3/19. The U.S. Court of Appeals (1stCir) issued its opinion in Situation Management Systems v. ASP Consulting, a copyright case involving training manuals. The issues in this appeal are substantial similarity, copyrightable subject matter, and the exclusion from copyright protection for processes and systems. The Court of Appeals vacated the District Court's judgment of non-infringement.

Background. Situation Management Systems, Inc. (SMS) has provided consulting services since the 1970s directed at improving employee communication and negotiation skills within the workplace.

It wrote training materials, which it sells to its customers, that teach effective communication and negotiation techniques. It has registered these with the Copyright Office.

ASP Consulting began competing with SMS in 2003. It hired former SMS employees who worked on developing the training materials. ASP also produced training materials which it sells to its customers.

SMS filed a complaint in U.S. District Court (DMass) against ASP alleging infringement of three of its copyrighted training books. The District Court found that ASP copied from SMS's works, but nevertheless entered judgment of noninfringement. It found little verbatim copying, and wrote that "the works at issue are so dominated by nonprotectable material that it is impossible to reduce the work to a copyrightable essence or structure".

The District Court denied ASP's request for attorneys fees.

Statute. 17 U.S.C. § 102 addresses "Subject matter of copyright".

Subsection 102(a) provides in part that "Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device."

Subsection 102(b) provides in full that "In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."

Court of Appeals. Both sides appealed. SMS appealed the judgment of non-infringement. ASP appealed the denial of attorneys fees. The Court of Appeals vacated and remanded.

The Court of Appeals wrote that there are two elements to copyright infringement: ownership of a valid copyright, and copying of constituent elements of the work that are original. The Court noted that ownership of a valid copyright is not in dispute in this case.

It next wrote that second prong involves two components: first, the plaintiff must show that the defendant actually copied the work as a factual matter; second, the plaintiff must show that the defendant's copying of the copyrighted material was so extensive that it rendered the infringing and copyrighted works substantially similar. The Court noted that actual copying is not in dispute in this case. Hence, the issue is substantial similarity.

"If such a small amount of the plaintiff's work is copied that the two works cannot be said to be substantially similar, then no infringement results." The Court added, "That the copying involved only a small portion of the plaintiff's work does not by itself make the copying permissible."

"As a result, de minimis copying is best viewed not as a separate defense to copyright infringement but rather as a statement regarding the strength of the plaintiff's proof of substantial similarity."

Then, "After identifying the aspects of the plaintiff's work that are protected by copyright, substantial similarity is assessed by comparing the protected elements of the plaintiff's work as a whole against the defendant's work."

The Court of Appeals, applying these principles, concluded that the District Court erred as to what is protected by copyright, and this caused it to err in assessing substantial similarity.

Original works are protected. Moreover, the "originality requirement for copyright protection is not particularly rigorous". The Supreme Court held in its 1991 opinion in Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, that it merely need be "independently created" and possess a "minimal degree of creativity".

Originality "merely means that the author did not himself copy his work from another source". Also, a work's "entitlement to copyright protection does not depend in any way upon the court's subjective assessment of its creative worth".

The Court of Appeals held that the District misapplied the originality requirement by treating it as a functional equivalent of patent law's novelty standard, which it is not.

It added that the District Court's "originality analysis was obviously tainted by its own subjective assessment of the works' creative worth. Its assessment of originality displayed nothing but pejorative disdain for the value of SMS's works."

The Court of Appeals then applied these standards, and concluded that SMS's works easily satisfy the originality requirement, as well as the minimal degree of creativity requirement, for copyright protection.

The Court of Appeals then addressed Subsection 102(b). The Court wrote, citing Feist Publications, that the idea expression dichotomy is the most fundamental axiom of copyright law, and assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work.

Applying this to the present case, the Court wrote that "to the extent that SMS's works teach a process or system for effective communication and negotiation, others may freely describe that process or system by using their own original expression. But others may not appropriate SMS's expression when describing that process or system."

It concluded that ASP did not merely describe SMS process or system, it copied SMS's original expression. The District Court erred because it applied Subsection 102(b) and the idea expression dichotomy as though they precluded protection of expression that describes a process or system.

It emphasized that "The fact that SMS's works describe processes or systems does not make their expression noncopyrightable." (Underlying in original.)

The Court of Appeals also wrote that "original selection and arrangement of noncopyrightable elements is itself copyrightable".

Hence, the Court vacated and remanded for further proceedings consistent with this opinion. It did not address the attorneys fees issue.

This case is Situation Management Systems, Inc. v. ASP Consulting LLC, et al., U.S. Court of Appeals for the 1st Circuit, App. Ct. Nos. 08-1543 and 08-1585, an appeal from the U.S. District Court for the District of Massachusetts, Judge William Young presiding. Judge Lynch wrote the opinion of the Court of Appeals, in which Judges Torruella and Boudin joined.

This issue contains the following items:
 • SEC Commissioner Advocates Expansion of SEC Authority and IT Based Surveillance
 • Discovery Communications Alleges Amazon's Kindle Infringes Patent
 • EPIC Files Complaint With FTC Against Google
 • 1st Circuit Addresses Copyrightable Subject Matter

The House will not meet.

The Senate will not meet.

12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will hold a brown bag lunch titled "Roundtable discussion with FCC and NTIA Technical Offices". The speakers will be Edward Davison (Deputy Chief of the NTIA's Office of Spectrum Management), Julius Knapp (Chief of the FCC's Office of Engineering and Technology), Karl Nebbia (Chief of the NTIA's OSM), and Ronald Repasi (Deputy Chief of the FCC's OET). For more information, contact Christy Hammond at 202-719-7365 or chammond at wileyrein dot com. Location: Wiley Rein, 10th floor, 1750 K St., NW.

1:00 - 2:30 PM. The Center for American Progress (CAP) will host a panel discussion titled "Opening Doors: Finding the Keys to Open Government". The speakers will be Ari Schwartz (Center for Democracy and Technology), Patrice McDermott, Dan Chenok, Katherine McFate, and Beth Noveck (New York law school). See, notice. Location: CAP, 10th floor, 1333 H St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding competitive bidding procedures for Auction 79. This is proceeding is AU Docket No. 09-21 (122 FM broadcast construction permits). See, February 27, 2009, Public Notice (DA 09-422), and notice in the Federal Register, March 11, 2009, Vol. 74, No. 46, at Pages 10578-10581.

The House will meet at 12:30 PM.

The Senate will meet at 2:00 PM.

TIME CHANGE. 9:00 AM - 1:30 PM. The New America Foundation (NAF) and the CTIA will host an event titled "The Wireless Future of Health IT". The speakers may include Craig Barrett (Intel), Thomas Kalil (Associate Director for Policy, White House Officer for Science and Technology Policy), Vince Kuraitis (Better Health Technologies), Max Stachura (Medical College of Georgia), Paul Meyer (Voxiva, Inc.), Douglas McClure (Center for Connected Health Care), Carolyn Brandon (CTIA), Julie Barnes (NAF), and Michael Calabrese (NAF). Lunch will be served. See, NAF notice. Location: Room G-106 Dirksen Building, Capitol Hill.

9:30 - 11:00 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Do or Die for the Doha Trade Talks". The speakers will be Claude Barfield (AEI), Aaditya Mattoo (World Bank), Christopher Padilla (C&M International), Robert Vastine (Coalition of Service Industries), and Philip Levy (AEI). See, notice. Location: AEI, 1150 17th St., NW.

10:00 AM. The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will hold the third in a series of four meetings regarding the broadband grant programs created by HR 1 [LOC | WW], the huge spending bill enacted in February, which programs are also known as the Broadband Technology Opportunities Program (BTOP). See, notice in the Federal Register, March 12, 2009, Vol. 74, No. 47, at Pages 10716-10721. Location: Department of Commerce, 1401 Constitution Ave., NW.

11:00 AM. The Copyright Alliance (CA) will host a teleconferenced media briefing on the Federal Trade Commission's (FTC) town hall meeting in Seattle, Washington on March 25 titled "Digital Rights Management Technologies". See, FTC's event web site. Patrick Ross, head of the CA, and a panelist at the FTC meeting, will speak. For more information about this media briefing, contact Gayle Osterberg at 202-548-0133 or gayle at 133publicaffairs dot com.

12:00 NOON. The Cato Institute will host an event titled "Tax Havens Should be Celebrated, Not Persecuted". The speakers will be Daniel Mitchell, author of book [Amazon] titled "Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It", and Richard Rahn, a former member of the Cayman Islands Monetary Authority. See, notice. Location: Room B-340, Rayburn Building, Capitol Hill.

2:00 - 4:00 PM. The American Enterprise Institute (AEI) will host a panel discussion titled "Libel Tourism and the First Amendment". The speakers will be Floyd Abrams (Cahill Gordon & Reindel), Bruce Brown (Baker Hostetler), Daniel Kornstein (Kornstein Veisz Wexler & Pollard) Mark Zauderer (Flemming Zulack Williamson Zauderer), Rachel Ehrenfeld (US victim of UK's libel law), and Richard Perle (AEI). See, notice. Location: AEI, 1150 17th St., NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Morris Communications, Inc v. FCC, App. Ct. No. 08-1080. Judges Ginsburg, Henderson and Kavanaugh will preside. See, FCC's brief [158 pages in PDF] states that the issue is whether the FCC "reasonably denied Morris's request to waive the agency's installment payment rules and reinstate Morris's radio licenses after those licenses canceled automatically upon Morris's failure to make full and timely installment payments ..." Location: 333 Constitution Ave., NW.

9:30 - 11:00 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Trade Versus Security". The speakers will be Christine McDaniel (USITC), Stewart Baker (Center for Strategic and International Studies), David Hummels (Purdue University), and Philip Levy (AEI). See, notice. Location: AEI, 1150 17th St., NW.

10:00 AM. The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will hold the fourth in a series of four meetings regarding the broadband grant programs created by HR 1 [LOC | WW], the huge spending bill enacted in February, which programs are also known as the Broadband Technology Opportunities Program (BTOP). See, notice in the Federal Register, March 12, 2009, Vol. 74, No. 47, at Pages 10716-10721. Location: Department of Commerce, 1401 Constitution Ave., NW.

2:00 PM. The House Ways and Means Committee's (HWMC) Subcommittee on Trade will hold a hearing titled "Hearing on Trade Aspects of Climate Change Legislation". See, notice. Location: Room 1100, Longworth Building.

8:15 AM -5:00 PM. The U.S.-China Economic and Security Review Commission will hold a meeting titled "China's Industrial Policy and its Impact on U.S. Companies, Workers and the American Economy". At 2:00 - 3:30 PM there will be a panel titled "China's Telecommunications and Information Technology (IT) Industries". At 3:45 - 5:15 PM there will be a panel titled "China's Nanotechnology and Optoelectronics Industries". See, agenda. Location: Room 236, Russell Building, Capitol Hill.

Deadline to submit reply comments to the Federal Communications Commission's (FCC) Media Bureau in response to the petitions for declaratory rulings of the Alliance for Community Media (ACM) and others regarding carriage of public, educational and governmental (PEG) channels. See, order [PDF] setting deadlines.

9:00 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Office of Law Enforcement Standards' (OLES) will hold a meeting to bring Project 25 Compliance Assessment Program stakeholders together to discuss what the process will be to assess software based test tools for the Project 25 Compliance Assessment Program. See, notice in the Federal Register, February 17, 2009, Vol. 74, No. 30, at Pages 7397-7398. This meeting will occur via teleconference and at the National Telecommunications and Information Administration's (NTIA) Institute for Telecommunication Sciences (ITS) in Boulder, Colorado.

9:30 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Oversight of the Federal Bureau of Investigation". The witness will be FBI Director Robert Mueller. See, notice. The SJC will webcast this event. Location: Room 216, Hart Building.

10:00 AM. The House Science Committee (HSC) will meet to mark up two bills, including HR 1850 [LOC | WW], the "Electronic Waste Research and Development Act". Location: Room 2318, Rayburn Building.

10:00 AM. The Senate Homeland Security and Governmental Affairs Committee (SHSGAC) will hold a hearing on the nomination of Jane Lute to be Deputy Secretary of the Department of Homeland Security (DHS). See, notice. Location: Room 342, Dirksen Building.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding the development of a rural broadband strategy, as required by the 2008 farm bill. This proceeding is GN Docket No. 09-29. See, FCC public notice, DA 09-561.

10:00 AM. The House Education and Labor Committee (HELC) will hold a hearing titled "The Economic and Employment Impact of the Arts and Music Industry". Location: Room 2175, Rayburn Building.

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) Wireline Practice Committee will host an event titled "CLE Seminar on Dial N for Numbering: Understanding the Role of Numbers and Numbering Policy in Modern Communications". See, notice and agenda. Location: Sidley Austin, 1501 K St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) to assist it in preparing a report to the Congress on the status of competition in markets for the delivery of video programming. The FCC engaged in the legal fiction of adopting a Notice of Inquiry (NOI) on November 27, 2007. It did not release the text [41 pages in PDF] of a NOI until January 16, 2009. It is FCC 07-207 in MB Docket 07-269. This NOI requests comments regarding "changes in the marketplace between 2006 and 2007". See, notice in the Federal Register, February 11, 2009, Volume 74, No. 27, at Pages 6875-6882.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its draft [209 pages in PDF] of Special Publication 800-53, Revision 3, titled "Recommended Security Controls for Federal Information Systems and Organizations".

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