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April 14, 2009, Alert No. 1,926.
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Liebowitz Picks Farrell to Lead FTC Bureau of Economics

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named Joseph Farrell Director of the FTC's Bureau of Economics (BOE). He was a professor at UC Berkeley.

He is also a former Chief Economist for the Department of Justice's (DOJ) Antitrust Division, and a former Chief Economist for the Federal Communications Commission (FCC).

He has also consulted for Charles River Associates. See, FTC bio. The CRA web site states that "Our roots lie in US antitrust law. Since our work on behalf of IBM in the 1970s, we have worked on many of the most important government and private antitrust suits on record, including IBM, Kodak, Microsoft, Visa-Mastercard, and Weyerhaeuser".

The CRA also states that "Our staff and senior consultants have been involved in computer industry matters before competition authorities around the world, among them: the US Department of Justice, the US Federal Trade Commission, the European Commission, and the competition authorities of EU member states."

The CRA adds that "Our clients include television broadcasters and networks, cable operators and program services, telephone service suppliers, international communications carriers, Internet service providers, providers of wireless services, and regulatory agencies at all levels."

Farrell is the co-author, with Carl Shapiro (UC Berkeley), of the 2008 paper [PDF] titled "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition".

They wrote in this paper that "Under current antitrust policy, the government can establish a presumption that a proposed horizontal merger will harm competition by defining the relevant market and showing that the merger will lead to a substantial increase in concentration in that market. However, this approach can perform poorly in markets for differentiated products, where market boundaries are unclear and the proximity of the products sold by the merging firms is a key determinant of the merger's effect on competition. Our test looks for upward pricing pressure (UPP) resulting from the merger."

They wrote that the current method of analysis does not work well for "computer hardware and software, and information content (magazines, newspapers, music, video programming)". (Parentheses in original.)

For example, "When Amazon.com teamed up with Borders on-line, was the relevant market on-line book retailing or all book retailing?"

Recently, the FTC floundered in federal court when it attempted to defend its argument that there is such a market as "premium natural and organic supermarkets". See, story titled "DC Circuit Reverses in FTC v. Whole Foods" in TLJ Daily E-Mail Alert No. 1,802, July 29, 2008. (On November 21, 2008, the Court of Appeals issued a revised opinion [65 pages in PDF].)

Similarly, the DOJ failed in its attempt to block the merger of Oracle and PeopleSoft, when the District Court rejected its market definition. See, stories titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004, and "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

Farrell is also the co-author, with Philip Weiser, of the 2003 paper [56 pages in PDF] titled "Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age".

Former FCC Chairman Michael Powell discussed this paper in a 2004 speech [6 pages in PDF]. See, story titled "Powell Opposes Regulations to Impose Broadband Network Neutrality" in TLJ Daily E-Mail Alert No. 833, February 10, 2004.

Farrell is also one for four co-authors of the 2007 paper titled "Standard Setting, Patents, and Hold-Up". It discusses, among other things, the FTC's 2006 order that concluded that Rambus violated antitrust law.

They wrote that economic analysis suggests that "efficiency, including efficient rewards for innovation, may be well served by antitrust enforcement that goes beyond an enforcement mechanism for SSO rules."

However, on April 22, 2008, the U.S. Court of Appeals (DCCir) issued its opinion [24 pages in PDF] setting aside the FTC's order concluding that Rambus violated Section 2 of the Sherman Act and Section 5 of the FTC Act.

Farrell is also the co-author, with Tim Simcoe (University of Toronto), of the 2009 paper [PDF] titled "Choosing the Rules for Consensus Standardization".

See also, story titled "FTC Writes Rules to Bolster Power of Antitrust Regulators" in TLJ Daily E-Mail Alert No. 1,882, January 13, 2009.

Liebowitz Picks Feinstein to Lead FTC Bureau of Competition

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named Richard Feinstein Director of the FTC's Bureau of Competition (BOC), which enforces antitrust laws. See, FTC release.

His area of expertise is antitrust matters involving health care and pharmaceuticals.

He was a partner in the law firm of Boies Schiller & Flexner. He was Assistant Director of the BOC from October 1998 to June 2001. Before that, he worked for the law firm of McKenna & Cuneo, now McKenna Long. And before that, he worked for the Department of Justice's (DOJ) Antitrust Division.

Liebowitz Picks DeSanti to Lead FTC Office of Policy Planning

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named Susan DeSanti Director of Policy Planning at the FTC. She worked at the FTC for 15 years, including as head of the Office of Policy Planning, before joining the Washington DC office of the law firm of Sonnenschein Nath & Rosenthal.

While at the FTC she was involved in drafting the FTC's 2003 report [PDF] titled "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy". See, story titled "FTC Releases Report on Competition and Patent Law" in TLJ Daily E-Mail Alert No. 768, October 29, 2003.

She was also involved in the drafting of the April 2000 guidelines [PDF] titled "Antitrust Guidelines for Collaborations among Competitors". She stated on November 14, 2000, that "I will work at MacDonalds before I work on another guidelines". See, transcript and TLJ Daily E-Mail Alert No. 21, November 15, 2000.

More FTC Appointments

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named David Vladeck Director of the FTC's Bureau of Consumer Protection (BCP). He was a professor at Georgetown University Law Center. Before that, he was a long time employee of the Public Citizen Litigation Group. See, FTC release.

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named Joni Lupovitz his Chief of Staff. She has worked at the FTC since 1999, most recently as an attorney advisor to Liebowitz. Previously, she worked for the law firm of McDermott Will & Emery. See, FTC release.

4/14. Federal Trade Commission (FTC) Chairman Jonathan Liebowitz named Jeanne Bumpus Director of the FTC's Office of Congressional Relations. She has held this position since 2006. Before that she worked for Sen. John McCain (R-AZ), former Sen. Slade Gordon (R-WA), and the Senate Commerce Committee (SCC). Before coming to Washington DC, she worked in the Seattle office of the law firm of Davis Wright Tremaine. See, FTC release.

Courts of Appeals Address Reliance Upon Government Databases

4/13. Two federal appeals courts issued opinions in obscure cases regarding government reliance upon information in government databases, without according the individuals whose rights are thereby affected the opportunity to challenge the veracity of the information in the databases. One individual prevailed on appeal, and the other lost.

Unlike the 9th Circuit's recent opinion in Humphries v. County of Los Angeles, where individuals brought a due process challenge to the government's refusal to establish a procedure for challenging erroneous information, these two cases involve individuals who did not seek to have the databases corrected. Rather, they challenged the courts' reliance upon data, without being afforded the opportunity to contest the veracity of that data. In US v. Felix, the Court of Appeals held that the government could rely upon data in a database without proving its veracity, while in Nyari v. Napolitano, the Court of Appeals held that it could not.

Felix Case. On April 13, the U.S. Court of Appeals (9thCir) issued its opinion [19 pages in PDF] in USA v. Felix, a criminal case in which the issue on appeal was sentencing. He pled guilty to one count of importation of methamphetamine.

The District Court admitted at his sentencing hearing a "computer printout" that listed a prior conviction of the defendant. The government produced no court record in corroboration of the "computer printout". A government probation officer testified that the original court file had been destroyed. The defendant challenged the veracity of the listing. He argued that there was an earlier criminal case, but that it had been dismissed. The District Court's reliance upon this "computer printout" caused it to impose a sentence of imprisonment.

The Court of Appeals held that the Federal Rules of Evidence, and due process procedures that apply during trial, do not apply in sentencing. The District Court may increase the sentence of a man based upon its reliance upon a "computer printout".

This case is USA v. Joe Raymond Felix, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 07-50173, an appeal from the U.S. District Court for the Southern District of California, D.C. No. 06CR1610-MJL, Judge James Lorenz presiding. Judge Consuelo Callahan wrote the opinion of the Court of Appeals, in which Judge Cynthia Hall and Barry Silverman joined.

Nyari Case. Also on April 13, the U.S. Court of Appeals (8thCir) issued its opinion [10 pages in PDF] in Nyari v. Napolitano, an appeal from a denial of an application for naturalization.

That is, Gyorgy Nyari, a resident of the U.S. since 1983, wants to become a U.S. citizen. The relevant naturalization statute requires that the applicant be "a person of good moral character". The former Immigration and Naturalization Service (INS) denied his application, on moral character grounds, because of his inclusion in a civil database of the state of Virginia.

The District Court dismissed his complaint, on cross motions for summary judgment, on the basis of the database entry, without considering the affidavits of the three persons with personal knowledge. All three swore that the database entry was erroneous.

Rule 56, Federal Rules of Civil Procedure, provides that summary judgment is appropriate only if the affidavits "show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law".

The Court of Appeals reversed. It held that the District Court erred in granting summary judgment to the government. It wrote that the affidavits "create a genuine issue of material fact" within the meaning of Rule 56. It added that the District Court was correct in denying Nyari's motion for summary judgment.

The case is remanded to the District Court.

This case is Gyorgy Nyari v. Janet Napolitano, et al., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 08-1406, an appeal from the U.S. District Court for the District of Minnesota. Judge Smith wrote the opinion of the Court of Appeals, in which Judges Melloy and Bowman joined.

Humphries Case. California maintained an electronic database, which the Court of Appeals wrote has a "high error rate", "perhaps as high as fifty percent". The state also required certain government agencies and private sector entities to rely upon this database. The state provided no recourse to individuals wrongfully listed in this database. They were allowed no opportunity to have their information corrected.

The opinion [53 pages in PDF] in Humphries stands as authority for the proposition that when the government creates and maintains an electronic database with individually identifiable information, and also mandates that various government and private sector parties access and rely upon information in this database in issuing licenses, permitting employment, or allowing the exercise of certain rights, then the individuals listed in that database have a due process right to challenge information in that database.

See also, story titled "9th Circuit Holds Government Database With No Redress Process Violates Due Process" in TLJ Daily E-Mail Alert No. 1,895, February 9, 2009.

This case is Craig and Wendy Humphries v. County of Los Angeles, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 05-56467, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-03-00697-JVS, Judge James Selna presiding. Judge Jay Bybee wrote the opinion of the Court of Appeals, in which Judges Milan Smith and Richard Mills (USDC/CDIL) joined.

What Shakespeare Had to Say About Government Databases. The playwright, William Shakespeare, addressed this issue in one of his history plays, Henry VI, Part 2.

The character Jack Cade explains why he is leading an armed rebellion against the government: "Is not this a lamentable thing, ... that parchment, being scribbled o'er, should undo a man?"

This statement is accompanied by two more frequently quoted lines: "let's kill all the lawyers" and "burn all the records of the realm".

In This Issue
This issue contains the following items:
  Liebowitz Picks Farrell to Lead FTC Bureau of Economics
  Liebowitz Picks Feinstein to Lead FTC Bureau of Competition
  Liebowitz Picks DeSanti to Lead FTC Office of Policy Planning
  More FTC Appointments (David Vladeck for BCP, Joni Lupovitz for COS, and Jeanne Bumpus for OCR)
  Courts of Appeals Address Reliance Upon Government Databases
Washington Tech Calendar
New items are highlighted in red.
Tuesday, April 14

The House will not meet the week of April 6-10 or 13-17. It will next meet at 2:00 PM on April 21, 2009. See, HConRes 93.

The Senate will not meet the week of April 6-10 or 13-17. It will next meet on April 20, 2009, at 2:00 PM, at which time it may begin consideration of S 386 [LOC | WW], the "Fraud Enforcement and Recovery Act".

12:00 NOON - 2:00 PM. The DC Bar Association will host a closed event titled "Posters, Pictures and Portraits: Hot Issues Involving Copyrights in Images". The speakers will include James Astrachan (Astrachan Gunst & Thomas) and Victor Perlman (American Society of Media Photographers). The price to attend ranges from $25 to $50. See, notice. For more information, call 202-626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

2:00 - 3:30 PM. The Department of Justice's (DOJ) Antitrust Division will host a seminar conducted by Catherine de Fontenay (University of Melbourne) on her paper, co-authored with Joshua Gans, titled "Bilateral Bargaining with Externalities". This is a game theoretical paper about bargaining between agents in a network, including patent holders' negotiations with several potential licensors. To request permission to attend, contact Patrick Greenlee at 202-307-3745 or atr dot eag at usdoj dot gov. Location: Bicentennial Building, 600 E St., NW.

Wednesday, April 15

9:00 AM. The Center for Democracy and Technology (CDT) will host a news briefing regarding "civil liberties challenges associated with national cybersecurity policy". The CDT will address recently introduced cyber security legislation, and the Obama administration's recently announced review. See, S 773 [LOC | WW], the "Cybersecurity Act of 2009", and S 778 [LOC | WW], an untitled bill to establish an Office of the National Cybersecurity Advisor in the Executive Office of the President, both introduced by Sen. Jay Rockefeller (D-WV) on April 1, 2009. See also, stories titled "Obama Administration Announces Review of Cyber and Communications Security" and "Obama Names Kundra Chief Information Officer" in TLJ Daily E-Mail Alert No. 1,909, March 5, 2009. The speakers will be the CDT's Leslie Harris and Greg Nojeim. A light breakfast will be served. The CDT will also teleconference this event. The participant call in number is 1-800-377-8846; the participant code is 92 87 41 58#. RSVP to Brock Meeks at brock at cdt dot org. Location: CDT, 11th floor, 1634 I St., NW.

12:00 NOON - 1:30 PM. The Disruptive Women in Health Care (DWINC) will host a panel discussion titled "Health eGaming, Healthy Patients". The topic is the use of video games to inform patients about health topics, such as diabetes, nutrition, and weight loss. The speakers will include former Rep. Nancy Johnson (R-CT). Lunch will be served. RSVP to 202-263-2926. Location: Room B339, Rayburn Building, Capitol Hill.

Thursday, April 16

2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics will host an untitled seminar by Ken Hendricks (University of Texas). He is an economist who has written extensively about competition, collusion, mergers, the Hirschmann Herfindahl Index (HHI), the computational bilateral oligopoly (CBO) model, and government merger reviews. See, paper [PDF] titled "Evaluating the Likely Effects of Horizontal and Vertical Mergers". He has also written about product discovery in the market for recorded music. See, paper [PDF] titled "Information and the Skewness of Music Sales". Location: FTC, New Jersey Ave. Building, Room 4100.

Friday, April 17

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in NCTA v. FCC, App. Ct. No. 08-1016 and 08-1017. Judges Tatel, Garland and Silberman will preside. This is the challenge by the NCTA and apartment owners to the FCC's MDU order, that asserts regulatory authority over the content of contracts negotiated by owners of multiple dwelling units (MDUs), such as apartment buildings, and cable companies. The FCC asserted authority under Subsection 628(b) of the Communications Act, which is codified at 47 U.S.C. 548(b). The order, adopted on October 31, 2007, is FCC 07-189 in MB Docket No. 07-51. See, stories titled "FCC Adopts R&O Abrogating Contracts Between MDU Owners and Cable Companies" and "Commentary on FCC's R&O Regarding MDU Owners and Cable Companies" in TLJ Daily E-Mail Alert No. 1,669, November 5, 2007. See, FCC's brief [68 pages in PDF]. Location: Courtroom 11, 333 Constitution Ave.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Alvin Lou Media, Inc. v. FCC, App. Ct. No. 08-1067. Judges Ginsburg, Rogers and Kavanaugh will preside. See, FCC's brief [80 pages in PDF]. Location: 333 Constitution Ave.

Deadline to submit initial comments to the The Federal Communications Commission (FCC) in response to its Public Notice [4 pages in PDF] regarding its implementation of Subsections 103(b) and 103(c)(1) of the Broadband Data Improvement Act (BDIA). President Bush signed S 1492 [LOC | WW], the BDIA, into law on October 10, 2008. It is now Public Law No. 110-385.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking [25 pages in PDF] regarding extending until June 30, 2010, the freeze of Part 36 category relationships and jurisdictional cost allocation factors used in jurisdictional separations. This freeze is set to expire on June 30, 2009. This NPRM is FCC 09-24 in CC Docket No. 80-286. See, notice in the Federal Register, April 3, 2009, Vol. 74, No. 63, at Pages 15236-15239.

Monday, April 20

The House will not meet.

12:00 NOON - 2:00 PM. The Federal Communications Bar Association's (FCBA) Intellectual Property and Legislative Practice Committees, and the DC Chapter of the Copyright Society of the U.S.A. will host a brown bag lunch titled "Communications and Copyright in the 111th Congress". The FCBA has a history of excluding persons from its lunches. Location: NCTA, 25 Massachusetts Ave., NW.

6:00 - 9:15 PM. The DC Bar Association will host the first part of a three part series titled "Preserving Intellectual Property Rights in Goverment Contracts". The speakers will include David Bloch (Winston & Strawn), Richard Gray (Department of Defense), John Lucas (Department of Energy), and James McEwen (Stein McEwen). The price to attend ranges from $89 to $129 per part, or $169 to $299 for the series. See, notice. This event qualifies for continuing legal education credits. The DC Bar Association has a history of excluding persons from its events. For more information, call 202-626-3488. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

Tuesday, April 21

The House will return from its two week Easter District Work Period.

8:00 AM - 3:30 PM. The Motion Picture Association of America (MPAA) will host an event titled "American Creativity at Work". For more information, contact 202-378-9118.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Verizon Washington DC v. Communications Workers of America, App. Ct. No. 08-7092. Judges Ginsburg, Rogers and Kavanaugh will preside. Location: 333 Constitution Ave.

10:00 AM - 12:00 NOON. The Heritage Foundation will host an event titled "The Taiwan Relations Act's Enduring Legacy on Capitol Hill". The speakers will include Rep. Shelley Berkley (D-NV). See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

2:00 - 3:30 PM. The Department of Justice's (DOJ) Antitrust Division will host a seminar conducted by Matt Osborne (DOJ) on his paper titled "Consumer Inventory Behavior, Price Sensitivity and Its Implications for Price Elasticities and Consumer Welfare". To request permission to attend, contact Patrick Greenlee at 202-307-3745 or atr dot eag at usdoj dot gov. Location: Bicentennial Building, 600 E St., NW.

2:00 - 3:30 PM. The Information Technology and Innovation Foundation (ITIF) will host a panel discussion titled "Copyright, Content and Class Action Lawsuits: A Debate on the Google Book Search Settlement". Location: Room LJ 162, Thomas Jefferson Building, Library of Congress, Independence Ave., NW.

2:00 - 4:00 PM. The Department of State's (DOS) Advisory Committee on International Economic Policy (ACIEP) will meet. See, notice in the Federal Register, March 30, 2009, Vol. 74, No. 59, at Page 14181. Location: DOS, Room 1107, 2201 C St., NW.

Deadline to submit initial comments to the Copyright Office (CO) and the U.S. Patent and Trademark Office (USPTO) in response to their notice of inquiry (NOI) regarding facilitating access to copyrighted works for blind or disabled people. See, notice in the Federal Register, March 26, 2009, Vol. 74, No. 57, at Pages 13268-13270.

More People and Appointments

4/13. Linda Thomsen returned to the law firm of Davis Polk & Wardell (DPW) as a partner in its Washington DC office. She was previously head of the Securities and Exchange Commission's (SEC) Division of Enforcement (DOE). During her employment in the DOE, the SEC aggressively pursued Martha Stewart and Mark Cuban, but not Bernard Madoff. See, DPW release.

4/11. Judith Krug died. She was Director of the Office of Intellectual Freedom at the American Library Association (ALA). See, ALA release.

More News

4/14. eBay announced in a release that it "plans to separate Skype from the company, beginning with an initial public offering that is intended to be completed in the first half of 2010. Specific timing of the IPO will be based on market conditions".

4/13. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (April 13, 2009) of, amendments to its Manual of Regulations and Procedures for Federal Radio Frequency Management, or NTIA Manual. See, Federal Register, April 13, 2009, Vol. 74, No. 69, at Pages 16795-16796.

4/13. The U.S. Court of Appeals (DCCir) issued another opinion [8 pages in PDF] in Sturdza v. UAE, a long running case involving claims of copyright infringement. Although, the present opinion only addresses the issue of appointment of a guardian ad litem. This case is Elena Sturdza v. United Arab Emirates, et al., U.S. Court of Appeals for the District of Columbia, App. Ct. Nos. 00-7279, 06-7061, and 06-7069, appeals from the U.S. District Court for the District of Columbia, D.C. No. 98cv02051.

4/13. The U.S. Court of Appeals (8thCir) issued its opinion in USA v. Rodebaugh, affirming the convictions of three persons for using a telephone to facilitate a controlled substance offense in violation of 21 U.S.C. 843(b). This case is U.S.A. v. Rodney Keith Rodebaugh, Bruce Allen Johnson, and Eugene Rodney Rodebaugh, U.S. Court of Appeals for the 8th Circuit, App. Ct. Nos. 08-1546, No. 08-1581, and 08-1675, appeals from the U.S. District Court for the Western District of Missouri.

3/31. The Federal Bureau of Investigations' (FBI) Internet Crime Complaint Center released an annual report [28 pages in PDF] titled "2008 Internet Crime Report". It states that complaints increased 33% from 2007 to 2008.

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