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Sunday, July 31, 2011, Alert No. 2,275.
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BEA Reports Sluggish GDP Growth But Jump in Computer Sales

7/29. The Department of Commerce's (DOC) Bureau of Economic Analysis (BEA) released its advance estimate of the U.S. Gross Domestic Product, 2nd Quarter 2011. Overall, growth remains low. However, computer sales grew more rapidly.

The BEA stated that real gross domestic product (GDP) "increased at an annual rate of 1.3 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter) ... In the first quarter, real GDP increased 0.4 percent." (Parentheses in original.)

The BEA termed the change from .4% to 1.3% as "acceleration". It wrote that "The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by a sharp deceleration in personal consumption expenditures."

In addition, the BEA wrote that "Final sales of computers added 0.15 percentage point to the second-quarter change in real GDP after adding 0.08 percentage point to the first-quarter change." See also, story titled "BEA Reports Sluggish Growth in GDP and IT Investment" in TLJ Daily E-Mail Alert No. 2,228, April 28, 2011.

Within the category of "Gross Private Domestic Investment" the category of "Information processing equipment and software" grew from $557.9 Billion in the first quarter (QI) to $571.2 Billion in QII (seasonally adjusted annual rate data).

With the category of "information processing equipment and software", the categories of "Computers and peripheral equipment" grew from $95.6 Billion in QI to $106.2 Billion in QII, and "Software" grew from $265.1 Billion in QI to $270.9 Billion in QII.

9th Circuit Affirms in Dath v. Sony

7/29. The U.S. Court of Appeals (9thCir) issued its brief opinion in Dath v. Sony Computer Entertainment, a copyright infringement case involving computer games in which the Court of Appeals affirmed the District Court's summary judgment for Sony.

The Court of Appeals did not write an opinion. It merely adopted the opinion of the District Court. That opinion addresses at length infringement based upon substantial similarity of works.

Plaintiffs, Jonathan Bissoon-Dath and Jennifer Dath, are the authors of copyrighted works -- two treatments titled "Theseus: A Screenplay Treatment" and "The Adventures of Owen", two screenplays titled "Olympiad Version A" and "Olympiad", and a map.

Defendant Sony Computer Entertainment America sells PlayStation 2 and PlayStation Portable (PSP) video game consoles and related games. Defendant David Jaffe is a Sony employee who developed the game titled "God of War".

The plaintiffs filed a complaint in the U.S. District Court (NDCal) against Sony and Jaffe alleging copyright infringement (based upon substantial similarity), contributory copyright infringement, and unfair business practices in violation of section 17200 of the California Business and Professions Code, in connection with Sony's and Jaffe's alleged use of their works in "God of War".

The District Court granted summary judgment to the defendants, in an opinion that is reported at 694 F. Supp. 2d 1071.

Plaintiffs did not show direct copying. They instead argued substantial similarity. The District Court listed precedents in the 9th Circuit on the issue of substantial similarity, and then compared the plaintiffs' works and the allegedly infringing work. It concluded that "An examination of articulable similarities between the plot, themes, dialogue, mood, settings, pace, characters and sequence of events of God of War and plaintiffs' works reveals far less similarity than would be required to overcome summary judgment, even if plaintiffs had proven access. Plaintiffs have pointed to no persuasive similarity in dialogue or narration that would suggest actual copying."

It wrote that "there is some degree of similarity between the plots at an extremely generalized level", but "No one can own the basic idea for a story. General plot ideas are not protected by copyright law; they remain forever the common property of artistic mankind", particularly "when virtually all of the elements comprising plaintiffs' works are stock elements that have been used in literary and artistic works for years, if not millennia."

This case is Jonathan Bissoon-Dath, et al., v. Sony Computer Entertainment America, Inc., et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 10-15783, an appeal from the U.S. District Court for the Northern District of California, No. C 08-1235 MHP, Judge Marilyn Patel presiding.

Durbin and Conyers Introduce Bills to Permit States to Tax Out of State Internet Retailers

7/29. Rep. Richard Durbin (D-IL), Sen. Tim Johnson (D-SD), and Sen. Jack Reed (D-RI) introduced S 1452 [LOC | WW], the "Main Street Fairness Act" in the Senate on July 29, 2011. Rep. John Conyers (D-MI), Rep. Peter Welch (D-VT), and Rep. Heath Shuler (R-NC) introduced HR 2701 [LOC | WW], the companion bill in the House, on the same day.

This bill would permit states that join a tax cartel to impose taxes on out of state internet retailers, and other direct sellers. Cartel members are those states that sign and meet the requirements of a document titled the "Streamlined Sales and Use Tax Agreement". The Streamline Sales Tax Governing Board drafted this in 2002, and has repeatedly amended it since.

S 1452 was referred to the Senate Finance Committee (SFC). HR 2701 was referred to the House Judiciary Committee (HJC).

The U.S. Supreme Court ruled in Quill v. North Dakota, 504 U.S. 298 (1992), that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons within the jurisdiction. However, the Court added that Congress may extend such authority. Legislation is introduced in every Congress that would give states the authority to impose taxes on distant and out of state direct retailers, including web based retailers. None have been enacted.

For example, in the 111th Congress former Rep. Bill Delahunt (D-MA) introduced HR 5660 [LOC | WW], the "Main Street Fairness Act". S 1452 and HR 2701 borrow much language from HR 5660, but are not identical.

Sen. Richard DurbinSen. Durbin (at right) stated in the Senate that "If you are a small business owner in Peoria or Springfield or Alton, you compete against neighboring businesses down the street and, increasingly, with sellers on the internet. The businesses down the street have to collect the same State sales taxes that you do. But, many internet sellers don't. That means internet sellers have a built-in price advantage. That isn't fair, and it's not a level playing field."  (See, Congressional Record, July 29, 2011, at Page S5073.)

He said that "The Main Street Fairness Act would address that. The bill would give Congressional endorsement to the Streamline Sales and Use Tax Agreement, which 45 States and the District of Columbia created years ago to help make it feasible for businesses selling online to collect State and local sales taxes already owed."

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "E-commerce has enabled businesses to broaden the scope of their activities beyond traditional geographic limitations. Sadly, this bill seeks to re-impose onto e-commerce businesses the very burdens that innovation has enabled them to overcome, and has given them a chance for success. It would even compound their burden by drafting them into service as remote sales tax collectors navigating the web of multiple tax jurisdictions."

"Penalizing businesses for utilizing technology and innovation is not fairness, but merely a shortsighted targeting of new revenue models, while protecting existing business models at the expense of consumers and growth", said Black. "Innovation and entrepreneurship have always been the engines of our economic growth, and it is counterproductive to add to the administrative burdens of small businesses at the very moment we need them to provide jobs and lead our economic recovery."

Sen. Lieberman Introduces Bill to Require Online GPO Publication of Congressionally Mandated Reports

7/25. Sen. Joe Lieberman (D-CT), Sen. Susan Collins (R-ME), and Sen. Tom Coburn (R-OK) introduced S 1411 [LOC | WW], the "Access to Congressionally Mandated Reports Act", a bill to require that when the Congress requires a federal entity to write a report, the Government Printing Office (GPO) must publish that report online, for free, without registration, in a searchable and copyable format.

It provides that "Not later than one year after the date of the enactment of this Act, the Public Printer shall establish and maintain a website accessible by the public that allows the public to obtain electronic copies of all congressionally mandated reports in one place." The Public Printer is the head of the GPO.

Moreover, "The Public Printer may not charge a fee, require registration, or impose any other limitation" upon public access.

Since reports mandated by the Congress are written by executive departments, independent agencies, and the Administrative Office of the U.S. Courts, the bill requires that reports be written  "in an open format that is platform independent, machine readable, and available to the public without restrictions (except the redaction of information described under section 5), including restrictions that would impede the re-use of the information in the reports".

This bill was referred to the Senate Rules Committee.

More Capitol Hill News

7/27. The House Small Business Committee (HSBC) held a hearing titled "Bureaucratic Obstacles for Small Exporters: Is our National Export Strategy Working?". Rep. Sam Graves (R-MO), Chairman of the HSBC, wrote in his opening statement that "One important way to get more small businesses to export is by passing the three pending free trade agreements with Colombia, Panama and South Korea." Suresh Kumar, a political appointee at the Department of Commerce (DOC), wrote in his prepared testimony that "the Obama Administration has encouraged and facilitated SME exports by raising public awareness of export opportunities and available assistance and by directing U.S. export promotion and financing agencies to revamp their services".

7/26. Sen. Amy Klobuchar (D-MN), Sen. Tom Udall (D-NM), and Sen. Jeanne Shaheen (D-NH) introduced S 1419 [LOC | WW], the "Anti-Cash Smuggling Act of 2011", a bill pertaining to the regulation of prepaid or stored value cards. It was referred to the Senate Banking Committee (SBC).

7/26. The House Commerce Committee's (HCC) Subcommittee on Oversight and Investigations held a hearing titled "Cybersecurity: An Overview of Risks to Critical Infrastructure". See, opening statement of Rep. Cliff Stearns (R-FL), opening statement of Rep. Fred Upton (R-MI), prepared testimony of Bobbie Stempfley (acting head of the DHS's Office of Cyber Security and Communications) and Sean McGurk (Director of the DHS's National Cybersecurity and Communications Integration Center), and prepared testimony of Gregory Wilshusen (Government Accountability Office).

In This Issue
This issue contains the following items:
  BEA Reports Sluggish GDP Growth But Jump in Computer Sales
  9th Circuit Affirms in Dath v. Sony
  Durbin and Conyers Introduce Bills to Permit States to Tax Out of State Internet Retailers
  Sen. Lieberman Introduces Bill to Require Online GPO Publication of Congressionally Mandated Reports
  More Capitol Hill News
Washington Tech Calendar
New items are highlighted in red.
Sunday, July 31

The House will meet at 1:00 PM in pro forma session. Rep. Cantor's schedule states that "Members are advised that they should be prepared to return to Washington within a few hours' notice, if necessary, given the critical fiscal and economic situation of the nation".

The Senate will meet at 1:00 PM.

Monday, August 1

10:00 AM. Day three of a three day meeting of the House Judiciary Committee (HJC) to mark up bills. The remaining agenda items include HR 83 [LOC | WW], the "Bullying Prevention and Intervention Act of 2011". See, manager's amendment [5 pages in PDF], and story titled "House Judiciary Committee to Mark Up Data Retention and Bullying Bills" in TLJ Daily E-Mail Alert No. 2,267, July 23, 2011. See, notice. The HJC will webcast this event. Location: Room 2141, Rayburn Building.

TIME? Gary Locke will take the oath of office as Ambassador to the People's Republic of China. Closed. Location?

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-90 A [135 pages in PDF] titled "Recommendation for Random Number Generation Using Deterministic Random Bit Generators".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft NIST IR-7802 [25 pages in PDF] titled "Trust Model for Security Automation Data 1.0".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-126 Rev. 2 [51 pages in PDF] titled "The Technical Specification for the Security Content Automation Protocol (SCAP): SCAP Version 1.2".

Tuesday, August 2

Deadline for the federal government to raise the limit on federal borrowing.

10:00 AM. The House Committee on Foreign Affairs will hold a hearing titled "Why Taiwan Matters". The witnesses will be Kurt Campbell (Assistant Secretary of State for East Asian and Pacific Affairs) and Michael Schiffer (Deputy Assistant Secretary of Defense for East Asia). See, notice. Location: Room 2172, Rayburn Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing. See, notice. Location: Room 219, Hart Building.

Wednesday, August 3

9:00 AM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Materials Processing Equipment Technical Advisory Committee (MPETAC) will hold a partially closed meeting. See, notice in the Federal Register Vol. 76, No. 138, Tuesday, July 19, 2011, at Pages 42678-42679. Location: DOC, Hoover Building, Room 3884,14th Street between Pennsylvania and Constitution Aves., NW.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Cybercrime: Updating the Computer Fraud and Abuse Act to Protect Cyberspace and Combat Emerging Threats". The witnesses will be James Baker (DOJ's Associate Deputy Attorney General) and Pablo Martinez (U.S. Secret Service). See, notice. The SJC will webcast this event. Location Room 226, Dirksen Building.

10:00 AM - 12:00 NOON. The House Science Committee (HSC) will hold a hearing titled "Impacts of the LightSquared Network on Federal Science Activities". See, notice. Location: Room 2318, Rayburn Building.

Thursday, August 4

10:00 AM - 12:00 NOON. The House Intelligence Committee (HIC) will hold a closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration of Steve Six (to be a Judge of the U.S. Court of Appeals for the 10th Circuit) and Morgan Christen (U.S. Court of Appeals for the 9th Circuit), and four District Court nominees: Yvonne Rogers (USDC/NDCal), Richard Andrews (USDC/DDel), Scott Skavdahl (USDC/DWyo), and Sharon Gleason (USDC/DAk). The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing. See, notice. Location: Room 219, Hart Building.

EXTENDED FROM JULY 5. Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) [46 pages in PDF] regarding how its rules and policies could be modified to provide greater economic, market entry, communication adoption opportunities, and incentives for Native Nations. This notice is FCC 11-30 in CG Docket No. 11-41. The FCC adopted it on March 3, 2011, and released the text on March 4, 2011. See, notice in the Federal Register, April 5, 2011, Vol. 76, No. 65, at Pages 18759-18761. See also, extension notice (DA 11-873).

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response its 3rd Further Notice of Proposed Rulemaking (NPRM) [110 pages in PDF] regarding extensive revisions to its Part 11 rules governing the Emergency Alert System (EAS). The FCC adopted this NPRM on May 25, 2011, and released the text on May 26, 2011. It is FCC 11-82 in EB Docket No. 04-296. See, notice in the Federal Register, Vol. 76, No. 118, Monday, June 20, 2011, at Pages 35810-35831.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice regarding whether certain docketed FCC proceedings should be terminated as dormant. See, June 3, 2011, Public Notice (DA 11-992 in CG Docket No. 11-99), and notice in the Federal Register, Vol. 76, No. 118, Monday, June 20, 2011, at Pages 35892-35893.

Friday, August 5

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing on the nominations of Michael Punke (to be Deputy U.S. Trade Representative), Paul Piquado (to be Assistant Secretary of Commerce), and David Johanson (to be a member of the U.S. International Trade Commission). See, notice. Location: Room 215, Dirksen Building.

EXTENDED FROM JULY 8. Deadline to submit comments to the Federal Trade Commission (FTC) in connection with June 21 event titled "Patent Standards Workshop". See, notice in the Federal Register, Vol. 76, No. 93, Friday, May 13, 2011, at Pages 28036-28038, and FTC release of May 9, 2011. See also, story titled "FTC to Hold Workshop on Standard Setting and Patents" in TLJ Daily E-Mail Alert No. 2,242, May 16, 2011. See, FTC's June 29, 2011, extension notice.

Monday, August 8

The House will be in recess until Wednesday, September 7.

EXTENDED TO AUGUST 15. Deadline to submit comments to the Federal Trade Commission (FTC) in response to its notice in the Federal Register regarding the proposed self-regulatory guidelines submitted to the FTC by Aristotle International, Inc. under the safe harbor provision of the Children's Online Privacy Protection Act (COPPA) Rule. See, Federal Register, Vol. 76, No. 123, Monday, June 27, 2011, at Pages 37290-37291. See, notice of extension.

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