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Monday, December 31, 2012, Alert No. 2,500.
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Obama Signs Bill to Extend FISA Outside the US Surveillance Authority

12/30. President Obama signed into law HR 5949 [LOC | WW], the "FISA Amendments Act Reauthorization Act of 2012". See, White House news office release.

This Act extends for five years government authority to conduct surveillance related to persons "outside" the US, without individualized court approval. Surveillance of persons "outside of the United States" is a term of art that also enables surveillance of persons inside of the US who fall within the protection of the 4th Amendment.

This warrantless "outside" of the US surveillance authority was enacted as part of HR 6304 [LOC | WW], the "Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2008". It is Public Law No. 110-261. The 2008 Act provided that this "outside" of the US authority sunsets on December 31, 2012. The just signed Act provides that this authority sunsets on December 31, 2017.

The Senate passed this bill on December 28, 2012 by a vote of 73-23. See, Roll Call No 236. See also, story titled "Senate Approves Bill to Extend FISA Outside the US Warrantless Intercept Authority" and related stories in TLJ Daily E-Mail Alert No. 2,499, December 30, 2012.

The House passed this bill on September 12, 2012 by a vote of 301-118. See, Roll Call No. 569.

See also:

  • "Senate Considers Bill To Extend FISA Outside the US Warrantless Wiretap Authority", "House Judiciary Committee Takes Up Bill To Extend FISA Outside the US Warrantless Wiretap Authority", and "Commentary: Warrantless Wiretaps and Senate Secrecy" in TLJ Daily E-Mail Alert No. 2,396, June 14, 2012.
  • "House Judiciary Committee Approves FISA Bill" in TLJ Daily E-Mail Alert No. 2,399, June 19, 2012
  • "House Rules Committee Allows No Amendments to FISA Surveillance Bill" in TLJ Daily E-Mail Alert No. 2,446, September 12, 2012.
Obama Signs Theft of Trade Secrets Clarification Act

12/28. President Obama signed into law S 3642 [LOC | WW], the "Theft of Trade Secrets Clarification Act of 2012". See, White House news office release.

This Act amends the Economic Espionage Act, which is codified at 18 U.S.C. 1832, and which criminalizes theft of trade secrets. It is a response to the April 11, 2012 opinion of the U.S. Court of Appeals (2ndCir) in U.S. v. Aleynikov, App. Ct. No. 11-1126. It clarifies that theft of software source code can constitute a violation of Section 1832.

Sen. Patrick Leahy (D-VT) introduced this bill on November 27, 2012. The Senate passed this bill, by unanimous consent, without debate, on the same day. See, story titled "Senate Passes Theft of Trade Secrets Clarification Act" in TLJ Daily E-Mail Alert No. 2,477, November 28, 2012. The House passed this bill on December 18, 2012. See, story titled "House Passes Theft of Trade Secrets Clarification Act" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012.

SEC to Hold Prehearing Conference in Cases Against PRC Accounting Firms

12/28. On January 9, 2013, the Securities and Exchange Commission (SEC) will hold a prehearing conference in the matters of Deloitte Touche Tohmatsu Certified Public Accountants Ltd. and BDO China Dahua CPA Co., Ltd., et al., Administrative Proceeding Nos. 3-14872 and 3-15116.

On December 3, 2012, the SEC issued an order that initiates an administrative action against the People's Republic of China (PRC) affiliates of five large accounting firms for refusing to produce audit work papers and other documents related to PRC based companies under investigation by the SEC for potential accounting fraud against U.S. investors. The five are:

  • BDO China Dahua CPA Co., Ltd.
  • Ernst & Young Hua Ming LLP
  • KPMG Huazhen (Special General Partnership)
  • Deloitte Touche Tohmatsu Certified Public Accountants Ltd.
  • PricewaterhouseCoopers Zhong Tian CPAs Limited

This is SEC Administrative Proceeding No. 3-15116. See also, story titled "SEC Launches Administrative Action Against PRC Accounting Firms" in TLJ Daily E-Mail Alert No. 2,487, December 10, 2012.

On May 9, 2012, the SEC issued a corrected order that initiates an administrative action against Deloitte Touche Tohmatsu Certified Public Accountants Ltd. That is SEC Administrative Proceeding 3-14872.

SEC Commissioner Luis Aguilar gave a speech on December 3, 2012, in which he addressed this matter. He said that "It is obvious that SEC enforcement staff often need access to audit work papers to investigate possible financial fraud claims. In fact, Section 106 of the Sarbanes-Oxley Act, as amended, requires foreign public accounting firms to provide audit work papers concerning U.S. issuers to the SEC upon request."

Luis AguilarAguilar (at left), continued, "Unfortunately, when we made these requests of audit firms in China, it was an act of futility. As a result, in May of this year, the Commission filed an enforcement action against the Shanghai member firm of a Big Four global accounting network for its refusal to provide the Commission with audit work papers. This particular action related to a China-based company under investigation for potential accounting fraud against U.S. investors."

That action pertains to Deloitte Touche Tohmatsu Certified Public Accountants Ltd. However, the order does not identify the securities issuer being investigated by the SEC. The order references it as "Client A".

The December 3 order does not identify the companies under investigation either. It states that the SEC "has ongoing fraud investigations concerning Clients A, B, C, D, E, F, G, H, and I, each of which is a U.S. issuer whose securities were registered with the Commission and whose principal operations were based in the People's Republic of China."

Aguilar continued that SEC "staff had sought to obtain such documents for more than two years before bringing that action. The Shanghai-based auditor refused to provide the documents, citing Chinese law as the reason for its refusal. Regardless of Chinese law, however, the fact remains that foreign auditors in China and elsewhere have voluntarily registered with the PCAOB and have chosen to perform audit work for U.S.-listed issuers, knowing full well that U.S. investors would be relying on their audit reports and other work product. If these firms are unable or unwilling to comply with U.S. law, the question to ask is whether the companies they audit should be allowed to trade in the U.S. securities markets?"

See also, story titled "SEC Brings Administrative Action Against China Based Software and Consulting Firm" in TLJ Daily E-Mail Alert No. 2,311, November 16, 2011.

DOJ Publishes Second Tunney Act Notice in Apple E-Books Antitrust Case

12/31. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register, as required by the Tunney Act, regarding its settlement with Penguin in its Sherman Act action against Apple and five e-book publishers.

This notice states that public comments are due within "60 days" of December 31. This would be Friday, March 1, 2013. See, FR, Vol. 77, No. 250, December 31, 2012, at Pages 77094-77111.

Previously, Apple and others filed comments vigorously opposing the earlier settlement with three other defendant publishers.

The DOJ filed its complaint on April 11, 2012 alleging that Apple and the five publishers violated of Section 1 of the Sherman Act, 15 U.S.C. 1, by conspiring to increase the prices that consumers pay for e-books. Three publishers (Hachette, HarperCollins, and Simon & Schuster) settled with the DOJ in April, while Apple and two other publishers (Pearson/Penguin and Holtzbrinck/Macmillan) continued to contest the action.

See, "DOJ Sues Apple and Book Publishers Alleging E-Book Price Collusion", "Analysis of DOJ's Sherman Act Claim Against Apple and E-Book Publishers", and related stories in TLJ Daily E-Mail Alert No. 2,368, April 11, 2012.

Under the Tunney Act, 15 U.S.C. 16, these settlements must be published, open for public comment, and then approved by the District Court. The Tunney Act requires that the District Court determine whether the proposed final judgment (PFJ) is "in the public interest", which includes consideration of the "competitive impact of such judgment".

Apple opposed the settlement with Hachette, HarperCollins, and Simon & Schuster, both in the District Court, and in the court of public opinion. See, story titled "Update on DOJ v. Apple eBooks Case" in TLJ Daily E-Mail Alert No. 2,437, August 25, 2012.

Apple lost in the District Court. On September 6, the U.S. District Court (SDNY) released its Opinion and Order [48 pages in PDF] approving the settlement agreement between the DOJ and the three settling publishers. See, story titled "District Court Approves Settlement in Apple E-Books Case" in TLJ Daily E-Mail Alert No. 2,442, September 6, 2012.

On December 18, 2012, the DOJ settled with another publisher defendant, Penguin. The just published notice seeks public comments on this second settlement. See, story titled "DOJ Settles With Penguin in E-Books Antitrust Action" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012.

The District Court's opinion in the first Tunney Act proceeding suggests that if Apple were to contest this second settlement, unless it were to present a new theory, its opposition would be rejected by the District Court.

Now, only Apple and Holtzbrinck Publishers (Macmillan) continue to contest the action. Trial may commence in June of 2013.

This case is U.S. v. Apple, et al., U.S. District Court for the Southern District of New York, D.C. 1:12-cv-02826-DLC, Judge Denise Cote presiding.

District Court in California Enjoins Aereokiller

12/27. The U.S. District Court (CDCal) issued an injunction in Fox v. Aereokiller, ordering defendants to stop streaming the plaintiffs' copyrighted television programming.

The plaintiffs are Fox Television Stations, and other companies that produce and license copyrighted programming for free over the air TV, and for cable and satellite service providers, and for online services such as Hulu and Apple iTunes. The defendants retransmit by online streaming the plaintiffs copyrighted programming, without license.

The plaintiffs claimed copyright infringement, and sought injunctive relief. The defendants relied upon the July 11, 2012, opinion  of the U.S. District Court (SDNY) in WNET v. Aereo.

That case is currently on appeal to the U.S. Court of Appeals (2ndCir). See, story titled "2nd Circuit Hears Oral Argument in Aereo Case" in TLJ Daily E-Mail Alert No. 2,482, December 4, 2012.

However, the USDC/CDCal reached the opposite conclusion in this case involving the same legal claim and similar facts.

This case is Fox Television Stations, Inc., et al. v. Aereokiller, LLC, et al., U.S. District Court for the Central District of California, D.C. No. 2-12:cv-06921-GW, Judge George Wu presiding. This is one of two very similar actions pending in the same court. The other is D.C. No. 2-12:cv-06950.

The two appeals pending in the the 2nd Circuit are CBS Broadcasting, Inc., et al. v. Aereo, Inc., and Fox Television Stations, Inc., et al. v. Aereo, Inc., U.S. Court of Appeals for the 2nd Circuit, App. Ct. Nos. 12-2808 and 12-2786.

In This Issue
This issue contains the following items:
  Obama Signs Bill to Extend FISA Outside the US Surveillance Authority
  Obama Signs Theft of Trade Secrets Clarification Act
  SEC to Hold Prehearing Conference in Cases Against PRC Accounting Firms
  DOJ Publishes Second Tunney Act Notice in Apple E-Books Antitrust Case
  District Court in California Enjoins Aereokiller
  OUSTR Seeks Special 301 Comments on Countries that Deny Adequate IPR Protection
  More IP News
Washington Tech Calendar
New items are highlighted in red.
Tuesday, January 1

New Year's Day. This is a federal holiday. See, OPM list of 2013 federal holidays.

The House is scheduled to meet at 12:00 NOON.

Wednesday, January 2

Deadline to submit oppositions to Motorola Solutions's petition for reconsideration of the FCC's Report and Order regarding certification and use of Terrestrial Trunked Radio (TETRA) technology on certain Part 90 land mobile radio frequencies. This R&O is FCC 12-114 in WT Docket No. 11-69. See also, notice in the Federal Register, Vol. 77, No. 243, December 18, 2012, at Pages 74822-74823.

Thursday, January 3

The House will meet. See, House calendar for 113th Congress, 1st Session.

Friday, January 4

The House will meet. See, House calendar for 113th Congress, 1st Session.

8:30 AM. The Department of Labor's (DOL) Bureau of Labor Statistics (BLS) is scheduled to release its December 2012 unemployment data.

EXTENDED TO FEBRUARY 4. 5:00 PM. Deadline to submit initial comments to the Copyright Office (CO) in response to its notice of inquiry (NOI) titled "Orphan Works and Mass Digitization". See, notice in the Federal Register, Vol. 77, No. 204, October 22, 2012, at Pages 64555-64561. See also, story titled "Copyright Office Issues Notice of Inquiry on Orphan Works" in TLJ Daily E-Mail Alert No. 2,468, November 2, 2012. See, extension notice in the Federal Register, Vol. 77, No. 231, November 30, 2012 at Page 71452.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its December 3, 2012 Public Notice (PN) that seeks comments on the FCC Media Bureau's November 14, 2012 report [121 pages in PDF] regarding regulation of media ownership. The December 3 PN is DA 12-1946. The November 14 report is DA 12-1667. See also, notice in the Federal Register, Vol. 77, No. 237, Monday, December 10, 2012, at Pages 73461-73462, and story titled "Sen. Sanders and Others Urge FCC to Continue Ancient Newspaper Broadcast Cross Ownership Rule" in TLJ Daily E-Mail Alert No. 2,484, December 6, 2012.

Monday, January 7

5:00 PM. Deadline to submit initial comments to the Copyright Office (CO) in response to its notice in the Federal Register regarding its proposed fee schedule for filing cable and satellite statements of account. See, FR, Vol. 77, No. 235, December 6, 2012, at Pages 72788-72791.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [57 pages in PDF] regarding cable TV technical rules. The FCC adopted and released this item on August 3, 2012. It is FCC 12-86 in MB Docket No. 12-217. See, notice in the Federal Register Vol. 77, No. 195, October 9, 2012, at Pages 61351-61375. See also, TLJ story titled "FCC Adopts NPRM Regarding Cable TV Technical Rules" in TLJ Daily E-Mail Alert No. 2,421, August 5, 2012.

Deadline to submit comments to the Department of Commerce's (DOC) Bureau of Industry and Security (BIS) regarding its proposed rules changes pertaining to voluntary self disclosures (VSD) of violations of the Export Administration Regulations (EAR). See, notice in the Federal Register, Vol. 77, No. 216, November 7, 2012, at Pages 66777-66780.

EXTENDED FROM DECEMBER 26. Extended deadline to submit comments to the Federal Communications Commission (FCC) in response to its November 1 Public Notice (PN) seeking updated information and comment on review of hearing aid compatibility regulations. This PN is DA 12-1745 in WT Docket No. 10-254. See also, November 27 extension Public Notice (DA 12-1898) and extension notice in the Federal Register, Vol. 77, No. 234, December 5, 2012, at Pages 72294-72295.

Deadline to submit comments to the Department of Health and Human Services (DHHS) in response to its December 7, 2012 notice in the Federal Register (FR) regarding health information technology. This notice contains interim final changes to the final rule published in the DHHS's September 4, 2012 notice in the FR. See, FR, Vol. 77, No. 236, December 7, 2012, at Pages 72985-72991, and FR, Vol. 77, No. 171, September 4, 2012, at Pages 54163-54292.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) regarding implementation of Phase II of the Mobility Fund, which pertains to universal service fund subsidies for mobile broadband. The FCC released this PN on November 27, 2012. It is DA 12-1853 in WC Docket No. 10-90 and WT Docket No. 10-208.  See, notice in the Federal Register, Vol. 77, No. 238, December 11, 2012, at Pages 73586-73589.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding its proposed consent agreement with Epic Marketplace, Inc. (an online behavioral advertising company) and Epic Media Group, LLC (its parent company). The complaint alleged violation of Section 5 of the FTC Act in connection with Epic's misrepresentation of the web browsing information that it collected. See, notice in the Federal Register, Vol. 77, No. 238, December 11, 2012, at Pages 73655-73657. See also, story titled "FTC Brings Action Against Behavioral Advertising Company for History Sniffing" in TLJ Daily E-Mail Alert No. 2,489, December 12, 2012.

Tuesday, January 8

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "Trademark Search Strategies in Europe, Latin America, Canada, and the U.S.". The speakers will be Matthias Berger (Harmsen Utescher), Katrin Lewertoff (Arent Fox), John McKeown (Cassels Brock & Blackwell), Mariano Municoy (Moeller IP), and Naresh Kilaru (Finnegan Henderson). Prices vary. CLE credits. See, notice.

OUSTR Seeks Special 301 Comments on Countries that Deny Adequate IPR Protection

12/31. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register (FR) that solicits comments to assist it in making Special 301 identifications of countries that deny adequate and effective protection of intellectual property rights (IPR) or deny fair and equitable market access to U.S. persons who rely on intellectual property protection.

Section 182 of the Trade Act of 1974, which is codified at 19 U.S.C. 2242, and which is also known as Special 301, requires the OUSTR to make these identifications.

This notice adds that the OUSTR "requests that interested persons identify those countries that deny adequate and effective protection for intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. USTR further requests that submissions include specific references to laws, regulations, policy statements, executive, presidential or other orders, administrative, court or other determinations, and any other measures relevant to the issues raised in the written submission or hearing testimony."

The OUSTR will also hold a hearing on Wednesday, February 20, 2013 at the OUSTR, 1724 F St., NW.

The deadline for all parties except foreign governments to submit comments, and requests to testify at the February 20, 2013 hearing, is Friday, February 8, 2013.

The deadline for foreign governments to submit comments, and requests to testify, is Friday, February 15, 2013.

See, FR, December 31, 2012, Vol. 77, No. 250, at Pages 77178-77180.

More IP News

12/28. The People's Republic of China's (PRC) Xinhua published a piece titled "Apple Fined for Copyright Violation". It states that "The Beijing No. 2 Intermediate People's Court ordered Apple to pay a total of 1.03 million yuan (165,908 U. S. dollars) to eight Chinese writers and two companies for violating their copyrights." (Parentheses in original.) It adds that the Court held that "Apple violated the plaintiffs' ``right of communication through information networks, an element of China's Copyright Law, by providing apps that contained unlicensed electronic versions of the books".

12/27. The U.S. Court of Appeals (10thCir) issued its opinion in Blehm v. Jacobs, a copyright case involving cartoon characters. The District Court granted summary judgment of non-infringement, on the basis that the works are not substantially similar. The Court of Appeals affirmed. This case is Gary Blehm v. Alberta Jacobs, et al., U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 11-1479, an appeal from the U.S. District Court for the District of Colorado, D.C. No. 1:09-CV-02865-RPM. Judge Matheson wrote the opinion of the Court of Appeals, in which Judges Briscoe and Gorsuch joined.

12/20. The Recording Industry Association of America's (RIAA) Joshua Friedlander wrote a short piece titled "Streaming Music and Investment".

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