3/19. Sen. Patrick Leahy (D-VT) and Sen. Mike Lee (R-UT) introduced S 607 [LOC | WW | PDF], the "Electronic Communications Privacy Act Amendments Act of 2013" a bill to require that the government obtain a court warrant to access the content of e-mail held by a service provider.

Sen. Leahy (at right) said that "the bill requires that the government obtain a search warrant based on probable cause to obtain the content of Americans' email and other electronic communications, when those communications are requested from a third-party service provider." See, Congressional Record, March 19, 2013, at Page S1951.

He added that "the bill requires that the government promptly notify any individual whose email content has been accessed via a third-party service provider, and provide that individual with a copy of the search warrant and other details about the information obtained. The bill permits the government to seek a court order temporarily delaying such notice in order to protect the integrity of ongoing government investigations. In addition, the bill permits the government to ask a court to temporarily preclude a service provider from notifying a customer about the disclosure."

This is a revised version of language adopted by the SJC late in the 112th Congress. The SJC approved a version of HR 2471 [LOC | WW | TLJ], a bill to revise the Video Privacy Protection Act to facilitate practices of social media web sites, with a section that required a warrant for accessing cloud stored e-mail. See, story titled "Senate Judiciary Committee Approves Leahy Bill to Require Warrant for Accessing Cloud Stored E-Mail" in TLJ Daily E-Mail Alert No. 2,479, November 30, 2012. However, the Congress later enacted a version of the bill without the e-mail section.

The just introduced bill provides that "A governmental entity may require the disclosure by a provider of electronic communication service or remote computing service of the contents of a wire or electronic communication that is in electronic storage with or otherwise stored, held, or maintained by the provider only if the governmental entity obtains a warrant issued using the procedures described in the Federal Rules of Criminal Procedure (or, in the case of a State court, issued using State warrant procedures) that is issued by a court of competent jurisdiction directing the disclosure." (Parentheses in original.)

This bill was referred to the Senate Judiciary Committee (SJC). Sen. Leahy is the Chairman. Sen. Lee is a member.

Greg Nojeim of the Center for Democracy and Technology (CDT) stated in a release that "This common sense reform, which has strong support across the political spectrum, would help extend Fourth Amendment rights in the Internet age."

However, the law enforcement agencies that would be required to obtain court approval to access stored e-mail do not Nojeim's enthusiasm for extending 4th Amendment rights. Moreover, many Senators and Representatives often follow the recommendations of these law enforcement officials. For these reasons, this bill is likely to face significant opposition in the Congress.

3/19. Sen. Charles Grassley (R-IA) sent a letter to Michael Horowitz, the Inspector General of the Department of Justice (DOJ), requesting copies of documents of the DOJ's Office of the Inspector General (OIG) regarding Valerie Caproni's involvement in Federal Bureau of Investigation's (FBI) violation of federal laws governing the use of National Security Letters (NSLs) and other surveillance laws.

Sen. Grassley noted that he first requested DOJ OIG documents related to Caproni on January 17, 2013, but that the DOJ OIG has so far refused. In particular, Sen. Grassley seeks the OIG's transcripts of its interviews of Caproni and her assistant, Julie Thomas.

The DOJ OIG released a series of reports in 2007, 2008 and 2010 that found that the FBI engaged in widespread illegal surveillance activities. Caproni was General Counsel of the FBI from 2003 through 2011. She presided over the FBI's Office of General Counsel (OGC) while the FBI engaged in the illegal surveillance activities that the DOJ OIG disclosed in its three reports.

However, these reports did not disclose the extent of Caproni's involvement.

Caproni's involvement is now pertinent, because on November 14, 2012, President Obama nominated her to be a Judge of the U.S. District Court for the Southern District of New York. See, story titled "Obama Nominates Caproni for District Court" in TLJ Daily E-Mail Alert No. 2,474, November 19, 2012.

Obama re-nominated Caproni (at left) in the 113th Congress on January 3, 2013. See, story titled "Obama Re-Nominates 33 for Federal Courts" in TLJ Daily E-Mail Alert No. 2,503, January 3, 2013.

The Senate Judiciary Committee (SJC), of which Sen. Grassley is the ranking Republican, reviews all federal judicial nominees.

Sen. Grassley's letter to Horowitz (at right) states that the refusal to produce documents is "unjustified", and raises questions about the OIG's supposed independence from the DOJ.

Sen. Grassley commented on the OIG's assertion that the documents are "internal DOJ communications". He wrote that "Communications between the agency's counsel and the OIG are emphatically not ``internal.´´"

The DOJ OIG surveillance reports are as follows:

• January 20, 2010 redacted report [306 pages in PDF] titled "A Review of the Federal Bureau of Investigation's Use of Exigent Letters and Other Informal Requests for Telephone Records".,
• March 13, 2008, report [PDF] titled "A Review of the FBI's Use of National Security Letters: Assessment of Corrective Actions and Examination of NSL Usage in 2006".
• March 9, 2007, report [PDF] titled "A Review of the Federal Bureau of Investigation's Use of National Security Letters".

3/15. The Securities and Exchange Commission (SEC) released a staff document titled "IM Guidance Update" and subtitled "Filing Requirements for Certain Electronic Communications". See also, SEC release.

This document states that SEC "staff has received inquiries regarding whether certain interactive content posted in a real-time electronic forum (i.e., chat rooms or other social media) (“interactive content”) should be filed under the filing requirements of Section 24(b) of the Investment Company Act of 1940 (“1940 Act”) or Rule 497 under the Securities Act of 1933 (“1933 Act”) if it is not required to be filed under Financial Industry Regulatory Authority (“FINRA”) Rule 2210." (Parentheses in original. Footnote omitted.)

This document states that "staff believes that certain interactive content need not be filed. Whether a communication need be filed depends on the content, context, and presentation of the particular communication or set of communications and requires an examination of the underlying substantive information transmitted to the social media user and consideration of any other facts and circumstances, such as whether the interactive communication is merely a response to a request or inquiry from the social media user or is forwarding previously-filed content."

3/19. The Securities and Exchange Commission (SEC) instituted an administrative proceeding against Craig Berkman, John B. Kern and various entities that alleges violation of federal securities laws in connection with a fraudulent investment scheme in which Berkman misrepresented to investors that he would acquire pre-IPO shares of Facebook, LinkedIn and other technology companies.

The SEC stated in a release that Berkman "touted to investors that he had special access to scarce sources of pre-IPO stock in Facebook, LinkedIn, Groupon, and Zynga. Instead of purchasing shares on investors’ behalf as promised, Berkman misused their investments to make Ponzi-like payments to earlier investors, fund personal expenses, and pay off claims against him in a bankruptcy case."

Simultaneously, the Office of the U.S. Attorney (OUSA) for the Southern District of New York announced that the arrest of Berkman on March 19, and the filing a sealed criminal complaint [20 pages in PDF] against Berkman in the U.S. District Court (SDNY) on March 15, which was unsealed on March 19. See also, OUSA release.

The SEC's order [15 pages in PDF] instituting the administrative proceeding states that Berkman "raised at least $13.2 million from approximately 120 investors by selling membership interests in limited liability companies ... that Berkman controlled".

The order continues that "Berkman told investors" in several ventures "that their funds would be used to acquire highly coveted, pre-initial public offering ... shares of Facebook, Inc., LinkedIn, Inc., Groupon, Inc., and Zynga Inc. In another offering, Berkman told investors in Face Off Acquisitions that their money would be used either to purchase pre-IPO shares of Facebook or to acquire a company that held pre-IPO Facebook shares. In a third offering, Berkman told investors in Assensus Capital that he would use their money to fund various new, large-scale, technology ventures."

However, "Instead of using the investor funds to acquire pre-IPO shares or fund technology ventures, Berkman misappropriated most of the offering proceeds."

The order adds that Kern is a lawyer for the LLCs and Face Off Acquisitions who "made certain material misstatements to investors that he knew or recklessly disregarded were false and misleading".

The DOJ complaint charges criminal securities fraud in violation of Section 10b of the Securities Exchange Act in violation of 15 U.S.C. §§ 78j(b) and 78ff, and Rule 10b5 thereunder, and wire fraud in violation of 18 U.S.C. §§ 1342 and 1343.

The criminal case is U.S. v. Craig L. Berkman, U.S. District Court for the Southern District of New York, D.C. No. 13 MAG 0732.

3/20. The U.S. District Court (SDNY) granted summary judgment of infringement to the Associated Press in AP v. Meltwater.

This is a victory for businesses that engage in actual news reporting -- those that hire reporters and editors, and write and publish their own stories. Also, to the extent that this opinion does not remove financial incentives to conduct actual news reporting, it will not tend to reduce news reporting. An opinion to the contrary -- allowing news story free riding as fair use -- would have reduced financial incentives to conduct actual reporting, reduced the quantity and quality of news available to the public, and thereby reduced consumer welfare. However, the District Court decided on the basis of the language of the statute, and applicable precedent.

The AP filed its complaint on February 14, 2012 alleging copyright infringement (17 U.S.C. § 106) and hot news misappropriation by Meltwater, which asserted fair use (17 U.S.C. § 107), equitable estoppel, laches and copyright abuse.

The District Court found infringement, and rejected all of Meltwater's affirmative defenses in a 91 page opinion.

Gary Pruitt, P/CEP of AP stated in a release that "This ruling makes it crystal clear that Meltwater wrongly used news content from AP to create its own content, while paying none of the costs associated with creating original news content ... This is an important ruling for AP and others in the news business who work so hard to provide high-quality original news reports on which the public relies."

The AP hires at great expense an army of reporters who engage in the labor intensive and time consuming process of collecting, researching, writing, and editing news stories. It licenses its works for fees. Meltwater does not license from AP. Rather it copies excerpts from AP's works, and sells its product to its own subscribers.

The key issue was whether Meltwater's free riding is protected fair use. Meltwater attempted to portray itself to the District Court as a search engine that provided a transformative use. The District Court rejected the fair use defense.

Meltwater stated in a release on March 21 that it "believes the ruling misapplies the fair use doctrine and is at odds with a variety of prior decisions that have paved the way for today’s Internet. Meltwater is especially troubled by the implications of this decision for other search engines and services that have long relied on the fair use principles for which Meltwater is fighting."

Jorn Lyseggen, CEO of Meltwater, stated in this release that "we look forward to having this decision reviewed by the Court of Appeals, which we are confident will see the case a different way."

On January 17, 2013, the Public Knowledge (PK) and Electronic Frontier Foundation (EFF) filed an amicus curiae brief [16 pages in PDF] in support of Meltwater. See story titled "PK & EFF Argue Fair Use in AP v. Meltwater" in TLJ Daily E-Mail Alert No. 2,514, January 22, 2013.

On February 25, 2013, the New York Times, Gannett, McClatchy, and others filed an amicus curiae brief [27 pages in PDF] in support of the AP.

This case is Associated Press v. Meltwater U.S. Holdings, Inc., et al., U.S. District Court for the Southern District of New York, D.C. 2:12-cv-1087-DLC-FM.

The AP is represented by the law firm of Davis Wright Tremaine. Meltwater is represented by the law firm of Wilson Sonsini.

3/8. The U.S.-China Economic and Security Review Commission released a paper [16 pages in PDF] titled "Staff Report on Monthly Trade Data with China".

This report states that "The U.S. trade deficit in goods with China in January 2013 was $27 billion, $1.7 billion higher than at the same point a year earlier. At this rate, the bilateral trade deficit will set a new record. However, the rise in the U.S. trade deficit with China is slower than a year ago, when the deficit increased by nearly $3 billion in January year-on-year. Exports to China in January grew by 12.1 percent over the previous year, compared to 4.4 percent in 2011- 2012. Even as export growth accelerated, the rise in imports from China dampened."

This report also states that "Computer and electronics products, as well as electrical equipment, exhibited the strongest growth among top U.S. imports from China."

This report includes data on the balance of trade in many categories. There is a huge imbalance in the category of "Information & Communications". For the month of January 2013 the US imported from the PRC $10,790,000,000, and exported to the PRC $336,000,000, for a deficit of $10,454,000,000. This is an increase of about $1.5 Billion from January 2012, when the deficit for this category was $8,400,000,000.

The House will meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule.

The Senate will meet at 9:30 AM. It will resume consideration of SConRes 8, a budget resolution.

8:30 AM - 3:15 PM. The Free State Foundation (FSF) will host an event titled "Fifth Annual Telecom Policy Conference". The keynote speakers will be Sen. Marco Rubio (R-FL) and Ajit Pai (FCC Commissioner). Robert McDowell (FCC Commissioner), Gary Epstein (Chair of the FCC's Incentive Auction Task Force), and William Lake (Chief of the FCC's Media Bureau) will be panelists. The other speakers will be Rebecca Arbogast (Comcast), Jeffrey Campbell (Cisco Systems), Michelle Connolly (Duke University), Steve Davis (CenturyLink), Stacy Fuller (Directv), Donna Gregg (Columbus School of Law), Rick Kaplan (NAB), Steve Largent (CTIA), Blair Levin (Aspen Institute), Daniel Lyons (Boston College Law School), Michael Powell (NCTA), Robert Quinn (AT&T), Gigi Sohn (Public Knowledge), Deborah Tate, Tom Tauke (Verizon), Steven Teplitz (Time Warner Cable), Richard Whitt (Google's Motorola Mobility), and Richard Wiley (Wiley Rein). Location: National Press Club, 13th Floor, 529 14th St., NW.

9:00 AM. The House Foreign Affairs Committee (HFAC) Subcommittee on on Europe, Eurasia, and Emerging Threats will hold a hearing titled "Cyber Attacks: An Unprecedented Threat to U.S. National Security". The witnesses will be Chris Painter (Department of State), Michael Mazz (American Enterprise Institute), Martin Libicki (RAND Corporation), Richard Bejtlich (Mandiant Corporation) and Greg Autry (Coalition for a Prosperous America). See, notice. See also, story titled "Mandiant Releases Report on Cyber Espionage by People's Liberation Army" in TLJ Daily E-Mail Alert No. 2,532, March 7, 2013. Location: Room 2172, Rayburn Building.

9:00 AM. The House Commerce Committee's (HCC) Subcommittee on Oversight and Investigations will hold a hearing titled "Health Information Technologies: Administration Perspectives on Innovation and Regulation". The witnesses will be Farzad Mostashari (Department of Health and Human Services) and Christy Foreman (Food and Drug Administration). See, notice. Location: Room 2322, Rayburn Building.

9:00 AM. The House Intelligence Committee will hold a closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Visitor Center.

10:00 AM. The House Small Business Committee (HSBC) will hold a hearing titled "Protecting Small Businesses Against Emerging and Complex Cyber-Attacks". The witnesses will be William Weber (Cbeyond, testifying on behalf of the COMPTEL), Justin Freeman (Rackspace, testifying on behalf of the Application Developers Alliance), and Phyllis Schneck (McAfee). See, notice. Location: Room 2360, Rayburn Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration of the nominations of Jane Kelly (USCA/8thCir) and Kenneth Gonzales (USDC/DNMex). See, notice. Webcast. Location: Room 226, Dirksen Building.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced presentation titled "Social Media and Local Governments". The speaker will be Julie Tappendorf (Ancel Glink). Prices vary. CLE credits. See, notice.

2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics will host a presentation titled "Switching Costs and Equilibrium Prices". See, paper [PDF] with the same title. The speaker will be the author Luis Cabral (New York University business school). This is an economics paper that does not discuss wireless or other services. However, it is pertinent to policy debates regarding wireless services. For more information, contact Christopher Metcalf at cmetcalf at ftc dot gov or Tammy John at tjohn at ftc dot gov. Location: FTC, 601 New Jersey Ave., NW.

Rep. Cantor's schedule states that no votes are expected in the House.

Supreme Court conference day. See, Supreme Court calendar.

12:00 NOON - 1:00 PM. The American Bar Association (ABA) will host a teleconferenced panel discussion titled "Associates under the New HSR Rules". The speakers will be Jeffrey Ayer (WilmerHale), Kathryn Walsh (FTC Premerger Notification Office), John Ingrassia (Proskauer), and Nadia Murad (Kirkland & Ellis). Free. No CLE credits. See, notice.

2:00 - 3:00 PM. The Brookings Institute will host an event titled "What Lies Ahead for Japan and the United States". Kenichiro Sasae (Ambassador of Japan to the United States) will speak and answer questions. Free. Open to the public. See, notice. Location: Brookings, 1775 Massachusetts Ave., NW.

The House will not meet the week of March 25 through March 29, or the week of April 1 through April 5. The House will return on Tuesday, April 9. See, House calendar for 113th Congress, 1st Session.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Intellectual Property Committee and Video Programming and Distribution Committee will host a brown bag lunch regarding the FCC’s encoding rules for cable and satellite providers. The speakers will be Stephanie Roy (Steptoe & Johnson), Robert Schwartz (Constantine & Cannon), and Paul Glist (Davis Wright & Tremaine). Location: Wiley Rein, 1776 K St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [34 pages in PDF] regarding rates for telecommunications services in prisons. The FCC adopted this NPRM on December 24, 2012, and released the text on December 28. It is FCC 12-167 in WC Docket No. 12-375. See, notice in the Federal Register, Vol. 78, No. 14, January 22, 2013, at Pages 4369-4376.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Apple v. Samsung, App. Ct. No. 2012-1600, an appeal from the U.S. District Court (NDCal) in a patent infringement case involving technology for smart phones and tablets. The District Court case is 11-CV-1846-LHK, Judge Lucy Koh presiding. See also, stories titled "Trial Jury Returns Verdict In Apple v. Samsung" in TLJ Daily E-Mail Alert No. 2,437, August 25, 2012, and "Apple Files Patent Infringement Complaint Against Samsung" in TLJ Daily E-Mail Alert No. 2,222, April 18, 2011. Location: Courtroom 201.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "The iPad for Lawyers: Incorporating Tablet Computing Into Your Practice". Prices vary. CLE credits. See, notice.

4:30 - 6:00 PM. The American Enterprise Institute (AEI) will host an event titled "Arbitration and the Constitution". The speakers will be Lee Otis, Peter Rutledge (University of Georgia School of Law), Paul Bland (Public Justice), James Chen (Brandeis School of Law), and Michael Greve (George Mason University School of Law). See, notice. Location: AEI, 1150 17th St., NW.

6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Why Every Lawyer Should Understand The Basic Concepts Of Enterprise Risk Management (ERM) -- 2013". Prices vary. CLE credits. Registrations and cancellations are due by 12:00 NOON on March 26. See, notice. Location: Bingham McCutchen, 2020 K St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rule Making (NPRM) regarding implementing allocation decisions from the World Radiocommunication Conference held in Geneva in 2007 (WRC-07) regarding spectrum between 108 MHz and 20.2 GHz, and changing service rules for this spectrum. The FCC adopted this NPRM on November 15, 2012, and released the text on November 19. It is FCC 12-140 in ET Docket No. 12-338. See, notice in the Federal Register, Vol. 77, No. 248, December 27, 2012, at Pages 76250-76287.

2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics will host a presentation titled "Monopoly Differential Pricing and Welfare". See, paper [30 pages in PDF] with the same title by Yongmin Chen (University of Colorado at Boulder) and Marius Schwartz. The speaker will be Chen. Differential pricing is employed, for example, when producers of intellectual property based products such as books sell at different prices in different countries or to different classes of consumers. It is the practice that the Supreme Court undermined in its March 19, 2013 opinion [74 pages in PDF] in John Wiley & Sons v. Supap Kirtsaeng. See, story titled "Supreme Court Holds First Sale Doctrine Applies Regardless of Location" in TLJ Daily E-Mail Alert No. 2,536, March 19, 2013. Also, geographically based differential pricing in telecommunications is barred by regulation. For more information, contact Christopher Metcalf at cmetcalf at ftc dot gov or Tammy John at tjohn at ftc dot gov. Location: Room 8089, 1800 M St., NW.

5:30 - 7:30 PM. Deborah Cohn, Commissioner for Trademarks at the U.S. Patent and Trademark Office (USPTO) and Gerard Rogers, Chief Administrative Trademark Judge of the Trademark Trial and Appeal Board, will speak at an event titled "The Trademark Office Speaks". The USPTO states that this is a DC Bar Association event. The DC Bar bars reporters from this event. No webcast. Prices vary. No CLE credits. See, notice. Location: Hotel Monaco, 700 F. St., NW.

3/14. The European Commission (EC) released a report [19 pages in PDF] titled "Trade and Investment Barriers Report 2013". It identifies barriers to investment in the People's Republic of China (PRC), the PRC's national security review mechanism for mergers and acquisitions involving foreign investors, the PRC's barriers in the information security sector based upon regulation on commercial encryption, the PRC's export financing conditions and subsidies, and India's telecoms security clearance requirements and new policy framework on telecoms, among other barriers.

3/14. The White House news office issued a release regarding President Obama's telephone conversation with People's Republic of China (PRC) President Xi Jinping on March 14, 2013. It states that the two discussed "the future of the U.S.-China relationship." This release also states that "President Obama welcomed China's G-20 commitment to move towards a more flexible exchange rate, and he underscored the importance of working together to expand trade and investment opportunities and to address issues such as the protection of intellectual property rights. In this context, the President highlighted the importance of addressing cyber-security threats, which represent a shared challenge."

3/13. The U.S.-China Economic and Security Review Commission released a paper [10 pages in PDF] titled "China's New Income Inequality Reform Plan and Implications for Rebalancing". The author is the USCESRC's Nargiza Salidjanova. This paper states that "China faces an already large and steadily growing gap in income between its urban and rural populations, and between its richest and poorest individuals. This inequality lies at the heart of much of the social unrest in China, and poses significant risks for the new Chinese Communist Party (CCP) leadership as it seeks to maintain a grip on power. The Party and the central government in Beijing have historically relied on strong economic growth to justify their authoritarian rule, but unless the benefits of economic reform are distributed beyond the urban elite, popular dissatisfaction with the Party and the government will grow."

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