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News, records, and analysis of legislation, litigation, and regulation affecting the computer, internet, communications and information technology sectors

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News Briefs from February 1-5, 2001
2/5. Don Evans was sworn in as the new Secretary of Commerce. President Bush stated at the event that "Don shares with me a conviction that open trade is a powerful force for good in the world.  In all our dealings abroad, we must stand for free markets and for the principles of democracy." Sec. Evans stated that "Bush has a vision for America. It is a vision where our e-commerce entrepreneurs are free from excessive regulation, so that they can dream and build. We look forward to leading the administration's e-commerce efforts, by our activities at NTIA, at NIST, at PTO, EDA, MBDA." Evans concluded that "Our e-commerce leaders can make plans secure in the knowledge that we will provide guidelines with certainty. Our economic team can implement your economic policy with data that is reliable and certain. Our trading partners can know we will enforce our trade agreements with certainty." See, transcript.
2/5. Joshua Paul joined the New York City office of the law firm of Morgan, Lewis & Bockius as a partner in the Intellectual Property Practice Group. He was previously a partner at Cowan Leibowitz & Latman in New York City. He focuses on litigation and counseling of trademark/brand identity, unfair competition, Internet advertising, e-commerce and related IP matters. See, release.
2/5. President Bush announced his intention to nominate Mark Weinberger as Assistant Secretary of Treasury for Tax Policy. The Office of Tax Policy has in the past been involved in many high tech issues, including depreciation schedules for computer equipment, the research and development tax credit, capital gains treatment of investments in venture capital partnerships, taxation of Internet sales, and the foreign sales corporation regime. However, President Bush's proposed $1.6 Trillion across the board tax cut may be a higher priority. Weinberger is presently the Director of National Tax Practice at Ernst & Young in Washington DC. See, release.
2/5. Rep. Billy Tauzin (R-LA), Chairman of the House Commerce Committee, named several more committee and subcommittee staff members. Will Nordwind will be counsel to the Telecom Subcommittee, which has jurisdiction over many high tech related bills. He most recently served as legislative director and counsel to Rep. Fred Upton (R-MI). He has also worked as legislative director and counsel to Rep. Deborah Pryce (R-OH), and as an attorney at the Washington DC law and lobbying firm of O'Connor & Hannan.
2/5. Patrick Morrisey will be deputy staff director and policy coordinator for the House Commerce Committee. Morrisey has been one of the committee's health policy counsel, and has worked on medical records privacy legislation. Last year Morrisey unsuccessfully sought the Republican nomination for the New Jersey 7th District, which had been represented by former Rep. Bob Frank (R-NJ), who made an unsuccessful bid for the Senate. Morrisey has also worked for former Rep. Dan Frisa (R-NY), and for the NRCC.
2/5. Ramsen Betfarhad will be counsel to the House Subcommittee on Commerce, Trade and Consumer Protection. Betfarhad previously was counsel and economic advisor to former House Commerce Committee Chairman Tom Bliley (R-VA). He has also worked on telecom policy at the American Enterprise Institute, at the FTC's Bureau of Competition, and at the law firm of Pillsbury, Madison & Sutro.
2/5. Greg Rohde, former head of the National Telecommunications and Information Administration (NTIA), will become the head of, a new consulting firm targeting New Economy clients. He does not yet have a title, and the firm will not disclose its clients. Rohde ran the NTIA for just over one year at the end of the Clinton administration. He was active on spectrum management issues, particularly, identifying and re-allocating spectrum for use by Third Generation (3G) wireless technology. Prior to that he was telecom counsel to Sen. Byron Dorgan (D-ND), who is a member of the Senate Commerce Committee, and its Communications Subcommittee. Copernicus is a subsidiary of the Dutko Group Companies, a major Washington DC lobbying and public relations firm.
2/5. WTO Director General Michael Moore gave a speech in Canberra Australia in which he once again advocated that "We urgently need a new round of trade negotiations."
2/5. The U.S. Court of Appeals (4th Cir.) issued its opinion in Karl Storz Endoscopy v. Fiber Tech Medical an action for trademark infringement and false designation of origin under 32(1)(a) and 43(a) of the Lanham Trade-Mark Act, 15 U.S.C. 1114(1)(a) and 1125(a).
2/5. The U.S. Court of Appeals (5th Cir) issued its opinion in Statoil v. HeereMac, an oil industry case regarding the application of U.S. antitrust laws to foreign conduct. The court construed the Foreign Trade Antitrust Improvements Act (FTAIA). The court held that since the plaintiff's injury did not arise from domestic anticompetitive effect, the district court properly dismissed the plaintiff's antitrust claims.
2/5. The USITC released its annual report [110 pages in PDF] for FY 1999.
2/2. The FDA and USPS arrested Steven Tondre in Rancho Palos Verdes, California, for using the Internet to market and sell an unapproved potion that he claimed could cure AIDS, treat arthritis and prevent aging. Tondre operates a web site which promotes his drug, "EXP," and himself, the "Expeditor." Law enforcement tests found that EXP is water. The arrest was for introduction of a misbranded drug into interstate commerce and introduction of an unapproved drug into interstate commerce, both of which are violations of the United States Food, Drug and Cosmetic Act. The Expeditor will be arraigned in U.S. District Court (CDCal) on February 26. See, USAO release.
2/2. The U.S. Court of Appeals (5thCir) issued its opinion in Veeck v. SBCCI, an Internet copyright infringement case. Veeck published in his web site copyrighted model building codes written by SBBCI that had been incorporated into law by reference by various local governments. The Appeals Court, following both precedent and policy arguments, held that a copyrighted work does not lose it protection when adopted into law. Judge Weiner wrote for the three judge panel; Stewart joined. USDC Judge White wrote a lengthy dissent. See, TLJ story.
2/2. Microsoft and the DOJ and state AGs filed a Joint Proposal for the Format of Oral Argument with the U.S. Court of Appeals (DCCir). The parties agreed that each side should be allowed 45 minutes to argue the tying issue, and another 45 minutes to argue the monopoly maintenance issue, on Feb. 26. They also agreed that each side should be allowed 15 minutes to argue the attempted monopolization issue, and 30 minutes to argue the remedies issue, on Feb. 27. Finally, they agree that issues regarding the conduct of trial, and judicial improprieties by Judge Jackson, should be considered on written submissions. Richard Urowsky and Steven Holley will argue for Microsoft. Jeffrey Minear, John Roberts, and David Frederick will argue for the governments. See also, PDF copy.
2/2. The ICANN published another advisory regarding the litigation between (RCOM) and Verio that is pending in the U.S. District Court (SDNY), and Verio's complaint filed with the ICANN on Dec. 21, seeking termination of RCOM's accreditation. The advisory summarizes two items recently submitted to the ICANN: RCOM's response to Verio's petition to terminate is accreditation (Jan. 26), and VeriSign's report on its investigation (Jan. 30). Background: On Dec. 8 the Court granted RCOM's motion for a preliminary injunction against Verio enjoining it from accessing RCOM's Whois database to target its customers with unsolicited commercial e-mail, direct mail and telemarketing activity. RCOM, based in New York City, provides domain name registration services. See, RCOM release. Verio, based in Englewood Colorado, is a wholly owned subsidiary of NTT Communications. It provides a web hosting, high speed Internet access, VPNs, and e-commerce products. On Dec. 21 it submitted to ICANN a Petition that requests that ICANN terminate its accreditation agreement with RCOM.
2/2. The U.S. Court of Appeals (DCCir) issued its opinion in WorldCom v. FCC. WorldCom, AT&T, Time Warner Telecom, and other long distance providers sought review of the FCC's Pricing Flexibility Order, which grants local exchange carriers (LECs) immediate pricing flexibility for some interstate access services and establishes procedures through which LECs may seek substantial additional relief from existing price cap regulation. LECs intervened in support of the FCC. The Court upheld the FCC order.
2/2. The USTR published in the Federal Register a notice and request for comments pertaining to the WTO dispute settlement proceeding regarding  110(5)(B) of the U.S. Copyright Act. A WTO Dispute Settle Body has found the statute is inconsistent with U.S. treaty obligations under the TRIPs Agreement. Comments are due by Feb. 26, 2001.
2/2. The NASDAQ halted trading in the stock of Critical Path, a California corporation, based in San Francisco, that provides Internet messaging infrastructure. The company's stock price has plummeted from a high of over $119 in March 2000 to just over $10. Reuters reported that Critical Path "is probing its accounting practices and has put its president on leave." Now, a flock of class action securities lawyers has descended.
2/2. Two individuals named Bill Reynolds and David Miller filed a complaint [PDF] in U.S. District Court (NDCal) against Critical Path and two of its officers, William Rinehart and David Thatcher, alleging violation of federal securities laws. The Plaintiffs, who are represented by the law firm of Milberg Weiss and other firms, seek class action status. The single count complaint alleges violation of 10b of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Milberg Weiss is a law firm that specializes in bring securities class action suits against technology companies when their stock prices drop. See also, MW release.
2/2. An individual named Fred Kessler filed a complaint [PDF] in U.S. District Court (NDCal) against Critical Path, David Thatcher and William Rinehart, alleging violation of federal securities laws. The plaintiff, who seeks class action status, is represented by the law firm of Shalov Stone & Bonner. He too alleges 10b and 10b-5 violations.
2/2. More firms rushed to file complaints. See:
  complaint filed by Weiss & Yourman, which in addition names CEO Douglas Hickey and Chairman David Hayden as defendants, and adds a 20 claim.
  complaint filed by Wolf Haldenstein, which in addition names PriceWaterhouseCoopers as a defendant.
  complaint [PDF] filed by Berman DeValerio & Pease, which also names CFO Mark Rubash. It alleges violations of 10b, 10b-5 and 20.
2/1. The Senate Commerce Committee announced assignments to its Communications Subcommittee: Conrad Burns (R-MT) (Chairman), Ernest Hollings (D-SC) (Ranking Democrat), Ted Stevens (R-AK), Trent Lott (R-MS), Kay Hutchison (R-TX), Olympia Snowe (R-ME), Sam Brownback (R-KS), Gordon Smith (R-OR), Peter Fitzgerald (R-IL), John Ensign (R-NV), George Allen (R-VA), Daniel Inouye (D-HI), John Kerry (D-MA), John Breaux (D-LA), Jay Rockefeller (D-WV), Byron Dorgan (D-ND), Ron Wyden (R-OR), Max Cleland (D-GA), Barbara Boxer (D-CA), and John Edwards (D-SC). Smith, Fitzgerald, Ensign, Boxer, and Edwards are new to the subcommittee. See, release.
2/1. The U.S. Court of Appeals (2ndCir) issued its opinion in ICOM Holdings v. MCI Worldcom. The Court affirmed the District Court's dismissal of ICOM's complaint. It held that state-law breach of contract claims premised on the defendant's failure to install high-speed telecommunications circuits for the purpose of providing the plaintiff with local access telecommunication service are preempted by the federal Communications Act and barred by the filed-rate doctrine.
2/1. Charles Nathan is joining Latham & Watkins as a partner in its New York office. He will head the New York mergers and acquisitions group. He was formerly Managing Director of Smith Barney, and partner at Fried Frank. See, release.
2/1. The Senate confirmed John Ashcroft to be Attorney General by a vote of 58 to 42. This completes the confirmation of all of President Bush's cabinet. In addition, Robert Zoellick is soon likely to be easily confirmed as the next USTR on Tuesday, Feb. 6.
2/1. The FTC sent a letter [PDF] to the Children's Advertising Review Unit (CARU) of the Council of Better Business Bureaus, informing it that its application to serve as a safe harbor program for the purpose of implementing the Children's Online Privacy Protection Rule has been approved by the FTC. This is the first Children's Online Privacy Protection Act (COPPA) safe harbor application to be approved by the FTC. See also, FTC release. Congress passed the COPPA in late 1998 to require that web site operators that collect personally identifiable information from children first obtain parental consent. The FTC still has pending safe harbor applications from ESRB Privacy Online,, and TRUSTe. See also, the FTC's COPPA Safe Harbor web page.
2/1. The U.S. Attorney's Office (NDCal) and IRS filed a criminal complaint and supporting affidavit [37 pages in PDF] against Shaw Roohparvar and Ron Roohparvar alleging violation 18 U.S.C. 371, to avoid the currency transaction reporting requirements of 31 U.S.C. 5324, and conspiring, in violation of 18 U.S.C. 1956(h), to launder proceeds of sales in interstate commerce of stolen computer components. The affidavit states that the defendants purchased stolen computer components made by Cisco and Netro, knowing that they were stolen, sold them across state lines, and then laundered the proceeds. The components were stolen from inside Cisco and Netro facilities by janitors, and from a Cisco parking lot. The investigation was conducted by a task force of local, state, and federal law enforcement agencies named the Rapid Enforcement Allied Computer Team (REACT). Asst. U.S. Atty. Joseph Sullivan will prosecute the case. See also, USAO release.
2/1. Sen. Charles Grassley (R-IA) introduced S 234, a bill to repeal the excise tax on telephone and other communications services. The bill was referred to the Finance Committee, which Sen. Grassley chairs. The bill is named the Help Eliminate the Levy on Locution Act. HELLO?
2/1. The amendments to the Hart Scott Rodino Act went into effect. The HSR amendments bill was passed late last year by the Congress, and signed by the President on Dec. 21. It amended the Hart Scott Rodino Act to, among other things, increase the size-of-transaction threshold to $50 Million.
2/1. The FTC issued a Notice of Proposed Rulemaking (NPRM) regarding amendments to its premerger notification rules that require the parties to certain mergers and acquisitions to file reports with the FTC and the Antitrust Division of the Department of Justice and to wait a specified period of time before consummating such transactions. The proposed rule changes include updating examples in  801.4, 801.14, 801.90 and 802.8; amending   801.15 to reflect the $50 million threshold and give proper reference to other rules sections; modifying  802.2 to remove an exemption for associated agricultural assets; revising  802.6(b) regarding federal regulatory approval; restructuring and revising  802.50 and 802.51 to clarify and refocus exemptions for acquisitions of foreign assets and voting securities; and amending the example to  802.52 to correctly cite restructured  802.50.The FTC seeks comments on these proposed rule changes. Comments must be received on or before March 19, 2001. See also, interim rules with request for comment.
2/1. ITD filed a complaint in U.S. District Court (DNJ) against Terra Lycos.
2/1. The USPTO extended the time period for submitting comments regarding the standard for declaring a patent interference to February 28. In its original notice in the Federal Register of Dec. 20, 2000, the USPTO requested comments by Jan. 31, 2000. On Feb. 1, 2001, the USPTO published a second notice in the Federal Register extending the deadline to Feb. 28, 2001. See, Federal Register, Feb. 1, 2001, Vol. 66, No. 22, at Page 8571
2/1. The NCTA promoted David Pierce (Director of Public Affairs) and Rick Cimerman (Director of State Telecommunications Policy) to the position of Senior Director. See, release.
2/1. Howard Waltzman is set to become the new communications counsel for the House Commerce Committee. Justin Lilley held the position in the 106th Congress; he now works for News Corp.
2/1. Art Brodsky, who was an assistant to Greg Rohde at the NTIA, will join Simon Strategies on Feb. 5.

Go to News Briefs from Jan. 21-31, 2001.

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