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News Briefs from March 16-20, 2001

3/20. Ronald Dick was appointed to be Deputy Assistant Director of the FBI's National Infrastructure and Computer Intrusion Program and Director of the FBI's National Infrastructure Protection Center. See, release.
3/20. The Business Software Alliance (BSA) named Richard Smith to be its UK Chairperson for 2001. He is director of PR and corporate communications for Symantec. He replaces Anne Smith of Adobe. See, release.
3/20. The Multnomah County Public Library (Portland Oregon area) and other plaintiffs filed a complaint [PDF] in U.S. District Court (EDPa) against the U.S. and other defendants challenging the constitutionality of the Children's Internet Protection Act (CIPA). The CIPA requires schools and libraries receiving e-rate subsidies to use pormography filtering technology on Internet access computers used by children. The lead counsel for the plaintiffs the ACLU. However, other attorneys include the EPIC, the law firm of Proskauer Rose, and others. The complaint asserts that the statute is unconstitutional on a variety of grounds. First, the complaint alleges that it "violates the First Amendment to the United States Constitution because it prevents plaintiffs from communicating and accessing constitutionally protected speech." The complaint also alleges that the CIPA "imposes a prior restraint in violation of the First Amendment ... because it provides for and induces suppression of speech without any judicial determination that the speech is unprotected by law." The complaint also alleges that the CIPA is void for overbreadth and vagueness. The plaintiffs seek a declaration that the statute is unconstitutional, and an injunction against its enforcement. The complaint also seeks an award of atttorney's fees. 11 attorneys' names are listed on the complaint. See also, ACLU release.
3/20. The American Library Association and others filed a separate complaint [PDF] challenging the constitutionality of the CIPA. These plaintiffs are represented by People for the American Way and the law firm Jenner & Block. "It's bad enough for government to intrude on the important decision-making authority of parents and individuals, but it should deeply concern us that a private software company that is not accountable to the public would be making decisions behind closed doors that could end up limiting our First Amendment rights," said Elliot Mincberg, Legal Director of PFAW. See, PFAW release. This complaint also alleges violation of the First Amendment, and seeks a declaration that the statute is unconstitutional, and an injunction against its enforcement. It also seeks attorneys fees. 8 attorneys are listed on this complaint.
Sponsors and backers of the CIPA defended the statute. Supporters on Capitol Hill held a press conference. "We're providing $3 Billion a year in federal tax money for computers and Internet access in schools and libraries," said Rep. Ernest Istook (R-OK). "Common sense says they should do their best to weed out the things that aren't right for kids." See, Istook release. The American Center for Law and Justice said that it would file briefs on behalf of Members of Congress. See, ACLJ release. See also, Family Research Council release.
3/20. Michael Ventimiglia entered a guilty plea to a one count felony information in U.S. District Court (MDFl) charging him with intentionally damaging a protected computer in violation of 18 U.S.C. § 1030(a)(5)(A). Ventimiglia entered the GTE Network Service Support Center in Tampa, Florida, where he worked, and entered commands into three computers which caused the computers to delete information stored on hard disk drives. The damage to GTE was at least $209,000. See, DOJ release.
3/20. The Cato Institute hosted a panel discussion titled Should the Government Regulate Online Privacy. Cato is a libertarian think tank, and the panelists criticized most proposals for government regulation of online privacy. The panelists were John Palafoutas (American Electronics Association), Mark Unacapher (ITAA), and James Harper ( and Clyde Crews of Cato moderated.
John Palafoutas stated that the AEA supports the adoption of federal preemption legislation. "We can't have 50 state laws governing privacy. And the way things are going on at the state level, that is one of our biggest concerns." He also advocated more education on the issue. "We have not adequately educated Members of Congress," said Palafoutas. "Members of Congress today are not surfing the net every day. They don't know what a cookie is, other than an Oreo. They don't know about new technologies that are out there. They are not focusing on this the same way the industry is. ... We have a lot of ignorance and a lot of confusion about it." He also predicted that Congress will pass legislation.
James Harper made the theoretical argument that privacy, like happiness, is a personal condition, that cannot be legislated by government. "The way to protect privacy is to distribute these decisions to those who are affected by them most." He said that the government should stop undermining people's ability to protect their information, and create circumstances in which people can protect their privacy, through enforcement of contracts, and tort litigation. Harper also argued that federal preemption legislation is unnecessary. State statutes pertaining to online privacy are unconstitutional under the Dormant Commerce Clause. However, he conceded that no cases have yet held this.
3/20. Rep. John Dingell (D-MI), the ranking Democrat on the House Commerce Committee, released a statement on medical privacy regulations. He said that "The decision to open this regulation to further debate and comment is not one I would have made." The Commerce Committee's Subcommittee on Health will hold a hearing titled "Assessing HIPAA: How Federal Medical Record Privacy Regulations Can Be Improved" on Thursday, March 22.
3/20. The Senate Finance Committee held a hearing on the U.S. Jordan Free Trade Agreement (FTA) [PDF], signed on October 24, 2000. The Senate has yet to ratify it. There was no dispute at the hearing that a FTA with Jordan is appropriate for political reasons. However, the FTA includes labor and environmental (L&E) paragraphs that were hotly debated. (They provide that neither party "shall fail to effectively enforce its" L&E laws.) Trade with Jordan is minimal. And, neither Jordan nor the U.S. cares about the other's L&E records. Rather, the Clinton administration insisted on these provisions with the idea that this FTA would serve as a model for all future FTAs. This FTA is serving as a vehicle for debate over what all future FTAs and other trade agreements should contain. This debate may affect what future trade agreements provide, as well as what trade agreements will be successfully negotiated.
Clinton administration veterans Charlene Barshefsky (former USTR) and Samuel Berger (former National Security Advisor) defended their Jordan treaty, and its L&E provisions. John Sweeney (AFL-CIO President), and Rodger Schlickeisen (Defenders of Wildlife) also defended them. Sen. Max Baucus (D-MT), the ranking Democrat on the Senate Finance Committee, supported them. Sen. John Kerry (D-MA) defended them emphatically. Committee Chairman Charles Grassley (R-IA) condemned them, as did Michael Smith (Deputy USTR in Republican administrations), Timothy Deal (U.S. Council for Int. Business), Jagdish Bhagwati (Columbia University), and Thomas Donohue (U.S. Chamber of Commerce). The Bush administration sent no one to testify.
Sen. Grassley stated that "these provisions could lead to the use of trade sanctions. Given the nearly unanimous opposition of the world's developing nations to the use of trade sanctions to enforce labor and environmental standards -- opposition that lead directly to the collapse of the last WTO Ministerial in Seattle -- this is a development that concerns me deeply." Smith elaborated that "these provision on labor and environment are a double edged sword. U.S. enforcement, possibly as a waiver under the Clean Air Act or any exercise of discretion by enforcement agencies, prosecutors, or courts, could become a trade agreement violation subject to trade sanctions."
The U.S. Jordan FTA is also significant in that it contains extensive language pertaining to intellectual property and e-commerce. The FTA addresses patents, trademarks, copyright, and enforcement of IPR. Jordan agreed to ratify and implement the WIPO's Copyright Treaty and WIPO Performances and Phonograms Treaty within two years. The FTA also provides that "each Party shall seek to refrain from: (a) deviating from its existing practice of not imposing customs duties on electronic transmissions; (b) imposing unnecessary barriers on electronic transmissions, including digitized products; and (c) impeding the supply through electronic means of services ..." This received little attention at the Senate Finance Committee hearing.
3/20. Rep. Heather Wilson (R-NM) introduced HR 1137, a bill to make permanent the research and development tax credit.
3/20. The U.S Court of Appeals (9th Cir) issued its opinion in Chance v. Pac Tel Teletrac, a case involving priority of use of a service mark. Pac Tel and Chance claim first use of the words Teletrac and TeleTrak, respectively. Pac Tel Teletrac operates a radio frequency based system for tracking fleet vehicles and recovering lost or stolen vehicles. Pac Tel Teletrac filed a complaint in U.S. District Court (CDCal) against Chance for damages. The District Court entered summary judgment in favor of Pac Tel based on a finding of first use. The Appeals Court affirmed.
3/20. An individual represented by the law firm of Keller & Rohrback filed a complaint in U.S. District Court (WDWash) against and several of its officers and directors alleging violation of federal securities laws, and seeking class action status.
3/20. Peter Morch plead guilty in U.S. District Court (NDCal) to one count of exceeding authorized access to a protected computer and obtaining information valued at more than $5,000, in violation of 18 U.S.C. §§ 1030(a)(2)(C) & 1030(c)(2)(B)(iii). Morch, a former employee of Cisco, exceeded his authorized access to the computer systems of Cisco by logging into the computer system from a workstation belonging to another Cisco software engineer and copying proprietary information that he knew he was not authorized to have. Just prior to leaving Cisco to work for a competitor, he copied Cisco project ideas, general descriptions, requirements, specifications, limitations of design, and procedures to overcome the design difficulties for a voice-over and optical networking software product. The sentencing is scheduled for June 27, 2001. See, release, March 21 plea agreement [PDF], and March 13 Information [PDF].
3/19. Opponents of the Children's Internet Protection Act (CIPA) will file a complaint in the U.S. District Court (EDPa) challenging the constitutionality of the Act. The Act requires schools and libraries that receive e-rate subsidies to use filtering technology on Internet access computers used by children.
3/19. The U.S. Court of Appeals (5thCir) issued its opinion in Southwestern Bell v. El Paso, an 11th Amendment case. Southwestern Bell, a telecommunications services provider, filed a complaint in U.S. District Court (WDTex) against the City of El Paso and El Paso Water Improvement District (EPWIP), alleging violation of the Telecom Act of 1996, the Texas Public Utilities Regulation Act, and other state law, for requiring that Southwestern Bell pay money and file detailed applications in order to lay phone lines that cross its rights of way (i.e., ditches). EPWIP moved to dismiss on 11th Amendment grounds. The District Court denied the motion, on the grounds that the EPWIP is not an arm of the state. The Appeals Court affirmed.
3/19. The U.S. Court of Appeals (7thCir) issued its opinion in Arsberry v. Illinois, a antitrust case regarding phone competition. Richard Posner wrote the opinion, in which Easterbrook and Evans joined. The plaintiffs, who are prison inmates and their families, filed a complaint in U.S. District Court (NDIll) against phone companies and the state agencies and officials alleging violation of the Sherman Act, the First Amendment, other Constitutional provisions, and Illinois state law. The suit challenges the practice by which each prison and jail grant one phone company the exclusive right to provide telephone service to the inmates in return for 50% of the revenues generated by the service. The district court dismissed the suit as beyond its jurisdiction by reason of the filed-rate and primary- jurisdiction doctrines. The appeals court modified and affirmed. It analyzed the two jurisdictional issues, and held that it was incorrect to dismiss on jurisdictional grounds. However, it affirmed on the merits. Posner wrote that "the plaintiffs' real argument has nothing to do with any horizontal conspiracy; it is rather that a monopolist, namely the State of Illinois (and its subdivisions), exercising as it does an iron control over access to the inmate market, has rented pieces of the market to different phone companies, in much the same way that an airport will charge a high fee to concessionaires eager to sell to the captive market represented by the airline passengers who perforce spend time in the airport. ... The concessionaires will pass on much of the fee to their customers, who will thus pay a higher than competitive price. States and other public agencies do not violate the antitrust laws by charging fees or taxes that exploit the monopoly of force that is the definition of government."
3/19. The U.S. Supreme Court denied certiorari in Contemporary Media v. FCC, No. 00-972, a broadcast radio license revocation case. See, March 19 Order List. See also, opinion of the U.S. Court of Appeals (DCCir) of June 16, 2000.
3/19. President Bush gave at speech at the CIA in which he stated that "Today, that single threat has been replaced by new and different threats, sometimes hard to define and defend against; threats such as terrorism, information warfare, the spread of weapons of mass destruction and the means to deliver them."
3/19. WTO Director General Mike Moore gave a speech in London on trade and poverty in less developed countries in which he again argued that "we need to launch a new WTO round this year." He also stated that "As well as the in-built agenda of agriculture and services, the new round must have implementation issues at its heart. And it should also encompass industrial tariffs, anti-dumping, and other issues that are important to developing countries."
3/19. Monday, March 19, was the deadline to file comments with the NTIA regarding its Notice of Proposed Rulemaking (NPRM) regarding compensating incumbent federal agency users in the 1755-1850 MHz band that may be required to modify their systems as a result of spectrum reallocation for 3G wireless uses. See, comments filed by the Federal Aviation Administration and Mobex Communications. See also, TLJ story of Jan. 18.
3/19. Monday, March 19, was the deadline to submit initial comments to the FCC in response to its Notice of Inquiry [PDF] regarding "Interactive Television Services Over Cable." The FCC received comments that it should not be involved in this matter. For example, the Progress & Freedom Foundation submitted a comment [PDF] in which it stated that "the Commission should terminate this inquiry and await further marketplace developments. ... In today's rapidly changing technological marketplace environment, however, even the launching of regulatory inquiries can do more harm than good." Similarly, TiVo submitted a comment in which it stated that "the NOI is perhaps ahead of its time as many fundamental questions are still being asked, including who are ITV providers, how will ITV services be delivered, what are the business models, as so forth. Generally, when such basic questions are being asked, it is far too early for the Commission to entertain imposing regulation." In contrast, Gemstar-TV Guide submitted a comment in which it asked the FCC "to adopt a general principle of nondiscrimination." Reply comments are due by April 20, 2001. (CS Docket No. 01-7.)
3/19. The USPTO published a notice in the Federal Register requesting comments on "the international effort to harmonize substantive requirements of patent laws, and the subsequent changes to United States law and practice." Comments on any topic may be submitted. However, the notice enumerates 17 topics, including the first to invent versus the first to file systems of priority, and what may be considered patentable subject matter in light of the State Street decision. Comments must be submitted no later than April 30, 2001. See, Federal Register, March 19, 2001, Vol. 66, No. 53, at Pages 15409 - 15411.
3/19. The USTR published a notice in the Federal Register requesting comments regarding the Antidumping Act of 1916. Following complaints by Japan and the EC, WTO dispute settlement panels, and the WTO Appellate Body, found that this statute is inconsistent with U.S.'s obligations under the General Agreement on Tariffs and Trade 1994 and the Agreement on Implementation of Article VI of GATT 1994. Comments should be submitted by April 16, 2001. See, Federal Register, March 19, 2001, Vol. 66, No. 53, at Pages 15517 - 15518.
3/19. The SEC published a notice in the Federal Register requesting comments on proposed amendments to revise rules under the Investment Company Act of 1940 and the Investment Advisers Act of 1940 that permit registered investment companies and registered investment advisers to preserve required records using electronic storage media such as magnetic disks, tape, and other digital storage media, pursuant to the ESIGN Act. Comments must be received on or before April 19, 2001. See, Federal Register, March 19, 2001, Vol. 66, No. 53, at Pages 15369 - 15373.
3/19. The Commodities Futures Trades Commission published a notice in the Federal Register requesting comments on proposed privacy rules pursuant to the Gramm Leach Bliley Act. Comments must be received by April 18, 2001. See, Federal Register, March 19, 2001, Vol. 66, No. 53, Pages 15549 - 15576. See also, CFTC release.
3/19. Andrew Velcoff joined the Atlanta office of the law firm of Greenberg Traurig as a shareholder in the firm's entertainment practice. He will focus on entertainment, intellectual property and media law. He was previously SVP of legal and business affairs for Turner Entertainment Group. See, release.
3/17. Several law firms that file securities class action suits filed complaints against New Focus. For example, an individual named L.A. Speck filed a complaint [PDF] in U.S. District Court (NDCal) against New Focus, and several of its officers and directors, alleging violation of federal securities laws. This plaintiff, who is represented by Milberg Weiss and other firms, seeks class action status. Count one alleges violation of § 10b of the Exchange Act, and Rule 10b-5 thereunder, by all defendants. Count two alleges violation of § 20 of the Exchange Act (controlling person liability) by the individual defendants. New Focus, based in San Jose, California, makes fiber optic products, including fiber amplifiers, wavelength management equipment, and optoelectronics. Milberg Weiss is a law firm that specializes in suing technology companies when their stock prices drop. New Focus's stock price closed at $16.69 per share on Friday, March 16. It was trading at over $150 last July.
3/16. Sarah Kirk joined the London office of the law firm of Arnold & Porter in the Intellectual Property and Technology section. She focuses on commercial IP/IT agreements, including those related to e-commerce, data protection, outsourcing and corporate deal support. She previously worked at Nicholson Graham & Jones in London. See, release.
3/16. The FCC issued an order suspending its May 19 deadline for AT&T to divest cable television assets to comply with its cable ownership caps. This deadline had been set by the FCC's June 6, 2000, order approving the merger of AT&T and MediaOne. This action is a consequence of the U.S. Court of Appeals (DCCir) March 2 opinion in Time Warner Entertainment v. FCC overturning the FCC's cable ownership caps on First Amendment grounds. FCC Chairman Michael Powell issued a statement in which he said that "Our action should not be read as eliminating the condition, but only as suspending the established benchmarks for compliance pending further consideration." See also, Ness statement, and Tristani dissent.
3/16. Law professor Michael O'Neill gave an address at a panel discussion on cybercrime in which he argued that private vigilante justice should be employed to reduce cybercrime. He stated that "Just as settlers in the old west couldn't necessarily always rely upon the local sheriff to provide good crime control, it may be in fact the case that Internet users may have to rely upon private parties, and third party concerns, for preventing crime, and enforcing certain criminal norms." He argued that the federal government lacks the ability to police cyberspace, and that attempting to do so would result in privacy violations. He stated that "private vigilante efforts, by for example, computer companies, software vendors, Internet servers, who are often the subject of attacks, may in fact be in the best situation, both to fend off attacks, and also to retaliate in kind." He also said that "vigilanteism was actually a fairly effective means in the old west of allowing criminal control in the absence of government intervention."
3/16. The Federalist Society's Criminal Law Practice Group hosted a panel discussion titled "Law Enforcement in Cyberspace: Who Has the Upper Hand -- the Hackers or the Cops?" The speakers were Orin Kerr of the DOJ Computer Crimes and Intellectual Property Section, Michael O'Neill of George Mason University School of Law, and Marc Rotenberg of EPIC. Kerr, a government prosecution, addressed the difficulties faced by law enforcement in detecting and prosecuting cyber criminals. Rotenberg argued for enhanced privacy protections for Internet communications, lamented the "CALEA tragedy," and criticized the FBI's Carnivore surveillance system. Both Kerr and Rotenberg rejected O'Neill's private vigilante proposal. Bill Jordan of the law firm of Alston Bird moderated.
3/16. The FCC suspended its May 19 deadline for AT&T to divest cable television assets to comply with its cable ownership caps. On March 2, the U.S. Court of Appeals (DCCir) issued its opinion in Time Warner Entertainment v. FCC overturning the FCC's cable ownership caps. However, the FCC rejected Viacom's request to suspend its 35% broadcast ownership cap by a vote 3 to 1 (Furchgott-Roth dissenting).
3/16. The FCC began the process of reallocating TV Channels 52-59 (698-746 MHz spectrum band) for new commercial wireless and broadcast services. The FCC also proposed rules for the licensing, operating, and competitive bidding of wireless and other licenses in this 48 MHz of spectrum. The FCC is reclaiming this spectrum as part of its transition of TV broadcasting from analog to digital transmission systems. The FCC vote was 3 to 1 (with Tristani dissenting in part). See, FCC release.
3/16. President Bush announced his intent to nominate Samuel Bodman to be Deputy Secretary of Commerce. He is currently the Chairman and CEO of Cabot Corporation in Boston, Massachusetts. See, release.
3/16. The U.S. Court of Appeals (4thCir) issued its opinion in Lyons Partnership v. Morris Costumes, a copyright and trademark case involving Barney the purple dinosaur. Defendants sold three lines of  purple animal costumes -- an unnamed dinosaur, a hippopotamus named Hillary, and a dragon named Duffy. Plaintiff, which holds trademarks and copyrights with respect to Barney, filed a complaint in U.S. District Court (WDNC) on May 2, 1997 alleging copyright and trademark infringement, as well as related a state law violations. The trial court found that the purple dinosaur and Hillary infringed plaintiff's copyrights and trademarks. However, the court also held that since plaintiff had notice of the infringement in April 1993, its claims were barred by the applicable statutes of limitations and by the doctrine of laches. The trial court held that the third costume, Duffy the Dragon, did not infringe. Reversed in part.
3/16. The USPTO published in it web site the March issue [PDF] of USPTO Today. It includes an item titled "Registration of Domain Names as Trademarks - Looking Back, Looking Ahead," by Jessie Marshall. She wrote that the USPTO "received 28,552 applications through the end of the year 2000 that included .COM in the mark presented for registration. In the year 2000 alone, the USPTO received 12,840 of those applications."
3/16. The GAO issued a report [PDF] titled "Information Management: Progress in Implementing the 1996 Electronic Freedom of Information Act Amendments". The GAO examined whether federal agencies are complying with the eFOIA amendments by asking the federal agencies if they were complying the eFOIA. The resulting report is a glossy and graphical 54 pages, but lacking the independent investigation and analysis typical of GAO reports.
3/16. The EU stated that "Europe now has about as many Internet users as the US." See, release.
3/16. The Administrative Office of U.S. Courts held a hearing on the privacy and security implications of allowing public access to federal court documents via the Internet.
3/16. Jing Ping Xie and his wife, Shenglan Liu, entered guilty pleas in U.S. District Court (DMd) to criminal copyright infringement for selling CDs containing copyrighted software. Xie and Liu obtained copies of software products and copying equipments. They then made copies of software produced by Adobe, Microsoft, Symantec, and other companies. Finally, they arranged sales of this counterfeit software via web sites and e-mail. The case was prosecuted by AUSA Stuart Berman and Michael O'Leary of the CCIPS. See, DOJ release.

Go to News Briefs from March 11-15, 2001.

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