|News Briefs from May
Divided 6th Circuit Addresses Pleading Standards in Securities
5/31. The U.S.
Court of Appeals (6thCir) issued its opinion
v. Vencor, a case regarding pleading standards in class action
securities suits under the Private Securities Litigation Reform Act (PSLRA). The
Court, sitting en banc, was split seven to six. There are also conflicting
interpretations by the various circuits that have examined this issue. See, TLJ story.
Beales May Head FTC Consumer Protection Bureau
5/31. The Wall Street Journal reported
that incoming FTC Chairman Timothy Muris will appoint Howard Beales head of the
FTC's Consumer Protection Bureau.
The FTC's Consumer Protection Division
is involved in both fighting online fraud and promoting online privacy.
is a "Chicago school" economist who is a professor at the business
school at George Washington University in Washington DC. He is an Associate
Professor of Strategic Management & Public Policy in the School of Business and Public Management. He
specializes in consumer research, contract law, economics of commercial free
speech, applied macro-economics, advertising, public policy toward business,
safety and health regulations.
Beales and Muris worked together at the FTC in the 1980s. They have also
co-authored academic works. See, Howard Beales and Timothy Muris, State and
Federal Regulation of National Advertising, The AEI Press, Washington DC,
1993. See, Amazon
listing (out of print), and AEI order form.
Privacy Advocates Write to Muris
5/31. A collection of groups that engage in advocacy regarding online privacy
sent a letter to
Timothy Muris, the incoming Chairman of the FTC, in which they advocated that
Muris "make the protection of privacy a top priority for the FTC."
They listed among their requests that the FTC "Revisit the effectiveness of
the "unfair and deceptive trade practices" regime to protect consumer
More People and Appointments
5/31. Michael Copps was sworn in as a Commissioner of the FCC. He is a Democrat, and a former aide to Sen. Ernest Hollings (D-SC). His term
runs until runs until June 30, 2005. See, FCC
5/31. Kathleen Abernathy was sworn in as a Commissioner of the FCC. She
is a Republican. Her term expires June 30, 2004. See, FCC
5/31. Valerie Caproni, Director of the SEC's Pacific Regional Office,
will leave her position at the end of July to join the law firm of Simpson Thacher & Bartlett. See, SEC release.
New IP Suits
5/31. Agere Systems filed a
complaint in U.S. District Court (DDel) against Proxim alleging patent infringement.
The three patents in suit relate to wireless local area networking products.
5/31. Motorola filed a complaint in U.S.
District Court against e-mail spammer Paging America alleging trademark
infringement and unfair competition. Motorola stated that Paging America
sent unsolicited e-mail messages that misled consumers into believing that
Motorola was affiliated with Paging America, which contained Motorola
trademarks, and which referenced free Motorola pagers that were neither free nor
made by Motorola. See, Motorola
5/31. The U.S.
Court of Appeals (5thCir) issued its opinion
in Spectators' Communication
Network v. Colonial Country Club, a Sherman Act antitrust
case. Plaintiff, Spectators' Communication Network, alleged that it was excluded
from broadcasting professional golf tournaments. The District Court
granted summary judgment to Defendant. The Appeals Court reversed.
5/31. BellSouth requested
permission from the Florida Public Service
Commission to provide long distance service in Florida. See, release.
5/31. President Bush extended the life of the President's Information Technology
Advisory Committee for two more years. See, release.
5/31. Lynn Turner, Chief Accountant of the SEC gave a speech on revenue
Invasion of Privacy v. Freedom of Speech
5/30. The California
Court of Appeal (4/2) issued its opinion [PDF]
v. Time Warner, a case involving privacy rights and the
California SLAPP statute. This is a case involving old media -- magazines and TV
-- not Internet technology; however, the legal issues involved also pertain to
Internet media and speakers. Time Warner
(now AOL Time Warner) published stories in a print publication (Sports
Illustrated) and in a TV program about a child molester who coached little
league baseball. The stories included a photograph of a team which he had
coached. Some of the children in the picture had been molested by him. The
Appeals Court held that the invasion of privacy claim survives a SLAPP motion.
See, TLJ story.
Trade Groups Release White Papers on Antitrust
5/30. The Association for
Competitive Technology (ACT) and the Computing
Technology Industry Association (CompTIA) released a report
[PDF] which rebutes a report [PDF]
issued by ProComp on May 15, and an
earlier report. ProComp, which is funded by Microsoft's competitors, alleged
that "Microsoft has ... introduced a series of
business initiatives that put Microsoft in a position to extend its monopoly to
the Internet itself." The trade groups supporting Microsoft responded that
this is "yet another effort by Microsoft rivals to misuse the
antitrust laws to stifle the very competition and innovation these laws are
designed to promote. The actions of Microsoft which were attacked in the ProComp
white papers violate neither the antitrust laws nor the 1995 consent
Gray, a partner at the Washington DC law firm of Wilmer Cutler & Pickering, and a
contributor to the ACT CompTIA report, stated in a release
that "Not surprisingly, the beneficiaries of a breakup would be Microsoft
rivals Oracle and Sun, but those who would be harmed most by a breakup are the
ones that antitrust law is designed to protect -- consumers."
5/30. May 30 was the deadline to file reply comments with the FCC in response to its Notice
of Proposed Rulemaking (NPRM) regarding revisions to the method of
subsidizing schools and libraries under its e-rate program when there is
insufficient funding to support all requests. See, reply comments in PDF
submitted by Funds
for Learning, Council
of the Great City Schools, and Education
and Library Networks Coalition.
Public Participation in the ICANN
5/30. The NGO and Academic ICANN Study (NAIS) group released its interim report
on elections and public participation in the ICANN. See, executive summary [HTML]
report [540 KB in PDF]. The report states that "the legitimacy of
ICANN's structure and policies have been questioned by various players in the
Internet community. The central plank of this criticism is that ICANN's
organizational structures and activities do not comply with the ethos of good
and democratic governance." The 107 page report concludes that "If
ICANN is a public entity formulating policy about the Internet, with broad
impact on the public globally, then the legitimacy of ICANN will depend on
public representation. If ICANN is viewed as a private business engaged in
narrow technical work, the case for public participation in its decisions or
selection of its directors is weaker."
Privacy: Government Web Site Cookies
5/30. The GAO released
a report [PDF] titled
"Internet Privacy: Implementation of Federal Guidance for Agency Use of
"Cookies" ". The report was written at the request of Sen. Fred Thompson (R-TN), Chairman of
the Senate Governmental Affairs
Committee. It reviewed federal agencies' compliance with the June 2000
Office of Management and Budget (OMB) guidance that established a presumption
that persistent (as opposed to session) cookies will not be used on federal Web
sites. The report found that "Of the 65 sites we reviewed, 57 did not use
persistent cookies on their Web sites. However, of the eight sites that were
using persistent cookies, four did not disclose such use in their privacy
policies, as required by OMB. The remaining four sites using persistent cookies
did provide disclosure but did not meet OMB's other conditions for using
post privacy policies on their home pages."
DOC Issues Request for Quotations for .us Top Level Domain
5/30. The Department of Commerce published in
its web site a notice
that it intends to issue a written solicitation (Request for Quotations) on
behalf of the NTIA for
services to establish centralized management and coordination of the registry,
registrar, database, and information services for the .us top level domain (usTLD).
E-SIGN and SEC Record Keeping Rules
5/30. The SEC published in the Federal
Register a final
rule regarding electronic storage of required records. The SEC adopted
amendments to its rules, which are effective May 30, 2001, 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. This rule change is made pursuant to the
Electronic Signatures in Global and National Commerce Act (E-SIGN). See, Federal
Register, May 30, 2001, Vol. 66, No. 104, at Pages 29224 - 29229.
5/30. XtremeSpectrum submitted to
the FCC a presentation
outline [PDF] regarding ultrawideband (UWB) transmission systems, and in
particular, their interference with existing systems. UWB operates across a wide
range of spectrum frequencies at low power levels using very narrow pulses.
Hence, there is the potential for interference. It is a promising technology
that can be used for wireless networks, remote sensing or tracking, and ground
Bush Addresses Trade and Fast Track
5/29. President Bush gave a speech
in California to the Los Angeles World Affairs
Council in which he addressed trade and fast track trade negotiating
authority. He stated that "I'm asking the United States Congress to approve
U.S. trade promotion authority this year. And because trade creates prosperity,
and prosperity promotes democracy, I will notify Congress on June 1st that I
intend to extend normal trade relation status with China for another year."
President Bush also stated that free trade will promote democracy in the PRC.
"Open trade is a force for freedom in China, a force for stability in Asia,
and a force for prosperity in the United States. And this is not just my
personal view; the institutions and individuals in China who are the least
friendly to freedom are often the least friendly to trade. The institutions and
individuals most sympathetic to freedom are often the most friendly to trade.
They know what I know: Free trade supports and sustains freedom in all its
forms. Free trade has expanded the portion of China's economy that is
independent of the state. Free trade has swelled the ranks of independent
businessmen. Free trade has introduced new technologies that offer Chinese
people access to uncensored information and democratic ideas. When we open
trade, we open minds. We trade with China because trade is good policy for our
economy, because trade is good policy for democracy, and because trade is good
policy for our national security."
Bush also stated that "we will secure our nation's energy future by
generating clean and reliable power on which high-tech economy depends."
Pitofsky Resigns, Effective May 31
5/29. Robert Pitofsky, the outgoing Chairman of the FTC, wrote a letter to President Bush in
which he stated, "I tender my resignation as Commissioner and Chairman of
the Federal Trade Commission, effective May 31, 2001." President Bush has
nominated, and the Senate has confirmed, Timothy Muris to replace him.
R&D Tax Credit
5/29. The Conference Report on HR 1836, the Economic Growth and Tax Relief
Reconciliation Act, which passed the House on May 25, and the Senate on May 26,
does not contain language making the research and development tax
credit permanent. An earlier Senate version of the bill did include this
provision. There are also stand alone bills pending in the House and Senate that
would permanently extend the R&D tax credit. See, S 41 and HR 41, so numbered
because they would amend Section 41 of the Internet Revenue Code. See also, S 515 and HR 1137.
Computer and Internet Crime
5/29. A grand jury of the U.S. District Court (NDCal) returned an indictment
[PDF] against Robert Robb charging 10 counts of wire fraud in violation of 18
U.S.C. § 1343 and one count extortion in violation of 18 U.S.C. § 875(b). The
indictment states that Robb made false statements to investors regarding his
online gambling companies, Junglegames.com and Millennium Networks, which made
multplayer gambling games that could be played at casinos, or over the Internet.
Among the false representations was that Microsoft President Steve Ballmer had
agreed to pay $50 Million for patents to the games. The false statements were
made "by means of wire communication in interstate commerce" -- i.e.,
by e-mail. AUSA
David Callaway is the Assistant U.S. Attorney prosecuting the case. See, release.
Appeals Court Rules in ASC v. IBM
5/29. The U.S.
Court of Appeals (8thCir) issued its opinion in American
Shizuki Corp. v. IBM, a case involving a dispute over IBM's purchase from ASC of plastic film
capacitors to be used by IBM in its mainframe computers. ASC wanted IBM to
purchase more capacitors manufactured by ASC. However, IBM never promised that
it would purchase any specific quantity of capacitors. ASC filed a complaint in
U.S. District Court (DNeb)
in June 1997 against IBM based upon diversity jurisdiction, in which it sought
$8.5 Million in damages under three theories of relief: promissory estoppel,
negligent misrepresentation, and fraudulent misrepresentation. The District
Court granted IBM's motion for summary judgment. The Appeals Court affirmed, two
Software Defined Radio
5/29. The NTIA
submitted a reply
comment to the FCC in response to its Notice
of Proposed Rulemaking [PDF] titled "In the Matter of Authorization and
Use of Software Defined Radios". (See, ET Docket No. 00-47.)
Internet and E Funds Transfers Facilitate Global Corruption
5/29. A conference titled "Global Forum on Fighting Corruption and
Safeguarding Integrity" is being held from May 28 through 31 at the
Ministry of Justice in Hague, Netherlands. U.S. Ambassador Victor Jackovich gave
on May 29 in which he addressed the role of globalization, the Internet and
electronic funds transfers in government corruption.
Jackovich stated that globalization, which he defined as "more rapid
communication, easier international travel and more technological innovation --
has given the purveyors of crime and corruption some potent tools. For this
reason, corruption and criminality can permeate an entire state apparatus and
present formidable cross-border threats." He continued that "the
stability and security of the most vulnerable of states is of vital interest to
the stability and security of the entire international community. We are only as
strong as our weakest link. In our modern age of instant transference of funds
and rapid exchange of information via the Internet, the world's inter-
connectivity has grown and developed at a pace never before experienced. Even if
we wanted, we could not consign criminality and corruption to certain states or
societies and give as the excuse that these problems are endemic or natural in
those parts of the world. Under these circumstances, it is clear that we must
work together ..."
Jackovich is the Associate Director of the George Marshall European Center for
Security Studies in Garmisch- Partenkirchen, Germany. See also, statement
by President Bush and statement
by Paula Dobriansky, Under Secretary of State for Global Affairs.
SEC Selects New Office Location
5/29. The SEC announced that it selected a
new location for its Washington DC headquarters. The new site will be on the
corner of F and 2nd Streets, NE, adjacent to Union Station and the Thurgood
Marshall Building. The building, named Station Place, is not yet under
construction. It is scheduled for occupancy in approximately three years. See, SEC release.
Radio Spirits v. Napster
5/29. Radio Spirits Inc. filed a complaint in U.S. District Court (NDCal)
against Napster alleging contributory and
vicarious copyright infringement and unfair competition. Radio Spirits is
the old-time radio and classic video subsidiary of MediaBay, Inc. (Case No. 01-02090.) See, MediaBay
5/28. The ICANN published
in its web site a document
titled "Discussion Draft: A Unique, Authoritative Root for the DNS."
Bush Tax Package Passes
5/26. The House adopted the Conference Report on HR 1836, the Economic Growth
and Tax Relief Reconciliation Act, by a vote of 240 to 154, on May 25. See, Roll
Call No. 149. This is President Bush's tax relief package. The Senate
approved the bill on Saturday, May 26, by a vote of 58 to 33. The conference
report does not contain language making the research and development tax
credit permanent. (An earlier Senate version of the bill did.)
USTR Nominees Confirmed
5/26. The Senate confirmed the nominations of Peter Allgeier and Linnet
Deily to be Deputy U.S. Trade Representatives.
Go to News Briefs from May 21-25, 2001.