News Briefs from November 26-30, 2001

Criminal Copyright Infringement
11/30. Inder Deot plead guilty in U.S. District Court (NDTex) to conspiracy and criminal infringement of a copyright, in violation of 18 U.S.C. §§ 371 and 2319. The Information states that he was involved in a conspiracy to replicate, manufacture, and distribute counterfeit copies Windows 95 and Windows Office 95. This case is being prosecuted by Erin Cox of the Computer Hacking and Intellectual Property (CHIP) Unit of the Dallas United States Attorney's Office (USAO). See, USAO release.
Fed Governors Address the Economy and High Tech
11/30. Federal Reserve Board Governor Edward Gramlich gave a speech on November 30 titled "Asset Prices and Monetary Policy" at a Bank of France symposium in Paris. He stated that "the U.S. economy has now slowed very sharply. One factor has been the apparent reconsideration of expected profitability in the high tech sector. This reassessment depressed equity prices for high tech firms, and it has significantly restrained investment in these types of equipment, which had been substantial contributors to the previously rapid rate of economic growth. Slowing investment and a shift from a positive to a negative wealth effect on consumption have significantly damped the growth in aggregate final demand since late last year. The associated inventory correction has accentuated the decline in production. Since the September 11 terrorist attacks, heightened uncertainty and concerns have also weighed on the U.S. economy. These factors, and many others, have informed our decision to shift the stance of monetary policy aggressively and reduce the target federal funds rate by 4-1/2 percentage points since the beginning of the year."
Federal Reserve Board Governor Laurence Meyer gave a speech on November 27 titled "Before and After" to the National Association of Business Economics in St. Louis, Missouri. He stated that "As a result of a coincidence of forces, the economy slowed much more steeply than the Fed expected or intended. ... But most important was the shock that hit the economy in late 2000 and early 2001 -- a reassessment of the profitability of producing and owning high tech equipment. This shock was manifest in both the financial markets and in the real economy. It resulted in a sharp correction in equity prices in the technology sector -- the bursting of the technology bubble -- and, at the same time, it led to a sharp retrenchment in the demand for and production of high tech equipment. The economy slowed to the point where real GDP was nearly flat in the second quarter of this year and likely would have been nearly flat in the third quarter, even without the events of September 11."
PPI Reports Economy Shows Signs of Recovery
11/30. In contrast to the Federal Reserve Governor's assessments, the Progressive Policy Institute (PPI), a Democratic think tank, released a paper titled "The Economy is Showing Signs of Recovery". The paper concludes that "the U.S. economy is actually poised for recovery." Moreover, this has policy consequences. Congress is currently considering a massive "stimulus" bill. The PPI report continues that "Congress wants more ``stimulus´´ for two main reasons. First, it feels obliged to do something when times are bad. Second, in a recession, members of Congress can dole out new tax cuts to favored groups for lofty economic reasons, and thereby sidestep the usual, less high minded characterizations of their actions. Making matters worse, NeoReaganites and big government liberals are fanning fears of a deep recession to resurrect economic theories that rightly fell out of favor in the 1990s." The report concludes that "Americans should not allow the ``stimulus´´ bandwagon to get out of control. Neither the 1980s style supply side tax cuts nor the 1970s style fiscal policies of Keynesian liberals will work as a short term economic stimulus, and neither represents a sound long term economic policy." The report was written by Jeff Lemieux.
FCC Chairman Powell Addresses FCC Agenda
11/30. FCC Chairman Michael Powell gave a speech to the ALTS Business Conference 2001 in Crystal City, Virginia. He addressed reducing uncertainty, FCC enforcement, inter carrier compensation, loops and UNE access, special access, and building access and rights of way. He also stated that one of the key proceedings for the upcoming year will be a "Broadband NPRM".
Senators Introduce Bill To End Diversion of USPTO Fees
11/30. Sen. Patrick Leahy (D-VT), Sen. Orrin Hatch (R-UT), and others, introduced S 1754, a bill to authorize appropriations for the USPTO for fiscal years 2002 through 2007.
Sen. Leahy stated that "The costs of running the PTO are entirely paid for by fees collected by the PTO form users, individuals and companies that seek to benefit from patent and trademark protections. However, since 1992 Congress has diverted over $800 million of those fees for other government programs unrelated to the PTO. This bill sends a strong message that Congress should appropriate to the PTO a funding level equal to these fees." See, Cong. Record, November 30, 2001, at S12262.
Sen. Hatch stated that "the USPTO has been under mounting pressure on three fronts, increased filings, increased complexity in the filings, and increased difficulty retaining valuable and experienced examiners in the face of more lucrative offers in the private sector. These pressures, if unaddressed, can lead to delays for applicants of months or years, or to reduced quality and reliability of the determinations that issue from the USPTO. Indeed, the USPTO estimates that the patent pendency period could rise to 38 months by 2006. I hate to think that innovative products could sit on the shelf for more than three years awaiting government review. This is especially troubling when we realize that in many high-tech sectors the shelf life of a product is often less than half that time." See, Cong. Record, November 30, 2001, at S12262.
Copyright Office Announces COL Adjustment
11/30. The Copyright Office published a notice in the Federal Register announcing, pursuant to 17 U.S.C. § 118, a cost of living adjustment of 2.1% in the royalty rates paid by colleges, universities, or other nonprofit educational institutions that are not affiliated with National Public Radio for the use of copyrighted published nondramatic musical compositions. The effective date is January 1, 2002. See, Federal Register, November 30, 2001, Vol. 66, No. 231, at Pages 59698 - 59699.
People and Appointments
11/30. The Senate Judiciary Committee approved the nomination of James Rogan to be head of the USPTO on November 29, and the full Senate confirmed his nomination on November 30. See, Cong. Record, Nov. 30, 2001, at S12273.
11/30. Gov. James Gilmore (R-VA) will step down as head of the Republican National Committee. See, statement by Gov. Gilmore and statement by President Bush.
11/30. President Bush announced his intent to nominate James Comey to be U.S. Attorney for the Southern District of New York. Comey is currently an Assistant U.S. Attorney in Richmond, Virginia.  He was a partner at the law firm of McGuire Woods from 1993 to 1996, an Assistant U.S. Attorney for the Southern District of New York from 1983 to 1993, and an associate at the law firm of Gibson Dunn & Crutcher from 1986 to 1987. See, White House release.
11/30. The President nominated Michael Shelby to be a U.S. Attorney for the Southern District of Texas. Shelby is currently an Assistant U.S. Attorney for the District of Arizona, Phoenix Division. He was previously an Assistant U.S. Attorney for the Southern District of Texas. See, White House release and release.
11/30. The Senate confirmed Arden Bement as director of the Commerce Department's National Institute of Standards and Technology (NIST). He succeeds Raymond Kammer, who retired in December 2000. See, DOC release.
11/30. Gov. Gray Davis (D-CA) announced the appointments of Lisa Lench, Luis Lavin, Joe Hilberman, Michael Stern, and Anne Egerton as judges of the Los Angeles County Superior Court. Stern is a litigator who focuses on federal and state civil litigation, including intellectual property. Egerton is the former SVP and General Counsel, West Coast, for NBC. Before joining NBC in 1990, she worked for the law firm of Munger Tolles & Olson from 1983 to 1990. She previously worked in the Washington DC office of the law firm of Wilmer Cutler & Pickering.
House Committee Holds Hearing on Net Gambling Bills
11/29. The House Judiciary Committee's Subcommittee on Crime held a hearing on HR 556, the Unlawful Internet Gambling Funding Prohibition Act, and HR 3215, the Combating Illegal Gambling Reform and Modernization Act.
HR 3215 -- Goodlatte Bill. This bill was introduced by Rep. Bob Goodlatte (R-VA) on November 1, 2001, and now has 115 cosponsors. The bill would amend 18 U.S.C. §§ 1081 and 1084, which contain the definitions and prohibition, respectively, of the Wire Act. The Wire Act currently criminalizes the use of "wire communications facilities" in interstate commerce for gambling. The Wire Act does not ban gambling. This is a matter of state law. The Goodlatte bill expands the prohibition to cover all communications between states or with other foreign countries. It maintains the principle that gambling is otherwise a matter of state law. Hence, under the Goodlatte bill, use of the Internet for gambling purposes would become illegal (if interstate or foreign). This hearing was the first hearing on his bill. However, Rep. Goodlatte sponsored similar bills in prior Congresses.
HR 556 -- Leach Bill. This bill was introduced by Rep. Jim Leach (R-IA) on February 12. It was approved by the House Financial Services Committee on October 31 by a vote of 34 to 18. However, the House Judiciary Committee also has jurisdiction. This bill would attempt to stem illegal Internet gambling by preventing the use of credit cards, wire transfers, and other financial instruments in connection with illegal Internet gambling.
It provides that "No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling (1) credit ... (including credit extended through the use of a credit card); (2) an electronic funds transfer ... ; (3) any check ...; or (4) the proceeds of any other form of financial transaction as the Secretary may prescribe by regulation ..." The bill further provides the "district courts of the United States shall have original and exclusive jurisdiction to prevent and restrain violations".
Hearing Testimony. Reps. Goodlatte and Leach both testified at the hearing. They covered the risks of Internet gambling, including increased bankruptcies, money laundering, and identity theft. Another witness, Timothy Kelly, the former Executive Director of the National Gambling Impact Study Commission, testified regarding the social consequences of Internet gambling, including crime, addiction, pathological gambling, and broken families. See, prepared statements of Goodlatte and Kelly.
Frank Catania testified on behalf of the Interactive Gaming Council. He opposed the two bills, and called on Congress to regulate Internet gambling, rather than pass prohibitions. See, prepared statement [PDF]. Rep. Goodlatte responded that it would be "totally impossible" for the U.S. to regulate Internet gambling, since almost all Internet gambling operations are located outside of the United States. Rep. Bobby Scott (D-VA), the ranking Democrat on the Subcommittee, also spoke critically of the two bills.
Rep. Lamar Smith (R-TX) presided; he called Internet gambling a "growing and serious problem". Rep. Steve Chabot (R-OH) asked about the affect of the two bills on charities that raise money through gambling. Timothy Kelly responded that states would still have the authority to make such activities legal. Rep. Howard Coble (R-NC) and Rep. Sheila Lee (D-TX) also participated.
Justice Department Support. Michael Chertoff, the Assistant Attorney General in charge of the Criminal Division at the Justice Department submitted prepared testimony. He wrote this: "The Justice Department believes that it is important to update existing federal law to cover gambling over emerging technologies, such as the Internet and wireless communication media. Given the extent to which the Internet gambling industry has flourished, it is clear that technology has far outpaced current law. In that regard, the Department strongly believes that federal law should be technology neutral. Congressman Goodlatte's bill, H.R. 3215, would update current law in a technology neutral manner."
He continued that "We support that approach. In conclusion, unlawful Internet gambling continues to be a serious problem. Both Congressman Goodlatte's bill and H.R. 556 offer useful approaches to combating this problem. While we have some technical and other concerns about both of these bills – which we intend to communicate to you in the near future, following additional interagency consultations – we support their sponsors’ efforts to address gambling on the Internet."
Chertoff did not attend the hearing; as head of the Criminal Division, he is taking a lead role in the war on terrorism. His testimony marks a shift in position. Under the Clinton administration the DOJ had opposed Rep. Goodlatte's prior bills. However, Rep. Goodlatte's prior bills would have created a new ban on Internet gambling, rather than amended the Wire Act to make it technology neutral.
ISP Immunity. The Goodlatte bill provides that "No relief requiring the blocking of websites may be granted under paragraph (1) against an interactive computer service (as defined in section 230(f) of the Communications Act of 1934), unless the service is acting in concert with a person who is violating the law and the service receives actual notice of the relief." Similarly, the Leach bill provides that "No provision of this section shall be construed as authorizing an injunction against an interactive computer service ... unless such interactive computer service is acting in concert or participation with a person who violates this section ..."
Senate Finance Committee Passes Andean Trade Bill
11/29. The Senate Finance Committee approved S 525, a bill to extend the Andean Trade Preferences Act, by voice vote, with amendments. This bill extends and expands a preferential trade program for Bolivia, Peru, Ecuador and Colombia. The House passed a different version of the bill, HR 3009, on November 16.
Intellectual Property Rights. Both versions of the bill provide that the President designates which counties are beneficiaries of the Andean Trade Preferences Act, taking into consideration several criteria, including "Whether the beneficiary country has demonstrated a commitment to ... undertake its obligations under the WTO", and "The extent to which the country provides protection of intellectual property rights consistent with or greater than the protection afforded under the Agreement on Trade Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act."
More Identity Theft Bills Introduced
11/29. Sen. Maria Cantwell (D-WA) introduced S 1742, the Restore Your Identity Act of 2001, a broad bill pertaining to prevention of identity theft. It was referred to the Senate Judiciary Committee.
On November 28 Rep. Jan Schakowsky (D-IL) and others introduced HR 3368, the Protect Victims of Identity Theft Act of 2001, a short bill that would amend the Fair Credit Reporting Act (FCRA) with respect to the statute of limitations on actions. It would amend the FCRA, 15 U.S.C. § 1681, et seq., to provide that "An action to enforce any liability created under this title may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction, not later than 2 years after the date on which the violation is discovered or should have been discovered by the exercise of reasonable diligence."
On November 28 Rep. John Shadegg (R-AZ) introduced HR 3369, the Fair Credit Reporting Act Amendment of 2001, another bill to amend the FCRA to provide that the statute of limitations begins to run on the "earlier of the date on which the consumer discovers, or the date by which the consumer reasonably should have discovered, the violation giving rise to the liability". It too was referred to the House Financial Services Committee and House Judiciary Committee.
These bills, and others, are, in part, a response to the November 13 opinion [PDF] of Supreme Court of the U.S. in TRW v. Andrews, a case regarding the running of the two year statute of limitations governing suits based on the FCRA. In that case, Adelaide Andrews had her identity stolen. An imposter obtained her name, social security number, and other information, which she provided to a radiologist. This imposter then used this information to apply for credit in her name. TRW, a credit reporting agency now known as Experian, disclosed her credit record upon each application. She filed a complaint in U.S. District Court (CDCal) against TRW alleging violation of the FCRA. She filed her suit 17 months after learning of TRW's disclosures, but more than two years after the disclosures. The District Court ruled that the statute of limitations had run. The Ninth Circuit reversed. The Supreme Court ruled that the statute had run.
CompTel Writes USTR Re Telecom Provisions in FTAs
11/29. Carol Ann Bischoff, EVP & General Counsel of CompTel sent a letter to USTR Robert Zoellick regarding telecommunications principles in free trade agreements being negotiated by the USTR. See, CompTel release.
Specifically, the letter states that CompTel supports inclusion in the Free Trade Agreements (FTAs) being negotiated with Chile and Singapore of "obligations requiring interconnection, unbundled access to incumbents’ network elements, timely provisioning and (where there is no effective competition) cost based pricing of incumbents' leased circuits, collocation at cost based rates, resale at appropriate wholesale rates, and access to rights of way. The FTAs should also contain requirements that ensure effective enforcement of the pro-competitive measures by an independent regulator, as such measures are of little value if they are not implemented. Finally, the FTAs should ensure that U.S. service providers are able to access and use the public telecommunications networks and services of our trading partners on a non-discriminatory basis."
Tauzin Dingell Bill News
11/29. The USTA, a group that represents the Bell phone companies, issued a release in which it stated that it will run another ad campaign in the Washington DC area in support of HR 1542, the Tauzin Dingell bill.
This bill has been stalled in the House since being reported adversely by the House Judiciary Committee on June 18. While the bill could be brought to the House floor before the end of the 2001 session, it faces opposition in the Senate, including from Sen. Ernest Hollings (D-SC), Chairman of the Senate Commerce Committee.
FCC Amends Rules Re Filings
11/29. The FCC announced that it has "amended its procedural rules on an emergency, interim basis to require the filing or refiling of certain documents electronically (i.e., by facsimile or e-mail as described below), by overnight delivery service (i.e. other than U.S. Postal Service Express and Priority Mail), or by hand delivery to the Commission's Capitol Heights, Maryland location." The FCC elaborated that it has been "unable to confirm receipt of certain Commission filings that may affect processing of applications and other urgent agency business." See, FCC release.
SEC and FASB Reform
11/29. Rep. John Dingell (D-MI), the ranking Democrat on the House Commerce Committee, released a statement on Enron. He wrote: "Where was the SEC? Where was FASB? ... This problem is not limited to Enron. There are likely other ticking time bombs out there with smoke and mirror earnings. Our accounting and auditing system and its oversight are seriously broken and need immediate reform."
Trade Promotion Authority News
11/29. Rep. Gary Condit (D-CA) entered a statement in the Congressional Record in which he criticized trade promotion authority. He wrote that "Under TPA, Congress cannot remove or amend offensive agricultural provisions, it can only reject the entire WTO negotiated pact. Under these conditions, American agriculture is at risk when negotiators are willing to compromise U.S. producers' interests in exchange for new market access for U.S. telecommunications firms, banks and other service providers in other nations." See, Cong. Record, November 29, 2001, at E2180. The House is scheduled to vote on HR 3005, the Bipartisan Trade Promotion Authority Act of 2001, on December 6.
GAO Reports on Online Procurement
11/29. The GAO released a report [PDF] titled "Electronic Commerce: Small Business Participation in Selected On-line Procurement Programs". The GAO examined a sample of three federal online purchasing programs. It found that "For the three federal on-line procurement programs we reviewed, the dollar share of awards to small businesses exceeded the overall small business share of total federal contract dollars awarded in fiscal years 2000 and 1999."
Nevertheless, the GAO wrote that "officials from organizations representing or working with small businesses, as well as related literature, still report that such businesses face obstacles in conducting electronic procurements with the government." The report was prepared at the request of Sen. Christopher Bond (R-MO), the ranking Republican on the Senate Committee on Small Business and Entrepreneurship.
SEC Chairman Addresses Internet and Market Information
11/29. SEC Chairman Harvey Pitt gave a speech in Washington DC to the Consumer Federation of America Financial Services Conference in which he addressed the role of the Internet in providing investors information about the market.
He stated that "Technology will play a very exciting role in the process of furnishing more, better, current and understandable information to investors. The Internet is capable of disseminating critical information quickly. It is inherently customized: users can find as much or as little information as they want and quickly."
He continued that "In rethinking our existing disclosure system, we need to use technology to put user friendly information into investors' hands more promptly. The Internet enables us to keep our current periodic disclosures as hyperlinks from new, summary and trend defining, disclosure reports."
"We are searching for a Chief Technology Officer to advise us on many issues, including using technology to simplify disclosure documents without sacrificing any part of the wealth of information investors already receive."
He concluded that "Cyberspace has made it increasingly easier for individual investors to go out and look for timely information. This is both a blessing and a curse. Unfortunately, we all have witnessed the willingness of otherwise thoughtful people to believe what they read on unverified websites and unregulated Internet bulletin boards: claims of sure things by individuals who probably were (or could have been) snake oil salesmen in prior lives. Small investors are easy prey for cyberspace sharpshooters who spread disinformation, or use their virtual pulpits to promote the sale of their own holdings at a profit. While there always will be people who allow dreams of untold wealth to distort their better judgment, we have redoubled our efforts to protect investors from fraud and manipulation."
FBI Issues Warning Re MSIE
11/29. The FBI's National Infrastructure Protection Center (NIPC) issued a warning titled "Multiple Vulnerabilities in Microsoft Internet Explorer -- All Versions". It addresses two vulnerabilities "that are primary means through which several generations of recent mass mailer computer worms ... propogate." See, Assessment No. 01-028.
People and Appointments
11/29. The Senate Judiciary Committee approved the nominations of eight federal judges: Harris Hartz (to be U.S. Circuit Court Judge for the 10th Circuit), John Bates (U.S. District Court Judge for the District of Columbia), Kurt Engelhardt (Eastern District of Louisiana), Joe Heaton (Western District of Oklahoma), William Johnson (District of New Mexico), Clay Land (Middle District of Georgia), Frederick Martone (Arizona), Danny Reeves (Eastern District of Kentucky), and Julie Robinson (Kansas). The nominees have yet to be confirmed by the full Senate.
More News
11/29. The House passed HR 3210, the Terrorism Risk Protection Act, on a largely party line vote of 227 to 193. See, Roll Call No. 464.
11/29. The Senate Judiciary Committee approved S 986, a bill to allow electronic media coverage of court proceedings.
11/29. President Bush gave a speech in Washington DC to U.S. Attorneys in which he discussed the war on terrorism. He also defended his decision to use military tribunals for foreign terrorists. He stated: "I have also reserved the option of trial by military commission for foreign terrorists who wage war against our country. Non citizens, non-U.S. citizens who plan and/or commit mass murder are more than criminal suspects. They are unlawful combatants who seek to destroy our country and our way of life. And if I determine that it is in the national security interest of our great land to try by military commission those who make war on America, then we will do so." He added that "we must not let foreign enemies use the forums of liberty to destroy liberty, itself."
11/29. Sen. Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee, scheduled a series of hearings for next week to provide a forum for critics of President Bush's use of military tribunals, and other anti terrorism policies. In addition to the use of military tribunals, Sen. Leahy has criticized detention practices, and policy regarding the monitoring of attorney client communications of certain terrorists.
Chertoff Discusses Electronic Surveillance Under USA PATRIOT Act
11/28. Michael Chertoff testified at a Senate Judiciary Committee hearing titled "DOJ Oversight: Preserving Our Freedoms While Defending Against Terrorism". Chertoff is the Assistant Attorney General in charge of the Criminal Division at the Justice Department. He was also one of the drafters of the language contained in HR 3162, the USA PATRIOT Act, the anti terrorism bill that the Congress passed last month.
He discussed the USA PATRIOT Act in response to a question from Sen. Orrin Hatch (R-UT), the ranking Republican on the Committee. However, the primary foci of the hearing were detentions, military tribunals, and monitoring of attorney client communications of detained terrorists.
Information Sharing. Chertoff stated first that the Act has been used to enable the sharing of information between law enforcement and intelligence agencies. (See, for example, Section 203 of HR 3162.)
Cable Communications. Second, he stated that the DOJ has utilized the newly amended Section 2703 of Title 18 to obtain customer communications or records from cable companies. (See, Section 212 of HR 3162. See also, Section 211, which provides that laws regarding interception and disclosure of wire and electronic communications apply to cable service providers when they provide telephony or Internet access services.)
Nation Wide Search Warrants for ISPs. Chertoff continued that "We have obtained court orders directed to out of district Internet service providers providing information, which has been, to enhance efficiency in terms of pursuing this investigation. We have used the nation wide search warrant provision to obtain relevant information." (See, Sections 219 and 220 of HR 3162.)
Emergency Disclosure Provisions. Chertoff next stated that "We have used the emergency disclosure provisions to support our use of information which is provided to us by an Internet service provider." (See, Section 211 of HR 3162.)
Addresses on the Internet. Finally, Chertoff concluded with a vague reference to obtaining an order for "addresses on the Internet". He did not reference any section of the bill or the U.S. Code. Nor was he clear as to whether he was talking about e-mail addressing information, uniform resource locators, IP numbers, or something else. This is what he said: "In fact, I can tell you personally, not, not more than two days ago, a request came to me about whether we could get some information about address, addresses on the Internet. And, it was information that was important that we might not have been able to get under the prior law. But because of the new law, I was able to direct people to go out and get an order, and make sure we get that information. So, we have absolutely made use of these tools ..."
Senate Judiciary Committee Holds Hearing on Anti Terrorist Measures
11/28. The Senate Judiciary Committee held a hearing titled "DOJ Oversight: Preserving Our Freedoms While Defending Against Terrorism". The lead witness was Michael Chertoff, Assistant Attorney General in charge of the Criminal Division at the Justice Department. The hearing focused on the use of military tribunals, monitoring of attorney client communications, and detentions. However, Chertoff also addressed electronic surveillance. Attorney General John Ashcroft is scheduled to testify to the Committee on December 4.
Sen. Patrick Leahy (D-VT) used the event to criticize the Bush administration, and the Justice Department specifically, for three recently announced anti terrorist measures: use of military tribunals to try terrorists, interception of attorney client communications of terrorists who might use those communications to commit further terrorist acts, and the detention of persons in connection with investigation, prosecution, and prevention of terrorism.
Sen. Leahy was the most critical member of the panel. Other Senators also voiced concerns about administration actions, including Sen. Arlen Specter (R-PA), Sen. Russ Feingold (D-WI), Sen. Herb Kohl (D-WI), and Sen. Ted Kennedy (D-MA).
Several Senators praised the actions taken by the administration as constitutional, necessary and appropriate. These included Sen. Orrin Hatch (R-UT), Sen. Jon Kyl (R-AZ), Sen. Mitch McConnell (R-KY), and Sen. Jeff Sessions (R-AL).
The Committee also heard from a second panel of witnesses comprised of William Barr (Former Attorney General in first Bush administration), Philip Heymann (Former Deputy Attorney General in Clinton administration), Griffin Bell (former Attorney General in Carter administration), Scott Silliman (Duke University School of Law), Kate Martin (Center for National Security Studies), and Neal Katyal (Georgetown University).
Bush Signs Net Tax Moratorium Extension
11/28. President Bush signed HR 1552, the Internet Tax Nondiscrimination Act. This bill extends the moratorium on multiple and discriminatory Internet taxes, and taxes on Internet access, through November 1, 2003.
Second Circuit Upholds DMCA and Corley Injunction
11/28. The U.S. Court of Appeals (2ndCir) issued its opinion in Universal City Studios v. Eric Corley, upholding the constitutionality of the Digital Millennium Copyright Act (DMCA), and an injunction issued by U.S. District Court Judge Lewis Kaplan to enforce the DMCA.
Defendant. Defendant Corley publishes a print magazine and the 2600 web site for hackers. In November 1999 he published a copy of the decryption computer program named DeCSS on his web site.
DeCSS. The DeCSS program was written by a Norwegian teenager named Jon Johansen and others to circumvent certain encryption protection for DVDs. DVD is sometimes known as Digital Versatile Disc. CSS is a Content Scrambling System for DVD to protect intellectual property rights by means of encryption. DeCSS is Johansen's decryption tool, which enables a user to copy a DVD's files and place these copies on the user's hard drive. These files can then be played on a non CSS compliant player. They can also be and copied, manipulated, and transferred. Hence, DeCSS can be used to infringe copyrights.
Plaintiffs. The Plaintiffs are Universal City Studios and seven other motion picture studios.
District Court. The plaintiffs filed a complaint in U.S. District Court (SDNY) against Corley and others. Corley raised First Amendment and other arguments. The District Court, Judge Lewis Kaplan presiding, granted plaintiffs injunctive relief under the DMCA. See, Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000).
DMCA. The DMCA is found at 17 U.S.C. § 1201 et seq. § 1201(a)(1)(A) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." § 1201(b)(1) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; (B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof."
Appeals Court. Corley presented several arguments on appeal. His main arguments were that the DMCA as applied to his dissemination of DeCSS violates the First Amendment because computer code is speech, and the DMCA fails to survive the strict scrutiny standard, and that the DMCA violates the First Amendment and the Copyright Clause by unduly obstructing the fair use of copyrighted materials.
The Court affirmed Judge Kaplan's judgment. It declined to apply the strict scrutiny test to the computer code at issue in this case. It further rejected the fair use argument, on several grounds. The Court wrote that "the Appellants do not claim to be making fair use of any copyrighted materials, and nothing in the injunction prohibits them from making such fair use. They are barred from trafficking in a decryption code that enables unauthorized access to copyrighted materials."
Code Can Be Speech. The Court also wrote that "Computer programs are not exempted from the category of First Amendment speech simply because their instructions require use of a computer. ... computer code, and computer programs constructed from code can merit First Amendment protection ..."
District Court Dismisses Felten's DMCA Challenge
11/28. The U.S. District Court (DNJ) announced its opinion from the bench in Felten v. RIAA dismissing this challenge to the anti circumvention provision of the DMCA.
On June 6, 2001, Edward Felten and others filed a complaint against the RIAA, SDMI Foundation, and others, seeking a declaration that the anti circumvention provision of the Digital Millennium Copyright Act is unconstitutional as a violation of free speech. The SDMI Foundation had initially sought to prevent Felton from publishing a paper. It wrote a letter to Felton, an associate professor in the Department of Computer Science at Princeton University, and others, warning them that public release of information concerning the Secure Digital Music Initiative (SDMI) "could subject you and your research team to actions under the Digital Millennium Copyright Act ..."
Cary Sherman, General Counsel of the RIAA, had this reaction: "We are happy that the court recognized what we have been saying all along: there is no dispute here. As we have said time and again, Professor Felten is free to publish his findings."
Trade Promotion Authority
11/28. Rep. David Dreier (R-CA) spoke in the House about trade promotion authority, which is also known as fast track. He stated that "a week from tomorrow, we in this House are going to be voting on the very important trade promotion authority that the President of the United States needs. The administration has not had it, the past administration did not have it, it expired in 1994; and because of the fact that it was not there and has not been there, we have been a party to only 2 of the 130 free trade agreements that have been established worldwide in the last several years, basically meaning that the United States of America has ceded its very important leadership role when it comes to global economic growth." See, Cong. Rec., Nov. 28, 2001, at H8429. Rep. Sherrod Brown (D-OH) spoke in opposition to TPA. See, page H8552.
Representatives Introduce TAA Bill
11/28. Rep. Ken Bentsen (D-TX) and Rep. Anna Eshoo (D-CA) introduced HR 3359, the Trade Adjustment Assistance for Workers, Farmers, Communities, and Firms Act of 2001, a bill to amend the Trade Act of 1974 with respect to trade adjustment assistance programs, and to provide assistance for trade affected communities. It was referred to the House Ways and Means Committee.
This bill is the House version of S 1209, which was introduced in the Senate on July 19 by Sen. Jeff Bingaman (D-NM), Sen. Max Baucus (D-MT), and Sen. Tom Daschle (D-SD). Rep. Bentsen submitted a statement for the Congressional Record (at page E2156) in which he said that "proponents of trade liberalization turn a blind eye toward those sectors of our economy which do not benefit, especially our workers." He added that under his bill, "workers are eligible for up to 52 weeks of income support, provided they are enrolled in re-training. The program also provides job search and relocation assistance."
DOJ Seeks Public Comment on Microsoft Settlement
11/28. The Department of Justice published in the Federal Register copies of the proposed Final Judgment and Competitive Impact Statement in the Microsoft antitrust case. Public comments are due within sixty days of publication in the Federal Register. Submit comments to, or by mail or fax. See, notice in Federal Register, November 28, 2001, Vol. 66, No. 229, at Pages 59452 - 59476.
UK Competition Bill
11/28. The United Kingdom Department of Trade and Industry (DTI) announced plans to introduce legislation regarding its merger regime and criminal penalties for price fixing, bid rigging, and market sharing cartels. Melanie Johnson, Minister for Competition, Consumers and Markets, stated in a release that "The Enterprise Bill is a key part of our mission to promote enterprise and drive up productivity in the UK which will improve living standards for us all. Strong competition drives improvements in efficiency and innovation across the economy. Entrepreneurs willing to take risks are essential to economic growth. Our proposals will strengthen competition, benefit consumers, and encourage enterprising behaviour."
Charles James, Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, praised the announcement. James released a statement in which he said that "The proposed amendments to the U.K.'s antitrust laws embody fundamental antitrust principles and are welcome signs of the growing convergence between the U.K.'s and the U.S.' view of the appropriate scope of antitrust enforcement. The central principle of U.S. antitrust law is the protection of competition and the U.K.'s clear statement of this guiding principle in its merger law is an important step forward in an increasingly global economy. The proposal to impose criminal sanctions on individuals who participate in hard core cartels will also greatly benefit U.K. businesses and consumers. The United States has long held the view that the most effective method to deter individuals from committing antitrust crimes is through the imposition of tough and certain penalties. We welcome the United Kingdom to the growing number of jurisdictions that share these views."
SEC Files Complaint Against HitsGalore
11/28. The SEC filed a civil complaint in U.S. District Court (CDCal) against, Inc., its former President, Stephen Bradford, Life Foundation Trust (LFT), and its administrator, Jeanette Wilcher, alleging violation of federal securities laws. The complaint alleges that Hitsgalore and Bradford issued three false and misleading press releases regarded purported investments by the LFT in Hitsgalore. The releases made statements regarding a purported $10 Million private placement investment by LFT in Hitsgalore, and an agreement in principle between LFT and Hitsgalore for an additional $100 Million investment. The releases also stated that LFT would be purchasing shares as a long term investor. However, the complaint further alleges that LFT sold its shares within weeks, at a huge profit. The complaint alleges that Hitsgalore and Bradford violated § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, that the LFT and Wilcher aided and abetted those violations, and that LFT violated the securities registration provisions of §§ 5(a) and 5(c) of the Securities Act of 1933. (D.C. Case No. SACV 01-1133 GLT (ANx).) See, SEC release.
NCTA Chief Addresses Competition and Broadband Issues
11/28. National Cable Telecommunications Association (NCTA) P/CEO Robert Sachs gave a speech in Anaheim, California, in which he stated that "One of the lessons of September 11th is the importance of having competitive telecommunications networks. With the growing recognition that multiple communications paths provide an extra and necessary measure of national security, we are likely to see facilities based competition take on increased importance in Washington."
Sachs also stated that "there is likely to be a greater emphasis placed on broadband deployment. We saw this recently in the economic stimulus package reported by the Senate Finance Committee where tax credits were provided to encourage further deployment."
WTO DG Moore Addresses Doha Accomplishments
11/28. WTO Director General Mike Moore gave a speech in Hong Kong on the recent meeting in Doha, Qatar, and the new round of trade talks. He praised the outcome of the Doha meeting, summarized its accomplishments, advocated the benefits of free trade, and discussed the compromise on TRIPs and pharmaceutical products.
Moore stated that "By any standards, the 4th Ministerial conference of the WTO was an extraordinarily successful meeting. We tend to talk rather glibly about the historic importance of such events, but this time, for once, the claim is not exaggerated; the meeting at Doha will be remembered as a turning point in the history of the WTO and the trading system and in relations between developed and developing countries within that system." He added that "The outcome at Doha brings to an end the uncertainty, loss of momentum and lack of confidence created by the equally spectacular failure at Seattle two years earlier."
Intellectual Property Rights. Moore stated that "The first major success of the conference was the completion of the Ministerial Declaration on TRIPs and Public Health. This had been a very difficult question, impossible to settle in Geneva, which raised economic and humanitarian issues of the highest importance. A delicate balance had to be struck between every Member government's right to act to protect public health and confront health crises and the need to avoid undermining the TRIPS Agreement, which could easily lead to the drying up of the investment funds needed for research into the drugs of the future. The job was well done, making it clear that there are important elements of flexibility in the TRIPS Agreement which can be used to respond to health emergencies. They include the right to grant compulsory licenses and to determine the grounds upon which they should be granted, and the right to establish national regimes for the exhaustion of intellectual property rights. The declaration removed a critical point of discord between developed and developing countries, and it has been welcomed by governments, by public health lobbies and by the pharmaceutical industry."
People and Appointments
11/28. The Senate confirmed Randall Kroszner to be a Member of the Council of Economic Advisers.
More News
11/28. The FBI's National Infrastructure Protection Center (NIPC) issued Advisory No. 01-027, titled "Significant Vulnerability Identified In Common Linux File: Transport Protocol Program Identified". The Advisory warns that there is a "vulnerability in versions of the Washington University File Transport Protocol Daemon (WU-FTPD) that could lead to an attacker gaining surreptitious access to sensitive information. For those systems using the WU-FTPD service for which a patch is not yet available, it is suggested that you either disable FTP by blocking TCP port 21 or, in those instances where this is not an option, disable anonymous logon."
11/28. The Supreme Court heard oral argument in Ashcroft v. ACLU, No. 00-1293. This case involves the constitutionality of the 1998 Child Online Protection Act which makes it illegal to provide to minors over the web material that is harmful to minors.
House Passes Computer Security Enhancement Act
11/27. The House passed HR 1259, the Computer Security Enhancement Act, by a vote of 391 to 4. See, Roll Call No. 449. The bill is sponsored by Rep. Connie Morella (R-MD) and other members of the House Science Committee. It amends the National Institute of Standards and Technology (NIST) Act to give the NIST the responsibility "to provide guidance and assistance to Federal agencies for protecting the security and privacy of sensitive information in interconnected Federal computer systems". However, it excepts national security systems.
The bill also provides that the NIST "shall not promulgate, enforce, or otherwise adopt standards or policies for the Federal establishment of encryption and electronic authentication standards required for use in computer systems other than Federal Government computer systems".
The bill also provides that NIST shall "develop technology neutral guidelines and standards, or adopt existing technology neutral industry guidelines and standards, for electronic authentication infrastructures to be made available to Federal agencies so that such agencies may effectively select and utilize electronic authentication technologies ..."
House Votes to Extend Export Administration Act
11/27. The House passed HR 3189, the Export Extension Act, by a voice vote. This short bill simply extends the Export Administration Act until April 20, 2002. It is sponsored by Rep. Henry Hyde (R-IL). The current Export Administration Act lapsed on August 20, 2001. However, President Bush issued an Executive Order on August 17 extending it.
The Congress has been working on legislation to overhaul the export control laws. The Senate passed S 149, the Export Administration Act of 2001, sponsored by Sen. Mike Enzi (R-WY), on September 6, by a vote of 85 to 14. This bill would  modernize export control laws. It would ease restraints on most dual use products, such as computers and software, but increase penalties for violations. It would also repeal provisions of the 1998 National Defense Authorization Act which require the President to use MTOPS to set restrictions on the export of high performance computers. The House International Relations Committee, which Rep. Hyde chairs, passed a much different version of the bill in August. President Bush supports the Senate bill.
FCC Releases NextWave Agreement
11/27. The FCC released the November 15 proposed settlement agreement [PDF] between the FCC, NextWave, the DOJ, and the re-auction winners. The 65 page document is titled "Settlement Agreement By and Among the United States of America the Federal Communications Commission NextWave Telecom Inc. and Certain Affiliates and Participating Auction 35 Winning Bidders".
NextWave obtained spectrum licenses at FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses, and make payments under an installment plan, thus creating a debtor creditor relationship between NextWave and the FCC. NextWave did not make payments required by the plan, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses. It then proceeding to re-auction the disputed spectrum. The U.S. Court of Appeals (DCCir) ruled in its June 22, 2001, opinion that the FCC is prevented from canceling the spectrum licenses by § 525 of the Bankruptcy Code. The FCC has petitioned the Supreme Court for writ of certiorari.
The agreement requires approval by the bankruptcy court, and passage of legislation by Congress.
FCC Chairman Michael Powell released a statement in which he said that "This begins to bring to a close a long and torturous event." He defended the agreement: "It reclaims the NextWave licenses and puts them in the hands of companies that can put them to use quickly for consumers. Additionally, it allows the American taxpayer to receive nearly double what it was legally entitled to collect under the Court of Appeals ruling -- rather than $5 billion, the American people will receive $10 billion. While it surely would have been preferable to have carried through on the reauction and collect the $16 billion that was bid, that option was extinguished by the Court and I believe this settlement is the best outcome under the circumstances."
The Department of Justice stated in a release that "The settlement agreement cannot be implemented before Congress passes particular legislation, and implementation also requires approval by the court that oversees NextWave's bankruptcy petition. In the meantime, the government's petition for a writ of certiorari is pending before the Supreme Court. According to the settlement agreement, NextWave will surrender all the C and F block licenses for wireless telecommunications spectrum it previously won. The FCC will then issue new licenses for that spectrum to qualified wireless carriers that offered the winning bids in Auction 35."
FCC Releases Report on International Negotiations
11/27. The FCC's International Bureau released its 2001 Report on International Negotiations, Spectrum Policy & Notifications [59 pages in PDF].
PPI Issues Report on e-Government
11/27. The Progressive Policy Institute, a Washington DC based Democratic Party think tank, released a report [3 MB in PDF] titled "Breaking Down Bureaucratic Barriers: The Next Phase of Digital Government". See also, summary [HTML]. It argues that government agencies so far have only provided information in agency based web sites, and allowed simple interactive functions, such as filing of taxes. The report advocates further development of government services on the Internet.
The report calls for "functionally oriented, citizen centered government Web presences designed to give citizens a self service government". It offers some recommendations, such as inter- govermental web sites, use of P3P enabled cookies on government Web sites, and more funding. It was written by Andrew Leigh and Robert Atkinson.
Hearing on Settlement of Microsoft Class Action Litigation
11/27. The U.S. District Court (DMD) commenced its hearing in In re Microsoft Corp. Antitrust Litigation, Multi District Litigation No. 1332, regarding the proposed Settlement Agreement. This agreement proposes a settlement of the private antitrust class action lawsuits against Microsoft alleging that it overpriced its products. The hearing will continue on December 10.
Criminal Copyright Infringement
11/27. A grand jury of the U.S. District Court (NDCal) returned an indictment [PDF] against Eric Niemi charging criminal copyright infringement in violation of 17 U.S.C. § 506(a)(1) and 18 U.S.C. § 2319(b)(1) in connection with the sale through eBay auctions of counterfeit copies of Adobe programs. He was also charged with mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343).
Niemi was previously charged by criminal complaint [PDF] on July 20. Scott Frewing and Lauri Gomez are prosecuting the case. This is D.C. Case No. CR 01-20179.
Bills Introduced
11/27. Rep. Mike Ferguson (R-NJ) and Rep. Danny Davis (D-IL) introduced H Res 295, a resolution pertaining to education and technology. It "urges the creation of a commission on technology and education that would (1) provide clear and focused goals for the future of classroom educational technology and make recommendations to efficiently implement technology to accomplish these goals ..."
11/27. Rep. Jeff Flake (R-AZ) and others introduced HR 3353, a bill to require the Assistant to the President for Homeland Security to establish a web site for providing information on suspicious activities that may be used by the FBI and other government agencies in the war on terrorism or to protect homeland security. The bill was referred to the House Judiciary Committee.
11/27. Rep. Mike Ferguson (R-NJ) and Rep. Danny Davis (D-IL) introduced HRes 295, a resolution urging the establishment of a commission on technology and education. It was referred to the House Committee on Education and the Workforce.
11/27. Sen. John Edwards (D-NC) introduced S 1733, a bill to develop a unified electronic data system to enhance access to information that is relevant to determine whether to issue a visa or admit an alien to the U.S. The bill was referred to the Senate Judiciary Committee. Sen. Edwards also issued a release that stated that "The legislation would use sophisticated computer programs to match names on passports, visas or other official documents against names on federal lookout lists. ... Based on recommendations from federal agencies involved in keeping would be terrorists out of the country, the legislation would insure that names stored in different databases may be matched more accurately. It would require the State Department, Customs Service, INS and other agencies to use a uniform record keeping system, and let the agencies take advantage of sophisticated computer software that spots variations of the same name."
People and Appointments
11/27. The Senate Banking Committee voted unanimously to approve the nominations of Susan Bies and Mark Olson to be members of the Federal Reserve Board.
11/27. BellSouth announced personnel changes. Vice Chairman Jere Drummond, and President -- Network Services Charlie Coe, will retire from the company, effective December 31. The new Vice Chairman is Gary Forsee. Also, Ralph de la Vega, who is currently President -- Broadband and Internet Services, will become President -- BellSouth Latin America. See, BellSouth release.
11/27. Lawrence Roberts joined the Washington DC office of the law firm of Skadden Arps as a partner in the communications practice. He was previously a partner in the Washington DC office of Davis Wright Tremaine.
Cal App Rules No Jurisdiction Over Out of State Poster to Yahoo Message Board
11/26. The Court of Appeal of California (2/4) issued its opinion [PDF] in Nam Tai Electronics v. Joe Titzer, a case regarding personal jurisdiction over persons who publish allegedly defamatory statements in Internet message boards. The Appeals Court affirmed the trial court's order quashing service and dismissing the complaint.
Parties. Nam Tai Electronics makes consumer electronic products. Its stock is traded on the NASDAQ [ticker: NTAI]. It is incorporated in the British Virgin Islands, and based in Hong Kong. Joe Titzer is an individual who anonymously published statements about Nam Tai stock on a Yahoo message board. He is a resident of Colorado. Yahoo is a California corporation.
Procedure. Nam Tai filed a complaint in California Superior Court alleging libel, trade libel, and violations of the California Business and Professions Code, Section 17200, against the unknown author of the Yahoo message board statements. Nam Tai subsequently obtained the identity of the anonymous poster (Titzer) from Yahoo pursuant to a subpoena, and amended its complaint. Titzer moved to quash service of process and dismiss the complaint on the grounds that, as a resident of Colorado, the California court lacked jurisdiction over him. The trial court quashed service and dismissed the complaint. Nam Tai filed this appeal.
Court of Appeal Holding. The Court of Appeal, relying heavily on Jewish Defense Organization v. Superior Court, 72 Cal.App.4th 1045 (1999), affirmed the trial court. It wrote that "The issue is not whether the company that makes the Web sites available is incorporated or based in California. As the courts recognize, an Internet company of Yahoo!'s type may be based anywhere in the world. The determinative question is whether the Web sites themselves are of particular significance to California or Californians such that the user has reason to know the posting of a message will have significant impact in this state. Although we presume respondent's messages were available to Californians or anyone else with access to the Internet, appellant presented no evidence to suggest that respondent's messages or the Web sites on which they were posted were directed at Californians or disproportionately likely to be read by residents of this state. Alternatively, appellant presented no evidence to suggest that its relationships with residents of California were of particular importance to its business and likely to be impacted negatively by the messages posted on the Web sites."
Choice of Forum Clause. The Appeals Court also rejected Nam Tai's argument that the choice of forum clause in Yahoo's terms of service (TOS) provided jurisdiction in California. The TOS state that the relationship between Yahoo and its subscribers "shall be governed by the laws of the State of California without regard to its conflict of law provisions". The Court reasoned that while choice of forum clauses are enforceable, they must be unambiguous, and in this case, the TOS do not unambiguously state that disputes between Yahoo's subscribers and third parties are covered by the clause.
Federal Jurisdiction in Contract Disputes Involving IPR
11/26. The U.S. Court of Appeals (7thCir) issued its opinion in International Armor v. Moloney Coachbuilders, a appeal from a case plead as a Lanham Act claim. The Appeals Court applied the "arising under" clause of Article III of the Constitution, and the artful pleading doctrine, to rule that the federal judiciary lacks jurisdiction in this case.
The Appeals Court concluded that the dispute was a contract dispute between citizens of the same state. The contract at issue concerned ownership of trademarks. Judge Easterbrook, writing for a three judge panel, wrote that intellectual property rights (IPR) in the form of patents, copyright and trademarks exist because of federal law. However, when parties enter into contracts regarding ownership of IPR, and then dispute the effect of those contracts, the disputes are claims arising under state contract law, not claims arising under federal IP law. The Appeals Court vacated the judgment of the District Court, and remanded with instructions to dismiss for lack of subject matter jurisdiction.
Supreme Court Denies Cert in NAFTA Challenge
11/26. The Supreme Court denied certiorari in United Steel Workers of America v. U.S., thereby letting stand the February 27, 2001, opinion of the U.S. Court of Appeals (11thCir) which invoked the political question doctrine to reject a challenge to the constitutionality of the North America Free Trade Agreement (NAFTA).
The United Steel Workers of America (USWA) filed a complaint in the U.S. District Court (NDAla) against the United States alleging that the NAFTA should be declared unconstitutional on the grounds that it was not ratified as a treaty by a two thirds vote in Senate. The Clinton administration and the Congress treated the NAFTA as an executive agreement not requiring Senate ratification as a treaty, and implemented it by passing legislation by simple majorities in the House and Senate.
The Appeals Court wrote in February that "We nonetheless decline to reach the merits of this particular case, finding that with respect to international commercial agreements such as NAFTA, the question of just what constitutes a "treaty" requiring Senate ratification presents a nonjusticiable political question."
The USWA petitioned for writ of certiorari. The Supreme Court denied the petition, without opinion. See, November 26 Order List [PDF] at page 2.
Supreme Court Denies Cert in Tereschouk Case
11/26. The Supreme Court denied certiorari in Tereschouk v. USPTO, thereby letting stand the April 4, 2001, opinion of the U.S. Court of Appeals (FedCir). The Court of Appeals affirmed a decision of the U.S. Patent and Trademark Office's Board of Patent Appeals and Interferences that sustained rejection of all of the claims of Tereschouk's patent application No. 08/490,903. Tereschouk petitioned for writ of certiorari. The Supreme Court denied the petition, without opinion. See, November 26 Order List [PDF] at page 7.
7th Circuit Reverses in Level 3 Insurance Case
11/26. The U.S. Court of Appeals (7thCir) issued its opinion in Level 3 Communications v. Federal Insurance, a diversity suit involving application of a policy of directors' and officers' liability insurance to shareholder securities fraud law suits. Reversed and remanded.
NTIA Chief Addresses Spectrum Issues
11/26. NTIA chief Nancy Victory gave a speech to the Latin American Wireless Industry Association (ALACEL) titled "The Politics of Telecommunications in Times of Crisis". She addressed the proposed Free Trade of the Americas Agreement (FTAA), government management of spectrum, the status of spectrum allocation for Third Generation (3G) wireless services, and the multitude of U.S. governmental bodies involved in international spectrum policy making.
Spectrum Management. She stated that certain basic principles regarding spectrum management have become apparent. "First, spectrum policy must recognize that it is not practical to try to anticipate consumer demand or technological development -- policies should be flexible to allow service growth and evolution."
"Second, spectrum policy must recognize the practicalities of running a business - certainty and predictability of regulation is essential to a company's ability to grow and succeed. The continued development of wireless services in the region requires that additional spectrum be offered in a non-discriminatory, transparent manner in order to secure further and sustained investment."
"Third, spectrum policy must recognize the practicality of limited government resources that cannot respond as quickly as the market - policies and requirements that are not necessary should not be imposed or should be eliminated if they exist."
"And finally, spectrum policy must recognize the practicalities of current spectrum use and the difficulties of changing the hand that we've been dealt," said Victory.
3G Wirless. She reiterated that the NTIA, Department of Defense, FCC, and others, are conducting an assessment of the viability of making certain identified spectrum available for 3G services. She said that this assessment will focus on the 1710-1770 and 2110-2170 MHz bands by NTIA and the FCC, respectively. She said that "We expect to complete this assessment by the late spring of 2002."
She also stated that "the need to harmonize our decisions within the region is a key component of our domestic discussions."
Representatives Complain About Internet Drug Sales
11/26. Rep. John Dingell (D-MI) and Rep. Henry Waxman (D-CA) sent at letter to Tommy Thompson, the Secretary of Health and Human Services, urging him "to take action to prevent inappropriate sales of Cipro and other antibiotics over the Internet." The two are the ranking Democrats on the House Commerce Committee and the House Government Reform Committee, respectively.
They continued that "Recently, web sites have sprung up that offer Cipro and other antibiotics for anthrax infection to an alarmed public without a doctor’s prescription. Antibiotic sales by these businesses can cost as much as ten times more than the government pays and lead to unnecessary adverse reactions and antibiotic resistance. The Food and Drug Administration (FDA) has moved to stop web sites from selling foreign drugs in the United States. However, the agency has not taken a clear position on sites that offer domestic antibiotics illegitimately."
Computer Crime
11/26. Geoffrey Osowski and Wilson Tang were each sentenced in U.S. District Court (NDCal) to serve 34 months in prison. Both plead guilty on August 20, 2001, to one count of computer fraud in violation of 18 U.S.C. § 1030(a)(4). The two exceeded their authorized access to the computer systems of Cisco Systems in order to illegally issue almost $8 million in Cisco stock to themselves. See, Osowski Plea Agreement [PDF], Tang Plea Agreement [PDF], and USAO release.
People and Appointments
11/26. Jeffrey Blattner joined the Washington DC office of the law firm of Hogan & Hartson as a partner the firm's Antitrust, Competition and Consumer Protection and Legislative Groups. He was previously a Deputy Assistant Attorney General and Special Counsel for Information Technology in the Antitrust Division of the Department of Justice. He worked on the Microsoft litigation. He is also a former long time staff assistant to Sen. Ted Kennedy (D-MA); he was one of the architects of the Senate rejection of Robert Bork's nomination to be a Supreme Court Justice. See, H&H release.
More News
11/26. Verizon submitted a Section 271 application to provide in region inter LATA service in Rhode Island. See, FCC release [PDF] and Verizon release. (CC Docket No. 01-324.)

Go to News Briefs from November 21-25, 2001.