|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
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
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
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.
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
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)
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
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
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
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
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."
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
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
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.
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.
11/29. The House passed HR 3210,
the Terrorism Risk Protection Act, on a largely party line vote of 227 to 193.
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
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
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
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
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
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
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 firstname.lastname@example.org, or by mail or
fax. See, notice
in Federal Register, November 28, 2001, Vol. 66, No. 229, at Pages 59452 -
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
Hitsgalore.com, 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
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
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
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
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.
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
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
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
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.
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
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
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
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
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]
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
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
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
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
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
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
"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
"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,
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."
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
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
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.)
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