News from February 21-25, 2004

Legislators Introduce Bills to Limit Deductions for Contributions of IPR

2/25. On February 25, Rep. Amo Houghton (R-NY), Rep. Rob Portman (R-OH), and Rep. Jerry Moran (R-KS) introduced HR 3837, an untitled bill to limit the deduction for charitable contributions of patents and similar property. It was referred to the House Ways and Means Committee, of which Rep. Houghton is a senior member. Rep. Portman is also a member.

On February 24, Sen. Pat Roberts (R-KS) and Sen. Sam Brownback (R-KS) introduced S 2103, the companion bill in the Senate. That bill was referred to the Senate Finance Committee.

Rep. Amo HoughtonRep. Houghton (at right) submitted a statement for the Congressional Record. He wrote that this bill would "tighten the tax rules for technology donations. The proposal would prevent the abusive transactions, but would allow the fair market value of legitimate gifts of technology to be deducted when the technology is transferred to universities, teaching hospitals, or nonprofit research institutions." Congressional Record, February 25, 2004, at page E232.

He continued that "Taxpayers are permitted to deduct the fair market value of patents and related technology that are donated to tax exempt charities. The benefit from the tax savings generated by patent and technology donations encourages the private owners of technology to transfer the patent to credentialed institutions that can develop it, creating new markets, improving people's lives, creating jobs, and strengthening the educational capabilities and innovative skills of our universities, teaching hospitals and research institutions." See, for example, Internal Revenue Service (IRS) Revenue Ruling 58-260, which confirmed the deductibility of donated patents.

However, he added that "In recent years the Internal Revenue Service and the Treasury Department have identified serious problems that have allowed unscrupulous taxpayers to abuse the law. In some cases, technology of questionable value is donated to tax exempt entities that are either incapable or unwilling to develop it. Any ``value´´ deducted in these cases is clearly exaggerated. In some cases, donor appraisals of otherwise valuable technology to a credentialed donee may have stated values that are inflated."

He explained that "My proposal would limit the incentive to very specific circumstances. Deductions would be limited to technology gifts in cases when all rights, title and interest in technology are transferred to either a university, teaching hospital, or non-profit research institute that is able to apply its credentialed expertise to the development of the technology. Under the proposal, the donor and donee of any cash included with a qualified gift must agree to limit its use to the development of the technology gift."

Also, "The bill adds a number of measures to avoid abuse in this area. Qualified appraisals and qualified appraisers are required and defined. One or more appraisals (second appraisal if value is over $5 million) would be required without regard to any value limitation. The Secretary of the Treasury shall prescribe regulations or guidance regarding the qualified appraisals and qualified appraisers. In addition, other anti-abuse measures to prevent the bundling of patents or similar property and/or manipulation of the tax basis in order to increase the amount of the contribution are included." (Parentheses in original.)

These two bills would amend Section 170 of the Internal Revenue Code, which is codified at 26 U.S.C. § 170. This section provides for the deduction of charitable contributions made within the tax year. Subsection 170(e) provides for the deduction of certain contributions of ordinary income and capital gain property.

170(e) pertains to "Certain contributions of ordinary income and capital gain property". Subsection 170(e)(1) provides the general rule.

These bills would amend Subsection 170(e)(1) to read as follows. (The words in red, that is, (B)(iii), are added. The word "or" at the end of (B)(i) is deleted.)

"The amount of any charitable contribution of property otherwise taken into account under this section shall be reduced by the sum of --
  (A) the amount of gain which would not have been long-term capital gain if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution), and
  (B) in the case of a charitable contribution --
    (i) of tangible personal property, if the use by the donee is unrelated to the purpose or function constituting the basis for its exemption under section 501 (or, in the case of a governmental unit, to any purpose or function described in subsection (c)), or
    (ii) to or for the use of a private foundation (as defined in section 509(a)), other than a private foundation described in subsection (b)(1)(E), or
    (iii) except as provided in paragraph (7), of any patent, copyright, trademark, trade name, trade secret, know-how, software, or similar property,
the amount of gain which would have been long-term capital gain if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution)."

These bills would then add a new subsection 170(e)(7) that would create an exception to the general rule for contributions to certain qualified research organizations.

Finally, these bills direct the IRS to promulgate regulations that require "the donor of property described in section 170(e)(1)(B)(iii) of such Code to obtain one or more qualified appraisals of the fair market value of such property by a qualified appraiser or appraisers."

These bills also direct the IRS to promulgate regulations that "may be necessary or appropriate to prevent the avoidance of the purposes of " the new provisions contained in this bill.

See also, February 2, 2004, International Intellectual Property Institute (IIPI) paper [48 pages in PDF] titled "IP Donations: A Policy Review".

See also, related TLJ stories:
 • "IIPI Paper Examines Tax Deductions for IP Donations" in TLJ Daily E-Mail Alert No. 837, February 16, 2004.
 • "IRS Plans Crack Down on Charitable Contributions Deductions Involving Transfers of Intellectual Property" in TLJ Daily E-Mail Alert No. 805, December 23, 2003.
 • "Tax Bill Signed, Without Broadband Expensing Provision or IP Deductions Limitation" TLJ Daily E-Mail Alert No. 669, May 29, 2003.
 • "Senate Passes Tax Bill with Limitation of Deduction for Charitable Contributions of Intellectual Property" TLJ Daily E-Mail Alert No. 664, May 19, 2003.

House Science Committee Holds Hearing on Visa Delays for Alien Scientists

2/25. The House Science Committee held a hearing titled "The Conflict Between Science and Security in Visa Policy: Status and Next Steps".

Rep. Sherwood Boehlert (R-NY), the Chairman of the Committee, wrote in his opening statement that "Our nation will not be secure, in the long run, if it does not have a healthy scientific enterprise, and science cannot thrive in an atmosphere of insecurity. But security and science are also complementary in more practical ways that must be kept in mind when reviewing visa policy. A visa regime that casts too wide a net - that holds up just about everybody for excessive security checks -- that regime is not good for security or for science."

Rep. Zoe LofgrenRep. Zoe Lofgren (D-CA), a member of the Committee who represents a Silicon Valley district, stated in a release that "Americans must keep our doors open to innovation and new ideas. The work of foreign students and the collaboration with their American born colleagues has not only created scientific discoveries and technological advancements for our country, but it has resulted in job creation that our economy so desperately needs. The visa system should incorporate enhanced security checks that do not create unnecessary or burdensome bureaucracies that will only further damage our scientific leadership and image throughout the world."

The Committee also released its hearing charter [11 pages in PDF], which contains a detailed summary of the issue.

Jess Ford of the General Accounting Office (GAO) presented written testimony [15 pages in PDF] titled "Border Security: Improvements Needed to Reduce Time Taken to Adjudicate Visas for Science Students and Scholars".

Ford explained the visa process. "Citizens of other countries seeking to enter the United States temporarily for study, exchanges, business, tourism, and other reasons generally must apply for and obtain a U.S. travel document, called a nonimmigrant visa, at U.S. embassies or consulates abroad before arriving at U.S. ports of entry. Since September 11, 2001, visa operations have played an increasingly important role in ensuring our country’s national security. In deciding who should and should not receive a visa, consular officers must balance the need to facilitate legitimate travel with the need to protect the United States against persons whose entry could be harmful to U.S. national interests."

Ford continued that "As part of the visa application process, many applicants with a science background, including students and scholars, must undergo an interagency security check, known as Visas Mantis, before being issued or denied a visa. A Visas Mantis check is required by the State Department (State), the Federal Bureau of Investigation (FBI), and other interested Washington agencies when there are potential concerns that the visa applicant may engage in the illegal transfer of sensitive technology, which could undermine U. S. national security."

The GAO found that the State Department "cannot readily identify the time it takes for a science student or scholar to obtain a visa."

However, the GAO conducted a random sample of Visas Mantis cases for science students and scholars, and found that "it took an average of 67 days for the security check to be processed and for State to notify the post". The GAO also visited posts in China, India, and Russia, and found that "many Visas Mantis cases had been pending 60 days or more."

The GAO recommended that "the Secretary of State, in coordination with the Director of the FBI and the Secretary of Homeland Security, develop and implement a plan to improve the Visas Mantis process in order to avoid unnecessary delays in visa issuance."

Janice Jacobs, the Assistant Secretary for the Office of Consular Affairs at the Department of State (DOS), wrote in her prepared testimony that "One of the highest foreign policy and national security priorities of the United States is preventing the spread of nuclear, biological, and chemical weapons, their delivery systems and advanced conventional weapons. The Visas Mantis program, designed to address technology transfer and nonproliferation concerns, is an effective tool for U.S. government agencies to prevent entry into the U.S. of foreign nationals to gain controlled goods, technology and sensitive information in violation of US export laws."

She acknowledged that "The business, academic, and scientific communities have expressed concern that delays in Mantis process result in disruptions to on-going research and commercial activities", but stated that the DOS has made a number of changes to increase efficiency.

See also, prepared testimony of Asa Hutchinson, the Under Secretary for Border and Transportation Security, DHS, and prepared testimony [9 pages in PDF] of Robert Garrity of the FBI.

The Committee did not hear testimony at this hearing from representatives of industry or universities that are affected by visa delays.

Zoellick Condemns PR China's Theft of Intellectual Property

2/25. U.S. Trade Representative (USTR) Robert Zoellick gave a speech [9 pages in PDF] titled "China and America: Power and Responsibility" at the Asia Society Annual Dinner in Washington DC. He criticized the People's Republic of China for its lax enforcement of intellectual property rights (IPR), its discriminatory taxation on semiconductors, and its mandatory encryption standard for wireless networking products.

Robert ZoellickZoellick (at right) stated that "If China does not reverse its lax enforcement of intellectual property rights (IPR), it will subvert the development of knowledge industries and innovation around the world. Piracy of ideas in China is rampant. If we can make it, they can fake it."

Zoellick stated that "For China to exercise the responsibility that comes with its new status as a trading power, China must fully implement the commitments it made on joining the WTO. China's WTO accession was an historical achievement, and the efforts required of China to implement its accession commitments are substantial. Yet the complexity of the task does not excuse an incomplete performance."

"With all of the challenges facing China, China may be losing momentum on WTO implementation. Some officials, bending to pressures from entrenched interests, are continually working to find ways around implementing the country’s obligations."

Zoellick addressed theft of IPR in China in more detail. He stated that "The items being counterfeited range far beyond DVDs and other creative media. They include automobile brakes, even entire passenger cars, electrical switches, medicines, processed foods and other items that present health and safety risks in China and abroad because of poor product quality regulation."

He continued that the "The scope and magnitude of the problem is increasing -- with some American firms experiencing wholesale theft of their brand names -- from sales operations to product delivery. Premier Wen Jiabao and others have spoken of the importance of IPR to an advancing economy and of the need to enforce IPR more actively. Vice Premier Wu Yi -- formerly China's Trade Minister and the accomplished woman who the leaders put in charge of the SARS crisis -- now chairs a working group on IPR enforcement. Yet, as the Chinese say, ``talk doesn't cook rice.´´ We need to see results."

He also stated that "China's discriminatory tax policies -- most blatantly on semiconductors -- are a troubling signal that China may seek to pursue an industrial policy of limiting competition from imports, while gaining the advantages of open competition in others' markets."

Finally, he said that "China is turning to special standards designed to limit foreign participation in key sectors. For example, China's new mandatory encryption standard for wireless networking products would make China the only WTO member to introduce such a mandate for consumer products -- a restriction compounded by granting domestic companies exclusive control over the technology."

Zoellick said that he had one encouraging encounter on a recent trip to China. He said that when he met with a group of graduate students from Liaoning University a colleague asked each to name the American, past or present, they would most wish to meet. Said Zoellick, "I smiled at the number who said ``Bill Gates´´; entrepreneurial capitalists have not always been held in high esteem in China. I also made a mental note to think how we might reference this interest to persuade their elders in Beijing to strengthen the protection of intellectual property."

District Court Upholds TSR Against Challenge by Non-Profits That Hire Telemarkers

2/25. The U.S. District Court (DMd) issued its opinion [28 pages in PDF] in National Federation of the Blind v. FTC, upholding the provisions of the Federal Trade Commission's (FTC) Telemarketing Sales Rule (TSR) that apply to non-profit organizations that hire telemarketers.

The National Federation of the Blind and Special Olympics Maryland are nonprofit organizations with tax-exempt status under § 501(c)(3) of the Internal Revenue Code. They both hire telemarketing firms to solicit charitable contributions. They filed a complaint in the District Court alleging that the FTC did not have the statutory authority to issue the TSR, that the TSR violates the First Amendment, and that TSR violates the Equal Protection Clause.

The plaintiffs challenged several of the limited restrictions imposed by the TSR upon the activities of telemarketers who solicit charitable contributions on behalf of non-profit organizations, including (1) the company specific prohibition on calling any consumer who has indicated that he wants no more calls from that particular entity, (2) the requirement that the telemarketer connect calls to a representative within two seconds of the person's completed greeting, (3) the prohibition on calls before 8:00 AM or after 9:00 PM, and (4) the requirement that telemarketers transmit caller ID information.

The District Court granted summary judgment to the FTC.

This case is National Federation of the Blind and Special Olympics Maryland, Inc. v. Federal Trade Commission, D.C. No. JFM-03-963, Judge Frederick Motz presiding.

Copps Wants an Expensive Broadband Regulatory Regime

2/25. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech [7 pages in PDF] in Washington DC titled "Disruptive Technology ... Disruptive Regulation". He argued that the U.S. needs broadband deployment, that the market alone cannot be relied upon to accomplish this, that a "broadband regulatory regime" will be necessary, that the legislative authority for this is Section 706, and that it will be expensive.

Michael Copps"Sure, what I'm talking about is expensive," said Copps (at left).

He stated that "the question here is this: how do we get infrastructure deployment done?" He answered that "given the scale of the challenge, given the difficult economics of rural areas, and given the rapidity with which other counties are building out their own broadband networks, we would be remiss if we didn’t ask whether the market alone can get the whole job done."

He stated that voice over IP (VOIP) is "another wake-up call that a national broadband policy is needed".

He then referenced the FCC's decisions of February 12, 2004. He stated that "Our actions in the Pulver decision and the IP-Enabled Services rulemaking week before last garnered a lot of attention. But for Voice Over to be truly transformative and disruptive -- rather than just being a marginal change that doesn't shake the system -- we need ubiquitous broadband deployment. We shouldn’t be debating this technology in terms of how it can help us to game the system or to create yet another generation of arbitrage maneuvering."

On February 12, the FCC adopted a Declaratory Ruling (DR) on's petition for declaratory ruling regarding the classification of its Free World Dialup (FWD) service. The FCC concluded that FWD is not telecommunications as defined by the Act, that FWD is not telecommunications service as defined by the Act, and that FWD is an information service as defined by the Act. See, story titled "FCC Rules Pulver's FWD Is Not Telecommunications, Is Not Telecommunications Service, and Is Information Service" also published in TLJ Daily E-Mail Alert No. 836, February 13, 2003.

The FCC also adopted a notice of proposed rulemaking (NPRM) regarding regulation of internet protocol services, including voice over internet protocol (VOIP). See, story titled "FCC Adopts NPRM Regarding Regulation of Internet Protocol Services" in TLJ Daily E-Mail Alert No. 837, February 16, 2004.

Copps continued that "Part of this thinking must focus on whether we believe that market forces alone -- practically and not just theoretically -- will blanket this land with broadband. And, yes, that means we have to struggle with universal service rather than say it doesn't matter anymore in our brave new world."

He then addressed where the FCC might find statutory authority for a broadband regulatory regime. He said "I believe we have a statutory obligation here. Section 706 of the Telecommunications Act directs the Commission to encourage the deployment of advanced telecommunications capability -- broadband -- to all Americans. If the Commission finds that this is not being accomplished in a reasonable and timely fashion, Congress directs us to take action to accelerate such deployment. In fact, Congress directs us to take immediate action."

Section 706 of the Telecommunications Act of 1996 (which is codified in the notes to 47 U.S.C. § 157) provides, in part, that "The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment." (Parentheses in original.)

Section 706 further provides, in part, that "The Commission shall, within 30 months after the date of enactment of this Act, and regularly thereafter, initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) and shall complete the inquiry within 180 days after its initiation. In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." (Parentheses in original.)

Copps next addressed intercarrier compensation. He said that "Our intercarrier compensation system is Byzantine and broken. We have in place today a system under which the amounts and direction of payments vary depending on whether carriers route traffic to an incumbent local provider, a competitive local provider, a long-distance provider, an Internet provider, a CMRS carrier or a paging provider. In an era of convergence of markets and technologies, this patchwork of rates should have been consigned by now to the realm of historical curiosity. Certainly no one should be surprised that with new technologies in the mix, carriers are disputing when and where charges apply."

"We have a two-year old proceeding on intercarrier compensation. We need to act on it", said Copps.

He concluded that "Going forward, then, we need to develop a real national plan for broadband deployment. Over the long-term, the debate over what is ``telecommunications´´ or ``telecommunications services´´ or ``information services´´ cannot be the single-minded focus of our broadband dialogue. Think about it: we have all spent the better part of the last two years classifying, reclassifying and declassifying. What do we have to show for it? We're all exhausted, that’s for sure. We're in free-fall when compared with broadband penetration in other nations."

House Commerce Subcommittee Approves Alternative Database Bill

2/25. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection approved HR __, the "Consumer Access to Information Act of 2004". See, full story.

People and Appointments

Rep. Joe Barton2/25. Rep. Joe Barton (R-TX), has been designated the new Chairman of the House Commerce Committee, replacing Rep. Billy Tauzin (R-LA). Rep. Barton (at right) and the Subcommittee Chairmen will announce a new Committee structure on Thursday, February 26 at 1:00 PM in the Committee hearing room, Room 2123, Rayburn Building.

2/25. President Bush announced his intent to nominate Ted Kassinger to be Deputy Secretary of Commerce. He is currently General Counsel for the Department of Commerce (DOC). He was previously a member of the law firm of Vinson & Elkins. He has also worked for the Senate Finance Committee as International Trade Counsel. See, White House release.

2/25. Clear Channel Communications, Inc. announced that it has adopted a "Responsible Broadcasting Initiative" to deal with broadcast indecency. See, Clear Channel release [PDF]. Pursuant to this initiative, it suspended its broadcast of Howard Stern's radio program. Back on September 9, 2003, the Federal Communications Commission's (FCC) Media Bureau issued a Declaratory Ruling [PDF] that the Howard Stern Show constitutes a "bona fide news interview program". See, story titled "FCC Rules that Howard Stern Has a Bona Fide News Interview Program" in TLJ Daily E-Mail Alert No. 736, September 10, 2003.

2/25. Gavin Harvey was named President of the Outdoor Life Network (OLN), a Comcast owned television network devoted to outdoor adventure and action sports, including the Tour de France. He replaces Roger Williams. See, Comcast release.

2/25. Sun Microsystems announced that Patricia Sueltz, EVP of Sun Services, is leaving Sun, effective immediately. See, Sun release.

More News

2/25. The EU issued a release regarding negotiations held on February 24-25 in Brussels, Belgium between the US, EU and EU member states, regarding Global Positioning System (GPS) and Galileo cooperation.

2/25. The U.S. Patent and Trademark Office (USPTO) that its Nanotechnology Customer Partnership will meet on April 20 from 1:00 - 5:00 PM. RSVP to Jill Warden at 571 272-1267 or See, notice.

Sen. Ron Wyden2/25. The Senate Budget Committee held a hearing on President Bush's budget proposals for the Department of Homeland Security (DHS) for fiscal year 2005. See, prepared testimony [8 pages in PDF] of Tom Ridge, the Secretary of Homeland Security. Sen. Ron Wyden (D-OR), a member of the Committee raised the subject of data mining activities at the DHS, a requested that the DHS provide information on its activities. Sen Wyden (at right) stated that "A whole host of information is being examined by government agencies every single day... Congress is in the dark with respect to what's going on in data mining, there are no privacy rules, and [taxpayers] are spending money on this, and it seems to me that the public has a right to know exactly what's going on." See, Wyden release.

2/25. The U.S. Court of Appeals (1stCir) issued its opinion in Zyla v. Wadsworth, a copyright case. Zyla, the co-author of an academic textbook, withdrew during the writing of a 4th edition of the book. After its completion she filed a complaint in the U.S. District Court (DMass) against the other author, and the publisher, alleging copyright infringement, violation of the Lanham Act, breach of contract and other claims. The defendants prevailed on summary judgment. The Appeals Court affirmed. This case is Gail Zyla v. Wadsworth, a Division of the Thomson Corporation, the Thomson Corporation, and Marie Boyle Struble, No. 03-1801, an appeal from the U.S. District Court for the District of Massachusetts, Judge Rya Zobel presiding.

2/25. The U.S. Court of Appeals (10thCir) issued its opinion in Santana v. Tulsa, a constitutional challenge to a municipality's enforcement of its nuisance ordinance. One Eddie Santana filed a pro se complaint in U.S. District Court (NDOkla) against the City of Tulsa, where he lives, after it had seized and removed some items from the back yard of his house. The City argued that it had legitimately seized junk pursuant to the city ordinance banning nuisances. The City prevailed below, and Santana brought the present appeal. The Appeals Court affirmed. What is notable about this case is that it did not involve junk autos sitting atop cinderblocks, rusting refrigerators, or such other typical yard junk. The City of Tulsa seized computer parts. This case is Eddie Santana v. City of Tulsa, App. Ct. No. 03-5056, and D.C. No. 02-CV-577-H.

2/25. Rep. Charles Rangel (D-NY) introduced HR 3827, the "Job Protection Act of 2004", a bill that includes replacement legislation for the FSC/ETI tax regime. The bill was referred to the House Ways and Means Committee, of which Rep. Rangel is the ranking Democrat.

Senators Write in Opposition to State Taxation of Internet Access

2/24. Sen. George Allen (R-VA), Sen. Ron Wyden (D-OR), Sen. John Sununu (R-NH), Sen. Conrad Burns (R-MT), Sen. Gordon Smith (R-OR), and Sen. John Ensign (R-NV) sent a "Dear Colleague" letter to other members of the Senate regarding S 150, the "Internet Tax Nondiscrimination Act", and S 2084, the "Internet Tax Ban Extension and Improvement Act".

  Sen. Ron

They write that S 150 "will likely be before the Senate in the very near future. Opponents of this legislation are floating a new bill seeking your support to tax consumers of Internet access. As Members of the Senate Committee on Commerce, Science, and Transportation, we think that it is important to provide context, truth and clarity to their position and proposal."

They proceed to offer criticism of S 2084, which is sponsored by Sen. Lamar Alexander (R-TN), Sen. Tom Carper (D-DE), and others.

They state that "Represented as a so-called ``compromise,´´ the new bill is far from it." They state that it "is an effort to gain Federal legal protection for the actions of several State and local revenue authorities that have used administrative rulings to do an end-run on the moratorium on Internet access taxes."

Sen. Lamar Alexander  
Sen. Lamar

They continue that S 2084 would "Authorize existing illegal taxes on Internet access for high-speed broadband connections (e.g., taxes on Digital Subscriber Lines) that some States and localities have imposed today." (Parentheses in original.)

They also state that S 2084 would "Authorize new taxes by narrowing the definition of Internet Access to cover only the connection between purchaser of Internet access and the Internet service provider. Tax collectors will merely push the taxes up the network line and consumers will pay these taxes in one form or another."

They conclude, "Simply put, supporting this bill would mean that you support taxing internet access".

See also, story titled "Sen. Alexander Introduces Bill Regarding Internet Tax Moratorium", also published in TLJ Daily E-Mail Alert No. 838, February 17, 2004.

Rep. DeLauro and Rep. Dingell Introduce Outsourcing Protectionism Bill

2/24. Rep. Rosa DeLauro (D-CT) and Rep. John Dingell (D-MI) introduced HR 3820, the "United States Workers Protection Act of 2004". The bill would amend the Office of Federal Procurement Policy Act, which is codified at 41 U.S.C. § 403 et seq., to bar most outsourcing by the federal government

Rep. Rosa DeLauroRep. DeLauro (at right) stated in a release that "Outsourcing these jobs is wrong and should not even be an option for the federal government".

The bill provides that "An activity or function of an executive agency that is converted to contractor performance under Office of Management and Budget Circular A-76 may not be performed by the contractor or any subcontractor at a location outside the United States except to the extent that such activity or function was previously performed by Federal Government employees outside the United States."

The bill also provides, that subject to certain exceptions, "A contract for the procurement of goods or services that is entered into by the head of an executive agency may not be performed outside the United States except to meet a requirement of the executive agency for goods or services specifically at a location outside the United States."

The bill was referred to the House Committee on Government Reform.

Senate Commerce Committee Holds Hearing On VOIP

2/24. The Senate Commerce Committee held a hearing on voice over internet protocol (VOIP). FCC Chairman Powell advocated non-regulation of the internet, with exceptions for CALEA surveillance, E911, universal service subsidies, and disabled access.

Sen. John McCain (R-AZ), the Chairman of the Committee, wrote in his opening statement that "we continue to regulate the telecommunications industry under the confines of an outdated statutory regime that has been rendered largely obsolete by technology. VOIP is a case in point: the FCC is forced to shoehorn a newly emerging technology into Congress's 1996 vision of communications regulation, and to classify as either fish or fowl that which may be neither."

Sen. Lamar Alexander (R-TN) wrote is prepared testimony for the Committee that "Historically, state and local governments have shared the responsibility in the regulation of the telephone industry. This shared responsibility has given states a major say in how service is provided in their states, the provision of emergency services, and the provision of services to low income and rural customers. As the FCC considers how this industry is to be regulated – and Chairman Powell has already indicated that he supports minimal regulation of VOIP technologies – we must recognize that state and local governments have interests that must be preserved." He went on to stress the importance of state and local taxation.

Federal Communications Commission (FCC) Chairman Michael Powell wrote in his prepared testimony that "we should begin with the non-regulation of the Internet as the first article of faith because limiting government intrusions -- both at the federal and state level -- maximizes the potential for innovation and increases opportunity for the nation as a whole."

But, he said that there are exceptions; "we must remain committed to universal service, law enforcement access, E911 capabilities, and access for people with disabilities. And, we must effectively manage the transition from the analog to an all digital world to ensure that Americans relying on yesterday’s communications tools are not left behind."

He also wrote that "While Internet voice services offer great potential, they are also extremely easy to establish abroad. If we do not create the proper regulatory climate in the United States, it is quite possible our local calls will be routed through Canada and Mexico at cheaper rates, rather than through Kansas and Montana. We must adopt the right policies to foster investment, innovation and competition."

Chairman Powell also gave a speech in Lawrence, Kansas on Februay 23 titled "Rural Lands of Opportunity: Broadband Deployment in America's Heartland".

See also, prepared testimony of Jeffrey Citron (CH/CEO of Vonage), prepared testimony of Glenn Britt (Ch/CEO of Time Warner Cable), prepared testimony of Glen Post (Ch/CEO of CenturyTel), prepared testimony of Stan Wise (President of the National Association of Regulatory Utility Commissioners), and prepared testimony of Kevin Werbach (Supernova Group).

Gates Announces Plans for Caller ID for E-Mail

2/24. Bill Gates, Chairman and Chief Software Architect of Microsoft, gave a speech at the RSA Conference in San Francisco, California. He talked about security threats, and what Microsoft is doing to address these threats. One threat that he covered is spam. He announced a Microsoft proposal that he called "caller ID for e-mail".

Bill GatesGates (at left) first described current techniques for filtering spam, which attempt to examine e-mail, and identify it as spam, such as by its origin or content. He then discussed how spammers evade these filters by spoofing the domain of origin, and by disguising the content.

He stated that Microsoft's "caller ID for e-mail" would not try to identify spam. Rather, it would try to identify legitimate e-mail via authentication.

He stated, "So authenticating e-mail, that it really came from who it appears to come from, avoiding this domain spoofing is a very key initiative for us. Now, our goal here is to get rid of spam, and we believe that over the next several years, with these various proof techniques, the filtering, that we can reduce spam to not being a huge problem."

He elaborated. "There's another piece that's part of our overall coordinated spam reduction initiative, which is seeing exactly who the mail comes from. The picture in the future is that you need to know that it's authentic, and then you'll have a so-called white list, a safe list, that shows mail that should come into your Inbox automatically. Mail that doesn't fit that profile will be judged by a variety of factors, what the content looks like, and by whatever proof is being offered along with that e-mail. So if it looks like it's spam, and there's no proof, an attempt to prove that it's not being offered, it's not on your safe list, then, depending on how you set your e-mail client, that mail will just go into a Junk folder."

Gates continued that "we're putting out, as an industry proposal this week what we call caller ID for e-mail. And it's a very specific technical proposal about how you can make sure that the domain is authentic. We've actually taken our we have some patents around this, we're saying are royalty free, available for everyone to use, the ones that relate to the fundamentals of this, and so we're talking with other ISPs and mail providers, and we believe that by this summer, with the right agreements, we can put this in place. So all the mail that's coming in and out, Hotmail or Exchange, systems like that, now can be authenticated in this way. It uses the DNS to do this, so it's piggybacking an infrastructure that's there. So we've come up with a way that we think will be very easy for people to apply."

Microsoft also issued two releases pertaining to Microsoft's spam related projects. See, releases titled "Q&A: Microsoft's Anti-Spam Technology Roadmap" and "Bill Gates Outlines Technology Vision to Help Stop Spam".

Gates also addressed other security issues, and Microsoft's research and development efforts. He said that Microsoft spends $6 Billion per year on R&D, that "the biggest part of that R&D" is spent on security.

Gates also reviewed the many types of spam during his presentation. At one point he stated, "This is one that must have been targeted towards me, it offers a university diploma".

CBO Issues Report on FSC/ETI Replacement Bills

2/24. The Congressional Budget Office (CBO) wrote a report [17 pages in PDF] titled "An Economic Analysis of Alternatives to Tax Reductions in S. 1637". This is a broad bill that includes replacement legislation for the FSC/ETI tax regime.

S 1637, the "Jumpstart Our Business Strength Act", sponsored by Sen. Charles Grassley (R-IA), includes replacement legislation for the Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) tax regimes, which the World Trade Organization (WTO) held to be illegal export subsidies. S 1637 would  repeal the current  ETI regime and replace it with a tax cut for all manufacturers, including family-held S corporations and partnerships that produce goods within the U.S.

Sen. Don Nickles (R-OK), who requested the CBO report, and Sen. Jon Kyl (R-AZ), have proposed a 2 percentage point cut in the corporate tax rate. The CBO report provides an economic analysis, including the impact on growth, efficiency, jobs, and the competitiveness of U.S. businesses, of these proposals.

The CBO summarized the findings in a cover letter. It stated that "First, an across-the board reduction in the corporate tax rate would improve economic efficiency in all three of the contexts specified. Second, both that cut and one targeted solely toward manufacturing would produce a relatively minor increase in long-term growth compared with the current tax regime and the provisions of S. 1637. Third, none of the alternatives considered would have any significant short-term effect on employment. And fourth, a corporate rate cut would improve the country’s international economic position compared with the current tax regime, but it would have roughly the same effects as the tax cuts embodied in S. 1637 or as a rate cut targeted solely toward manufacturing."

Sen. Grassley also released a memorandum [2 pages in PDF] that responds to the CBO report.

Supreme Court Holds No Recovery Against Federal Government Under Privacy Act for Disclosure of SSNs Without Showing of Actual Damages

2/24. The Supreme Court issued its opinion [PDF] in Buck Doe v. Elaine Chao, holding that plaintiffs must prove some actual damages to qualify for a minimum statutory award in an action against a federal agency for violation of the Privacy Act of 1974. In this case the violation was the improper disclosure by the Department of Labor of social security numbers. This opinion affirms the September 20, 2002 opinion [48 pages in PDF] of the U.S. Court of Appeals (4thCir). Justice Souter wrote the opinion of the Court. Justices Ginsburg, Stevens and Breyer dissented.

Elaine Chao is the Secretary of Labor. She is the respondent in this case because she is the current Secretary of Labor. The Department of Labor (DOL) adjudicates coal miners' black lung compensation claims. Previously, the DOL used applicants' social security numbers (SSNs) as its claim identifying numbers. That is, the DOL and its administrative law judges disclosed the SSNs of Buck Doe and other applicants in public documents. These applicants did not, however, with one exception, suffer actual damages as a result of the disclosure. The DOL has not disputed that it violated the Privacy Act. The issue has been whether the applicants are entitled to collect damages.

5 U.S.C. § 552a(g)(4) provides, in part, that "In any suit brought under the provisions of subsection (g)(1)(C) or (D) of this section in which the court determines that the agency acted in a manner which was intentional or willful, the United States shall be liable to the individual in an amount equal to the sum of (A) actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000; and" costs and attorneys fees.

Doe and others filed complaints in the U.S. District Court (WDVa) alleging violation of the Privacy Act, 5 U.S.C. § 552 et seq, and violation of a right to privacy under the Constitution. The Plaintiffs also sought class certification. The District Court consolidated the various cases. The DOL stipulated that it would stop its practice of publicly disclosing SSNs, and the District Court so ordered.

The District Court also held that actual damages are necessary to recover statutory damages under the Privacy Act, and that only one plaintiff had done so, by proving emotional distress. It granted summary judgment to the DOL as to all but one plaintiff (Buck Doe), denied the remaining plaintiffs' motion to amend the complaint to allege actual damages, and denied class action certification. The District Court also ruled for the DOL on the Constitutional claim. The black lung claimants appealed.

The Appeals Court affirmed in a split opinion. It held that "a person must sustain actual damages to be entitled to the statutory minimum damages award." See, story titled "4th Circuit Rules No Recovery Under Privacy Act for Disclosure of SSNs Without Showing of Actual Damages", also published in TLJ Daily E-Mail Alert No. 514, September 23, 2002.

The Supreme Court affirmed. Justice Souter wrote the opinion of the Court.

He wrote that the "Government's position is supported by a straightforward textual analysis. When the statute gets to the point of guaranteeing the $1,000 minimum, it not only has confined any eligibility to victims of adverse effects caused by intentional or willful actions, but has provided expressly for liability to such victims for ``actual damages sustained.´´ It has made specific provision, in other words, for what a victim within the limited class may recover. When the very next clause of the sentence containing the explicit provision guarantees $1,000 to a ``person entitled to recovery,´´ the simplest reading of that phrase looks back to the immediately preceding provision for recovering actual damages, which is also the Act's sole provision for recovering anything (as distinct from equitable relief)." (Parentheses in original.)

GAO Reports on Use of Social Security Numbers

2/24. The General Accounting Office (GAO) released a report [35 pages in PDF] titled "Social Security Numbers: Private Sector Entities Routinely Obtain and Use SSNs, and Laws Limit the Disclosure of This Information".

The report, which was prepared for Rep. Clay Shaw (R-FL), the Chairman of the House Ways and Means Committee's Subcommittee on Social Security, focused on the use of social security numbers (SSNs) by information resellers, credit reporting agencies (CRAs) and health care organizations.

The report found that "that information resellers, CRAs, and some health care organizations routinely obtain SSNs from their business clients and individual customers and have come to rely on SSNs as identifiers that help them verify an individual’s identity and accumulate information about that person."

"This is particularly true of information resellers, who amass personal information, including SSNs, from public and private sources, and provide their products and services to a variety of customers. Large information resellers generally limit their services to their business clients, including law firms and financial institutions that establish accounts with them. Officials from these entities told us that they usually obtain SSNs from their business clients and use the information as a factor in determining the identity of an individual for purposes such as employment screening, credit information, and criminal history. Other Internet-based information resellers whose Web sites we accessed also obtain SSNs from their individual customers and scour public records and other publicly available information to obtain information about individuals. These resellers provide information about individuals through the Internet to persons willing to pay a fee to obtain the information."

The report states that "CRAs obtain SSNs from businesses that furnish individuals' data, including SSNs, to them and they also receive information from other information resellers and public records. CRA officials told us that they use SSNs to determine consumers’ identities and match the information they receive from businesses with information stored in consumers' credit files."

The report continues that "health care organizations obtain SSNs from individuals themselves and from companies that offer health care plans. These organizations use SSNs as member identification numbers, which enable them to identify the correct individual, the type of coverage the individual has under the health plan, and other information, such as medical services and prescription drugs provided to that individual."

The report states that "Certain federal laws help to safeguard consumers' personal information, including SSNs, by restricting the disclosure of and access to such information, and private sector officials we spoke with said that they indeed take steps to safeguard the SSN information they collect. Federal laws, such as the Gramm-Leach-Bliley Act, the Drivers Privacy Protection Act, and the Health Insurance Portability and Accountability Act, have placed restrictions on the ways in which information resellers, CRAs, and health care organizations may use and disclose consumers’ personal information, including SSNs. Information resellers, CRAs, and health care organizations said that they take steps to safeguard SSN data, in part for business purposes but also because of federal and state laws that require such safeguards."

The report adds that "some states are taking steps, legislatively, to address consumer concerns regarding SSN use and the privacy of their personal information. Of the 18 states we examined, at least 6 of them enacted laws specifically restricting private sector use or display of SSNs. California's law has influenced business practices and some states have adopted laws similar to California's. Also, while some state laws and regulations we reviewed did not restrict or prohibit SSN use or display specifically, they did extend beyond federal restrictions regarding the sharing of personal information."

Third Circuit Rules in Compelled Speech Case

2/24. The U.S. Court of Appeals (3rdCir) issued its opinion [PDF] in Cochran v. Veneman, a First Amendment free speech case involving whether speech is governmental or private, and whether it is compelled in violation of the Constitution.

This case concerns the advertising campaign featuring the phrase "Got Milk?" that is operated pursuant to the Dairy Promotion Stabilization Act of 1983, which is codified at 7 U.S.C. § 4501, et seq. The Department of Agriculture assesses all dairy farmers, including Joseph Cochran, to pay for these ads.

Cochran is a small scale, independent farmer who does not follow common dairy industry practices, such as the use of growth hormones. He asserts that, contrary to the message of the ad, there is no generic milk product.

The Department of Agriculture argued that the speech involved is governmental speech, and is therefore immune from First Amendment challenge, and that the ad program is permissible under the Supreme Court's holding in Glickman v. Wileman Brothers & Elliot, Inc., 521 U.S. 457 (1997).

The Court of Appeals rejected these arguments. It held that the speech in this case is compelled, that it is private, and that it is therefore subject to First Amendment scrutiny. It also held that "the Dairy Act violates the Cochrans' First Amendment free speech and associational rights. Although the dairy industry may be subject to a labyrinth of federal regulation, the Dairy Act is a stand-alone law and the compelled assessments for generic dairy advertising are not germane to a larger regulatory purpose other than the speech itself."

The facts of this case involve milk and the Agriculture Department. However, the concept of compelled speech is also present in various debates over communications and technology related issues, such as forced access to cable facilities, must carry, equal time, free time for candidates, and truth in billing.

This case is Joseph Cochran, et al. v. Ann Veneman, et al., U.S. Court of Appeals for the 3rd Circuit, No. 03-2522, an appeal from the Middle District of Pennsylvania, D.C. Civil No. 02-cv-00529, Judge John Jones presiding.

More Court Opinions

2/24. The Supreme Court released four other opinions in addition to its opinion in Doe v. Chao. None of these other opinions are technology related. See, list with hyperlinks.

2/24. The U.S. Court of Appeals (DCCir) issued its opinion [13 pages in PDF] in In Re James Tennant, a petition for writ of mandamus regarding historic preservation procedures in the placement of wireless communications towers on land listed in the National Register of Historic Places. The Court of Appeals held that it lacked jurisdiction, and dismissed the petition. This is Appeals Court No. 02-1060.

People and Appointments

2/24. Sen. Patrick Leahy (D-VT) noted in his prepared statement for the Senate Judiciary Committee's Subcommittee on Terrorism, Technology and Homeland Security hearing on cyberterrorism on that John Malcolm "will soon be leaving his post at the Department of Justice to fight piracy for the Motion Picture Association of America. I wish him well in that endeavor." Malcolm is currently the Deputy Assistant Attorney General in charge of the Computer Crimes and Intellectual Property Section of the Department of Justice's (DOJ) Criminal Division.

More News

2/24. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held a hearing titled "Reauthorization of the Satellite Home Viewer Improvement Act". See, prepared testimony [9 pages in PDF] Marybeth Peters, the Register of Copyrights, prepared testimony of Fritz Attaway of the Motion Picture Association of America (MPAA), prepared testimony of David Moskowitz on behalf of the Satellite Broadcasting & Communications Association (SBCA), and prepared testimony [PDF] Robert Lee on behalf of the National Association of Broadcastsers (NAB).

2/24. The Federal Trade Commission's (FTC) Chief Administrative Law Judge Stephen McGuire released a redacted version of his initial decision in the Rambus matter. Caution: this Initial Decision [PDF] is a 19MB download. See also, FTC release. See also, stories titled "ALJ Dismisses FTC Complaint Against Rambus" in TLJ Daily E-Mail Alert No. 839, February 18, 2004; and "FTC Files Administrative Complaint Against Rambus" in TLJ Daily E-Mail Alert No. 455, June 20, 2002.

2/24. The Department of Justice's (DOJ) Antitrust Division released a report titled "Status Report: An Overview Of Recent Developments In The Antitrust Division's Criminal Enforcement Program". It states that the DOJ has "employed a strategy of concentrating its enforcement resources on international cartels that victimize American businesses and consumers".

2/24. Rep. Marcy Kaptur (D-OH) introduced HRes 532. It is a long and rambling list of charges against international trade, free markets, and investment. It states that it seeks to advance "the common good", "the Earth's natural environment", "the most vulnerable stakeholders", "the integrity of creation, and our common humanity".

Tom Ridge Addresses Technology, Critical Infrastructures, and Information Sharing

2/23. Secretary of Homeland Security Tom Ridge gave at wide ranging speech at George Washington University, in Washington DC, on the occasion of the first anniversary of the formation of the Department of Homeland Security (DHS)

He addressed the events of September 11, 2001, the formation of the Department of Homeland Security (DHS), and its accomplishments in its first year of operation. He addressed the interoperability of communications systems, and border and port security systems.

Tom RidgeHe also touched on the role of new technologies. He stated that "Every day we must operate with the knowledge that our enemies are changing based on how we change. As we shore up one vulnerability, they work to uncover another. This is why science and technology is key to winning this new kind of war. The work we do at Homeland Security, in partnership with the private sector, national laboratories, universities and research centers, help us push the scientific envelope. It helps drive the development and use of high technology to combat the weapons of high consequence. New tools of analysis, information sharing and detection help us counter terrorist attacks -- before they can happen -- and if they happen, minimize their impact."

The DHS also released a document titled "Homeland Security's Strategic Plan". It elaborates that "Through the Homeland Security Advanced Research Projects Agency (HSARPA), the department will engage both small and large businesses to assist in filling technology gaps quickly."

He also addressed information sharing between governmental entities. He stated that "We will secure real-time nationwide connectivity between all 50 states and territories. This will mean multi-directional information sharing -- the first phase of which, cyber-connectivity, will be completed within the next three months. Most notably, this is a system driven from the bottom up ... and brought to us as a communication tool because our state and local partners developed it and wanted it."

He also covered information collection and sharing regarding critical infrastructures. He said that "vast, rich information sharing tools are critical to our ability to keeping our nation's critical infrastructure far from a terrorist's reach. And so, I'm announcing today that, by December of this year, together with our partners, we will create a unified, national critical infrastructure database that will enable us to identify our greatest points of vulnerability, existing levels of security and then add increased measures of protection where needed."

The DHS Strategic Plan adds that "To increase protections of the nation's critical infrastructure, the department is taking a systemized, risk based approach to this important challenge. By the end of this year, the department will create a master database of all existing critical infrastructure in the country which will be matched against current intelligence. This will allow the department to more easily and quickly identify the greatest points of vulnerability, assess existing levels of security and increase protections as necessary."

The Strategic Plan also describes the "Unified National Database of Critical Infrastructure". It states that "A national database of all physical critical infrastructure ranked by priority will be created by December 2004. The department will also develop the tools, processes, and methodologies for identifying new critical infrastructure so that the unified national database will remain current."

Amit YoranNeither Secretary Ridge, nor the Strategic Plan, specifically addressed protection of computer or communications systems. However, on Tuesday, February 24, the Senate Judiciary Committee's Subcommittee on Terrorism, Technology and Homeland Security will hold a hearing titled "Cyberterrorism". The scheduled witnesses include Amit Yoran (at right), Director of the DHS's National Cybersecurity Division. This hearing is scheduled to begin at 10:00 AM in Room 226 of the Dirksen Building.

Supreme Court Denies Cert in Video Pipeline v. Buena Vista

2/23. The Supreme Court denied certiorari, without opinion, in Video Pipeline v. Buena Vista, See, Order List [26 pages in PDF] at page 4. This is a petition for writ of certiorari to the U.S. Court of Appeals (3rdCir) in a copyright infringement case involving the online distribution of short clip previews of Disney movies. Buena Vista (a licensed distributor of Disney movies) prevailed below. The Appeals Court rejected Video Pipeline's fair use and copyright misuse defenses.

For a summary of the proceedings below, see story titled "3rd Circuit Addresses Fair Use and Copyright Misuse" published in TLJ Daily E-Mail Alert No. 727, August 27, 2003.

The August 26, 2003 Court of Appeals opinion [23 pages in PDF] is notable because of its analysis of the doctrine of copyright misuse. It expanded the scope of the doctrine from its origins in competition and antitrust analysis. It wrote that copyrights should not be enforceable where the enforcement undermines the Constitutional purpose of copyright protection -- "to promote the Progress of Science and useful Arts". Specifically, the Court wrote that suppression of criticism may be inconsistent with the Constitutional purpose. See also, September 19, 2003 order [2 pages in PDF] amending opinion.

However, the Court held that the defense is inapplicable in this case. It wrote that "There is no evidence that the public will find it any more difficult to obtain criticism of Disney and its interests, or even that the public is considerably less likely to come across this criticism, if it is not displayed on the same site as the trailers."

The dispute in the case involves Video Pipeline's internet publication of approximately two minute long "clip reviews" of Disney movies, made by Video Pipeline. These clip reviews are different from the approximately two minute long "movie trailers", made by Disney, and published in Disney web sites, and licensed to other web site operators.

The defense of copyright misuse was raised in this case because Disney licensed its movie trailers subject to license terms that prohibit the licensees from using the movie trailers in a way that is "derogatory to or critical of the entertainment industry or of" Disney. That is, Disney uses the exclusive rights conferred upon it by the Copyright Act, not only to obtain a return for its creative efforts (which is consistent with the purposes of copyright protection), but also to suppress criticism (which is contrary to the purposes of copyright protection).

Whether or not anyone can distribute short movie clip reviews may not be of momentous importance. But, the doctrine misuse, if it were expanded as the Court of Appeals suggests, could have many significant applications in the context of digital works and online distribution. For a discussion of the history of the doctrine of misuse, and the possible implications of cases such as Video Pipleline, see story titled "3rd Circuit Breaks New Ground on Copyright Misuse", also published in TLJ Daily E-Mail Alert No. 727, September 27, 2003.

The case is Video Pipeline, Inc. v. Buena Vista, et al., Sup.Ct. No. 03-763, a petition for writ of certiorari to the U.S. Court of Appeals for the 3rd Circuit. The Appeals Court issued its opinion on August 26, 2003, and amended it on September 19, 2003. Judge Thomas Ambro wrote the unanimous opinion for the three judge panel; Judges Becker and Nygaard joined. The opinion is also reported at 342 F.3d 191. This is App. Ct. No. 02-2497. The U.S. District Court for the District of New Jersey issued its opinion of March 28, 2002. It is published at 192 F. Supp. 2d 321. It is D.C. No. 00-cv-05236, Judge Jerome Simandle presiding.

Supreme Court Denies Certiorari in Patent Cases

2/23. The Supreme Court denied certiorari, without opinions, in several notable patent cases, including Accuscan, Inc. v. Xerox Corp., DeKalb Genetics Corp. v. Bayer CropScience, and Deering Precision Instruments v. Vector Distribution Systems.

Accuscan, Inc. v. Xerox Corp. is a patent case involving the doctrine of equivalents. Accuscan obtained a judgment in the U.S. District Court (SDNY). The U.S. Court of Appeals (FedCir) reversed in part. On June 3, 2002 the Supreme Court granted certiorari, vacated and remanded (in one order) in light of the May 28, 2002 opinion [PDF] in Festo v. Shoketsu Kinzoku Kogyo Kabushiki. On September 17, 2003, on remand, the Appeals Court again held, in an unpublished opinion, that none of the accused products infringe the asserted claims either literally or under the doctrine of equivalents. This is Sup. Ct. No. 03-869.

The Supreme Court also denied certiorari in DeKalb Genetics Corp. v. Bayer CropScience. See, Order List [26 pages in PDF] at page 6. This is a patent, trade secret, misappropriation and fraudulent inducement case involving the genetic material of plant seeds. This is Sup. Ct. No. 03-916. See, September 29, 2003 opinion of the Federal Circuit on remand, also reported at 345 F.3d 1366.

Finally, the Court denied certiorari in Deering Precision Instruments v. Vector Distribution Systems. See, Order List [26 pages in PDF] at page 7. This is a petition for writ of certiorari to the U.S. Court of Appeals (FedCir) in a patent case involving the doctrine of equivalents. See, Appeals Court opinion. This is Sup.Ct. No. 03-958, Appeals Court Nos. 02-1013 and 02-1197, and D.C. No. 01-C-1118 (Northern District of Illinois). The patent in suit is U.S. Patent No. 4,744,428.

People and Appointments

2/23. Nancy Judy was named Director of the Federal Trade Commission's (FTC) Office of Public Affairs. She has previously worked in public relations at Myvesta, ProMarc Agency, and the American Bankers Association. She replaces Cathy MacFarlane, who has been nominated to be Assistant Secretary (Public Affairs) at the Department of Housing and Urban Development. See, FTC release.

2/23. Lillie Coney joined the Electronic Privacy Information Center (EPIC) as a Senior Policy Analyst. She will focus on civil rights, privacy, and electronic voting issues. She will also be the Coordinator of the National Committee on Voting Integrity. She was previously the Public Policy Coordinator for the Association of Computing Machinery (ACM). Before that, she worked for Rep. Sheila Lee (D-TX).

More News

2/23. Rep. Roy Blunt (R-MO), the House Republican Whip released the Whip Notice for the week of February 23, 2004. This lists bills and others items scheduled for consideration during the week of February 23. Notably, the notice does not include HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003".

Robert Zoellick2/23. U.S. Trade Representative (USTR) Robert Zoellick (at right) held a press conference in Geneva, Switzerland at which he discussed his travels over the past two weeks to Japan, China, Singapore, India, South Africa, and other countries. He stated that "there are encouraging signs that 2004 need not be a lost year for the Doha negotiations". See, transcript.

2/23. MCI WorldCom announced in a release that AT&T and MCI WorldCom "today jointly announced they have reached an out-of-court resolution of all claims the two companies have had against each other, both before and after MCI filed Chapter 11 petitions in July 2002. The agreement includes resolution of AT&T's call routing claims against MCI and MCI's dismissal of its contempt of court motion against AT&T." It added that "No other terms of the agreement were disclosed. The agreement has been submitted for approval to the federal Bankruptcy Court for the Southern District of New York." See also, AT&T release.

2/23. The Copyright Office (CO) published a notice in the Federal Register that recites, discusses, and sets a comment deadline for, proposed rules governing the service of complaints, summonses, subpoenas and other legal process on the CO and its employees in their official capacities. Comments are due by March 24, 2004. See, Federal Register, February 23, 2004, Vol. 69, No. 35, at Pages 8120 - 8126.

2/23. The General Accounting Office (GAO) released a report [83 pages in PDF] titled "Information Management: Update on Freedom of Information Act Implementation Status". It is a presentation outline prepared for Sen. Patrick Leahy (D-VT), the ranking Democrat on the Senate Judiciary Committee, and a defender of the Freedom of Information Act.

Go to News from February 16-20, 2004.