News from May 6-10, 2004

Bush Nominates Griffith for DC Circuit

5/10. President Bush nominated Thomas Griffith to be a Judge of the U.S. Court of Appeals (DCCir). See, White House release.

The District of Columbia Circuit is particularly important for technology and communications law for several reasons. First, it hears most of the petitions for review of orders of the Federal Communications Commission (FCC), such as the FCC's recent triennial review order. It also hears petitions for review of orders of other agencies, such as the Federal Trade Commission (FTC).

Also, the DC Circuit hears some appeals in major antitrust cases, such as the government antitrust action against Microsoft. Finally, a disproportionate number of Supreme Court nominees in recent decades were DC Circuit judges at the time of their nominations.

The online directory for Brigham Young University (BYU), in Provo, Utah, currently lists Griffith as its Assistant to the President and General Counsel. This directory lists addresses for Griffith in both Provo, Utah and McLean, Virginia.

Previously, he worked as legal counsel for the Senate from 1995 through 1999, and for the Washington DC law firm of Wiley Rein & Fielding.

The Senate has not acted on most of President Bush's nominations for the DC Circuit. For example, Bush nominated Miguel Estrada in May of 2001. Estrada withdrew his name from consideration in September of 2003, after the Senate Democrats delayed consideration of his nomination for over two years. Also, Bush nominated Brett Kavanaugh and Janice Brown in July of 2003. Both of these nominations are still pending.

Griffith has an undergraduate degree from BYU, and a law degree from the University of Virginia law school.

He also has a significant supporter in the Senate -- Sen. Orrin Hatch (R-UT), the Chairman of the Senate Judiciary Committee.

The Federalist Society's practice group on federalism and separation of powers lists him as a Senior Advisor.

See also, prepared testimony of Griffith for the House Judiciary Committee's Subcommittee on Commercial and Administrative Law on October 28, 1999 regarding executive orders.

DOJ's Delrahim Addresses Compulsory Licensing of IPR In Antitrust Cases

5/10. Makan Delrahim, a Deputy Assistant Attorney General in the Department of Justice's Antitrust Division, gave a speech in London, United Kingdom titled "Forcing Firms to Share the Sandbox: Compulsory Licensing of Intellectual Property Rights and Antitrust".

He stated that while courts have imposed compulsory licensing as a remedy in antitrust cases, it "also has the real potential to harm innovation."

He added that "Compulsory licensing as a merger remedy is a well-established tool and has not been particularly controversial. Non-merger compulsory licensing imposed by an agency or the courts, though, should be a rare beast."

Delrahim said that "There are important policy reasons to cause us to be cautious when considering a compulsory licensing remedy. The most important of these is the concern that an improperly-designed compulsory license can stifle innovation."

"Some of the risks being taken by today's innovators are massive, with rewards systems that may be very fragile and that could potentially be destroyed by over-aggressive antitrust remedies."

Another problem he raised with compulsory licensing is the problem of drafting the order. He stated that "For antitrust enforcers, licensing is not what we would call our ``core competence.´´" For example, he asked, "how do you set a reasonable royalty?"

He concluded by pointing out that "I can identify three circumstances where compulsory licensing is particularly likely to be appropriate" -- in mergers cases, as an alternative to divestiture, and in cases where there is an extraordinary level of concentration and the defendant is resistant to reform.

He elaborated that "compulsory licensing may be used in a non-merger case when other, less restrictive remedies would most likely fail to address anticompetitive conduct by a defendant. Before imposing the remedy in this type of case, we would look for an extraordinary level of market dominance and a demonstrated history of monopolization and resistance to reform. In other words, we would look for a situation where the chief objections to compulsory licenses evaporate, because monitoring the defendant's behavior has already been demonstrated to be a problem and the harm to other innovation, by other competitors, trumps the alleged harm to the defendant's innovation incentives. But even if compulsory licensing is justified in such a case, the antitrust authorities should draft the license as narrowly as possible."

Greenspan Addresses Information Technology and Globalization

5/6. Federal Reserve Board (FRB) Chairman Alan Greenspan gave a speech in Chicago, Illinois titled "Globalization and innovation".

He first gave a long discourse on the causes, nature and consequences of increased globalization, which he defined simply as "the extension of the division of labor and specialization beyond national borders". Then, he commented on technology and innovation, and their effect upon globalization.

He said that "Augmenting the dramatic effect of increased globalization on economic growth, and perhaps at some times, fostering it, have been the remarkable technological advances of recent decades. In particular, information and communication technologies have propelled the processing and transmission of data and ideas to a level far beyond our capabilities of a decade or two ago."

He continued that "The advent of real-time information systems has enabled managers to organize a workforce without the redundancy required in earlier decades to ensure against the type of human error that technology has now made far less prevalent. Real-time information, by eliminating much human intervention, has markedly reduced scrappage rates on production lines, lead times on purchases, and errors in all forms of recordkeeping. Much data transfer is now electronic and far more accurate than possible in earlier times."

He also commented that "The long-term path of technology and growth is difficult to discern. Indeed, innovation, by definition, is not forecastable. Nonetheless, the overall pace of productivity growth that has recently been near 5 percent at an annual rate is highly likely to slow because we have rarely exceeded 3 percent for any protracted period. In the United States, we have always employed technologies at, or close to, the cutting edge, and we have created much of our innovative technologies ourselves. The opportunities of many developing economies to borrow innovation is not readily available to us. Thus, even though the longer-term prospects for innovation and respectable productivity growth are encouraging, some near-term slowing in the pace of advance to a rate closer to productivity's long-term average seems likely."

People and Appointments

Bruce Mehlman5/10. Bruce Mehlman and Alex Vogel formed a public affairs firm named Mehlman & Vogel. Mehlman (at right) has been the Executive Director of the Computer Systems Policy Project (CSPP) since late last year. He will continue in this role. Before that he was Assistant Secretary of Commerce for Technology Policy. Before that he was policy counsel for Cisco. He has also worked as General Counsel and Policy Director for the House Republican Conference, General Counsel of the National Republican Congressional Committee, and an attorney at the law firm of Wiley Rein & Fielding. Vogel was previously Chief Counsel to Senate Majority Leader Bill Frist (R-TN). He will continue to provide legal counsel to the Majority Leader's Political Action Committee, Volunteer PAC. Before that, he was General Counsel to the National Senatorial Republican Committee during the 2002 election cycle. He too previously worked for Wiley Rein & Fielding.

More News

5/10. Secretary of Homeland Security Tom Ridge met with European Union Commissioner Of Justice and Home Affairs Antonio Vitorino. Afterwards, the two spoke to reporters. Ridge stated that "We had a good discussion about the need to share advance passenger information data so that we can protect our skies and keep terrorists off commercial airliners and away from our borders. We share a common interest in making this vital information available in a manner that will help us protect our citizens while, at the same time, maintaining the privacy of that information of these travelers." Vitorino stated that "the European Union is committed to introduce biometric features in their visa, in their residence permits for third country nationals who live in the territory of the member states. We are determined to introduce biometric features in our own -- in the European citizens' passports." See, transcript.

Bush Addresses Trade and Broadcast and Internet Speech

5/8. President Bush gave a speech in Prairie Du Chien, Wisconsin, and another speech in LaCrosse, Wisconsin in which he addressed technology, trade and regulation of speech. He once again endorsed free trade, and opposed isolationism, but said nothing about outsourcing. Regarding broadcast speech, he said that "it's very important that we remain a country of free speech", and "that's why you put an off-on button on there".

In Prairie Du Chien he said that "Trade policy needs to be confident, not pessimistic, in the ability for Americans to compete. Most Presidents have opened up our markets for other countries. That's good for consumers. If you've got more product from which to choose, you're likely to get a better price and better quality. In other words, the most choice you get, the more that people will meet demand with better product at a price you can afford. But the problem is, other countries haven't responded. So rather than becoming economic isolationists, for the sake of long-term job growth, this country must say, treat us like we treat you. With a level playing field, we can compete with anybody, anyplace, anywhere. Good trade policy is necessary to make sure jobs exist not only in the short-term, in the long-term."

In LaCrosse he said that "We need to be confident when it comes to trade policy. Listen, other Presidents before me have opened up U.S. markets for the good of consumers. When you get more products coming into America, consumers get better choices at better prices, and better quality. What we need to do is reject economic isolationism and say to other nations, treat us the way we treat you. Open up your markets. Create a level playing field for America's workers and farmers and manufacturers, and we can compete with anybody, anyplace, anywhere on the face of the Earth. I'm running -- I'm running because I want to make sure this economic growth continues. I'm running to make sure America is the greatest economy on the face of the Earth. I'm running because I want our people with good, solid jobs. I'm running to promote a pro-entrepreneur, pro-small business, pro-growth economic agenda."

In Prairie Du Chien a conservative Christian clergyman asked the President about "political correctness", laws "being passed to limit offensive speech", and courts that "limit our free speech when it comes to offensive speech toward different groups?"

Bush said that "Freedom to speak is a valuable part of our country. And a President has got to protect that. People ought to be allowed to speak the way you want to speak. But there are limits. And it is very important for our society to work with those that push the limits without abridging anybody else's freedom to speak."

He later discussed broadcast and internet speech. He said, "Obviously there's a line to cross when it comes to speech. That's been a difficult challenge for our country, to figure out where it is and where it isn't. You know, sometimes on TV, there are things you don't want to see. But that's why you put an off-on button on there. You just kind of turn it off. You don't have to watch it. You can also pay attention --  And there are other things we can do to make it easier for parents to make sure their children aren't watching garbage. And there are things you can do on the Internet to make sure that garbage doesn't get in your living room. But it's very important that we remain a country of free speech and of free religion."

Bush also offered a comment on the nature of technology and innovation. Said the President, "There's new technologies happening all the time".

Microsoft Bounty Leads to Arrest of Worm Perpetrator

5/8. Law enforcement authorities in Germany made an arrest  on May 7 in connection with the release of the Sasser worm and several variants. Microsoft announced the next day that its reward program led others to provide information to Microsoft that led to the arrest.

The U.S. CERT states that this worm, which affects computers running Microsoft Windows XP and Microsoft Windows 2000, "attempts to take advantage of a buffer overflow vulnerability in the Windows Local Security Authority Service Server (LSASS). The vulnerability allows a remote attacker to execute arbitrary code with SYSTEM privileges." See also, Microsoft Security Bulletin MS04-011, for a more detailed discussion of the worm.

Microsoft announced that its bounty program played a role in catching the perpetrator. Microsoft stated in a release on May 8 that last November it created "a $5 million anti-virus reward program, supporting Interpol, the FBI, and the Secret Service. Aware of this program, certain individuals in Germany approached Microsoft investigators last week, offered to provide information about the creator of the Sasser virus, and inquired about their potential eligibility for a reward. Microsoft informed the individuals that the company would consider providing a reward of up to $250,000 if their information led to the arrest and conviction of the Sasser perpetrator."

Microsoft added that "Following this discussion, the individuals provided information to Microsoft and local authorities in Germany. Microsoft reviewed this information and, in conjunction with law enforcement authorities, pursued technical analysis to verify the accuracy of the information provided. The FBI also provided investigative support for German law enforcement."

Finally, it stated that "The investigation led by German police over the past week led to information relating not only to all four variants of the Sasser worm, but also to the Netsky worm, which was launched on Feb. 16, 2004. Ultimately there were 28 variants of the Netsky worm, and German authorities are alleging that all these variants are connected to the individual arrested yesterday."

See also, story titled "Microsoft Offers Rewards for Information Leading to Convictions of People Who Launch Malicious Code" in TLJ Daily E-Mail Alert No. 773, November 6, 2003.

Heretofore, few people who have written or launched malicious viruses or worms on the internet have been apprehended.


House Subcommittee Holds Hearing on P2P Smut

5/6. The House Commerce Committee's Subcommittee on Commerce Trade and Consumer Protection held a hearing titled "Online Pormography: Closing the Doors on Pervasive Smut".

Several members of Congress and child advocates condemned P2P child porm, and called for passage of HR 2885, the "Protecting Children from Peer to Peer Pormography Act". Representatives of the P2P industry argued that the attack on P2P porm is being promoted by the entertainment industries to destroy the nascent P2P industry in order to protect copyrighted works. See, full story.

FRB Governor Olson Addresses Use of Information Technology in Banking

5/6. Federal Reserve Board (FRB) Governor Mark Olson gave a speech in Chicago, Illinois titled "The Competitive Edge of Community Banks". One of the topics that he covered was the use of information technology in the banking sector.

Mark Olson

Olson (at right) stated one of the competitive factors favoring banks "has been the use of technology. Banks were among the first businesses to migrate toward mass storage and processing of data, in part because this information was needed to meet regulatory and other requirements, for example, the loans to one borrower rule."

"Analysis and collection of this data has supported many important management and risk-management initiatives at banks, including the development and refinement of internal credit rating systems", said Olson.

"Further investment in information technology capabilities may tap into other uses of this information to enhance the function and performance of commercial banks, including community banks, especially in the context of the Gramm-Leach-Bliley Act. Though community banks cannot invest as heavily in technology as large banks, the ever increasing efficiency of technology also works to the benefit of community banks. Newly chartered start-up banks are able to provide real-time online banking services to customers and operate general ledger systems that provide a full range of financial reporting and product support systems either through in-house technology or through outside vendors", said Olson.

Both Olson and Greenspan spoke at the Conference on Bank Structure and Competition that was sponsored by the Federal Reserve Bank of Chicago. (See, story titled "Greenspan Addresses Information Technology and Globalization", in this issue.)

PFF Releases Papers on Compulsory Licensing

5/6. The Progress and Freedom Foundation's (PFF) IPCentral Review published three papers on a compulsory licensing system as an alternative to the copyright protection system, primarily for the music recording industry.

Stanley Liebowitz, a professor at the University of Texas at Dallas, wrote the lead paper titled "Alternative Copyright Systems: the Problem with Compulsory Licenses". He is skeptical of compulsory licensing.

He wrote that "many academics in the copyright and Internet communities have argued that an alternative to the current copyright regime is in order. The proposals that have been offered are often subsumed under the rubric of a 'compulsory license'. Proponents of this suggestion generally emphasize several of its positive characteristics -- it appears to have relatively low administrative costs, it decriminalizes behavior that has become widespread, it might lead to greater production, and it offers to artists a potentially large payday, thus providing continued or increased incentive for artistic creation."

Liebowitz continued that "the basic idea is that a pool of money would be generated in a secondary market (presumably related to MP3s) and transferred to copyright owners. We are talking here about taxes on ancillary products, such as blank CDs, CD writers, ISPs, stereo equipment, and so forth. Although some commentators see a compulsory license as a supplement to the current copyright system, it is also viewed, particularly by its more passionate advocates, as a complete replacement of traditional copyright, at least for recorded music."

He argued that "the defects of such a system have not been sufficiently examined. Although the current system is obviously imperfect, as any system must be, it is unlikely that a compulsory license would meet even the modest goals of a net positive impact, to say nothing of the claims of virtual perfection that have been attributed to it."

The gist of one of his concerns is that government planners who would set prices do not have access to the information that would be aggregated by a free market.

He wrote that "A compulsory license system throws out the markers, the lighthouses if you will, that can help guide the prices in these markets. A compulsory license regime requires that prices and revenues be set in some arbitrary manner. Setting prices and revenues are the very questions that any economic system answers by its choice of rules. The evidence of the last century has led almost all commentators to agree that markets are superior at allowing consumers to determine which goods producers produce, how much is produced, and at providing incentives for quality improvements, compared to command and control methods."

He also wrote that "We also need to consider other proposals, such as enhanced copy protection, known as digital rights management."

The second paper, titled "Copyrighted Works as Public Goods", by Michael Abramowicz, a law professor at George Mason University, comments on Liebowitz's paper. He too is skeptical of compulsory licensing. But, he concludes that "a governmental program that complements the existing copyright system by encouraging the placement of certain works in the public domain deserves study".

The third paper, titled "Why Be Creative? Motivation and Copyright Law in a Digital Era", was written by Katherine Lawrence, a graduate student at the University of Michigan.

FCC Releases Agenda of May 13 Meeting

5/6. The Federal Communications Commission (FCC) released the agenda [3 pages in PDF] for its meeting of Thursday, May 13, 2004. The agenda includes, among other items, an NPRM regarding use of spectrum by unlicensed devices, such as WiFi, in the TV broadcast bands and the 3650-3700 MHz band. The agenda also includes an order regarding access charge reform.

First, three FCC bureaus will present a progress report on number portability implementation. The report will be presented by the Wireless Telecommunications Bureau (WTB), Wireline Competition Bureau (WCB), and the Consumer & Governmental Affairs Bureau (CGAB).

Second, the FCC will consider an order on access charge reform. This will be an Eighth Report and Order and Fifth Order on Reconsideration regarding amendments to and clarification of the rules governing the tariffing of interstate switched exchange access services provided by competitive local exchange carriers (CLECs). This is CC Docket No. 96-262.

Third, the FCC will consider a Notice of Proposed Rulemaking (NPRM) that requests comments on various abbreviated dialing arrangements that could be used by state One Call notification systems in compliance with the Pipeline Safety Improvement Act of 2002. This act was HR 3609 (107th Congress). It became Public Law No. 107-355. This FCC proceeding is CC Docket No. 92-105.

Fourth, the FCC will consider an Order on Review that will address petitions for review of the March 10, 2003 Order [21 pages in PDF] finding that the Philippine carriers named in that Order whipsawed U.S. carriers, and ordering the suspension of payments for termination services to the Philippine carriers pending restoration of circuits. This is IB Docket No. 03-38. See also, February 12, 2004 Public Notice [PDF].

Fifth, the FCC will consider an NPRM regarding use by unlicensed devices below 900 MHz and in the 3 GHz Band. Unlicensed devices would include, among other things, 802.11 devices. This is ET Docket No. 02-380.

This NPRM concerns allowing unlicensed devices to operate in TV broadcast bands below 900 MHz at locations and times when spectrum is not being used, and with requirements with respect to interference. This NPRM also concerns permitting unlicensed devices to operate in the 3650-3700 MHz band.

The FCC announced a Notice of Inquiry [MS Word] (NOI) in this proceeding on December 11, 2002. See, story titled "FCC Announces Notice of Inquiry Re More Spectrum for Unlicensed Use" in TLJ Daily E-Mail Alert No. 566, December 12, 2002. The FCC released its NOI on December 20, 2002.

The meeting will be at 9:30 AM at the FCC, in the Commission Meeting Room (Room TWC305), 445 12th Street, SW. The meeting will be webcast by the FCC.

8th Circuit Rules on Interstate Nature of Phone Calls in Criminal Case

5/6. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in USA v. RJS, a criminal case. However, this case involves the interstate and intrastate character of telephone calls.

RJS (initials are used because the defendant is a juvenile) is a high school student. He placed a telephone call, using a telephone in the school's detention room, to a school counselor who answered on a telephone in the school secretary's office. He entered a ten digit number to place this call. He made a bomb threat.

RJS was charged with violating 18 U.S.C. § 844(e), which provides that "Whoever, through the use of the mail, telephone, telegraph, or other instrument of interstate or foreign commerce, or in or affecting interstate or foreign commerce, willfully makes any threat, or maliciously conveys false information knowing the same to be false, concerning an attempt or alleged attempt being made, or to be made, to kill, injure, or intimidate any individual or unlawfully to damage or destroy any building, vehicle, or other real or personal property by means of fire or an explosive shall be imprisoned for not more than 10 years or fined under this title, or both."

RJS was convicted by the U.S. District Court and sentenced to two years' probation. He appealed.

On appeal, he argued that the telephone call was a wholly intrastate activity and hence, the Congress had no power to regulate it under the Commerce Clause.

The Appeals Court held that "the commerce power reaches wholly intrastate telephone calls, so long as the calls are made with telephones connected to an interstate telephone system." It reasoned that "Under the plain language of § 844(e), defendant need only use an ``instrument of interstate commerce´´ to establish a sufficient nexus to interstate commerce."

The Court added that "Regardless of whether the call defendant made within the school required the use of an interstate telephonic system, both telephones were connected to an interstate telephonic system. Both were connected to separate ten-digit interstate numbers. In addition, defendant's call made both telephones unavailable to outside, interstate contact. Thus, we hold that the telephone defendant used to communicate the threat was an instrument of interstate commerce as that phrase is used in § 844(e). It was therefore subject to federal regulation and protection, United States v. Lopez, 514 U.S. 549, 558 (1995), and therefore was within the power of Congress to regulate under the Commerce Clause."

This case is USA v. RJS, U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 03-2855SD, an appeal from the U.S. District Court for the District of South Dakota.

House Telecom & Internet Subcommittee Holds Hearing on Dot Kids Domain

5/6. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled "The Dot Kids Internet Domain: Protecting Children Online".

The hearing focused on implementation of HR 3833 (107th Congress), the "Dot Kids Implementation and Efficiency Act of 2002", which required that the National Telecommunications and Information Administration (NTIA) must require the establishment of a second level domain within the .us country code domain that is restricted to material that is not harmful to minors.

The bill excludes certain content from this location. However, it does nothing to compel content providers to place material at this location. The success of this program relies, in part, upon voluntary activity by content providers.

See also, stories titled "Reps. Shimkus and Markey Seek a .kids Domain", TLJ Daily E-Mail Alert No. 234, July 25, 2001; "House Subcommittee Holds Hearing on Kids Domain" TLJ Daily E-Mail Alert No. 300, November 2, 2001; "House Passes Dot Kids Domain Bill", TLJ Daily E-Mail Alert No. 436, May 22, 2002; and "Bush Signs Dot Kids Bill" in TLJ Daily E-Mail Alert No. 561, December 5, 2002.

NeuStar Inc. has the contract with the NTIA to manage the .us top level domain. NeuStar activated the directory on September 4, 2003. See, story titled " Directory Activated" in TLJ Daily E-Mail Alert No. 734, September 8, 2003.

Richard Tindal of NeuStar wrote in his prepared testimony that "To date, NeuStar has had very positive experiences in the process of content management and enforcement. The content received is generally appropriate for the domain."

Rep. Fred Upton (R-MI), the Chairman of the Subcommittee presided. He issued a release that states that "today there are over 1700 names registered on Dot Kids".

Rep. Joe Barton (R-TX), the Chairman of the full Committee, wrote in his opening statement that "We need to continue to leverage the strength of these sites to encourage other companies, nonprofits, schools, and foundations to post content that can benefit America's children."

The acting head of the NTIA, Michael Gallagher, wrote in his prepared testimony that the "NTIA believes that there is still much work to be done to help generate widespread interest and support for" He also wrote that "the success of the domain will come with a shared responsibility by all stakeholders."

NeuStar's Tindal also wrote that "On June 1, 2004, NeuStar will re-introduce the domain to the marketplace by implementing a multifaceted marketing campaign that includes advertising, public relations, customer outreach and direct marketing programs.  This new program is designed to: (1) broaden consumer awareness and use of the namespace; (2) encourage the activation of content by registrants; and (3) increase the number of domain name registrations."

See also, prepared testimony of Cynthia Johanson (PBS) and prepared testimony of Teri Schroeder (I-SAFE America).

Senate Judiciary Committee Holds Hearing on Nomination of Dudas to Head the USPTO

5/6. The Senate Judiciary Committee held a hearing on the nomination of Jonathan Dudas to be Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO). The hearing went smoothly for Dudas.

Sen. Orrin Hatch (R-UT), the Chairman of the Committee, said that Dudas is "an excellent choice for this position", and that he will work to get him confirmed by the Senate as soon as possible. Sen. Patrick Leahy (D-VT), the ranking Democrat on the Committee, was cordial, and refrained from criticizing Dudas.

No other members of the Committee were present. Rep. Henry Hyde (R-IL), the former Chairman of the House Judiciary Committee, and the man who brought Dudas to Washington DC, praised Dudas. He was the only witness.

Jonathan DudasDudas is young and inexperienced, but has risen rapidly in Washington DC. He is 35 years old, and graduated from the University of Chicago Law School in 1993. After a brief stint with the law firm of Neal Gerber & Eisenberg in Chicago, he went to work for Rep. Hyde as Legislative Counsel. He then worked for the House Judiciary Committee (which Rep. Hyde chaired from 1995 through 2000), and its Subcommittee on Courts and Intellectual Property.

In 2001, Dudas became Counsel for Legal Policy and Senior Floor Assistant for the Speaker of the House, Rep. Denny Hastert (R-IL). In 2002, he was named Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO. That is, he was the second ranking official at the USPTO, during the directorship of James Rogan. When Rogan left in January, Dudas became the acting Director.

Sen. Hatch raised three issues with Dudas -- workload, pendency, and global piracy. Dudas said that the most important thing for him now is to get HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2004", passed.

The bill contains increases in user fees that implement the USPTO's 21st Century Strategic Plan. It also provides for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs. The House passed this bill on March 3, 2004 by a vote of 379-28. See, Roll Call No. 38. See also, story titled "House Passes USPTO Fee Bill" in TLJ Daily E-Mail Alert No. 849, March 4, 2004.

The Senate Judiciary Committee passed HR 1561, without amendment, on April 29, 2004. However, Sen. Leahy stated that there may be some changes in the version of bill that will be considered on the Senate floor. He did not identify these changes.

Dudas stated that without the increased funding provided by the Strategic Plan, pendency in some areas will double. Dudas also said that "quality is the primary goal of the Patent and Trademark Office".

In response to questions from Sen. Leahy, Dudas stated that increased fees will enable the USPTO to hire "900 additional examiners in the first year". He also said that "a fair amount will also go into electronic processing" and "updating the system". But, he added that these will be up front expenses that will ultimately save the USPTO money.

Sen. Leahy also asked Dudas about Cuban trademarks, the World Intellectual Property Organization (WIPO) and broadcaster treaty negotiations, and why the USPTO relies on its Patent Public Advisory Committee (PPAC) rather than the Congress's General Accounting Office (GAO).

Bill Would Reinstate Video Description Rules

5/6. Rep. Ed Markey (D-MA) introduced HR 4311, the "Video Description Restoration Act of 2004", a bill to reinstate the Federal Communications Commission's (FCC) rules for the description of video programming.

On November 8, 2002, the U.S. Court of Appeals (DCCir) issued its opinion in MPAA v. FCC, vacating the FCC's video description rules. See, story titled "DC Circuit Vacates FCC's Video Description Rules" in TLJ Daily E-Mail Alert No. 547, November 12, 2002.

47 U.S.C. § 613(g) defines video description as "the insertion of audio narrated descriptions of a television program's key visual elements into natural pauses between the program's dialogue".

47 U.S.C. § 613(f) provides that "Within 6 months after February 8, 1996, the Commission shall commence an inquiry to examine the use of video descriptions on video programming in order to ensure the accessibility of video programming to persons with visual impairments, and report to Congress on its findings."

However, the FCC adopted a Report and Order [MS Word] in the proceeding titled "Implementation of Video Description of Video Programming" (MM Docket No. 99-339) in which it concluded that "we have the authority to adopt video description rules, and require the top broadcast stations and multichannel video programming distributors (MVPDs) to provide programming with video description on the top programming networks."

The Appeals Court held that the FCC does not have authority under the statute to require video description rules, and vacated the order. Rep. Markey's bill would overturn this court opinion, and reinstate the order.

The bill was referred to the House Commerce Committee. Rep. Markey is the ranking Democrat on the Subcommittee on Telecommunications and the Internet.

This case is Motion Picture Association of America, Inc., et al., v. FCC and USA, respondents, and National Television Video Access Coalition, intervenors, App. Ct. Nos. 01-1149 and 01-1155, petitions for review of a final order of the FCC. It is also reported at 309 F. 3d 796.

People and Appointments

5/6. President Bush announced his intent to appoint Gary Forsee (Ch/CEO of Sprint) and William Swanson (Ch/CEO of Raytheon) to be Members of the President's National Security Telecommunications Advisory Committee. See, White House release.

5/6. Erica McMahon was named Associate Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau's Consumer Policy Division. She will oversee rulemakings and orders regarding the FCC's telemarketing and fax advertising rules. She joined the FCC in December of 2001. Before that, she worked for the Federal Election Commission (FEC). See, FCC release [PDF].

5/6. Zalmai Azmi was named Chief Information Officer (CIO) of the Federal Bureau of Investigation (FBI). He has been the acting CIO for six months. See, FBI release.

More News

5/6. The Senate Judiciary Committee postponed its executive business meeting scheduled for Thursday, May 6. The agenda included two technology related bills: S 1933, the "Enhancing Federal Obscemity Reporting and Copyright Enforcement (ENFORCE) Act of 2003", and S 1635, the "L-1 Visa (Intracompany Transferee) Reform Act of 2003". The Committee has not yet rescheduled this meeting. However, Thursday mornings are the usual time.

5/6. The U.S. Court of Appeals (10thCir) issued its opinion in Salguero v. City of Clovis, a wrongful termination case. Salguero, a former police officer for the City of Clovis in the state of New Mexico, was terminated for his involvement in obtaining illegal access to satellite television. He obtained illegal satellite access cards from Canada, and gave them to a relative, two friends, and other police officers. Clovis fired him. He then filed a complaint in U.S. District Court (NM) against the Clovis alleging breach of employment contract, dismissal without due process of law in violation 42 U.S.C. § 1983, and race discrimination in violation of 42 U.S.C. § 1981. Clovis prevailed in the District Court, and the Court of Appeals affirmed. This case is Gilbert Salguero v. City of Clovis, U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 03-2120, an appeal from the U.S. District Court for the District of New Mexico, D.C. No. CIV-02-0319 WJ/LCS.

5/6. On May 6 the Federal Trade Commission (FTC) announced that it settled its civil action in U.S. District Court (NDIll) against Brian Westby and others in which it alleged deceptive trade practices in violation of Section 5 of the Federal Trade Commission Act (FTCA), codified at 15 U.S.C. § 45, in connection with the sending of spam e-mail that spoofed the return e-mail addresses of others, contained false information in subject lines, and contained false removal information. See, Stipulated Final Judgment and Order for Permanent Injunction [12 pages in PDF], which was signed by the Court on March 4, 2004. See also, September 18, 2003 amended complaint [8 pages in PDF] and FTC release.

Go to News from May 1-5, 2004.