TLJ News from September 1-5, 2005

Australian Court Finds Sharman Infringed Music Copyrights

9/5. The Federal Court of Australia issued its judgment in Universal Music Australia v Sharman License Holdings, holding that the distribution of Kazaa file sharing system by Sharman and others violates Australia copyright law. See, full story.

William Rehnquist Died

9/5. William Rehnquist died on September 3. On September 5, President George Bush nominated Judge John Roberts, whom he had previously nominated to be an Associate Justice, to be the Chief Justice. See, President Bush's statement on Rehnquist's death, and statement regarding nominations.

President Bush stated that "The passing of Chief Justice William Rehnquist leaves the center chair empty just four weeks left before the Supreme Court reconvenes. It is in the interest of the Court and the country to have a chief justice on the bench on the first full day of the fall term. The Senate is well along in the process of considering Judge Roberts' qualifications. They know his record and his fidelity to the law. I'm confident that the Senate can complete hearings and confirm him as chief justice within a month."

Bush added that "As a result of my decision to nominate Judge Roberts to be chief justice, I also have the responsibility to submit a new nominee to follow Justice Sandra Day O'Connor. I will do so in a timely manner."

Former President Nixon appointed William Rehnquist to the Supreme Court in 1972. Former President Reagan elevated him to Chief Justice in 1986.

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9/3. Nellie Kroes, the European Competition Commission, gave a speech titled "Competition must drive European competitiveness in a global economy" in Cernobbia, Italy, on September 3, 2005. She argued that Europe needs more competition and free trade, rather than more regulation and protectionism.

DOJ Requires NSM and Ecast to End Digital Jukebox Non-Compete Agreement

9/2. The Department of Justice's (DOJ) Antitrust Division announced that it filed a complaint in U.S. District Court (DC) against NSM Music Group Ltd. and Ecast Inc. alleging violation of federal antitrust law in connection with their agreement under which NSM agreed not to enter the U.S. market with a digital jukebox to compete with Ecast. The DOJ simultaneously announced that it has reached a settlement with NSM and Ecast under which the two companies will terminate their non-compete agreement. The settlement requires approval by the Court.

The DOJ stated in a release that "NSM, already a manufacturer of CD jukeboxes, planned to begin offering a digital jukebox powered by its own platform in the United States in late 2002. At that time, digital jukebox purchasers had only two choices of digital jukebox products, one of which used Ecast's platform. A digital jukebox platform consists of a library of songs that have been licensed from U.S. copyright holders and the software necessary to access and play the songs. When installed in jukeboxes, a platform allows consumers to play any song in the music library. NSM abandoned its plans to enter the U.S. market with its own platform once it reached an agreement with Ecast that it would only manufacture digital jukeboxes incorporating Ecast's platform. NSM's release of a third competing digital jukebox platform likely would have stimulated competition and resulted in better products at lower prices ..."

See also, DOJ hyperlinks to pleadings in the related case of U.S. v. Jurgen Jost and John Tracy, U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. No. 04 C 1854, which pertained to obtaining evidence from Jost and Tracy, former employees of NSM.

District Court Dismisses SEC's Reg FD Complaint Against Siebel Systems

9/1. The U.S. District Court (SDNY) dismissed the complaint [PDF] in SEC v. Siebel Systems, a dispute regarding Regulation FD.

The Securities and Exchange Commission (SEC) filed a civil complaint in the District Court on June 29, 2004, against Seibel Systems alleging that it violated the SEC's Regulation FD, and against Kenneth Goldman, Siebel's CFO, and Mark Hanson, another Siebel officer, alleging that they aided and abetted Siebel's violations. See, SEC release of June 29, 2004.

The SEC adopted Regulation FD on August 15, 2000. The SEC asserted in its complaint that "Regulation FD protects small investors by prohibiting issuers from selectively disclosing material nonpublic information to certain persons -- securities analysts, broker-dealers, investment advisers and institutional investors -- before disclosing the same information to the public."

Siebel wrote in a release that "the Court completely vindicated the Company and two if its executives, Mark Hanson and Ken Goldman, stating that the SEC's approach and interpretation of Regulation FD ``places an unreasonable burden on a company's management and spokespersons to become linguistic experts, or otherwise live in fear of violating Regulation FD should the words they use later be interpreted by the SEC as connoting even the slightest variance from the Company's public statements."

Robin Conrad, of the National Chamber Litigation Center, which filed an amicus curiae brief [PDF], stated in a release that "The court recognized that the SEC rule would have a chilling impact on corporate speech ... Lawsuits based on vague and general observations will overly restrict corporate speech and run counter to the purpose of the regulation: to promote disclosure."

This case is Securities and Exchange Commission v. Siebel Systems, Inc., Kenneth A. Goldman and Mark D. Hanson, U.S. District Court for the Southern District of New York, D.C. No. 04-CV-5130 (GBD).

Tech Lawyers Scheduled to Testify at Roberts Confirmation Hearing

9/1. The Senate Judiciary Committee (SJC) announced the tentative witness list for the hearing on the confirmation of Judge John Roberts to be a Justice of the Supreme Court.

The list currently includes three presenters and fourteen witnesses on six panels. At least three witnesses have yet to be named. One thing that is notable about the list is that it includes several attorneys who focus on technology related areas of law.

One witness is Christopher Yoo, a professor at Vanderbilt Law School, who has taught copyright law, intellectual property law, mass media law, and telecommunications law. He has also written extensively about network neutrality. He previously worked at Hogan & Hartson, which was Roberts' firm.

Another witness is Patricia Bellia, a professor at Notre Dame Law School, who teaches internet law and electronic surveillance law. She previously worked in the DOJ's Office of Legal Counsel (OLC) during the Clinton administration, where she worked on high-tech crime issues.

More recently, Bellia, along with Ohio State law professor Peter Swire, represented Sen. Patrick Leahy (D-VT), the ranking Democrat on the SJC, in his submission of an amicus curiae brief [22 pages in PDF] in US. v. Councilman. See, story titled "1st Circuit Issues En Banc Opinion in Councilman Case", story titled "So, Just What Are All These Statutory Sections Cited in the Councilman Case?", and story titled "US v. Councilman and VOIP Communications", all in TLJ Daily E-Mail Alert No. 1,194, August 12, 2005.

Another witness is Catherine Stetson, a partner in the Washington DC office of the law firm of Hogan & Hartson. She worked for him on appellate litigation. Her experience includes patent appeals. She worked with Roberts on Litton Systems v. Honeywell. See, opinion at 238 F.3d 1376 (FedCir 2001). Roberts and Stetson also represented Litton Systems as an amicus in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. Ltd., the landmark case on the doctrine of equivalents.

Yoo and Belia are scheduled to testify on panel 5. Stetson is scheduled for panel 3.

People and Appointments

9/1. Gerald Masoudi was named Deputy Assistant Attorney General in charge of International, Policy, and Appellate Matters in the Department of Justice's (DOJ) Antitrust Division. Thomas Barnett is the acting Assistant Attorney General. Masoudi is currently Deputy Chief Counsel at the Food and Drug Administration (FDA). Before that, he was a partner in the Washington DC office of the law firm of Kirkland & Ellis. And, he is a former law clerk to Judge Frank Easterbrook. See, DOJ release.

9/1. The Federal Communications Commission (FCC) announced the membership of its just created task force on VOIP E911 enforcement. The ten members are Gary Klug (Colorado Public Utilities Commission), Robert Mayer (New York State Department of Public Service), Jeff Richter (Public Service Commission of Wisconsin), Eddie Roberson (Tennessee Regulatory Authority), Steve Wilt (Oklahoma Corporation Commission), Joseph Casey (Chief of the FCC's Enforcement Bureau's Spectrum Enforcement Division), Colleen Heitkamp (Chief of the FCC's EB's Telecommunications Consumers Division), Sue McNeil (acting Deputy Bureau Chief of the FCC's Consumer & Governmental Affairs Bureau), Louis Sigalos (Chief of the FCC's CGAB's Consumer Affairs and Outreach Division), and Julie Veach (acting Chief of the FCC's Wireline Competition Bureau's Competition Policy Division). This task force is made up entirely of government regulators. There is no representation of technologists, VOIP users, VOIP service providers, of other technology entities.

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9/1. Intel filed its answer in U.S. District Court (DDel) to the antitrust complaint [PDF] filed by Advanced Micro Devices (AMD) on June 27, 2005. AMD's complaint alleges that Intel has wrongfully maintained a monopoly in the x86 microprocessor market in violation of Section 2 of the Sherman Act, and that Intel has made secret payments and allowances of rebates and discounts, and secretly and discriminatorily extended to certain purchasers special services or privileges, in violation of California Business & Professions Code 17045. See, story titled "AMD Files Antitrust Complaint Against Intel" in TLJ Daily E-Mail Alert No. 1,165, June 30, 2005. Intel denies wrongdoing. It asserts that its success is due to its technological leadership, large investments, and risk taking. See also, Intel release.

Go to News from August 26-31, 2005.