TLJ News from March 21-25, 2006

More Court Opinions

3/24. The U.S. Court of Appeals (4thCir) issued its opinion [PDF] in Schwam v. XO Communications. The Court of Appeals affirmed the judgment of the District Court for XO. Schwam was salesman for XO on federal government sales who worked for commissions. XO terminated his employment, but did not pay him commissions on sales to government agencies that Schwam generated, but for which payment was not made until after XO terminated him. He filed a complaint in U.S. District Court (EDVa) alleging breach of contract and unjust enrichment. The District Court granted summary judgment to XO. The Court of Appeals affirmed. This case is Jayson Schwam v. XO Communications, Inc., U.S. Court of Appeals for the 4th Circuit, App. Ct. No. No. 05-1060, an appeal from the U.S. District Court for the Eastern District of Virginia, at Alexandria, D.C. No. 04-351-1, Judge Gerald Bruce Lee presiding. The Court of Appeals wrote that this opinion is unpublished, and that "Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c)."

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3/24. Rep. Bob Inglis (R-SC) announced in a release that he will introduce a bill in the House that would create a federal government program to give financial prizes for the "best technology advancements in hydrogen production, storage, distribution, and utilization". He added that "I envision a grand prize perhaps as much as $100 million". This bill pertains to energy technology, and not information technology, or technology generally. However, if enacted into law, this would mark a change in how the government seeks to promote innovation. The primary means by which the federal government seeks to incent innovation is by creating property rights regimes, granting inventors or authors exclusive rights, for limited times, in their inventions and expressions, thereby allowing them an opportunity to obtain a financial return through market transactions. Other current means include direct federal subsidization of research, and tax policies -- especially the research and development tax credit. Rep. Inglis proposes to incent innovation by having the government grant post-invention awards. The federal government already has the non-financial National Medal of Technology program. Awards in that program are affected by political influence and political campaign contributions. See, story titled "Commentary: National Medal of Technology Program" in TLJ Daily E-Mail Alert No. 1,312, February 17, 2006.

3/24. Peter Allgeier, a Deputy U.S. Trade Representative, spoke and answered questions in Geneva, Switzerland, regarding the World Trade Organization's (WTO) Trade Policy Review of the United States. See, transcript [PDF]. See also, WTO release, which contains hyperlinks to the various parts of its report. And see, story titled "WTO Releases U.S. Trade Policy Review" in TLJ Daily E-Mail Alert No. 1,335, March 23, 2006. Allgeier was asked about U.S. concerns regarding the People's Republic of China, and the WTO's forthcoming trade policy review of China. He said that "We are putting together now the questions that we will put to China where we will be requesting responses in writing." He added that "We will ask about the whole range of policies that they took on when they acceded to the WTO. Obviously things like intellectual property will figure very prominently, but there are many other areas of our relations with China that will be important."

House Commerce Committee to Mark Up DATA Bill

3/23. The House Commerce Committee (HCC) issued a release that states that Committee leaders "have reached bipartisan agreement" on language for HR 4127, the "Data Accountability and Trust Act", or DATA. This release also states that the full Committee will mark up the bill on Wednesday, March 29.

The HCC did not release the text of bill to be approved next week. However, the HCC's release summarizes the bill, and changes to be made by a manager's amendment.

It states that manager's amendment will "Narrow the definition of data brokers to include only those entities that sell noncustomer data to nonaffiliated third parties, ensuring mailing lists and others aren't inadvertently affected by the law. The FTC would also be granted the authority to deem in compliance with H.R. 4127 those companies already meeting the Fair Credit Reporting Act, Gramm-Leach Bliley Act or the Health Insurance Portability and Accountability Act (HIPPA) requirements."

It also states that the manager's amendment will require data brokers to "establish reasonable procedures to verify the accuracy of information that they collect and maintain", and "regularly monitor security systems for breaches". Also, data brokers would be prohibited from "obtaining information on someone by impersonating that person".

The release also states that the manager's amendment will "Change the threshold for consumer notification from ``significant risk of identity theft´´ to ``reasonable risk of identity theft to the individual to whom the personal information relates, fraud or other unlawful conduct.´´" The bill will also "Allow consumers annual access to records maintained on them by data brokers as well as the right to have inaccurate information corrected or labeled as disputed."

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3/23. President Bush signed HR 1053, a bill to extend normal trade relations treatment to the products of Ukraine. Bush gave a speech at a signing ceremony in which he stated that "President Yushchenko has made reforms to increase transparency and provide intellectual property protection and strengthen the enforcement of the rule of law." He added that "These reforms have taken great conviction. And earlier this month, our two nations signed a bilateral agreement that will establish the terms of trade between our nations when Ukraine joins the World Trade Organization. We support Ukraine's goal of joining the WTO, and we will help resolve the remaining steps required for entry as quickly as possible." The House approved HR 1053 on March 8, 2006, by a vote of 417-2. See, Roll Call No. 24. The Senate approved the bill on March 9.

3/23. The National Telecommunications and Information Administration (NTIA) published a web page that summarizes the programs that the Digital Television Transition and Public Safety Act of 2005 assigns to the NTIA, including the digital to analog converter program. This page also states that "NTIA will be conducting rule makings and other required administrative proceedings in order to establish the programs as directed by the Act."

3/23. The U.S. Court of Appeals (FedCir) issued its opinion [27 pages in PDF] in Atofina v. Great Lakes Chemical Corporation, a patent infringement case involving synthesization of difluoromethane. The Court of Appeals reversed and remanded. This case involves the issues of unenforceability because of inequitable conduct, and anticipation. This case is App. Ct. No. 05-1359, an appeal from the U.S. District Court for the District of Delaware, D.C. No. Civ. No. 02-1350, Judge Sue Robinson presiding. Judge Lourie wrote the opinion of the Court of Appeals, in which Judge Rader joined. Judge Dyk dissented in part.

Supreme Court Rules in Georgia v. Randolph

3/22. The Supreme Court issued its opinion [51 pages in PDF] in Georgia v. Randolph. This is a 4th Amendment search and seizure case involving a warrantless search of a home for cocaine. The significance of this case for technology, if any, is that it deals with the question of whose consent is sufficient for a warrantless search when there are multiple persons who might be willing to express consent.

The Supreme Court held that when police go to a residence, and encounter two people, one of whom says the police can search, and one of whom says the police cannot search, the police must obtain a warrant before they can search.

The Supreme Court also wrote that the police may rely on the consent of anyone present who reasonably appears to have authority to consent. It added that police have no duty to ask a tenant, even if he is nearby, such as someone held in custody in a nearby police car.

There is also joint or shared control or ownership of servers and data stored on servers and computers. This case may protect drug dealers and wife beaters, who tend to be at the door to object to searches, but may not assist people who store data remotely, but tend not to be next to computer servers when the government comes for their confidential electronic information?

The Supreme Court did not address whether or not this case might be relied upon by law enforcement agencies that seek to obtain warrantless searches for electronic data, based upon the consent of some third party.

However, Chief Justice Roberts wrote a dissenting opinion that does touch on information technology. He wrote that "If two roommates share a computer and one keeps pirated software on a shared drive, he might assume that his roommate will not inform the government. But that person has given up his privacy with respect to his roommate by saving the software on their shared computer. A wide variety of often subtle social conventions may shape expectations about how we act when another shares with us what is otherwise private, and those conventions go by a variety of labels -- courtesy, good manners, custom, protocol, even honor among thieves. The Constitution, however, protects not these but privacy, and once privacy has been shared, the shared information, documents, or places remain private only at the discretion of the confidant."

This case is Georgia v. Randolph, Sup. Ct. No. 04-1067, a petition for writ of certiorari to the Supreme Court of Georgia. Justice Souter wrote the opinion of the Court, in which Justices Kennedy, Stevens, Ginsburg and Breyer joined. Justice Stevens also wrote a concurring opinion in which Justice Breyer joined. Chief Justice Roberts wrote a dissent, in which Justices Scalia and Thomas joined.

See also, March 23, 2006, opinion [PDF] of the U.S. Court of Appeals (8thCir) in USA v. Robert Elam, App. Ct. No. 04-4170.

WTO Releases U.S. Trade Policy Review

3/22. The World Trade Organization (WTO) released a report titled "Trade Policy Review: Report of the Secretariat: United States". See, WTO release, which contains hyperlinks to the various parts of the report, in MS Word format.

This lengthy report contains summaries of the trade related aspects of various areas of U.S. statutes, treaties, and rules, including intellectual property rights (IPR), antitrust, and telecommunications.

Intellectual Property Rights. The report states that the U.S. "is a major producer of goods and services that embody knowledge and other intellectual developments. It is committed to a policy of promoting increased IPR protection, and is advancing this protection through a variety of mechanisms, including FTAs, intellectual property agreements, and memoranda of understanding. Various regulatory changes took place during the period under review, particularly in the areas of patents, trade marks, copyright, and enforcement. The U.S. Patent Office is implementing a programme to expand the quality review of patent applications, among other things. The United States has yet to implement the DSB ruling with respect to Section 211 of the U.S. Omnibus Appropriations Act of 1998." See, table of contents and summary of observations.

The section of the report that addresses IPR reviews the nature of, and recent developments in, the U.S. patent, trademark and copyright systems. The discussion of patent protection notes that there have been few significant recent changes to patent law, other than the Cooperative Research and Technology Enhancement (CREATE) Act of 2004, but that the Federal Trade Commission (FTC) and National Academy of Sciences (NAAS) have both produced reports with recommendations for changes.

The discussion of copyright reviews the Family Entertainment and Copyright Act of 2005, and the Copyright Royalty and Distribution Reform Act of 2004. It also reviews the Special 301 process, Section 337 proceedings, and criminal enforcement.

Antitrust. The report states that "Competition policy enforcement has remained focused on the activities of international cartels.  Other areas addressed by the antitrust agencies include anticompetitive mergers and non-merger enforcement in key sectors, such as health care and energy. Changes to competition policy legislation, including penalties for violating the Sherman Act, took effect in 2004. The U.S. economy's good performance has been linked to regulatory reform efforts in a broad range of industries, but it has also been noted that competition policy could be improved by eliminating antirust exemptions, enhancing competition at the sectoral level and clarifying assignments of responsibility among different enforcement officials."

Telecommunications. The report states that "The U.S. telecommunications market is open to foreign participation and highly competitive. In December 2004, the Federal Communications Commission adopted new regulations that redefine the extent to which incumbent firms are required to make elements of their network available to other carriers."

The report contains an overview of federal telecommunications regulation, including developments affecting unbundled network elements, and intercarrier compensation. The report also contains a detailed review of U.S. restrictions on foreign ownership of certain FCC issued licenses.

U.S. Trade Representative (USTR) Rob Portman stated in a release that "The WTO's review affirms our belief that the United States prospers from open markets. Our economic strength -- 3.5% growth in GDP and 2 million new jobs last year -- is in part a reflection of our low trade barriers. This is why, as the report recognized, the U.S. economy has been the engine for global growth over the past decade. The United States’ trade weighted average applied tariff is just 1.4%."

Portman added that "We will continue to vigorously pursue tariff reductions and the removal of non-tariff barriers because it will help generate global economic growth and lift millions from poverty. That is why we are committed to trade liberalization in the Doha Development Round. We will also continue to pursue FTAs because they complement these multilateral efforts to bring down barriers."

Portman also stated that "The report identifies that barriers to trade aren't always economic -- at times they are political. We are cognizant of the potential for protectionism in the U.S. and we are actively communicating the real world benefits of trade at home. Economic isolationism, though, is not just a phenomenon in the United States. We all must fight the protectionist forces with the facts, which show that benefits from trade are substantial."

People and Appointments

3/22. Janet Hale, the Department of Homeland Security's (DHS) Under Secretary for Management, announced her intent to resign, effective in early May. See, DHS release.

3/22. The National Association of Broadcasters (NAB) announced the results of it elections for its Board of Directors for 2006. See, list of 2006 directors.

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3/22. The U.S. Court of Appeals (9thCir) issued its opinion [37 pages in PDF] in Alaska Right to Life Committee v. Miles. The Court of Appeals affirmed the District Court's judgment upholding the state of Alaska's campaign finance statute against a First Amendment challenge. This opinion may be of some interest to persons following federal regulation of internet speech. The Alaska Right to Life Committee is neither an individual, nor a blogger. However, the Court wrote that it "seeks to accomplish its goals through various forms of communication to the public, including a newsletter, telemarketing, and the Internet." Also, in this case, a main issue was the definition of the term "electioneering communication". In the ongoing Federal Election Commission (FEC) rulemaking proceeding the definition of "public communication" is the main issue. The Alaska statute includes internet communications. It provides, in part, that "communication" means "an announcement or advertisement disseminated through print or broadcast media, including radio, television, cable, and satellite, the Internet, or through a mass mailing, excluding those placed by an individual or nongroup entity and costing $500 or less and those that do not directly or indirectly identify a candidate or proposition, ..." Then, an "electioneering communication" means a communication that "(A) directly or indirectly identifies a candidate; (B) addresses an issue of national, state, or local political importance and attributes a position on that issue to the candidate identified; and (C) occurs within the 30 days preceding a general or municipal election". The 9th Circuit upheld the constitutionality of this language. This case is App. Ct. No. 04-35599, an appeal from the U.S. District Court for the District of Alaska, D.C. No. CV-02-00274-A, Judge Ralph Beistline presiding. Judge William Fletcher wrote the opinion of the Court of Appeals, in which Judges Alfred Goodwin and Melvin Brunetti joined. See also, story titled "House Committee Holds Hearing on Regulation of Internet Speech" in TLJ Daily E-Mail Alert No. 1,222, September 27, 2005.

3/22. Earl Comstock, head of Comptel, criticized the Federal Communications Commission's (FCC) inaction which, by operation of law, granted Verizon's December 20, 2004, petition for forbearance from Title II of the Communications Act, and the FCC's Computer Inquiry rules. See, story titled "FCC Announces that Verizon Petition for Forbearance is Deemed Granted" in TLJ Daily E-Mail Alert No. 1,334, March 22, 2006. Comstock wrote in a release that the action "represents the height of irresponsibility by a federal official. With this action the Chairman has unilaterally abdicated the Commission's responsibilities with respect to oversight of Verizon's common carrier service offerings. As a result, competition and consumers are now at the mercy of Verizon's financial self-interest. If history is any guide, there will be predictable adverse results." Comstock added that "What makes this action particularly egregious is that Verizon has already been granted significant regulatory relief through previous actions championed by the Chairman, and two similar petitions by AT&T and Bell South were withdrawn after those actions. Verizon alone thumbed its nose at the Chairman by not withdrawing its petition, and the Chairman has knuckled under to its bullying tactics."

FCC Announces that Verizon Petition for Forbearance is Deemed Granted

3/21. The Federal Communications Commission (FCC) issued a release that states that the FCC, by operation of law has granted Verizon's December 20, 2004, petition for forbearance from Title II of the Communications Act, and the FCC's Computer Inquiry rules.

The FCC adopted no order or decision upon a majority vote of the members of the Commission. The FCC issued only a short release, and Commissioners wrote separate statements.

The release states as follows: "The Verizon telephone companies (Verizon) filed a petition for forbearance from Title II of the Communications Act of 1934, as amended, and the Commission's Computer Inquiry rules on December 20, 2004. On December 19, 2005, the Commission extended the forbearance deadline to March 19, 2006. Verizon amended its petition on February 7 and February 17th, 2006. Section 10(c) provides that a forbearance petition ``shall be deemed granted if the Commission does not deny the petition for failure to meet the requirements for forbearance under subsection (a) within one year after the Commission receives it, unless the one year period is extended by the Commission.´´ This is to inform the public that, pursuant to section 10(c), the relief requested in Verizon’s petition was deemed granted by operation of law, effective March 19, 2006."

See, full story.

Verizon Seeks Access to  Cablevision Programming

3/21. Verizon announced in a release that it filed a complaint with the Federal Communications Commission (FCC) against Cablevision Systems Corp. and its wholly owned subsidiary, Rainbow Media Holdings, "to secure Rainbow's sports programming for Verizon's FiOS TV customers in New York and New England".

The complaint states that "This case involves the paradigmatic abuse of monopoly power that the program access rules were adopted to prevent. It presents the Commission with an opportunity to take quick and decisive action against a particularly egregious example of the cable industry’s efforts to block telephone companies from competing in video services."

It continues that "Apparently to make it more difficult for Verizon to compete effectively and to protect Cablevision’s dominant position, Cablevision and Rainbow are refusing to negotiate terms for Verizon’s distribution of Rainbow’s valuable regional sports networks. Although Rainbow provides that programming to all other major MVPDs in the New York City metropolitan area and Massachusetts, including of course Cablevision, Rainbow will not sell to Verizon -- its largest potential wireline competitor."

The complaint alleges violation of 47 U.S.C. §§ 548(b) and (c)(2)(B), and §§ 76.1001 and 76.1002(b) of the FCC's rules.

Verizon's Terry Denson stated that "Cablevision's consistent refusal to negotiate carriage terms clearly is an attempt to block competition and preserve its market position ... and the 1992 Cable Act specifically prohibits this type of refusal to deal."

Gigi Sohn, head of the Public Knowledge, a Washington DC based interest group, responded in a release that "Verizon certainly has the right to complain about access to Rainbow's programming. But it is extremely curious that Verizon, by opposing an enforceable net neutrality law, would not grant the same rights to others to gain access to its broadband system. Verizon appears to favor government rules to enforce competition to benefit Verizon, but not when others could benefit. Verizon's complaint demonstrates that a properly tailored government rule (whether program access or net neutrality) can promote competition and restrain the abuse of market power." (Parentheses in original.)

SEC Chairman Cox Addresses Internet Proxy Proposal

3/21. Securities and Exchange Commission (SEC) Chairman Chris Cox gave a speech in Washington DC. He discussed, among other topics, the SEC's internet proxy proposal.

The SEC released its notice of proposed rulemaking [109 pages in PDF] on December 8, 2005. It states that "We are proposing amendments to the proxy rules to update our regulatory framework to take advantage of communications technology and provide an alternative proxy model that could reduce the printing and mailing costs associated with furnishing proxy materials to shareholders. The proposed amendments would provide an alternative method for furnishing proxy materials to shareholders based on a ``notice and access´´ model. Under the proposals, an issuer would be able to satisfy its obligations under the Commission’s proxy rules by posting its proxy materials on a specified, publicly-accessible Internet Web site (other than the Commission’s EDGAR Web site) and providing shareholders with a notice informing them that the materials are available and explaining how to access those materials." (Parentheses in original. Footnotes omitted.)

See also, comments that have been submitted to the SEC in response to this NPRM.

See also, story titled "SEC Proposes to Allow Internet Delivery of Proxy Materials" in TLJ Daily E-Mail Alert No. 1,263, December 1, 2006.

Cox stated in his March 21 speech that the SEC's electronic proxy proposal "is another step we're taking to make the Internet a more efficient forum for communication with shareholders. By giving investors more, and importantly, more usable information, we can enable increased participation by better informed shareholders."

He continued that "A postcard-sized notice would apprise shareholders of the availability of their proxy materials on the Web. By going online, they could search the proxy statement for the items they want, and follow links to other, more detailed information. They could do everything they do now with paper proxies, just more of it, and faster and more efficiently. Investors who want paper in addition, or instead, would simply call a toll free number."

He concluded that "With more than 75% of Americans having access to the Internet -- and spending an average of 25% of their waking hours online -- it's high time to bring this revolutionary technology to the world of shareholder democracy. When progress is about to overtake you, you either ride the wave or get wiped out -- or at least that's how it is in Southern California."

Supreme Court Rules in SLUSA Pre-emption Case

3/21. The Supreme Court released its opinion [PDF] in Merrill Lynch v. Dabit, holding that the Securities Litigation Uniform Standards Act's (SLUSA) pre-emption provision applies to class action claims asserted by holders of securities, notwithstanding the SLUSA's language, "in connection with the purchase or sale".

Shadi Dabit, a former Merrill Lynch broker, filed a complaint in U.S. District Court (WDOkla) against Merrill Lynch alleging violation of Oklahoma securities law. Dabit, who also sought class action status, pled that Merrill Lynch breached the fiduciary duty and covenant of good faith and fair dealing that it owed its brokers by disseminating misleading research, and manipulated stock prices.

That is, Dabit did not plead Section 10b-5 fraud or any other cause of action under federal securities law. Nor did he technically plead fraud "in connection with the purchase or sale". He plead fraud in connection with holding on to already held securities -- the decision not to sell.

Dabit argued that the broker class was injured by Merrill Lynch's actions because these actions caused them to hold on to overvalued securities, and because they lost commission fees when their clients made bad investments and took their business to other brokers.

Other similar actions were filed in other district courts. They were consolidated in the U.S. District Court (SDNY).

Merrill Lynch argued that the SLUSA preempts these state law claims. The District Court agreed. Dabit appealed.

The U.S. Court of Appeals (2ndCir) held that the claims asserted by the class of holders did not allege fraud "in connection with the purchase or sale" of securities within the meaning of the preemption language of the SLUSA.

The Supreme Court vacated the opinion of the Court of Appeals. It wrote that "The holder class action that respondent tried to plead, and that the Second Circuit envisioned, is distinguishable from a typical Rule 10b-5 class action in only one respect: It is brought by holders instead of purchasers or sellers. For purposes of SLUSA pre-emption, that distinction is irrelevant; the identity of the plaintiffs does not determine whether the complaint alleges fraud "in connection with the purchase or sale" of securities. The misconduct of which respondent complains here -- fraudulent manipulation of stock prices -- unquestionably qualifies as fraud "in connection with the purchase or sale" of securities ..."

This case is Sup. Ct. No. 04–1371.

Bhatia Addresses Threat of Protectionism in US and China

3/21. Karan Bhatia, a Deputy U.S. Trade Representative, gave a speech [7 pages in PDF] to the Shanghai Institute of Foreign Trade, in Shanghai, China. He said that "we face the threat of protectionism on both sides of the Pacific".

He reviewed protectionist trends in the U.S., and then turned to China.

He said that "There are worrisome trends in China as well. There are numerous voices calling for new policies and regulations to restrict market access by foreign firms, particularly in high technology and service sectors. There are growing calls to provide protection, and other forms of government support to domestic companies. And there signs that the government is listening to these requests and is increasingly experimenting with mercantilist policies that seek to direct markets rather than opening them."

He argued that "This is a mistake. Not only will these efforts generate trade frictions, but they will also prevent the market from selecting optimal technologies, reducing the efficiency and raising the cost structure of the entire Chinese economy."

He continued that "From the U.S. perspective, there are several concerns. There is concern that, while the United States has fulfilled its commitment to open its market to Chinese companies, China is not fulfilling its part of the bargain. There is growing frustration that China is not ``playing by the rules.´´"

For example, he said that "Americans do not believe that China is competing fairly when rampant piracy, counterfeiting, and copyright infringement cost businesses billions of dollars each year. The movie, music, publishing, software and electronic entertainment industries are areas where the U.S. is especially competitive, and China's weak enforcement of copyright laws has a disproportionately heavy impact on our sales to China. IPR enforcement problems in China also affect us in markets outside of China. Last year, for example, 69 percent of IPR infringing goods seized by U.S. customs at the U.S. border had originated in China.

He added that "the failure to protect intellectual property also hurts innovative Chinese companies, and could undermine China’s efforts to continue to foster an even more dynamic, knowledge-based economy."

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3/21. Sen. Ted Stevens (R-AK), the Chairman of the Senate Commerce Committee (SCC), gave a speech at CompTel's 2006 Spring Convention in San Diego, California. He said that the SCC "is trying to create new legislation which is technology-neutral". He discussed 911, municipal broadband, network neutrality, video franchising, universal service taxes and subsidies, and family tiers for cable and satellite. He said that "I want to convince the Committee to have a new Communications Act and to have a goal of a final draft to be ready to be marked up by the Committee right after the Easter recess."

3/21. The Federal Communications Commission (FCC) released the text [30 pages in PDF] of its "Eighth Notice of Proposed Rulemaking" regarding public safety communications in the 764-776 MHz and 794-806 MHz bands. The FCC adopted, but did not release, this item at its meeting of Friday, March 17, 2006. See, story titled "FCC Adopts NPRM Re Public Safety Communications in the 700 MHz Band" in TLJ Daily E-Mail Alert No. 1,332, March 20, 2006. See also, FCC release [PDF] that describes this item. Initial comments will be due 60 days after publication of a notice in the Federal Register. Reply comments will be due 90 days after publication. This item is FCC 06-34 in WT Docket No. 96-86.

3/21. Microsoft announced that it has delayed the scheduled release of its next generation of operating system, Vista, until January of 2007. See, Microsoft release.

3/21. The Cato Institute published a paper [28 pages in PDF] titled "Circumventing Competition: The Perverse Consequences of the Digital Millennium Copyright Act". The author is Timothy Lee. It is a criticism of the anti-circumvention provisions of the DMCA. Lee asserts that "the copyright industry is exerting increasing control over playback devices, cable media offerings, and even Internet streaming. Some firms have used the DMCA to thwart competition by preventing research and reverse engineering. Others have brought the weight of criminal sanctions to bear against critics, competitors, and researchers." He argues that "but people should be free to circumvent copy protection for purposes that are otherwise lawful."

3/21. The U.S. Court of Appeals (7thCir) issued its opinion [8 pages in PDF] in U.S. v. Connors, a case that demonstrates the lengths that the Department of Homeland Security's (DHS) Customs and Border Protection (CBP) will go to prosecute people who bring Cuban cigars into the U.S., in violation of the Trading with the Enemy Act [PDF], which is codified at 50 U.S.C. Appendix. Richard S. Connors for years brought Cuban cigars into the U.S. in his luggage when he returned from trips to Cuba (via Toronto or Cancun). He also has an ex-wife, who for years collected evidence for the CBP. Court of Appeals Judge Evans wrote that "marital splits get nasty when an ex-spouse decides to dish out a little dose of discomfort", but "the havoc visited on Chicago lawyer Richard Connors by his ex-wife would win a gold medal for creativity". The CBP spent over three years investigating Connors. The prosecution, after an 11 day trial, obtained a guilty verdict, and a 37 month prison sentence. The ex-wife's activities were not disclosed to Connors. The prosecution did not call her as a witness. After trial the ex-wife informed Connors, and testified in a post trial hearing. Judge Evans wrote that she testified that the CBP "not only asked her to cozy up to Connors but also suggested that she obtain incriminating documents from his house and place them in the trash" where the CBP would retrieve them. Connors asserted that this constituted unreasonable government searches and seizures in violation of the 4th Amendment, and that failure to disclose violated his Due Process rights. The District Court found this testimony to be not credible, and rejected these arguments. The Court of Appeals affirmed. Judge Evans wrote that "When a friend is false, blame the friend, not the government." Also, citing "The Betrothed" by Rudyard Kipling, he wrote that a "woman is only a woman, but a good cigar is a Smoke."

Go to News from March 16-20, 2006.