TLJ News from October 26-31, 2006

FTC Sues Another Malware Distributor

10/31. The Federal Trade Commission (FTC) filed a complaint [17 pages in PDF] in U.S. District Court (DNev) against ERG Ventures, LLC, dba Media Motor, and others, alleging violation of Section 5(a) of the FTC Act in connection with their distribution of exploitive malware. This is the FTC's ninth malicious software related action.

The FTC also obtained an Ex Parte Temporary Restraining Order and Order to Show Cause [19 pages in PDF] (TRO).

The FTC has only civil authority. It cannot obtain fines in Section 5(a) cases. Moreover, Section 5(a), which is codified at 15 U.S.C. § 45(a), merely provides that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful." Yet, the TRO in this case demonstrates that the FTC can obtain, with notice or hearing, relief that may be more disruptive to a defendant's business operations than some criminal prosecutors can obtain upon final judgment, such as an immediate computer shut down order, and a financial institution asset freeze order.

The complaint alleges that defendants "have surreptitiously distributed and installed exploitive software program onto consumers' computers through a sophisticated and expansive network of affiliates."

It continues that "In order to maximize the number of installations -- and their resulting profits -- the ERG defendants utilize deception to trick consumers into downloading and installing the package of exploitive software programs they have assembled."

The complaint alleges that the ERG defendants operate web sites that offer free software, such as screensavers and video files, but that "Hidden within this purportedly free software is code ... that, once installed, silently activates itself on the consumer's computer and proceeds to covertly download and install the package of exploitive software programs ..." The complaint states that the ERG defendants have developed a network of web site operators, some of whom are also named as defendants, who also engage in deceptive practices to covertly download and install this software onto consumers' computers.

The complaint also lists the effects of this software: "1) changing consumers' default home pages; 2) adding a difficult-to-remove toolbar to consumers' Internet browser that displays advertising; 3) tracking consumers' Internet activity; 4) generating repeated and occasionally pornographic pop up advertising; 5) adding advertising icons to consumers desktops; 6) altering consumers' Internet browser settings; 7) degrading computer performance; and 9) attacking and disabling consumers' anti-spyware software. By design, these exploitive software programs are extremely difficult for consumers to uninstall."

The TRO temporarily enjoins defendants from installing "any Software directly or indirectly installed on consumers' computers by the ERG Defendants: 1) failing to clearly and conspicuously disclose the name and function of all such Software (the "Required Disclosure"); and 2) failing to provide, immediately after the Required Disclosure is made, a clearly and conspicuously disclosed option to prevent the installation of all such Software, which when exercised by the consumer, prevents the installation of all such Software."

The TRO also temporarily enjoins defendants from installing software that,

   "A. tracks consumers’ Internet activity;
   B. changes consumers’ preferred Internet homepage settings;
   C. inserts an advertising toolbar onto consumers' Internet browsers;
   D. generates numerous "pop up" advertisements on consumers' computer screens even when consumers' Internet browsers are closed;
   E. adds advertising icons to the computers' desktop;
   F. tampers with, disables or otherwise alters the performance of other programs, including anti-spyware and anti-virus programs; or
   G. alters Internet browser security settings, including the list of safe or trusted websites."

The TRO also freezes assets, imposes record keeping requirements, and imposes data and records retention requirements upon defendants. It prohibits defendants from destroying or altering "all computer data and storage media (including but not limited to floppy disks, hard drives, CD-ROMS, zip disks, punch cards, magnetic tape, backup tapes, and computer chip and any and all equipment needed to read any such material)". (Parentheses in original)

Moreover, the TRO provides that "In order to preserve all active and inactive computer data the Corporate Defendants and Individual Defendants shall immediately upon service of this order power down and only then unplug any and all computers in their control that are being used or have been used in connection with their Internet marketing and distribution activities and shall cease suing (sic) such computers until ..." (The word "suing" is likely a typographical error for the word using.)

The TRO provides three options for defendants to restart computers, but only if one is performed within 24 hours. TLJ spoke with a FTC representative who declined to discuss how this provision of the TRO has been implemented in this case.

The TRO also requires that certain defendants provide a verified statement containing specified information about all of their software providers.

The TRO also affects persons and entities who are neither named as defendants, nor accused of wrongdoing. The TRO imposes data retention and asset freeze requirements upon any financial institution served with a copy of the TRO. It also requires entities served to deny access to certain safe deposit boxes.

The TRO also require non-parties served with the TRO to disclose within five days certain specified information that would typically be acquired through the civil discovery process.

The TRO states that there will be a hearing on a motion for preliminary injunction on November 14. This has been rescheduled for Wednesday, November 22.

The FTC also issued a release that states that "The U.S. Attorney's Office in Washington, D.C. is engaged in a parallel criminal investigation of the defendants in which search warrants were executed. These investigations demonstrate the joint commitment of the FTC and the Department of Justice to combat spyware." The USAO did not immediately return a phone call from TLJ.

The FTC case is Federal Trade Commission v. ERG Ventures LLC, et al., U.S. District Court for the District of Nevada, D.C. No. 3:06-CV-00578-LRH-VPC.

GAO Reports on Federal Government Cybersecurity R&D

10/31. The Government Accountability Office (GAO) released a report [34 pages in PDF] titled "Information Security: Coordination of Federal Cyber Security Research and Development".

The report states that many entities are involved in federal cyber security research and development (R&D). It states that the Executive Office of the President's (EOP) Office of Science and Technology Policy (OSTP) and Office of Management and Budget (OMB) "provide high-level oversight for federal research and development, including cyber security".

It states that the OSTP "coordinates the development of a federal agenda for cyber security research and oversees the National Science and Technology Council, which prepares R&D strategies that are to be coordinated across federal agencies."

The report continues that "Much of the government’s cyber security R&D activities are funded or conducted by the National Science Foundation and the Departments of Defense and Homeland Security. Other agencies that also fund or conduct cyber security R&D activities include the Department of Energy, the National Institute of Standards and Technology, and agencies within the intelligence community."

The report finds that a "federal cyber security research agenda has not been developed".

The report also finds that while one cybersecurity activity is "developing and maintaining governmentwide repositories of information on R&D projects", currently, "the governmentwide repositories are incomplete and not fully populated". Consequently, "key information needed for the effective oversight and coordination of cyber security research activities is not readily available".

The report makes two recommendations. First, it recommends that the OSTP "establish firm timelines for the completion of the federal cyber security R&D agenda". Second, it recommends that OMB "issue guidance to agencies on reporting information about federally funded cyber security research projects to the governmentwide repositories".

DOJ Suspends Investigation of Entercom's Purchase of Radio Stations from CBS

10/31. The Department of Justice's (DOJ) Antitrust Division announced in a release that "it has suspended its investigation of Entercom Communications Corporation's proposed acquisition of New York radio stations from CBS Corporation as long as the companies sell three Rochester radio stations as planned."

The DOJ added that "Entercom informed the Department that it planned to divest the three Rochester stations in order to avoid the need for further investigation by the Justice Department and to comply with the Federal Communications Commission's (FCC) local ownership rules. The investigation arose from Entercom's proposed $262 acquisition of 15 radio stations from CBS in Austin, Texas; Cincinnati, Ohio; Memphis, Tenn.; and Rochester, N.Y."

Entercom owns four stations in the Rochester area. It would have acquired from CBS four more stations.

The DOJ elaborated that "The FCC's local ownership rules prohibit Entercom from owning more than five FM stations in one area and would require Entercom to sell two stations. Prior to the conclusion of the Department's antitrust investigation, Entercom advised the Department that it planned to sell CBS's WRMM-FM and WZNE-FM and Entercom's WFKL-FM to a third party. The Department determined that this sale would reduce Entercom's post-transaction share of Rochester radio advertising revenues to about 40 percent. Based on the reduced share of revenue and the characteristics of the radio stations being sold, the Department concluded that it would not have reason to continue its investigation if the proposed sale is completed."

Alfred Kahn Opines Against Net Neutrality Regulation

10/31. The Progress and Freedom Foundation (PFF) released a short paper titled "A Democratic Voice of Caution on Network Neutrality". The author is Alfred Kahn, who, as former President Jimmy Carter's Chairman of the Civil Aeronautics Board, deregulated the airline industry.

Kahn noted that "The advocates of network neutrality have become distressingly, stridently apocalyptic, rallying all good liberals against" broadband service providers. He asked rhetorically, "Why all the hysteria?"

He argued that "There is nothing ``liberal´´ about the government rushing in to regulate these wonderfully promising turbulent developments. Liberals of both 18th and 20th -- and I hope 21st -- century varieties should and will put their trust in competition, reinforced by the antitrust laws -- and direct regulation only when those institutions prove inadequate to protect the public."

He wrote that "competition is a far better protector of the interest of both consumers and content providers (think radio, television, motion pictures and, now, the Internet) than government ownership or regulation. In telecommunications, cable and telephone companies compete increasingly with one another, and while the two largest wireless companies, Cingular and Verizon, are affiliated with AT&T and Verizon, respectively, some 97 percent of the population has at least a third one competing for their business as well; and Sprint and Intel have recently announced their plan to spend 3 billion dollars on mobile Wi-Max facilities nationwide. Scores of municipalities led by Philadelphia and San Francisco, are building their own Wi-Fi networks. And on the horizon are the electric companies, already beginning to use their ubiquitous power lines to offer broadband--to providers of content, on the one side, and consumers, on the other."

He wrote that if any discrimination occurs, such as in the Madison River Communications case, either the Federal Communications Commission (FCC) or antitrust regulators will stop it.

People and Appointments

10/31. Sherwin Siy joined the Public Knowledge (PK) as staff attorney and director of PK’s Global Knowledge Initiative, effective November 1, 2006. He previously worked for the Electronic Privacy Information Center (EPIC).

Supreme Court Denies Cert in Inequitable Conduct Case

10/30. The Supreme Court denied certiorari in Ferring B.V. v. Barr Laboratories, a pharmaceutical patent case involving the inequitable conduct doctrine. See, Order List [15 pages in PDF].

This lets stand the February 15, 2006, opinion [46 pages in PDF] of the U.S. Court of Appeals (FedCir) which held that a patent enforceable for inequitable conduct.

The Supreme Court wrote in its order that "The motion of Biotechnology Industry Organization for leave to file a brief as amicus curiae is granted. The motion of Pharmaceutical Research and Manufacturers of America for leave to file a brief as amicus curiae is granted. The motion of Washington Legal Foundation for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is denied."

Ferring B.V. and Aventis Pharmaceuticals, Inc. filed a complaint in U.S. District Court (SDNY) against Barr Laboratories, Inc. alleging infringement of Ferring's U.S. Patent No. 5,407,398. The District Court granted summary judgment to Barr on the grounds that the patent is unenforceable due to inequitable conduct, and secondly, noninfringement.

The Court of Appeals affirmed on the grounds of inequitable conduct, and did not reach the infringement issue.

The majority wrote that "Inequitable conduct occurs when a patentee breaches his or her duty to the PTO of `candor, good faith, and honesty.´" It added that it includes both affirmative misrepresentations of material facts and failure to disclose material information.

The majority wrote also, quoting from earlier opinions, that "The inequitable conduct analysis is performed in two steps comprising `first, a determination of whether the withheld reference meets a threshold level of materiality and intent to mislead, and second, a weighing of the materiality and intent in light of all the circumstances to determine whether the applicant's conduct is so culpable that the patent should be held unenforceable.´" (Emphasis in original.)

The majority concluded that supporting declarations submitted in support of the application to the USPTO failed to disclose prior relationships between the declarations, that this was material, and that this was intentional.

Judge Pauline Newman wrote a long dissent. She wrote that "``Inequitable conduct´´ in patent practice means misconduct by the patent applicant in dealings with the patent examiner, whereby the applicant or its attorney is found to have engaged in practices intended to deceive or mislead the examiner into granting the patent. It is a serious charge, and the effect is that an otherwise valid and invariably valuable patent is rendered unenforceable, for the charge arises only as a defense to patent infringement."

She continued that "My colleagues, endorsing several novel and unsupportable presumptions of wrongdoing, do injury to the reasonable practice of patent solicitation, even as they defy the rules of summary judgment."

"This is not hyperbole", wrote Newman. "Practitioners from an earlier era well recall the adverse impact on industrial innovation when patents were not a reliable support for commercial investment, based in part on the judicial belief that patents and their practice were seriously flawed. With invalidation of most of the patents that reached the courthouse, the contribution of a diminished patent incentive to the weakening of technology-based investment was a serious national concern, and the impact on the nation's commercial vigor was recognized by government as well as by the industrial and scientific communities."

She wrote that the Federal Circuit was created, in part, to deal with this problem, but now, the majority "on this panel have regressed to that benighted era".

She elaborated that the majority restores "a casually subjective standard, they also impose a positive inference of wrongdoing, replacing the need for evidence with a ``should have known´´ standard of materiality, from which deceptive intent is inferred, even in the total absence of evidence. Thus the panel majority infers material misrepresentation, infers malevolent intent, presumes inequitable conduct, and wipes out a valuable property right, all on summary judgment, on the theory that the inventor ``should have known´´ that something might be deemed material. The panel majority, steeped in adverse inferences, holds that good faith is irrelevant and presumes bad faith. Thus the court resurrects the plague of the past".

Amicus Briefs. The Supreme Court received several amicus briefs. See, amicus brief [27 pages in PDF] of the Washington Legal Foundation (WLF), amicus brief [PDF] of the Biotechnology Industry Organization (BIO), and amicus brief of the Pharmaceutical Research and Manufacturers of America urging the Supreme Court to grant certiorari and reverse.

For example, the BIO wrote that "The decision in Ferring highlights, in dramatic fashion, the unjustifiably low standards for materiality and intent that some panels of the Federal Circuit now apply in an inequitable conduct determination. The court below ruled that an important biotech patent was unenforceable based on omissions in declarations about prior relationships that had no bearing on the validity of the patent or the scientific accuracy of the declarants' testimony. The decision provides no limits on the standard for materiality of information that should be supplied to avoid a finding of inequitable conduct and it infers intent to deceive based on omission alone. The panel decision goes to far and, if permitted to stand, makes the patent application process unpredictable and more costly, and will make the unenforceability of otherwise valid patents uniformly suspect. This is particularly true for the biotechnology industry which suffers from disproportionate levels of patent attacks claiming inequitable conduct."

Of course, the Supreme Court might grant certiorari in another similar case in the future.

This case is Ferring B.V. et al. v. Barr Laboratories, Inc., Sup. Ct. No. 06-372, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit. The Court of Appeals case is App. Ct. No. 05-1284. It heard an appeal from the U.S. District Court for the Southern District of New York.

DOJ Approves VITA Patent Policy

10/30. Thomas Barnett, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, sent a letter to legal counsel for the VMEbus International Trade Association (VITA) stating that the DOJ will not oppose a proposal by the VITA to implement a policy on the disclosure and licensing of patents.

Thomas BarnettBarnett (at right) wrote that the VITA's policy "should preserve, not restrict, competition among patent holders".

The DOJ stated in a release that "The policy requires the disclosure of essential patents, commitments to license essential patent claims on fair, reasonable, and non-discriminatory terms, and declarations of the most restrictive licensing terms that patent holders will require."

The letter states that "VITA is comprised of developers, vendors, and users of real-time modular embedded computing systems originally based on the VMEbus computer architecture. This architecture enables engineers to design application-specific computer systems that can be embedded in a wide range of high-performance and mission critical systems such as ultrasound and magnetic resonance imaging machines, semiconductor manufacturing equipment, and industrial control equipment." (Footnote omitted.)

The DOJ release adds that "VITA requested a business review letter from the Antitrust Division expressing its enforcement intentions regarding a proposed patent policy that will impose two requirements on holders of essential patents who participate in VSO standard-setting activities. First, the policy requires that patent holders make early disclosures of patents and patent applications that may be essential to implementing VITA standards once they are adopted. Second, the policy requires that patent holders declare the maximum royalty rate and most restrictive non-price licensing terms they will require from those who must take a patent license in order to implement the eventual VITA standard. These declarations are irrevocable, but patent holders may submit subsequent declarations with less restrictive licensing terms."

This DOJ business review letter was sent to Robert Skitol, of the Washington DC office of the law firm of Drinker Biddle & Reath, the VITA's counsel.

Copyright Office Delays Release of Triennial DMCA Exemptions Rule

10/30. The Librarian of Congress published a notice in the Federal Register that announces that he "is extending, on an interim basis, the existing classes of works with respect to which the prohibition against circumvention of technological measures that effectively control access to copyrighted works shall not apply to persons who engage in noninfringing uses."

The notice adds that this rulemaking is in its "final stages", and that "It is anticipated that this extension will be in effect for no more than a few weeks."

The notice contains no tentative conclusions or exemptions. Nor does it state a cause for the delay. See, Federal Register, October 30, 2006, Vol. 71, No. 209, at Page 63247.

The Digital Millennium Copyright Act (DMCA) requires the Copyright Office to conduct a rulemaking proceeding every three years to designate exemptions to the anti-circumvention provisions of the DMCA.

17 U.S.C. § 1201 provides, in Subsection (a)(1)(A), that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title ...".

Then, Subsections (a)(1)(B) through (E) provide for rulemaking proceedings conducted by the CO every three years to establish exemptions to the prohibition of (a)(1)(A) for certain non-infringing uses.

The CO is now conducting its third rulemaking. The CO began this process one year ago. See, story titled "Copyright Office Announces Proceeding on DMCA Anti-Circumvention Exemptions" in TLJ Daily E-Mail Alert No. 1,229, October 7, 2005. The CO received, and published in its web site, 74 initial comments, and 35 reply comments.

It announced its hearing schedule in February. See, notice in the Federal Register, February 23, 2006, Vol. 71, No. 36, at Pages 9302-9303. and story titled "Copyright Office Announces Hearings on Exemptions to Anti-Circumvention Provisions" in TLJ Daily E-Mail Alert No. 1,318, February 27, 2006.

The rule adopted in the second triennial review, conducted in 2003, expired on October 27, 2006. The CO's legal team on this rulemaking, headed by David Carson, has not completed its work. Hence, the Librarian of Congress announces this extension of the existing exemptions, and a delay in releasing a new list of exemptions.

The current rules, which have just been extended, were announced, described, and recited in a notice in Federal Register, October 31, 2003, Vol. 68, No. 241, at Pages 62011-62018. They are also codified at 37 C.F.R. § 201.40(b).

Notably, while the just published notice states that the extension is for "no more than a few weeks", the actual wording of the extension makes it indefinite.

NMPA to Settle with Kazaa over P2P Infringement

10/30. The National Music Publishers Association (NMPA) announced in a release that "the music publishers have reached an anticipated settlement of the publishers' class action litigation against the operators of the Kazaa peer-to-peer network."

The NMPA release adds that "Under the terms of the settlement, Kazaa has agreed to pay a substantial sum to compensate music publishers and songwriters for the infringement of musical works on the Kazaa network."

This settlement follows the Supreme Court's June 27, 2005, opinion [55 pages in PDF] in MGM v. Grokster, and the U.S. District Court's (CDCal) September 27, 2006, opinion [60 pages in PDF] on remand.

Metro Goldwyn Meyer (MGM), other movie companies, and record companies, filed one complaint in the U.S. District Court (CDCal) against Grokster, Streamcast and Kazaa alleging copyright infringement, in violation of 17 U.S.C. § 501. They alleged contributory and vicarious infringement. In addition, professional songwriters and music publishers filed a separate class action complaint against the same defendants also alleging contributory and vicarious infringement. The two actions were consolidated.

See also, story titled "Supreme Court Rules in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.

The Kazaa defendants previously settled with the record and movie company plaintiffs. See, story titled "Kazaa Settles With Music Companies" in TLJ Daily E-Mail Alert No. 1,420, July 28, 2006.

Bush Continues Attacks on Democrats for Voting Record on PATRIOT Act and NSA Electronic Surveillance

10/30. President Bush gave a speech at an election campaign event in Sugar Land, Texas, in which he attacked the position of many Democrats on electronic surveillance of terrorists, and the war on terrorism generally.

He said that "If anybody has any doubts about the differences of opinion in Washington, D.C. between Republicans and Democrats, I want them to analyze the recent votes that took place on these important programs. When it came time to renew the Patriot Act, more than 75 percent of the House Democrats voted against it."

And, "When it came time to vote on whether the National Security Agency should continue to monitor communications that we think would be -- contain information that would protect you, more than 90 percent of the House Democrats voted against it."

He also discussed other aspects of the war on terrorism. He then said that "In all these vital measures for fighting a war on terror, the Democrats in Washington follow a simple philosophy: Just say no."

He then asked a series of questions to his audience, such as, "When it comes to listening in on the terrorists, what's the Democrats' answer?"

"And so when the Democrats ask for your vote on November 7th, what's your answer?"

He concluded that "however they put it, their approach comes down to this: The terrorists win and America loses."

Bush also gave a similar speech at Georgia Southern University in Statesboro, Georgia on October 30. He used many of the same lines in both speeches.

He also said in his Texas speech that "when we found al Qaeda or al Qaeda affiliates making phone calls into the United States, I thought it was important to understand why in order to protect you". He added in his Georgia speech that "I believe that if al Qaeda or an al Qaeda associate is making a phone call from outside the United States to inside the United States, we need to know why in order to be able to protect you."

Supreme Court Grants Cert In Microsoft v. AT&T

10/27. The Supreme Court granted certiorari in Microsoft v. AT&T, a patent infringement case regarding the extraterritorial application of 35 U.S.C. §271(f) to software written in the U.S. but installed on foreign made computers.

The Supreme Court's order [PDF] states that "The motion of Software & Information Industry Association for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted. The Chief Justice took no part in the consideration or decision of this motion and this petition." This is Sup. Ct. No. 05-1056. See also, Supreme Court docket.

Introduction. AT&T is the assignee of U.S. Reissue Patent No. 32,580, titled "Digital speech coder".

Microsoft makes and sells, among other things, the Windows operating system. Windows incorporates some speech codecs that infringe AT&T's patent. It is not now in dispute that Microsoft's Windows infringed the AT&T patent, and that this is a violation of Section 271 for copies of Windows sold in the U.S.

However, Microsoft also licenses its software to foreign equipment manufacturers. Microsoft, like other software companies, makes master disks containing its software that it distributes to foreign computer manufacturers, who then copy the software onto the equipment that they manufacture, and sell to foreign customers.

Microsoft, and others in the software industry, argue that U.S. software companies should not be held liable under Subsection 271(f) for patent infringement for each copy of infringing software sold outside of the U.S. under these circumstances.

The District Court and the Federal Circuit held that Subsection 271(f) can be applied extraterritorially to reach these foreign sales. Court of Appeals Judge Randall Rader wrote a dissent, which the Solicitor General and the SIIA now urge the Supreme Court to follow.

The Supreme Court has now agreed to hear the case.

The outcome of this case will affect not only how much money AT&T collects from Microsoft. The U.S. has a patent rights regime. So do other countries. This case goes to which patent rights regimes may be asserted in certain situations. AT&T, the District Court, and the majority opinion on the Court of Appeals support the notion of extraterritorial application of the U.S. bar on patent infringement to computer products made and sold abroad, that include copies of U.S. made software sent to foreign manufacturers by master disks.

Subsection 271(f) closed a loophole in U.S. patent law that enabled U.S. manufacturers to make physical parts, that where then exported and assembled abroad, without incurring liability under U.S. patent law. The Court of Appeals has extended this subsection to apply to one copy of software code that is then replicated many times for installation on foreign built computers. Moreover, the Court of Appeals applied Subsection 271(f) not to the export of the one master copy, but to each and every installation.

The Supreme Court's decision may have many consequences. Affirming the Court of Appeals may give software companies a disincentive to locate operations in the U.S. That is, the U.S. is the location of much development of ideas, discovery of knowledge, and design of products. On the other hand, much of what is conceptually created in the U.S. is reduced to manufactured product outside of the U.S. The Court of Appeals opinion threatens those who make things outside of the U.S., that are based upon U.S. inventions, to lawsuit in the U.S. under U.S. law.

The Court of Appeals opinion could also be viewed in some countries as a violation of their sovereignty, and result in decreased respect for U.S. sovereignty.

On the other hand, some countries do not have developed patent rights regimes, or effectively operating courts for the enforcement of patent rights. The Court of Appeals opinion provides a remedy in the U.S. for certain infringement taking place in those countries.

Statute. 35 U.S.C. § 271 pertains to "Infringement of patent". Subsection (a) provides that "Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent."

Subsection (f), which is at issue in this case, provides, in full, as follows:

   "(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
   (2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer."

The statute does not define the terms "components of a patented invention" or "components". Nor does the statute elaborate upon the meaning of "supplying in or from the United States any component".

Proceedings Below. AT&T filed a complaint in U.S. District Court (SDNY) against Microsoft alleging infringement of its patent.

Microsoft argued in the District Court that software is intangible information that does not constitute a "component" of a patented invention within the meaning of Subsection 271(f). It also argued that no "components" had been "supplied" from the U.S. within the meaning of Subsection 271(f).

The District Court rejected both arguments and entered summary judgment for AT&T.

Microsoft appealed. The U.S. Court of Appeals (FedCir) issued its opinion [20 pages in PDF] on July 13, 2005, affirming the judgment of the District Court.

It first held that software can be a component of a patented invention under Subsection 271(f), citing its 2005 opinion in Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325. (The Supreme Court denied certiorari in the Eolas case.)

It also rejected Microsoft's extraterritoriality argument. It wrote that "Microsoft posits that § 271(f) liability should attach only to each disk that is shipped and incorporated into a foreign-assembled computer", rather than to each copy installed on computers made abroad.

"We reject this theory of liability as it fails to account for the realities of software distribution." The Court of Appeals continued that "we cannot disregard the nature of the relevant technology and business practices underlying a particular litigation. It is inherent in the nature of software that one can supply only a single disk that may be replicated -- saving material, shipping, and storage costs -- instead of supplying a separate disk for each copy of the software to be sold abroad. All of such resulting copies have essentially been supplied from the United States."

The Court of Appeals also rejected the argument that electronic transmission must be treated differently for purposes of § 271(f) liability from software shipped on disks.

The Court of Appeals added that "Were we to hold that Microsoft's supply by exportation of the master versions of the Windows® software -- specifically for the purpose of foreign replication -- avoids infringement, we would be subverting the remedial nature of § 271(f), permitting a technical avoidance of the statute by ignoring the advances in a field of technology -- and its associated industry practices -- that developed after the enactment of § 271(f)."

Randall RaderJudge Rader (at right) wrote a lengthy dissent. He stated that "This court today determines that supplying a single ``component´´ of a patented invention from the United States gives rise to endless liability in the United States under § 271(f) for products manufactured entirely abroad."

He added that "this judgment disregards the existing international scheme of patent law". He continued that "although agreeing that software may be a component of a patented invention under § 271(f) and that electronic transmissions of software from the United States must receive the same treatment as software shipped from the United States on disks, I respectfully dissent from the proposition that foreign manufacture of a mere component of a patented product creates liability in the United States under § 271(f)."

He wrote that "this court provides extraterritorial expansion to U.S. law by punishing under U.S. law ``copying´´ that occurs abroad. While copying in Düsseldorf or Tokyo may indeed constitute infringement, that infringement must find its remedy under German or Japanese law."

Amicus Briefs. The Department of Justice's (DOJ) Office of the Solicitor General (OSG) submitted an amicus brief, at the invitation of the Supreme Court, urging the Court to grant certiorari and reverse.

The OSG wrote that the two issues in this case are "1. Whether software object code can be a component of a patented invention; and, if so, 2. Whether copies of software object code are "supplie[d]" from the United States when those copies are created overseas by replicating a separate master version supplied from the United States."

It first argued that software object code can be a component of a patent invention, notwithstanding its intangibility.

It second argued that the Court of Appeals "erred in holding that the creation of software copies overseas by replication of a master version provided from the United States constitutes the ``suppl[y]´´ of software ``from the United States´´ within the meaning of 35 U.S.C. 271(f)."

The OSG also restated with approval a policy argument advanced by the SIIA in its amicus brief. (See, below.) The OSG wrote that "Under the court of appeals' decision, companies that design software in the United States cannot distribute their software abroad without running the risk that they will be compelled to pay royalties under United States patent law with respect to all of their foreign sales. Their foreign competitors, by contrast, run no such risk of global liability under United States law, because they are exempt from application of Section 271(f) with respect to their foreign conduct."

The OSG added that "As a result, United States software companies will find themselves at a substantial competitive disadvantage in foreign markets, and may even be foreclosed from competing in those markets altogether. That disadvantage will harm the software sector of the American economy and could ultimately compel some software companies to relocate their research and development operations abroad."

The Software and Information Industry Association (SIIA) also submitted an amicus brief [25 pages in PDF] urging the Supreme Court to grant certiorari, and then reverse the Court of Appeals.

It wrote that "The Federal Circuit has wrongly extended the extraterritorial application of United States patent law to cover products containing copies of a patented product, even when the copies are made in a foreign country, ignoring §271(f)'s clear requirement that ``components of a patented invention´´ be ``supplie[d] . . . from the United States´´ before liability can be assessed. 35 U.S.C. §271(f)(1)."

It argued that "The Federal Circuit's interpretation of §271(f) is also at odds with principles of comity, making review desirable to avoid the gratuitous encroachment of United States law on the patent systems of foreign nations."

Finally, it warned that "Foreign nations -- upset with the encroachment of American patent law on their legal regimes or simply looking for justifications to impose protectionist measures -- may attempt to impose liability on American companies producing goods within the United States that incorporate components or even intangible ideas covered by patents in their legal systems. That type of legal liability, and the possible trade barriers put up in retaliation, would increase costs for many producers and would raise prices for consumers in the United States and abroad."

The District Court case is AT&T Corporation v. Microsoft Corporation, D.C. No. 01-CV-4872, Judge William Pauley presiding.

The Court of Appeals case is AT&T Corporation v. Microsoft Corporation, 04-1285. Judge Lourie wrote the opinion of the Court, in which Judge Mayer joined. Judge Rader wrote a dissent.

Microsoft is represented before the Supreme Court by Theodore Olson of the Washington DC office of the law firm of Gibson Dunn & Crutcher.  AT&T is represented by Stephen Neal of Palo Alto office of the law firm of Cooley Godward and Seth Waxman of the Washington DC office of the law firm of Wilmer Hale.

FCC Releases Agenda for November 3 Meeting

10/27. The Federal Communications Commission (FCC) released an agenda [2 pages in PDF] for its event on Friday, November 3, 2006, titled "Open Meeting".

AT&T BellSouth Merger Order. This agenda states again that the FCC will consider a Memorandum Opinion and Order regarding the merger of AT&T and BellSouth, which is nominally an approval of the transfer of FCC licenses.

The FCC has previously announced, but postponed, cancelled or held over, consideration of this order.

See, story titled "FCC Issues Second Public Notice Seeking Comments on AT&T's Revised Proposed Conditions" TLJ Daily E-Mail Alert No. 1,469, October 16, 2006; stories titled "FCC Further Delays AT&T BellSouth Merger Decision and NOI on Broadband Industry Practices" and "FCC Releases Public Notice Seeking Comments on AT&T's Proposed Conditions" in TLJ Daily E-Mail Alert No. 1,468, October 13, 2006; and story titled "FCC Delays its AT&T BellSouth Merger Review Decision" in TLJ Daily E-Mail Alert No. 1,467, October 12, 2006.

See also, the FCC's web page for this merger review. This proceeding is WC Docket No.06-74.

It may only be safe to predict that either the FCC will, or will not, hold this meeting, and that if it does hold this meeting, it either will, or will not, consider this item.

The FCC's agenda does not include consideration of a Notice of Inquiry (NOI) regarding broadband industry practices. This had been on the agenda for previous meetings.

Regulatory Classification of BPL. The FCC's agenda states that it will consider a Memorandum Opinion and Order in its proceeding titled "United Power Line Council’s Petition for Declaratory Ruling Regarding the Classification of Broadband over Power Line Internet Access Service as an Information Service" and numbered WC Docket No. 06-10.

On December 23, 2005, the United Power Line Council (UPLC) filed a Petition for Declaratory Ruling [16 pages in PDF] with the FCC requesting that the FCC "declare that BPL-enabled Internet access service is an interstate information service, consistent with the Cable Modem Declaratory Ruling and the DSL Order."

BPL service providers do not want to be subjected to regulation under Title II of the Communications Act, or be subjected to state regulation of intrastate telecommunications.

The UPLC wrote that "Both cable modem service and DSL now enjoy regulatory certainty and regulatory parity as a result of each being classified as interstate information services subject to regulation under Title I. However, the Commission's decisions clarifying the regulatory status of cable modem and DSL-enabled Internet access were limited to those respective technologies. The Commission's provision of the requested declaratory ruling would help provide the same level of regulatory clarity to the nascent BPL industry as well, thereby assuring regulatory neutrality among the competing technologies." (Footnote omitted.)

Other Items on Agenda. The FCC's agenda states that it will consider a Report and Order in its proceeding titled "Revision of Procedures Governing Amendments to FM Table of Allotments and Changes of Community of License in the Radio Broadcast Services" and numbered MB Docket No. 05-210.

The FCC's agenda also states that it will consider an NPRM in its proceeding titled "In the Matter of the Effects of Communications Towers on Migratory Birds" and numbered WT Docket No. 03-187.

This event titled "Open Meeting" is scheduled for 9:30 AM on Friday, November 3, 2006 in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always consider all of the items on its published agenda. The FCC sometimes adds items to the agenda without providing the "one week" notice required 5 U.S.C. § 552b. The FCC does not always start its events at the scheduled time, or at all. The FCC usually does not release at its events copies of the items that it adopts at its events.

8th Circuit Affirms in Connect Communications v. SWBT

10/27. The U.S. Court of Appeals (8thCir) issued its divided opinion [22 pages in PDF] in Connect Communications v. Southwestern Bell, a dispute regarding compensation for ISP bound calls.

Southwestern Bell Telephone (SWBT) is an incumbent local exchange carrier. Connect Communications is a competitive local exchange carrier. The Arkansas Public Service Commission (APSC) approved an interconnection agreement between SWBT and Connect.

SWBT and Connect disputed whether ISP bound calls were local calls subject to reciprocal compensation under the interconnection agreement.

The APSC determined that the ISP bound calls were not local calls under the agreement.

Connect filed a complaint in U.S. District Court (EDArk) against the APSC and its members challenging the determination of the APSC. The District Court upheld the determination of the APSC.

Connect brought the present appeal. The Court of Appeals affirmed the judgment of the District Court.

This case is Connect Communications Corporation v. Southwestern Bell Telephone L.P, Arkansas Public Service Commission, et al., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 05-3698, an appeal from the U.S. District Court for the Eastern District of Arkansas. Judge Hansen wrote the opinion of the Court of Appeals, in which Judge Benton joined. Judge Bye wrote a dissenting opinion.

2nd Circuit Affirms Dismissal of Antitrust Action Brought by Web Site Payments Processor

10/27. The U.S. Court of Appeals (2ndCir) issued its opinion [26 pages in PDF] in Paycom v. Mastercard, an antitrust case brought under Section 1 of the Sherman Act. The District Court dismissed for lack of antitrust standing. The Court of Appeals affirmed.

Mastercard is one of the four major U.S. payment card network service providers. The other three are Visa, American Express and Discover. Mastercard is operated as an open joint venture, and is comprised of and owned by more than 20,000 member banks and other financial institutions.

Paycom Billing Service sells access to its customers' password protected web sites. Most of its customers operate subscription based porn sites. These are web based transactions in which the customer is not present (CNP) and signs no receipt.

The Court of Appeals described Paycom's operations. "In serving as ``payment processor´´ or ``agent´´ for its customer website operators, Paycom is a merchant purchaser of MasterCard network services that has contracted with a MasterCard member acquiring bank directly. Under its merchant account with an acquiring bank, Paycom submits consumers' MasterCard transactions for authorization and payment. After receiving authorization and payment from the acquiring bank, Paycom credits the accounts of its customer websites in the amount of the transaction minus those fees Paycom charges for arranging the transaction. All purchases through Paycom are CNP transactions."

Mastercard has implemented several policies to which Paycom objects. These are (1) Mastercard's allowing the imposition of penalties for charges denied by customers of, and failure to guarantee payment to, merchants who accept credit card charges without obtaining a signed receipt, (2) Mastercard's limitations on member banks' associating with competing credit cards, also titled its "Competitive Programs Policy", and (3) Mastercard's rules limiting the participation of foreign banks in MasterCard's payment-card business, also titled "Cross-Border Acquiring Rules".

There is a much higher incidence of fraud, and hence, charges denied by customers, with CNP than with customer present (CP) transactions. Under Mastercard's policy, payment is guaranteed to CP merchants. However, for CNP transactions, the merchants bear the loss. Moreover, Mastercard's policy allows its members to add chargeback fines and penalties to acquiring banks. Paycom, which processes CNP transactions for porn sites, does not like this policy.

Paycom participates in a fraud ridden business, and then argues that penalties for processing fraudulent transactions rise to the level of an antitrust violation.

Paycom filed a complaint in U.S. District Court (EDNY) against Mastercard alleging that these three policies violate Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1.

The District Court dismissed the complaint for failure to state a claim.

The Court of Appeals affirmed the dismissal, based upon lack of antitrust standing.

The Court of Appeals wrote that private plaintiffs must demonstrate antitrust standing. They must show that they have suffered an antitrust injury, which is an injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful.

The Court wrote that this antitrust injury requirement ensures that a plaintiff can recover only if the loss stems from a competition reducing aspect or effect of the defendant's behavior.

Moreover, the Court recited several other factors that are relevant, in addition to antitrust injury, to establishing antitrust standing.

The Court then applied the law of antitrust standing to Paycom's factual allegations regarding the three objectionable policies, and concluded that there is no antitrust standing in this case. It affirmed the District Court's dismissal.

This case is Paycom Billing Services, Inc. v. Mastercard International, Inc., U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 05-1845-cv, an appeal from the U.S. District Court for the Eastern District of New York, Judge Trager presiding. Judge Ralph Winter wrote the opinion of the Court of Appeals, in which Judges Jacobs and Walter joined.

Deputy Treasury Secretary Discusses CFIUS

10/27. Robert Kimmitt, Treasury Deputy Secretary, gave a speech in Washington DC regarding the Committee on Foreign Investment in the United States (CFIUS).

He said that "The free flow of capital in open and competitive markets contributes directly to higher productivity growth and efficiency. When capital is free to flow in response to market demand, it is channeled into its most efficient uses." But, he added, "Our open investment policy has always recognized the need to protect the national security".

He continued that "Some countries attempted to thwart takeovers of perceived ``national champions,´´ while other countries raised concerns about the free movement of labor and capital. In the United States, a small number of high-profile transactions sparked a debate in Washington about foreign investment in the United States."

He also argued that notwithstanding the Dubai Ports World case, "we are open for investment". He added that "we must avoid the trap of creeping protectionism".

He continued that the U.S. "intends to lead by example. We must preserve the careful balance between open investment and national security. We know that if we do not preserve this balance, we can expect reciprocal actions from our partners. Already, we can see troubling signs of other nations moving toward protectionist intervention in foreign investment."

He cited four examples. First, "In August, China issued draft regulations governing M&A of domestic Chinese enterprises, reviewing foreign investments in terms of their impact on "economic security."

Second, "Russia justified a proposal to protect 39 industries from foreign control based on what it viewed as U.S. actions in the CFIUS process."

Third, "Mexico's Senate has passed a restrictive investment bill". Finally, "India is considering its own system of investment controls that may cause high hurdles to investment."

Martin Discusses Chevron Deference, Biennial Reviews and Forbearance

10/26. Federal Communications Commission (FCC) Chairman Kevin Martin gave a speech [7 pages in PDF] in Washington DC.

Kevin MartinMartin (at right) discussed the difficulty of applying a Communications Act (CA) that treats different industry sectors differently, when those sectors are now converging. Second, he discussed the Supreme Court's opinion in Brand X, and especially its holding regarding judicial deference to agency decisions. Third, he discussed Section 11 of the CA, which requires the FCC to conduct biennial reviews of its regulations. Finally, he discussed forbearance under Section 10 of the CA.

Brand X and Chevron Deference. On March 14, 2002, the FCC adopted a Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF]. The Declaratory Ruling (DR) component of this item states that "we conclude that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service."

Brand X, EarthLink, the State of California, and others filed petitions for review of the FCC's order in various federal circuits. These petitions for review were assigned to the 9th Circuit by lottery. The 9th Circuit vacated the DR, without applying the deference to administrative agency decisions required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). It concluded that it was bound by the doctrine of stare decisis to follow its June 22, 2000 opinion in AT&T v. Portland, 216 F.3d 871.

On June 27, 2005, the Supreme Court issued its opinion [59 pages in PDF] in NCTA v. Brand X, reversing the 9th Circuit, and upholding the FCC's determination that cable broadband internet access service is an information service.

Martin focused on those parts of the majority opinion regarding Chevron deference.

He stated that "the Court held that even if a reviewing court had previously construed a statute differently, it must give Chevron deference to an expert agency’s subsequent interpretation unless the statute is subject to only one permissible construction."

"Normally, we are disposed to think judicial interpretations trump those of agencies. But the Court held that ``Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency’s, the court must hold the statute unambiguously requires the court's construction´´", said Martin.

He added that "The Court's strong reaffirmation of Chevron deference means that an agency’s statutory interpretation may trump an earlier judicial one, and that it may even change its mind about a statute's meaning after its earlier interpretation has been judicially affirmed."

He concluded that "Having the ability to adopt a less burdensome regulatory scheme for broadband services was critical to the Commission from a policy perspective. But I note that I agree with some of the concerns about the breadth of discretion available to our or any administrative agency as a result of this decision."

Biennial Reviews. 47 U.S.C. § 161 provides, in part, that "In every even-numbered year (beginning with 1998), the Commission --- (1) shall review all regulations issued under this chapter in effect at the time of the review that apply to the operations or activities of any provider of telecommunications service; and (2) shall determine whether any such regulation is no longer necessary in the public interest as the result of meaningful economic competition between providers of such service."

This section also provides that "The Commission shall repeal or modify any regulation it determines to be no longer necessary in the public interest."

This section was added to the CA by Section 402 of the Telecommunications Act of 1996. It is also known as section 11.

Martin said that "In construing the meaning of Section 11, the D.C. Circuit has upheld a looser definition of the statutory term ``necessary in the public interest´´ than the language of the statute suggests. The Court accepted the FCC's arguments that the term requires only that a regulation serve the public interest and does not require any higher showing of necessity."

See, for example, February 13, 2004, opinion [24 pages in PDF] of the U.S. Court of Appeals (DCCir) in Cellco Partnership v. FCC, petitions for review of certain parts of the FCC's biennial regulatory reviews. This case is Cellco Partnership, dba Verizon Wireless v. FCC and USA, No. 02-1262, and Verizon Telephone Companies, Inc., et al. v. FCC and USA, respondents, and AT&T and Cingular Wireless, intervenors, No. 03–1080. See also, story titled "Appeals Court Addresses Meaning of "Necessary" in FCC Biennial Review Process" in TLJ Daily E-Mail Alert No. 837, February 16, 2004.

See also, the DC Circuit's June 21, 2002, opinion in Fox Television Stations, Inc. v. FCC, 293 F.3d 537 (2002).

Martin added that "I had dissented from that FCC decision, arguing that Section 11's language requires a showing that a regulation is actually still ``necessary.´´"

Martin has written about the meaning of "necessary" on many occasions. See for example, August 8, 2002 statement [PDF] in WT Docket No. 01-108.

See also, July 16, 2002 statement [4 pages in PDF] in WT Docket No. 01-184 and CC Docket No. 95-116 regarding the meaning of "necessary" in the context of forbearance petitions.

He concluded his discussion of biennial reviews by saying that "The result of this decision gives the Commission substantially more discretion in deciding whether to retain rules, since it is not too difficult to justify a rule as in the public interest. The FCC thus managed to take a tool intended by Congress to impose some rigor on the FCC’s analysis and turned it into more of a procedural hurdle. The Commission only has to explain periodically why regulations on the books are in the public interest."

Forbearance. 47 U.S.C. § 160 provides, in part, that the FCC "shall forbear from applying any regulation or any provision of this chapter to a telecommunications carrier or telecommunications service, or class of telecommunications carriers or telecommunications services, in any or some of its or their geographic markets, if the Commission determines that --- (1) enforcement of such regulation or provision is not necessary to ensure that the charges, practices, classifications, or regulations by, for, or in connection with that telecommunications carrier or telecommunications service are just and reasonable and are not unjustly or unreasonably discriminatory; (2) enforcement of such regulation or provision is not necessary for the protection of consumers; and (3) forbearance from applying such provision or regulation is consistent with the public interest."

The forbearance provision is also referred to as Section 10. It was added to the CA by Section 401 of the Telecommunications Act of 1996.

Martin commented that "Section 10 is unusual in several respects. First, it enables regulated entities to seek relief from otherwise applicable statutory mandates. In the usual course, an agency may not waive a statutory requirement since the agency is subordinate to Congress. But Section 10 delegates to the Commission the authority to forbear from applying sections of the Communications Act to telecommunications carriers and services."

He said that "A second unusual aspect of section 10 is that it provides for the effective repeal of regulations outside the normal practice of notice and comment rulemaking. If the Commission determines that a petition for forbearance meets the three statutory criteria, it is required to forbear from applying the regulation to the telecommunications carrier or service."

He noted the potential of this to decrease transparency. He said that "Although it is the Commission’s usual practice to seek public comment on petitions for forbearance, Section 10 does not expressly require this. Further, although the rule remains in the Code of Federal Regulations, it is no longer operative with respect to the carriers or services specified in the Commission’s forbearance order."

Finally, he discussed the "deemed granted" language in the statute. He said that "forbearance petitions are ``deemed granted´´ unless the Commission denies the petition within one year, a period which the Commission may only extend for an additional three months."

He also related that the FCC "deemed granted" a Verizon petition. On March 21, 2006, the FCC issued a release that states that the FCC, 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.

Martin explained that "Verizon had filed a petition for forbearance concerning high capacity services. Due to a vacancy, the FCC had only four Commissioners and could not reach a majority determination on whether to grant or deny the petition. As a result, we were unable to issue a decision by the statutory deadline and the petition was deemed granted by operation of law."

He added that "Some of Verizon's competitors have petitioned for review of this grant, and those petitions are currently pending in the D.C. Circuit. This case raises many unique issues, including whether the court has jurisdiction to review the grant by operation of law since there is no Commission order to review."

Privacy Board Seeks Comments on Watch List Redress

10/26. The Privacy and Civil Liberties Oversight Board (PCLOB) announced that it seeks comments or suggestions from the public regarding watch list redress.

The PCLOB's notice states that "Processes currently exist to redress errors and ameliorate false positives associated with the use of watch list data for aviation and other security screening purposes. Efforts to address, enhance, conform, and potentially streamline these procedures are ongoing throughout the Federal government, and the Board is assisting relevant executive branch departments and agencies in those efforts. The Board seeks any comments, suggestions or other information from members of the public who have knowledge on this subject."

This notice also states that under the Terrorist Screening Center's (TSC) supervision "the Terrorist Screening Database (TSDB) was created to compile the most thorough, accurate and current information possible about individuals known or suspected to be or to have been engaged in conduct advancing terrorism. This database consolidates the federal government's terrorism screening databases into a single integrated database and provides for its appropriate and lawful use in screening processes administered by federal, state, local, and tribal authorities."

There is no deadline to submit comments to the PCLOB.

In addition, on Wednesday, December 6, 2006, the Department of Homeland Security's (DHS) Data Privacy and Integrity Advisory Committee (DPIAC) will meet in Miami Beach, Florida. See, notice in the Federal Register, November 14, 2006, Vol. 71, No. 219, at Page 66340.

Go to News from October 21-25, 2006.