TLJ News from December 1-5, 2007

House Passes Amendments to Missing Children's Assistance Act

12/5. The House passed HR 2517 [LOC | WW], the "Protecting Our Children Comes First Act of 2007", by a vote of 408-3. See, Roll Call No. 1,132.

This bill would amend the Missing Children's Assistance Act (MCAA), which is codified at 42 U.S.C. §§ 5771-5780, to extend and increase the authorization for appropriations. It would also add provisions related to internet activities.

This bill adds to the MCAA's recitation of findings (42 U.S.C. § 5771) a reference to use of the internet. It states that "growing numbers of children are the victims of child sexual exploitation, increasingly involving the use of new technology to access the Internet".

The MCAA assigns certain responsibilities to the Department of Justice's (DOJ) Office of Juvenile Justice and Delinquency Prevention (OJJDP). (See, 42 U.S.C. § 5773.) This bill adds more responsibilities, including some that pertain to online activity.

It requires the OJJDP to "operate a cyber tipline to provide online users and electronic service providers an effective means of reporting Internet-related child sexual exploitation in the areas of ... (i) possession, manufacture, and distribution of child pornography; (ii) online enticement of children for sexual acts; ... (vi) unsolicited obscene material sent to a child; (vii) misleading domain names; and (viii) misleading words or digital images on the Internet, and subsequently to transmit such reports, including relevant images and information, to the appropriate international, Federal, State or local law enforcement agency for investigation".

It also requires the OJJDP to "work with law enforcement, Internet service providers, electronic payment service providers, and others on methods to reduce the distribution on the Internet of images and videos of sexually exploited children".

It also requires the OJJDP to "develop and disseminate programs and information ... on ... internet safety".

The MCAA currently authorizes appropriation for the OJJDP of $20 Million per year through FY 2008. This bill increases the authorization to $40 Million in FY 2008, and unspecified amounts for FY 2009 through 2013. The OJJDP funds the National Center for Missing and Exploited Children (NCMEC).

Rep. Ron Paul (R-TX), Rep. Jeff Flake (R-AZ), and Rep. Paul Broun (R-GA) voted against the bill.

House Passes CP Reporting and Data Retention Bill

12/5. The House passed an amended version of HR 3791, [LOC | WW], the "Securing Adolescents From Exploitation-Online Act of 2007" or "SAFE Act", by a vote of 409-2. See, Roll Call No. 1,131.

This bill imposes reporting and data retention requirements upon providers of any "electronic communication service" (ECS) or "remote computing service" (RCS) with respect to child pornography (CP).

Current law requires internet service providers to report CP to the National Center for Missing and Exploited Children (NCMEC). This bill expands the requirement, by specifying in detail what information must be reported, by requiring registration by service providers, and by imposing a requirement to retain data related to CP incidents.

Rep. Nick Lampson (D-TX) introduced this bill on October 10, 2007. The House Judiciary Committee (HJC), which had jurisdiction over the bill, did not mark up or report the bill.

This bill adds to the criminal code a new section, to be codified as 18 U.S.C. § 2258A.

Registration and Reporting Requirements. First, the bill creates new reporting and registration requirements. It provides that "Whoever, while engaged in providing an electronic communication service or a remote computing service to the public through a facility or means of interstate or foreign commerce, obtains actual knowledge of any facts or circumstances described in paragraph (2) shall, as soon as reasonably possible" register with the CyberTipline of the NCMEC, and file a report with the NCMEC.

The above referenced paragraph (2) enumerates several child pornography (CP) related crimes. That is, any ECS or RCS that becomes aware of CP must register with the NCMEC, and file a report with the NCMEC.

The bill provides a detailed list of information that these reports must contain, including "electronic mail address, website address, uniform resource locator, or any other identifying information", information regarding time, and information regarding geographic location.

The bill further provides that the NCMEC "shall forward each report" to the Department of Justice (DOJ), and may forward reports to state, local, and foreign governments.

The bill provides that any ECS or RCS that "knowingly and willfully fails to make a report" shall be fined up to $150,000 for the first incident, and up to $300,000 for subsequent incidents.

Monitoring and Surveillance. The bill states that it does not require any ECS or RCS to "monitor any user, subscriber, or customer of that provider", "monitor the content of any communication", or "affirmatively seek facts or circumstances".

Data Retention. The bill also contains a data retention mandate. It provides that if any ECS or RCS receives a notice from the NCMEC, it must then preserve certain data for 180 days, "as if such notice was made pursuant to section 2703(f)"

This is a reference to the Stored Communications Act (SCA). 18 U.S.C. § 2703(f) provides in part that "A provider of wire or electronic communication services or a remote computing service, upon the request of a governmental entity, shall take all necessary steps to preserve records and other evidence in its possession pending the issuance of a court order or other process".

The data which the ECS or RCS must retain includes its report to the NCMEC, as well as the name, address, "local and long distance telephone connection records, or records of session times and durations", "length of service (including start date) and types of service utilized", "telephone or instrument number or other subscriber number or identity, including any temporarily assigned network address", and "means and source of payment for such service (including any credit card or bank account number)" or the user or subscriber. (Parentheses in original.)

This is not a general mandate to retain all data. Rather, it only requires retention of data related to the CP incident and the user or customer associated with the incident.

Immunity. The bill also provides limited immunity to any ECS or RCS, or "domain name registrar", as well as their agents, for complying with the requirements of this bill.

The bill also provides limited immunity to the NCMEC.

Statements by Sponsors. Rep. Lampson, the bill's sponsor, stated in the House that "Popular social networking Web sites allow profiles to be public, providing predators with an encyclopedia of pictures, personal interests and even addresses, which they can be used, or they can use to cause harm."

He continued that "this dangerous trend has become a feeding ground for pedophiles and convicted sex offenders. Parents, law enforcement and legislators must work together to bring social networking Web sites into the fight to protect America's children".

Rep. Steve Chabot (R-OH), a cosponsor of the bill, stated in the House that this bill "recognizes that advances in technology have made electronic communication service providers the first line of defense against crimes against children, possessing the real-time information critical to child pornography investigations. By requiring electronic communication service providers to report this information to the CyberTipline as soon as reasonably possible and maintain this information for an investigation, this act, the SAFE Act, is giving Federal, State and foreign law enforcement and prosecutors a fighting chance to put these criminals away, no matter where they are located."

Rep. Ron Paul (R-TX) and Rep. Paul Broun (R-GA) voted against the bill.

FTC Brings and Settles Case for Using Spyware to Display Pop-Up Porn Ads

12/5. The Federal Trade Commission (FTC) filed a complaint [8 pages in PDF] in U.S. District Court (NDCal) against Various, Inc. alleging violation of Section 5 of the Federal Trade Commission Act (FTC Act) in connection with its using spyware to caused "consumers, including minors, to view unsolicited sexually explicit online advertisements" for porn services.

Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45, provides in part that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful."

The complaint alleges that "Defendant, directly or through marketing partners acting on its behalf, including but not limited to its marketing affiliates, have used ad-serving software, often referred to as ``spyware´´ or ``adware,´´ that has been installed on consumers' computers, often without consumers' knowledge or consent, to cause Defendant's sexually explicit, full-screen advertisements to ``pop-up´´ on consumers' computer screens. These advertisements contain graphic images of fully or partially nude persons exhibiting their ..."

It alleges that "this unsolicited distribution of unwanted sexually explicit advertisements is an unfair act or practice in violation of Section 5 of the FTC Act."

The FTC and Various simultaneously settled this case. The Stipulated Final Order for Permanent Injunction [13 pages in PDF] enjoins Various and its marketing partners from using pop-up ads that contain "unsolicited sexually explicit material".

The injunction also imposes monitoring, reporting, and record keeping requirements on Various. See also, FTC release.

This case is FTC v. Various, Inc., U.S. District Court for the Northern District of California, San Jose Division.

Representatives Introduce PRO IP Act

12/5. Rep. John Conyers (D-MI), Rep. Lamar Smith (R-TX), Rep. Howard Berman (D-CA), and others introduced HR 4279, the "Prioritizing Resources and Organization for Intellectual Property Act of 2007".

This is a 69 page bill that largely addresses remedies for infringement and counterfeiting and the organization and funding of government efforts to enforce intellectual property rights.

Title I of the bill contains numerous procedural changes to civil copyright and trademark law.

It provides a harmless error exception in the registration requirement for civil actions for copyright infringement. It amends 17 U.S.C. § 410 to provide that "A certificate of registration satisfies the requirements of section 411 and section 412 regardless of any inaccurate information contained in the certificate, unless ... the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate", and would have caused the Copyright Office to refuse registration if it had known.

It amends 17 U.S.C. § 503(a), which provides for pretrial impounding of copies, phonorecords, and other articles of infringement. The bill would add the clause "and of records documenting the manufacture, sale, or receipt of things involved in such violation". This changes the character § 503(a). It is currently remedial. It allows things to be seized at the outset of an action that could be awarded to the copyright holder upon final judgment. The bill would make § 503(a) both a remedial and a pretrial discovery and preservation of evidence provision.

The bill revises the method of computation of statutory damages in copyright infringement actions. It also amends trademark law to provide for treble damages in counterfeiting cases. It also amends trademark law to increase statutory damages for counterfeiting.

Title I also contains substantive changes. The bill would amend 17 U.S.C. § 602 to cover both importation and exportation of copies and phonorecords. It currently applies only to importation. The bill contains a parallel section to cover exportation of goods containing infringing marks.

Title II of the bill strengthens both copyright and trademark criminal and civil procedure with respect to forfeiture, destruction, and restitution.

Titles III, IV and V of the bill pertain to the organization of government activities and operations related to intellectual property rights enforcement.

Title III would create in the Executive Office of the President (EOP) an "Office of the United States Intellectual Property Enforcement Representative". The head of this office would be appointed by the Senate with the advice and consent of the Senate. It further specifies that the Senate Judiciary Committee would have jurisdiction over this nomination. This person would coordinate intellectual property enforcement efforts of the federal government.

The bill also requires this IP Enforcement Representative to submit every three years a "joint strategic plan" to the President and the Congress.

Title IV requires the head of the U.S. Patent and Trademark Office (USPTO), in consultation with the Director General of the U.S. and Foreign Commercial Service, to appoint ten intellectual property attaches to serve in embassies or other diplomatic missions.

Title VI requires the Department of Justice to establish in the Office of the Deputy Attorney General a new "Intellectual Property Enforcement Division". Those functions of the Criminal Division's Computer Crime and Intellectual Property Section (CCIPS) that relate to the enforcement of criminal laws relating to the protection of intellectual property rights and trade secrets would be transferred to this new division.

Title VI also provides for additional personnel and funding for the DOJ, and for grants to state and local governments.

The House Judiciary Committee (HJC) issued a release that describes the bill, and includes quotations of various of its sponsors.

Rep. Conyers stated in this release that "This legislation is an important and necessary step in the fight to maintain our competitive edge in a global marketplace ... By providing additional resources for enforcement of intellectual property, we ensure that innovation and creativity will continue to prosper in our society."

This release also states that the HJC's Subcommittee on Courts, the Internet and Intellectual Property will hold a hearing next week.

This bill contains some provisions that are also in S 2317 [LOC | WW], the "Intellectual Property Enforcement Act", which Sen. Patrick Leahy (D-VT) and Sen. John Cornyn (R-TX) introduced on November 7, 2007. See, story titled "Senators Leahy and Cornyn Introduce Intellectual Property Enforcement Act" in TLJ Daily E-Mail Alert No. 1,672, November 8, 2007.

Reaction. John Engler, head of the National Association of Manufacturers (NAM), stated in a release that "In an increasingly competitive global marketplace, protection of U.S. intellectual property is vital for the long-term growth of American industry ... But it is also important for the health, safety and welfare of every American consumer. From pharmaceuticals to brake pads to fuse boxes, Americans have a right to safe and legitimate products -- not substandard fakes."

David Israelite, head of the National Music Publishers Association (NMPA), stated in a release that "Music publishers and their songwriting partners are increasingly concerned about the theft of the songs they worked so hard to create. They need to be fairly compensated for their efforts so they can continue doing what they do best -- making great songs the world enjoys."

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "Our intellectual property laws should penalize pirates, not pioneers. PROIPA moves us in the wrong direction. Rather than increasing the enforcement of IP rights against piracy and counterfeiting at home and abroad, aspects of PROIPA increase the risk that innovative U.S. businesses will be baselessly persecuted and subjected to frivolous litigation. We look forward to working with the Judiciary Committee and all stakeholders to achieve legislation that protects U.S. IP rights and the public from infringement and counterfeiting, rather than encouraging IP trolls to play the litigation lottery."

Gigi Sohn, head of the Public Knowledge, stated in a release that "We remain concerned that several provisions in this bill could have harmful, if unintended, consequences that would harm consumers. The bill rightly targets enforcement of copyright law against commercial infringers, but some of these same enforcement provisions are likely to hurt ordinary consumers. Seizing expensive manufacturing equipment used for large-scale infringement from a commercial pirate may be appropriate. Seizing a family’s general-purpose computer in a download case, as this bill would allow, is not appropriate."

DC Circuit Rules on Retroactivity of FCC Order on Prepaid Calling Cards

12/4. The U.S. Court of Appeals (DCCir) issued its opinion [16 pages in PDF] in Qwest v. FCC, consolidated petitions for review of the Federal Communications Commission's (FCC) final order that retroactively applies its determination that certain prepaid calling cards offer telecommunications services, and are therefore subject to access charges, universal service taxes, and other obligations under the Communications Act.

Qwest and iBasis challenged the retroactivity of the order. Verizon Communications and others intervened.

The Court of Appeals denied the petition as to calling cards provided by iBasis that use internet protocol technology to transport part or all of a telephone call. However, the Court of Appeals granted the petition as to calling cards provided by Qwest that offer a menu driven interface through which users can either make a call or access several types of information.

This case is Qwest Services Corporation v. FCC and USA, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 06-1274, consolidated with App. Ct. Nos. 06-1298 and 06-1309, petitions for review of a final order of the FCC. Judge Williams wrote the opinion of the Court of Appeals, in which Judges Sentelle and Tatel joined.

More News

12/4. President Bush nominated John Sullivan to be Deputy Secretary of Commerce. See, White House release and release. He is currently the General Counsel of the Department of Commerce. He previously worked for the law firm of Mayer Brown. If confirmed by the Senate he would replace David Sampson, who has resigned.

12/4. Victoria Espinel joined Romulus Global Issues Management as Senior Counselor for Intellectual Property and Innovation. Espinel previously worked for the Office of the U.S. Trade Representative (OUSTR) as Assistant USTR for Intellectual Property and Innovation when Robert Zoellick was the USTR. See, Romulus release. She will also work for George Mason University (GMU) School of Law as a Visiting Assistant Professor in the Spring 2008 semester, when will teach a course titled "International Trade" and a seminar titled "International Intellectual Property and Policy". See, GMU release. In addition, Chris Moore joined Romulus Global Issues Management as Executive Vice President. Moore was previously Assistant USTR for China Affairs.

12/4. The Copyright Office published a notice in the Federal Register announcing that royalty rates will be adjusted for satellite carriers for the accounting period commencing January 1, 2008, based on changes in the Consumer Price Index. See, Federal Register, December 4, 2007, Vol. 72, No. 232, at Pages 68198-68199.

12/4. The U.S. Court of Appeals (7thCir) issued its opinion in Top Tobacco v. North Atlantic Trading Company, a trademark case involving likelihood of confusion. The Court of Appeals affirmed the judgment of the District Court for North Atlantic Trading Company. Both companies sell tobacco for people who roll their own cigarettes. Both use the word "top" on the cans in which the tobacco is sold.  However, the courts held that consumers would not confuse the two products because the word "top" is used in different senses. One company uses it to refer to the top of its can, which keeps the tobacco fresh. The other uses it to refer to a spinning top. This case is Top Tobacco L.P., et al. v. North Atlantic Trading Company, Inc., et al., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 07-1244.

Supreme Court to Hear Case Regarding Patent Exhaustion Doctrine

12/3. The Supreme Court issued an order in Quanta Computer v. LG Electronics, a case regarding the patent exhaustion doctrine. See, Orders List [11 pages in PDF] at page 1, and docket.

The Supreme Court wrote only that "The motion of petitioners for leave to file Volume II of the joint appendix under seal is granted."

The Supreme Court granted certiorari on September 25, 2007. Last month, the Supreme Court scheduled oral argument for January 16, 2008.

The U.S. Court of Appeals (FedCir) issued its opinion [31 pages in PDF] under review on July 7, 2006.

The question presented is "Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent’s patent rights were not exhausted by its license agreement with Intel Corporation, and Intel’s subsequent sale of product under the license to petitioners."

See, stories titled "Solicitor General Urges Supreme Court to Take Case Regarding Patent Exhaustion Doctrine" in TLJ Daily E-Mail Alert No. 1,629, August 28, 2007, and "Supreme Court Requests Solicitor General Brief in Patent Case" in TLJ Daily E-Mail Alert No. 1,566, April 17, 2007.

See also, amicus brief [PDF] of the Computer and Communications Industry Association (CCIA), amicus brief [PDF] of the Consumers Union, Public Knowledge and Electronic Frontier Foundation, amicus brief  [PDF] of the Biotechnology Industry Association, and amicus brief [PDF] of Dell, Cisco, HP, and eBay.

Dell and other technology companies wrote in their brief that "The patent exhaustion doctrine is a long-settled limitation on patent owner rights that advances the purposes of the patent act efficiently while avoiding harmful consequences. It protects the patent owner's right to compensation for the use of its invention by others while at the same time providing a clear standard precluding the assertion of infringement claims against those who purchase patented articles. The doctrine holds that upon the purchase of an article in an authorized sale -- from either the patentee or a licensee authorized by the patentee to make and sell the article -- the patentee's rights with respect to that article are exhausted."

Dell added that "The Federal Circuit in this case abandoned the doctrine of patent exhaustion as it has been defined by this Court for over a century."

This case is Quanta Computer, Inc., et al. v. LG Electronics, Inc., Supreme Court of the U.S., Sup. Ct. No. 06-937, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 05-1261, 05-1262, 05-1263, 05-1264, 05-1302, 05-1303, and 05-1304. Judge Mayer wrote the opinion of the Court of Appeals, in which Judges Michel and Newman joined. The Court of Appeals heard appeals from the U.S. District Court for the Northern District of California, Judge Claudia Wilkin presiding.

Supreme Court Denies Certiorari in Perfect 10 v. CCBill

12/3. The Supreme Court denied certiorari in Perfect 10 v. CCBill, a case regarding liability of web site operators and payments processors for copyright infringement, and related actions, of their customers. See, Orders List [11 pages in PDF] at page 3 and docket.

This lets stand the March 29, 2007, opinion [26 pages in PDF] of the U.S. Court of Appeals (9thCir).

Perfect 10 publishes a magazine and web site with pictures of women. It has registered the copyrights for these pictures. Cavecreek Wholesale Internet Exchange (CWIE) provides web site hosting services to others. CCBill, a related company, allows consumers to use credit cards or checks to pay for subscriptions or memberships to web sites. Customers of CWIE and CCBill infringed the copyrights in photographs of Perfect 10 and others.

Perfect 10 filed a complaint in U.S. District Court (CDCal) against CWIE and CCBill alleging copyright infringement, as well as violation of trademark, state unfair competition, false advertising and right of publicity laws.

The District Court held, among other things, that CWIE and CCBill are immune from copyright infringement liability under the Digital Millenium Copyright Act (DMCA) safe harbor that is codified at 17 U.S.C. § 512, and that CCBill and CWIE are immune from liability for state law unfair competition and false advertising claims under the interactive computer service immunity provision codified at 47 U.S.C. § 230(c)(1).

The Court of Appeals affirmed in part and reversed in part and remanded.

With respect to Section 512, it remanded for a determination by the District Court of whether CCBill and CWIE reasonably implemented a policy under § 512(i)(1)(A) based on its treatment of non-party copyright holders.

With respect to Section 230, it noted that this section provides that it does not "limit or expand any law pertaining to intellectual property". The Court of Appeals wrote that this means that Section 230 "does not clothe service providers in immunity" from laws pertaining to intellectual property. However, it added that this only applies to federal intellectual property laws. Hence, Section 230 provides CWIE and CCBill with immunity from Perfect 10's state law claims.

This case is Perfect 10, Inc. v. CCBill LLC, et al., Supreme Court of the United States, Sup. Ct. No. 07-266, a petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos.. 04-57143 and 04-57207

Supreme Court Denies Cert in Eichorn v. AT&T

12/3. The Supreme Court denied certiorari in Eichorn v. AT&T, an ERISA case brought by employees of a former unit of AT&T. See, Orders List [11 pages in PDF] at page 8, and docket.

This lets stand the judgment of the U.S. Court of Appeals (3rdCir). The Court of Appeals issued its opinion [31 pages in PDF] on May 2, 2007, affirming the District Court's summary judgment for AT&T and the other defendants.

The is the second time that the Supreme Court has denied certiorari in this case. The Court of Appeals issued an opinion on April 23, 2001, which is reported at 248 F.3d 131. The Supreme Court denied certiorari in an order reported at 534 U.S. 1014. See also, story titled "Antitrust" in TLJ Daily E-Mail Alert No. 173, April 25, 2001.

This case is Kurt Eichorn, et al. v. AT&T Corp., et al., Supreme Court of the United States, Sup. Ct. No. 07-280, a petition for writ of certiorari to the U.S. Court of Appeals for the 3rd Circuit.

Supreme Court Denies Rep. McDermott's Cert Petition

12/3. The Supreme Court denied certiorari in McDermott v. Boehner. See, Orders List [11 pages in PDF] at page 8. This lets stand the judgment of the U.S. Court of Appeals (DCCir) which previously affirmed the judgment of the U.S. District Court (DC), which held that Rep. Jim McDermott (D-WA) violated the wiretap statute, 18 U.S.C. § 2511.

Rep. McDermott disclosed the contents of an intercepted cell phone call. The persons who intercepted the call long ago pled guilty to criminal wiretap charges. Rep. John Boehner (R-OH), a party to the intercepted conversation, brought the present civil action against Rep. McDermott.

See, Court of Appeals' en banc opinion [32 pages in PDF] of May 1, 2007, and story titled "The District Court District Court Holds Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 964, August 23, 2004.

See also, Court of Appeals opinion [23 pages in PDF] of March 28, 2006, and story titled "Court of Appeals Holds that Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 1,339, March 30, 2006.

And see, story titled "The District Court District Court Holds Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 964, August 23, 2004.

This case is James McDermott v. John Boehner, Sup. Ct. No. 07-439, a petition for writ of certiorari to the U.S. Court of Appeals for the District of Columbia, App. Ct. No. 04-7203. The Court of Appeals heard an appeal from the U.S. District Court for the District of Columbia, D.C. No. 98cv00594.

People and Appointments

12/3. President Bush named Daniel Price to be Assistant to the President for International Economic Affairs. He will also continue to be Deputy National Security Advisor for International Economic Affairs. See, White House release.

12/3. Melissa Maxfield was named VP of Federal Government Affairs at Comcast, effective January 1, 2008. She has worked for Comcast since July of 2003. Comcast stated in a release that she will handle "lobbying efforts focused on Congress". Kerry Knott remains VP of Government Affairs.

More News

12/3. The U.S. Court of Appeals (9thCir) issued an amended opinion [47 pages in PDF] in Perfect 10 v. Amazon and Perfect 10 v. Google.

Go to News from November 26-30, 2007.