TLJ News from December 21-25, 2007

5th Circuit Addresses Statute of Limitations in Internet Based Libel Case

12/21. The U.S. Court of Appeals (5thCir) issued its opinion [15 pages in PDF] in National Bi-Weekly v. Belo Corp., affirming the judgment of the District Court, which dismissed on statute of limitations grounds. The opinion addresses the application of a statute of limitations to a complaint alleging that an article published on the internet is tortious.

Introduction. The Court of Appeals held that for content on a free access web site, the time limitation begins to run at the time of original publication, and that the continued availability on the internet does not restart or interrupt the running of the time period.

However, this opinion applies only to free access web sites where the content alleged to be libelous is static. The Court of Appeals leaves uncertain the status of suits that involve content published in subscription web sites and closed networks. It also does not reach information that is acquired as a consequence of querying a database.

Also, while the plaintiff and defendants are located in places distant from each other, this opinion does not address venue or jurisdiction. This case addresses when internet based defamation takes place for the purpose of applying a statute of limitations. It does not address where internet based defamation takes place for the purpose of applying jurisdiction and venue rules.

See, full story.

More Court Opinions

12/21. The U.S. Court of Appeals (5thCir) issued its opinion [14 pages in PDF] in Pierce v. U.S. Air Force, an action brought under the Privacy Act of 1974, which is codified at 5 U.S.C. 552a(b). The Court of Appeals affirmed the District Court's summary judgment for the Air Force. One Air Force officer complained to the Air Force about alleged improprieties by other officers, including Pierce. The Air Force investigated, and prepared a "Report of Investigation" and "Summary of Report of Investigation" (SROI). The Court of Appeals held that the release to a newspaper of the SROI and cover letter did not violate Pierce's rights under the Privacy Act because these were not "records" contained within a "system of records" within the meaning of the Privacy Act. This case is Robert Earl Pierce v. Department of the U.S. Air Force, U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 06-61050, an appeal from the U.S. District Court for the Southern District of Mississippi. Judge Eugene Davis wrote the opinion of the Court of Appeals, in which Judges Barksdale and Prado joined.

12/21. The U.S. Court of Appeals (5thCir) issued its opinion [11 pages in PDF] in Armour v. Knowles, a copyright infringement action involving music. Jennifer Armour wrote a song and created a demo tape. She registered a copyright for a capella version, and later an instrumental version, of her song. Her manager sent copies of the demo tape to people associated with Beyonce Knowles, a commercially successful singer. Soon after, Knowles recorded a song that Armour alleges infringed her copyright. The Court of Appeals affirmed the judgment of the District Court for Knowles based upon a finding of lack of substantial similarity of the two works. This case is Jennifer Armour v. Beyonce Knowles, et al., U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 06-20934, an appeal from the U.S. District Court for the Southern District of Texas. The Court of Appeals affirmed in a per curiam opinion of Judges Higgambotham, Smith and Owen.

SEC and DOJ Fine Lucent $2.5 Million for Entertaining Chinese Telecom Employees

12/21. The Securities and Exchange Commission (SEC) filed a complaint [15 pages in PDF] in U.S. District Court (DC) against Lucent Technologies alleging violation of the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA).

The complaint alleges that "From at least 2000 to 2003, Lucent spent over $10 Million for approximately 1,000 Chinese foreign officials, who were employees of Chinese state-owned or state-controlled telecommunications enterprises, to travel to the United States and elsewhere. The Chinese government enterprises were either entities to which Lucent was seeking to sell its equipment and services or existing Lucent customers."

The complaint continues that "The majority of the trips were ostensibly designed to allow the Chinese foreign officials to inspect Lucent's facilities and to train the officials in using Lucent equipment. In fact, during many of these trips, the officials spent little or not time in the United States visiting Lucent's facilities. Instead, they visited tourist destinations throughout the Unites States, such as Hawaii, Las Vegas, the Grand Canyon, Niagara Falls, Disney World, Universal Studios, and New York City."

The SEC simultaneously announced that it has reached a settlement with Lucent under which Lucent has agreed to entry of judgment, and pay a $1,500,000 civil fine, but admitted no wrongdoing. See, SEC release.

In addition, the Department of Justice (DOJ) announced that has reached a related settlement with Lucent under which it will pay a $1,000,000 fine. See, DOJ release.

Lucent Technologies is now a wholly owned subsidiary of Alcatel-Lucent.

WTO Allows Offshore Nation not to Enforce US IPR as Damages for US Protection of Onshore Internet Gambling

12/21. The World Trade Organization (WTO) released a arbitration report [PDF] in the case brought by the tiny Caribbean nation of Antigua and Barbados (A&B). A&B asserts, and the WTO has held, that U.S. laws related to internet gambling violate U.S. trade treaty obligations by protecting onshore internet gambling, while outlawing the provision of similar gambling services online by providers in A&B. This report allows A&B to collect $21 Million per year from the U.S. in the form of non-protection of U.S. intellectual property rights (IPR).

Previously, in this long running WTO proceeding, the WTO found that the U.S. has violated its treaty obligations on the grounds that U.S. law carves out an domestic exception for internet gambling on horse racing.

This report summarizes past proceedings, and provides a ruling on remedies. It provides that A&B may collect damages of $21 Million per year from the U.S. by suspending their own treaty obligations, under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) [33 pages in PDF], to protect U.S. IPR.

That is, unless the U.S., A&B, and other affected nations do not resolve this dispute, U.S. creators and inventors, IPR owners, and the content aggregation and distribution sectors, will pay to maintain the protection domestic gambling operations.

The report allows A&B not to enforce rights of U.S. persons with respect to "Copyright and related rights", "Trademarks", "Industrial designs", "Patents", and "Protection of undisclosed information".

It adds that "we may not question the complaining party's choice of specific obligations to be suspended".

A&B had sought billions per year in such damages. The small size of the damages award is a victory for the Office of the U.S. Trade Representative (OUSTR), which has long fought A&B in this proceeding.

Also, it should also be noted that but for the negligence of the OUSTR in failing to include gambling services as an exception to the treaty obligations of the U.S. in original negotiations, and the failure of the Congress to regulate internet gambling in a uniform and nondiscriminatory manner, A&B could not have maintained this WTO proceeding.

The report states that "the Arbitrator determines that the annual level of nullification or impairment of benefits accuing to Antigua in this case is US$21 million and that Antigua has followed the principles and procedures of Article 22.3 of the DSU in determining that it is not practicable or effective to suspend concessions or other obligations under the GATS and that the circumstances were serious enough. Accordingly, the Arbitrator determines that Antigua may request authorization from the DSB, to suspend the obligations under the TRIPS Agreement ... at a level not exceeding US$21 million annually."

The USTR's Sean Spicer stated in a release on December 21 that "The United States has already initiated the formal process under the WTO for clarifying its schedule of commitments and is engaged in compensation negotiations with Antigua and six other WTO Members that have claimed to be affected. We announced a compensation agreement with three of those Members earlier this week, and are continuing discussions with the others.  We would expect that Antigua would not suspend its WTO commitments to the United States while that process is underway."

See also, USTR release of December 17.

Sallie James, a trade policy analyst at the Cato Institute, wrote in a short piece published in the Cato web site that "The $21 million worth of pirated software, movies, and music would go on annually unless and until the United States changes its laws, so we can expect some lobbying from Hollywood to have the restrictions on internet gambling lifted."

Go to News from December 16-20, 2007.