TLJ News from June 1-5, 2008

Verizon Wireless to Acquire Alltel

6/5. Verizon, which owns a majority interest in Verizon Wireless (VZ), announced in a release that VZ "has entered into an agreement with Alltel Corporation and Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital and GS Capital Partners, to acquire Alltel Corporation in a cash merger".

Verizon added that VW "will acquire the equity of Alltel for approximately $5.9 billion".

This transaction requires approvals from the Department of Justice's (DOJ) Antitrust Division and the Federal Communications Commission (FCC).

On February 4, 2008 the Federal Communications Commission (FCC) released its annual report to the Congress on the state of competition Commercial Mobile Radio Services (CMRS) industry. The report concluded that "there is effective competition in the CMRS market" and that "No single competitor has a dominant share of the market". See, story titled "FCC Releases Report on Wireless Competition" in TLJ Daily E-Mail Alert No. 1,713, February 7, 2008.

The FCC also found that the concentration in the U.S. mobile telephone market, as measured by the Herfindahl-Hirschman Index (HHI), was 2674 at the end of 2006. Pursuant to the Horizontal Merger Guidelines issued by the Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC), a market with an HHI score of over 1800 is considered to be concentrated. See, Chapter 1.5 of these Guidelines.

Gigi Sohn, head of the Public Knowledge, stated in a release that "If the deal goes through, two companies, Verizon and AT&T, will control about 150 million of the 260 million wireless customers in the U.S. Verizon will have about 80 million alone. With Sprint in a weakened condition, this deal will speed the unfortunate trend of giving consumers fewer, rather than more, choices in telecommunications services, while giving a few companies more control over the lives of consumers."

Sohn added that "Should the Justice Department approve, the FCC should impose conditions that would require that the combined network be open to outside applications and devices, extending the policy the Commission started in the recent spectrum auctions. The Commission should also make clear that, as Public Knowledge asked in our pending complaint against Verizon, text messaging is protected by the Communications Act, and that actions such as Verizon's denial of text-messaging short codes to NARAL will not be permitted."

The PK and other groups filed a Petition for Declaratory Ruling [33 pages in PDF] with the FCC on December 11, 2007. See, story titled "Public Knowledge Asks FCC to Declare that Blocking and Refusing to Carry Text Messages Violates Title II" in TLJ Daily E-Mail Alert No. 1,686, December 11, 2007. See also, story titled "Martin Discusses Complaints Against Comcast and Verizon Wireless" in TLJ Daily E-Mail Alert No. 1,728, March 10, 2008.

Verizon stated also that "Alltel serves more than 13 million customers in markets in 34 states. This includes 57 primarily rural markets that Verizon Wireless does not serve."

Verizon also stated that "The transaction puts the Alltel markets and customers on a path to advanced 4th generation services as Verizon Wireless deploys LTE technology throughout its network over the next several years. Alltel’s customers also will reap the benefits of Verizon Wireless’ Open Development initiative, which welcomes third-party devices and services to use the Verizon Wireless network."

People and Appointments

6/5. President Bush named Thomas Bossert to be Deputy Assistant to the President for Homeland Security.. See, White House release.

6/5. President Bush named Pete Patterson to be Associate Counsel to the President. See, White House release.

6/5. President Bush announced his intent to appoint Wayne Paugh to be Coordinator for International Intellectual Property Enforcement (CIIPE) at the Department of Commerce (DOC). He is currently Senior Advisor and acting CIIPE. See, White House release.

6/5. The Senate confirmed Paul Schneider to be Deputy Secretary at the Department of Homeland Security (DHS). See, DHS release and statement by Rep. Bennie Thompson (D-MI).

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6/5. The Federal Communications Commission (FCC) released a revised agenda for its event on June 12, 2008. This agenda states that the FCC will first hold a hearing on early termination fees. Then, it may adopt an order regarding Skype's 2007 petition [36 pages in PDF] titled "Petition to Confirm a Consumer’s Right to Use Internet Communications Software and Attach Devices to Wireless Networks". This is RM-11361. The agenda also states that the FCC may adopt a Report and Order (R&O) regarding the National Do-Not-Call Registry. This is CG Docket No. 02-278. The agenda also states that the FCC may adopt a Notice of Proposed Rulemaking (NPRM) regarding "the Provision of Speech-to-Speech, a form of Telecommunications Relay". This is CG Docket No. 03-123. The agenda also states that the FCC may adopt a R&O and Further NPRM regarding "Ten-Digit Numbering Plan for Internet-Based TRS". This is CG Docket No. 03-123 and WC Docket No. 05-196. See also, story titled "FCC to Hold Meeting and Hearing on June 12" in TLJ Daily E-Mail Alert No. 1,774, June 2, 2008. This event is scheduled to begin at 10:00 AM. However, most of the FCC's recent events titled "Open Meeting" have not been held at the time announced by the FCC.

6/5. Trade representatives of the US, EU, Japan, and other nations met in Geneva, Switzerland on June 3-4, 2008, to discuss the proposed Anti-Counterfeiting Trade Agreement. The Office of the U.S. Trade Representative (OUSTR) stated in a release that "The main focus of the discussion was border measures, particularly how to deal with large-scale intellectual property infringements".

6/5. The House passed HR 5940 [LOC | WW], the "National Nanotechnology Initiative Amendments Act of 2008", by a vote of 407-6. See, Roll Call No. 383. Rep. Bart Gordon (D-TN) introduced this bill on May 1, 2008. He stated in a release that "The promise of nanotechnology is enormous, but potential downsides need to be addressed from the beginning in a thorough, transparent process" He continued that "The federal interagency nanotechnology research program has not yet put in place a well designed, adequately funded, and effectively executed research program focused on the environmental and safety aspects of nanotechnology."

Barnett Addresses Sherman Section 2 Remedies

6/4. Thomas Barnett, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, gave a speech in Charlottesville, Virginia, titled "Section 2 Remedies: What to Do After Catching the Tiger by the Tail".

The entire speech built upon the metaphor of wild tigers.

Thomas Barnett

Barnett (at right) said that "it is in the nature of successful firms, like tigers, to pounce and devour, and to deprive other hunters of their prey. I prefer to watch tigers and successful firms -- even dominant firms -- from a safe distance and without interfering with their natural activities, confident that any harm they visit on competitors will -- in general -- redound to society's benefit."

But, he continued, "Dominant firms also resemble tigers in that powerful animals can inflict great damage that sometimes should be prevented. Economic theory provides a sound basis for believing that firms can injure the competitive process by acquiring or maintaining monopoly power through anticompetitive means. And so we should seek to identify when and how government intervention is justified and will prove beneficial."

He then stated that there are situations where, even though there is a violation, the government should not intervene. For example, "a bad section 2 remedy risks hurting consumers and competition and thus is worse than no remedy at all".

Also, he said that "certain kinds of conduct appearing to harm competition have proven themselves beyond the limits of effective antitrust control".

He identified bundled discounts as one possible example. He did not mention any companies or industry sectors. However, bundled discounts are used in the telecommunications and information technology sectors, such as in triple play offerings of voice, broadband, and video. See, story titled "9th Circuit Rules on Application of Antitrust Law to Bundling Discounts" in TLJ Daily E-Mail Alert No. 1,634, September 5, 2007.

He said that "Because price competition is so close to the heart of the competitive process that our antitrust laws seek to foster, I am not sanguine about section 2's prospects for appropriately remedying other forms of price competition posing theoretical harm to consumers absent clear, cost-based liability standards. In particular, there may be areas of bundled discounting and single-product loyalty discounts where any theoretical harm from above-cost discounting is beyond the practical ability of courts to remedy through antitrust litigation, much as above-cost pricing is in the context of predatory pricing."

Barnett also reiterated points that he has made in other speeches. For example, he said that "it is important always to keep in mind that the goal of catching the tiger is to protect competition, not competitors". Also, citing the Supreme Court's 2004 opinion [22 pages in PDF] in Verizon v. Trinko, he said that "equitable remedies should not interfere with the defendant's innovation incentives going forward". See also, story titled "Supreme Court Holds That There is No Sherman Act Claim in Verizon v. Trinko" in in TLJ Daily E-Mail Alert No. 815, January 14, 2004.

He also used the U.S. Court of Appeals' (DCCir) 2001 opinion in US v. Microsoft, 253 F.3d 34, as the basis for a counseling against remedies that restructure markets. He said that "A finding that section 2 has been violated does not open the door to wholesale restructuring of a market. Instead, the remedy needs to be tied closely to the anticompetitive conduct occasioning it. That means that remedies need to be sufficient but not overbroad, proportional to the offense. Implementing a remedy that is too broad runs the risk of distorting markets, impairing competition, and prohibiting perfectly legal and efficient conduct."

He also said, referencing Microsoft litigation, that the government should consider private litigation. He said that "My final point tonight is that it is worth asking whether anyone else is trying to catch the tiger. Congress has established an overall antitrust regime in which private plaintiffs as well as others have the right to bring section 2 claims in addition to the federal government. Thus, in addressing questions such as whether civil fines should be available for government section 2 cases, it is relevant to consider the complete picture. As one example, I do not have precise figures, but public reports indicate that Microsoft has paid billions of dollars to resolve private litigation involving claims that followed on from the Division's case."

He did not discuss the private litigants' reliance upon the res judicata effects of the judgment in the governments' case against Microsoft.

Section 2 of the Sherman Act, which is codified at 15 U.S.C. § 2, provides in full that "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court."

Bernanke Discusses Innovation, Productivity Growth and Dislocations

6/4. Ben Bernanke, Chairman of the Federal Reserve Board (FRB), gave a speech at Harvard University, in Cambridge, Massachusetts, in which he discussed, among other topics, productivity, technology, and economic performance.

"As Adam Smith pointed out in 1776, in the long run, more than any other factor, the productivity of the workforce determines a nation's standard of living." And, he said, productivity follows from technological innovations that are "translated into successful commercial applications".

He said that while productivity has been growing, the benefits have not been uniform; technological innovation and trade create dislocations for some people. He argued that the appropriation response is not to limit innovation or trade, but rather to address these dislocations.

Ben BernankeBernanke (at right) stated that "From 1948 to 1973, output per hour of work grew by nearly 3 percent per year, on average. But then, for the next 20 years or so, productivity growth averaged only about 1-1/2 percent per year, barely half its previous rate. Predictably, the rate of increase in the standard of living slowed as well".

Then, "Productivity growth revived in the mid-1990s", said Bernanke. "Since 1995, productivity has increased at about a 2-1/2 percent annual rate."

He then offered his analysis of the causes of technological innovation and productivity growth. "While private-sector initiative was the key ingredient in generating the pickup in productivity growth, government policy was constructive, in part through support of basic research but also to a substantial degree by promoting economic competition."

He elaborated that "Beginning in the late 1970s, the federal government deregulated a number of key industries, including air travel, trucking, telecommunications, and energy. The resulting increase in competition promoted cost reductions and innovation, leading in turn to new products and industries."

"It is difficult to imagine that we would have online retailing today if the transportation and telecommunications industries had not been deregulated. In addition, the lowering of trade barriers promoted productivity gains by increasing competition, expanding markets, and increasing the pace of technology transfer."

He also said that "Even though average economic well-being has increased considerably over time, the degree of inequality in economic outcomes over the past three decades has increased as well."

He continued that "new technologies and increased international trade can lead to painful dislocations as some workers lose their jobs or see the demand for their particular skills decline". He argued that "hindering the adoption of new technologies or inhibiting trade flows would do far more harm than good over the longer haul. In the short term, the better approach is to adopt policies that help those who are displaced by economic change."

This speech was similar to other speeches by Bernanke, and his predecessors at the FRB. See, Bernanke's August 31, 2006 speech, and story titled "Bernanke Gives Another Speech on ICT and Productivity Growth" in TLJ Daily E-Mail Alert No. 1,444, September 7, 2006, and January 19, 2005 speech and story titled "FRB's Bernanke Addresses Productivity Growth and Information Technology" in TLJ Daily E-Mail Alert No. 1,061, January 24, 2005.

See also, October 24, 2002 speech by former FRB Vice Chairman Roger Ferguson titled "Productivity Growth: A Realistic Assessment", and story titled "FRB Vice Chairman Addresses Impact of Computer and Software Technology on Productivity Gains" in TLJ Daily E-Mail Alert No. 535, October 25, 2002. And see also, October 23, 2002 speech by former FRB Chairman Alan Greenspan, and story titled "Greenspan Addresses Productivity Gains and Technological Innovation" in TLJ Daily E-Mail Alert No. 534, October 24, 2002.

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6/4. The House passed HR 5893 [LOC | WW, the "Library of Congress Sound Recording and Film Preservation Programs Reauthorization Act of 2008", by voice vote.

6/4. The House Commerce Committee's (HCC) Subcommittee on Health held a hearing titled "Discussion Draft of Health Information Technology and Privacy Legislation". See also, HCC memorandum [6 pages in PDF], draft bill [89 pages in PDF], and statement by Rep. John Dingell (D-MI), Chairman of the HCC.

House Approves Federal Agency Data Protection Act

6/3. The House passed HR 4791 [LOC | WW], the "Federal Agency Data Protection Act", by voice vote.

This bill states that its purpose is to "protect personally identifiable information of individuals that is maintained in or transmitted by Federal agency information systems".

This bill would authorize the Office of Management and Budget (OMB), among other things, to establish "minimum requirements regarding the protection of personally identifiable information maintained in or transmitted by mobile digital devices, including requirements for the use of technologies that efficiently and effectively render information unusable by unauthorized persons".

This bill would also require certain public disclosures of data breaches at federal agencies that involve the disclosure of personally identifiable information, including notice to affected individuals.

This bill would also require agencies to "develop and implement a plan to ensure the security and privacy of information collected or maintained by or on behalf of the agency from the risks posed by certain peer-to-peer file sharing programs".

Rep. Lacy Clay (D-MO), Chairman of the House Oversight and Government Reform Committee's Subcommittee of Information Policy, Census and National Archives, introduced this bill on December 18, 2007.

He stated in the House on June 3 that the Government Accountability Office (GAO) has "found that pervasive weaknesses continue to exist primarily because agencies fail to maintain secure IT networks. As a result, GAO concluded that Federal financial data are at risk of unauthorized modification or destruction, sensitive information at risk of inappropriate disclosure, and critical operations at risk of disruption."

He continued that this bill "would secure our agencies' IT access and require an annual audit of agency programs. The bill would also establish a comprehensive definition for ``personally identifiable information´´ and mandate that agencies notify individuals when their personal information is accessed in a data breach."

This bill is based upon an earlier bill, HR 2124 [LOC | WW], also titled the "Federal Agency Data Breach Protection Act", that was introduced on May 3, 2007, by Rep. Tom Davis (R-VA).

Rep. Davis stated that "despite the volume of sensitive information held by agencies -- tax returns, military records, health records, to name a few -- there currently is no requirement that agencies notify citizens whose personal information may have been compromised. We need to ensure the public knows when its sensitive personal information has been lost or compromised."

However, he continued that "I do not believe H.R. 4791 does enough. Most of the provisions contained in this bill are a grab bag of vague requirements, additional mandates, and misplaced priorities. It casts dynamic concepts in stone. And it gives agency personnel more boxes to check."

For example, he argued that there should be incentives for agencies to improve IT security, such as funding rewards and penalties.

House Passes Federal Agency Telework Bill

6/3. The House passed HR 4106 [LOC | WW], the "Telework Improvements Act of 2008", by voice vote.

This bill provides that each federal agency, within 180 days, "shall establish a policy under which employees shall be authorized to telework". The bill defines "telework" as "a work arrangement under which an employee regularly performs the duties and responsibilities of such employee's position, and other authorized activities, from home or another worksite removed from the employee's regular place of employment".

Rep. Danny Davis (D-IL) introduced this bill on November 7, 2007. He stated in the House that "Telework has a number of benefits for both agencies and employees. A happy workforce is a productive workforce, and giving employees the opportunity to telework can help boost productivity by cutting down on commuting time, reducing absenteeism, and allowing for greater organizational flexibility. Improving telework can also help reduce pollution, traffic congestion, and the significant financial burdens that Federal employees face from high gas prices."

Rep. John Sarbanes (D-MD) stated that the U.S. Patent and Trademark Office (USPTO) and Defense Information Systems Agency (DISA) "have some of the most robust telework policies in the Federal Government" and "are perfect examples of how agencies can utilize telework to recruit and retain a first-rate workforce".

He said that the "USPTO and DISA have retained workers, despite having a workforce that is in high demand elsewhere. The private sector is still far ahead of the government in terms of embracing telework as a recruiting tool. We must catch up if we want to compete."

Rep. Tom Davis (R-VA), whose district includes many current and potential government agency teleworkers, praised the bill. He also discussed some of the changes made during mark up by the House Oversight and Government Reform Committee.

He said that "the reported version includes stronger language regarding the protection of information being accessed through remote networks. This IT security language is important to reassure the general public that, as we promote the use of telework in federal agencies, the government is taking necessary steps to make sure personal information is safeguarded."

He also said that "the reported version requires agencies to further integrate telework into their continuity of operations planning by making sure mission critical personnel are prepared to telework in the event of a major disaster, such as a terrorist attach or an outbreak of the pandemic flu."

Supreme Court Denies Cert in Fantasy Sports Case

6/2. The Supreme Court denied certiorari in Major League Baseball v. CBC, a case regarding internet based fantasy baseball. See, Orders List [8 pages in PDF] at page 7. This lets stand the October 16, 2007, divided opinion [13 pages in PDF] of the U.S. Court of Appeals (8thCir). This is a victory for operators of internet based fantasy sports products, and a defeat for the sports leagues, which have sought to derive revenue for the licensing of fantasy sports products.

C.B.C. Distribution and Marketing, Inc (CBC) filed a complaint in U.S. District Court (EDMo) against the Major League Baseball Advanced Media (MLBAM) seeking a declaratory judgment regarding CBC's right to use the names of baseball players in connection with internet and e-mail based fantasy baseball products.

MLBAM counterclaimed alleging that CBC violated its right of publicity under state law. The MLB Players Association intervened. The District Court granted summary judgment to CBC.

The Court of Appeals affirmed. It concluded that the baseball players "offered sufficient evidence to make out a cause of action for violation of their rights of publicity under Missouri law", but that "CBC's first amendment rights in offering its fantasy baseball products supersede the players' rights of publicity". The Court of Appeals did not reach the issue of whether federal copyright law preempts the players' state law rights of publicity.

And now, the Supreme Court has declined to hear the case.

This case is Major League Baseball Advanced Media, L.P., et al. v. C.B.C. Distribution and Marketing, Inc., Supreme Court of the U.S., Sup. Ct. No. 07-1099, a petition for writ of certiorari to the U.S. Court of Appeals for the 8th Circuit, App. Ct. Nos. 06-3357/3358. The Court of Appeals heard appeals from the U.S. District Court for the Eastern District of Missouri. Judge Arnold wrote the opinion of the Court of Appeals, in which Judge Loken joined. Judge Colloton dissented.

See also, Supreme Court docket and story titled "8th Circuit Rules that First Amendment Supersedes Right of Publicity in Fantasy Baseball Case" in TLJ Daily E-Mail Alert No. 1,656, October 17, 2007.

Supreme Court Denies Cert in Perfect 10 v. Visa

6/2. The Supreme Court denied certiorari in Perfect 10 v. Visa, a case regarding secondary liability of payments processors for web site operators that engage in direct copyright and trademark infringement. See, Orders List [8 pages in PDF] at page 1.

This lets stand the July 3, 2007, divided opinion [59 pages in PDF] of the U.S. Court of Appeals (9thCir), which affirmed the District Court's dismissal of the copyright holder's complaint. See also, Supreme Court docket.

Perfect 10 [porn site] publishes a print magazine, and operates a web site, that display pictures of naked women. The women are young, and their images appeal to a prurient interest. P10 has registered copyrights with the Copyright Office. P10's business model includes generating revenues from magazine sales, web site subscriptions, and licensing.

Visa, MasterCard, and affiliated banks and data processing services process credit card payments to web site operators that infringe Perfect 10's intellectual property rights. Perfect 10 seeks to stop infringement via litigation against the payments processors.

Perfect 10 filed a complaint in U.S. District Court (NDCal) against Visa and others alleging secondary liability under federal copyright and trademark law, as well as the law of the state of California.

The District Court dismissed pursuant to Rule 12(b)(6), FRCP, for failure to state a claim upon which relief can be granted. The Court of Appeals affirmed. And now, the Supreme Court has refused to hear the case.

The Court of Appeals first addressed contributory infringement.

The Court of Appeals wrote that "one contributorily infringes when he (1) has knowledge of another’s infringement and (2) either (a) materially contributes to or (b) induces that infringement." However, it concluded that the defendants neither materially contributed to, nor induced, the infringement.

The Court of Appeals elaborated that "The credit card companies cannot be said to materially contribute to the infringement in this case because they have no direct connection to that infringement. Here, the infringement rests on the reproduction, alteration, display and distribution of Perfect 10’s images over the Internet. Perfect 10 has not alleged that any infringing material passes over Defendants’ payment networks or through their payment processing systems, or that Defendants’ systems are used to alter or display the infringing images. ... Nor are Defendants’ systems used to locate the infringing images."

The Court of Appeals distinguished this case from Perfect 10, Inc. v., Inc. 487 F.3d 701, which involved secondary liability of internet search engines Amazon and Google. See, May 16, 2007, opinion [48 pages in PDF] of the 9th Circuit.

In that case the Court of Appeals wrote that "Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10's copyrighted works, and failed to take such steps."

In the present opinion, the Court of Appeals wrote that "Helping users to locate an image might substantially assist users to download infringing images, but processing payments does not. If users couldn’t pay for images with credit cards, infringement could continue on a large scale because other viable funding mechanisms are available. For example, a website might decide to allow users to download some images for free and to make its profits from advertising, or it might develop other payment mechanisms that do not depend on the credit card companies."

The Court of Appeals added that "We acknowledge that Defendants’ payment systems make it easier for such an infringement to be profitable, and that they therefore have the effect of increasing such infringement, but because infringement of Perfect 10’s copyrights can occur without using Defendants' payment system, we hold that payment processing by the Defendants as alleged in Perfect 10’s First Amended Complaint does not constitute a ``material contribution´´ under the test for contributory infringement of copyrights."

The Court of Appeals also distinguished the present case from Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (1996), in which the 9th Circuit held a flea market proprietor liable as a contributory infringer when it provided the facilities for and benefited from the sale of pirated works.

The Court of Appeals also distinguished the present case from A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, in which the Court of Appeals held the designer and distributor of a file sharing program liable for contributory infringement, which, while capable of non-infringing use, was engineered to enable the easy exchange of pirated music and was widely so used. See, opinion.

The Court of Appeals next rejected the argument that the payments processors' conduct rose to the level of inducement within the scope of the Supreme Court's June 27, 2005, opinion [PDF] in MGM v. Grokster. See also, story titled "Supreme Court Rules in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.

In that case, the Supreme Court held that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

In the present case, the Court of Appeals wrote that "Because Perfect 10 alleges no ``affirmative steps taken to foster infringement´´ and no facts suggesting that Defendants promoted their payment system as a means to infringe, its claim is premised on a fundamental misreading of Grokster that would render the concept of ``inducement´´ virtually meaningless."

The Court of Appeals next addressed vicarious infringement. It wrote that "To state a claim for vicarious copyright infringement, a plaintiff must allege that the defendant has (1) the right and ability to supervise the infringing conduct and (2) a direct financial interest in the infringing activity." (Footnote omitted.)

The Court concluded that "Perfect 10 has failed to show that Defendants have the right and ability to control the alleged infringing conduct".

Finally, the Court of Appeals addressed with brevity the trademark and state law claims.

This case is Perfect 10, Inc. v. Visa International Service Association, et al., Supreme Court of the U.S., Sup. Ct. No. 07-1026, a petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 05-15170. The Court of Appeals heard an appeal from the U.S. District Court for the Northern District of California, D.C. No. CV-04-00371-JW, Judge James Ware presiding. Judge Milan Smith wrote the opinion of the Court of Appeals, in which Judge Stephen Reinhardt joined.

Judge Alex Kozinski wrote a 27 page dissenting opinion. Much of the majority opinion is devoted to responding to his dissent. Judge Kozinski has a history of seeking regulation of internet activities. He also wrote the April 3, 2008, majority opinion of the en banc panel of the Court of Appeals in FHCSFV v., holding that an interactive computer service, such as, can be held liable for the speech of users, despite language to the contrary in Section 230. See, opinion [PDF] and story titled "En Banc 9th Circuit Panel Rejects Section 230 Immunity in Case" in TLJ Daily E-Mail Alert No. 1,741, April 2, 2008.

Donald Verrilli of the law firm of Jenner & Block represented Perfect 10 before the Supreme Court. Nancy Tompkins of Townsend and Townsend and Crew represented Visa, Andrew Bridges of Winston & Strawn represented MasterCard, and Michael Page of Keker & Van Nest represented First Data Corporation. In addition, Kelly Klaus of Munger Tolles & Olson represented the Motion Picture Association of America.

FCC to Hold Meeting and Hearing on June 12

6/2. On May 23 the Federal Communications Commission (FCC) issued a release [2 pages in PDF] that contains a tentative agenda [2 pages in PDF] for its event scheduled for June 12, 2008, titled "Open Meeting". The FCC will also conduct a hearing on early termination fees at this event.

The FCC release states that the FCC may adopt an order regarding Skype Communications' 2007 petition [36 pages in PDF] titled "Petition to Confirm a Consumer’s Right to Use Internet Communications Software and Attach Devices to Wireless Networks".

Skype's February 20, 2007, petition requests that the FCC "declare that wireless carrier services are subject to the Carterfone principle that consumers have the right to attach any non-harmful device of their choosing to the network and that this, by necessity, includes users' rights to run Internet applications of their choosing." See, story titled "Skype Files Petition Requesting that FCC Declare that Carterfone Principles Apply to Wireless Carriers" in TLJ Daily E-Mail Alert No. 1,546, March 5, 2007.

Its petition is also in the nature of a request for application of certain network neutrality principles to wireless carriers that provide broadband internet access.

Since Skype filed its petition, the FCC has auctioned one block of spectrum in the 700 MHz band that is subject to open devices and applications requirements (ODAR). This is the C Block, 22 MHz of paired spectrum (746-757 and 776-787), auctioned by Regional Economic Area Groupings (REAGs) in 12 licenses.

Verizon Wireless acquired C Block spectrum for all states except Alaska. See also, story titled "Verizon Wireless and AT&T Announce Plans for Use of Spectrum Acquired in 700 MHz Auction" in TLJ Daily E-Mail Alert No. 1,743, April 8, 2008.

On April 1, 2008, FCC Chairman Kevin Martin gave a speech [4 pages in PDF] in Las Vegas, Nevada, in which he said that "I will circulate to my fellow commissioners an order dismissing a petition for declaratory ruling filed by Skype that would apply Carterfone requirements to existing wireless networks". See, story titled "Martin Proposes Dismissal of Skype Petition" in TLJ Daily E-Mail Alert No. 1,739, March 31, 2008.

The FCC release regarding the June 12 meeting also states that the FCC may adopt a Report and Order (R&O) regarding the National Do-Not-Call Registry.

The FCC release also states that the FCC may adopt a Notice of Proposed Rulemaking (NPRM) regarding "the Provision of Speech-to-Speech, a form of TRS".

The FCC release also states that the FCC may adopt a R&O and FNPRM regarding a "Ten-Digit Numbering Plan for Internet-Based TRS"

Finally, the FCC release states that the FCC may adopt a R&O containing service rules for AWS Spectrum in the 1.9 GHz-2.1 GHz bands, an Order on Reconsideration that would address petitions for reconsideration of an FCC Order regarding applications and forbearance petitions, and a FNPRM seeking further comment regarding service rules for the AWS spectrum.

In addition, the FCC will conduct a hearing regarding early termination fees.

The FCC release also states that that the FCC may adopt another order that responds to petitions for reconsideration or clarification regarding the DTV transition. On May 29, the FCC adopted and released an Order on Clarification [3 pages in PDF]. This order is FCC 08-141 in MB Docket No. 07-91.

This event may be held at 9:30 AM on Thursday, June 12, 2008, in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. Most of the FCC's recent events titled "Open Meeting" have not been held at the time announced by the FCC. The FCC may adopt some of these items beforehand. The FCC may postpone consideration of some of these items. The FCC sometimes adds items to the program without providing the "one week" notice required 5 U.S.C. § 552b. The FCC usually does not release at its events copies of the items that it adopts at its events.

People and Appointments

6/2. President Bush announced his intent to nominate Gregory Garre to be the Solicitor General at the Department of Justice, and to designate him acting Solicitor General. He is currently the Principal Deputy Solicitor General. Previously, he worked for the law firm of Hogan & Hartson. If confirmed, he will replace Paul Clement. See, White House release.

6/2. Walter Ricciardi will retire from the Securities and Exchange Commission (SEC), where he is Deputy Director of the Division of Enforcement. He will join the New York office of the law firm of Paul Weiss Rifkind Wharton & Garrison. See, SEC release.

More News

6/2. The Copyright Office (CO) published a notice in the Federal Register that announces, describes, recites, and sets the comment deadlines for, its proposed rule changes regarding retransmission of digital television broadcast signals by cable operators pursuant to 17 U.S.C. § 111. The CO does not seek comments in this proceeding on internet retransmission of digital broadcast signals. Initial comments are due by July 17, 2008. Reply comments are due by September 2, 2008. See, Federal Register, June 2, 2008, Vol. 73, No. 106, at Pages 31399-31415.

6/2. The Supreme Court denied certiorari in Apotex Corporation v. Merck & Co., Inc., Sup. Ct. No. 07-1238, a patent case. See, Orders List [8 pages in PDF] at page 7. This lets stand the November 16, 2007, opinion [11 pages in PDF] of the U.S. Court of Appeals (FedCir). See also, Supreme Court docket.

Go to News from May 26-31, 2008.