TLJ News from August 21-25, 2008

Department of Commerce Announces National Medal of Technology Awards

8/25. The Department of Commerce (DOC) announced the 2007 winners of the National Medal of Technology and Innovation (NMTI). See, release.

One half of these awards involve information technology. One winner is Paul Baran, for his joint invention of packet switched networks, while at the RAND Corporation, beginning in the 1960s.

Another is David Cutler, a software engineer who has long worked on operating systems for Microsoft.

Another winner is Grant Willson of the University of Texas at Austin, whose web site biography states that his work has focused on "the design and synthesis of functional organic materials with emphasis on materials for microelectronics".

Another NMTI award is for the eBay corporation.

The DOC also announced NMTI awards for Roscoe Brady, for his work on enzymatic defects in hereditary metabolic disorders, Armand Feigenbaum, for his work on economic relationship of quality costs, productivity improvement, and profitability, and Adam Heller, for his work in electrochemistry and bioelectrochemistry. Finally, the DOC awarded a NMT to the Skunk Works division of Lockheed, for its development of aircraft technology.

President Bush will present the NMTI winners with medals at a White House ceremony on September 29, 2008.

The NMTI program was instituted by the Stevenson-Wydler Technology Innovation Act of 1980. This was Public Law No. 96-180. It is now codified, along with amendments, at 15 U.S.C. § 3711.

The NMTI program is now administered by the U.S. Patent and Trademark Office (USPTO).

See also, TLJ coverage of awards in 2005, published in TLJ Daily E-Mail Alert No. 1,312, February 17, 2006.

People and Appointments

8/25. Federal Communications Commission (FCC) Commissioner Robert McDowell named Rosemary Harold his new Legal Advisor for media issues. She replaces Cristina Pauzé. Harold has worked at the FCC since December of 2005, most recently as Deputy Chief of the Media Bureau. Before joining the FCC, she worked at the law firm of Wiley Rein. See, FCC release [PDF].

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8/25. The Federal Communications Commission (FCC) released its Notice of Proposed Rulemaking (NPRM) in its proceeding titled "In the Matter of Implementation of the NET 911 Improvement Act of 2008". It adopted this item on August 22, and announced it and released the text [34 pages in PDF] on August 25, 2008. This item had been on the agenda for the FCC's event titled "Open Commission Meeting" scheduled for August 22. However, the FCC cancelled this meeting just prior to its scheduled start time. This NPRM is FCC 08-195 in WC Docket No. 08-171.

8/25. The Federal Communications Commission (FCC) released its Notice of Inquiry (NOI) in its proceeding titled "In the Matter of Development of Devices Capable of Supporting Multiple Audio Entertainment Services". It adopted this item on August 22, and announced it and released the text [34 pages in PDF] on August 25, 2008. This NOI is FCC 08-196 in MB Docket No. 08-172.

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8/22. The U.S. Court of Appeals (DCCir) issued its opinion [92 pages in PDF] in Free Enterprise Fund v. PCAOB, affirming the District Court's summary judgment for Public Company Accounting Oversight Board (PCAOB). The plaintiffs and amicus curiae parties challenged the Constitutionality of the portion of the Sarbanes Oxley Act that created the PCAOB.

8/22. The Bureau of Industry and Security (BIS) extended the deadline to submit comments in response to its Notice of Inquiry (NOI) regarding recommendations made by the Deemed Export Advisory Committee (DEAC) with respect to BIS's deemed export licensing policy. The BIS seeks comments on, among other things, whether the scope of technologies on the Commerce Control List (CCL) that are subject to deemed export licensing requirements should be narrowed, and if so, which technologies should be subject to deemed export licensing requirements. The original deadline was August 18, 2008. See, original notice in the Federal Register, May 19, 2008, Vol. 73, No. 97, at Pages 28795-28797. The new deadline is September 22, 2008. See, extension notice in the Federal Register, August 22, 2008, Vol. 73, No. 164, at Pages 49645-49646.

8/22. Federal Reserve Board (FRB) Chairman Ben Bernanke gave a speech in Jackson Hole, Wyoming, in which he metaphorically spoke of "software" as the "statutory, regulatory, and contractual frameworks and the business practices that govern the actions and obligations of market participants". He said that "one of the best ways to protect the financial system against future systemic shocks, including the possible failure of a major counterparty, is by strengthening the financial infrastructure, including both the ``hardware´´ and the ``software´´ components."

8/22. The Copyright Royalty Judges published a notice in the Federal Register announcing the commencement of the proceeding to determine the distribution of the digital audio recording technology royalty fees in the 2002, 2003, and 2004 Musical Works Funds. The deadline to submit petitions to participate, and the $150 filing fee, is September 22, 2008. See, Federal Register, August 22, 2008, Vol. 73, No. 164, at Pages 49708-49709.

8/22. Thomas C. Rushing III, Brian C. Rue, William Lance Partridge pled guilty in U.S. District Court (WDTex) to violation of federal criminal copyright laws in connection with their operation of web sites that sold a counterfeit software by download. The Department of Justice (DOJ) stated in a release that "The software sold by the defendants had a combined retail value of $2,500,000."

DOJ Prosecutes Botnet Seller

8/21. A grand jury of the U.S. District Court (EDLa) returned an indictment that charges Leni de Abreu Neto with conspiracy to violate 18 U.S.C. § 1030, the computer hacking statute, in violation of 18 U.S.C. § 371, in connection with his involvement with a botnet scheme.

The indictment states that Neto is a Brazilian. It also states that Nordin Nasiri, a 19 year old resident of the Netherlands, who was not indicted, created a botnet that infected over 100,000 internet connected computers worldwide. Neto was involved with Nasiri in the sale of the botnet to an unnamed party in the U.S. to be used to distribute spam e-mail messages. The sale price was €25,000.

The Department of Justice (DOJ) stated in a release that "Neto was apprehended by Dutch authorities on July 29, 2008, in the Netherlands and is currently in confinement in the Netherlands pending resolution of extradition proceedings. Nasiri was also apprehended by Dutch authorities and is being prosecuted by Dutch authorities in the Netherlands."

The indictment does not charge Neto with conspiracy to violate the federal CAN SPAM Act, which is codified at 18 U.S.C. § 1037.

Botnet is a slang term of recent origin that is used to describe a collection of software robots that reside on a collection of compromised computers, almost always without the authority or knowledge of the owners or operators, that are controlled remotely for various nefarious purposes. The compromised computers are often referred to as zombies. The purposes for forming botnets include sending spam, running denial of service attacks, committing click fraud, and spyware.

The indictment states that the controller of a bot, or bot herder, accomplishes "the installation of bot code on computers by using a computer of computers to electronically scan or search computers connected to the Internet for particular security vulnerabilities or weaknesses, and using computer code written to exploit those vulnerabilities to compromise or ``hack´´ the computer, and install bot code. Once on a computer, the bot code allowed the person who controlled it to instruct the infected computer to perform various functions without the authorization or knowledge of the computer's owner, including launching denial of service attacks designed to disable targeted computer systems, and sending spam emails."

The indictment states that Nasiri created the botnet at issue in this case, and that Neto used it. Then, Nasiri agreed with Nasiri "to act as an intermediary for the leasing, and subsequently the sale, of the botnet to a third party known to be interested installing computer code on infected bot computers that would allow the sending of ``spam´´ email ..."

The indictment further states that Neto "did knowingly cause the transmission of a program, information, code and command" and intentionally caused damage to a protected computer within the meaning of subsection 1030(e)(2), and caused loss to 1 or more persons of at least $5,000, in violation of subsections 1030(a)(5)(A)(i) and 1030(a)(5)(B)(i).

While the DOJ was able to obtain an indictment in this case, there is legislation pending in the Congress that would make it easier to prosecute botnet herders. See, Section 9 of HR 2290 [LOC | WW], the "Cyber-Security Enhancement Act of 2007", and story titled "Rep. Schiff and Rep. Chabot Introduce Bill to Expand § 1030" in TLJ Daily E-Mail Alert No. 1,583, May 18, 2007.

HR 2290 would allow prosecution when 10 or more computers are compromised within one year, without any minimum dollar amount of damage.

Section 1030 currently contains vague language that serves as the basis for some criminal prosecutions, and civil actions, not contemplated by the members of Congress who drafted and voted for this section and its amendments.

For example, on May 15, 2008, a grand jury of the U.S. District Court (CDCal) returned a four count indictment [PDF] that charges Lori Drew with violation of Section 1030 in connection with her violation of the terms of service of the social networking web site MySpace. See, story titled "Lori Drew Pleads Not Guilty in Section 1030 Case" in TLJ Daily E-Mail Alert No. 1,794, June 23, 2008.

John Morris, of the Center for Democracy and Technology (CDT), stated in a May 19, 2008, release that Drew indictment represents "a gross and inappropriate expansion of federal power to regulate speech and communications over the Internet".

See also, story titled "Law Professors Argue for Dismissal of MySpace Section 1030 Prosecution" in TLJ Daily E-Mail Alert No. 1,810, August 11, 2008.

FCC Releases NPRM on Wireless Microphones Operating in 700 MHz Band

8/21. The Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking and Order [24 pages in PDF] regarding "broadcast low power auxiliary stations" operating in the 700 MHz band, such as wireless microphones. See also, FCC release [PDF].

This spectrum is currently occupied by television broadcasters as TV Channels 52-69, but is to be reassigned to commercial and public safety wireless operations.

The NPRM portion of this item states that "we tentatively conclude to amend our rules to make clear that the operation of low power auxiliary stations within the 700 MHz Band will no longer be permitted after the end of the DTV transition because such operations could cause harmful interference to new public safety and commercial wireless services in the band."

See, full story.

7th Circuit Considers Use of Video Surveillance Cameras

8/21. The U.S. Court of Appeals (7thCir) issued its opinion in Wheeler v. Lawson, in which the Court of Appeals affirmed the District Court's dismissal of a Section 1983 claim. The Court of Appeals wrote that using a video surveillance camera was one factor that gave police probable cause to arrest the operator of the camera for a crime that occurred at the surveiled location.

Michelle Wheeler was arrested for, and charged with, maintaining a common nuisance in violation of Indiana Code § 35-48-4-13. She and her husband owned a house and surrounding property. There was a two car garage about 500 feet from the house. This garage was outfitted with a video surveillance camera which focused on the outside. It was monitored from inside the house.

The Court of Appeals opinion recites substantial evidence that the garage was used by Wheeler's husband and her cousin to illegally manufacture methamphetamine. After her cousin died in an explosion in the garage, state police arrested and charged her with the minor offense of maintaining a common nuisance, rather than drug related charges. The charge against her was later dismissed.

She filed a complaint in U.S. District Court (NDInd) against the arresting officer and others alleging violation of 42 U.S.C. § 1983.

The District Court dismissed her claim, and the Court of Appeals affirmed. The Court of Appeals reasoned that the officer had qualified immunity because he had probable cause to arrest Wheeler for maintaining a common nuisance, in part because the officer knew of, and relied upon, "the fact that the area surrounding the garage was outfitted with a surveillance system".

This case is Michelle Wheeler v. Ronald Lawson, et al., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 07-1791, an appeal from the U.S. District Court for the Northern District of Indiana, South Bend Division. D.C. No. 05 C 421, Judge Robert Miller presiding. Judge Ripple wrote the opinion of the Court of Appeals, in which Judges Kanne and Williams joined.

9th Circuit Remands in Warrantless Surveillance Case

8/21. The U.S. Court of Appeals (9thCir) issued a short order [PDF] in Hepting v. AT&T, a class action against AT&T arising out of AT&T surveillance assistance to the U.S. government.

In June, the Congress enacted, and President Bush signed, HR 6304 [LOC | WW], the "Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2008".

The bill provides immunity, including retroactive immunity, from civil suits for carriers and other service providers who cooperate, and who cooperated in the past, with government intelligence agencies.

The Court of Appeals wrote that "In light of the FISA Amendments Act of 2008, Pub. L. No. 110-261, we remand this case to the district court. We retain jurisdiction over any further appeals."

See also, story titled "District Court Denies DOJ Motion Dismiss Class Action Against AT&T Regarding Warrantless Surveillance" in TLJ Daily E-Mail Alert No. 1,415, July 21, 2006.

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8/21. The Bureau of Industry and Security (BIS), which regulates exports and other matters, published a notice in the Federal Register that announces, describes, recites, and sets the effective date (October 20, 2008) for, its rules changes mandating that export and reexport license applications, classification requests, encryption review requests, License Exception AGR notifications and related documents be submitted to the BIS by its electronic filing system. See, Federal Register, August 21, 2008, Vol. 73, No. 163, at Pages 49323-49331.

Go to News from August 16-20, 2008.