TLJ News from May 1-5, 2011

Rep. Crowley Introduces Bill to Regulate Baby Monitor Labelling

5/5. Rep. Joe Crowley (D-NY) introduced HR 1752 [LOC | WW], the "Keeping Children Safe Act of 2011", a bill to require that baby monitors carry labels that warn that signals can be intercepted.

This bill would require the Federal Communications Commission (FCC) to promulgate regulations requiring a warning label to be displayed on the packaging of analog baby monitors regarding possible interception.

Rep. Joe CrowleyThis bill was referred to the House Commerce Committee (HCC). Rep. Crowley (at right) is a member. There are no original cosponsors.

This bill would mandate warning labels on "the packaging of a baby monitor" that state, either that "Sounds captured by this device may be easily heard by potential intruders outside your home", or "Images and sounds captured by this device may be easily viewed or heard by potential intruders outside your home", depending whether the device also captures images.

The bill defines covered baby monitors as "one or more analog transmitting devices that wirelessly transmit images or sounds to one or more receiving devices, .. allows an individual to see images of or hear sounds made by another individual from a short distance within or around a residence; and ... is designed for use by an individual to monitor a child in the care of such individual in a residential setting".

Rep. Gerlach and Rep. Kissell Introduce Another R&D Tax Credit Bill

5/5. Rep. Jim Gerlach (R-PA) and Rep. Larry Kissell (R-NC) introduced HR 1773 [LOC | WW], the "Made in America Act of 2011". This bill would, among other things, make the research and development tax credit permanent. See, 26 U.S.C. § 41(h).

The R&D tax credit was first enacted in 1981 as a temporary measure. Since then the Congress has repeatedly extended it for one or a few years. The credit is now set to expire on December 31, 2011. See, story titled "Tax Bill Enacted With R&D Tax Credit Extension" in TLJ Daily E-Mail Alert No. 2,182, December 18, 2010.

This bill would also raise the alternative simplified credit from 14% to 20%.

This bill would also lower the corporate tax rate from 35% to 30%.

This bill would also make permanent the increased expensing for acquisition of property under 26 U.S.C. § 179.

It was referred to the House Ways and Means Committee (HWMC).

Rep. Engel Reintroduces Texting While Driving Bill

5/5. Rep. Eliot Engel (D-NY) introduced HR 1772 [LOC | WW], the "Distracted Driving Prevention Act of 2011".

This is a reintroduction of HR 3994 [LOC | WW], the "Distracted Driving Prevention Act of 2009", which Rep. Engel introduced in the 111th Congress. HR 1772 (112th) is very similar, but not identical, to HR 3994 (111th).

HR 3994 was referred to both the House Commerce Committee (HCC) and the House Transportation and Infrastructure Committee (HTIC). Neither Committee took any action in the 111th Congress. The just introduced HR 1772 was referred to the same two Committees. Rep. Engel is a member of the HCC. There are no original cosponsors of HR 1772.

The related bill in the Senate in the 111th Congress was S 1938 [LOC | WW], the "Distracted Driving Prevention Act of 2009". Sen. John Rockefeller (D-WV) introduced that bill on October 27, 2009. The Senate Commerce Committee (SCC) held an executive session on June 9, 2010, at which it approved that bill. See, story titled "Senate Commerce Committee Approves Distracted Driving Prevention Act" in TLJ Daily E-Mail Alert No. 2,096, June 17, 2010. The full Senate did not pass that bill.

Hr 1772 constitutes an attempt to regulate conduct that, in the US federal system, falls under state powers. Hence, the bill would attempt to leverage federal grants -- and the threat to withhold grants -- to states to compel states enact the regulatory regime sought by this bill.

The exercise of police powers, including enacting and enforcing criminal and traffic laws, is predominantly a matter of state activity. Moreover, many states have already enacted legislation pursuant to their police powers to prohibit individual conduct while driving that may cause distraction. The federal government does have authority to regulate interstate commerce, and it uses this authority to regulate the activities of the commercial enterprises that provide communications services and equipment. However, this bill is not directed at communications companies. It seeks to regulate individual conduct.

This bill would create a distracted driving grant program, to be administered by the Department of Transportation (DOT). States would only be eligible for grants if they enacted, or modified, distracted driving statutes to meet the requirements of this bill.

The bill would require a statute that "prohibits the use of a personal wireless communications device by a driver for texting while driving",

The bill would further require a statute that "prohibits a driver from holding a personal wireless communications device to conduct a telephone call while driving".

However, the bill would allow exceptions for use by individuals for contacting emergency services, for use by emergency services, for use with of hands free devices, and other things.

This bill would also provide for DOT regulation of "the use of electronic or wireless devices, including cell phones and other distracting devices, by an individual employed as the operator of ... a commercial motor vehicle ... or ... a school bus ..."

Rep. Baldwin and Rep. LaTourette Introduce PEG Channels Bill

5/5. Rep. Tammy Baldwin (D-WI) and Rep. Steve LaTourette (R-OH) introduced HR 1746 [LOC | WW], the "Community Access Preservation Act" or "CAP Act",

This bill would amend 47 U.S.C. § 531, which pertains to "Cable channels for public, educational, or governmental use". This section requires cable companies to set aside some of their channels for use for public, educational and governmental (PEG) purposes. PEG channels once performed a unique function, and possessed a relevance, that are diminishing with the alternative internet technologies and adoption of broadband internet access.

Rep. Tammy BaldwinRep. Baldwin (at right) and Rep. LaTourette issued a release that states that "There are an estimated 5,000 PEG channels in America that serve their communities in a variety of important ways. They connect residents with their local government, televising city council and county board meetings and hearings. Local school districts operate PEG channels to broadcast school board meetings and forums, homework helpers, lectures, and sporting events not otherwise aired on television."

This is a reintroduction of HR 3745 [LOC | WW], the "Community Access Preservation (CAP) Act of 2009", which Rep. Baldwin introduced in the 111th Congress, on October 7, 2009. The two bills are similar, but not the same. See, story titled "Rep. Baldwin Introduces PEG Mandates Bill" in TLJ Daily E-Mail Alert No. 2,003, October 15, 2009. There was no action on that bill in the 111th Congress.

Rep. Baldwin stated in her release that "The nature of television programming is changing, as are the methods in which that programming is delivered. These changes should not come at the expense of the diversity and vibrancy of local voices".

This bill would also mandate that cable operators carry signals for PEG use "from the point of origin of such signals to subscribers without material degradation and without altering or removing content or data".

It would also require cable operators to "provide such signals to, and make such signals viewable by, every subscriber of the cable system without additional service or equipment charges".

It also require cable operators to "provide to the appropriate local government subdivision, free of charge, any transmission services and the use of any transmission facilities that are necessary" to carrying PEG signals.

The bill also addresses cable operators' subsidies for PEG use. Rep. Baldwin's release states that the bill requires cable "operators to provide the support required under state laws, or the support historically provided for PEG, or up to 2% of gross revenue, whichever is greater".

This bill would give local government entities authority to enforce the provisions of this bill.

The bill would also direct the Federal Communications Commission (FCC) to conduct "an analysis of the impact of the enactment of State video service franchising laws since 2005 on" PEG use of cable systems.

This bill would also amend the definition of "cable service" in 47 U.S.C. § 522. It currently means "(A) the one-way transmission to subscribers of (i) video programming, or (2) other programming service; and (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service". The bill would insert, at the beginning, the phrase "regardless of the technology or transmission protocol used in the provision of service".

The bill was referred to the House Commerce Committee (HCC). Rep. Baldwin is a member.

People and Appointments

5/5. The Senate Judiciary Committee (SJC) was scheduled to hold an executive business meeting, but failed to obtain a quorum. Hence, it held over consideration of the nominations of Virginia Seitz (to be Assistant Attorney General in charge of the Department of Justice's (DOJ) Office of Legal Counsel), Donald Verrilli (DOJ Solicitor General), and Lisa Monaco (AAG in charge of the DOJ's National Security Division).

5/5. The Senate Judiciary Committee (SJC) was scheduled to hold an executive business meeting, but failed to obtain a quorum. Hence, it held over consideration of the nominations of Bernice Donald (to be a Judge of the U.S. Court of Appeals (6thCir)), Henry Floyd (USCA/4thCir), Kathleen Williams (USDC/SDFl), Nelva Ramos (USDC/SDTex), Richard Jackson (USDC/DColo), and Sara Darrow (USDC/CDIll).

5/5. Federal Communications Commission (FCC) Commissioner Mignon Clyburn released a statement regarding the departure of Lori Kenyon from the Regulatory Commission of Alaska.

5/5. President Obama announced his intent to nominate Stephen Higginson to be a Judge of the U.S. Court of Appeals (5thCir). See, White House news office release. He is a professor at Loyola University's law school, and a part time Assistant U.S. Attorney for the Eastern District of Louisiana.

More News

5/5. The Senate Judiciary Committee (SJC) was scheduled to hold an executive business meeting, but failed to obtain a quorum. Hence, it held over consideration of S 623 [LOC | WW], the "Sunshine in Litigation Act".

5/5. The Federal Communications Commission (FCC) released an agenda for its event on Thursday, May 12, 2011, titled "open meeting. It contains the same three items that were listed on its preliminary agenda released on April 21, 2011. See, story titled "FCC Releases Tentative Agenda for May 12 Meeting" in TLJ Daily E-Mail Alert No. 2,225, April 25, 2011.

Rep. Van Hollen Introduces Bill to Create High Tech Investment Tax Credit

5/4. Rep. Chris Van Hollen (D-MD) and five other Democrats introduced HR 1732 [LOC | WW], the "Innovative Technologies Investment Incentive Act of 2011", a bill to create a new tax credit of 25% of certain equity investments in high tech and bio tech small business concerns.

This bill would add to the Internal Revenue Code of 1986, which is codified in Title 26, a new Section 30E titled "Investments in High Technology and Biotechnology Small Business Concerns Developing Innovative Technologies".

It would provide that "There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 25 percent of the qualified equity investments made by the taxpayer during the taxable year."

A "qualified equity investment" would only include acquisitions "by the taxpayer at its original issue (directly or through an underwriter) solely in exchange for cash". (Parentheses in original.)

This credit would only apply to investment in a "small business concern" that "is engaged in a high technology or biotechnology trade or business" and employs fewer than 500 people.

Also, it would only apply to investment in concerns that also qualify under the Small Business Innovation Research (SBIR) grant program. Section 9 of the Small Business Act (SBA), which is codified at 15 U.S.C. § 638, provides for the SBIR grant program. The entire SBA is codified at 15 U.S.C. §§ 631-657p.

This bill does not provide a definition of "high technology". Nor does 15 U.S.C. § 638. However, the bill would give the Internal Revenue Service (IRS) authority to write implementing rules.

Rep. Chris Van HollenRep. Van Hollen (at right) stated in a release that this bill "incentivizes meaningful investment in America's most innovative small companies so we can leverage private capital to create good-paying American jobs and lay the foundation for our future economic success. It will provide a boost to those at the cutting edge of tomorrow’s breakthroughs and cures -- as well as job creators -- at a time when that boost is needed most."

This bill was referred to the House Ways and Means Committee. Rep. Van Hollen is the ranking Democrat on the House Budget Committee (HBC).

The original cosponsors of this bill are Rep. Dutch Rupersberger (D-MD), Rep. Allyson Schwarz (D-PA), Rep. Betty McCollum (D-MN), Rep. John Garamendi (D-CA), and Rep. Jared Polis (D-CO).

Rep. Van Hollen introduced a substantially identical bill in the 111th Congress, HR 5767 [LOC | WW], the "Innovative Technologies Investment Incentive Act of 2010", on July 15, 2010. There was no action on that bill.

House Commerce Committee Holds Hearing on Data Security

5/4. The House Commerce Committee's (HCC) Subcommittee on Commerce, Manufacturing, and Trade held a hearing titled "The Threat of Data Theft to American Consumers".

Rep. Mary Mack (R-CA), the Chairman of the Subcommittee, wrote in her opening statement that "I am deeply troubled by these latest data breaches, and the decision by both Epsilon and Sony not to testify today. This is unacceptable."

"According to Epsilon, the company did not have time to prepare for our hearing -- even though its data breach occurred more than a month ago. Sony, meanwhile, says it’s too busy with its ongoing investigation to appear."

She also stated that "This ongoing mess only reinforces my long-held belief that much more needs to be done to protect sensitive consumer information. Americans need additional safeguards to prevent identity theft, and I will soon introduce legislation designed to accomplish this goal. My legislation will be crafted around a guiding principle: Consumers should be promptly informed when their personal information has been jeopardized."

The witnesses were David Vladeck (Director of the FTC's Bureau of Consumer Protection), Pablo Martinez (Deputy Special Agent in Charge of the DHS's Secret Service's Criminal Investigative Division), Justin Broookman (Center for Democracy and Technology), and Eugene Spafford (Purdue University).

The FTC's prepared testimony states that the FTC "has brought more than 30 law enforcement actions against businesses that allegedly failed to protect consumers' personal information appropriately". And, in addition to law enforcement, the FTC engages in education and policy initiatives.

The FTC enforces data security requirements for financial institutions under the Gramm Leach Bliley Act (GLB Act), for credit reporting agencies under the Fair Credit Reporting Act (FCRA), and for businesses generally under Section 5(a) of the FTC Act, which is codified at 15 U.S.C. § 45, in cases where a business makes false or misleading claims about its data security procedures.

The FTC's testimony also reviews three public roundtables hosted by the FTC on consumer privacy in 2009 and 2010, and previews its roundtable on child identity theft scheduled for July 12, 2011.

Also, the Federal Trade Commission (FTC) released a document [122 pages in PDF] titled "Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers", on December 2, 2010. It proposed, among other things, an online do not track regime. See, story titled "Divided FTC Proposes Do Not Track Regime" in TLJ Daily E-Mail Alert No. 2,169, December 5, 2011.

The FTC's prepared testimony also states its "support for federal legislation that would (1) impose data security standards on companies and (2) require companies, in appropriate circumstances, to provide notification to consumers when there is a security breach".

The DHS's Martinez wrote in his prepared testimony about the nature and extent, and law enforcement investigation of, electronic crimes.

He wrote that "Advances in computer technology and greater access to personal information via the Internet have created a virtual marketplace for transnational cyber criminals to share stolen information and criminal methodologies. As a result, the Secret Service has observed a marked increase in the quality, quantity and complexity of cyber crimes targeting private industry and critical infrastructure. These crimes include network intrusions, hacking attacks, malicious software and account takeovers leading to significant data breaches affecting every sector of the world economy."

The CDT's Brookman wrote in his prepared testimony that "data breach is a major longstanding problem for consumers, businesses and government".

He recommended that "Any federal action on data breach should be a mix of requirements and incentives for both companies and government bodies to install sufficient front-end data security measures, to minimize their holdings of consumer data that is no longer necessary for a specific, legitimate purpose, and to develop structures that monitor and control where consumer data resides. Finally, although data breach is an important problem, new rules on data breach would be best addressed as one part of comprehensive baseline consumer privacy legislation."

He also discussed HR 2221 [LOC | WW], the "Data Accountability and Trust Act", or "DATA Act", which was introduced in the 111th Congress by Rep. Bobby Rush (D-IL), Rep. Joe Barton (R-TX), Rep. Jan Schakowsky (D-IL), Rep. Cliff Stearns (R-FL), and former Rep. George Radanovich (R-CA). The HCC and the full House passed that bill. See also, story titled "House Commerce Subcommittee Marks Up Data Accountability and Trust Act" in TLJ Daily E-Mail Alert No. 1,948, June 4, 2009.

Rep. Rush, Rep. Barton, and Rep. Schakowsky reintroduced the DATA Act on May 4. See, related story in this issue titled "Rep. Rush Reintroduces Data Accountability and Trust Act".

Brookman stated that HR 2221 "contained provisions on consumer access to data broker files in addition to security and breach notification requirements. That bill would have created a nationwide data breach notification standard, which CDT supports so long as that standard is at least as effective as the laws already in place at the state level."

Currently, almost all of the states have law pertaining to data breaches. Brookman added that "If a federal law were to preempt state laws and replace them with a weak notification regime, the result would be a significant step backwards for consumers and data security."

Brookman also outlined the CDT's recommendations for a federal data breach law, as well as for "enactment of a uniform set of baseline rules for personal information collected both online and off-line".

See also, prepared testimony of Eugene Spafford.

Rep. Rush Reintroduces Data Accountability and Trust Act

5/4. Rep. Bobby Rush (D-IL), Rep. Joe Barton (R-TX), and Rep. Jan Schakowsky (D-IL) introduced HR 1707 [LOC | WW], the "Data Accountability and Trust Act", or DATA Act. This is a reintroduction of HR 2221 [LOC | WW], a bill with the same title, from the 111th Congress.

Rep. Rush stated at the House Commerce Committee's (HCC) Subcommittee on Commerce, Manufacturing, and Trade's hearing on May 4, 2011, that "The DATA Act is the same bill that I introduced and was able to get passed out of this Committee, with bipartisan support, in December, 2009 in the 111th Congress." See, opening statement.

He continued that it is important "to remain technologically neutral, so that we don't pick winners and losers. We have also endeavored to better understand the unique natures of the business models and realities involving what the bill defines as "service providers," "information brokers" and "fraud databases" so as not to cause unintended consequences or to unreasonably disrupt the free flow of interstate commerce."

He added that "the DATA bill would allow for delays of up to 30 days -- or indefinitely -- before security breach notifications must be given to individuals in instances where a Federal, state, or local law enforcement agency, or a federal security or homeland security agency, says in writing that doing so would impede a criminal or civil investigation or threaten national security."

The bill was referred to the HCC.

PRC Creates New Office to Regulate Internet News, Domain Names, and Video

5/4. The People's Republic of China's (PRC) Xinhua announced in an English language release "the setting up of an office to manage Internet information" titled "State Internet Information Office" or SIIO.

Xinhua is a PRC government entity. Its primary responsibility is to disseminate information on behalf of the PRC government.

The Xinhua stated its release that the SIIO is a government office that "will direct, coordinate and supervise online content management and handle administrative approval of businesses related to online news reporting".

It will also "investigate and punish websites violating laws and regulations".

The SIIO will also "oversee telecom service providers in their efforts to improve the management of registration of domain names, distribution of IP addresses, registration of websites and Internet access".

It will also "direct the development of online gaming, online video and audio businesses and online publication industries". This release did not elaborate.

Wang Chen was appointed Director of the SIIO, and Qian Xiaoqian was appointed Vice Director. The Xinhua also stated that "Vice Minister of Industry and Information Technology Xi Guohua, and Vice Minister of Public Security Zhang Xinfeng were concurrently appointed vice directors of the office".

Sen. Durbin Is Drafting a Bill to Require Tech Companies to Protect Human Rights

5/4. Sen. Dick Durbin (D-IL) announced in a letter to Baidu that he is "working on legislation that would require technology companies to take reasonable steps to protect human rights or face liability". It would be modeled on the Foreign Corrupt Practices Act (FCPA), but be directed at companies involved in censorship of the internet.

Baidu is the People's Republic of China's national champion internet search provider. Sen. Dubin expressed his "serious concerns" about Baidu's "censorship of the internet". He propounded interrogatories regarding human rights and free expression, and Baidu's possible partnership with Facebook. Also, he briefly outlined his proposed legislation.

Sen. Dick DurbinFirst, Sen. Durbin (at right) urged Baidu "to take immediate and tangible steps to protect human rights, including freedom of expression and privacy". He argued that "your company has a moral obligation to respect fundamental human rights".

He continued that "Baidu controls the vast majority of the internet search market in China. Your share of the search market increased when Google, the second largest search engine in China, decided to stop cooperating with the Chinese government’s internet censorship regime."

See, stories titled "Google Offers Uncensored Search from Google Hong Kong" in TLJ Daily E-Mail Alert No. 2,063, March 24, 2010, and "Google Accuses Red China of Cyber Attacks Directed at Human Rights Activists" in TLJ Daily E-Mail Alert No. 2,036, January 19, 2010.

Sen. Durbin also said that "I recently returned from a Congressional delegation to China. I decided to personally verify the reports about Baidu's censorship. During my trip, I accessed Baidu's homepage and attempted to search for a number of terms. I was disappointed, but not surprised, to see that Baidu heavily censors its search results."

Sen. Durbin noted that Microsoft's Bing also censors search results on behalf of the Chinese government.

Second, Sen. Durbin asked Baidu to respond to two questions that Sen. Durbin stated he has posed to "dozens of American internet companies".

One, "Please describe your company's policies and practices for advancing and protecting human rights and minimizing the risk that your products and/or services will facilitate human rights abuses." Two, "What are your company’s future plans for protecting human rights, including freedom of expression and privacy, in China? Please describe any specific measures you will take to ensure that your products and/or services do not facilitate human rights abuses by the Chinese government, including censoring the internet and monitoring political and religious dissidents."

See also, Sen. Durbin's January 29, 2010, letters to Facebook, Amazon, Twitter, and numerous other companies, and web page with hyperlinks to their responses. See also, Sen. Durbin's August 2009, letter to numerous companies.

Sen. Durbin also asked Baidu, "Do you plan to enter into a partnership with Facebook to provide a social-networking service in China? If so, what safeguards will you implement to protect the users of this service?"

Finally, Sen. Durbin raised the specter of legislation that would impose liability upon Baidu and other companies that fail to protect human rights.

He wrote that "the technology industry is failing to address the serious human rights challenges that it faces. As a result, I am working on legislation that would require technology companies to take reasonable steps to protect human rights or face liability. Baidu and other public companies whose shares are traded on the U.S. stock exchange would be subject to this legislation."

Sen. Durbin did not release a draft of his bill. However, a spokesman for Sen. Durbin told TLJ that it would be modeled on the Foreign Corrupt Practices Act (FCPA), which is codified at 15 U.S.C. §§ 78dd, 78dd-1, 78d-2, and 78dd-3.

Another bill directed at foreign internet censorship, HR 1389 [LOC | WW], the "Global Online Freedom Act of 2011", was introduced in the House on April 6, 2011. See also, related story in this issue titled "Representatives Introduce Global Online Freedom Act".

Members of Congress have introduced numerous bills and resolutions related to internet censorship in recent years. For the 112th Congress, see also HRes 57, introduced on January 26, 2011, by Rep. Mary Mack (R-CA). This is merely a resolution that calls on the President to "oppose any effort to transfer control of the Internet to the United Nations or any other international governmental entity", to "recognize the need for, and pursue a continuing and constructive dialogue with the international community on, the future of Internet governance", and to "advance the values of a free Internet in the broader trade and diplomatic conversations of the United States".

There are also items directed at internet censorship in Vietnam. See, HRes 29, introduced on January 7, 2011, by Rep. Loretta Sanchez (D-CA), Rep. Zoe Lofgren (D-CA), and Rep. Ed Royce (R-CA). This is merely a resolution that the House "supports the right of Vietnamese citizens to access Web sites of their choosing and to have the freedom to share and publish information over the Internet". See also, HR 1410 [LOC | WW], the "Vietnam Human Rights Act of 2011", introduced on April 7, 2011, by Rep. Chris Smith (R-NJ) and others, a larger bill that recites in its findings that the government of Vietnam engages in internet censorship.

Senate Judiciary Committee Hold DOJ Oversight Hearing

5/4. The Senate Judiciary Committee (SJC) held a hearing titled "Oversight of the Department of Justice". The witness was Attorney General Eric Holder.

Most of Holder's prepared testimony [16 pages in PDF] for this hearing was identical to his prepared testimony [16 pages in PDF] for the House Judiciary Committee's (HJC) hearing on May 3, 2011. See, story titled "AG Holder Addresses Surveillance, IPR and Antitrust" in TLJ Daily E-Mail Alert No. 2,232, May 4, 2011.

Sen. Patrick Leahy (D-VT), the Chairman of the SJC, read an opening statement. Also, Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, read parts of an longer opening statement. Sen. Herb Kohl (D-WI), Sen. Jeff Sessions (R-AL), Sen. Charles Schumer (D-NY), and Sen. Jon Kyl (R-AZ) also participated.

Extension of Expiring Provisions of Surveillance Law. Holder requested that the Congress extend the sunsets on certain provisions of surveillance law.

Three provisions are set to expire on May 27, 2011. See, story titled "Obama Signs Three Month Extension of Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,198, February 25, 2011. For a more on the surveillance provisions at issue, and the history of extension of their sunset dates, see story titled "House and Senate Extend Expiring Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,054, March 3, 2010.

Sen. Leahy stated in opening that "I appreciate Attorney General Holder's consistent support of our efforts to reauthorize the expiring provisions of the USA PATRIOT Act and to improve them by increasing oversight and accountability. He has said repeatedly that legislation before the Senate, which we negotiated with the administration, poses no operational concerns."

Sen. Leahy asked Holder about his bill, S 193 [LOC | WW], the "USA PATRIOT Act Sunset Extension Act of 2011". Sen. Leahy was also the sponsor of a similar bill in the 111th Congress, S 1692 [LOC | WW], the "USA PATRIOT ACT Sunshine Extension Act".

Sen. Leahy's bills would extend the sunsets on several provisions of the USA PATRIOT Act, and address standards, accountability, and oversight, for the purpose of limiting government abuse of surveillance authority. However, many Senators and Representatives would support instead simple extensions, without addition provisions.

The SJC approved S 193 on March 10, 2011.

Holder stated, about S 193, that it is "critical that that bill become law as quickly as possible".

For more on Sen. Leahy's bills, see story titled "Senate Judiciary Committee to Consider Sen. Leahy's Surveillance Bill" in TLJ Daily E-Mail Alert No. 2,197, February 16, 2011, and story titled "Holder Writes Sen. Leahy Regarding Surveillance" in TLJ Daily E-Mail Alert No. 2,177, December 13, 2010.

Privacy, ECPA, and Cellphone Collection of Location Information. Sen. Leahy stated in opening that "Americans' privacy is another matter in which we are vitally interested. This year I established a Subcommittee on Privacy, Technology and the Law. The collection, use and storage of Americans' sensitive personal information, including by mobile technologies, is an important privacy issue."

He also stated that "Congress failed to enact the bipartisan Personal Data Privacy and Security Act, legislation I introduced the past several Congresses, and that was been approved by this Committee three times." See, S 1490 [LOC | WW] (111th Congress).

He added that "As we move forward to update the Electronic Communications Privacy Act and other Federal laws implicating Americans' privacy, I hope that the Justice Department will work with us on these important issues."

Sen. Leahy asked about Apple's location information collection. Holder noted that the SJC will hold a hearing on this matter on May 10, and "it is something that we will follow", and "determine whether there is appropriate action" for the DOJ to take.

Sen. Leahy asked the DOJ to work with the SJC on ECPA reform. Holder said "yeah, we want to make sure that we strike an appropriate balance" between privacy protection and enabling law enforcement access to information.

Intellectual Property. Sen. Leahy also discussed and asked about intellectual property. He said to Holder that "I applaud the work that you have done ... on IP enforcement", and asked "can you work with us?" However, he did not expressly reference his yet to be reintroduced "Combating Online Infringement and Counterfeits Act" or "COICA" bill. See also, S 3804 [LOC | WW] (111th Congress).

Holder said only that he would work with the SJC, and that "this is a very very substantial problem".

Confirmations. Holder requested that the Senate confirm Jim Cole as DAG, and all outstanding federal judicial nominees. Cole received a recess appointment in December.

Sen. Leahy also urged Senate confirmation of Jim Cole as well as Lisa Monaco to be Assistant Attorney General in charge of the DOJ's National Security Division (NSD).

Sen. Schumer also urged confirmation of Cole.

Internet Gambling. Sen. Kyl briefly discussed internet gambling. He stated that he wants longer maximum prison sentences. Holder said that the DOJ would be glad to "engage" with Sen. Kyl on this issue.

Interoperable Communications. Sen. Grassley addressed law enforcement communications in his opening statement.

He stated that "The integrated wireless network program (IWN) was recently suspended by the Department of Justice and it appears that the project will end without completing its original goal to integrate the wireless radios for all federal law enforcement agencies."

He stated that "I am concerned that this program is starting to look a lot like other failed IT programs at the department -- hundreds of millions of taxpayer dollars spent with nothing to show for it."

His longer written statement also states that "The IWN program was designed to implement a key recommendation of the 9/11 Commission and create a single interoperable communication system between federal law enforcement agencies. However, the Inspector General, the Government Accountability Office (GAO), and the Office of Management and Budget have all expressed concerns with the program and labeled it as high risk. To date, hundreds of millions of dollars have been spent, and there is no part of the country where all federal law enforcement radios are interoperable. The contractors have argued, as expected, that they just need more money and time and there are rumors that the department now wants to issue sole source contracts to companies just to buy equipment. I want to know more about this stop work order and whether the stop work order will simply be used to sole source a contract for radios to vendors outside the original IWN program."

Sen. Grassley's opening statement also references the importance of "the new Sate Secrets Policy ... the reauthorization of the USA PATRIOT Act, and efforts to reform critical laws such as the Communications Assistance to Law Enforcement Act and the Electronic Communications Privacy Act."

FCC Again Extends Freeze on Rules Regarding Jurisdictional Separations

5/4. The Federal Communications Commission (FCC) released a Report and Order [20 pages in PDF] that extends until June 30, 2012 the existing freeze of the FCC's rules regarding jurisdictional separations.

This item states that "We extend until June 30, 2012, the freeze on Part 36 category relationships and jurisdictional cost allocation factors that the Commission adopted in the 2001 Separations Freeze Order."

Jurisdictional separations is the process by which incumbent local exchange carriers (ILEC) apportion regulated costs between the intrastate and interstate jurisdictions. There is an order in effect, which the FCC keeps extending, that freezes category relationships and jurisdictional cost allocation factors, pending some hypothetical future comprehensive reform.

This item is FCC 11-71 in CC Docket No. 80-286. The FCC adopted it on May 3, and released it on May 4.

Obama Nominates Droney for 2nd Circuit

5/4. President Obama nominated Judge Christopher Droney to be a Judge of the U.S. Court of Appeals (2ndCir). See, White House news office release and release. He has been a Judge of the U.S. District Court (DConn) since 1997. Before that, he was a federal prosecutor.

Judge Droney, sitting by designation, joined in the opinion of a three judge panel of the Second Circuit in Arista Records v. Launch Media, holding that a webcasting service is not an interactive service within the meaning of 17 U.S.C. § 114(j)(7).

Judge Richard Wesley, who wrote the opinion, explained that the issue was "whether a webcasting service that provides users with individualized internet radio stations -- the content of which can be affected by users' ratings of songs, artists, and albums -- is an interactive service within the meaning of 17 U.S.C. § 114(j)(7). If it is an interactive service, the webcasting service would be required to pay individual licensing fees to those copyright holders of the sound recordings of songs the webcasting service plays for its users. If it is not an interactive service, the webcasting service must only pay a statutory licensing fee set by the Copyright Royalty Board."

The Court of Appeals held that it is not. Thus, President Obama has made a nomination of a Judge who has joined in an opinion that went against the interests of the record industry.

See also, story titled "2nd Circuit Rules Webcasting Service is Not an Interactive Service Under Section 114" in TLJ Daily E-Mail Alert No. 1,979, August 24, 2009. That opinion is also reported at 578 F.3d 148.

Obama Nominates Time Warner Copyright Lawyer for SDNY

5/4. President Obama nominated Katherine Forrest to be a Judge of the U.S. District Court (SDNY). See, White House news office release.

She has served briefly as a Deputy Assistant Attorney General in the Department of Justice's (DOJ) Antitrust Division. A spokesman for the DOJ told TLJ that she handles "civil matters" and "operations matters".

Before that, she worked for two decades for the law firm of Cravath Swaine handling intellectual property matters. She represented Time Warner companies, and companies in which they hold an interest, on copyright matters.

For example, she worked on the successful litigation against, UMG v., U.S. District Court for the Southern District of New York, D.C. No. 00-CV-0472 (JSR).

This was a landmark case, to the extent that it resulted in a reasoned opinion that rejected a fair use defense in the context of internet services. provided a music storage service that allowed subscribers to copy and store online the content of purchased CDs, and then play them back via the internet. However, the service was broad. The District Court found that "purchased tens of thousands of popular CDs in which plaintiffs held the copyrights, and, without authorization, copied their recordings onto its computer servers so as to be able to replay the recordings for its subscribers." The Court thus concluded that "although defendant seeks to portray its service as the ``functional equivalent´´ of storing its subscribers' CDs, in actuality defendant is re-playing for the subscribers converted versions of the recordings it copied, without authorization, from plaintiffs' copyrighted CDs."

On January 21, 2000, five recording companies, including Universal Music Group (UMG) and Warner Bros. Records, Inc., filed a complaint [10 pages in PDF] in the District Court against The Court granted the plaintiffs' partial summary judgment on April 28, 2000. It issued its opinion on May 4, 2000. That opinion is also reported at 92 F. Supp. 2d 349.

More recently, Forrest worked on the Google Books class action litigation.

Judicial Appointments

5/4. The Senate confirmed John McConnell to be a Judge of the U.S. District Court (DRI) by a vote of 50-44. See, Roll Call No. 66. It was a straight party line vote. No Democrats voted no. No Republicans voted yes. However, some Republicans first voted to end a Republican filibuster. Sen. Patrick Leahy (D-VT) praised the Senate for "restoring a longstanding tradition of deference to home state Senators with regard to Federal District Court nominations". He also said that McConnell is an "outstanding litigator in private practice". See, statement and statement. The U.S. Chamber of Commerce released a statement expressing opposition. One source of opposition has been McConnell's hefty contributions over the years to politicians who outsource litigation on a contingency fee basis. The Federal Election Commission's (FEC) individual contributor database also show that some of the Senators who voted for confirmation have received campaign contributions from McConnell.

5/4. President Obama nominated Yvonne Rogers to be a Judge of the U.S. District Court (NDCal). See, White House news office release. She has been a California state trial court judge, in Alameda County, since 2008. She previously worked for the law firm of Cooley Godward.

5/4. President Obama nominated Edgardo Ramos to be a Judge of the U.S. District Court (SDNY). See, White House news office release.

5/4. President Obama nominated Dana Christensen to be a Judge of the U.S. District Court (DMont). See, White House news office release.

5/4. President Obama nominated John Gerrard to be a Judge of the U.S. District Court (DNeb). See, White House news office release.

5/4. President Obama nominated Robert Scola to be a Judge of the U.S. District Court (SDFl). See, White House news office release.

People and Appointments

5/4. James Burns was named Deputy Chief of Staff at Securities and Exchange Commission (SEC). He replaces Kayla Gillan who went to work for RiskMetrics Group. See, SEC release.

5/4. The Department of Commerce (DOC) named the members of the Innovation Advisory Board, which was created by HR 5116, the "America COMPETES Reauthorization Act of 2010", in the 111th Congress. See, DOC release. The members are:

More News

5/4. Ron Kirk, the U.S. Trade Representative, sent a letters to Sen. Max Baucus (D-MT) and Sen. Orrin Hatch (R-UT) regarding pending U.S. Columbia free trade agreement (FTA), and a letter regarding the pending U.S. Korea FTA. See also, OUSTR release.

Genachowski Addresses Communications After Disasters

5/3. Federal Communications Commission (FCC) Chairman Julius Genachowski gave a speech regarding communications following earthquakes, tsunamis and other disasters.

He said that "The Japanese used broadband to mitigate the impact of the earthquake and tsunami, and their efforts offer examples for us. For example, the Japan Meteorological Agency's earthquake early warning system relied on broadband to automatically issue alerts via cell phones and TV after the first, less harmful earthquake shock wave, providing a short window for people to prepare for the more powerful shock wave that followed. The broadband-based warning system also caused many energy plants, industrial facilities, and transportation services to shut down automatically, averting problems at these locations."

He added that the US "doesn’t currently have a comparable earthquake warning system. It is something we should consider".

He also stated that "The events in Japan also demonstrate the importance of reliable and resilient Internet-based communications, especially mobile services. Residents of Japan with mobile phones, for example, were able to rely on their battery-powered devices to access web-based disaster message boards, Twitter, and social networking sites to report on their status and check for updates regarding family and friends."

Also, "The Japanese tragedy showed the role that broadcasting plays in emergencies. Radio in particular played a significant role in Japan, as residents who lost power could turn on the radio in their cars and receive essential information."

He also stated, regarding recent tornadoes in the US, that "carriers and broadcasters have been handling the damage to the communications infrastructure admirably, and we have not received express requests for assistance or special temporary authority".

Rep. Eshoo Reintroduces Broadband Conduit Bill

5/3. Rep. Anna Eshoo (D-CA) introduced HR 1695 [LOC | WW], the "Broadband Conduit Deployment Act of 2011".

She also sponsored HR 2428 [LOC | WW], the "Broadband Conduit Deployment Act of 2009", in the 111th Congress. These bills would require that broadband conduits, such as underground plastic pipes for housing fiber optic cable, be installed on federally funded highway construction or expansion projects.

HR 2428 would have amended Title 23 of the U.S. Code, which pertains to highways, to provide that the Department of Transportation (DOT) "shall require States to install broadband conduit in accordance with this section as part of any covered highway construction project".

It defined "broadband conduit" as "a conduit for fiber optic cables that support broadband or, where appropriate, wireless facilities for broadband service".

It defined "covered highway construction project" as "a project to construct a new highway or to construct an additional lane or shoulder for an existing highway that is commenced after the date of enactment of this section and that receives funding under this title".

Michael Powell, head of the National Cable & Telecommunications Association (NCTA), applauded Rep. Eshoo in a a release, and stated that this bill "will facilitate the further deployment of broadband service throughout the U.S."

Grant Siefert, head of the Telecommunications Industry Association (TIA), stated in a release that "According to some estimates, more than half of the cost of new broadband deployment is expenses that can be ascribed to the digging up and repaving of roadways. Further, it is estimated that the inclusion of broadband conduit in highway construction would add less than 1% to the cost of the overall project. Not only does this legislation go a long way towards facilitating the goal of universal access to broadband across the United States by substantially reducing the cost of deployment, but it also limits the negative impact on communities by reducing the amount of time that roads are under construction".

The companion bill in the Senate in the 111th Congress was S 1266 [LOC | WW], also titled the "Broadband Conduit Deployment Act of 2009", sponsored by Sen. Amy Klobuchar (D-MN).

The cosponsors of the just introduced bill are Rep. Henry Waxman (D-CA), Rep. Ed Markey (D-MA), Rep. Doris Matsui (D-CA) and Rep. Lynn Woolsey (D-CA). The bill was referred to the House Transportation and Infrastructure Committee.

MPAA's Dodd Wants Crack Down on Rogue Web Sites

5/3. Chris Dodd, head of the Motion Picture Association of America (MPAA) gave a speech at a Media Institute lunch in Washington DC. He said that the movie industry embraces new technologies, that movie piracy harms millions of working people, and that the government should crack down on rogue web sites.

"There are some who insist and falsely believe that the motion picture and television industry consists of a leadership that acts like dinosaurs, afraid of new technology and stubbornly refuses to evolve. Nothing could be further from the truth." Dodd added that "Not only are we not intimidated by the future -- we embrace it. Our ability to evolve, and to take advantage of the opportunities presented by new technology, has helped to cement our status as one of the most successful -- and economically important -- industries in the nation."

Dodd, who was a U.S. Senator until the end of the 111th Congress, stated that "The industry is moving by leaps and bounds to devise and test new offerings that allow consumers to purchase the content they want -- and use it on the platforms they want -- at a price that’s right for them."

Next, he said that "content theft" affects more than movie stars. It harms the other "2.4 million people who work every day in this business". He said that "threats to the content of the film industry are direct threats to those hard working middle-class families".

"This looting is the single greatest threat to the 2.4 million people who work in our industry. It is doing harm, not only to those of us in film and television, but to those who make their living producing music, software, pharmaceuticals, and a wide range of commercial goods as well. And it’s time that industry and government join forces to stop it. We need to crack down on the rogue websites that traffic in stolen goods", said Dodd.

This is a reference to the yet to be introduced bills that would give the Department of Justice (DOJ) new powers to target web sites dedicating to infringing activity, and the intermediaries that facilitate their operations.

The previous version of this bill in the 111th Congress was S 3804 [LOC | WW], the "Combating Online Infringement and Counterfeits Act". Sen. Patrick Leahy (D-VT), Rep. Lamar Smith (R-TX), and others have announced that they will introduce similar legislation in the 112th Congress.

See also, stories titled "Senators Introduce Bill to Enable DOJ to Shut Down Web Sites Dedicated to Infringement", "Bill Summary: Combating Online Infringement and Counterfeits Act", and "Commentary: Combating Online Infringement and Counterfeits Act" in TLJ Daily E-Mail Alert No. 2,132, September 21, 2010.

AG Holder Addresses Surveillance, IPR and Antitrust

5/3. The House Judiciary Committee (HJC) held a hearing titled "Oversight Hearing on the United States Department of Justice". The witness was Attorney General Eric Holder.

The technology related issued covered included electronic surveillance, extending the sunsets on expiring provisions of surveillance law, data retention mandates, enforcement of intellectual property laws, cyber security and antitrust.

Eric HolderHolder (at left) is scheduled to testify before a similar hearing of the Senate Judiciary Committee (SJC) on Wednesday, May 4.

Surveillance and Data Retention. Holder wrote in his prepared testimony [PDF] that many of the DOJ's recent prosecutions, "and the countless intelligence actions that do not result in prosecution but do disrupt terrorist and criminal activity -- depend on the government aggressively employing the full arsenal of available authorities, including the Foreign Intelligence Surveillance Act."

Rep. Lamar Smith (R-TX), the Chairman of the HJC, wrote in his opening statement that "I would like to thank the Attorney General for supporting the reauthorization of the expiring PATRIOT Act provisions."

On February 25, 2011, President Obama signed HR 514 [LOC | WW], the "FISA Sunsets Extension Act of 2011". This action merely extends sunsets for three months. The new sunset date is May 27, 2011. See, story titled "Obama Signs Three Month Extension of Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,198, February 25, 2011.

For a more detailed summary of the surveillance provisions at issue, and the history of extension of their sunset dates, see story titled "House and Senate Extend Expiring Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,054, March 3, 2010. For more on the legislative history of HR 514, see story titled "House to Continue Consideration of Bill to Extend Sunsets on Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,197, February 16, 2011.

Rep. Lamar SmithRep. Smith (at right) said that "Despite Sunday's victory, we cannot afford to leave our intelligence community without the resources it needs to dismantle terrorist organizations, identify threats from groups and individuals, and interrupt terrorist plots. So Congress must reauthorize the PATRIOT Act."

Holder also asserted that the DOJ "through its national security review process, is working to ensure that FBI national security investigations are conducted in accordance with the Constitution, federal statutes, Attorney General Guidelines, and internal FBI policy directives."

Investigations by the DOJ's Office of the Office of the Inspector General (OIG) in recent years have found wrongdoing at the FBI. On March 9, 2007, the DOJ's OIG released a report [30 MB in PDF] titled "A Review of the Federal Bureau of Investigation's Use of National Security Letters". See also, story titled "DOJ IG Releases Reports on Use of NSLs and Section 215 Authority" in TLJ Daily E-Mail Alert No. 1,551, March 13, 2007. That report covered the use of NSLs in 2003 through 2005. And, on March 13, 2008, the OIG released a report [187 pages in PDF] titled "A Review of the FBI’s Use of National Security Letters: Assessment of Corrective Actions and Examination of NSL Usage in 2006". See also, story titled "DOJ Inspector General Releases Second Report on FBI Misuse of National Security Letters" in TLJ Daily E-Mail Alert No. 1,730, March 12, 2008.

Rep. Smith also praised Holder for "his support of a mandatory data retention policy" for law enforcement purposes.

"Child pornography on the Internet may be our fastest growing crime, increasing by an average of 150% a year", said Rep. Smith. "Better data retention will assist law enforcement officers with the investigation of child pornography and other Internet-based crimes."

However, Rep. Smith added that "While I appreciate the Department's support on these important matters, I am concerned that in some cases this administration may have placed political and ideological considerations above enforcing the law."

Intellectual Property and Counterfeit IT Equipment. Holder also wrote that the DOJ is "dedicated to vigorous enforcement of intellectual property laws. Criminals who steal American ideas and products -- everything from counterfeit pharmaceuticals and electronics to pirated movies, music and software -- and sell them over the internet and elsewhere are undermining the U.S. economy and threatening public health, safety, and national security."

Holder also dropped the following statement into his prepared testimony. "Together with our law enforcement partners at Immigration and Customs Enforcement and Customs and Border Protection in the Department of Homeland Security, the Department of Justice has obtained 30 felony convictions and seized over $143 million in counterfeit computer network hardware manufactured in China as a part of Operation Network Raider. This important joint enforcement effort is designed to protect our nation's IT infrastructure from failures associated with counterfeit network hardware and to secure our supply chain."

These prosecutions go back many years. See, for example, FBI release of May 9, 2008, and DOJ release of May 6, 2010.

Gordon Snow, Assistant of the FBI's Cyber Division, testified in more detail about this before the Senate Judiciary Committee's (SJC) Subcommittee on Crime and Terrorism on April 12, 2011.

Snow wrote then in his prepared testimony that "Cyber crime that manipulates the supply chain could pose a threat to national security interests and U.S. consumers. Poorly manufactured computer chips or chips that have been salvaged and repackaged infringe on intellectual property rights and could fail at critical times, posing a serious health and safety threat to U.S. citizens."

In addition, said Snow, "Malware could be embedded on the chips to exfiltrate information from computers and result in the theft of Personally Identifiable Information (PII) that could then be used in future cyber crimes. As the quality of counterfeit goods increases, U.S. consumers may be challenged to tell the difference between authentic and fraudulent goods."

Snow elaborated that "Operation Cisco Raider is a joint initiative between the U.S. and Canada that targets the illegal distribution of counterfeit network hardware manufactured by private entities in China. The use of counterfeit network components can lead to exploitation of cyber infrastructure vulnerabilities and even network failure. Since 2006, Operation Cisco Raider has seized over 3,500 network components amounting to $3.5 million of Cisco retail products. Ten individuals have been convicted as a result of the joint initiative."

Antitrust. Holder said that in the last two years the DOJ "has focused on important sectors of the economy, including ... telecommunications, ... and technology. Because addressing antitrust issues increasingly demands a global approach, the Department has stepped up our efforts on the international front, advocating for global as well as domestic competition and engaging foreign competition authorities on both policy and particular enforcement matters."

He also discussed the Horizontal Merger Guidelines released by the DOJ and Federal Trade Commission (FTC) in August of 2010. He said that this document "provides for predictability and certainty, and thus, allows for more efficient business behavior."

And, he said that "the Antitrust Division acted against 10 merger transactions in FY 2010, reaching negotiated settlements to protect competition in each case. Already in FY 2011, we have reached negotiated settlements in four transactions, including the combination of Comcast, General Electric and NBC Universal, and Google's acquisition of ITA Software."

Holder also noted that the DOJ "reached a settlement with Adobe Systems, Apple, Google, Intel, Intuit, Pixar, and Lucasfilm that prevents them from entering into anticompetitive employee solicitation agreements."

Rep. John Conyers (D-MI), the ranking Democrat on the HJC, sent a letter to President Obama on May 3 in which he stated that "the fight against Osama Bin Laden and Al Qaeda has defined our national security policy and -- all too often -- our domestic politics. This focus has often come at the expense of other vital national interests, cherished civil rights and freedoms ..."

Also on May 3, Rep. Conyers, Rep. Jerrold Nadler (D-NY), the ranking Democrat on the HJC's Subcommittee on the Constitution, and 31 other House Democrats sent a letter to AG Holder regarding mortgage foreclosures.

Rep. Carney Introduces Another R&D Tax Credit Bill

5/3. Rep. John Carney (D-DE) introduced HR 1693 [LOC | WW], the "Research and Development Tax Credit Extension Act of 2011". This is one of many bills introduced in every Congress to amend 26 U.S.C. § 41(h) to make permanent, to temporarily extend, and/or to modify, the research and development (R&D) tax credit.

HR 1693 would make the R&D tax credit permanent. It would also raise from 14% to 17% the alternative simplified research credit.

The credit was first enacted in 1981 as a temporary measure. Since then the Congress has repeatedly extended it for one or a few years. With so many extensions, some companies have come to expect the credit to be continued, and often plan accordingly, even when the credit is allowed to lapse. Extensions have always been retroactive, with the exception of one year 15 years ago.

The last extension was enacted in Section 731 of HR 4853 [LOC | WW], a huge tax bill enacted in the closing days of the lame duck session at the end of the 111th Congress. The credit is now set to expire on December 31, 2011. See, story titled "Tax Bill Enacted With R&D Tax Credit Extension" in TLJ Daily E-Mail Alert No. 2,182, December 18, 2010.

By keeping the credit temporary, administration and Congressional budget staff, in making revenue projections, can operate under the fiction that tax revenues will increase when the credit expires. That is, temporary extensions of the R&D tax credit are part of the ongoing budgetary smoke and mirrors process.

By keeping the issue on the agenda, candidates for federal office, and especially incumbents, can rely upon a continuous flow of endorsements and campaign contributions from supporters of the credit.

There are no original cosponsors of HR 1693. It was referred to the House Ways and Means Committee (HWMC).

Rep. Doris Matsui (D-CA) spoke at a conference in Washington DC hosted by the Computer and Communications Industry Association (CCIA) on May 4, 2011, at which she advocated making the R&D tax credit permanent.

Rep. Doris Matsui"Recently I joined a bipartisan group of my colleagues, lead by Kevin Brady and John Larsen, in introducing legislation to make the research and development tax credit permanent", said Rep. Matsui (at right), referring to another bill, HR 942 [LOC | WW], titled the "American Research and Competitiveness Act of 2011".

HR 942 would raise the alternative simplified research credit to 20%, and make that permanent. However, it would only extend the basic R&D tax credit for one year, to December 31, 2012.

Rep. Kevin Brady (R-TX), Rep. John Larsen (D-CT), Rep. Matsui, and others circulated a "Dear colleague" letter [PDF] on March 22, 2011, urging others to support HR 942, which they introduced on March 8, 2011.

They stated that "Our legislation would simplify and strengthen the U.S. credit by increasing the ``alternative simplified credit´´ from 14% to 20% and making it permanent, while providing a one-year bridge for those companies that still use the ``traditional credit,´´ to December 31, 2012."

Rep. Matsui stated on May 4 that "Congress has continued to kick this can down the road. But, it is my hope that it will become a reality this year". Her late husband, former Rep. Bob Matsui (D-CA), also sponsored bills to make the R&D tax credit permanent.

Related House Bills:

Senate Bills:

People and Appointments

5/3. President Obama announced his intent to nominate Janice Eberly to be Assistant Secretary for Economic Policy at the Department of the Treasury (DOT). See, White House news office release.

EPIC Wants FTC to Mandate More Privacy Related Practices for Google

5/2. The Electronic Privacy Information Center (EPIC) submitted a comment [27 pages in PDF] to the Federal Trade Commission (FTC) regarding the consent agreement that settles the FTC's complaint against Google regarding Buzz.

On March 30, 2011, the Federal Trade Commission (FTC) issued an administrative complaint [8 pages in PDF] against Google alleging that it violated FTC Act, and the US-EU Safe Harbor Framework, in connection with the initial launch of its Buzz social networking service.

The FTC and Google simultaneously entered into an Agreement Containing Consent Order [9 pages in PDF] which mandates a privacy program for Google. The FTC also requested public comment on the agreement before making it final. See, story titled "FTC Issues and Settles Complaint Against Google" in TLJ Daily E-Mail Alert No. 2,213, March 31, 2011.

The EPIC requests that the FTC impose further privacy related mandates upon Google, that affect, not only its Buzz service, but also a wide range of other Google operations.

For example, the EPIC wants the FTC to require Google to "Encrypt Encrypt all of its cloud computing services". It also wants the FTC to require Google to "Protect the privacy and anonymity of Google Books users".

The EPIC also wants Google to "Build a Do Not Track mechanism into the company’s Chrome web browser".

It also wants Google to "Cease tracking mobile phone users’ locations or web-browsing habits without explicit opt-in permission".

See also, story titled "EPIC Launches Campaign Regarding FTC Settlement with Google on Buzz" in TLJ Daily E-Mail Alert No. 2,218, April 6, 2011.

Krasnow Advocates Dumping Public Airwaves Concept

5/2. The Media Institute published a short paper titled "The First Amendment and the Fallacy of the Public’s Airwaves". The author is Erwin Krasnow of the Washington DC law firm of Garvey Schubert Barer.

He wrote that the "public-airwaves concept" is "a mischievous notion that has been misused as a rationalization for government regulation".

He argued that the notion of public ownership of radio spectrum, and the resulting government licensing, is an "absurdity foisted on our broadcasting industry".

Moreover, "Closely related to the public-airwaves concept is the notion of scarcity. The combination of public ownership of the airwaves and scarcity has been used as the underlying raison d'etre for applying the public interest standard to regulate the programming practices of broadcasters."

"The Internet, satellite technology, digital broadcasting, and wireless broadband have revolutionized the way Americans communicate", wrote Krasnow. "There is no blinking from the fact that technological developments have advanced so far that the time has come for both Congress and the FCC to revisit and to renounce the notion of scarcity in today’s digital world."

He urged the Federal Communication Commission (FCC) to "Renounce the discredited concept of public ownership of the airwaves, bury the scarcity rationale, and adopt the approach" of "applying a public-interest standard based on minimally regulated marketplace forces rather than content regulation."

Krasnow is a former General Counsel of the National Association of Broadcasters (NAB). See also, Media Institute release.

OUSTR Releases Special 301 Report

5/2. The Office of the U.S. Trade Representative (OUSTR) released it report [53 pages in PDF] titled "2011 Special 301 Report" on the adequacy and effectiveness of other nations' protection of intellectual property rights.


1. Summary of Special 301 Process. This is an annual report, required by statute, prepared by the OUSTR, following the receipts of written comments. The OUSTR also held a public hearing this year, on March 2, 2011.

Large companies, and groups that represent the interests of copyright based industries, and as well as some affected nations, provide comments and information to the OUSTR. Recently, US based interest groups that advocate exceptions to, and limitations upon, intellectual property rights (IPR) have also been participating in the Special 301 report drafting process.

Copies of comments submitted to the OUSTR in this proceeding are published in the federal government's web site. This OUSTR proceeding is numbered USTR-2010-0037.

U.S. law provides for the protection of certain IPR. The U.S. also endeavors to incent other nations to protect the interests of US IPR based industries, through statutory protection, government enforcement, civil remedies, and other means.

The Special 301 process, which was created by the Trade Act of 1974, requires the executive branch to identify countries that fail to protect the IPR and market access of US companies, and take certain actions against those countries. These Special 301 provisions are codified at 19 U.S.C. § 2411, et seq.

Under the Special 301 provisions, the OUSTR identifies other countries that deny adequate and effective protection of IP or deny fair and equitable market access to U.S. artists and industries that rely upon IP protection. It does this primarily in annual reports. However, it also conducts out of cycle reviews (OCRs).

The statute then provides that if the OUSTR determines that "the rights of the United States under any trade agreement are being denied", then the OUSTR "shall take action". For example, it may "impose duties or other import restrictions", or "suspend, withdraw, or prevent the application of, benefits of trade agreement concessions to carry out a trade agreement with the foreign country".

Others tools for obtaining protection for US intellectual property based industries abroad include enforcement of multilateral agreements through the World Trade Organization (WTO) dispute settlement process, urging nations to implement existing agreements, and negotiating of new multilateral treaties, such as the Anti-Counterfeiting Trade Agreement (ACTA), and bilateral free trade agreement with IPR provisions, such as the US Korea FTA.

See, stories titled "ACTA Draft Released", "Summary of ACTA", and "Reaction to ACTA" in TLJ Daily E-Mail Alert No. 2,140, October 11, 2011. See also, story titled "Update on US Korea FTA" in TLJ Daily E-Mail Alert No. 2,230, May 2, 2011.

2. Summary of 2011 Special 301 Report. This report finds that "increased availability of broadband Internet connections around the world ... has also made the Internet an extremely efficient vehicle for disseminating copyright-infringing products".

The report again singles out one nation for lengthy discussion -- the People's Republic of China.

This report also announces that the OUSTR "invites any trading partner appearing on the Special 301 Priority Watch List or Watch List to work with the United States to develop a mutually agreed action plan designed to lead to that trading partner’s removal from the relevant list". (See, page 5.)

Ron Kirk, the U.S. Trade Representative, stated in a release on May 2 that "This year's Special 301 Report comes with a call to action for our trading partners. We are ready to work intensively with you to stop intellectual property theft that threatens IP-related jobs in the United States and other countries".

Ron KirkKirk (at right) added that "Today's report is a springboard for ambitious and collaborative partnerships in the coming year to strengthen protection for the innovation and creativity that drive jobs and exports for the United States and our partners around the world."

The 2011 report places 12 nations on its Priority Watch List: Algeria, Argentina, Canada, Chile, China, India, Israel, Indonesia, Pakistan, Russia, Thailand, Venezuela.

It places 29 nations on its Watch List: Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, Vietnam.

It also states that there will be an OCR for Italy, "to monitor progress on IPR protection and enforcement, in particular in the area of piracy over the Internet", and an OCR for "notorious markets". The report adds that the "USTR may conduct additional OCRs in consultation with a trading partner as circumstances warrant."

This report states that "Piracy over the Internet is a significant concern with respect to a number of trading partners, including Brazil, Canada, China, India, Italy, Russia, Spain, and Ukraine."

For example, "Unauthorized retransmission of live sports telecasts over the Internet continues to be a growing problem for many trading partners, particularly in China, and ``linking sites´´ are exacerbating the problem. In addition, piracy using new technologies is an emerging problem internationally."

It adds that "U.S. copyright industries also report growing problems with piracy using mobile telephones, tablets, flash drives, and other mobile technologies. In some countries, these devices are being pre-loaded with illegal content before they are sold. In addition to piracy of music and films using these new technologies, piracy of ring tones, ``apps´´, games, and scanned books also occurs."

"Recent developments include the creation of ``hybrid´´ websites that offer counterfeit goods in addition to pirated copyrighted works, in an effort to create a ``one-stop-shop´´ for users looking for cheap or free content or goods."

3. Notorious Markets. Recent OUSTR Special 301 reports have addressed notorious markets. The OUSTR now conducts a separate review for these marketplaces that deal in infringing goods. See, story titled "OUSTR Announces Separate Notorious Markets Process" in TLJ Daily E-Mail Alert No. 2,138, October 4, 2010.

The OUSTR's 2010 Special 301 report [54 pages in PDF], released on April 30, 2010, addressed notorious markets at pages 43-45.

The just released report characterizes its notorious markets review as an OCR.

However, the just released report states that the US "will encourage trading partners to enhance enforcement efforts including, for example, through ... strengthening enforcement against major channels of piracy over the Internet, including notorious markets".

Also, in its discussion of the PRC, the report addresses some of the notorious markets in that country. For example, it states that the US "is also encouraged by media reports that Baidu, recently listed for the fifth year in a row in the USTR Notorious Markets report, will be launching a licensed music search service soon. At this moment it appears that a licensing agreement has only been reached with Chinese rights holders."

It adds that the US "urges Baidu to reach a similar agreement with U.S. rights holders, and eliminate all pirated music from their site. Recent reports also indicate that Baidu has removed 2.8 million items from an online library after Chinese authors complained it was distributing their works without permission. However, the publishing industry continues to report problems involving unauthorized distribution of electronic journals in libraries."

This report does not discuss legislative proposals in the US Congress that relate to notorious markets. Late in the 111th Congress, Sen. Patrick Leahy (D-VT) and others introduced, and the Senate Judiciary Committee (SJC) amended and approved, S 3804 [LOC | WW], the "Combating Online Infringement and Counterfeits Act". Sen. Leahy and others have announced that they will introduce similar legislation in the 112th Congress.

See, story titled Senators Introduce Bill to Enable DOJ to Shut Down Web Sites Dedicated to Infringement", "Bill Summary: Combating Online Infringement and Counterfeits Act", and "Commentary: Combating Online Infringement and Counterfeits Act" in TLJ Daily E-Mail Alert No. 2,132, September 21, 2010.

4. PRC: Indigenous Innovation. The just released report devotes almost seven pages to the PRC, far more than for any other country. As expected, the PRC remains on the Priority Watch List. As in prior reports, it acknowledges commitments from PRC officials, and states that the US looks forward to further progress in IPR protection.

The report expresses concern over the PRC's "indigenous innovation" policy, and policies that "require or encourage U.S. parties to transfer their IPR to Chinese parties or to Chinese subsidiaries of U.S. firms".

It adds that some PRC regulations "call for technology transfer, and in certain cases, condition, or propose to condition, eligibility for government benefits or preferences on intellectual property being owned or developed in China, or being licensed, in some cases exclusively, to a Chinese party".

The report urges the PRC to "abandon" these policies and practices.

It argues that "Innovation will produce greater societal and global gains when market participants, irrespective of their nationality or the places where they may own or develop intellectual property, are able to enjoy the fruits of their investments without the danger that their efforts, including in developing and commercializing intellectual property, will be undermined, or shared with others who did not undertake the initial risk. The United States encourages China to adopt policies that eliminate improper government intervention in intellectual property licensing and other lawful contractual business arrangements, and that welcome exports to and investments in China, irrespective of where the intellectual property in the products and services is owned or developed."

Hu Jintao
EOP Photo,
January 19, 2011

The report also notes that at the US China Joint Commission on Commerce and Trade (JCCT) meetings in 2010, at meetings of the JCCT IPR Working Group, and at the meeting in January of 2011 between President Obama and President Hu Jintao (at right), the US "raised its concerns regarding China's indigenous innovation product accreditation system. Notably, President Hu stated that ``China will not link its innovation policies to the provision of government procurement preferences.´´"

The report states that "This is a very important commitment, and the United States looks forward to full implementation of this commitment in all Chinese central, provincial and municipal laws, regulations, rules and regulatory documents that link innovation policies to the provision of government procurement preferences."

5. PRC: Online Piracy. The report also addresses online piracy in the PRC. It states that "It is estimated that there are 457 million Internet users in China, as compared with 223 million in the United States" and that "99% of all music downloads in China are illegal". However, the report documents progress in some areas, particularly online video distribution.

Neil Turkowitz, of the Recording Industry Association of America (RIAA), stated in a release that "The Chinese marketplace, long dominated by piracy, has evolved in precisely the wrong manner. The physical market was decimated by piracy, and digital distribution promised a new beginning. Unfortunately, the digital market now closely resembles its physical counterparts, with theft levels well above 90 percent, fueled principally by the deep-linking, unlicensed music services by companies such as Baidu, Sohu and Xunlei who, as major actors in the Internet space, should know better."

However, Turkowitz acknowledged that the PRC "has recently undertaken some enforcement actions against Baidu, and has committed to reform its legal structure to ensure that those who facilitate copyright infringement like Baidu are held to be as equally liable as those who directly engage in this theft."

6. PRC: Criminal Enforcement and Private Rights of Action. The OUSTR report also addresses the lack of government criminal enforcement actions in the PRC against sellers of counterfeit goods. It references high thresholds for bringing actions, and adds that "fines lack deterrent effect".

On February 15, 2011, the US China Business Council (USCBC) submitted a comment to the OUSTR in which it offered a gloomy perspective of civil remedies in the PRC. It wrote that "companies remain skeptical about the viability of China's courts as an option for battling IPR infringement. Last year, 43 percent of respondents said that China's courts were still not a viable option in any cases, while 54 percent said that they would be viable in some cases. Even when companies are successful, however, fines and punishments for administrative IPR enforcement cases and court cases are often too low to serve as adequate disincentives."

The USCBC comment also reported the results of a survey of its membership. It wrote that "companies report that the overall IPR picture has shown steady improvement, though at a slow pace."

The USCBC also offered recommendations for the PRC for dealing with internet based infringement. It recommended "Drafting and enforcing new rules to define and regulate IPR on the Internet, including use of trademarks on websites, use of websites as platforms for goods, and trademark-related aspects of domain name registration; Increasing the monitoring of Internet sales and distribution channels to crack down on counterfeiting; and Strengthening intermediary liability rules on the Internet for both trademark-infringing goods and copyright piracy."

7. PRC: Standards Development and Patents. The OUSTR report also expresses concern about the PRC's "proposed treatment of patented technology in connection with domestic standards development processes".

It states that the PRC has proposed to "establish the general principle that mandatory national standards should not incorporate patented technologies. However, the draft measures provide that when mandatory national standards incorporate patented technologies, there is the possibility of a compulsory license if a patent holder does not grant a royalty-free license."

The OUSTR report explains that "This differs from the typical practice of accredited standards developing organizations in other countries, which require disclosure of intellectual property in the standards development process and support ``reasonable and nondiscriminatory´´ (RAND) licensing policies with respect to intellectual property that is incorporated into a standard. RAND policies require concerned patent rights holders to make any intellectual property incorporated into the standards that these bodies develop available to all interested parties on RAND terms. Within the standards development process, licensing terms are typically negotiated between the right holder and parties interested in implementing the standards."

8. Canada. Canada is an anomalous nation. It is a developed nation, with intellectual property based industries, and a party to ACTA negotiations. However, it continues draw the ire of US IP based companies for its failure to protect their IPR.

The report maintains Canada on the Priority Watch List for the third year. It notes that "Canadian efforts in 2010 to enact long-awaited copyright legislation were unsuccessful." The report urges Canada to "to make the enactment of copyright legislation that addresses the challenges of piracy over the Internet, including by fully implementing the WIPO Internet Treaties, a priority for its new government".

The RIAA's Neil Turkowitz stated in a release on May 2 that "Canada is virtually alone in the developed world in failing to bring its copyright standards into line with accepted international standards for the digital age. As a direct result, it has become a haven for many unscrupulous individuals and companies wishing to cash in from providing access to illegal content. We hope that Canada’s new government, when installed, will move quickly to address this harmful anachronism." See also, Turkowitz's February 15 comment.

However, concerns extend beyond online copyright infringement. For example, Intel submitted a comment on February 15, 2011, in which it urged the OUSTR to keep Canada on the Priority Watch List because of its failure to protect well know marks.

9. Italy. The report puts Italy on the Watch List, and states that it will be the subject of an OCR.

The report states that "Italy continued to make progress in improving its IPR protection and enforcement in 2010, including by increased cooperation among law enforcement officials and improved enforcement actions against certain types of IPR violations. The United States remains concerned that, overall enforcement against copyright piracy continues to be inadequate and that piracy over the Internet continues to grow, severely damaging the legitimate market for distribution of copyrighted works."

The Entertainment Software Association (ESA) stated in a release that "Italian Internet subscribers were responsible for more P2P file sharing of member titles than any other country in 2010".

The OUSTR report also expresses concern about a "ruling prohibiting the monitoring of peer-to-peer networks".

10. India. The report again puts India on the Priority Watch List.

It states that "India continued to make incremental progress in 2010 to address its IPR legislative, administrative, and enforcement issues. Improvements in 2010 included the introduction of a Copyright Amendment Bill, which may assist in addressing some aspects of the widespread piracy of copyrighted materials on the Internet. However, the bill may not fully implement the WIPO Internet Treaties."

It also urges India to adopt "stronger patent protection" and to "strengthen its criminal enforcement regime".

11. Reaction of IP Based Industries. The groups that represent the interests of US IP based industries, including movies, music, software, and games, praised the OUSTR and its report, and articulated the harms of lack of IPR protection.

Chris DoddChris Dodd (at left), head of the Motion Picture Association of America (MPAA), stated in a release that "The USTR's Special 301 report is a stark reminder of the challenges facing the strongest and most reliable American exporters -- the creators of filmed entertainment. Movie theft, especially online, is a growing threat -- not only to the 2.4 million men and women working in the motion picture and television community, but also to the health of the American economy as a whole."

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that the OUSTR report "underscores the severity of the problem that the software industry faces with rampant piracy in the world's fastest-growing markets ... Prominent on the Administration’s watch lists are countries such as China, Russia, Indonesia, and many others where the IT hardware market is growing rapidly but software piracy is unacceptably high."

He continued that "I applaud the Obama Administration for its ongoing efforts to focus attention on the need for robust intellectual property protection and enforcement to spur technological innovation and economic growth. Given the scale of software piracy around the world, governments must take concrete steps to curb this theft in all its forms. We need to see sustained efforts and a roadmap for progress. That's why a particularly important element of this year's Special 301 report is US Trade Representative Ron Kirk’s call to other governments to come forward with concrete action plans. BSA applauds this initiative."

Michael Gallagher, head of the ESA, which represents computer and video game companies, stated in a release that "One of the fastest ways to get our economy back on track is to incent and reward high value intellectual property like video games ... We thank Ambassador Kirk for his leadership and urge outlying countries to elevate laws and enforcement practices to protect copyrighted works."

Eric Smith, of the International Intellectual Property Alliance (IIPA), stated in a release that the USTR "recognizes the devastating impact copyright piracy -- both online and physical -- has on the continued viability of creative industries in both developed and emerging markets".

He wrote that this report "signals strongly the Administration's commitment to protect our nation's creative industries abroad through strong copyright protection, reducing piracy through more effective enforcement, and toppling market access barriers, steps that will help boost U.S. exports, create good jobs here at home, and contribute to U.S. economic growth, in line with the Administration's goals.

He also wrote that the "IIPA is particularly pleased that in today's announcement, USTR Ron Kirk commits to pay special attention to Internet piracy issues in the coming year." See also, the IIPA's February 15 comment.

12. Criticism of Report. Rashmi Rangnath, of the Public Knowledge (PK), stated in a release that "We are disappointed with the latest Section 301 report."

She wrote that the OUSTR "declined generally to adopt our recommendations that the policy prescriptions be more specific and that countries not be required through the Special 301 process to implement agreements and treaties with which they disagree, such as World Intellectual Property Organization (WIPO) copyright treaty and the Anti-Counterfeiting Trade Agreement (ACTA)."

Rashmi Rangnath
Copyright PK

Rangnath (at right) added that "We are also skeptical about the proposal for the 'mutually agreed upon solution' for intellectual property enforcement with other countries to be taken off of the watch list. The question is how much pressure would be brought to bear on countries to agree to such a solution. We don't know what the process was before nor much about how it would work under this new procedure."

Previously, Rangnath wrote in a comment submitted to the OUSTR on March 9, 2011, that "rights holder comments have typically viewed intellectual property laws only as a means of providing them with exclusive rights, and regarded skeptically any country's limitations and exceptions to those rights. However, U.S. law, as well as the laws of many other countries, not only protect owners' rights but also provide users with rights intended to advance culture, learning, and innovation. Protection of intellectual property rights or fair market access are not inconsistent with these limitations and exceptions."

She expressed particular concern about the inclusion of Canada, Chile and India on the Priority Watch List.

The PK and Electronic Frontier Foundation (EFF) submitted a joint comment on February 15, 2011, in which they argued that "the USTR should consider the economic effects of its determination on all constituencies, not only large copyright holders."

They continued that "constituents as varied as libraries, teachers, students, individual innovators, documentarians, and cover artists are all able to contribute to society by utilizing the limitations and exceptions in U.S. copyright law. By pressuring other countries to omit limitations and exceptions in their domestic copyright law, the USTR prevents U.S. constituencies from marketing their works internationally and from making lawful uses of foreign works domestically." (Footnote omitted.)

See also, February 15, 2011, comment submitted by Knowledge Ecology International.

Sen. Leahy Urges Commitment to Rights and Principles Following Bin Laden's Death

5/2. Sen. Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee (SJC), stated in a release issued following the death of Osama bin Laden that "We should also stand united in our commitment to the rights and principles that define us as a democratic Nation that respects the rule of law. That is what distinguishes us from those who seek to harm us, it is what will ultimately enable us to succeed against them, and it is what people around the world expect of us."

Sen. Leahy continued that "Regrettably, the September 11 attacks, and other acts of international terrorism, have often been used to justify policies which strayed dangerously from those rights and principles."

Sen. Leahy is the sponsor of S 193 [LOC | WW], the "USA PATRIOT Act Sunset Extension Act of 2011". He was the sponsor of a similar bill in the 111th Congress, S 1692 [LOC | WW], the "USA PATRIOT ACT Sunshine Extension Act".

These bills would extend the sunsets on several provisions of the USA PATRIOT Act, and address standards, accountability, and oversight, for the purpose of limiting government abuse of surveillance authority.

For more on these bills, see story titled "Senate Judiciary Committee to Consider Sen. Leahy's Surveillance Bill" in TLJ Daily E-Mail Alert No. 2,197, February 16, 2011, and story titled "Holder Writes Sen. Leahy Regarding Surveillance" in TLJ Daily E-Mail Alert No. 2,177, December 13, 2010.

People and Appointments

5/2. The Senate confirmed Kevin Sharp to be a Judge of the U.S. District Court (MDTenn) by a vote of 89-0. See, Roll Call No. 62.

5/2. Brian Markwalter was promoted to SVP, Research and Standards, at the Consumer Electronics Association (CEA). See, CEA release.

5/2. Traci Morris was named Director of Operations of Native Public Media (NPM). See, NPM release.

More News

5/2. The Semiconductor Industry Association (SIA) released data on recent semiconductor sales. It stated that "worldwide sales of semiconductors were $25.3 billion for the month of March 2011, a 2.5 percent increase from the prior month when sales were $24.7 billion, and an increase of 8.6 percent from March 2010 when sales were $23.2 billion. Sales in the first quarter of 2011 reached $75.8 billion, an increase of 8.6 percent over last year's first quarter sales of $69.8 billion and a sequential increase of 0.4 percent over the prior quarter." See, SIA release and table and chart.

5/2. The U.S. Patent and Trademark Office (USPTO) announced that it will host an event titled "2011 National Trademark Expo" on October 14-15, 2011, at the USPTO headquarters in Alexandria, Virginia. See, USPTO release.

5/2. The Supreme Court issue an Orders List [9 pages in PDF] that discloses that it granted certiorari, vacated, and remanded in Cellco Partnership v. Litman and Litman v. Cellco Partnership, Sup. Ct. Nos. 10-398 and 10-551. The issue is arbitration clauses in consumer contracts that prohibit class action arbitration. The Supreme Court remanded to the U.S. Court of Appeals (3rdCir) for further consideration in light of its April 27, 2011, opinion [39 pages in PDF] in AT&T Mobility v. Concepcion. See, story titled "Supreme Court Holds Class Action Waiver Clauses in Arbitration Contracts Are Enforceable " in TLJ Daily E-Mail Alert No. 2,228, April 28, 2011. See also, May 21, 2010, vacated opinion [8 pages in PDF] of the Court of Appeals.

5/2. Jim Harper, Director of Information Policy Studies at the Cato Institute, wrote in a short piece that "Now that bin Laden is gone, the public will be more willing to carefully balance security and privacy in our free country. By a small, but important margin, courts will be less willing to indulge extravagant government claims about threat and risk."

5/2. The Information Technology and Innovation Foundation (ITIF) released a paper [16 pages in PDF] titled "The Chain of Logic to Get to a Robust National Innovation and Competitiveness Policy". The author is the ITIF's Robert Atkinson. This paper urges the U.S. to develop a "comprehensive national innovation and competitiveness policy", and intervene in economic activity. It urges industry subsidies, more subsidization of university research, more spending on STEM education, tax incentives for corporations to invest in the U.S., and dealing with "the rampant innovation mercantilism practiced by some of our trading partners".

5/2. The Free Press (FP) released a paper regarding Federal Communications Commission's (FCC) regulation of news reporting via conditions imposed in antitrust merger reviews. This paper pertains to Comcast NBCU, and local news and information. It is titled "No News is Bad News: An Analysis of Comcast-NBCU Compliance with FCC Localism Conditions". The author is the FP's Corrie Wright.

Go to News from April 26-30, 2011.