TLJ News from January 1-5, 2013

House Bill Would Prevent FCC from Subsidizing Lifeline Cell Phone Service

1/4. Rep. Tim Griffin (R-AR) and Rep. Kerry Bentivolio (R-MI) introduced HR 176 [LOC | WW], the "Stop Taxpayer Funded Cell Phones Act of 2011".

This bill would amend 47 U.S.C. § 254 to prevent the Federal Communications Commission (FCC) from using universal service taxes to subsidize commercial mobile service providers through its Lifeline program. This bill would not affect other FCC universal service programs.

The FCC Lifeline program subsidizes landline and cell phone service for low income customers -- those with annual incomes at or below 135 percent of the Department of Health and Human Services' (DHHS) poverty guidelines.

The FCC also has a Lifeline pilot program for broadband service. Although, it exceeds statutory authority. Section 254 and 47 U.S.C. § 214(e) limit universal service subsidies to a "common carrier" and "telecommunications carriers" providing "telecommunications services".

There have been legislative proposals to expand the FCC Lifeline subsidies to include broadband. See for example, HR 3646 [LOC | WW], the "Broadband Affordability Act of 2009" in the 111th Congress, and HR 2163 [LOC | WW], the "Broadband Affordability Act of 2011" in the 112th Congress, both introduced by Rep. Doris Matsui (D-CA). See also, story titled "Rep. Matsui Introduces Bill to Expand FCC Lifeline Universal Service Subsidies to Cover Broadband" in TLJ Daily E-Mail Alert No. 1,993, September 30, 2009.

HR 176 states that "A provider of commercial mobile service may not receive universal service support under sections 214(e) and 254 of the Communications Act of 1934 (47 U.S.C. 214(e); 254) for the provision of such service through the Lifeline program of the Federal Communications Commission."

Rep. Griffin introduced a substantially identical bill in the 112th Congress, HR 3481 [LOC | WW], the "Stop Taxpayer Funded Cell Phones Act of 2011". In reintroducing the bill, he did not update the year of the bill from 2011 to 2013. He introduced HR 3481 on November 18, 2011. It was referred to the House Commerce Committee (HCC), and its Subcommittee on Communications and Technology. There were no hearings or markups of that bill during the 112th Congress. However, that bill eventually had 20 cosponsors.

The just introduced bill was also referred to the HCC. Neither Rep. Griffin nor Rep. Bentivolio are members.

Rep. Serrano Introduces Bill to Require Notice of Mobile Device Tracking

1/4. Rep. Jose Serrano (D-NY) introduced HR 210 [LOC | WW], an untitled bill that would require retail establishments that use mobile device tracking technology to display notices.

This bill would provide that "A person who owns or operates a retail establishment and uses mobile device tracking technology in such establishment shall display in a prominent location in such establishment a notice that such technology is in use and that individuals can avoid being tracked by turning off their mobile devices."

The Federal Communications Commission (FCC) is the federal agency with authority to regulate communications. However, in recent years, it has done very little to protect consumer privacy, and much that reduces privacy, particularly in mobile communications. Hence, this bill would give regulatory authority to the Federal Trade Commission (FTC).

This bill states that "A violation of section 1(a) or a regulation promulgated pursuant to section 1(b) shall be treated as an unfair or deceptive act or practice in violation of a regulation under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive acts or practices."

It defines a "mobile device" as "mobile telephone" or "any device that uses or provides access to commercial mobile data service", as defined by Section 6001 of the spectrum bill enacted in 2012. See, HR 3630 [LOC | WW], the "Middle Class Tax Relief and Job Creation Act of 2012".

This bill would give the FTC authority to write implementing rules, pursuant to Administrative Procedure Act (APA) process, which is codified 5 U.S.C. § 553.

It was referred to the House Commerce Committee (HCC). Rep. Serrano is not a member.

REAL ID Act Still Not Implemented

1/4. On December 20, 2012, the Department of Homeland Security (DHS) yet again extended deadline for states to come into compliance with the state identification process requirements imposed by the REAL ID Act. Nominally, the deadline had been January 15, 2013. Also, the 112th Congress adjourned without revising the REAL ID Act.

The Congress enacted this widely disregarded mandate back in 2005 in an attempt to impose federal control over the state identification document process, and to mandate state electronic databases and data sharing.

This expensive mandate is largely unfunded by the federal government, unwanted by many voters, and hence, unfulfilled by most states.

The DHS stated in a release that "Beginning January 15, 2013, those states not found to meet the standards will receive a temporary deferment that will allow Federal agencies to continue to accept their licenses and identification cards for boarding commercial aircraft and other official purposes."

The DHS added that "develop a schedule for the phased enforcement of the Act's statutory prohibitions to ensure that residents of all states are treated in a fair manner. DHS expects to publish a schedule by early fall 2013 and begin implementation at a suitable date thereafter. Until the schedule is implemented, Federal agencies may continue to accept for official purposes driver's licenses and identity cards issued by all states."

The DHS has set no new deadline for compliance.

Rep. Lamar Smith (R-TX), the current Chairman of the House Judiciary Committee (HJC), stated in a release that "The Administration should not prolong REAL ID implementation. By doing so, they disregard the law of the land."

Rep. Smith, however, has little cause to be shocked by state and DHS disregard for the REAL ID Act.

First, the enactment of the REAL ID Act demonstrates that Congressional leaders, by manipulating agendas, can alter legislative outcomes. Since Kenneth Arrow first published his Social Choice and Individual Values in 1951 economists and game theorists have been writing theoretically about this.

Rep. James Sensenbrenner (R-WI), the architect of the enactment of this Act, manipulated the agenda masterfully. He sponsored the original bill, HR 418 (109th Congress), the "REAL ID Act of 2005". But, it was not going to be enacted into law as a stone alone bill. So, HR 418 was added to HR 1268 (109th Congress), an emergency supplemental defense and anti-terrorism appropriations bill, that also included additional funding for the FBI, DEA, and other agencies. Many members of the House and Senate voted for this bill because of the defense appropriations, and in spite of the REAL ID Act.

President Bush signed HR 1268 (109th) on May 11, 2005. It is now Public Law 109-13. See, Sections 201-207 of Title B.

Second, while scope of the federal legislative power is broad, under the US system of separation of powers -- both between legislative, executive, judicial, and regulatory bodies, and between the federal government and the multitude of state governments -- the power of the legislature to see its laws put into effect is minimal. Without the assistance of other governmental bodies, the power of the Congress is reduced to merely adding words to the U.S. Code.

Rep. Sensenbrenner and Rep. Smith were successful in adding words. They have not succeeded in implementation.

While the REAL ID Act was enacted as part of an appropriations bill, it did not appropriate funds necessary to reimburse the states for the cost of implementing the standards contained in the Act. That is, it is an unfunded mandate. The federal government has provided some grants to states, but these provide only a small fraction of the actual cost of coming into compliance with the Act.

Rep. Sensenbrenner, the architect of the enactment of the Act, complained in a release that "Earlier this year, the Administration testified before a Judiciary Subcommittee hearing that DHS would not delay the deadline for states to comply with REAL ID." See, story titled "House Judiciary Subcommittee Holds Hearing on REAL ID Act" in TLJ Daily E-Mail Alert No. 2,352, March 21, 2012.

He continued that "I am disappointed and extremely concerned that the Obama Administration will not be honoring that commitment. This is a dangerous reversal. The Administration is not taking seriously the security risk of delaying REAL ID implementation further."

Rep. Sensenbrenner added that "Every step of the way, the Administration has stonewalled implementation of this critical national security law. They have not given states necessary and timely guidance, encouraging states not to comply with delay after delay. This is the fourth time DHS delayed implementation of something the 9/11 Commission said was critical to preventing another terrorist attack. The 9/11 hijackers had at least 30 pieces of identification on them. We need the Administration to implement the law and fulfill the 9/11 Commission's recommendations."

The Obama administration and DHS have reasons not to try to compel states to enforce the statute. Realistically, this would mean directing the federal government not to recognize non-compliant identification. For example, the Obama administration could tell citizens of entire states that they lack sufficient identification to board an aircraft. But, the administration does not wish to incur the consequences of such a decision.

On September 21, 2012, the Government Accountability Office (GAO) released a report [47 pages in PDF] titled "Drivers License Security: Federal Leadership Needed to Address Remaining Vulnerabilities".

On January 28, 2013 at 11:00 AM the Heritage Foundation (HF) will host a panel discussion titled "REAL ID Realities: Perspectives on the Future of the REAL ID Program". The speakers will be Jennifer Cohan (Delaware Division of Motor Vehicles), Lori Rectanus (GAO), Andrew Meehan (Coalition for A Secure Driver’s License), and Jessica Zuckerman (HF). See, notice.

BLS Releases December 2012 Employment Data

1/4. The Department of Labor's (DOL) Bureau of Labor Statistics (BLS) released employment data for the U.S. for the month of December 2012.

The BLS stated in a release that the seasonally adjusted unemployment rate in the US in December was 7.8%. It stated that this is unchanged from November.

Actually, one month ago the BLS reported that the November unemployment rate was 7.7%. It then revised that up to 7.8%.

Data for employment by industry sector shows that employment decreased in most tech sectors. One exception was in the category of "Computer systems design & related services", which continued its job growth trend.

BLS Table A-1, which is based on household surveys, shows that the seasonally adjusted total labor force grew from 155,319,000 to 155,511,000, an increase of 192,000. The labor force participation rate remained constant at 63.6%. This same table shows that total employment grew from 143,277,000 to 143,305,000, an increase of 28,000. The BLS reported that total unemployment increased from 12,042,000 to 12,206,000, an increase of 164,000 unemployed people.

Using these numbers, the unemployment rate, calculated out to two more digits, rose from 7.753% to 7.849%. The BLS rounds to the nearest one tenth of one percent. However, without this rounding, unemployment rose by almost a tenth a one percent in December.

BLS Table B-1, which is based upon business surveys, reveals employment trends in various industry sectors, including information and communications technology (ICT) sectors. The BLS's categories do not facilitate precise analysis of trends in ICT. Nevertheless, the data set out in the table below contains ICT related categories. (This table also includes legal services because most of the subscribers to TLJ are lawyers.)

The table below contains ICT related excerpts from the BLS table titled "Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail". This is the seasonally adjusted data.

Table: Total Number of Employees in Thousands by ICT Industry Sector
  Computer & peripheral equipment 162.2 164.6 164.3 164.3
  Communication equipment 112.2 107.1 106.8 106.7
  Semiconductors & electronic comp. 386.5 384.7 383.2 382.8
Information Services:        
  Publishing industries, except Internet 746.1 736.2 733.0 730.3
  Motion picture & sound recording 363.8 365.3 381.5 378.8
  Broadcasting, except Internet 279.6 278.4 278.4 278.2
  Telecommunications 846.9 828.5 828.2 826.4
  Data processing, hosting & related serv. 242.5 241.6 240.7 240.9
  Other information services 165.5 171.2 171.9 170.6
Professional Services:        
  Legal services 1,115.6 1,122.6 1,122.4 1,123.4
  Computer systems design & related serv. 1,557.8 1,623.8 1,632.7 1,638.3
Source: BLS, December 7, 2012 employment report, Table B-1.

Commentary on the Unemployment Rate and Participation Rate

1/4. This commentary piece explains the unemployment rate and participation rate, and recites their recent trends. While far more attention is focused on the unemployment rate, this piece argues that the participation rate now warrants notice. It is in a steep decline.

This piece also argues that this could impact technology related policy making. In particular, there is a large and growing number able bodied trained workers who no longer have jobs, and are not longer looking for jobs. They now longer count in calculating the unemployment rate, but they still vote. Politicians may seek their support by casting blame for their lack of employment on foreign competition. This may result in policies that undermine free trade, and the free flow of services, capital, data, and tech workers. This would harm tech companies and consumers both in and outside of the US.

Most of the attention to the Bureau of Labor Statistics (BLS) employment data is focused on the unemployment rate. In December it was 7.8%. In December of 2011 is was 8.5%. In December of 2010 it was 9.3%. In December of 2009 it was 9.9%. It was at a low point of 4.4% for several months in 2006 and 2007.

The participation rate in December was 63.6%. It has dropped precipitously from 66.2% in the last four years. The unemployment rate peaked at 10% in October of 2009. In contrast, the participation continues its steady decline. The participation rate had remained very close to just over 66% from mid 2003 through mid 2008.

See, TLJ table titled "U.S. Civilian Labor Force Participation Rate: January 2001 through December 2012: Seasonally Adjusted".

See, full story.

More News

1/4. American Antitrust Institute (AAI) released a paper [19 pages in PDF] titled "The Dormant Commerce Clause, Anticompetitive State Regulation, Competition and Consumers". The author is the AAI's Kexin Li. This article focuses on the May 28, 2009 opinion of the U.S. Court of Appeals (9thCir) in National Association of Optometrists & Opticians v. Brown, 567 F.3d 521.

Rep. Holt Introduces Bill to Create Tax Credit for Investing in Smallish Businesses with High Rates of Spending on Research

1/3. Rep. Rush Holt (D-NJ) introduced HR 122 [ LOC | WW], the "Creating Jobs From Innovative Small Businesses Act of 2013", a bill to incent investment in small businesses that devote a high percentage of their expenditures to research and experimentation.

HR 122 would not affect the research and development (R&D) tax credit that is codified at 26 U.S.C. § 41. Rather, it would amend the Internal Revenue Code (IRC) to create a credit against income tax for equity investments in research oriented small business concerns. Like the R&D tax credit, it would be another means for incenting research.

Rep. Rush HoltRep. Holt's (at right) bill provides that this "high technology investment tax credit" would be "20 percent of the amount paid by the taxpayer during such year to acquire a qualified equity investment in a qualified high technology small business concern".

The bill defines a "qualified high technology small business concern" as a small business concern with "fewer than 500 employees" and for which at least 50% of the gross expenditures are for "research or experimental expenditures".

The credit would be capped at $100,000 per taxable year per company. The bill would also set a national aggregate cap.

It was referred to the House Ways and Means Committee (HWMC). See also, Rep. Holt's release.

Rep. Kaptur Introduces Bill to Compel Free TV and Cable Ads for Candidates

1/3. Rep. Marcy Kaptur (D-OH) introduced HR 128 [LOC | WW], the "Fairness in Political Advertising Act of 2013". This bill would amend the Communications Act to compel television broadcasters and cable operators to broadcast or carry ads of state and federal political candidates, without compensation.

It would amend 47 U.S.C. §§ 309 and 315 to require that TV broadcasters broadcast two hours of political ads for every "qualified political candidate" for statewide or federal office. The bill further mandates that at least half of the free ads be broadcast between 7:00 and 10:00 PM. It places a cap of four and one half hours per week of compelled free advertising.

It would also amend 47 U.S.C. § 531 by adding the following: "A cable operator shall annually make available free cable time for political advertising in accordance with the requirements of regulations prescribed by the Commission. Such regulations shall, to the extent practicable, require each such cable operator to provide such free cable time in the same amounts and manner, to the same eligible political candidates, and subject to the same conditions as free broadcast time is required to be provided by television broadcast station licensees under section 315(c) of the Act. No franchise authority shall renew the franchise of any cable operator that fails to comply with such regulations, but such operator shall not be subject to any other sanction or remedy for such failure or refusal."

The bill would compel free advertising for a potentially huge number of persons. It provides that a person is a "qualified political candidate" for the purposes of this bill if such person is a candidate for either a statewide or federal office, it is an even numbered year, and that person's political party "received more than 2 percent of the total number of votes" in the most recent statewide or federal election.

This bill, if enacted with this minimal standard, would encourage persons to register as candidates for office, in order to obtain the two hours of free advertising from every TV broadcaster and cable operator in the area.

It would be very easy to qualify for free ads under this standard. For example, in Rep. Kaptur's state of Ohio, to become a candidate for Governor, Lieutenant Governor or other statewide office, the requirements are minimal, and the fees total $150. The fees to run for U.S. Representative are $85. See, R.C. 3513.10.

This bill was referred to the House Commerce Committee (HCC). In the state of Oregon, which is represented by the Chairman of the HCC's Subcommittee on Communications and Technology, Rep. Greg Walden (R-OR), the requirements to run for U.S. Representative are submitting Oregon form SEL 101 and paying the $100 filing fee.

In Rep. Anna Eshoo's (D-CA) state of California the filing fee to run for U.S. Representative is "One percent of the first-year salary for the office of Representative in Congress", or nothing, if the candidate submits a petition signed by 3,000 voters. See, California Elections Code §§ 8100-8107.

Basically, in many states, for the cost of filling out a form and paying a token filing fee, one could qualify for free advertising under Rep. Kaptur's bill. This would encourage people to register as candidates for the sole purpose of obtaining free advertising of their political views. It would likely also be exploited by persons seeking to indirectly advertise their businesses.

Rep. Kaptur introduced a substantially identical bill at the beginning of the 112th Congress, HR 137 [LOC | WW], the "Fairness in Political Advertising Act of 2011".

HR 128 was referred to the HCC. Rep. Kaptur is not a member. There are no original cosponsors of this bill.

It is highly unlikely that the Congress will pass this bill.

FTC Concludes Its Investigation of Google

1/3. The Federal Trade Commission (FTC) filed and simultaneously settled an administrative complaint against Google regarding its abuse of standards essential patents (SEPs) for which it was bound by FRAND commitments. Google admitted neither wrongdoing, nor relevant factual allegations. An accompanying order imposes some limitations on its ability to abuse these SEPs.

Second, the FTC announced in a statement [4 pages in PDF] that it will take no action against Google with respect to search bias.

FTC Chairman Jonathan Leibowitz said in a statement that "There are two aspects to the settlement we announce today. The first involves Google’s misuse of patent protection to prevent competition. We stop that abuse. The second concerns allegations that Google unfairly biases its search results to harm competition. We close that investigation, finding that the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification. But we do accept Google’s binding commitment to stop the most problematic business practices relating to its search and search advertising business."

Google's David Drummond stated in a release that "The conclusion is clear: Google's services are good for users and good for competition."

Microsoft's Dave Heiner stated in a release that "The FTC's overall resolution of this matter is weak and --frankly -- unusual. We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address."

See, full story.

Turkish Intermediate Certificate Authority Issued Unauthorized Digital Certificate for Google

1/3. Google published a statement on January 3, 2012 by Adam Langley titled "Enhancing Digital Certificate Authority".

He wrote that Google's operating system, Chrome, "detected and blocked an unauthorized digital certificate for the ``*´´ domain. We investigated immediately and found the certificate was issued by an intermediate certificate authority (CA) linking back to TURKTRUST, a Turkish certificate authority. Intermediate CA certificates carry the full authority of the CA, so anyone who has one can use it to create a certificate for any website they wish to impersonate. In response, we updated Chrome's certificate revocation metadata on December 25 to block that intermediate CA, and then alerted TURKTRUST and other browser vendors."

Also on January 3, Microsoft issued its Microsoft Security Advisory (2798897), titled "Fraudulent Digital Certificates Could Allow Spoofing". Microsoft wrote that "Microsoft is aware of active attacks using one fraudulent digital certificate issued by TURKTRUST Inc., which is a CA present in the Trusted Root Certification Authorities Store. This fraudulent certificate could be used to spoof content, perform phishing attacks, or perform man-in-the-middle attacks. This issue affects all supported releases of Microsoft Windows."

Microsoft added that "To help protect customers from the fraudulent use of this digital certificate, Microsoft is updating the Certificate Trust list (CTL) and is providing an update for all supported releases of Microsoft Windows that removes the trust of certificates that are causing this issue."

See also, January 3 story titled "Turkish Registrar Enabled Phishers to Spoof Google" in Krebs on Security.

USPTO Announces Roundtables on Software Patents

1/3. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register announcing two roundtables, to be held at Stanford University, and at New York University, regarding software patents.

This notice also announces a new USPTO program titled "Software Partnership". These two roundtables will be the first events of this new program.

The notice elaborates that this program "is a cooperative effort between the USPTO and the software community to explore ways to enhance the quality of software-related patents."

The first roundtable will be held on February 12, 2013, at Stanford University, in northern California. The second roundtable will be held on February 27, 2013, at New York University, in New York City.

The deadline to register is February 4. The deadline to submit written comments is March 15.

This notice contains no request for applications to make presentations at either of these workshops.

The notice seeks written answers to numerous questions. It seeks comments on numerous questions related to "how to more effectively ensure that the boundaries of a claim are clear so that the public can understand what subject matter is protected by the patent claim and the patent examiner can identify and apply the most pertinent prior art."

This notice also asks for suggestions for "topics related to enhancing the quality of software-related patents to be discussed at future Software Partnership events."

The USPTO also used this notice to announce that "In the near future, the USPTO will issue a Request for Comments on Preparation of Patent Applications. The purpose of this forthcoming Request for Comments is to seek public input on whether certain practices could or should be used during the preparation of an application to place the application in the best possible condition for examination and whether the use of these practices would assist the public in determining the scope of the claims as well as the meaning of the claim terms in the specification."

David Kappos, the outgoing head of the USPTO, gave a speech on software patents on December 20, 2012. See also, story titled "Kappos Defends Software Patents" in TLJ Daily E-Mail Alert No. 2,484, December 6, 2012.

Obama Re-Nominates 33 for Federal Courts

1/3. President Obama re-nominated 33 persons for various U.S. Courts of Appeals (USCA), U.S. District Courts (USDC), and the U.S. Court of International Trade (USCIT). White House news office release.

President Obama stated that "I am re-nominating thirty-three highly qualified candidates for the federal bench, including many who could have and should have been confirmed before the Senate adjourned".

Actually, most of these 33 were only recently nominated, and had not yet run the ordinary course of Senate consideration in the 112th Congress. However, four USCA nominees, and two of the USDC nominees were approved by the Senate Judiciary Committee (SJC), and blocked by Republican filibuster. Another USCA nominee has long been opposed by Republicans.

Court of Appeals. President Obama re-nominated seven persons for the USCA. The seven are:

The filibustered nominees are Taranto, Bacharach, Kayatta and Shwartz. Halligan, Srinivasa and Pryor had not yet been approved by the SJC.

Halligan was not subject to a filibuster when the 112th Congress concluded this week. However, she was previously the subject of a filibuster. A motion to invoke cloture (to end the filibuster) failed, thus returning the nomination to the President. President Obama renominated her in September, just before the Senate recessed for elections. However, the SJC did not again approve her nomination. So, there was nothing for Republicans to filibuster in the just finished lame duck session.

See also, stories titled "Obama Again Nominates Halligan for DC Circuit" in TLJ Daily E-Mail Alert No. 2,454, September 22, 2012, "Obama Nominates Caitlin Halligan for DC Circuit" in TLJ Daily E-Mail Alert No. 2,138, October 4, 2010, and "Senate Judiciary Committee Approves Halligan" in TLJ Daily E-Mail Alert No. 2,203, March 11, 2011.

See also, Halligan's questionnaire responses.

There is also a special history here. She is being nominated for a seat that Democrats long kept open during the Bush administration. Bush had nominated Peter Keisler, the then Assistant Attorney General in charge of the Department of Justice's Civil Division. Moreover, there are precedents for this tit for tat strategy. For example, after Senate Republicans blocked one of President Clinton's nominees for the 6th Circuit back in the late 1990s, Senate Democrats blocked President Bush's nominee until 2008, when the Clinton nominee finally got her seat. See, story titled "President Bush and Senate Democrats Reach Compromise on 6th Circuit Nominees" in TLJ Daily E-Mail Alert No. 1,747, April 15, 2008.

Taranto is a nominee with extensive experience in technology related areas of law. As a nominee to the Federal Circuit, he could have a particular impact on the development of patent law and some other technology related areas of law. See, story titled "Richard Taranto and the Federal Circuit" in TLJ Daily E-Mail Alert No. 2,497, December 24, 2012.

Srinivasan was nominated on June 11, 2012, but has not yet had a hearing. He represented Hynix Semiconductor before the Federal Circuit in Hynix v. Rambus, 645 F.3d 1336 (2011). Notably, Rambus was represented by Taranto. See, his questionnaire responses.

While Pryor was nominated on February 16, 2012, the SJC has not yet held a hearing on her nomination. The SJC is controlled by Democrats. Republicans alone can not stop a nominee in the SJC.

District Court. Two of the re-nominated persons were subject to filibusters:

Four more had been nominated, and approved by the SJC, but not until December:

Another re-nominated person is Valerie Caproni, whom Obama first nominated for the U.S. District Court (SDNY) in November. The SJC has not yet held a hearing on her nomination. She too has a history in technology related areas of law, and especially those related to electronic surveillance. See, story titled "Obama Nominates Caproni for District Court" in TLJ Daily E-Mail Alert No. 2,474, November 19, 2012.

The other persons re-nominated for the USDC are as follows:

US Court of International Trade. Finally, Obama re-nominated two persons for the US Court of International Trade: Mark Barnett and Claire Kelly.

More People and Appointments

1/3. Senate Republicans announced five new Republican members of the Senate Commerce Committee (SCC): Sen. Ted Cruz (R-TX), Sen. Tim Scott (R-SC), Sen. Dan Coats (R-IN), Sen. Deb Fischer (R-NE), and Sen. Ron Johnson (R-WI). Six of the Republican members of the SCC in 112th will not be members in the 113th Congress. Former Sen. Kay Hutchison (R-TX) retired. Former Sen. Olympia Snowe (R-ME) retired. Former Sen. Jim DeMint (R-SC) recently resigned from the Senate to lead the Heritage Foundation. Sen. Johnny Isakson (R-GA) and Sen. Pat Toomey (R-PA) obtained seats on the Senate Finance Committee (SFC). Sen. John Boozman (R-AR) also left the SCC.

1/3. Sen. Johnny Isakson (R-GA), Sen. Rob Portman (R-OH), and Sen. Pat Toomey (R-PA) were named to the Senate Finance Committee (SFC). See, SFC release. The SFC has jurisdiction over trade issues. Sen. Portman is a former U.S. Trade Representative (USTR).

1/3. Sen. Max Baucus (D-MT), Chairman of the Senate Finance Committee (SFC), named Bruce Hirsh Chief International Trade Counsel for the SFC. He will replace Amber Cottle, who was previously promoted to Staff Director for the SFC. See, SFC release.

1/3. Member countries of the World Trade Organization (WTO) nominated nine persons for the position of WTO Director General. The nomination period closed on December 31, 2012. The nine are Roberto Carvalho de Azevêdo (Brazil), Taeho Bark (Korea), Tim Groser (New Zealand), Herminio Blanco (Mexico), Alan John Kwadwo Kyerematen (Ghana), Anabel González (Costa Rica), Mari Elka Pangestu (Indonesia), Amina Mohamed (Kenya), and Ahmad Thougan Hindawi (Jordan). The WTO stated in a release that "The selection process will conclude with a decision by the General Council no later than 31 May 2013.". The current DG is Pascal Lamy. His term expires on August 31, 2013.

1/3. Diane Strahan was named Chief Operating Officer of the Motion Picture Association of America (MPAA). She was previously a SVP at Neustar. See, MPAA release.

More News

1/3. The Federal Trade Commission (FTC) released a report [34 pages in PDF] titled "Horizontal Merger Investigation Data: Fiscal Years 1996 - 2011".

1/3. The Public Knowledge (PK) published an essay titled "The Question at the Core of the Data Caps Debate". The author is the PK's Michael Weinberg.

1/3. The U.S. Court of Appeals (9thCir) issued its opinion [53 pages in PDF] in U.S. v. Chao Fan Xu, affirming the criminal convictions in this decade old case regarding banking in the People's Republic of China (PRC). This case is U.S. v. Chao Fan Xu, Ying Yi Yu, Guo Jun Xu, and Wan Fang Kuong, U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos. 09-10189, 09-10193, 09-10201and 09-10202, appeals from the U.S. District Court for the District of Nevada. Judge Alfred Goodwin wrote the opinion of the Court of Appeals, in which Judges Stephen Reinhardt and Mary Murguia joined.

Update on FTC Antitrust Investigation of Google

1/2. Various news media have reported that the U.S. Federal Trade Commission (FTC) is about to announce a settlement with Google, under which Google will change some business practices, and the FTC will commence no action against it.

For example, Bloomberg published a story by Sara Forden titled "Google Said Set to Resolve FTC Antitrust Probe Tomorrow" at 12:01 AM on January 3 which states that the FTC "is poised to announce that Google has agreed to voluntarily change some business practices and settle allegations it misused patents to thwart competitors in smartphone technology", and "is expected to close its investigation into whether Google ... skews its search results to favor its own services without enforcement action".

The Wall Street Journal published a story by Brent Kendell titled  "FTC May Strike Deal With Google This Week" on January 2 which states that the FTC "this week" could announce a settlement with Google based upon voluntary commitments. However, the WSJ added the European Commission's (EC) antitrust regulators "are expected to extract more extensive and binding commitments from the company as part of any legal settlement there."

Dave Heiner, VP and Deputy General Counsel of Microsoft, stated that "the future of competition in search is at stake in" the FTC's and the EC's "antitrust investigations into Google’s business practices". He complained that "Google continues to prevent Microsoft from offering consumers a fully featured YouTube app for the Windows Phone". See, piece titled "Still Seeking Resolution to Search Competition Issues".

Heiner added that "Google often says that the antitrust offenses with which it has been charged cause no harm to consumers. Google is wrong about that. In this instance, for example, Google’s refusal deprives consumers who use competing platforms of a comparable experience in accessing content that is generally available on the Web, almost all of which is created by users rather than by Google itself. And it’s inconsistent, to say the least, with Google’s public insistence that other competing services, such as Facebook, should offer Google complete access to their content so they can index and include it on their search site."

More Antitrust News

1/2. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that announces that the Interchangeable Virtual Instruments Foundation, Inc. (IVI Foundation) filed a notification of a change in its membership, pursuant to the National Cooperative Research and Production Act of 1993, which pertains to limiting antitrust liability of standard setting consortia. See, FR, Vol. 78, No. 1, January 2, 2013, at Page 117.

1/2. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that announces that the PXI Systems Alliance, Inc. filed a notification of a change in its membership, pursuant to the National Cooperative Research and Production Act of 1993, which pertains to limiting antitrust liability of standard setting consortia. See, FR, Vol. 78, No. 1, January 2, 2013, at Pages 117-118.

1/2. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that announces that the DVD Copy Control Association filed a notification of a change in its membership, pursuant to the National Cooperative Research and Production Act of 1993, which pertains to limiting antitrust liability of standard setting consortia. See, FR, Vol. 78, No. 1, January 2, 2013, at Page 118.

People and Appointments

1/2. The 112th Congress concluded without the confirmation of four pending Court of Appeals nominees. The four had been nominated by President Obama, and approved by the Senate Judiciary Committee (SJC), but not confirmed by the full Senate, or withdrawn by the President. The four are Richard Taranto (nominated for the Federal Circuit), William Kayatta (1st Circuit), Patty Schwartz (3rd Circuit), and Robert Bacharach (10th Circuit). See also, story titled "Pending Court of Appeals Nominees" in TLJ Daily E-Mail Alert No. 2,497, December 24, 2012, and story titled "Richard Taranto and the Federal Circuit" in the same issue.

1/2. The 112th Congress concluded without the confirmation of David Medine to be Chairman of the Privacy and Civil Liberties Oversight Board (PCLOB). The SJC approved his nomination on May 23, 2012. See, stories titled "Senate Judiciary Committee Approves PCLOB Nominees" in TLJ Daily E-Mail Alert No. 2,385, May 23, 2012, and "Senate Judiciary Committee Holds Hearing on PCLOB Nominees" in TLJ Daily E-Mail Alert No. 2,375, April 19, 2012. Sen. Patrick Leahy (D-VT) stated in a release that "The obstruction of a few Republican Senators leaves the American people without a fully functioning Privacy and Civil Liberties Oversight Board at a time when Americans face growing threats to their privacy rights and civil liberties. ... I encourage the President to promptly re-nominate Mr. Medine and I hope that the Senate will confirm him this year."

More News

1/2. Rep. Fred Upton (R-MI), Chairman of the House Commerce Committee (HCC), released a report on the accomplishments of the HCC during the 112th Congress.

1/2. The U.S. Patent and Trademark Office (USPTO) and the European Patent Office (EPO) announced the launch of the Cooperative Patent Classification (CPC) system. The USPTO stated in a release that this is an effort "to develop a common, internationally compatible classification system for technical documents used in the patent granting process that incorporates the best classification practices from both offices. See also, EPO release.

1/2. The CTIA announced that it will host a single mobile industry trade show, beginning in 2014. It has been hosting both the CTIA Show and MobileCON. It will host the CTIA 2014 on September 9-11, 2014, at the Sands Expo Convention Center in Las Vegas, Nevada. See, CTIA release.


1/1. The story titled "Senate Passes Economic Espionage Penalties Bill" in TLJ Daily E-Mail Alert No. 2,496, December 21, 2012 stated that "The Senate passed HR 6029 [LOC | WW], the "Foreign and Economic Espionage Penalty Enhancement Act of 2012", on December 19, 2012. The House passed this bill on August 1, 2012. This bill is now ready for President Obama's signature." In fact, the Senate amended the bill. The Senate deleted from the House bill a provision that would increase the statutory maximum penalty from 15 to 20 years imprisonment. Hence, the bill was not ready for President Obama's signature.

House Passes Senate Version of Foreign and Economic Espionage Penalty Enhancement Act of 2012

1/1.The House again passed HR 6029 [LOC | WW], the "Foreign and Economic Espionage Penalty Enhancement Act of 2012.

The House passed this bill in August. The Senate passed it in December, but deleted one provision. The House has now agreed to the Senate amendment. The bill is now ready for President Obama's signature.

Rep. Lamar Smith (R-TX), Rep. John Conyers (D-MI), and others introduced this bill on June 27, 2012. See, story titled "Representatives Introduce Bill to Increase Penalties for Economic Espionage" in TLJ Daily E-Mail Alert No. 2,405, July 9, 2012.

The House passed this bill on August 1. See, story titled "House Passes Bill that Increases Penalties for Economic Espionage" in TLJ Daily E-Mail Alert No. 2,418, August 2, 2012.

The Senate amended and passed this bill on December 19, 2012. See, story titled "Senate Passes Economic Espionage Penalties Bill" in TLJ Daily E-Mail Alert No. 2,496, December 21, 2012.

Rep. Smith stated in the House on December 30 that the bill passed by the House in August included a provision that increased "the maximum penalty from 15 to 20 years imprisonment". He added that "Several Senators wanted to give further consideration to the proposed statutory maximum increase from 15 to 20 years imprisonment. The Senate amended H.R. 6029 by deleting this single provision." He concluded, "I urge my colleagues to support H.R. 6029 as it was amended by the Senate."

Rep. Bobby Scott (D-VA) also spoke in support of the Senate amendment in the House on December 30. He said that "Economic espionage represents a significant cost to victim companies and threatens the economic security of the United States. This crime inflicts costs on companies, such as the loss of unique intellectual property, the loss of expenditures related to research and development, and the loss of future revenues and profits. Many companies are unaware when their sensitive data is pilfered, and those that find out are often reluctant to report the losses, fearing potential damage to their reputations with investors, customers, and employees. The pace of the foreign collection of economic information and industrial espionage activities against major United States corporations is accelerating."

The House approved the Senate amendment on January 1, 2013, by unanimous consent, in seconds, at 11:13 PM.

House Passes Smith Patent Bill

1/1. The House again passed HR 6621 [LOC | WW], an untitled bill that would make numerous changes to patent law.

The House passed this bill on December 18. See, story titled "House Passes Rep. Smith's Patent Bill" in TLJ Daily E-Mail Alert No. 4,494, December 19, 2012.

The Senate passed it on December 28, but deleted one controversial provision regarding pre-GATT patent applications. The House has now agreed to the Senate amendment. The bill is now ready for President Obama's signature.

The Senate passed a substitute amendment offered by Sen. Patrick Leahy (D-VT) and Sen. Charles Grassley (R-IA). See, "Senate Amends and Passes Rep. Smith's Patent Bill" in TLJ Daily E-Mail Alert No. 2,499, December 30, 2012.

Rep. Lamar Smith (R-TX) and Rep. Bobby Scott (D-VA) spoke in the House on December 30 in support of agreeing to the Senate amendment. However, the vote was postponed. The House approved the Senate amendment on January 1, 2013, by unanimous consent, in seconds, at 11:13 PM.

R&D Tax Credit Extended

1/1. The House and Senate passed, and President Obama signed, HR 8 [LOC | WW] (112th Congress), the "American Taxpayer Relief Act of 2012", huge bill also know as the fiscal cliff bill. Section 301 of this bill modifies and extends the research and development tax credit.

This tax credit expired December 31, 2011. This extension is retroactive back to December 31, 2011. It extends the credit through December 31, 2013.

Grant Sieffert, head of the Telecommunications Industry Association (TIA), stated in a release that "R&D credit has been, and will remain, a cost-effective policy for increasing research activity and producing a dollar-for-dollar increase in research spending", that it is "essential to maintaining U.S. leadership in telecommunications".

Section 41 of the Internal Revenue Code (IRC), 26 U.S.C. § 41, pertains to the "Credit for increasing research activities".

The Congress enacted its first research and development (R&D) tax credit bill in 1981 as a temporary measure. Since then the Congress has repeatedly extended it for one or a few years.

There were numerous bills in the 112th Congress to revise this credit. See, stories titled "Ways and Means Subcommittee Hearing to Address Expired R&D Tax Credit" in TLJ Daily E-Mail Alert No. 2,376, April 20, 2012, and "Startup R&D Tax Credit Bills Introduced" in TLJ Daily E-Mail Alert No. 2,434, August 22, 2012.

Senate Confirms Wright for FTC

1/1. The Senate confirmed Joshua Wright, without debate or a roll call vote, to be a member of the Federal Trade Commission (FTC) for a term of seven years beginning on September 26, 2012. See, Congressional Record, January 1, 2013, at Page S8634.

He will replace Commissioner Thomas Rosch as one of the FTC's two Republican Commissions. Wright has committed to recuse himself from matters involving Google for two years, because of his prior statements, and funding from Google for the International Center for Law and Economics (ICLE).

Wright is an authority on antitrust law and economics, a professor at George Mason University school of law, and Director of Research at the ICLE.

Senate Confirms Clyburn for FCC

1/1. The Senate confirmed Mignon Clyburn, without debate or roll call vote, to be a member of the Federal Communications Commission (FCC) for a term of five years beginning on July 1, 2012. See, Congressional Record, January 1, 2013, at Page S8634. This is a reappointment.

See, statement by Clyburn. See also, reactions of the other four FCC Commissioners: statement by Julius Genachowski, statement by Jessica Rosenworcel, statement by Robert McDowell, and statement by Ajit Pai.

Representatives of regulated entities also praised her confirmation. See for example, statement by AT&T's Bob Quinn, and statement by the NCTA's Michael Powell

Cathy Sloan of the Computer and Communications Industry Association (CCIA) stated in a release praising Clyburn that "We will likely see epic FCC battles over universal broadband access and interconnection in the transition to all IP telecom networks. This year will also see implementation of key policy initiatives such as incentive auctions. Internet users and businesses that depend on the mobile Internet will be counting on the FCC to hold the line on spectrum concentration and to reserve some spectrum for innovative unlicensed use.”

More People and Appointments

1/1. The Senate confirmed Richard Berner to be Director of the Department of the Treasury's Office of Financial Research for a term of six years. See, Congressional Record, January 1, 2013, at Page S8634.

1/1. The Senate confirmed Mark Doms to be Under Secretary of Commerce for Economic Affairs. See, Congressional Record, January 1, 2013, at Page S8634. See, Congressional Record, January 1, 2013, at Page S8634.

Go to News from December 26-31, 2012.