Source: http://www.techlawjournal.com/alert/2004/11/09.asp
Timestamp: 2019-04-20 12:18:18+00:00

Document:
TLJ Daily E-Mail Alert No. 1,014, November 9, 2004.
November 9, 2004, 9:00 AM ET, Alert No. 1,014.
11/8. Microsoft reached agreements with more entities that have complained to courts and regulatory agencies that Microsoft has violated competition laws. Microsoft reached a partial settlement of claims asserted by Novell, a competitor in the sale of software. Microsoft also reached an agreement with the Computer and Communications Industry Association (CCIA), a Washington DC based interest group.
Novell. Novell stated in a release that it reached "an agreement with Microsoft to settle potential antitrust litigation related to Novell's NetWare operating system in exchange for $536 million in cash." Novell also stated that "by the end of this week it will file an antitrust suit against Microsoft in the United States District Court in Utah seeking unspecified damages in connection with alleged harm to Novell’s WordPerfect application software business in the mid-1990s."
Novell elaborated that "Under terms of the settlement, in exchange for the cash payment, Novell has agreed to a general release of claims that it has as of the date of the agreement, with certain exclusions that include patent claims and claims associated with Novell's WordPerfect business. The agreement also includes a release by Microsoft of claims that would have been compulsory counterclaims to the NetWare claims asserted by Novell. Finally, Novell has agreed to withdraw its intervention in the European Commission’s case with Microsoft."
Novell also described the forthcoming lawsuit. "The WordPerfect suit that Novell will file seeks unspecified damages arising from Microsoft's efforts to eliminate competition in the office productivity applications market during the time that Novell owned the WordPerfect word-processing application and the Quattro Pro spreadsheet application. The suit is based in part on facts proved by the United States Government in its successful antitrust case against Microsoft. In that suit, Microsoft was found to have unlawfully maintained a monopoly in the market for personal computer operating systems by eliminating competition in related markets."
Microsoft added in its release that "Novell will also withdraw from participation in the European Commission's case with Microsoft and will no longer participate as an intervener on behalf of the European Commission in Microsoft's appeal of the Commission's March 24 ruling."
Brad Smith, General Counsel of Microsoft, stated at a press conference that "Our settlement with Novell covers all of the antitrust issues relating to Novell's Netware products as of today, as well as all of Novell's other current businesses as of today. This means that we have resolved Novell's claims under U.S. antitrust law."
He added that "While the parties were able to resolve all antitrust claims related to Novell's current businesses, including NetWare, they have not been able to reach agreement concerning Novell's antitrust claims related to its ownership of WordPerfect between June 1994 and March 1996. Novell retains the right to pursue those claims. In addition, both parties retain the right to pursue past or future patent claims." See, transcript.
CCIA. Microsoft stated in a release that it will give money to the CCIA. Microsoft stated that "The company will compensate the CCIA for certain legal-related expenditures it has incurred, in some cases over the past decade, and provide substantial institutional support for new and important policy undertakings on which CCIA will take a leadership role."
However, Microsoft did not disclose how much it will pay the CCIA. It stated that "Specific financial terms of the agreement are confidential."
Microsoft stated that, in return, the CCIA "agreed not to seek certiorari to the Supreme Court in its challenge to the District Court's Final Judgment in the United States v. Microsoft antitrust case. The Washington, D.C. based trade association has also agreed that it will no longer participate as an intervener on behalf of the European Commission in Microsoft's appeal of the Commission's March 24 Decision, and it will also withdraw its complaint with the European Commission filed in February 2003 on issues related to Microsoft Windows XP."
11/8. The Progress and Freedom Foundation (PFF) filed an amicus curiae brief [12 pages in PDF] with the Supreme Court in MGM v. Grokster, urging the Court to grant certiorari.
The PFF wants the Supreme Court to reverse the August 19, 2004 opinion [26 pages in PDF] of the U.S. Court of Appeals (9thCir) which affirmed the District Court's judgment that Grokster's and Streamcast's peer to peer (P2P) file copying networks do not contributorily or vicariously infringe the copyrights of the holders of music and movie copyrights.
See also, April 25, 2003, opinion of the U.S. District Court (CDCal), which the Appeals Court followed and praised.
The PFF argues in its brief that "Consumers have two strong interests: (1) Avoiding inhibitions on technological progress; and (2) Fostering the production of content by providing incentives to creators."
"These are complementary, not conflicting, because each is necessary to the other. Technological devices are useless without content, and content is pointless without means of delivery. But they must be reconciled, because, each taken to the limit of its logic, can do serious harm to the other."
It continues that "The Ninth Circuit focused totally on the need to avoid any inhibition on technology, and in so doing it lost sight of the other, equally important consumer interest in promoting content. It failed to recognize that no group of consumers, interested in maximizing its long-term enjoyment of music, would select a legal regime that allows the untrammeled operation of Grokster and similar programs. Such a regime would quickly distribute the existing stock of music, but would provide no incentives for future production, and would destroy any hope for the creation of legitimate Internet distribution systems that can provide continuing incentives to the creative community."
The PFF argues that this is an example of what economists and game theorists call the prisoner's dilemma [Wikipedia]. "Each consumer is better off if he or she has total access to unauthorized file-sharing while every other consumer pays for the music. But when everyone tries to free ride on everyone else, the whole system collapses."
The solution, writes the PFF, is for the Supreme Court to grant certiorari, and then solve the prisoner's dilemma that consumers face, by creating a new legal regime.
The brief does not site any authority for the proposition that the judiciary has the responsibility or power to solve prisoner's dilemmas.
The PFF's brief was written by James DeLong and Solveig Singleton. See also, PFF release.
On October 8, 2004, movie and music industry entities filed their petition for writ of certiorari. The petitioners include Metro Goldwyn Mayer Studios Inc., other movie studios, record companies, and music publishers and songwriters. The respondents are Grokster, Ltd. and StreamCast Networks, Inc. See, story titled "Movie and Music Industry Entities File Cert Petition in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 994, October 11, 2004.
This case is Metro-Goldwyn-Mayer Studios Inc., et al. v. Grokster, Ltd., et al., Sup. Ct. No. 04-480, on petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit.
11/8. The Supreme Court denied certiorari in Larimer v. IBM, an ADA and ERISA case involving association disability. Thomas Larimer was employed by IBM as a salesman. IBM fired him shortly after his twin daughters were born, prematurely, and suffering serious medical conditions.
Larimer did not assert that he was disabled. Rather, he asserted that his daughters were disabled, and that he was fired because their disability would cause IBM to incur greater medical expenses. IBM asserted that he was fired because he did not sell enough Lotus software.
The Americans with Disability Act (ADA) provides, at 42 U.S.C. § 12112(b)(4), that employers are prohibited from discriminating against "a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association."
The U.S. District Court (NDIll) granted summary judgment for IBM. The U.S. Court of Appeals (7thCir) issued its opinion [9 pages in PDF] on June 3, 2004 affirming the District Court. See, 370 F3d 698. The Supreme Court's denial of certiorari lets stand the judgment for IBM.
Judge Richard Posner, writing for the three Judge panel of the Court of Appeals, reasoned that association disability can arise in one of three ways, "disability by association", "distraction", or "expense".
He wrote that "disability by association" exists in situations such as where an employee associates with a person with HIV and the employer fears that the employee too may become infected. But, Judge Posner concluded that premature birth is not communicative to the father, so there cannot be "disability by association".
Second, he wrote that "distraction" disability exists where an employee is distracted by the disability of another. But, he concluded that this is not present in this case because there is no evidence that Larimer was absent from, or distracted at, work.
Finally, he wrote that "expense" disability exists, for example, where the spouse of an employee has a disability that is expensive to the employer. But, Judge Posner concluded that this basis for association disability was not present because there was "no evidence that health benefits are in the budget of the unit of IBM that employed and discharged Larimer".
The District Court, and the Court of Appeals, also rejected Latimer's claims of prima facie employment discrimination and violation of the ERISA.
See, Order List [7 pages in PDF] at page 5. This case is Thomas Larimer v. International Business Machines, Corp., Sup. Ct. No. 04-330, a petition for writ of certiorari to the U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 03-2256.
11/8. The Department of the Treasury announced the departure of Brian Roseboro . He was Under Secretary of the Treasury for Domestic Finance. Before that, he was Assistant Secretary of the Treasury for Financial Markets. See, statement by Treasury Secretary John Snow.
11/8. Jill Luckett was promoted to SVP -- Program Network Policy at the National Cable and Telecommunications Association (NCTA). Luckett has worked on digital carriage issues and a la carte pricing. Also, William Check was promoted to SVP -- Science and Technology. Check is responsible for analysis and evaluation of technical issues, and worked on the 2002 plug and play digital TV agreement. See, NCTA release.
11/4. Novell announced in a release that "Chris Stone, Vice Chairman, Office of the CEO, has left the Company to pursue other opportunities. Stone had responsibility for engineering, product management, and alliances. No successor has been named. On an interim basis, Stone's responsibilities will be overseen by Jack Messman, Chairman and CEO of Novell."
11/8. The Supreme Court issued an order in two consolidated cases, Veneman v. Livestock Marketing Association (No. 03-1164 ) and Nebraska Cattlemen v. Livestock Marketing Association (No. 03-1165 ). The order states only that "The motion of the Acting Solicitor General for divided argument is granted." See, Order List [7 pages in PDF] at page 1. Oral argument in this case is scheduled for Wednesday, December 8, 2004. See, oral argument calendar [PDF]. These cases involve whether the Beef Promotion and Research Act of 1985 provision that requires that beef producers pay for generic advertising of beef and beef products violates the First Amendment. These cases involve beef and the Agriculture Department. However, the concept of compelled speech is also present in various debates over communications and technology related issues, such as forced access to cable facilities, must carry, equal time, free time for candidates, election campaign advertising disclosures, and truth in billing.
CANCELLED. 9:30 AM - 12:00 NOON. The Department of Homeland Security's (DHS) Telecommunications Service Priority (TSP) System Oversight Committee will hold a meeting. See, notice in the Federal Register, October 8, 2004, Vol. 69, No. 195, at Page 60415. Location: NCS, 2nd floor conference room, 701 South Courthouse Road, Arlington, VA. See, notice of cancellation in the Federal Register, November 3, 2004, Vol. 69, No. 212, at Page 64091.
6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) program titled "Potential of Alternative Dispute Resolution for Enhancing Communications Practices and Clients' Business Objectives". Location: Wiley Rein & Fielding, 1776 K St., NW.
10:30 AM. Public Knowledge (PK) will host an event that its describes as a "a press conference ... to discuss copyright legislation in the upcoming lame duck session". The participants will be Gigi Sohn (PK), Gary Shapiro (Consumer Electronics Association), Ed Black (Computer and Communications Industry Association), James Burger (TiVo), and Sarah Deutsch (Verizon). Location: PK, Suite 650, 1875 Connecticut Ave., NW, at Connecticut and T Streets.

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