Source: http://www.techlawjournal.com/alert/2006/06/16.asp
Timestamp: 2019-04-18 10:57:27+00:00

Document:
TLJ Daily E-Mail Alert No. 1,393, June 16, 2006.
June 16, 2006, Alert No. 1,393.
6/14. The U.S. Department of Justice (DOJ) filed a civil complaint [14 pages in PDF] in U.S. District Court (DNJ) against the the Attorney General of the state of New Jersey, other New Jersey officials, and phone companies that have been subpoenaed by New Jersey. The complaint seeks declaratory judgment that the state lacks authority to issue the subpoenas.
Background. On May 11, 2006, USA Today published an article titled "NSA has massive database of Americans' phone calls". It stated that "The National Security Agency has been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth ..."
See also, story titled "Bush Responds to USA Today Story Regarding NSA Database of Phone Calls" Alert No. 1,369, Friday, May 12, 2006, and story titled "BellSouth and Verizon Attack USA Today Story" in TLJ Daily E-Mail Alert No. 1,372, Wednesday, May 17, 2006.
New Jersey's Attorney General, Zulima Farber, issued subpoenas duces tecum (for records) to AT&T, Verizon, Cingular Wireless, Sprint Nextel, and Qwest on May 17, 2006, to investigate this matter.
DOJ Complaint. Count I of the two count complaint alleges that the subpoenas are invalid and preempted by the supremacy clause of the Constitution, unnamed federal laws, and "exclusive control over foreign intelligence gathering activities, national security, the conduct of foreign affairs, and the conduct of military affairs".
The supremacy clause merely provides that "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land ..."
Count II alleges that "Providing responses to the Subpoenas would be inconsistent with and would violate federal law including, but not limited to, Executive Order 12958, 18 U.S.C. § 798, and 50 U.S.C. § 402 note, as well as other applicable federal laws, regulations, and orders."
See, Executive Order 12958, which "prescribes a uniform system for classifying, safeguarding, and declassifying national security information, including information relating to defense against transnational terrorism".
18 U.S.C. § 798 is a provision in the criminal code that criminalizes the disclosure of classified information. It makes reference to "communication intelligence activities" and "purposes".
50 U.S.C. § 402 pertains to the National Security Council.
The first paragraph of the complaint provides that "the United States seeks to prevent the disclosure of highly confidential and sensitive government information that the defendant officers of the State of New Jersey have sought to obtain from telecommunications carriers without proper authorization from the United States. Compliance with the subpoenas issued by those officers would first place the carriers in a position of having to confirm or deny the existence of information that cannot be confirmed or denied without causing exceptionally grave harm to national security. And if particular carriers are indeed supplying foreign intelligence information to the Federal Government, compliance with the subpoenas would require disclosure of the details of that activity. The defendant state officers' attempts to obtain such information are invalid under the Supremacy Clause of the United States Constitution and are preempted by the United States Constitution and various federal statutes. This Court should therefore enter a declaratory judgment that the State Defendants do not have the authority to seek confidential and sensitive federal government information and thus cannot enforce the subpoenas they have served on the telecommunications carriers."
The NSA program disclosed by the New York Times last December, and subsequently partially described by federal officials, involves intercepts of communications where one party is inside the U.S. and one party is outside of the U.S., and where one party is suspected of having some connection to terrorism. That is, the intercepts are terrorism related, even though persons inside the U.S. are affected.
However, the program disclosed by USA Today in May involves extensive databases of phone call data. Most of the data collected involves communications unrelated to terrorism. The DOJ now asserts that this data is foreign intelligence information.
DOJ Letters. In addition, Peter Keisler of the DOJ wrote a letter to Farber informing her of the lawsuit, in which he stated that "it is our belief that compliance with the subpoenas would place the carriers in a position of having to confirm or deny the existence of information that cannot be confirmed or denied without harming national security, and that enforcing compliance with these subpoenas would be inconsistent with, and preempted by, federal law."
He added that "The subpoenas infringe upon federal operations, are contrary to federal law, and accordingly are invalid under the Supremacy Clause ..."
Keisler also wrote a second letter to the subpoenaed carriers. One of the addressees is Bradford Berenson of the law firm of Sidley & Austin, who represents AT&T in this matter.
Peter Keisler. The DOJ complaint lists the names of several DOJ attorneys. Peter Keisler is the first listed name. Keisler also wrote the DOJ's letter to New Jersey AG Farber. Keisler also wrote the DOJ's letter to the attorneys for AT&T and the other carriers.
Keisler is the Assistant Attorney General in charge of the DOJ's Civil Division. He was until recently a partner in the law firm of Sidley & Austin, where he represented AT&T.
AT&T is one of the carriers subpoenaed by the New Jersey. AT&T is also a party to a pending merger application at the Federal Communications Commission (FCC) in which the legality of AT&T's participation in the NSA program is at issue.
For example, on June 5, 2006, the ACLU sent a letter [PDF] to the FCC arguing that it can not approve the merger of AT&T and BellSouth until it first determines whether either of the two companies violated 47 U.S.C. § 222 in connection with the activities addressed in the May 11 USA Today article.
AT&T also faces potential civil liability in connection with its participation in the NSA program.
The action just taken by the DOJ also serves the interests of AT&T.
A spokesman for the DOJ told TLJ that he (spokesman) would not answer any question about this case.
6/15. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet, and Intellectual Property (CIIP) held a hearing titled "Patent Trolls: Fact or Fiction".
Rep. Lamar Smith (R-TX), the Chairman of the Subcommittee, wrote in his opening statement that "According to its critics, the troll is an individual who invents a patented product or process of suspect legal integrity or who acquires such a patent from a third party. The owner is characterized as someone who makes money by extorting a license from a manufacturer who allegedly has infringed the patent. Fearing the possibility of an injunction that will force the manufacturer to cease operations, the company settles."
Rep. Smith (at right) also said that "patent practice frequently pits conflicting interests against one other. For example, a software developer might endorse a specific change to the current statutory treatment of injunctive relief or damages computation set forth in the Patent Act. These same revisions would be opposed by a number of patentee interests, especially those in the biotechnology and pharmaceutical industries. Different entities use the patent system in different ways, depending on their respective business models."
Ed Reines, an attorney in the Silicon Valley office of the law firm of Weil Gotshal & Manges, wrote in his prepared testimony [13 pages in PDF] that "the existence of entities fairly characterized as patent trolls is a fact. If lawyers start a company purely to buy a patent out of bankruptcy, and promptly seek royalties that are one hundred thousand times what they just paid for the patent, you have a patent troll under any reasonable definition. This is particularly true where the demand is based on an implausible theory of infringement." He added that a troll "Acquires patents, but does not invent technology itself." He did not identify any trolls in his written testimony.
He also argued that there are six areas of patent law in need of reform, "treble damages based on claims of willfulness", submarine patents (which he described as "patents that are secret until long after the date of invention and long after the market in an area of technology has developed"), the "unlimited right patent applicants have to file continuation applications when seeking patents", damage apportionment, forum shopping, and injunctive relief. Although, he added that the opinion [12 pages in PDF] of the Supreme Court in eBay v. MercExhange will "improve the law of patent injunctions". See also, story titled "Supreme Court Rules on Availability of Injunctive Relief in Patent Cases" in TLJ Daily E-Mail Alert No. 1,371, May 16, 2006.
Dean Kamen is an inventor, and President of DEKA Research & Development Corporation, a company that develops and patents new technologies, which it then licenses to others. He is also a past winner of the Medal of Technology.
He wrote in his prepared testimony [5 pages in PDF] that "while there do seem to be certain bad actors who inappropriately assert questionable patents, there are also bad actors who deliberately infringe the legitimate patent rights of others."
He argued that the term patent troll has been used to describe people and companies who activities are "legitimate and constructive" and "represent part of the intended purpose of the U.S. patent system".
For example, he said that the term "troll" is sometimes used to describe "those who don't manufacture products embodying their patent", "those who offer a license as an alternative to suing for patent infringement", or "those who sue alleged infringers that have products already on the market".
He wrote that "In trying to prevent the bad acts of a few so-called patent trolls, we must be careful not to destroy the patent system that has been the driving force behind the innovation that has made the United States an unrivaled global leader over the past two centuries."
He argued that patent law must recognize the "right to exclude", including by "permanent injunction", and that "Weakening the standard for granting permanent injunctions would be tantamount to adopting compulsory licensing."
Paul Misener, of Amazon.com, wrote in his prepared testimony that a patent troll is "a moniker usually ascribed to entities that own and enforce patents without substantially practicing them".
He offered two proposals for revising patent law with respect to damages. First, "allow successful claimants with method patents to obtain damages only back to the point that the defendant had actual notice or knowledge of alleged infringement and, as under current law, in no case back more than six years before the complaint was filed". Second, "clarify that when courts analyze whether a plaintiff should be entitled to an award of lost profits as a matter of law, a plaintiff should be entitled to such an award only if, and for the time that, the defendant's infringing product competes with a product that the plaintiff makes or sells".
Chuck Fish of Time Warner offered no definition of troll in his prepared testimony [9 pages in PDF]. He wrote that it is not "productive to engage in name calling exercises". However, he had not reservation about attorney name calling. He said that there is a PI to IP problem in the legal profession. "There has been a huge increase in cases, many of them brought by former tort lawyers who have found patent litigation more lucrative than traditional tort work." He pointed out the that number of patent cases has grown rapidly, while the number brought in the U.S. District Court (EDTex), Marshall Division, has skyrocketed.
He urged full funding of the USPTO as well as "limits on abuse of continuation practice, meaningful post grant opposition procedures, publication of all patent applications, and improved ability of the public to submit prior art during prosecution."
6/13. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law held a hearing titled "State Taxation of Interstate Telecommunications Services".
Rep. Chris Cannon (R-UT) (at left) wrote in his opening statement that "Taxes on communications services are a jumble. The tax rates on communications are about at the point where these taxes approach the level of ``sin´´ taxes. We want to encourage the use of communications by ALL people, not move the cost beyond what the poor amongst us can afford."
Scott Mackey (Kimbell Sherman Ellis) wrote in his prepared testimony [PDF] that "excessive and discriminatory taxation of communications consumers has gotten worse".
Stephen Kranz (Council On State Taxation, which represents tax paying companies) wrote in his prepared testimony [PDF] that "The tax system has not kept pace with changes in telecommunications technology, generally rendering the current system inequitable and unworkable. The telecommunications tax system should be overhauled to eliminate the discriminatory administrative and tax burden facing telecommunications providers and services."
David Quam (National Governors' Association), wrote in his prepared testimony that the "ability of states to structure their revenue systems is a core element of sovereignty that must be respected by the federal government". Therefore, the Congress should do nothing. See also, prepared testimony [PDF] of Steven Rauchenberger (Illinois State Senate and National Conference of State Legislatures).
10:00 AM. The Senate Commerce Committee's (SCC) Subcommittee on Technology, Innovation, and Competitiveness will hold a hearing titled "High-Performance Computing". Sen. John Ensign (R-NV) will preside. Location: Room 562, Dirksen Building.
12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch titled "Copyright Overview and Hot Topics for Communications Lawyers". For more information, contact Tarah Grant at tsgrant at hhlaw dot com or 703-610-6155 or Brendan Carr at bcarr at wrf dot com or 202-719-7305. RSVP to Brendan Carr. Location: Wiley Rein & Fielding, 1776 K Street, NW.
6:00 PM. The filing window closes for the Federal Communications Commission's (FCC) Auction 66. This is the auction of Advance Wireless Services (AWS) licenses in the 1710-1755 MHz and 2110-2155 MHz (AWS-1) bands. See also, notice in the Federal Register, June 2, 2006, Vol. 71, No. 106, at Pages 32089-32091.
2:00 PM. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "Privacy in the Commercial World II". See, notice. The hearing will be webcast by the HCC. Press contact: Larry Neal (Barton) at 202-225-5735 or Paul Flusche (Stearns) at 202-225-5744. Location: Room 2123, Rayburn Building.
10:00 AM. The Senate Commerce Committee (SCC) will meet to mark up S 2686, the "Communications, Consumer's Choice, and Broadband Deployment Act of 2006". See, notice. Press contact: Aaron Saunders (Stevens) at 202-224-3991 or Andy Davis (Inouye) at 202-224-4546. The meeting will be webcast by the SCC. Location: __.
RESCHEDULED FROM MAY 23. 10:30 AM. The House Ways and Means Committee's Subcommittee on Select Revenue Measures will hold a hearing titled "Hearing on the Impact of International Tax Reform on U.S. Competitiveness". See, notice. Location: Room 1100, Longworth Building.
2:00 PM. The House Commerce Committee's (HCC) Subcommittee on Oversight and Investigations will hold the second of two hearings titled "Internet Data Brokers and Pretexting: Who has Access to Your Private Records?". See, notice. The hearing will be webcast by the HCC. Press contact: Larry Neal (Barton) at 202-225-5735 or Terry Lane (Barton) at 202-225-5735. Location: Room 2322, Rayburn Building.
6/16. The Office of the U.S. Trade Representative (USTR) published a notice in the Federal Register requesting comments regarding its special provincial review (SPR) of intellectual property rights (IPR) protection in Peoples Republic of China (PRC).
The USTR wrote that it "proposes to focus the SPR on the locations in China that are most economically significant for U.S. right holders, or which merit special attention for other reasons. USTR seeks public comments on the specific provinces and other jurisdictions at the provincial level that should be the focus of the SPR."
It added that "Within each province, municipality, or autonomous region that is included in the review, USTR proposes to examine the issues and locations of greatest interest to U.S. right holders. USTR therefore requests that, with respect to each province, municipality, and/or autonomous region recommended for inclusion in the SPR, commenters identify with particularity any key locations or issues that merit attention. Key locations could include, for example, particular regions, cities, towns, districts, sub-districts, or markets. Key issues could include, for example, counterfeiting or piracy of particular types of products in a particular location, or factors that affect the ability to enforce particular rights (e.g., positive or negative aspects of local policy, legislation, or resources)."
It also wrote that its "plans to seek more detailed public comments before concluding the SPR."
Comments are due by July 14, 2006. See, Federal Register, June 16, 2006, Vol. 71, No. 116, at Pages 34969-34970.
6/15. President Bush announced his intent to nominate eight people to be Members of the National Science Foundation's (NSF) National Science Board, all for terms that expire on May 10, 2012. The eight are Mark Abbott, Camilla Benbow, John Bruer, Patricia Galloway, Jose Marie Griffiths, Karl Hess, Thomas Taylor, and Richard Thompson. See, White House release.
6/15. President Bush announced his intent to designate Daniel Pearson and Shara Araonoff to be the Chairman and Vice Chairman, respectively, of the U.S. International Trade Commission (USITC) for two year terms beginning on June 17, 2006. See, White House release and USITC release and release.
6/15. President Bush signed S 193, the "Broadcast Decency Enforcement Act of 2005". See, White House release and speech by President Bush.
6/15. The Office of the Attorney General of the State of New York announced in a release that it has entered into settlement with EMI Music North America "to end its pervasive "pay-for-play" practices in the music industry". The release states that "investigation determined that EMI provided illegal financial benefits to obtain airplay and boost the chart position of its artists by bribing radio station employees with concert tickets, video games, and hotel and airfare expenses; providing a stream of financial inducements to radio stations to assist with overhead costs; using independent promoters as conduits for the illegal payments to radio stations; and engaging in fraudulent call-in campaigns to increase the airplay of particular songs." It adds that New York has already entered into settlements with Sony BMG, Warner and Universal, and that "The investigation is continuing".
6/15. The Antitrust Modernization Commission (AMC) published notice in the Federal Register requesting public comments on any topic related to the AMC's study. The deadline for comments is July 10, 2006. See, Federal Register, June 15, 2006, Vol. 71, No. 115, at Pages 34590-34591.
6/16. Danny Ferrer pled guilty in U.S. District Court (EDVa) to one count of conspiracy and one count of criminal copyright infringement for selling pirated software through the mail. The Department of Justice (DOJ) stated in a release that "Ferrer and his co-conspirators operated the www.BUYSUSA.com Web site, which sold copies of software products that were copyrighted by companies such as Adobe Systems Inc., Autodesk, and Macromedia Inc. at prices substantially below the suggested retail price. The software products purchased on the website were reproduced on compact discs and distributed through the mail. The operation included a serial number that allowed the purchaser to activate and use the product." See also, Business Software Association (BSA) release.

References: § 798
 § 402
 § 798
 § 402
 § 222
 v.