Source: http://techlawjournal.com/home/newsbriefs/2001/07d.asp
Timestamp: 2019-04-19 22:21:12+00:00

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News Briefs: July 16-20, 2001.
7/20. The U.S. Court of Appeals (FedCir) issued its opinion in State Contracting & Engineering v. Florida, a case involving the application of state sovereign immunity to patent infringement and related claims.
The plaintiffs hold two patents pertaining to highway sound barrier walls. Plaintiffs bid on, and received construction contracts from the State of Florida Department of Transportation (FDOT). Plaintiffs subsequently obtained patents on the technology included within their proposals. The FDOT included data from these proposals in subsequent requests for bids. Plaintiffs sought royalties. After unsuccessful negotiations, plaintiffs filed a complaint in U.S. District Court (SDFl) against Florida and seven private contracts. Plaintiffs alleged direct infringement by Florida, direct infringement by the private contractors, a Lanham Act violation by Florida, unconstitutional taking by Florida, and breach of contract by Florida. The District Court granting summary judgment to Defendants.
The Appeals Court affirmed the District Court's grant of summary judgment to Florida as to the patent infringement and Lanham Act claims on grounds of sovereign immunity. It also affirmed the grant of summary judgment to Florida as to the takings claim and the breach of contract claim. It vacated and remanded the District Court's grant of summary judgment to the private contractors on the patent infringement claims.
7/20. The U.S. Court of Appeals (3rdCir) issued its opinion in Southco v. Kanbridge, a case regarding the originality requirement for copyright protection.
Facts. Southco manufactures captive screw fasteners, devices used in assembling the panels of computers and telecommunications equipment. Southco developed a numbering system to serve as a shorthand description of the relevant characteristics of each fastener to assist its employees and customers in identifying and distinguishing among its products. This nine digit numbering system has become an industry standard. Kanebridge is a distributor of competing fasteners. It began using Southco's part numbers in comparison charts that were included in advertisements and other literature that it provides to customers.
District Court. Southco filed a complaint in U.S. District Court (EDPenn) against Kanbridge alleging patent infringement. The District Court granted Southco a preliminary injunction. This appeal followed.
Appeals Court. Kanbridge argued several issues on appeal (including lack of originality, the scenes a faire doctrine, the merger doctrine, and fair use). However, the Appeals Court reversed pursuant to the lack of originality, and therefore did not address the other issues. The Court applied Section 102 of the Copyright Act (which provides copyright protection for "original works of authorship") and the 1991 opinion of the Supreme Court in Feist Publications v. Rural Tel. Serv., 499 U.S. 340 (which held that the originality requirement means that a work must have been "independently created by the author" and must possess "at least some minimal degree of creativity."). The Appeals Court held that there was no originality here. It wrote: "there is simply no room for creativity when assigning a number to a new panel fastener. The part has certain relevant characteristics, and the numbering system specifies certain numbers for each of those characteristics. As a result, there is only one possible part number for any new panel fastener that Southco creates. This number results from the mechanical application of the system, not creative thought."
7/20. The USTR stated that the U.S. and Singapore concluded the fourth round of negotiations on the U.S. Singapore Free Trade Agreement (FTA) in London. The USTR stated in a release that "The two sides continued intensive negotiations on a wide range of issues, including trade in goods, customs and rules of origin, textiles, trade in services, investment, intellectual property rights, and government procurement. Significant progress was achieved in services and rules of origin. The two sides agreed to adopt the negative list approach for services and investment and to develop state of the art rules of origin to take into account the globalization of manufacturing in a knowledge-based world economy." The parties will resume negotiations during the week of September 17-21, 2001 in London.
7/20. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing on the software, movie and music industries' efforts to curb children's exposure to violent content.
Rep. Billy Tauzin (R-LA), Chairman of the full committee, said in his prepared statement that "there is legislation currently before the Energy and Commerce Committee that would enable the government to enforce policies against marketing and selling this material to minors, and we need to think about it very carefully."
Douglas Lowenstein of the Interactive Digital Software Association (IDSA) addressed games. He argued in his prepared testimony that a majority of game players are adults, and that since games are costly, children need parental consent to obtain them. He also testified that "we do live in a world where media is incredibly complex, where the Internet spans the globe, where consumers, young and old, have access to information in ways never before imagined. In this environment, it is simply not possible or realistic to create an airtight system where young people do not hear about, or even obtain, games that are not appropriate for them."
Lee Peeler of the Federal Trade Commission said in his prepared testimony that "Seventy percent of the 118 electronic games with a Mature rating for violence the Commission examined targeted children under 17."
See, prepared statements of other witnesses: Jack Valenti (Motion Picture Association of America), Hilary Rosen (Recording Industry Association of America), Doug McMillon (Wal-Mart Stores), and Daphne White (The Lion & Lamb Project).
7/20. Attorney General John Ashcroft gave a speech in which he announced the formation of nine new units at the Department of Justice named Computer Hacking and Intellectual Property (CHIP) units. The new units will prosecute computer intrusions, copyright and trademark violations, theft of trade secrets and economic espionage, theft of computer and high tech components, fraud, and other Internet crimes. One such unit already exists for the San Francisco area. New units will be created for Los Angeles, San Diego, Atlanta, Boston, New York City, Dallas, Seattle and northern Virginia. The CHIP units will be staffed with a total of 77 people, of which 48 will be prosecutors.
AG Ashcroft stated that "These new teams will prosecute vigorously those responsible for cybercrime. As a result we hope to reinforce the message to would-be criminals that there are no free passes in cyberspace. Crimes will be investigated and criminals will be prosecuted to the fullest extent of the law."
7/19. Rep. David Dreier (R-CA), Amo Houghton (R-NY) and Jeff Flake (R-AZ) introduced HR 2568, the Export Administration Act of 2001. It is identical to S 149 as reported by the Senate Banking Committee on March 22, 2001. The bill would ease restraints on the export of most dual use products, such as computers and software. The bill was referred to the Committee on International Relations. See, Dreier release.
7/18. Rep. Robert Menendez (D-NJ), Rep. Amo Houghton (R-NY), Jeff Flake (R-AZ), and Earl Blumenauer (D-OR) introduced HR 2557, the Export Administration Act of 2001.
7/20. Rep. Benjamin Gilman (R-NY) introduced HR 2581, a bill to provide authority to control exports.
7/20. Rep. John LaFalce (D-NY) introduced HR 2579, the Internet Gambling Payments Prohibition Act. On Tuesday, July 24, the House Financial Services Committee's Financial Institutions Subcommittee will hold a hearing on Internet gambling proposals.
7/20. Rep. Ed Markey (D-MA), the ranking Democrat on the House Telecom and Internet Subcommittee, sent a letter [PDF] to Commerce Secretary Donald Evans regarding the .us top level domain.
Rep. Markey stated that the "NTIA has announced its intent to contract out management of the ".us" domain, apparently to any contractor willing to run the ccTLD registry service at no cost to the government. I strongly suggest that the Department of Commerce reconsider this proposal for several reasons." He went on to state that it should be managed "in the public interest, serving all Americans in a non-commercial context." Moreover, he stated that "it is inexcusable to give away this public asset without due compensation".
On June 13, NTIA, which is a part of the Commerce Department, issued a Request for Quotations (RFQ) for management of the .us domain. The final date for responses to the RFQ is July 27.
7/20. The FCC approve Verizon's Section 271 application to provide in region interLATA service in Connecticut. Verizon serves only two communities in Connecticut with a total of 60,000 lines. See, FCC release. Verizon has a 271 application pending with the FCC for Pennsylvania, and plans to file applications later this year for the states of New Hampshire, New Jersey, Rhode Island, and Vermont. See, Verizon release.
Sprint General Counsel Richard Devlin had this reaction: "Sprint is disappointed that the FCC did not use this Section 271 application to signal a get-tough approach to Verizon and other Bell companies that have not truly opened up their local markets to competition. Verizon's Connecticut customers, like its New York customers, will experience very limited local competition - and not benefit from the promise of full local competition under the Telecom Act." See, release.
7/20. The Senate confirmed Ralph Boyd to be Assistant Attorney General for the Civil Rights Division and Eileen O'Connor to be Assistant Attorney General for the Tax Division.
7/20. The U.S. Court of Appeals (FedCir) issued its opinion in Dayco v. Total Containment, a patent infringement case. The case involved claims of infringement of several patents pertaining to cylindrical hoses. The District Court granted summary judgment of non-infringement. The Appeals Court affirmed as to one patent, and vacated and remanded as to the others.
7/20. Microsoft filed its opposition [PDF] to the DOJ's July 13 motion [PDF] for immediate issuance of mandate in the Microsoft antitrust case. Microsoft would like the Appeals Court to address its July 18 Petition for Rehearing [PDF] before returning the case to the District Court. It stated that the petition "raises a substantial question and thus merits the attention of the Court. The mandate plainly should not issue while the Court is still considering Microsoft�s petition and plaintiffs� response."
7/19. The Senate Appropriations Committee approved its version of HR 2500, the appropriations bill for the Departments of Commerce, Justice, and State, and for the Judiciary, and for related agencies, including the FCC, FTC, and SEC. The House passed its version of this bill, which is also known at the CJS appropriations bill, on July 18. See, Senate Appropriations release.
The Senate version of the bill now includes $73.0 Million for the NTIA; $43.4 Million is for public telecommunications facilities, planning and construction, and $15.5 Million for information infrastructure grants. The bill also includes $252.5 Million for the FCC, $514 Million for the SEC, and $696.5 Million for the NIST.
The Senate bill also provides $1.1 Billion for the USPTO, which is a part of the Department of Commerce. The House bill provides $1.129 Billion. The USPTO is funded by fees collected from users. However, the amount of fees collected exceeds that made available to the USPTO. The difference is diverted to subsidize other government programs, a practice that is opposed by the intellectual property community.
7/19. The House Judiciary Committee postponed indefinitely its scheduled mark up of HR 2047, the Patent and Trademark Office Authorization Act of 2002. The bill provides that "There are authorized to be appropriated to the United States Patent and Trademark Office for salaries and necessary expenses for fiscal year 2002 an amount equal to the fees collected in fiscal year 2002 ..." Hence, it seeks to end the diversion of USPTO fees to fund other government programs.
7/19. Commerce Secretary Donald Evans sent a letter to FCC Chairman Michael Powell regarding plans to "identify additional spectrum for third generation (3G) advanced mobile wireless services." He stated that this will be done "with additional time". While the Clinton administration had developed a plan, and set a timetable for identifying and allocating spectrum for 3G wireless systems, Evans stated that "I have directed the Acting Administrator of the National Telecommunications and Information Administration to work with the FCC to develop a new plan for the selection of 3G spectrum."
CTIA P/CEO Tom Wheeler had this reaction: "Today's letter is good news for the wireless industry. It confirms that the highest levels of government, from both the commercial and military perspectives, are searching for a �win-win� solution on spectrum allocation for the next generation of wireless services. The letter also calls for both speed and flexibility in finding that solution - two characteristics that will be necessary as we strive in the weeks ahead for a solution that preserves national security and enhances our economy. ..." See, release.
7/19. InterTrust, a provider of digital rights management technologies, announced that it will file a second amended complaint in the U.S. District Court (NDCal) against Microsoft adding a claim for infringement of InterTrust's U.S. Patent No. 5,920,861, which discloses techniques for defining, using, and manipulating rights management data structures. InterTrust will seek monetary damages and injunctive relief, including an injunction prohibiting further infringement by Microsoft products, including Microsoft's Reader (application for reading electronic books) and Digital Asset Server. See, release.
7/19. The Department of Justice formally announced the appointments of Hewitt Pate, Deborah Herman, and Michael Katz to be Deputy Assistant Attorney Generals (DAAGs) in the Department of Justice (DOJ) Antitrust Division; however, these selections have long been public knowledge. Hewitt Pate was appointed DAAG in charge of regulatory matters; he will oversee airline, transportation, energy and other regulatory matters. He previously was a partner in the litigation, intellectual property and antitrust section of the law firm of Hunton & Williams. See, DOJ release and Hunton release.
7/19. Deborah Herman was appointed DAAG in charge of civil enforcement. She was previously a partner in the antitrust litigation section of the law firm of Jones Day. She has experience in telecommunications and high technology issues. See, DOJ release.
7/19. Michael Katz was appointed DAAG in charge of economic analysis. He is a professor of economics and business at the University of California at Berkeley's Haas School. He also directs the school's Center for Telecommunications and Digital Convergence. From 1994 through 1996 he was Chief Economist at the FCC. His areas of interest include networks industries, intellectual property licensing, telecommunications policy, and cooperative research and development. See, DOJ release and Berkeley bio.
7/19. The Senate Banking Committee held a hearing on the nomination of Harvey Pitt to be Chairman of the Securities and Exchange Commission.
7/19. The Senate Judiciary Committee approved the nomination of Roger Gregory to be a Judge on the U.S. Court of Appeals (4thCir).
7/19. The Senate Judiciary Committee approved the nomination of Ralph Boyd to be Assistant Attorney General for the DOJ's Civil Rights Division, and the nomination of Robert McCallum to be Assistant Attorney General for the DOJ's Civil Division.
7/19. The U.S. Court of Appeals (DCCir) issued an order [PDF] in USA v. Microsoft regarding Microsoft's July 18 petition for rehearing [PDF]. The Court wrote, "Upon consideration of appellant�s petition for rehearing filed on July 18, 2001, it is ORDERED that appellees respond thereto and do so on or before August 3, 2001. A reply to the response will not be accepted by the court."
7/19. The House rejected HJRes 50 by a vote of 169 to 259. See, Roll Call No. 255. This resolution, which is sponsored by Rep. Dana Rohrabacher (R-CA) and Rep. Sherrod Brown (D-OH), would have ended normal trade relations with China. Specifically, it would have disapproved of the extension of the waiver authority contained in � 402(c) of the Trade Act of 1974 with respect to the People's Republic of China.
7/19. The Senate Judiciary Committee approved S 407, the Madrid Protocol Implementation Act, a bill to amend the Trademark Act of 1946 to provide for the registration and protection of trademarks in order to carry out provisions of certain international conventions.
7/18. The House Judiciary Committee's Commercial & Administrative Law Subcommittee held a hearing on HR 1410, the Internet Tax Moratorium and Equity Act, sponsored by Rep. Ernest Istook (R-OK) and others. This bill would temporarily extend that existing moratorium on multiple and discriminatory Internet taxes, and Internet access taxes. It would also provide that state and local taxing authorities may require out of jurisdiction Internet sellers (and other remote sellers) to collect sales taxes.
The U.S. Supreme Court ruled in Quill v. North Dakota, 504 U.S. 298 (1992) that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons within the jurisdiction. However, the Court added that Congress may extend such authority. HR 1410 would provide such taxing authority.
ITFA. Congress passed the Internet Tax Freedom Act (ITFA) in 1998, creating the existing three year moratorium, which expires on October 21 of this year. Proponents of increasing state and local taxing authority seek to bundle their proposals with a moratorium extension. Some others seek only an extension of the moratorium contained in the ITFA. Rep. Chris Cox (R-CA) is sponsoring a pair of bills that would do only this.
State Tax Base. Rep. Jerrold Nadler (D-NY) supports Rep. Istook's bill. He stated that Congress should "enable state and local governments to levy sales and use taxes" This, he said, is for the purpose of "protecting the tax bases of state and local governments." Rep. Spencer Bachus (R-AL) stated that "you have those taxes being undermined because more and more people are going to the Internet". Grover Norquist of Americans for Tax Reform countered that the Internet is not a threat to state and local tax collection. First, he said that it accounts for about 1% of sales, while the "state governments are flush with resources" that they do not tax, such as services. Norquist added that Internet retailers are taking sales away from catalogue sellers, not brick and mortar retailers located within the taxing jurisdictions.
States Rights. Rep. Istook testified that this is not just a tax collection issue -- it is a states rights issue also. That is, if states are not able to put their policies into effect with revenues collected from sales taxes, political power will shift to Washington. Norquist retorted that this states rights argument is "George Wallace's argument."
Privacy. Rep. Bob Barr (R-GA) and Norquist raised the issue of privacy. Under the proposed legislation, retailers would need to collect data, including individuals' names, addresses, items purchased, and locations of purchases. Norquist pointed out that this would enable the government to track individuals. He also reminded the Subcommittee that "this government can't keep people's FBI files private". Rep. Istook responded that "the government's interest is in the overall level of sales", not individual level data. Rep. Mel Watt (D-NC) argued that "this is pretty much a red herring issue", noting that the IRS already collects far more personal information.
See, opening statement of Subcommittee Chairman Bob Barr, and prepared testimony of Rep. Ernest Istook. See also, prepared testimony of other witnesses: Grover Norquist, Frank Julian, and Jon Abolins.
7/18. The U.S. Court of Appeals (7thCir) issued its opinion in Bock v. Computer Associates, an ERISA case involving a severance pay agreement for executives of a software company. The Plaintiff, Kevin Bock, was an employee of Platinum Technology, a software company acquired by Computer Associates International (CAI). There was a severance agreement that provided that employees would receive "aggregate severance pay" consisting of a "bonus amount" added to twice the sum of their highest base salary plus their highest 12-month amount of "incentive compensation." In 1998, Bock had a salary of $145,000 and commissions of $674,333. When CAI bought Platinum in 1999 it terminated Bock, and gave him severance pay of $290,00, or twice his salary. Bock filed a complaint to enforce the severance agreement, asserting that commissions constituted "incentive compensation." The U.S. District Court (NDIll) entered judgment for Bock. CAI appealed. Vacated and remanded.
7/18. Microsoft filed a Petition for Rehearing with the U.S. Court of Appeals (DCCir) in Microsoft v. USA on the sole issue of commingling of certain software code specific to web browsing with software code used for other purposes in certain files in Windows 98. Microsoft stated that the June 28 opinion of the U.S. Court of Appeals "accepted the district court�s conclusion that such "commingling" had occurred and that it violated Section 2 of the Sherman Act. The Court�s ruling with regard to "commingling" of software code is important because it might be read to suggest that OEMs should be given the option of removing the software code in Windows 98 (if any) that is specific to Web browsing. ... The Government, however, did not seek such relief on appeal."
7/18. The SEC announced that it settled all claims in SEC v. Stadtt Media, a civil securities fraud action pending in the U.S. District Court (NDTex). Stadtt Media, and four of its owners and employees, fraudulently raised over $900,000 from about 50 investors for the development of a website called C-Magazines.com. Defendants falsely represented that Stadtt Media owned patents on Internet related inventions and that a major investment banking firm was committed to underwriting a $100 Million initial public offering. The defendants consented to final judgments that impose permanent injunctions and other equitable relief against them. However, no civil penalties were imposed, and payment of disgorgement was ordered, but waived for inability to pay.
7/18. The Federal Election Commission (FEC) made public its disposition of its self initiated review of the Compaq Citizenship Fund's (CCF) failure to timely file a disclosure report, as required by the Federal Election Campaign Act. The FEC and CCF reached a conciliation agreement under which the CCF will pay a $2,300 civil penalty. The Compaq Citzenship Fund is connected with Compaq Computer Corporation. See, FEC release. (FEC MUR 5193.) The Treasurer is Michele Blair.
7/18. The U.S. Court of Appeals (9thCir) issued an order stating the order of July 12 of the U.S. District Court (NDCal) in A&M Records v. Napster is "stayed pending a further order of this court." The stayed order had required that Napster block all songs that had been identified as copyrighted. The RIAA's Cary Sherman had this reaction: "We are confident that after a thorough review, the Ninth Circuit Court of Appeals will uphold Judge Patel's decision. The evidence in this case clearly shows that Napster has not done all it can to police its system. The Ninth Circuit Court has previously ruled that Napster's conduct required an injunction and we expect them to do so again after a full review of the facts. It is important to note that today's ruling does not change in any way the fact that Napster must prevent copyrighted works from appearing on its system as previously ordered by the Court." See, RIAA release.
7/18. The House passed HR 2500, the FY 2002 appropriations bill for the Departments of Commerce, Justice, and State, for the Judiciary, and for related agencies, including the FCC, FTC, and SEC.
7/18. The FCC adopted its Sixth Annual Report on the state of competition in the wireless marketplace. See, FCC release.
7/18. FCC Chairman Michael Powell gave a speech to the Tenth African Telecommunications and Information Technology Conference (AFCOM 2001) in Arlington, Virginia. He spoke about digital divides and digital development. AFCOM opened its three day conference on July 18.
7/18. Federal Reserve Chairman Alan Greenspan appeared before the House Financial Services Committee to present the Federal Reserve's semiannual report on monetary policy. He provided an assessment of the current economic situation, with particular attention to the technology sector. See, prepared testimony and semiannual report.
7/18. AT&T's Board of Directors voted unanimously to reject Comcast's proposal to acquire AT&T Broadband. See, AT&T release.
7/17. The U.S. Attorney's Office (NDCal) charged Dmitry Sklyarov by criminal complaint [PDF] with one count of trafficking in a product designed to circumvent copyright protection measures in violation of Digital Millennium Copyright Act (DMCA), at 17 U.S.C. � 1201. The complaint states that Sklyarov developed for sale and distribution a program that can convert Adobe's eBooks into naked files that can be read, copied, and stored on any computer.
Adobe Systems makes the eBook Reader, a program which can read books in an electronic format named eBook. The program is downloadable at Adobe's web site. Users can then purchase encrypted electronic books in eBook format from online bookstores, such as Amazon.com, and read them with the eBook Reader. The books are encrypted to protect copyright interests.
An affidavit of an FBI Agent made a part of the complaint states that "Adobe is being victimized by a Russian company name Elcomsoft. Elcomsoft is distributing a key over the Internet in the form of a software program that illegally unlocks copyright protections on the e-Book files. This unlocking key is available for purchase on the Internet at http://www.elcomsoft.com/aebpr.html. The commercial name given by Elcomsoft to this unlocking key program is Advanced eBook Processor (AEBPR)." The affidavit further states that Sklyarov was scheduled to speak on July 15 at a hacker conference titled Defcon 9 in Las Vegas, Nevada.
The Department of Justice stated in a release that Sklyarov was arrested, and "made his initial appearance in federal court in Las Vegas, yesterday, July 16, 2001. Mr. Sklyarov was detained without bail and ordered removed to the Northern District of California. No dates have been set for the defendant's next appearance."
Elcomsoft's web site states that Sklyarov is an employee of the company, and that he developed the AEBPR. The web site is also still selling the AEBPR.
The Statute: Anti Circumvention. 17 U.S.C. � 1201(a)(1)(A) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." 17 U.S.C. � 1201(b)(1) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; (B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof.
The Statute: Criminal Penalties. 17 U.S.C. � 1204 provides, in part, that "Any person who violates section 1201 or 1202 willfully and for purposes of commercial advantage or private financial gain (1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and (2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense."
See also, prepared testimony in PDF of witnesses: Mel Karmizan (Viacom), Jack Fuller (Tribune Publishing Company Alan Frank (Post-Newsweek Stations), William Baker (WNET), Gene Kimmelman (Consumer�s Union), and Eli Noam (Columbia Business School). Karmizan, who opposes the rules, stated that "a worldwide technological tsunami has crashed upon the world, flooding the broadcast industry with competition in unprecedented proportions. Broadcast radio now competes head-to-head with Internet radio" and "As for broadcast television, it competes directly with cable ... That service, subscribed to by nearly 70% of the country�s households, has developed into a multi-channel video programming distribution platform that not only carries hundreds of cable networks but serves as a high-speed gateway to the Internet ..." In contrast, Kimmelman argued that "consumers' interests will best be served if the Federal Communications Commission (FCC) is instructed to maintain previous media ownership rules ..."
7/17. Rep. Clifford Stearns (R-FL) introduced HR 2535, a bill pertaining to the amount of spectrum that may be licensed to wireless carriers. It was referred to the House Commerce Committee, of which Rep. Stearns is a member. FCC rules prohibit a single entity's interests in the licenses of broadband PCS, cellular, and SMR services from cumulatively exceeding more than 45 MHz of spectrum within the same geographic area.
Rep. Stearns stated in a release that "The current 45 MHz spectrum cap is beginning to impact innovation and competition in the wireless industry. ... The cap now works to limit competition by denying wireless providers access to open markets, thereby denying consumers the benefits that arise from additional competition, such as lower prices and innovative services. Additionally, continuation of the spectrum cap will result in the continued lag of U.S. companies behind Europe and Japan in the deployment of wireless Third Generation technologies."
7/17. Sen. Ernest Hollings (D-SC), Sen. Daniel Inouye (D-HI), and Sen. Byron Dorgan (D-ND) introduced S 1189, a bill to require the FCC to amend its daily newspaper cross ownership rules. It was referred to the Senate Commerce Committee; all three are members. Sen. Hollings stated that "This legislation is necessary to stem the tide toward concentration in the broadcast and newspaper industries and force a thorough and reasoned examination of the claims that further consolidation will serve the public interest."
7/17. In contrast, Rep. Clifford Stearns (R-FL) introduced HR 2536, a bill to amend the Communications Act of 1934 to reduce restrictions on media ownership. This bill was referred to the House Commerce Committee.
7/17. Rep. Steve Chabot (R-OH) and Rep. Bill Delahunt (D-MA) introduced HR 2519 a bill to allow media coverage of court proceedings. It was referred to the House Judiciary Committee.
The Cellular Telecommunications Industry Association (CTIA) is not happy. CTIA P/CEO Tom Wheeler stated that "we hope the Commission will revisit soon whether 70 MHz of spectrum needs to be locked up for this use at all." On July 12, the CTIA sent a letter [PDF] to the FCC in which it stated that "It is reasonable to expect that most � and perhaps all � of the current MSS applicants will ultimately not launch and provide service in that band. Given increasing spectrum needs for other services, the track record of underutilized MSS spectrum in other bands, the financial condition of numerous MSS companies, and the claims made by New ICO that MSS is not viable without terrestrial flexibility, the Commission should consider whether it is in the public interest to license an additional 70 MHz for MSS." See also, CTIA release.
7/17. Roy Bartlett joined the San Francisco office of the law firm of Covington & Burling as Of Counsel. He previously was a partner in the law firm of White & Case. He will focus on complex business litigation matters, with an emphasis on intellectual property concerns. See, C&B release [PDF].
7/17. The Senate Commerce Committee approved new subcommittee assignments for the Committee. The Subcommittee on Communications is chaired by Sen. Daniel Inouye (D-HI). The other Democratic members are Sens. Ernest Hollings (SC), John Kerry (MA), John Breaux (LA), John Rockefeller (WV), Byron Dorgan (ND), Ron Wyden (OR), Max Cleland (GA), Barbara Boxer (CA), John Edwards (NC), and Jean Carnahan (MO). The ranking Republican is Sen. Conrad Burns (R-MT). The other Republicans on the Subcommittee are Sens. Ted Stevens (AK), Trent Lott (MS), Kay Hutchison (TX), Olympia Snowe (ME), Sam Brownback (KS), Gordon Smith (OR), Peter Fitzgerald (IL), John Ensign (NV), and George Allen (VA).See, release.
7/16. Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman and ranking Democrat on the House Commerce Committee, sent a letter to members of the House of Representatives regarding the Federal Communications Commission's media cross ownership and multiple ownership rules. On July 17, the House is scheduled to vote on HR 2500, a bill to make appropriations for FY 2002 for the Departments of Commerce, State, and Justice, for the Judiciary, and related agencies. The FCC's appropriation is a part of this bill. On July 16 the House Rules Committee adopted an open rule for consideration of this bill. Rep. David Obey (D-WI) is likely to offer an amendment that would prevent the FCC from modifying its media cross ownership and multiple ownership rules.
The Senate Commerce Committee, now chaired by Sen. Ernest Hollings (D-SC), will hold a hearing on media concentration on July 17 at 9:30 AM. In addition, Sen. Hollings may introduce a bill that would prevent the FCC from eliminating ruled that limit the size of media companies until it has conducted a study of the market.
7/16. Comdisco announced that "it has reached a definitive agreement with Hewlett-Packard Company to sell substantially all of its Availability Solutions (Technology Services) business for $610 million." Comdisco also announced that it and its U.S. subsidiaries have filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court (NDIll). See, Comdisco release and HP release.
7/16. Homestore.com announced that it has been notified by the Department of Justice that the DOJ has concluded its inquiry into certain business activities of Homestore, and that no enforcement action is necessary. See, Homestore release.
7/16. The U.S. Court of Appeals (FedCir) issued it opinion in Tegal Corp. v. Tokyo Electron, a consolidation of three appeals in patent litigation regarding plasma reactors, which are used in the fabrication of semiconductor devices. The issues on appeal included right to jury trial, invalidity for obviousness, invalidity for being anticipated, enforceability, willful infringement, and attorneys fees. The Court of Appeals vacated and remanded.
7/16. Susan Creighton will join the FTC's Bureau of Competition, which handles antitrust matters. She is currently a partner in the law office of Wilson Sonsini. She focuses on intellectual property and antitrust issues. She is best known for co-authoring with Gary Reback a white paper regarding antitrust matters relating to Microsoft that preceded action by the Antitrust Division of the Department of Justice against Microsoft. She has also represented Orbitz, VISX, Lexis Nexis, and Autodesk in federal antitrust matters, and Borland and Octel in intellectual property matters.
7/16. Christopher Libertelli was named Legal Counsel to the FCC's Common Carrier Bureau Chief, Dorothy Attwood. He will focus on local competition, broadband deployment, and antitrust merger reviews. He joined the FCC in 1999. Previously, he was an associate in the Washington DC office of the law firm of Dow Lohnes & Albertson.
7/16. Stephen Crimmins joined the Washington DC and New York City offices of the law firm of Holland & Knight as a partner in its securities litigation practice. He was Deputy Chief Litigation Counsel in the SEC's Division of Enforcement until July 13, 2001. See, SEC release.
7/16. Patricia Paoletta joined the Washington DC office of the law firm of Wiley Rein & Fielding as a partner in its Communications practice. She will head the International Telecommunications Group. She was previously VP of Government Relations at Level 3 Communications. Prior to that she worked for the House Commerce Committee. Before that she worked as Director of Telecommunications Trade Policy at the Office of the U.S. Trade Representative. And before that, she worked in the Office of International Communications at the FCC. See, WRF release.
7/16. The GAO released a report [PDF] titled "Department of Commerce: Status of Achieving Key Outcomes and Addressing Major Management Challenges." The report addresses, among other topics, proliferation of dual use commodities.
7/16. Napster announced that it has licensed PlayMedia Systems' AMP technology to power the secure digital music player in its new membership service. See, Napster release and PlayMedia release [PDF].
Go to News Briefs from July 11-15, 2001.

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