Source: http://techlawjournal.com/home/newsbriefs/2001/06e.asp
Timestamp: 2019-04-22 08:08:45+00:00

Document:
News Briefs: June 21-25, 2001.
6/25. The Supreme Court of the U.S. issued its opinion [PDF] in New York Times v. Tasini, a case regarding the application of copyright law to the republication of the articles of free lance writers in electronic databases. The Court ruled, 7-2, that the defendant publishers did not have a privilege under Section 201(c) of the Copyright Act to include in electronic databases free lance articles written for print publications.
Facts. The plaintiffs are free lance authors whose articles were previously published in periodicals. The defendants are publishers and owners of electronic databases which have republished their articles. None of the plaintiffs were employed by the periodical publications in which their articles appeared. Nor did they have work for hire contracts. All registered a copyright in each of the articles at issue in this proceeding. The authors' ownership of the copyright in their individual works is not in dispute. Subsequently, the periodical publications licensed much of the content of their periodicals, including the plaintiffs' works, to one or more of the electronic database providers.
Lower Court Proceedings. Plaintiffs filed a complaint in U.S. District Court (SDNY) in 1993 alleging copyright infringement. The District Court issued its opinion in 1997 holding that defendants are protected by the privilege afforded the publishers of "collective works" under Section 201(c) of the Copyright Act. Collective works include newspapers and magazines. Judge Sotomayor ruled on cross motions for summary judgment that the electronic databases are a "revision" of the individual periodical issues from which the articles were taken, and hence, granted summary judgment for the defendants. The U.S. Court of Appeals (2ndCir) issued its opinion reversing the District Court in 1999. Judge Winter, writing for a three judge panel, held that the privilege afforded authors of collective works under Section 201(c) does not permit the publishers to license individually copyrighted works for inclusion in the electronic databases.
17 U.S.C. 201(c). "Contributions to Collective Works. Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series."
Opinion of the Court. Justice Ginsburg wrote the opinion of the Supreme Court. She wrote that "�1(c) does not authorize the copying at issue here. The publishers are not sheltered by �1(c), we conclude, because the databases reproduce and distribute articles standing alone and not in context, not "as part of that particular collective work" to which the author contributed, "as part of ... any revision" thereof, or "as part of ... any later collective work in the same series." Both the print publishers and the electronic publishers, we rule, have infringed the copyrights of the freelance authors." Ginsburg added, "we leave remedial issues open for initial airing and decision in the District Court."
Dissent. Justice Stevens wrote a dissent, in which Justice Breyer joined. He wrote that electronic databasing is a revision within the meaning of Section 201. Stevens also stated that he was concerned about "the difficulties of locating individual freelance authors and the potential of exposure to statutory damages may well have the effect of forcing electronic archives to purge freelance pieces from their databases." He also commented, in a footnote, that "congressional action may ultimately be necessary to preserve present databases in their entirety. At the least, Congress can determine the nature and scope of the problem and fashion on appropriate licensing remedy far more easily than can courts."
The Software & Information Industry Association (SIIA) criticized the opinion, and called for legislation. It is a Washington DC based trade group which represents, among others, the electronic database companies which lost this case. SIIA President Ken Wasch stated that the "SIIA is committed to uniting publishers of digital content and companies providing electronic archival services to lobby Congress to consider the effects of this decision". See, release.
6/25. The Supreme Court of the U.S. granted certiorari in Verizon Maryland v. Public Service Commission of Maryland (No. 00-1531) and U.S. v. PSC of Maryland (No. 00-1711). These two cases are set for oral argument in tandem with Mathias v. Worldcom (No. 00-878). See, Order List [PDF] at page 3. The issue is whether state public utility commissions are immune under the 11th Amendment from being sued in federal court under the Communications Act. The Constitution provides: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."
6/25. The Supreme Court of the U.S. denied certiorari certiorari in Graceba Total Communications v. FCC. See, Order List [PDF] at page 5.
The Supreme Court is likely to hand down its remaining decisions of the term on Thursday, June 28.
6/25. The U.S. Court of Appeals (7thCir) issued an opinion in Nilssen v. Motorola. The underlying dispute pertains to intellectual property. However, the appellate opinion avoids the substantive issues, and instead only addresses various procedural rules in patent and trade secret related litigation.
Ole Nilssen, a litigious inventor, filed a complaint in U.S. District Court against Motorola alleging patent infringement, breach of contract, and violation of trade secret rights. The District Court split the proceeding into two cases, one for patent claims, and the other for state law claims. This created issues of jurisdiction of the District Court over the state law proceeding, finality of any judgment of the purpose of appeal, and which appellate court has jurisdiction over an appeal. It also affected several aspects of each proceeding, including issues to be tried by a jury, and calculation of damages. In this appeal from a judgment in the state law proceeding, Judge Easterbrook vacated the judgment of the District Court, and remanded with instructions to consolidate this state law proceeding with the patent law proceeding. Once consolidated, any appeal will lie in the Federal Circuit.
6/25. Rep. Zoe Lofgren (D-CA) placed extended remarks in the Congressional Record regarding HR 2231, the Patent Reexamination Enhancement Act of 2001, which she introduced on June 19. She wrote that "an invalid patent -- a patent that either should never have been issued or which confers protection beyond what is entitled -- can cause significant damage not only to individual companies but to competitors. Those individuals who rely on their patent and discover a defect, or those who face the threat of litigation on the basis of a patent that is invalid each have a substantial interest in having a mechanism to 'fix' the problem with the patent. This is why I am calling for an enhancement of our patent reexamination system."
Her bill would expand the grounds upon which one may initiate a patent reexamination. She wrote that "Under current law, reexaminations may be based only on patents or printed publications. In a number of fast-moving technologies, such as business methods and software, there is often a substantial body of information that is not formally published or found in patents, so that other information is not considered when making the determination to issue a patent." See, Congressional Record, June 25, 2001, at Page E1191.
6/25. Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, and Rep. Heather Wilson (R-NM) sent a letter to the CEOs of Yahoo, eBay and Amazon seeking details on marketplace efforts to curb online auction fraud, and specifically shilling, the practice of driving up bidding prices on behalf of the seller. "The ability to disguise identity, revoke bids and maintain multiple online identities may facilitate undesirable practices like shilling," wrote Tauzin and Wilson. "Although there are copious statistics on Internet auction fraud, there is little analysis of the practices that facilitate that fraud. We request your assistance in determining the causes of online auction fraud as well as solutions to help protect consumers and boost confidence in e-commerce."
6/25. Recently appointed FCC Commissioner Kathleen Abernathy gave a speech in which she summarized her approach to regulation. She stated that "I will always prefer a private market based solution to a government mandate. I have learned through experience that functioning markets will always make better decisions than government. It will reward winners and punish losers more effectively and efficiently than regulators and provides consumers with greater benefits. In areas where it is necessary for government to intervene and to enact rules, they must be clear, obtainable, and enforced vigorously. Government must be humble, especially in regulating technology."
6/25. President Bush announced his intent to nominate John Marburger to be Director of the Office of Science and Technology. See, release.
6/25. The U.S. International Trade Commission held a Section 337 evidentiary hearing regarding "Certain Field Programmable Gate Arrays and Products Containing Same." This is a matter in which Xilinx is the complainant and Altera is the respondent. See also, notice of investigation.
6/22. The U.S. Court of Appeals (DCCir) issued its opinion in NextWave v. FCC, holding that the FCC is prevented from canceling NextWave's spectrum licenses by the Bankruptcy Code. The decision will further delay the use of this spectrum for wireless communications services, including third generation services.
Background. NextWave obtained spectrum licenses at FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses then, and later make payment under an installment plan. NextWave was unable to make payments, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses, but was blocked by the bankruptcy court. The U.S. District Court (SNDY) affirmed. The U.S. Court of Appeals (2nd Cir.) issued its order reversing and remanding the case on Nov. 24, 1999; it issued its opinion explaining its reversal in May 2000. The FCC then re-auctioned this spectrum to Verizon Wireless and other successful bidders, which intend to use it for third generation wireless, and other, services.
Holding of the DC Circuit. Judge Tatel, writing for a three judge panel, opined that the 2nd Circuit had not already addressed NextWave's bankruptcy claims. He further wrote that the FCC was prevented from canceling the spectrum licenses pursuant to Section 525 of the Bankruptcy Code. He wrote that the FCC "violated the provision of the Bankruptcy Code that prohibits governmental entities from revoking debtors' licenses solely for failure to pay debts dischargeable in bankruptcy. The Commission, having chosen to create standard debt obligations as part of its licensing scheme, is bound by the usual rules governing the treatment of such obligations in bankruptcy."
6/22. President Bush formally nominated Richard Clifton to be a United States Circuit Judge for the Ninth Circuit. He is a partner in the litigation department of Cades Schutte Fleming & Wright, in Honolulu, Hawaii. His practice focuses on antitrust counseling and litigation, financial institution litigation, securities litigation, and arbitrations. He is also general counsel of the Republican Party of Hawaii. See, Cades bio and White House release.
6/22. President Bush formally nominated Carolyn Kuhl to be a United States Circuit Judge for the Ninth Circuit. She is a Los Angeles County Superior Court Judge; she was appointed by former Gov. Pete Wilson. Prior to that, she was a partner at the law firm of Munger Tolles & Olson. Before that, she worked in the Reagan administration as Special Assistant to Attorney General William French Smith, Deputy Assistant Attorney General in the Civil Division, and Deputy Solicitor General. Sen. Barbara Boxer (D-CA), who may attempt to block Kuhl's confirmation, stated in a release that "I am continuing to evaluate this nomination."
6/22. The Federal Election Commission extended the temporary appointment of Acting General Counsel Lois Lerner until September 15, 2001." See, release.
6/22. The Progress and Freedom Foundation (PFF) hosted a panel discussion on antitrust law and policy in the Rayburn House Office Building in Washington DC. The panel was comprised of Jeffrey Eisenach (PFF), Ken Starr (Kirkland & Ellis), Robert Atkinson (Progressive Policy Institute), Albert Foer (Antitrust Institute), and Makan Delrahim (Sen. Hatch).
Makan Delrahim, who is the Republican Staff Director for the Senate Judiciary Committee, stated that just there was an injection of economic analysis into antitrust law in recent decades, "it may be time for a new injection of technical expertise" into antitrust law.
Bob Atkinson, of the Progressive Policy Institute, a Democratic think tank, stated that antitrust enforcement should focus on collusion by middlemen who prevent to development of e-commerce. He cited auto dealers who seek to prevent Internet auto sales as an example. He also stated that online exchanges, such as Covisant and Orbitz, pass antitrust muster.
Ken Starr, whose firm presents ProComp, an anti Microsoft group, stated that "the government is going to stay the course" in the Microsoft case. He also criticized Microsoft's forthcoming XP technology. He stated that with XP Smart Tags "Microsoft can re-edit anyone's site." He also said that XP "should be examined through the lens of traditional antitrust law." The PFF did not include a Microsoft proponent on the panel.
6/22. The USTR released a statement regarding the U.S. Foreign Sales Corporation (FSC) tax regime, and EU challenges to legality before the World Trade Organization (WTO). He stated: "A panel of the World Trade Organization has issued a confidential interim report today on the FSC Repeal and Extraterritorial Income Exclusion Act of 2000, the law which replaced the Foreign Sales Corporation provisions of U.S. tax law. The report will be distributed on a confidential basis to the United States and the European Union, who will have the opportunity to submit written comments on the report to the panel. The WTO panel is scheduled to issue its final report in July, and the report will be made public in August. The United States will respect the confidential nature of the report and will not comment on its findings, nor its implications, at this time."
6/22. The American Bar Association released for public comment its Public Key Infrastructure Assessment Guidelines -- PAG v0.30 Public Draft. The draft was written by the Information Security Committee of the ABA Section of Science and Technology Law.
6/22. G黱ter Burghardt, Head of the European Commission Delegation to the U.S., gave a speech in New Haven, Connecticut titled "The New Europe and the e-Economy."
6/21. The California Court of Appeal (1/2) issued its opinion [PDF] in AOL v. Superior Court affirming the trial court's denial a AOL's motion to stay or dismiss a class action suit brought by AOL subscribers in California state court, despite a choice of forum clause in AOL's Terms of Service (TOS) designating Virginia as the jurisdiction for all litigation.
Facts and Procedure. Al Menendez and other former AOL subscribers filed a complaint in the Superior Court of Alameda County, California, against AOL alleging unauthorized billing of credit card accounts in violation of several California state statutes. Plaintiffs seek class action status. AOL's TOS contains both a choice of forum clause, and a choice of law clause. Both designate Virginia, the home of AOL. Significantly, Virginia state law does not allow consumer lawsuits to be brought as class actions. The Superior Court denied AOL's motion. AOL then brought this petition for writ of mandate.
Holding. The California Court of Appeal denied AOL's petition on the basis the AOL's choice of forum clause is unenforceable. The Court wrote that "Our law favors forum selection agreements only so long as they are procured freely and voluntarily, with the place chosen having some logical nexus to one of the parties or the dispute, and so long as California consumers will not find their substantial legal rights significantly impaired by their enforcement." It continued that "enforcement of AOL's forum selection clause, which is also accompanied by a choice of law provision favoring Virginia, would necessitate a waiver of the statutory remedies of the CLRA, in violation of that law's anti-waiver provision (Civ. Code, � 1751) and California public policy. For this reason alone, we affirm the trial court抯 ruling."
6/21. The Senate Finance Committee completed two days of hearings on granting the President trade promotion authority, formerly known as fast track. Sen. Max Baucus (D-MT), the new Chairman of the Committee, said in his opening statement [PDF] on June 20 that he supports trade promotion authority, but is pessimistic that it will pass this year. He continued that "In the 1980s, the issue was intellectual property. And on this issue, there is great parallel with the current discussions on labor rights and environmental standards. Initially, developing countries hotly opposed the U.S. position on intellectual property. And they wanted it addressed through the largely ineffective World Intellectual Property Organization. In our own country, many argued that trying to address this issue "muddied the waters." But after years of hard negotiation, the developing world relented, and intellectual property protection became an integral part of trade agreements. It remains so today. Now the issue is standards on labor and the environment." See also, Sen. Baucus' opening statement from June 21.
Sen. Charles Grassley (R-IA), the ranking Republican, said in his opening statement [PDF] on June 20 that "Unfortunately, whenever we have attempted to talk about the benefits of international trade during the last six months, the discussion has soon been diverted into a discussion on labor and the environment. These are important issues. We have to address them in some fashion. I hope to do that in a constructive, bipartisan way this year. But they are not, and should not be, the central focus of the trade debate."
USTR Robert Zoellick stated in his prepared testimony of June 21 that "If the Congress cannot or will not act, the United States will pay a price. Since the Congressional grant of authority to negotiate trade agreements expired in 1994, America has fallen behind." He also said that "It really will not help working men and women at home or abroad -- or environmental causes -- to paralyze trade negotiations with cumbersome limits or sanctions or pressures. Together, we want to achieve results, not procedural breakdowns."
See also, prepared testimony of June 20 witnesses: Harold McGraw (McGraw-Hill Companies), Chuck Merja (National Association of Wheat Growers), John Sweeney (AFL-CIO), Mark Van Putten, President and CEO, National Wildlife Federation), Robert Hormats (Goldman Sachs), Peter Scher (Mayer, Brown & Platt), Alan Wolff (Dewey Ballantine), Clayton Yeutter (Hogan and Hartson).
6/21. Rep. Phil English (R-PA) spoke in the House about HR 1446, the Standard Trade Negotiating Authority Act, which he introduced on April 4, 2001. He stated that his bill "allows for full and appropriate consideration of labor and environmental issues as important trade agreements are negotiated." He added that it "ensures that no country could engage in a race to the bottom in order to lure jobs by sacrificing the environment or debasing the common rights of its citizens."
6/21. Rep. William Jefferson (D-LA) and others introduced HR 2281, a bill to amend the Internal Revenue Code to extend and expand the enhanced deduction for charitable contributions of computers. It was referred to the House Ways and Means Committee.
6/21. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing titled Information Privacy: Industry Best Practices and Technological Solutions. This was its fifth hearing on privacy related issues this year. Rep. Cliff Stearns (R-FL), Chairman of the Subcommittee, stated that "technological solutions designed to reach information privacy concerns of the consumer are a critical ingredient of whatever is the recipe to the solution for the problem. ... The second component of the private sector response to the American consumer抯 information privacy concerns is the adoption of self-regulatory measures." See also, prepared statement of Rep. Billy Tauzin (R-LA), the full committee Chairman.
See also, prepared testimony of witnesses: Michael Wallent (Microsoft), Austin Hill (Zero-Knowledge), Frances Schlosstein (Webwasher), Stephen Hsu (SafeWeb), John Schwarz (Reciprocal), Trevor Hughes (Engage), Jerry Cerasale (Direct Marketing Association), Steven Cole (Council of Better Business Bureaus), Jerry DeVault (Ernst & Young), and Marc Rotenberg (Electronic Privacy Information Center).
6/21. USTR Robert Zoellick announced that the U.S. "will not renew the bilateral Nippon Telegraph and Telephone (NTT) Agreement with Japan covering NTT procurement due to substantive progress on this issue. The agreement is set to expire July 1, 2001. Instead, the United States will actively monitor NTT's procurement practices and purchases from U.S. suppliers through information provided by U.S. industry." See, USTR release. See also, TIa release.
6/21. The SEC published an interpretation in the Federal Register regarding the Application of the Electronic Signatures in Global and National Commerce (E-SIGN) Act to record retention requirements pertaining to issuers under the Securities Act of 1933, the Securities Exchange Act of 1934, and Regulation S-T.
6/21. President Bush nominated Harris Hartz to be a Judge of the U.S. Court of Appeals for the Tenth Circuit. See, release.
6/21. President Bush nominated Jon Huntsman to be a Deputy United States Trade Representative. See, release.
6/21. The Senate Finance Committee held a hearing on several nominations, including Allen Johnson (Chief Agricultural Negotiator, USTR), William Lash (Asst. Sec. of Market Access and Compliance, DOC), Brian Roseboro (Asst. Sec. of Financial Markets, Treasury).
6/21. The ICANN announced that Theresa Swinehart will join ICANN as its Counsel for International Legal Affairs. She previously worked as Associate Counsel, and in other positions, at MCI WorldCom in Washington DC. See, ICANN release.
6/21. Floyd Chapman and David Kulik joined the Washington DC office of the law firm of Wiley Rein & Fielding as a partner and of counsel, respectively, in the firm's intellectual property practice. Both were formerly with the Washington DC office of the law firm of Brobeck Pheleger & Harrison. See, release.
6/21. FCC Chairman Michael Powell gave a speech to the Federal Communications Bar Association in Washington DC. This was another in a series of addresses in which he advocated "building policy that is centered around market economics."
He stated that "Market systems, far from being the bane of consumers, have unquestionably produced more consumer welfare than any other economic model devised by mankind. How is it that anyone can argue that the pro-market policies of the United States have not yielded enviable productivity in our economy, jobs for our citizens, a higher standard of living than nearly any other country in the world, and a tradition of innovation and invention that has brought new products, tools and services to our citizens?" However, he also stated that "deregulation for its own sake is not responsible policy." He also stated that "responsible government policy must acknowledge that consumers can be harmed by market abuses and we must have a robust and effective consumer protection component at the FCC."
Go to News Briefs from June 16-20, 2001.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.