Source: http://www.techlawjournal.com/alert/2005/08/01.asp
Timestamp: 2019-04-20 10:11:37+00:00

Document:
TLJ Daily E-Mail Alert No. 1,185, August 1, 2005.
August 1, 2005, 9:00 AM ET, Alert No. 1,185.
7/28. The Federal Communications Commission (FCC) released an agenda [PDF] for its event titled "Open Meeting", scheduled for Thursday, August 4, 2005.
First, the FCC will consider a Notice of Inquiry (NOI) concerning the effects of anticompetitive conduct and circuit disruption by foreign carriers on U.S. international routes.
Second, the FCC will consider a NOI that requests comments to assist it in preparing its 12th annual report on the status of competition in the market for the delivery of video programming.
Third, the FCC will consider an Order on Reconsideration regarding its service rules for advanced wireless services in the 1710-1755 MHz and 2110-2155 MHz bands. This is WT Docket No. 02-353.
As with other recent events, the agenda for this event is short and non-controversial. With the departure of Michael Powell, there are two Democrats and two Republicans. More significant FCC decisions are likely to be delayed until there are again five Commissioners. This will not likely be soon. The Senate, which must confirm any nominee for FCC Commissioner, is on recess until after Labor Day. Then, the Senate will have some other major items on its Fall agenda, including consideration of the nomination of John Roberts to be a Justice of the U.S. Supreme Court.
This event is scheduled for 9:30 AM on Thursday, August 4, 2005 in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always take up all of the items on its agenda. The FCC does not always start its monthly meetings at the scheduled time. The FCC usually does not release at its meetings copies of the items that its adopts at its meetings.
7/28. Secretary of Homeland Security Michael Chertoff gave a speech in Santa Clara, California, to the Commonwealth Club of California in which he discussed technology and the provisions in the Homeland Security Act of 2002 that limit liability for certain anti terrorism technologies. He also addressed cyber security.
Companies that develop and sell anti terrorism technologies could face lawsuits, and massive liability, when terrorist attacks occur. This gives would be technology developers a disincentive to develop anti terrorism related technologies. The SAFETY Act, which is a part of the Homeland Security Act, pertains to this problem. However, its effectiveness in incenting technology development may be limited by several things.
For example, it only offers protection to "qualified anti-terrorism technologies". That is, the developer must first obtain certification from the Department of Homeland Security (DHS). The lengthy and burdensome regulatory review process has resulted in few certifications. Also, once the developer qualifies, the limitation on liability is only partial. Secretary Chertoff stated the the DHS "not done enough to take advantage" of the SAFETY Act's provisions.
The Congress enacted the "Support Anti-terrorism by Fostering Effective Technologies Act of 2002", or SAFETY Act, as Subtitle G of Title VII of the "Homeland Security Act of 2002", or HSA. The HSA was HR 5005 in the 107th Congress. It is now Public Law No. 107-296.
The SAFETY Act provides that "There shall exist a Federal cause of action for claims arising out of, relating to, or resulting from an act of terrorism when qualified anti-terrorism technologies have been deployed in defense against or response or recovery from such act and such claims result or may result in loss to the Seller."
It then provides that "Such appropriate district court of the United States shall have original and exclusive jurisdiction over all actions for any claim for loss of property, personal injury, or death arising out of, relating to, or resulting from an act of terrorism when qualified anti-terrorism technologies have been deployed in defense against or response or recovery from such act and such claims result or may result in loss to the Seller."
The SAFTETY Act also prohibits the award of punitive damages. It also limits non-economic damages. It provides that "Noneconomic damages may be awarded against a defendant only in an amount directly proportional to the percentage of responsibility of such defendant for the harm to the plaintiff, and no plaintiff may recover noneconomic damages unless the plaintiff suffered physical harm."
The SAFETY Act provides no protection in any litigation brought by governmental authority under a criminal statute. Nor does it provide any limitation on liability in civil actions if the defendant "attempts to commit ... any criminal act".
The Act also creates a "rebuttable presumption that the government contractor defense applies" in product liability litigation, but only for "qualified anti-terrorism technologies approved by the Secretary".
Chertoff (at left) stated that "Technology can play a role in the detection of a threatened nuclear attack. Technology can be deployed in the form of biological sensors throughout our cities to detect the release of dangerous toxins. Technology provides the ability to screen passengers with just the simple swipe of a finger or screen cargo without ever opening a lid."
"Of course to realize the full benefits technology has to offer, we are looking beyond the walls of DHS -- to the private sector, to the high tech world. To the innovators who have made our world so much smaller, we are now looking to you to help make it that much safer."
Chertoff continued that "we recognize our responsibility to support and aid these efforts in any way we can. For example, three years ago, Congress passed the SAFETY Act to enable our private sector partners to develop innovative technology to protect the homeland without the fear of unduly high transaction costs imposed by the possibility of frivolous lawsuits."
He concluded that "we have not done enough to take advantage of this powerful tool to spur new technologies and new systems. We are streamlining the application process and working to deploy incentives under the SAFETY Act more broadly, with the hope that these changes will motivate the private sector to take full advantage of this tool."
Cyber Security. Chertoff stated that "when it comes to securing the cyber systems that connect and control much of our infrastructure, we depend on our technology providers to take a direct role and partner with us in cyber risk assessment and mitigation to achieve the measure of security we all desire." He added that "the vast majority of our cyber assets are privately owned and operated. It therefore follows that security cannot take the form of government dictates, but must be the product of strong partnership work and disciplined collaboration."
He said that "There are several steps we must take. These include maintaining and enhancing a robust cyberspace response system, furthering information sharing and supporting working partnerships between government and industry � operationally and on strategic issues such as software assurance and corporate governance. In addition, we must work to integrate cyber priorities into our infrastructure protection plans and prepare ourselves to respond to new technology threats.
Chertoff added that "we are working to finalize a National Infrastructure Protection Plan that will offer baseline preparedness plans and response protocols for seventeen critical infrastructure sectors and resources including Information Technology, Agriculture, Water, and Energy. We�re working closely with a variety of stakeholders to develop our plan for the IT portion, but we�re also looking at the kind of impact IT has on other infrastructures."
7/27. The U.S. Court of Appeals (7thCir) issued its opinion [12 pages in PDF] in FTC v. World Media Brokers, a telemarketing sales rule case involving the sale of Canadian lottery tickets by telephone to consumers in the U.S. This is not legal. Yet, the telemarketers deceived consumers about this. The Court of Appeals affirmed the District Court's $19 Million judgment against both corporate defendants, and two individuals. The Court's opinion sets for the circumstances under which individuals can be held liable for the deceptive acts of corporations under the FTC Act.
The U.S. Federal Trade Commission (FTC) filed a complaint [PDF] in U.S. District Court (NDIll) on September 30, 2002, against World Media Brokers, related corporate entities and dbas, and its principals, alleging violation of � 5(a) of the FTC Act, which is codified at 15 U.S.C. � 45(a). It prohibits unfair or deceptive acts or practices in or affecting commerce. The complaint also alleged violation of �� 13(b) and 19 of the FTC Act, 15 U.S.C. �� 53(b) and 57b, the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. � 6101-6108, and the FTC Telemarketing Sales Rule (TSR), 16 C.F.R. � 310.1-9.
The District Court entered judgment against five corporate entities, and two principals, George Yemec and Anita Rapp, individually. It enjoined further violations of the law, and ordered the payment of $19 Million in consumer redress.
This case is Federal Trade Commission v. World Media Brokers, et al., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 04-2721, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 C 6985, Judge Amy St. Eve presiding. Judge Rovner wrote the opinion of the Court of Appeals, in which Judges Bauer and Easterbrook joined.
7/28. The U.S. Court of Appeals (4thCir) issued its divided opinion [25 pages in PDF] in Hatfill v. New York Times, a defamation case. The District Court dismissed for failure to state a claim. A three judge panel of the Court of Appeals reversed. Judge Niemeyer dissented.
The Department of Justice has not prosecuted anyone for mailing letters containing anthrax spores in the fall of 2001. However, the Federal Bureau of Investigation (FBI) has investigated Steven Hatfill, a research scientist who is a germ warfare specialist.
Nicholas Kristoff is employed by the New York Times (NYT), a daily newspaper. Kristoff wrote on numerous occasions about the 2001 anthrax mailings, and the FBI's investigation. Hatfill asserts that this defamed him.
Hatfill filed a complaint in U.S. District Court (EDVa) against the NYT and Kristoff alleging defamation and intentional infliction of emotional distress, under Virginia state law. Hatfill dismissed the claims against Kristoff, on the basis that the court lacks personal jurisdiction over him.
The District Court dismissed the claims against the NYT for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Hatfill appealed.
The Court of Appeals reversed. Judge Dennis Shedd wrote the opinion for the majority. He quoted extensively from Kristoff's pieces in the NYT, and concluded that the complaint adequately alleges claims for defamation and intentional infliction of emotional distress, based upon the courts construction of the Kristoff pieces.
Judge Niemeyer wrote a dissent. He argued that Kristoff criticized the FBI's handling of the investigation of Hatfill, and the Kristoff argued that the FBI should have been pursuing certain leads regarding Hatfill, but that Kristoff never accused Hatfill of sending the anthrax, or committing a crime. He would have affirmed the District Court's dismissal.
Christopher Wright of the law firm of Harris Wiltshire & Grannis argued the case for Hatfill. Wright is a former General Counsel of the Federal Communications Commission (FCC).
This case is Steven Hatfill v. The New York Times Company and Nicholas Kristoff, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 04-2561, an appeal from the U.S. District Court for the Eastern District of Virginia, D.C. No. CA-04-807-A, Judge Claude Hilton presiding. Judge Dennis Shedd wrote the opinion of the Court of Appeals, in which Judge Wilkins joined. Judge Niemeyer dissented.
There was no issue of the TLJ Daily E-Mail Alert on Friday, July 29, 2005.
7/28. The Recording Industry Association of American (RIAA) announced the filing of another round of lawsuits against individuals in U.S. District Courts around the country alleging copyright infringement in connection with the use of peer to peer systems. See, release.
7/28. The Department of Justice (DOJ) announced that a grand jury of the U.S. District Court (WDNC) returned an indictment that charges four people with criminal copyright infringement in connection with their alleged illegal distribution of copyrighted movies, software, games and music on the internet. The indictment charges David Lee Pruett (of Auburn, Washington), Alexander C. Von Eremeef (Belmont, Massachusetts), George C. Stoutenburgh (Bennet, Colorado), Jerry M. Melvin (Roanoke, Virginia). The DOJ also announced in a release that it charged four additional persons by criminal information with conspiracy to commit criminal copyright infringement. These people are David Chen Pui (Fountain Valley, California), Shawn W. Laemmrich (Calumet, Michigan), Scott John Walls (Spokane, Washington), and Franklin Edward Littell (Martinsville, Indiana).
7/27. The U.S. Court of Appeals (11thCir) issued its opinion [13 pages in PDF] in Maverick Boat Company v. American Marine Holdings, a copyright infringement and trade dress infringement case involving boat hull designs. Not everything in the Digital Millennium Copyright Act (DMCA) pertains to digital works. The Congress included in the DMCA the Vessel Hull Design Protection Act (VHDPA). It is now codified at 17 U.S.C. � 1301 et seq. This was a response to the opinion of the Supreme Court in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989). The District Court cancelled Maverick's copyright registration, and denied its claims for copyright and trade dress infringement. The Court of Appeals affirmed. This case is Maverick Boat Company, Inc. v. American Marine Holdings, Inc., U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 04-11259, an appeal from the U.S. District Court for the Southern District of Florida, D.C. Nos. 02-14102 CV-DMM and 02-14283 CV-DMM. Judge Dubina wrote the opinion of the Court of Appeals, in which Judges Fay and Goldberg joined.
7/27. The Federal Communications Commission (FCC) published a notice in the Federal Register that states that the Office of Management and Budget (OMB) has approved the extensive information collection mandates contained in the FCC's VOIP E911 Order. See, Federal Register, July 27, 2005, Vol. 70, No. 143, at Page 43323. See also, the FCC's document titled "First Report and Order and Notice of Proposed Rulemaking" [90 pages in PDF], numbered FCC 05-116, adopted on May 19, 2005, and released on June 3, 2005. See also, the order contained in the FCC's document titled "Public Notice' [PDF], numbered DA 05-2085, and released on July 26, 2005. These orders were issued in FCC proceedings regarding extending elements of the regulatory regime for communications to internet protocol based services: "In the Matter of IP-Enabled Services", numbered WC Docket No. 04-36, and "E911 Requirements for IP-Enabled Service Providers", numbered WC Docket No. 05-196.

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