Source: http://www.techlawjournal.com/alert/2003/10/21.asp
Timestamp: 2019-04-19 04:38:04+00:00

Document:
TLJ Daily E-Mail Alert No. 762, October 21, 2003.
October 21, 2003, 9:00 AM ET, Alert No. 762.
10/20. The Supreme Court denied certiorari, without opinion, in America West Holding v. No. 84 Employer-Teamster Joint Council Pension Trust Fund, S.C. No. 03-250. See, Order List [10 pages in PDF] at page 3.
The Court passed up an opportunity to interpret (and resolve the conflict between the various circuits) the heightened pleading requirements language of the Private Securities Litigation Reform Act of 1995 (PSLRA).
The plaintiffs filed a complaint in the U.S. District Court (DAriz) against America West Holding Corporation and some of its officers and directors alleging securities fraud. They alleged violation of Section 10(b) of the 1934 Act and Rule 10b-5 thereunder. They also alleged violation of Section 20(a) of the 1934 Act. They are represented by the class action securities fraud specialists, Milberg Weiss.
The District Court dismissed the complaint. The Court of Appeals (9thCir) issued its opinion [PDF] on February 13, 2003, reversing and remanding. It was a split opinion.
This case is America West Holding Corporation, et al. v. No. 84 Employer-Teamster Joint Council Pension Trust Fund, S.C. No. 03-250, a petition for writ of certiorari to the U.S. Court of Appeals for the Ninth Circuit. The Appeals Court number is 01-16725. This case arose in the U.S. District Court for the District of Arizona, D.C. No. CV-99-00399-OMP.
10/16. Rep. Robert Wexler (D-FL), Rep. Jay Inslee (D-WA), and Rep. Tom Feeney (R-FL) held a press conference to announce the formation of a Congressional Caucus on Intellectual Property, and to advocate an end to the practice of diverting user fees collected by the U.S. Patent and Trademark Office (USPTO) to fund other government programs. Specifically, the Caucus wants the House leadership to schedule a vote on HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003".
They were joined by Gerald Mossinghoff, who was head of the USPTO in the Reagan administration, and Todd Dickinson, who was head of the USPTO in the Clinton administration.
The USPTO is funded solely from user fees. However, since 1990 a part of the fees collected by the USPTO have been diverted to pay for other government programs. Companies that own intellectual property, and their trade groups, have never liked this arrangement. They have called it a hidden tax, and a tax on innovation.
Rep. Wexler stated that "In years past, the Judiciary Committee, at different points, has passed a bill similar to 1561. It has never, to my knowledge, been heard by the full House. And we are making a prominent effort in trying to get the House leadership to advance the bill to the House floor so that we can get a debate and a vote."
He added that "the bill enjoys a strong degree of support from both small businesses and larger corporations. I think there is a growing understanding that the U.S. Patent and Trademark Office is one of the few agencies that actually brings more money into the Treasury than is allocated in terms of expenditures on it."
Rep. Inslee stated that "we are right now in one of the biggest periods of job loss in American history, and we need an economic policy. Everybody knows that our economy will blossom, and we will create new jobs, only when we create new technologies, because that is the way America creates new jobs."
Inslee continued that "it is the single best economic investment that the United States can make, and the full House needs to seize a little destiny, even though a particular committee may not like this issue. But, I believe that ultimately, we are going to get this done, because I believe that people are starting to understand."
He added that "the U.S. Congress is throwing sand in the gears of technological development" and "it is really a national embarrassment".
Rep. Feeney (at left) stated that "the truth of the matter is the patent process takes too long. We have lost the entire reason that the founding fathers set -- the importance of protecting intellectual property."
He also argued that "If you are willing to provide a short, concise and reasonable application, you ought to, number one, get hurried up treatment."
Mossinghoff stated that "the fact is the Office is not keeping up with its workload" and that "pendency might go up as high as four years". He said that "that is unacceptable to U.S. industry. It is unacceptable to high technology inventors. And, we have got to do something to address that, and bring us back to something like the 18 months which we established when we established the fee funding in the first place".
Dickinson (at right) said Mossinghoff's projection (of four year pendency) is "valid" and "likely to be borne out if the revenue does not arrive. And it would be a disaster for the vending community, a disaster for the investment community, the high technology community in this country, and for the public at large. Because, what it does, if you are not able to get your patents out of the Office soon enough, or your trademark registration, for that matter, the patent in particular, people will stop using the system. It will atrophy. People will keep their inventions secret. The public disclosure function of the patent system will be undermined, and in that, undermining the incentive to move forward. Invention and technology will be undermined."
There have been many attempts to end the diversion of USPTO fees over the years. All have failed. The proposals are strongly supported by the members of the House Judiciary Committee, and its Subcommittee on Courts, the Internet and Intellectual Property (CIIP), as well as by many members of the Senate Judiciary Committee.
The Clinton and current Bush administrations have expressed support for ending the diversion of fees, but have continued to submit annual budgets that perpetuate the diversion.
There has been one vote in the full House on this issue. In June of 2000, Rep. Howard Coble (R-NC), who was then the Chairman of the CIIP Subcommittee, offered an amendment to the CJS appropriations bill that would have reduced the size of the diversion. It failed on a role call vote of 145-223. See, TLJ story titled "House Rejects Coble Amendment on USPTO Funding", June 25, 2000.
The Coble amendment was supported more by Republicans (48% voted yes) than by Democrats (18% vote yes). The Judiciary Committee members voted 20 yes, and 6 no. The Appropriations Committee members voted 8 yes and 41 no. There was also disproportionate support for the Coble amendment from Representatives from California and other western states. See, TLJ story titled "Analysis of House Vote on Coble Amendment", June 25, 2003.
10/16. Attorney General John Ashcroft gave a speech to the Defense Research Institute in Washington DC in which he addressed roving wiretaps under the PATRIOT Act.
He stated in his prepared text that "In the days after September 11, we did not have to look far to find investigative tactics to prevent additional acts of terrorism. The answer was simple: use the same tools to prevent terrorism that we use to prevent other crimes. For example, for years we have used roving wiretaps in organized crime and drug cases. If a drug trafficker is working on a big haul of contraband and moves from his home phone to his office phone and then to his cell phone, the FBI can use the same wiretap to listen to all his conversations, instead of having to get a warrant for each phone the trafficker is using."
"If tools like this work against gangsters, drug king pins and murderers, then why shouldn't we use them against terrorists? We should. And that is why Congress passed the PATRIOT Act by a wide, bipartisan margin. It gives law enforcement the same tools and the same capabilities to prevent terrorism that we have used to combat other forms of crime", said Ashcroft.
10/20. The Center for Democracy and Technology (CDT) released a report [31 pages in PDF] titled "Implications of the Broadcast Flag: A Public Interest Primer". It pertains to the Federal Communications Commission's (FCC) Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection".
This NPRM proposed that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. While the FCC adopted this NPRM on August 8, 2002, it remains an open proceeding. However, the FCC stated in its report and order containing digital plug and play cable compatibility rules (announced on September 10) that the FCC "will address Digital Broadcast Copy Protection issues in the near future." See, stories titled "FCC Adopts Digital Plug and Play Cable Compatibility Rules" and "FCC States That It Will Act On Broadcast Flag" in TLJ Daily E-Mail Alert No. 737, September 11, 2003.
The Copyright Act gives rule making authority for implementing the Copyright Act to the Library of Congress, not the FCC. Moreover, there is no specific grant of authority to the FCC in the Communications Act to promulgate copyright protection regulations.
Nevertheless, the FCC is involved in this issue because it seeks to promote a transition to DTV. That is, programming that is in digital format is more susceptible to copying and copyright infringement than analog programming, because it is easier to make and distribute exact copies of digital content. Thus, content providers have a disincentive to make their works available in digital format. To the extent that less content is made available in digital format, consumers have less incentive to purchase DTV receivers and equipment. So, the FCC, which seeks a conversion to DTV, has involved itself in copy protection issues.
See also, stories titled "FCC Issues NPRM on Broadcast Flag" and "FCC Debates Its Authority to Promulgate Broadcast Flag Rule" in TLJ Daily E-Mail Alert No. 489, August 12, 2002. See also, FCC release [PDF].
The CDT report states that "Proposed broadcast flag regulations, currently before the FCC, create many legitimate concerns for television viewers, Internet users, and industry groups. As drafted they may restrict reasonable uses of content by viewers, hinder future technology innovation, and impose costs that are not worth the limited copy protection provided."
The CDT continues that "Better versions of the broadcast flag proposal could be created to deal with many of these concerns, primarily by creating more clearly objective and focused functional standards for the devices and uses that will be permitted by flag regulations, and by creating a more open and accountable process for certifying permitted technologies."
It adds that "Even with those improvements, the flag proposal poses unresolved issues regarding technical regulation of computers and the Internet by the government, the impact of the flag itself on innovation and future consumer uses, and the definition of "fair use" and other copyright doctrines in the digital age. It also leaves other serious copy protection problems for television content unresolved."
The CDT also submitted a shorter comment [4 pages in PDF] to the FCC on December 6, 2002.
10/20. The House Rules Committee adopted a closed rule for consideration of HJRes 73, making continuing appropriations for FY 2004. The House is scheduled to consider the resolution on Tuesday, October 21.
10/20. The Supreme Court denied certiorari, without opinion, in Richard Hodges v. Sprint Spectrum, No. 03-5996. See, Order List [10 pages in PDF] at page 5.
10/17. The Federal Trade Commission (FTC), Federal Communications Commission (FCC), and U.S.A. filed their consolidated opening brief [120 pages in PDF] with the U.S. Court of Appeals (10thCir) in Mainstream Marketing v. FTC. They argue that the FTC's telemarketing do not call registry does not violate the First Amendment of the Constitution.
10/20. Novell announced that the U.S. District Court (CDCal) entered judgment of copyright and trademark infringement against Keynet Corporation. See, Novell release.
10/15. The California Court of Appeal issued its opinion in Barrett v. Rosenthal, an internet defamation case involving California's strategic lawsuit against public participation (SLAPP) statute and 47 U.S.C. � 230(c)(1), regarding interactive computer service immunity. This case is Stephen Barrett, et al. v. Ilena Rosenthal, California Court of Appeal, First Appellate District, Division Two, Case No. A096451, an appeal from the Superior Court for Alameda County, Super. Ct. No. 833021-5.
10/19. President Bush announced that he intends to negotiate a free trade agreement with Thailand. See, White House release.
10/20. The Office of the U.S. Trade Representative (USTR) announced in a release that Robert Zoellick will visit the People's Republic of China on October 19-21 after attending the Ministerial Meeting of the Asia Pacific Economic Cooperation (APEC) forum in Bangkok, Thailand. He will discuss, among other topics, "increasing protection for U.S. intellectual property".
10/17. Hewitt Pate, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, wrote a business review letter for the National Cable Television Cooperative (NCTC). He wrote that, based upon the information provided to it by the NCTC, "the Department does not believe that NCTC's proposed joint purchasing procedures will have anticompetitive effects", and "the Department has no current intention to challenge the NCTC's proposed procedures for jointly negotiating national cable programming contracts for its active members". This letter clears the way for this consortium of primarily independent and smaller owners of cable television systems to jointly purchase national cable network programming. See also, DOJ release.
10/20. The Brookings Institute released a report [53 pages in PDF] titled "Spreading the Wealth: Building a Tech Economy in Small and Medium-Sized Regions", by Paul Sommers and Deena Heg. The report offers recommendations on how to enhance technology-based economic development. See also, summary.
10/17. Microsoft, the Department of Justice, and the state plaintiffs, filed their pleading titled "Interim Joint Status Report on Microsoft's Compliance with Final Judgments" with the U.S. District Court (DC) in U.S. v. Microsoft, D.C. No. 98-1232 (CKK), the government antitrust case against Microsoft.
The report focuses on the requirement that Microsoft make available for license certain communications protocols used by Windows, and on complaints regarding a feature of Windows XP named "Shop for Music Online".
The Report states that this feature "allows a user to go online to purchase compact discs from retailers". It continues that the DOJ and state plaintiffs "are concerned that the feature invokes Microsoft's Internet Explorer, rather than the user's chosen default browser, in a manner that may be inconsistent with Section III.H.2(b). Plaintiffs and Microsoft have conferred extensively on this issue, and the Technical Committee has also been engaged on the issue. If Plaintiffs and Microsoft are unable to resolve this issue, the parties may seek assistance from the Court."
The District Court, Judge Colleen Kotelly presiding, will hold a status conference on Friday, October 24, at 9:00 AM in Courtroom 11 of the U.S. Courthouse at 333 Constitution Ave., NW.
The House will meet at 9:00 AM for morning hour and at 10:00 AM for legislative business. It will consider HJRes 73, making further continuing appropriations for FY 2004. See, Republican Whip notice.
11:00 AM. The House Armed Services Committee's Subcommittee on Terrorism, Unconventional Threats and Capabilities Subcommittee will hold a hearing on Command, Control, Communications, Computer, & Intelligence (C41) Interoperability. The witnesses will be Lt. Gen. William Wallace (Commanding General, U.S. Combined Arms Center and Fort Leavenworth), Maj. Gen. Keith Stadler (USMC), Brig. Gen. Walter Jones (Joint Staff), Brig. Gen. Dennis Moran (Director of Information Operations, Networks and Space, Office of the Chief Information Officer/G-6, U.S. Army), and Lt. Gen. Daniel Leaf (Air Force Space Command). Location: Room 2212, Rayburn Building.
11:00 AM. Rep. Bob Goodlatte (R-VA), Rep. Adam Schiff (D-CA), Sen. Joe Biden (D-DE) and Sen. Gordon Smith (R-OR), will hold a press conference to announce the formation of the Congressional International Anti-Piracy Caucus. They will also announce a "2003 International Piracy Watch List". They will be joined by Jack Valenti (MPAA), Mitch Bainwol (RIAA), Robert Holleyman (BSA), and Douglas Lowenstein (ESA). Press contact: Elyse Bauer (Goodlatte) at 202 225-5431. Location: Room H-144, U.S. Capitol.
Day three of a three day conference titled "Networked Economy Summit". Phil Bond, Under Secretary of Commerce for Technology, will speak at 9:00 AM. See, event web site and agenda. Press information: the summit is open to all media -- print, radio, Internet and TV. For day-of coverage at the event, please sign up at www.publicforuminstitute.org or call Mark Marich at Public Forum Institute at 202 467-2776. Location: Hyatt Regency Reston, Reston, VA.
Deadline to submit requests to the Internal Revenue Service (IRS) to speak at its October 23, 2003 hearing regarding its notice of proposed rulemaking (NPRM) regarding computation and allocation of the credit for increasing research activities for members of a controlled group of corporations or a group of trades or businesses under common control. The rules implement the research and development tax credit codified at 26 U.S.C. � 41. See, notice in the Federal Register, July 29, 2003, Vol. 68, No. 145, at Pages 44499 - 44506.
12:00 NOON. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. Section 182 of the Trade Act of 1974 requires the USTR to prepare a report. Section 182, which is codified at 19 U.S.C. � 2242, is also referred to as "Special 301". This is an out of cycle review. The USTR announced that this review will focus on Korea. However, it added that "Additional countries may also be reviewed as a result of the comments received pursuant to this notice, or as warranted by events." See, notice in the Federal Register, October 3, 2003, Vol. 68, No. 192, at Page 57503.
2:00 PM. The House Ways and Means Committee will meet to mark up HR 2896, the "American Jobs Creation Act of 2003". This bill would, among other things, replace the FSC & ETI tax regimes that the WTO held to be illegal export subsidies. Location: Room 1100, Longworth Building.
Deadline to submit written comments to the Internal Revenue Service (IRS) regarding its notice of proposed rulemaking (NPRM) regarding computation and allocation of the credit for increasing research activities for members of a controlled group of corporations or a group of trades or businesses under common control. The rules implement the research and development tax credit codified at 26 U.S.C. � 41. See, notice in the Federal Register, July 29, 2003, Vol. 68, No. 145, at Pages 44499 - 44506.

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