Source: http://www.techlawjournal.com/home/newsbriefs/2008/01d.asp
Timestamp: 2019-04-20 13:06:17+00:00

Document:
TLJ News from January 16-20, 2008.
1/18. Paul Atkins, one of four Commissioners of the Securities and Exchange Commission (SEC), gave a speech in Dallas, Texas, in which he condemned the activities of the Department of Justice (DOJ) and SEC that weaken the attorney client privilege.
Atkins (at right) said that "The two Federal agencies that have been most vigorous in seeking waiver of the attorney-client privilege have been" the DOJ and SEC. He reviewed in some detail the memoranda and practices of the two agencies.
He argued that long standing legal privileges should be respected. He also argued that weakening privileges has adverse consequences.
For example, he said that "As the SEC and other Federal agencies press to have the attorney-client privilege waived, the entire privilege is weakened. As knowledge of its weakening spreads, corporate employees will be less candid and forthcoming, corporate internal investigations will be less trustworthy, and shareholders and government investigators will be frustrated in their efforts to prevent misdeeds."
Atkins said that this weakening creates another problem for companies. It exposes them to the risk of having to disclose attorney client communications and work product privilege items to third party requestors on the theory that the privileges have been waived as to all the world.
He cited the June 19, 2006 opinion [50 pages in PDF] of the U.S. Court of Appeals (10thCir) in In re Qwest Communications International, which is reported at 450 F.3d 1179. This case is App. Ct. No. 06-1070, a petition for writ of mandamus to the U.S. District Court for the District of Colorado, D.C. No. 01-CV-1451-REB-CBS. The Supreme Court then denied Qwest's petition for writ of certiorari.
Atkins also said that "Not only does the SEC and Department of Justice policy of pressing corporations to waive the common law attorney-client privilege open them to disclosure to the world, but it also can have the effect of individuals' waiving the Fifth Amendment Constitutional right against self-incrimination by pressuring the business organization to do what the SEC or the Department of Justice could not do directly."
There have been Congressional hearings on this subject, and there are pending bills. The House has passed HR 3013 [LOC | WW], the "Attorney-Client Privilege Protection Act of 2007" on November 13, 2007.
This bill, as passed, provides, in part, that "In any Federal investigation or criminal or civil enforcement matter, an agent or attorney of the United States shall not ... demand, request, or condition treatment on the disclosure by an organization, or person affiliated with that organization, of any communication protected by the attorney-client privilege or any attorney work product" or "condition a civil or criminal charging decision relating to a organization, or person affiliated with that organization, on, or use as a factor in determining whether an organization, or person affiliated with that organization, is cooperating with the Government ... any valid assertion of the attorney-client privilege or privilege for attorney work product ..."
See also, stories titled "Rep. Scott and Rep. Forbes Introduce Bill to Protect Attorney Client Privilege" in TLJ Daily E-Mail Alert No. 1,609, July 16, 2007, and "House Passes Bill Regarding Attorney Client and Work Product Privileges" in TLJ Daily E-Mail Alert No. 1,676, November 14, 2007.
The companion bill in the Senate, S 186 [LOC | WW], has yet to be approved by the Senate Judiciary Committee (SJC).
Atkins also used this speech to praise the Supreme Court's January 15, 2008, opinion [33 pages in PDF] in Stoneridge v. Scientific Atlanta. See, story titled "Supreme Court Rules in Stoneridge v. Scientific Atlanta" in TLJ Daily E-Mail Alert No. 1,701, January 16, 2008.
1/18. A trial jury of the U.S. District Court (DUtah) acquitted William Kurt Dobson of all charges.
On August 9, 2006, a grand jury returned an indictment that charged Dobson with violation of 18 U.S.C. § 1030(a)(2)(C) and 18 U.S.C. § 2511(1)(a) in connection with his alleged accessing of e-mail of other persons.
For a summary of the indictment, see story titled "Grand Jury Indicts Man for Accessing E-Mail of Others at Former Place of Employment" in TLJ Daily E-Mail Alert No. 1,430, August 11, 2006.
Section 1030 codifies the Computer Fraud and Abuse Act (CFAA). Section 2511(1)(a) provides that "any person who -- (1) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication ... shall be punished ..."
Dobson was represented by Peter Stirba of the law firm of Stirba Associates, in Salt Lake City, Utah.
The firm stated in a release that "The federal government mischaracterized Mr. Dobson as a ``disgruntled former employee´´ but the evidence at trial showed him to be a founder, shareholder and director of local technology startup, S5 Wireless, at the time he reviewed the email. Unauthorized interception of email communications is similar to unauthorized interception of telephone conversation according to federal statute. However, consent is a defense to the crime -- meaning if the company had consented to review of the emails, no crime had been committed."
Stirba stated in this release that Dobson "has been totally and completely exonerated by this acquittal". He added that "It has always been the fact that as a founder and director of S5 Wireless, he never broke the law when he reviewed his own company's email."
This case is U.S.A. v. William Kurt Dobson, U.S. District Court for the District of Utah, D.C. No. 2:06CR00563 TC.
1/18. The Federal Trade Commission (FTC) announced that it will publish a notice [3 pages in PDF] in the Federal Register that sets upward revisions to the minimum thresholds for the Hart Scott Rodino Antitrust Improvements Act of 1976. This pertains to the premerger notification and waiting period requirements of Section 7A of the Clayton Act, which are codified at 15 U.S.C. § 18a. These thresholds are adjusted annually. For example, the basic threshold for the aggregate total amount of the voting securities and assets of the acquired entity is raised to $252.3 Million. This notice further states that these new thresholds take effect 30 days after publication of a notice in the Federal Register. The FTC has published this notice in its web site, but not yet in the Federal Register.
1/18. The U.S. Court of Appeals (1stCir) issued its opinion in Naser Jewelers v. Concord, a First Amendment challenge to a municipal ordinance of the City of Concord, New Hampshire, banning signs that display electronically changeable messages (ECMs). The Court of Appeals affirmed the judgment of the District Court, which upheld the constitutionality of the ordinance. The Court of Appeals reasoned that the ordinance is a content neutral restraint that need only be narrowly tailored to serve a significant governmental interest and leaves open alternative channels of communication. This case is Naser Jewelers, Inc. v. City of Concord, New Hampshire, U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 07-2098, an appeal from the U.S. District Court for the District of New Hampshire.
1/17. Susan Schwab, the U.S. Trade Representative (USTR), gave a speech [6 pages in PDF] in Washington DC in which she discussed the People's Republic of China's violations of trade treaty obligations, ongoing Doha round trade negotiations, the Korea US free trade agreement, and other topics.
The US has filed complaints against the PRC with the World Trade Organization (WTO). See, story titled "US to Complain to WTO Regarding PR China's Failure to Protect IPR" in TLJ Daily E-Mail Alert No. 1,562, April 9, 2007.
Schwab said that "we fully expect the WTO to begin handing down decisions early this year that vindicate our claims in the remaining three cases -- auto parts, intellectual property rights enforcement, and market access."
She added that "We hope the Chinese and others will take note that when it comes to our enforcement efforts more generally, we have won or successfully settled the cases we have taken to the WTO 96% of the time."
She concluded on this subject with the observation that "This is not a good time for Congress to be seeking quick-fixes for complex international economic challenges."
Regarding the Doha round, she said that "we continue to press ahead in Geneva, pushing for an outcome that will increase economic growth and development and alleviate poverty by generating new trade flows in agriculture, goods, and services."
She also discussed free trade agreements (FTAs). She said that "The first up on our legislative agenda this year is the Colombia Trade Promotion Agreement." However, the Korea US FTA is "the most commercially significant FTA of them all".
Schwab continued that "The good news is that we continue to work in good faith with our Korean colleagues to fully re-open this important market and ensure that U.S. beef gets treated with the respect that international standards of science demand."
"U.S. farmers, ranchers, service providers, and manufacturers have so much to gain by opening this enormous -- and traditionally closed -- market", said Schwab. "I look forward to -- indeed I relish -- having this debate about American competitiveness and how much we stand to gain from a bilateral agreement with this major trading partner, friend and ally in Asia."
1/17. The Progress & Freedom Foundation's (PFF) Adam Thierer released an item that announces that he and Grant Eskelsen of the PFF are working on a project titled "Media Metrics: The True State of The Modern Media Marketplace".
This item also includes the first installment of the project -- its analytical framework. Thierer also published the second installment, which is titled "Household Access to Media Services & Technologies".
Thierer states that he intends to "create a massive online database for the public, the press, and policymakers to use as a resource". He argues that "in recent years, media criticism has been infused with an unprecedented level of raging emotionalism, so much so that it sometimes borders on mass hysteria".
Thierer further state that "there are a number of objective metrics than can be used to prove that we as a society are better off in almost every way possible. Indeed, I hope to show that we are blessed to live in a golden age of media. We have access to more inputs and outlets, more and better news options, more diverse information and entertainment sources, more local fare, more media gadgets, more ways to interact with our fellow citizens, and so on".
1/17. Tony Scott was named Chief Information Officer (CIO) and Corporate Vice President of Microsoft. He was previously CIO of Walt Disney Company. See, release.
1/17. Ben Bernanke, Chairman of the Federal Reserve Board (FRB), testified before the House Budget Committee. He stated in his testimony that "In the business sector, investment in equipment and software appears to have been sluggish in the fourth quarter".
1/17. The Federal Communications Commission (FCC) released a Public Notice [12 pages in PDF] that announces that the FCC's Office of Engineering and Technology (OET) "will begin a second phase of laboratory bench testing on the performance of prototype television white space devices on January 24, 2008." This notice is numbered DA 08-118.
1/17. The Federal Communications Commission (FCC) held an event titled "Open Meeting". The FCC Commissioners heard status reports from senior officials in various FCC Bureaus and Offices. See, FCC web page with hyperlinks to presentations.
1/16. The U.S. Court of Appeals (6thCir) issued its opinion [9 pages in PDF] in NCR v. Korala, a copyright dispute involving a contract arbitration clause.
NCR Corporation provides automatic teller machines (ATMs), and related equipment, software, and services. NCR has registered or applied for registrations of copyrights in its software. One software application of NCR is named "APTRA XFS". It is installed on ATMs that run on the Windows operating. Another software application of NCR is named "S4i". It is installed on ATMs that run on the OS/2 operating system.
NCR entered into an agreement in 1998 with Korala Associates Ltd. (KAL), which is located in Scotland, titled "Software License Agreement". This agreement provides that Korala will develop and license to NCR three specific software components for NCR's ATMs. NCR also agreed to loan to Korala computer hardware and software that were necessary to enable Korala to develop these components.
NCR alleges that is loaned equipment with the APTRA XFS software, and that Korala illegally copied and analyzed NCR's copyrighted software to produce its own competing software. NCR also alleges that Korala acquired from NCR's licensees ATMs with the S4i software, and that Korala likewise copied that.
The agreement between NCR and Korala provides that "Any controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled by arbitration ..."
NCR filed a complaint in U.S. District Court (SDOhio) against Korala pleading numerous copyright related claims, and other claims, but not breach of contract.
NCR pled two counts of direct infringement of two software copyrights -- one each for the copying of the APTRA XFS and S4i software. NCR pled two counts of contributory infringement, based upon Korala's alleged inducement of NCR licensees to breach confidentiality restrictions in NCR licensing agreements. NCR pled one count of tortious interference with NCR contracts with its licensees. NCR pled one count of illegally importing infringing software into the U.S. Finally, NCR pled one count of common law unfair competition.
The District Court issued an order compelling arbitration. NCR brought the present appeal.
The Court of Appeals affirmed as to some counts of the complaint, but reversed as to other counts in the complaint.
The Court of Appeals applied the principle that "the cornerstone of our inquiry rests upon whether we can resolve the instant case without reference to the agreement containing the arbitration clause".
For example, with respect to the claim of direct infringement of the APTRA XFS copyright, the Court of Appeals wrote that "While a court would not need to reference the 1998 Agreement to determine if NCR owns a copyright for APTRA XFS, a court would need to reference the Agreement to determine what, if any, authorization NCR provided to KAL with respect to the APTRA XFS software contained on the ATM that NCR loaned to KAL under the 1998 Agreement." Hence, that claim must be arbitrated.
The Court of Appeals also held that the common unfair competition claim and the illegally importing infringing software claim, as it pertains to APTRA XFS, must also be arbitrated. The Court of Appeals returned the other claims to the District Court.
This case is NCR Corporation v. Korala Associates LTD, U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 06-3685, an appeal from the U.S. District Court for the Southern District of Ohio at Dayton, D.C. No. 04-00407, Magistrate Judge Michael Merz presiding. Judge Alice Batchelder wrote the opinion of the Court of Appeals, in which Judges Kennedy and Clay joined.
1/16. The U.S. Court of Appeals (10thCir) issued a divided opinion [PDF] in NEHCEPF v. Woodruff, Nacchio and Qwest, a class action securities fraud case.
Joseph Nacchio is a former CEO of Qwest Communications. Woodruff is a former Chief Financial Officer of Qwest. The New England Health Care Employees Pension Fund and others filed class action securities fraud actions in U.S. District Courts against Qwest, Nacchio, Woodruff, and others. The present appeal concerns a settlement that was negotiated and approved by the plaintiffs and Qwest and certain others, but not by Nacchio and Woodruff. The District Court approved the settlement. Nacchio and Woodruff appealed.
The Court of Appeals held that Nacchio and Woodruff have standing to challenge the settlement, and remanded the case to the District Court to provide a more extensive explanation for its decision. Judge Kelly wrote the opinion of the Court of Appeals, in which Judge Baldock joined. Judge Briscoe wrote a lengthy dissent.
This case is New England Health Care Employees Pension Fund, et al. v. Robert Woodruff, et al., U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 06-1482.
1/16. MySpace, which is owned by News Corporation, and most state Attorneys General entered into and released a document [12 pages in PDF] on January 14, 2008, titled "Joint Statement on Key Principles of Social Networking Safety".
It acknowledges the benefits of social networking sites and MySpace's efforts to improve online safety for minors. It provides for the creation of a task force to study online identity management tools and other online safety tools. The appendices, which come after the signatures, list numerous web site design and functionality changes that MySpace has made, or plans to implement.
The document contains no call for state or federal legislation. No other social networking service, and no federal agency is a party to the document.
1/16. Oracle and BEA Systems announced in a release that "they have entered into a definitive agreement under which Oracle will acquire all outstanding shares of BEA for $19.375 per share in cash. The offer is valued at approximately $8.5 billion, or $7.2 billion net of BEA's cash on hand of $1.3 billion." Larry Ellison, CEO of Oracle, stated in this release that "Oracle Fusion middleware has an open ``hot-pluggable´´ architecture that allows customers the option of coupling BEA's WebLogic Java Server to virtually all the components of the Fusion software suite." This transaction requires regulatory approvals.
1/16. Sun Microsystems and MySQL AB announced in a release and release that Sun "has entered into a definitive agreement to acquire MySQL AB, an open source icon and developer of one of the world's fastest growing open source databases for approximately $1 billion in total consideration". This transaction requires regulatory approvals.

References: v. 
 v. 
 § 1030
 § 2511
 v. 
 § 18
 v. 
 v. 
 v. 
 v. 
 v. 
 v.