Source: http://techlawjournal.com/home/newsbriefs/2003/07a.asp
Timestamp: 2017-03-24 21:53:43
Document Index: 273943098

Matched Legal Cases: ['§ 501', '§ 309', '§ 20', '§ 309', '§ 309', '§ 309', '§ 309']

News from July 1-5, 2003
On May 15, 2003, the Federal Communications Commission (FCC) adopted a Notice of Proposed Rulemaking (NPRM) [28 pages in PDF] proposing to make available an additional 255 MHz of spectrum for unlicensed use. This NPRM proposed allocating the 5.470-5.725 GHz band. See also, FCC press release [PDF], and stories titled "FCC Adopts NPRM to Increase Unlicensed Spectrum" and "FCC Unlicensed Spectrum NPRM and the Jumpstart Broadband Act" in
The ITU stated in a July 4
release that the WRC-03 "established new frequency allocations to the mobile service in the bands 5 150-5 350 MHz and 5 470-5 725 MHz for the implementation of wireless access systems including RLANs. Wireless devices that do not require individual licenses are being used to create broadband networks in homes, offices and schools. These networks are also being used in public facilities in so-called hot spots such as airports, cafes, hotels, hospitals, train stations and conference sites to offer broadband access to the Internet."
7/3. The U.S. District Court (CDCal) issued an
Order Granting in Part Plaintiffs' Motion to Dismiss Counterclaims [PDF] in MGM v. Grokster. The order dismisses Sharman's counterclaims alleging antitrust violations.
This case involves two consolidated actions directed at shutting down Kazaa. In one action, Metro Goldwyn Mayer Studios Inc. (MGM) and other movie and music recording companies filed a complaint against Grokster, Ltd. and others involved in the exchange of copyrighted music, movies and other digital works over the internet. These plaintiffs alleged copyright infringement in violation of
17 U.S.C. § 501. In the second action, Jerry Leiber, and other professional songwriters and music publishers, filed a complaint against Consumer Empowerment BV a/k/a FastTrack and others. Both suits involve essentially the same claims against the same defendants.
Sharman, which now owns the key assets of Kazaa, is organized in the offshore jurisdiction of
Vanuatu, apparently for the purpose of evading the reach of U.S. courts. However, in January the District Court issued an order and opinion in which it denied Sharman Network's motion to dismiss for lack of personal jurisdiction. See,
TLJ story titled "District Court Squeezes Sharman on Internet Based Personal Jurisdiction", January 9, 2003.
On April 25, 2003, the District Court issued its
opinion that Grokster's and Streamcast's peer to peer file copying networks do not contributorily or vacariously infringe the copyrights of the holders of music and movie copyrights. The holding of the District Court is arguably inconsistent with the opinion of the Court of Appeals in the case A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001), which held that Napster contributorily and vicariously infringed copyrights. See, story titled "District Court Holds No Contributory or Vicarious Infringement by Grokster or Streamcast P2P Networks" in TLJ Daily E-Mail Alert No. 650, April 28, 2003.
The District Court summarized the counterclaims at issue: "While there is considerable redundancy in the counterclaims, the essence of Sharman’s grievance appears to be thus: Sharman alleges that Plaintiffs control as much as eighty-five percent of the market for manufacturing, labeling and distributing copyrighted music and films. Sharman further alleges that Plaintiffs together have acted monopolistically and in restraint of trade by refusing to license any copyrighted works to Altnet. This conduct, the FAAC claims, unlawfully precludes Sharman and Altnet from competing effectively in the market for distribution of
licensed copyrighted works."
Copyright misuse could be an area of law that expands in future years. For example, in an obscure
opinion last year in a copyright case involving Beanie Babies, the U.S. Court of Appeals (7thCir) hinted, but did not hold, that copyright misuse could arise out of copyright licensing practices and litigation strategies intended to suppress critical reviews of products -- a purpose that is contrary to the underlying purposes of copyright protection. Judge Richard Posner wrote the opinion. The Supreme Court denied certiorari in January. (Ty v. Publications International).
First, representatives of the FCC's International Bureau will report on the World Radio Conference 2003, which took place in Geneva, Switzerland from June 9 through July 4. One of the items on the agenda was allocation of spectrum for unlicensed devices in the 5 GHz band.
On June 26, the U.S. Court of Appeals (5thCir) issued its
opinion [39 pages in PDF] in Dickerson v. Bailey, holding that Texas' ban on direct sale by out of state wine sellers violates the dormant commerce clause. See, story titled "5th Circuit Holds Texas Wine Sales Statute Unconstitutional" in TLJ Daily E-Mail Alert No. 690, June 30, 2003,
On November 12, 2002, the U.S. District Court (SDNY) issued its
On April 8, 2003, the
Also, the U.S. District Court (EDVa), which is in the Fourth Circuit, held that Virginia's statute unconstitutionally discriminated against out of state wine and beer manufacturers and sellers and was not saved by the 21st Amendment. See, Bolick v. Roberts, 199 F. Supp. 2d 397. However, the Virginia state legislature subsequently amended its statute. Then, on May 23, 2003, the Court of Appeals issued its per curiam
opinion upholding a state statute in Bridenbaugh v. Wilson. In that case, the plaintiffs challenged the constitutionality of an Indiana statute that made it unlawful for persons in another state to ship an alcoholic beverage directly to an Indiana resident. The District Court held that the Indiana direct shipment regulation was unconstitutional under the Commerce Clause, and granted the plaintiffs' summary judgment motion (Bridenbaugh v. O'Bannon, 78 F. Supp.2d 828 (N.D. Ind. 1999)). Then, the Seventh Circuit reversed, upholding the constitutionality of the state ban. The Indiana ban affected both in state and out of state sellers.
7/3. The U.S. Court of Appeals (9thCir) issued its
opinion [12 pages in PDF] in In Re Read-Rite Corp. Securities Litigation, a case involving application of the pleading requirements of the
Private Securities Litigation Reform Act (PSLRA).
The Appeals Court affirmed in a relatively brief opinion which it relied upon 9th Circuit precedent in Ronconi v. Larkin, 253 F.3d 423 (2001), and
In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970 (1999).
7/3. The Department of Justice, the state plaintiffs, and Microsoft filed a
pleading titled "Joint Status Report on Microsoft's Compliance with the Final Judgments" with the U.S. District Court (DC) in U.S. v. Microsoft. See also,
PDF version [44 pages].
7/3. The Copyright Office (CO) published a
notice in the Federal Register announcing, describing, and reciting its final rule adjusting royalty rates under the Copyright Act for the statutory license for the use of sound recordings by preexisting subscription services for the period January 1, 2002 through December 31, 2007. This rule takes effect on August 4, 2003. For more information, contact David Carson (General Counsel) or Tanya Sandros (Senior Attorney) at 202 707-8380. See, Federal Register, July 3, 2003, Vol. 68, No. 128, at Pages 39837 - 39841.
7/3. The Department of the Navy's
Naval Research Advisory Committee (NRAC) will hold a closed two week long meeting to discuss "the application of science and technology to FORCEnet; the reform of technology acquisition; and the assessment of electromagnetic gun technology."
FORCEnet is the Navy's plan to modernize how it acquires, stores, secures and shares information in network-centric warfare. The meeting will be held from July 21 through August 1, 2003 in San Diego, California. The entirety of the meeting is closed to the public. See,
notice in the Federal Register, July 3, 2003, Vol. 68, No. 128, at Page 39902. The NRAC's Panel on Technology for FORCEnet will also meet in Arlington, Virginia on July 8 through 10, 2003 to discuss "appropriate near and far term naval science and technology investments to enhance FORCEnet". The entirety of this meeting is also closed to the public. See,
notice in the Federal Register, July 2, 2003, Vol. 68, No. 127, at Pages 39534 - 39535.
opinion [PDF] in Carefirst Maryland v. CPC, a case involving whether the operation of a website by a local non profit group can serve as the basis for personal jurisdiction over it by an out of state court in a trademark infringement case. The District Court dismissed for lack of personal jurisdiction. The Appeals Court affirmed. See, full story.
7/2. The Federal Communications Commission (FCC) released its
Report and Order and Notice of Proposed Rulemaking [257 pages in PDF] in its proceeding regarding its media ownership rules.
FCC Commissioner Jonathan Adelstein also released an additional
dissenting statement [39 pages in PDF]. In addition to discussing policy considerations, he argued that "indefensible under the law" and that "today's decision departs dramatically from our statutory responsibility".
7/2. The National Institute of Standards and Technology (NIST) published a
notice in the Federal Register stating that it "requests nominations of individuals for appointment to the Information Security and Privacy Advisory Board (ISPAB)." There is no deadline for submissions. The ISPAB was previously named the Computer System Security and Privacy Advisory Board (CSSPAB). See, Federal Register, July 2, 2003, Vol. 68, No. 127, at Pages 39527 - 39528.
7/2. The National Communications System (NCS) published a
notice in the Federal Register stating that "A meeting of the President's National Security Telecommunications Advisory Committee will be held via conference call on Wednesday, July 14, 2003, from 11 a.m. to 1 p.m." Calendars for the year 2003 indicate that July 14 is a Monday. The meeting will be held to discuss a document titled "
Physical Security Assessment of Cyber Assets". Also, the NCS stated that the meeting is closed to the public. See, Federal Register, July 2, 2003, Vol. 68, No. 127, at Pages 39599 - 39600.
7/2. Joel David Kaplan was named Deputy Director of the
Office of Management and Budget (OMB). Kaplan is currently Special Assistant to the President in the Office of the Chief of Staff. Before that, he worked on the Bush presidential campaign. See,
OMB release [PDF].
7/2. The Business Software Alliance (BSA) announced that Rep. Tom Davis (R-VA), the Chairman of the House Government Reform Committee, and Rep. Cal Dooley (D-CA), will receive its 2003 Cyber Champion Awards. See, BSA Davis
release and Dooley
7/2. Patrick Hofer was named Deputy Assistant Attorney General for Policy and Planning in the Department of Justice's Tax Division. He previously worked for the law firm of Hogan & Hartson. See,
7/2. Michael Bloomquist was named Associate General Counsel of the
House Science Committee. He previously worked for the law firm of Patton Boggs.
7/2. Peter Rooney was named Deputy Staff Director for the
House Science Committee. He was previously Staff Director for the Subcommittee on Research. He replaces Scott Giles, who left the Committee to become Vice-President of Policy, Research and Planning for the Vermont Student Assistance Corporation.
7/2. The Federal Communications Commission (FCC) and the Department of Agriculture's Rural Utilities Service (RUS) hosted meeting regarding the "Federal Rural Wireless Outreach Initiative". See, FCC
speech [PDF] by FCC Commissioner
Congress amended the Communications Act of 1934 by in 1993 by adding Section 309(j), codified at 47 U.S.C. § 309(j), which authorized the FCC to award almost all spectrum licenses by competitive bidding and limited the use of lotteries. The 1993 legislation provided that the FCC "shall not issue any license or permit [by lottery] ... unless ... one or more applications for such license were accepted for filing by the Commission before July 26, 1993."
The Court wrote that the petitioners had some credible arguments. For example, it wrote that "cellular service is regulated as a ``commercial mobile radio service,´´ 47 C.F.R. § 20.9(a), which seems to place it neatly within the more general class of ``commercial radio and television stations´´ referenced in § 309(l)." However, the Court also found that the FCC supported its argument that "commercial radio or television stations" does not encompass cellular telephone services. The Court applied the Chevron standard, and concluded that the FCC "has shown that § 309(l), viewed in the context of the 1997 Act, supports a reading that covers only broadcast stations. Although this reading is not the only possible interpretation of § 309(l), it is certainly a reasonable one and therefore commands our deference."
Finally, it held that the FCC was not subject to 47 U.S.C. § 309(j)(7)(B), which provides that "in prescribing regulations pursuant to Paragraph 4(A) of this subsection, the Commission may not base a finding of public interest, convenience and necessity solely or predominantly on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection."
7/1. The Computer & Communications Industry Association (CCIA) filed an
amicus curiae brief [41 pages in PDF] with the U.S. Court of Appeals (6thCir) in Lexmark v. Static Control Components, a case involving the anti-circumvention provisions of the DMCA and the use of copyrighted software programs embedded in printers and cartridges to prevent interoperability of cartridges made by competitors. See also, CCIA release
District Court. On December 30, 2002 Lexmark filed a
complaint [17 page PDF scan] in U.S. District Court (EDKent) against SCC alleging violation of the anti-circumvention provisions of the DMCA in connection with its production and sale of replacement cartridges for certain Lexmark printers. Lexmark alleged in its complaint that its "strategy is based on a business model of building an installed base of printers that will then generate demand for Lexmark's printer supplies and services. Lexmark designs, manufactures, and distributes a variety of toner cartridges for use in its installed base of laser printers."
The District Court issued a temporary restraining order on January 9, 2003 that enjoins SCC from making or selling its Smartek microchip for toner cartridges developed for the Lexmark T520/522 and T620/622 laser printers. See, Lexmark
release of January 9. On February 27, 2003, the District Court issued its
preliminary injunction order [54 page PDF scan] and findings of fact and conclusions of law. It provides that SCC "shall cease making, selling, distributing, offering for sale or otherwise trafficking in the ``SMARTEK´´ microchips for the Lexmark T520/522 and T620/622 toner cartridges, until further Order from this Court". See also, Lexmark
release of February 27, 2003.
Copyright Office Rulemaking. The Copyright Office (CO) is conducting a rulemaking proceeding, as required by the DMCA, regarding exempting certain classes of works from the prohibition against circumvention of technological measures that control access to copyrighted works. Moreover, SCC filed a
petition [PDF] with the CO in this proceeding.
See, CO's web page for this rulemaking proceeding. See also, story titled "CO to Consider Programs Embedded in Printers and Cartridges In DMCA Exemptions Rulemaking" in
7/1. President Bush announced his intent to nominate Sandra Townes to be a Judge of the U.S. District Court (EDNY). See, White House
7/1. The U.S. Patent and Trademark Office (USPTO) announced that "effective June 30, 2003, all newly filed patent applications will be converted to electronic applications and processed electronically. Additionally, over the next 15 months, the USPTO will scan more than a half million pending applications into the electronic system." See,
7/1. The U.S. Court of Appeals (DCCir) issued its
opinion [17 pages in PDF] in Z-Tel v. FCC. In 2001 the Federal Communications Commission (FCC) issued an order approving Verizon's
Section 271 application to provide in region interLATA services in the state of Pennsylvania. Z-Tel, a competitive local exchange carrier, challenged the order, arguing that the FCC erred in finding that Verizon provides competitors nondiscriminatory access to its wholesale billing services. The Appeals Court affirmed the order of the FCC.
Go to News from June 26-30.