Source: http://www.techlawjournal.com/alert/2004/09/28.asp
Timestamp: 2017-09-25 15:07:37
Document Index: 772431416

Matched Legal Cases: ['§ 501', '§ 56', '§ 56', '§ 421', '§ 422', '§ 501']

TLJ Daily E-Mail Alert No. 985, September 28, 2004.
September 28, 2004, 9:00 AM ET, Alert No. 985.
Senate Judiciary Committee Releases Draft of the Inducing Infringement of Copyrights Act
9/24. The Senate Judiciary Committee released a draft version of S 2560, the "Inducing Infringement of Copyrights Act of 2004". The Committee could mark up the bill at its weekly business meeting on Thursday, September 30. However, this bill was on the Committee's agenda last week, but was held over. It could be further delayed.
This version provides that "Whoever intentionally induces, by manufacturing, offering to the public, providing, or otherwise trafficking in any product or service, any violation identified in subsection (a) shall be liable as an infringer."
All of the versions of this bill would add a new subsection (g) to Section 501 of the Copyright Act. Currently, 17 U.S.C. § 501 defines infringement of copyrights. For example, subsection (a) provides, in part, that "Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 121 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be."
The just released version further provides that "For inducement to be intentional the actor must have engaged in conscious and deliberate affirmative acts which a reasonable person would expect to result in widespread violations of subsection (a) taking into consideration a totality of the circumstances."
It then enumerates numerous limitations to actions for inducement that take into consideration concerns raised by opponents of the bill. For example, it provides that "intentional inducement does not include merely: (i) providing venture capital, financial assistance, payment services, or financial services; (ii) advertising, marketing or promoting a device, service or software when doing so does not encourage the use of that device, service or software for infringing purposes;"
It further provides that "Nothing in this subsection shall enlarge or diminish the doctrines of direct, vicarious, or contributory liability for copyright infringement, nor to alter or diminish the authority of the courts of appropriate jurisdiction to adapt or evolve those doctrines, including any defenses thereto or any limitations on rights or remedies for infringement and including those articulated in Sony Corp. v. Universal City Studios, Inc."
In Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), which is also know as the Betamax case, the Supreme Court held that Sony was not vicariously liable for infringement by Betamax users because the Betamax was capable of commercially significant noninfringing uses, because consumers used it for time shifting, which is a fair use.
While the bill does much to address objections raised to the original bill, there remains intense opposition to the latest version. For example, Gigi Sohn of Public Knowledge stated that "Although this new draft may appear on the surface to be more friendly to technology and innovation than were past drafts, in fact it is not. It nullifies the 1984 Betamax decision, the fundamental Supreme Court decision that helped to create new choices and experiences for consumers, and will create a litigation nightmare. We urge the Senate Judiciary Committee not to consider this legislation until the issue is more thoroughly vetted and balanced."
Versions of S 2560
June 22 bill as introduced
Aug. 24 opponents' draft
Sept. 2 CO discussion draft
Sept. 9 CO discussion draft
Sept. 24 SJC discussion draft
Legislative History. Sen. Orrin Hatch (R-UT), Sen. Patrick Leahy (D-VT), and others introduced the original version in the Senate on June 22, 2004. See, story titled "Senators Introduce Bill to Amend Copyright Act to Ban Inducement of Infringement", in TLJ Daily E-Mail Alert No. 925, June 24, 2004.
The bill was referred to the Senate Judiciary Committee (SJC). Sen. Hatch and Sen. Leahy are the Chairman and ranking Democrat. On July 22, the SJC held a hearing on the bill. Sen. Hatch and Sen. Leahy asked that opponents submit their proposal for how an inducement bill should be drafted. See, story titled "Senate Judiciary Committee Holds Hearing on Inducement Bill" in TLJ Daily E-Mail Alert No. 963, August 20, 2004.
In addition, the staff of the Copyright Office (CO) has been meeting with representatives of interested groups and companies regarding revisions to the bill. On September 2 the CO released its 9/2 discussion draft. See, story titled "Copyright Office Releases Draft Version of Inducement Bill" in TLJ Daily E-Mail Alert No. 970, September 6, 2004.
On September 9, after further meetings and public debate, the CO released its 9/9 discussion draft with explanatory memorandum. See, story titled "Senate Judiciary Committee May Consider Inducement Bill" in TLJ Daily E-Mail Alert No. 980, September 21, 2004.
Donaldson Addresses New Technologies and Regulation NMS
9/27. Securities and Exchange Commission (SEC) Chairman William Donaldson gave a speech in New York City to the Financial Services Leadership Forum in which he stated that one of his goals at the SEC is to "make the securities markets more efficient and transparent by updating practices and requirements and taking advantage of modern technology".
Donaldson (at right) elaborated that "Since the creation of the national market system in 1975, new technologies and trading patterns have strained the existing facilities and rules that link our securities markets. The Commission has started the process of putting forward ideas on how to modernize our markets in the form of proposed Regulation NMS."
He added that "It encompasses a broad set of proposals designed to improve the regulatory structure of the U.S. equity markets. These proposals target four substantive areas -- trade-throughs, market access, sub-penny quoting, and market data. While this is an issue that certainly merits action sooner rather than later, any reforms we initiate will have far-reaching consequences. We are still reviewing a number of proposed enhancements to NMS and hope to bring forth our new rules shortly."
Ridge Addresses Public Safety Interoperability
9/27. Secretary of Homeland Security Tom Ridge gave a speech in New Orleans, Louisiana at an event titled "Technologies for Public Safety in Critical Incident Response Conference and Exposition 2004". He addressed, among other topics, public safety interoperability. See also, DHS release.
He stated that the Department of Homeland Security (DHS) has established an Office of Interoperability and Compatibility (OIC), effective October 1, and that its Director will be David Boyd.
Ridge said that the OIC "will incorporate and build on SAFECOM’s bottom-up approach and expand the focus on interoperability beyond communications into equipment, training, and other areas that may be identified in the future."
He added that "interoperability does not happen overnight. There is no switch that you can just turn on that allows everyone to communicate with each other. It is a process that has taken, and will continue to take, many years. The interoperability process is a continuum moving from simply swapping radios, to electronic patches that can receive signals transmitted over any system and re-broadcast them to all the others, to a system where everyone is working on a common frequency."
"The process involves interdependent parts moving together -- from technology and training to governance, standard operating procedures, and frequency of use of the communications tools. All these aspects must be in place and be synchronized to achieve success", said Ridge.
Attorney General John Ashcroft also spoke at this conference. He stated that the Department of Justice's (DOJ) National Institute of Justice has taken steps to "Develop computer algorithms to improve the analysis of handwriting samples".
Rep. Lofgren Introduces Bill to Repeal AMT Treatment of Incentive Stock Options
9/23. Rep. Zoe Lofgren (D-CA) introduced HR 5141, an untitled bill to amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax treatment of incentive stock options.
This bill would amend 26 U.S.C. § 56, which pertains to the alternative minimum tax (AMT). Rep. Lofgren represents a Silicon Valley district where many of her constituents received incentive stock options from tech company employers, and exercised their options before the tech bust. The price of these stocks dropped. However, under the AMT, in some cases, they have nevertheless had to pay large tax assessments.
The bill provides that "Subsection (b) of section 56 of the Internal Revenue Code of 1986 (relating to adjustments applicable to individuals) is amended by striking paragraph (3)." (Parentheses in original.)
Currently, 26 U.S.C. § 56(b)(3) provides that "Section 421 shall not apply to the transfer of stock acquired pursuant to the exercise of an incentive stock option (as defined in section 422). Section 422 (c)(2) shall apply in any case where the disposition and the inclusion for purposes of this part are within the same taxable year and such section shall not apply in any other case. The adjusted basis of any stock so acquired shall be determined on the basis of the treatment prescribed by this paragraph." (26 U.S.C. §§ 421-424 pertain to stock options. § 422 pertains to incentive stock options.)
The bill further provides that "The amendment made by subsection (a) shall apply with respect to incentive stock options exercised in 2000 or thereafter regardless of when such options were granted."
It also provides that "If refund or credit of any overpayment of tax resulting from the application of the amendment made by subsection (a) is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period." (Parentheses in original.)
The bill was referred to the House Ways and Means Committee. Rep. Lofgren is not a member.
Rep. Lofgren, and others, have introduced similar legislation in the past. See for example, HR 1487 in the 107th Congress.
9/24. Michelle Carey was named Deputy Chief of the Federal Communications Commission's (FCC) Wireline Competition Bureau. She will oversee the Competition Policy Division (CPD) and the Industry Analysis and Technology Division (IATD). She has been Chief of the CPD since January 2000. Before that, she was Deputy Chief. Before that, she was a staff attorney in the Policy and Enforcement Divisions of the former Common Carrier Bureau. Tom Navin was named Chief of the CPD, replacing Carey. He will be responsible for the triennial review of the rules governing interconnection between telephone companies, wireline broadband policy, and internet telephony matters. He has worked for the FCC since 1999. Before that he was an attorney at the law firm of McDermott Will & Emery. Julie Veach was named Deputy Chief of the CPD. She will work on FCC regulation of internet protocol services, including voice over internet protocol. She will also work on state and federal regulatory jurisdiction, broadband policy, and forbearance petitions. She has previously worked as an attorney at the law firm of Wilmer Cutler & Pickering. Narda Jones was named Chief of the Telecommunications Access Policy Division (TAPD). She will oversee universal service subsidies, the Telecommunications Relay Service (TRS), and telephone numbering resources. Before going to work for the FCC in 2001, she worked for the Minnesota Public Utilities Commission.
9/27. The Government Accountability Office (GAO) released a report [54 pages in PDF] titled "Department of Homeland Security: Formidable Information and Technology Management Challenge Requires Institutional Approach". This report finds that the Department of Homeland Security (DHS) "is working to address the daunting challenge of standardizing and integrating the various legacy IT environments and management approaches it inherited from its predecessor agencies while it is concurrently attempting to ensure that existing levels of IT support for critical homeland security missions are not only maintained but improved in the near term. To do so, the department has, among other things, made progress in establishing seven key information and technology management disciplines. However, fully establishing and institutionalizing these disciplines remains a work in progress that has yet to be accomplished."
9/27. The Department of Justice's (DOJ) Antitrust Division's Director of Operations, which includes the Premerger Notification Unit (PNU), moved from the DOJ's Patrick Henry Building on D Street to the DOJ's main building on Pennsylvania Ave., effective September 27. The new mailing address for the PNU is Department of Justice, Antitrust Division, Office of Operations, Premerger Notification Unit, 950 Pennsylvania Avenue, NW, Room 3335, Washington, DC, 20530. See, DOJ release.
9/27. The U.S. Court of Appeals (1stCir) issued its opinion on petition for rehearing in USA v. Hilton, a case regarding the Child Pormography Prevention Act (CPPA), and computer generated images. This case was commenced in 1997, before passage of the PROTECT Act. In 2002 the Supreme Court issued its opinion [PDF] in Ashcroft v. Free Speech Coalition, 535 U.S. 234, holding unconstitutional on First Amendment and overbreadth grounds provisions of the CPPA banning computer generated images depicting minors engaging in sezually explicit conduct. The Supreme Court's opinion opened the door for all digital child pormographers to escape conviction by falsely asserting that their images are computer generated. This is an assertion that is difficult for prosecutors to disprove beyond a reasonable doubt. Hence, the Congress passed the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003 (or PROTECT Act). This bill shifted the burden of proof on the issue of virtual pormography from the prosecution to the defense. See, §§ 501-513 of the conference report [118 pages PDF] on S 151 (107th Congress). See also, story titled "House and Senate Pass Conference Report on Child Protection Bill" in TLJ Daily E-Mail Alert No. 642, April 11, 2003.
The calendar in the Friday and Monday issues (TLJ Daily E-Mail Alert Nos. 983 and 984, September 24 and 27, 2004) incorrectly stated that the deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by unlicensed devices of broadcast television spectrum where the spectrum is not in use by broadcasters is Friday, October 1, 2004. The deadline for comments has been extended to November 30, 2004. The deadline for reply comments has been extended to December 30, 2004. See, notice (setting original deadlines) in the Federal Register, June 18, 2004, Vol. 69, No. 117, at pages 34103-34112; and notice [PDF] of extended deadlines, and erratum [PDF]. This NPRM is FCC 04-113 in ET Docket Nos. 04-186 and No. 02-380.
The Senate will meet at 9:45 AM for morning business. It will then begin consideration of S 2845, the "National Intelligence Reform Act of 2004".
9:30 AM. The Senate Commerce Committee will hold a hearing on media ownership issues. The witnesses will be Edwin Baker (University of Pennsylvania Law School), Ben Compaine, Geneva Overholser (Missouri School of Journalism), and Adam Thierer (Cato Institute). Press contact: David Wonnenberg at 202 224-2670 or david_wonnenberg @commerce.senate.gov. See, notice. The hearing will be webcast. Location: Room 253, Russell Building.
2:00 PM. The House Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection will hold a hearing titled "Protecting the Privacy of Consumers' Social Security Numbers". The witnesses will be Thomas Leary (Commissioner of the Federal Trade Commission), Barbara Bovbjerg (Government Accountability Office), and Chris Hoofnagle (Electronic Privacy Information Center). Rep. Cliff Stearns (R-FL) will preside. See, notice. Press contact: Samantha Jordan (Barton) at 202 225-5735 or Paul Flusche (Stearns) at 202 225-5744. The hearing will be webcast. Location: Room 2123, Rayburn Building.
2:30 PM. The Senate Commerce Committee's Subcommittee on Science, Technology and Space will hold a hearing on the effectiveness of media ratings systems. The witnesses will be Dan Glickman (P/CEO of the Motion Picture Association of America), Jack Valenti (former Ch/CEO of the MPAA), Patricia Vance (Entertainment Software Rating Board), Kim Thompson (Harvard School of Public Health), Patti Miller (Children Now), David Kinney (PSVratings, Inc.), and Anthony Podesta (Podesta Mattoon). See, notice. Press contact: David Wonnenberg at 202 224-2670 or david_wonnenberg @commerce.senate.gov. The hearing will be webcast by the Committee. Location: Room 253, Russell Building.
CANCELLED. 10:30 AM - 12:30 PM. The House Science Committee will hold a hearing on HR 4670, an untitled bill to provide for the establishment of a "Center for Scientific and Technical Assessment".
EXTENDED TO DECEMBER 30. Deadline to submit reply comments to Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by unlicensed devices of broadcast television spectrum where the spectrum is not in use by broadcasters. See, notice (setting original deadlines) in the Federal Register, June 18, 2004, Vol. 69, No. 117, at pages 34103-34112. See, notice [PDF] of extended deadlines, and erratum [PDF].
12:15 PM. The Federal Communications Bar Association's (FCBA) Engineering & Technical Practice Committee will host a brown bag lunch. The topic will be "activities for the coming year". RSVP to Deborah Wiggins at dwiggins@g2w2.com. Location: Goldberg Godles, 1229 19th St., NW.
Day two of a two day event hosted by the Department of Commerce's Bureau of Industry and Security titled "17th Annual Update Conference on Export Controls and Policy".