Source: http://techlawjournal.com/home/newsbriefs/2003/06b.asp
Timestamp: 2018-11-19 20:33:04
Document Index: 364615463

Matched Legal Cases: ['§ 103', '§ 102', '§ 102', '§ 103', '§ 310', 'art 76']

TLJ News: June 6-10, 2003.
News from June 6-10, 2003
6/10. The House amended and passed HR 2143, the "Unlawful Internet Gambling Funding Prohibition Act", by a vote of 319-104. See, Roll Call No. 255.
This bill does not ban or regulate internet gambling. This remains a matter of state law. However, offshore internet based gambling operations are largely beyond the reach of prosecutors.
Rather, this bill seeks to stop internet gambling by prohibiting the use of bank instruments to conduct gambling transactions that are already illegal. This bill, which was reported by the House Financial Services Committee, attempts to bar internet gambling operations access to the financial services system by banning the use of credit cards, wire transfers, or any other bank instrument to fund illegal gambling transactions.
The House approved by voice vote an amendment [2 pages in PDF], offered by Rep. Sue Kelly (R-NY). It provides that "No provision of this Act shall be construed as altering, limiting, extending, changing the status of, or otherwise affecting any law relating to, affecting, or regulating gambling within the United States."
The House rejected an amendment [2 pages in PDF] offered by Rep. James Sensenbrenner (R-WI) by a vote of 186-237. See, Roll Call No. 254. The bill provides that the term "bets or wagers" does not include "any lawful transaction with a business licensed or authorized by a State." This amendment would strike this exception. This amendment would have remove from the bill the exception that creates a carve out for state approved gambling on horse racing, dog racing, and jai alai.
Another version of this bill, HR 21, also titled the "Unlawful Internet Gambling Funding Prohibition Act of 2003", was reported by the House Judiciary Committee. On May 14, the Judiciary Committee narrowly approved this same amendment. However, the full House took up the Financial Services Committee bill instead.
The House also rejected by voice vote an amendment [2 pages in PDF] offered by Rep. Sheila Lee (D-TX), a member of the House Judiciary Committee. It would have removed credit cards, as well as "credit, or the proceeds of credit", from the list of items that may not be used to fund illegal gambling operations. This would have essentially gutted the bill.
The companion bill in the Senate is S 627. This bill has not yet passed the Senate, or the Senate Banking Committee, which has jurisdiction. However, the Senate has in the past approved legislation pertaining to internet gambling.
Background. See, story titled "Rep. Leach Introduces Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 579, January 9, 2003, and story titled "House Committee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 623, March 14, 2003. See also, TLJ story titled "Senate Committee Holds Hearing on Internet Gambling Bill", March 18, 2003. See also, stories titled "House Subcommittee Holds Hearing on Internet Gambling Bills" in TLJ Daily E-Mail Alert No. 652, May 2, 2003; "House Crime Subcommittee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 656, May 7, 2003; "House Judiciary Committee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 662, May 15, 2003; "House Financial Services Committee Approves Revised Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 666, May 21, 2003; and "House To Take Up Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 677, June 10, 2003.
Ways and Means Committee Holds Hearing on Chile and Singapore FTAs
6/10. The House Ways and Means Committee's Trade Subcommittee held a hearing titled "Implementation of U.S. Bilateral Free Trade Agreements with Chile and Singapore".
Rep. Earl Blumenauer (D-OR) testified in favor of the FTAs. He stated that "Technology remains a mainstay of West Coast economies. In Oregon, the leading industry is high-tech, much of it destined for export. The agreement with Chile represents an opportunity to improve markets at a time of great economic stress." See, prepared testimony.
Rep. Pete Sessions (R-TX) testified in favor also. He stated that the U.S. Singapore FTA is "a modern, forward looking agreement that updates Singapore's intellectual property law and brings it in line with American standards. It updates Singapore’s copyright and patent law to prevent circumvention and to ensure that the creators of new technologies and inventions reap the rewards of their innovation. It updates the country’s trademark regime to reflect the new market realities of branding and product identity building, while enhancing protection for well-known trademarks. All of these enhanced protections will be complimented by a robust enforcement regime that criminalizes the willful infringement of copyrights and imposes tough punishments on piracy." See, prepared testimony.
Jeff Jacobs of Qualcomm testified that "QUALCOMM strongly supports free trade, and the results of the U.S.-Singapore and U.S.-Chile free trade negotiations. Open markets and strong trade rules are critical to QUALCOMM. More than half of QUALCOMM’s revenues are generated outside of North America, with most of our growth resulting from demand in Latin America, East Asia (especially China, Japan and Korea) and India. These trends are not unique to QUALCOMM; the American high-tech sector collectively is the largest source of U.S. merchandise exports, as well as the largest cumulative source of U.S. direct investment overseas." See, prepared testimony.
Joseph Papovich of the Recording Industry Association of America (RIAA) testified that "Growing levels of physical piracy, online piracy and inadequate enforcement of copyright laws internationally are challenging the competitiveness of our industries worldwide. These two FTAs succeed in addressing these challenges in ways that bode well for high levels of protection in Singapore and Chile and for setting critical, essential precedents for future Free Trade Agreements. These agreements provide high standards of copyright protection for the modern digital age, and ensure that protection is meaningful in practice through strong enforcement. Piracy of our works represents the single largest trade barrier we face in markets outside the United States." See, prepared testimony.
See also, prepared testimony of Peter Allgeier (Deputy U.S. Trade Representative), Leon Trammell (on behalf of the U.S. Chamber of Commerce), Keith Gottfried (Borland Software), Bob Haines (Exxon Mobil), David Spence (Air Courier Conference of America), Gawain Kripke (Oxfam America), Thea Lee (AFL-CIO), and John Audley (Carnegie Endowment for International Peace).
Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, has stated that he intends to hold a hearing on these FTA's later this month.
On August 8, 2002, the FCC adopted a Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. See, 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, 2003.
"We know fair use is a defense that may limit any of the copyright owner's exclusive rights. The Copyright Act states that fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research does not constitute infringement. Fair use is determined on a case-by-case basis" said Rep. Smith. "For example, in Sony Corp. v. Universal City Studios, the Supreme Court held that the practice of taping free television broadcasting for later viewing was a fair use." (Sony is reported at 464 U.S. 417.)
6/10. Rep. Lamar Smith (R-TX) and others introduced HR 2391, the "Cooperative Research and Technology Enhancement (CREATE) Act of 2003", on June 9, 2003. On June 10, the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held a hearing on the bill. See, TLJ copy of HR 2391.
Amendments to the Patent Act. Section 103(c), codified at 35 U.S.C. § 103, pertains to conditions for patentability, and non-obviousness. It currently provides that "Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the invention was made, owned by the same person or subject to an obligation of assignment to the same person."
Section 102(f), codified at 35 U.S.C. § 102, pertains to conditions for patentability, and novelty and loss of right to patent. It currently provides, in part, that "A person shall be entitled to a patent unless ... (f) he did not himself invent the subject matter sought to be patented".
Witness Testimony. John Thomas of the Georgetown University Law Center wrote in his prepared testimony that this bill "provides that prior art available under 35 U.S.C. § 102(f) may not be considered as evidence of obviousness under 35 U.S.C. § 103. The effect of the Act is to overturn the 1997 holding of the U.S. Court of Appeals for the Federal Circuit in OddzOn Products, Inc. v. Just Toys, Inc., which ruled that derived prior art may serve as evidence of obviousness." See, August 8, 1997 opinion of the U.S. Court of Appeals (FedCir), reported at 122 F.3d 1396.
DC Circuit Addresses Standing to Challenge FCC Orders
6/10. The U.S. Court of Appeals (DCCir) issued its opinion [PDF] in Rainbow/PUSH Coalition v. FCC, a petition for review of an FCC order approving TV license transfers. The issue on appeal was whether an interest group has standing to challenge a final order of the FCC approving a broadcast license transfer. The Appeals Court dismissed for lack of standing. It held that there is no "automatic audience standing" to challenge broadcast license transfers. Notably, to reach this conclusion, the Court critiqued the theory that underlies the FCC's duopoly rule.
Sullivan Broadcast Holdings applied to the Federal Communications Commission (FCC) for approval to transfer licenses in connection with the sale of five television stations, pursuant to 47 U.S.C. § 310(d). The Rainbow/PUSH Coalition (RPC) petitioned the FCC to deny the original, and revised, applications to transfer licenses. The RPC stated that it had members who reside in the broadcast markets affected by these transactions. The RPC raised the FCC's duopoly rule. The FCC approved license transfers, without holding a hearing.
The RPC filed a petition for review with the Court of Appeals. The Court did not reach the merits of the RPC's petition. It dismissed for lack of standing. However, in analyzing the issue of standing, the Court addressed the FCC's duopoly rule.
The Court applied the three part test (injury-in-fact, causation, and redressability) stated in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). It found that the RPC failed to produce evidence that either the RPC or any of its members suffered the injury-in-fact required for standing.
The Court wrote that the RPC "seems to argue that our cases establish a per se rule that a person has standing to protect the ``public interest´´ by challenging any decision of the Commission regulating (or, as in this case, declining to regulate) a broadcaster in whose listening or viewing area the person lives." (Parentheses in original.) The Court rejected this argument.
The Court reasoned that the RPC's claim of injury, namely, deprivation of program service in the public interest, is not sufficiently concrete and particularized to pass constitutional muster.
The Court noted that one of RPC's arguments was that "increased concentration in the ownership of broadcast stations results in fewer voices being heard and therefore in decreased diversity in content; ergo, the public interest automatically suffers when two formerly independent stations come under common ownership."
The Court wrote that this "theory has an intuitive appeal, and indeed something very like it underpins the Commission's duopoly rule." It continued that "While it is reasonable for the Commission, however, to assume that a greater concentration of ownership may decrease the diversity of voices on the airwaves, and to erect a prophylactic regulation in order to avert that possibility, ... it does not follow that common control of two licenses in the same market necessarily or even probably affects their programming. Absent a showing that Sinclair's assumption of control of KOKH or KRRT resulted in some actual effect upon the programming of those or of the commonly controlled stations in their markets, Rainbow's fears of decreased diversity remain purely speculative."
On June 2, 2003, the FCC announced a Report and Order revising its media ownership rules. This order maintains, but relaxes, the FCC's local TV broadcast ownership rules. See, story titled "FCC Announces Revisions to Media Ownership Rules" in TLJ Daily E-Mail Alert No. 672, June 3, 2003.
Sen. Schumer Introduces Wireless Number Portability Bill
6/10. Sen. Charles Schumer (D-NY) introduced S 1221, the "Wireless Telephone Number Portability Act of 2003", a bill to require certain wireless carriers to provide number portability -- that is, to provide consumers the ability to keep their phone numbers when switching carriers.
The bill would provide that "Commencing not later than six months after the date of the enactment of this Act, or November 24, 2003, whichever is earlier, the Federal Communications Commission shall require each wireless telephone service provider offering service in one of the 100 largest Metropolitan Statistical Areas (MSA), as defined by the Bureau of the Census, to provide consumers with the option to port telephone numbers between wireless telephone service providers by implementing wireless telephone number portability throughout the networks of wireless telephone service providers in each of such 100 largest Metropolitan Statistical Areas."
Also, in smaller MSAs, in which there are three or more wireless telephone services providers, the FCC be required to mandate wireless number portability within 18 months.
The bill was referred to the Senate Commerce Committee. Sen. Schumer is not a member.
6/10. MCI WorldCom announced the resignations of Michael Salsbury, EVP and General Counsel, and Susan Mayer, SVP and Treasurer. See, release.
6/10. The House passed HR 1086, the "Standards Development Organization Advancement Act", by voice vote. This is bill to encourage the development and promulgation of voluntary consensus standards by providing relief under the antitrust laws to standards development organizations.
6/10. The National Telecommunications and Information Administration (NTIA) filed a reply comment with the Federal Communications Commission (FCC) in its proceeding regarding the international emergency distress frequency of 406.025 MHz. The NTIA wrote that it "supports extending interference protection to the emergency distress frequency of 406.025 MHz. ... The proposed extension of the frequency limits for interference protection to 405.925 - 406.176 MHz should not impact cable television service operations since the nearest video carriers are at 403.25 MHz and 409.25 MHz, and the nearest aural carrier is at 407.75 MHz." This proceeding is titled "In the Matter of Amendment of Part 76 of the Commission's Rules To Extend Interference Protection to the Marine and Aeronautical Distress and Safety Frequency 406.025 MHz. This is MB Docket No. 03-50.
Bill Would Task DHS's IAIPD With National Parks Protection Responsibilities
6/9. Sen. Hillary Clinton (D-NY) introduced S 1212, an untitled bill to amend the Homeland Security Act of 2002 regarding the protection of National Park Service sites, including Mount Rushmore and the Statute of Liberty.
What is significant about the bill, from a technology standpoint, is that it would amend Section 201 of the Act. This is the section that created the Information Analysis and Infrastructure Protection Directorate (IAIPD). See, Homeland Security Act of 2002, HR 5005 (107th), Public Law No. 107-296. The Act created the Department of Homeland Security (DHS). Title II of the Act creates the IAIPD, which has primary responsibility for protecting critical infrastructures, such as computer and communications systems.
For example, Section 201 provides that the responsibilities of the IAIPD include developing "a comprehensive national plan for securing the key resources and critical infrastructure of the United States, including power production, generation, and distribution systems, information technology and telecommunications systems (including satellites), electronic financial and property record storage and transmission systems, emergency preparedness communications systems, and the physical and technological assets that support such systems." (Parentheses in original.)
Sen. Clinton's bill would define "key resources", as used in Section 201, to include certain "National Park Service sites". Thus, the governmental entity responsible for protecting against cyber attacks, would be required to devote resources to studying terrorist threats to Mount Rushmore and other tourist destinations.
In a related matter, on June 6, the DHS announced the creation of a National Cyber Security Division (NCSD), located in the DHS's IAIPD. Information technology groups expressed disappointment that the head of the NCSD will be three levels below the Secretary. For example, Harris Miller, President of the Information Technology Association of America (ITAA), stated in a release the "position was not given the rank within the Administration that we believe it merits". See, story titled "DHS Creates Cyber Security Division" in TLJ Daily E-Mail Alert No. 676, June 9, 2003.
Senators Introduce Cell Phone Users Bill of Rights
6/9. Sen. Charles Schumer (D-NY) and Sen. Barbara Boxer (D-CA) introduced S 1216, the "Cell Phone Users Bill of Rights".
The bill contains the wireless number portability provisions of S 1221. See, story titled "Sen. Schumer Introduces Wireless Number Portability Bill" in TLJ Daily E-Mail Alert No. 681, June 16, 2003.
The bill would also require the Federal Communications Commission (FCC) to promulgate regulations mandating the form and content of wireless telephone service providers' publications regarding charges, minutes, contract terms and taxes and surcharges.
The bill would also require that each "wireless telephone service provider shall make available a map showing the wireless telephone service area of such provider. Each such map shall contain the maximum practicable level of granularity."
The bill would also require the FCC to "monitor the quality of wireless telephone service" and prepare semiannual reports.
The bill also contains a very broad definition of the term "wireless telephone service". It encompasses not only current cell phone service, broadband PCS, and SMR, but also "any successor service to such service (including so-called next generation or third generations service)." (Parentheses in original.) The bill does not reference IP number or URL portability.
Second, there is the Lee amendment [2 pages in PDF] offered by Rep. Sheila Lee (D-TX), a member of the House Judiciary Committee. It would remove credit cards, as well as "credit, or the proceeds of credit", from the list of items that may not be used to fund illegal gambling operations. This would essentially gut the bill.
See also, stories titled "House Subcommittee Holds Hearing on Internet Gambling Bills" in TLJ Daily E-Mail Alert No. 652, May 2, 2003; "House Crime Subcommittee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 656, May 7, 2003; House Judiciary Committee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 662, May 15, 2003; and "House Financial Services Committee Approves Revised Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 666, May 21, 2003.
GAO Reports on DHS's Visa Entry/Exit Info Tech
Go to News from June 1-5, 2003.