Tech Law Prof Blog

Judge Stays Google's Trial Move Request

A federal judge in California has stayed Google's request to move the litigation concerning Microsoft's former employee Dr. Kai-Fu Lee.  The case is now being heard in Seattle.  The issue is the non-compete clause in Dr. Lee's contract with Microsoft and whether he breached it in his new employment with Google.

Inforworld has a story here.

eBay Bans Stun Gun Purchase for New York Citizens

The New York Daily News and other media outlets are reporting that eBay has removed stun guns from items available for sale to New York state residents.  The ban was imposed after state investigators posed as buyers and managed to buy 16 stun guns through the aution site.  Stun guns are illegal in New York.  A warning pop-up now informs New York residents that such sales are unavailable for them.  Attorney General Eliot Spitzer's office said through a spokesman that the probe will continue to seek other illegal items.

Read the story here.

Senate Judiciary Committee to Hold Hearing on Video Competition

NOTICE OF SUBCOMMITTEE HEARING

"Video Competition in 2005 - More Consolidation, or New Choices for Consumer? "
Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights

DATE: October 19, 2005
TIME: 02:00 PM
ROOM: 226 Dirksen

The Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights has scheduled a hearing on“Video Competition in 2005 – More Consolidation, or New Choices for Consumers?” for Wednesday, October 19, 2005 at 2:00 p.m. in Room 226 of the Senate Dirksen Office Building.

Senator DeWine will preside.

Adobe Clears DOJ Hurdle in Acquiring Macromedia

Adobe and Macromedia have announced that they have received DOJ clearance in Adobe's acquisition of Macromedia.  The press release is here.  A documents library and history of the takeover is here.  European regulators must still give their consent to the transaction.

New From The National Bureau of Economic Research

Price Discrimination, Copyright Law, and Technological Innovation: Evidence from the Introduction of DVDs

by Julie Holland Mortimer  -  #11676 (IO)

Abstract:

This paper examines the welfare effects of intellectual property protection, accounting for firms' optimal responses to legal environments and technological innovation. I examine firms' use of indirect price discrimination in response to U.S. copyright law, which effectively prevents direct price discrimination. Using data covering VHS and DVD movie distribution, I explain studios' optimal pricing strategies under U.S. copyright law, and determine optimal pricing strategies under E.U. copyright law, which allows for direct price discrimination. I analyze these optimal pricing strategies for both the existing VHS technology and the new digital DVD technology. I find that studios' use of indirect price discrimination under US copyright law benefits consumers and harms retailers. Optimal pricing under E.U. copyright law also tends to benefit studios and consumers. I also reanalyze these issues assuming continued DVD adoption.

The paper is available at http://papers.nber.org/papers/W11676.

Three Indicted in Massive U.S. Piracy Scheme

Reuters is reporting that three individuals have been indicted near San Francisco in a massive piracy bust that included 325,000 CD's of software and music.  The three were arrested last week as part of Operation Remaster, an undercover law enforcement operation in Northern California targeting the large-scale suppliers of pirated copyrighted music, software, and movies.  Software included some Symantec Security products and music featured some latin artists.  Discs showed up at one point in a store in Chicago. 

The three even included the FBI anti-piracy warning on the disc labels. 

The press release from the U.S. Attorney's Office in Northern California on Operation Remaster is here.  The press release about the indictment is here.

Samsung Pays $300 Million to Settle DRAM Antitrust Claims

From The Department of Justice Press Release:

Samsung Electronics Company Ltd. (Samsung), a Korean manufacturer of dynamic random access memory (DRAM) and its U.S. subsidiary, Samsung Semiconductor Inc., have agreed to plead guilty and to pay a $300 million fine for participating in an international conspiracy to fix prices in the DRAM market, the Department of Justice announced. Samsung's fine is the second largest criminal antitrust fine in U.S. history and the largest criminal fine since 1999.

According to the one-count felony charge filed today in the U.S. District Court in San Francisco, from April 1, 1999 to June 15, 2002, Samsung and its U.S. subsidiary, Samsung Semiconductor Inc., conspired with other DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers. The computer makers directly affected by the price-fixing conspiracy were: Dell Inc., Compaq Computer Corporation, Hewlett-Packard Company, Apple Computer Inc., International Business Machines Corporation, and Gateway Inc. Under the plea agreement, which must be approved by the court, Samsung has agreed to cooperate with the government in its ongoing investigation of other DRAM producers.

Samsung is charged with carrying out the conspiracy by:

• Participating in meetings, conversations, and communications in the United States and elsewhere with competitors to discuss the prices of DRAM to be sold to certain customers;
• Agreeing, during those meetings, conversations, and communications, to charge prices of DRAM at certain levels to be sold to certain customers;
• Issuing price quotations in accordance with the agreements reached; and
• Exchanging information on sales of DRAM to certain customers for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

Read about it in a story by CNET or Infoworld.

Symantec Won't Sue Microsoft Over Security Software

So they say now.  John Thompson, Symantec CEO, said yesterday that his company would not sue Microsoft on antitrust grounds nor complain to regulators over Microsoft's impending move into the security software market.  Symantec sells the popular Norton brand of security products, including Norton Anti-Virus.  Comments contained in an article on CNET News indicate that the company was prepared to compete.

A more interesting take on Microsoft's entry into the market is by PC Magazine columnist John Dvorak who suggests that Microsoft should fix their products rather than charge to protect people from the flaws that exist in the operating system.  Read his rant here.

Dutch Police Arrest Three in Virus DOS Plot

Dutch Police arrested three men for creating a botnet network of 100,000 strong PC's that were used in a denial of service attack against an unidentified U.S. company.  The three men used the Toxbot trojan (also known as Codbot) to infect the machines.

Details are in an Information Week story here.

U.S. Press Shield for Bloggers? Probably Not But Who Knows

Editor and Publisher is reporting on remarks by Senator Richard Lugar (R-IN) at the 61st Inter American Press Association Conference in Indianapolis rergarding the status of bloggers under the proposed Free Flow of Information Act of 2005.  Sen. Lugar sponsored the act as a response to the Judy Miller situation in the Valarie Plame investigation.

Asked by Washington Post Deputy Managing Editor Milton whether bloggers are journalists or other commercial entities under the law, Lugar said that bloggers would probably not be considered journalists under the law,  though "this will be the subject of debate as the bill goes along."  There are two bills introduced in the Senate that address the issue, S.340 and S.1419.  There are companion bills in the House, H.R. 581 and H.R. 3323.

As of now, the bill language (from S. 1419, sec. 5) describing the term `covered person' means--

(A) an entity that disseminates information by print, broadcast, cable, satellite, mechanical, photographic, electronic, or other means and that--

(i) publishes a newspaper, book, magazine, or other periodical in print or electronic form;

(ii) operates a radio or television broadcast station (or network of such stations), cable system, or satellite carrier, or a channel or programming service for any such station, network, system, or carrier; or

(iii) operates a news agency or wire service;

(B) a parent, subsidiary, or affiliate of such an entity to the extent that such parent, subsidiary, or affiliate is engaged in news gathering or the dissemination of news and information; or

(C) an employee, contractor, or other person who gathers, edits, photographs, records, prepares, or disseminates news or information for such an entity.

ESA Sues California Over Violent Video Game Law

The Entertainment Software Association has launched a legal challenge to a California law signed by Governor Arnold "Terminator" Schwarzenegger last week.  This follows lawsuits initiated against Michigan and Illinois which placed other restrictions on distribution of games to children.  Similar suits in St. Louis, Indianapolis, and Washington State were successful in challenging laws on First Amendment grounds.

AB 1179 prohibits the sale or rental of violent video games to anyone under the age of 18 and requires a label to be affixed to all games falling into this category. This legislation also imposes a fine of up to $1,000 on anyone who sells or rents violent video games to minors.

In a statement made by the Governor, who himself starred in many violent films in his Hollywood days, some of which have spun off popular violent games, "Today I signed legislation to ensure parent involvement in determining which video games are appropriate for their children. The bill I signed will require that violent video games be clearly labeled and not be sold to children under 18 years old. Many of these games are made for adults and choosing games that are appropriate for kids should be a decision made by their parents."

The text of the bill in question is here.

The web site for the Entertainment Software Association is here.

Liberty Alliance Releases Legal and Privacy Guidelines

The Liberty Alliance released guidelines that address some of the legal and privacy issues surrounding federated identity systems.  The organization was formed to address identity issues when individuals log onto secure web sites for commercial and financial transactions.  To some extent, the organization was created as an alternative to Microsoft's Passport federated system, which has failed to catch on at this time.  Members of the LIberty Alliance include industry heavyweights such as IBM, Oracle, Bank of America,Sun, American Express, America Online, and many others.

The guidelines are available here.

An Infoworld story reporting on this event is here.

Report: Microsoft and Real Near Settlement of Antitrust Suit

Business Week, among others, is reporting that Microsoft and RealNetworks are near settling their antitrust suit.  Real had sued Microsoft in late 2003 claiming that by forcing consumers to accept Windows Media Player, they were harming the market for RealNetwork products.  A news conference is scheduled for later on today.

Update:  RealNetworks and Microsoft settled for $460 million (earlier estimates were for $750 million) and cooperative cross-licensing in each other's software.  CNET News has the details here.  Bill Gates and Real CEO Rob Glaser were on hand for the news conference.

Selling on eBay in North Dakota? You May Need a License

North Dakota (population 642,200) is contemplating whether to require an auctioneer's license before they can legally sell items for others on eBay (and presumably, other auction sites).  An auctioneer's license costs $35, with added requirements that include obtaining a $5,000 surety bond and training at one of eight approved auction schools.

California, Florida, Maine, Missouri, and Texas are considering similar rules, while Tennessee already has something like this in place.

More information is available from this AP story at the CNN website.

Copyright Office Seeks Comment on DMCA's Anti-Circumvention Rules

The United States Copyright Office is seeking public comment on exemptions to prohibition on circumvention of protection systems technologies. The Digital Millennium Copyright Act prohibits the cracking of systems designed to limit use or duplication of copyrighted materials. The same act, however, authorizes the Copyright Office to request public comments and to hold hearings about potential exemptions to the rule. In the past, exemptions have included cracking web filters to see what sites they filter, copy protection in obsolete program formats, and digital books so that the blind may use them. The review for possible exemptions is conducted every three years. Comments are due by December 1.

The Federal Register notice is available from the Copyright Office web site here. The notice includes details on how to submit comments.

A story about the request for comments is available from Wired News here.

GSA Accepts Bids in Biggest Federal Telecom Deal

The General Services Administration has accepted bids in what is called the biggest federal telecom deal. Networx, as it's named, is to provide the next generation communication to the United States agencies, military, and diplomats with a global reach. The estimated $20 billion contract is to provide wireless, Internet, and satellite communication capabilities to U.S. employees stationed at over 15,000 locations worldwide.

Competitors for contracts under the project include AT&T, MCI, Sprint Nextel, and Quest. Details about the competition are in a Washington Post story here.

The GSA Networx overview with links to the 1,000 plus page RFP are available here.

Appeals Court Denies En Banc Hearing in Blackberry Patent Case

A federal appeals court on Friday rejected a motion by Research In Motion, Inc. for an en banc hearing in a case where the Blackberry manufacturer was found at trial to have infringed patents.  RIM's next step is an appeal to the United States Supreme Court.

The trial court, in a complicated case, found that RIM infringed on patents held by NTP Inc.  The Patent Office, in a parallel process, has rejected the patents that RIM was supposed to have violated, with the last decision coming last week.

The Washington Post has a story with full details here.