JOLT Digest

Third Circuit Affirms Prior Decision to Strike Down FCC Fine for CBS Broadcast of Janet Jackson’s Breast During Super Bowl Halftime Show
By Abby Lauer – Edited by Albert Wang

CBS Corp. v. FCC, No. 06-3575 (3d Cir. Nov. 2, 2011)
Slip Opinion

The Third Circuit Court of Appeals affirmed its earlier decision throwing out a $550,000 fine that the Federal Communications Commission imposed on broadcasting corporation CBS for airing a split-second image of Janet Jackson’s exposed breast during the 2004 Super Bowl Halftime Show.

Reaching the same conclusion as it had in a 2008 ruling, the Third Circuit held that CBS’s broadcast was legal under the FCC’s policy at the time, which permitted networks to air instances of “fleeting” indecency without being sanctioned. The Court of Appeals ruled that it was arbitrary and capricious for the FCC to change its policy retroactively and impose a steep fine on CBS without notifying the network of the policy change. In reaffirming its 2008 ruling, the Third Circuit declined to change its position in light of the Supreme Court’s recent decision in FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800 (2009), which upheld the FCC’s decision to abandon its safe harbor for broadcasted expletives that are not repeated. The Third Circuit stated that “Fox confirms our previous ruling in this case and that we should readopt our earlier analysis and holding that the [FCC] acted arbitrarily . . . .” Slip op. at 5.

SCOTUSblog provides an overview of the case. Ars Technica also describes the decision and discusses possible implications for future prime time broadcasts.

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by Heather Whitney

Google calls competitors’ patent acquisition anticompetitive; Microsoft claims Google was invited

Techcrunch reports that Google accused Microsoft of buying the Nortel patents in order to supress competition from Android, Google’s popular mobile operating system. On Wednesday, Google SVP and Chief Legal Officer David Drummond released a blog post calling, among other things, the recent Nortel patent auction win by a consortium including competitors Microsoft, Apple, and Oracle anticompetitive, done to stifle Android innovation through litigation. On Thursday, Microsoft’s General Counsel, Brad Smith, tweeted a response, explaining that Microsoft asked Google to bid jointly but Google refused. Microsoft’s Head of Communication tweeted a follow-up, attaching an image of an email sent from Kent Walker, Google’s GC, to Microsoft’s GC, where Google expressly declined to bid jointly. Google responded again, as did Microsoft. In the end, Google contends that a joint bid would not have protected Android from patent litigation since Microsoft would have the patents too. Microsoft argues Google refused to join in the bid because Google was looking to buy up additional patents to use to go after Microsoft.

Facebook’s Marketing Director says online anonymity has to “go away”, leaves Facebook to start her own media company

According to the Huffington Post, during a discussion last Tuesday on cyber bullying, Facebook’s Marketing Director Randi Zuckerberg gave a solution: get rid of online anonymity all together. “I think anonymity on the Internet has to go away. People behave a lot better when they have their real names down… I think people hide behind anonymity and they feel like they can say whatever they want behind closed doors.” The EFF responded, claiming that while private companies like Facebook can require users to give their real names, requiring anybody roaming the Internet at all to do so constitutes a freedom of expression “disaster”. Faster Forward, a Washington Post blog, reports that, while purportedly unrelated, Zuckerberg submitted her letter of resignation a week and a day later. In her letter, Zuckerberg said she plans to leave and start her own social media company.

Eighth Circuit affirms that student’s IM with threats to third party not protected speech

Education Week reports that the Eighth Circuit, in D.J.M. v. Hannibal Public School District, affirmed a lower court’s ruling that a student’s instant message containing a threat to third party students, sent outside of school, is not protected speech. The Appeals Court found that because the student directed his IMs at a student who could reasonably be seen to forward the threats to the actual victims, it was a true threat. The Eighth Circuit also analyzed the situation under the Tinker “substantial disruption” test, finding that the IM comments, given that they were easy to copy and thus foreseeably likely to be forwarded on to school administrators, constituted such a substantial disruption of the school.

Senator Grassley objects to rumored removal of NIH conflict of interest disclosure requirements.

Senator Chuck Grassley wrote a letter to Office of Management and Budget this week, urging them not to strip a proposed transparency rule of one of its central features – a requirement that universities post the financial conflicts of publicly funded medical researchers on  a public website. Senator Grassley’s letter was prompted by a Nature article reporting that the requirement had been dropped. Senator Grassley also demanded documents related to meetings on the rule attended by Cass Sunstein, the head of OMB’s Office of Information and Regulatory Affairs. Pharmalot reports that Sunstein is rumored to have disliked the website requirement. Grassley has asked for a response from OMB by August 25.

by Alea J. Mitchell

Obama Seeks Secure Online Identities

The White House Blog announced that President Obama released the “National Strategy for Trusted Identities in Cyberspace” (PDF), a plan to improve online security and e-commerce. The proposal is aimed at combating online fraud and identity theft, and calls on the private sector to design a trusted identity system to better protect an increasingly wired culture. Wired reports the proposal distances itself from a national ID approach and instead urges the private sector to develop ways for consumers to create privacy-enhancing secure identity credentials that will enable safer online transactions.

Senators Kerry and McCain Propose Online Privacy Legislation

Wired reports that Senators John Kerry (D-Massachusetts) and John McCain (R-Arizona) introduced on Tuesday the Commercial Privacy Bill of Rights, online privacy legislation that would allow web users to demand websites stop tracking and selling their online behavior.  The bill aims to regulate how identifiable information is used, stored, and distributed. Ars Technica reports that consumer groups criticize the bill for shying away from overt “Do Not Track” legislation, giving special interest treatment to social media marketers, and creating a conflict of interest by allowing the Department of Commerce to influence privacy policies.

House Votes to Repeal Net Neutrality Rules

Reuters reports that the House of Representatives voted last Friday to reject the FCC’s net neutrality rules, which were adopted last year and bar Internet service providers from blocking or interfering with traffic on their networks. The Hill reports that Republicans, who oppose the rules, claim the FCC lacks authority to regulate the Internet and that net neutrality rules impose unwarranted government regulation over an open and thriving Internet. The largely partisan effort is expected to fail once the legislation reaches the Democratic-controlled Senate. As Wired reports, the vote is largely symbolic, as President Obama has promised to veto any legislation proposing to reverse the rules.

Congress Revisits COICA

Ars Technica reports that the battle over the Combating Online Infringement and Counterfeits Act (COICA) is heating up again as both chambers draft amended versions of COICA, set to be rolled out in coming weeks. Last November, JOLT reported on the bill, which would grant the Attorney General power to seize domain names through in rem action and require online ad services and credit card companies to stop working with blacklisted sites, with the goal of targeting foreign piracy and counterfeiting sites not easily reached by US courts. While the Senate Judiciary Committee unanimously approved the bill, it never made it to the Senate floor, owing to efforts of Senator Ron Wyden, who has again vowed to oppose the bill. Wired reports that Google’s Kent Walker testified at one of two recently held House hearings to oppose the Act, particularly the private right of action a COICA claim would give rightsholders. The Citizen Media Law Project laments the bill’s return.

By Tim Grayson

FCC Moves to Dismiss Net Neutrality Challenges

As PCMag.com reports, the FCC moved to dismiss two challenges to the agency’s December 2010 adoption of controversial net neutrality rules regulating broadband and wireless networks. Verizon and MetroPCS filed suit, each claiming that the FCC lacks the authority to enforce net neutrality. The FCC’s motion to dismiss stems from a timing issue: Verizon and MetroPCS both filed suit before the new rules were published in the Federal Register. This means a dismissal would likely be a temporary reprieve for the agency.  Those on both sides of the debate will watch with interest as courts determine the scope of the FCC’s jurisdiction.

Johnson & Johnson Loses $482 Million Stent Case

The Wall Street Journal reports that Bruce Saffran has scored a big payday at the expense of Johnson & Johnson. A Texas jury awarded Saffran, a New Jersey radiologist, a $482 million verdict after finding that Cordis (J&J’s stent-making subsidiary) had infringed Saffran’s patent for producing “Cypher” drug-coated stents. Stents are small metallic devices designed to hold open arteries, and are used in a variety of cardiac procedures. This isn’t the first big court victory for Saffran—he received a $50 million settlement from Boston Scientific after an initial jury verdict of $431 million. His suit against Abbott Laboratories is still pending.

Mozilla adds “Do not Track” feature for Firefox 4.1

Following recent FCC recommendations, Mozilla has announced that Firefox 4.1 will incorporate a “Do not Track” feature, earning praise from the Electronic Frontier Foundation. Privacy advocates say that “Do not Track” additions will protect consumers from surreptitious and difficult-to-avoid mechanisms that allow marketers and advertisers to follow most of users’ browsing histories. Google announced similar—but less thorough—developments for Chrome, which recently became the third browser with a double-digit market share.

Senate Judiciary Committee Approves Patent Overhaul Bill

The Senate Judiciary Committee approved by a vote of 15-0 a bill designed to reduce the massive damage awards that often arise from patent disputes. The bill would give judges a larger role in determining the importance of a particular patent to a product, and would also grant patents to the first inventor to file rather than the first to invent—aiding companies who file patent applications in multiple countries. The House Judiciary Committee has yet to begin drafting a companion bill, the next step in the legislative process.

By Greg Tang

TSA Offends Travelers with Body Scanners, Fails to be Accountable

The Electronic Frontier Foundation (EFF) commented on the TSA’s use of body scanners in airports across the country, which has raised serious public concerns over the indignity and invasiveness of the body scanners and pat-down searches. The EFF expressed skepticism over the effectiveness of the body scanners in detecting terrorist attacks like the Christmas Day Bomb of 2009, citing various sources, including a TSA document, that have shown materials such as liquid, powder, and thin plastic — as well as passenger clothing — to be undetectable by the scanners. The EFF also reported on the Government Accountability Office’s criticisms of the TSA. The TSA has routinely refused to release test results to the public or perform cost-benefit analyses before adopting new technologies, despite estimated direct costs of $2.4 billion over a 7-year life cycle for the body scanners.

FCC Commissioner Casts Doubt Over Net Neutrality Rules

Ars Technica reported on comments that FCC Commissioner Robert McDowell made regarding the likelihood of FCC-issued net neutrality rules in a talk to the Federalist Society last Monday. The Commissioner expressed uncertainty regarding the substance and timing of any potential rules. The comments came just one week after FCC Chair Julius Genachowski spoke at the Web 2.0 summit in San Francisco, promising to make the rules happen and lambasting Google and Verizon for proposing their own version of open Internet rules back in August. McDowell cautioned against “taking a giant leap into a potentially dark and dangerous regulatory abyss,” and instead advocated cooperation with the FTC, trade associations, consumer groups, and Internet engineers to use existing consumer protection and antitrust laws to punish bad actors and help consumers — a proposal similar to the self-regulatory approach suggested by Comcast last week.

Novell Acquired by Attachmate; IP Goes to Microsoft

Enterprise Linux provider Novell announced last Monday that it would merge with Attachmate, with some intellectual property assets going to a consortium organized by Microsoft. InfoWorld reported on speculations that Microsoft would acquire core Unix IP from the deal, but ComputerWorld confirmed that Attachmate retains control over Novell’s copyrights for the Unix operating system. Since SCO Group launched its attack on Linux in 2003, claiming ownership of Unix intellectual property and copyright infringement by the open-source Linux operating system, Novell has defended the Linux community by defeating SCO in court and declining to pursue copyright action against Linux users. However, Novell has been subjected to criticism from the open-source community in 2006 for reaching a patent agreement with Microsoft over claims that Linux infringed upon Microsoft’s patents.

Jury Awards $1.3 billion in Copyright Damages from SAP to Oracle

Ars Technica reported on the record $1.3 billion that German software maker SAP was ordered to pay rival Oracle in their copyright infringement lawsuit in the Northern District of California. Oracle sued SAP in March 2007 for allegedly using customers’ login credentials to download software and technical support materials from Oracle’s servers. Despite admitting to the inappropriate downloads, SAP had hoped for damages of $41 million from the jury. Several jurors have stated that the award was determined by focusing on how much SAP would have paid if it simply licensed the rights from Oracle, a common method for determining losses in piracy cases.

US Government Cracks Down on Piracy by Seizing Over 70 Domain Names

The New York Times reported that the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) division seized over 70 websites suspected to be involved in file-sharing and counterfeiting goods early Friday morning. The popular file-sharing blog TorrentFreak explained that the websites were shut down by ordering ICANN, the non-profit corporation responsible for mapping human-understandable domain names into numeric IP addresses, to redirect traffic from the seized domains to ICE’s takedown notice. OSNews raised concerns that the method used by the ICE could escalate to censorship of websites outside the US (such as whistleblower site WikiLeaks), as ICANN operates the root domain name servers for the entire Internet. The domain name seizures resemble actions authorized under the Combating Online Infringement and Counterfeits Act, which just passed the Senate Judiciary Committee last week.