JOLT Digest

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.

By Lauren Henry

Senate Judiciary Committee Approves Anti-Piracy Bill

Ars Technica and CNET report that the Senate Judiciary Committee has unanimously approved a bill that would blacklist websites deemed to be “pirate websites” from the Domain Name System, ban credit card companies from processing US payments to such sites, and forbid online ad networks from working with the sites. The bill — known as the Combating Online Infringement and Counterfeits Act, or COICA — received the strong support of content industry leaders, who perceive it as protecting their intellectual property, and the vociferous opposition of free speech advocates. Peter Eckersley at EFF’s Deeplinks blog argues that COICA fails to monetize content distribution for intellectual property holders, increases data traffic costs, and unconstitutionally restricts freedom of speech.

Limewire: Pirate Edition Provokes Search for Its Creator

Ars Technica reports that the RIAA and LimeWire are attempting to identify the creator of LimeWire: Pirate Edition. Days after a federal judge ordered LimeWire to shut down all software and cease distribution, LimeWire: Pirate Edition appeared. The new version of the program is functionally equivalent to LimeWire, as it is based on LimeWire’s open-source code. RIAA and LimeWire are conducting independent investigations to find the culprit.

Democrats Propose Cybersecurity Bill to Empower DHS to Punish Tech Firms

CNET reports that Democrats have proposed legislation that would give the Department of Homeland Security the power to fine technology companies $100,000 a day for failure to comply with the agency’s directives. The bill, known as the Homeland Security Cyber and Physical Infrastructure Protection Act, would give the DHS broad authority to enforce cybersecurity measures upon any “system or asset” deemed to be a “component of the national information infrastructure.” Critics argue that DHS lacks the institutional competency to effectively administer such powers, and that private companies need no additional incentives to enact security measures.

DC District Court Orders a Halt to Federally Funded Embryonic Stem Cell Research
By Jessica Palmer – Edited by Ryan Ward

Sherley v. Sebelius, 2010 U.S. Dist. LEXIS 86441 (D.D.C. August 23, 2010)
Memorandum Opinion

On August 23, the United States District Court for the District of Columbia granted a preliminary injunction blocking the implementation of the National Institutes of Health (NIH)’s July 2009 guidelines for human embryonic stem cell (hESC) research. Judge Royce Lamberth held that “because the Guidelines allow federal funding of ESC [Embryonic Stem Cell] research, which involves the destruction of embryos,” federal funding for hESC research “clearly violate[s]” the Dickey-Wicker Amendment.

The Dickey-Wicker Amendment, an appropriations bill rider originally passed in 1996 and renewed each appropriations cycle thereafter, prohibits the use of appropriated funds for “research in which a human embryo or embryos are destroyed.” P.L. 111-8 § 509 (2009). Judge Lamberth rejected the government’s argument that, under Dickey-Wicker, NIH could support research on hESCs, as long as federal funding did not support the initial derivation of the stem cell lines from human embryos. Judge Lamberth reasoned that the NIH’s interpretation of the Dickey-Wicker Amendment did not deserve Chevron deference because the statute is unambiguous: “the language of the statute reflects the unambiguous intent of Congress to enact a broad prohibition of funding research in which a human embryo is destroyed. This prohibition encompasses all ‘research in which’ an embryo is destroyed, not just the ‘piece of research’ in which the embryo is destroyed.”

Professor Glenn Cohen of Harvard Law School criticized the order at Concurring Opinions, arguing that “it is hard to find that the statute is ‘unambiguous’ in Chevron terms in the way Lamberth says.” Professor Russell Korobkin of UCLA, writing at The Volokh Conspiracy, found the grant of a preliminary injunction “troubling” because “the balance of hardships tilts strongly in the direction of hESC researchers and the patients who hope their work will lead to cures, not in the direction of the plaintiffs who might see their chances of winning a grant reduced.” Both Cohen and Korobkin predicted that the Court of Appeals for the District of Columbia Circuit will reverse the district court’s grant of an injunction. (more…)

By Ian B. Brooks

Illinois Establishes Standard for Identifying Anonymous Internet Commenters

Evan Brown at Internet Cases reports that the Appellate Court of Illinois, Third District has set forth a standard for identifying an anonymous internet commenter in Maxon v. Ottawa Publishing Co., No. 3-08-0805 (Ill. App. 3d June 1, 2010). A couple from Illinois, unhappy with anonymous comments on a local newspaper website, sought to identify the commenters. Illinois Rules on Civil Proceedings Rule 224 allows a petitioner to file a petition to identify a person “responsible in damages.” The trial court followed the analysis of Dendrite International. Inc. v. Doe No. 3, 775 A.2d 756 (N.J. Super. Ct. App. Div. 2001) and Doe v. Cahill, 884 A.2d 451 (Del. 2005), in denying the petition. The appellate court reversed and remanded, setting forth a new standard that requires a court to “insure that the petition: (1) is verified; (2) states with particularity facts that would establish a cause of action for defamation; (3) seeks only the identity of the potential defendant and no other information necessary to establish the cause of action of defamation; and (4) is subjected to a hearing at which the court determines that the petition sufficiently states a cause of action for defamation against the unnamed potential defendant.” Maxon, slip op. at 9. As Brown notes, this standard — unlike that of past cases — does not require the petitioner to attempt to identify the commenter.

FCC Votes to Proceed with Net Neutrality Regulations

Joelle Tessler for the Associated Press reports that the Federal Communications Commission has voted to accept public comments on three proposed broadband regulations. The regulations are part of the FCC’s latest attempt to establish oversight of broadband providers. The proposal would redefine broadband access as a telecommunications service, allowing the FCC greater regulatory control. FCC Chairman Julius Genachowski hopes to ensure that broadband providers treat network traffic equally, limiting their ability to selectively block traffic. JOLT Digest previously highlighted the objections of many members of Congress to the FCC’s attempts to regulate in the aftermath of Comcast Corp. v. FCC.

Napolitano Calls for Balance Between Civil Liberties and Security

Lolita C. Baldor for the Associated Press reports that in a recent speech, Homeland Security Secretary Janet Napolitano discussed the balance between fighting terrorism and maintaining civil liberties. Citing the recent homegrown, online terrorist recruitment efforts, Napolitano suggested that the law should allow the government to monitor these growing threats. Napolitano believes that by monitoring Internet communications the United States can better protect national security without necessarily “having a deleterious effect on individual rights.”