US Supreme Court Approves
Extension of Copyrights. By a majority of 7-2, the US Supreme
Court has ruled that Congress acted within its constitutional
powers when it passed legislation extending the term of a copyright
from 50 to 70 years for most copyrighted works. Constitutional
expert and Stanford Law School Professor and Lawrence Lessig
had argued on behalf of opponents of the law that Congress' action
violated the copyright clause of the US Constitution, and First
Amendment rights of free expression. Report
at law.com and article
at washingtonpost.com.
Analysis
at law.com. Case, Eldred
vs. Ashcroft, No. 01-618, argued October 9, 2002, Decided
January 15, 2003. (pdf file)
SEC I: New Sarbanes-Oxley Rules Issued; Corporate
Code of Ethics, Audit Experts Required; "Noisy Withdrawal"
Provisions for Corporate Attorneys Dropped. In further action to establish
regulations under the Sarbanes-Oxley legislation, the Securities
and Exchange Commission (SEC) has announced
that it has issued final
rules requiring a corporate code of ethics and audit committee
financial experts for companies subject to its regulation. The
new rules also govern conditions for the use of non-GAAP financial
information, form 8-K amendments, and insider trading. A previously
proposed rule to require corporate attorneys, if they suspected
wrongdoing by their corporate clients, to withdraw from representation
and report their suspiciions to the SEC, (a "noisy
withdrawal") was dropped after objections by the legal
community that such a requirement would gut the attorney-client
privilege, and result in corporate clients keeping information
from their attorneys.
SEC II: Final Rule issued to Strengthen Auditor
Independence. The SEC
has issued a
final rule designed "to enhance the independence of
accountants that audit and review financial statements and prepare
attestation reports filed with the Commission." The rules
also apply to "foreign accounting firms that conduct audits
of foreign subsidiaries and affiliates of U.S. ssuers..."
It also "provides guidance on the provision of non-audit
services by foreign accounting firms, including the treatment
of legal services and tax services."
SEC III: SEC Seeks to Void State Homestead Laws. As
reported by Reuters.com,
the SEC wants Congress to grant it the power to pre-empt state
laws that protect homes. In a report to Congress, the agency
contends, "'[T]here continue to exist several practical
and legal obstacles to providing compensation to injured investors.'"
SBC Claims Patent on Use
of Website Frames. You may recall the claim a few
years ago by British Telecom, that it owned the patent on the
hyperlink. To the great relief of many, that claim failed. But
now SBC Communications claims a patent on the use of Website
frames, and has sent letters containing licensing terms to several
major companies using the frames. SBC believes that any Web site
that has a menu that remains on the screen while a user clicks
through the site may owe it royalties - hundreds of thousands
of websites. As reported
by nytimes.com (free subscription
required)
Jurisdiction Over Operators
of Website Requires "Purposeful Availment.": 3rd Circuit
Even if a website is both interactive
and commercial (some cases have previously held that no in
personam jurisdiction will lie unless a website is interactive),
a court cannot exercise jurisdiction over an out of state website
operator unless there is evidence that the company "purposefully
availed itself of doing business in that state. Report
at law.comToys
"R" Us v. Step Two SA, No. 01-3390, 3rd Circuit
CA, (January 27, 2003)
Major Retailers Voluntarily
Tax Internet Sales in Support of Proposal to Tax Web Sales. Pursuant to an agreement with 38
states and the District of Columbia, several major retailers,
including Wal-Mart, Target and Toys-R-Us, have voluntarily begun
to charge sales tax on their internet sales. In return, the states
and the District of Columbia have agreed not to hold the retaielrs
liable for tax not previously collected on Internet sales. Previously,
retailers only charged tax on internet sales in states where
they maintained physical facilities. Although Congress has so
far declined to pass legislation to tax internet sales by dot
com sellers, state governments have long been active in trying
to pass such legislation in order to support dwindling sales
tax revenues. As reported in our
January 26, 2003 issue, 30 states have banded together to
agree on a method to tax internet sales. Article
on action of major retailers reported at washingtonpost.com.
(free subscription may be required)
Database Allows Search to
Find an Employer Identification Number. FreeErisa.com
provides an expanded database of employer identification
numbers (EINs). The site contains over 4 million records, and
allows you to search by company name or by EIN. A separate database
is provided for the EINs of Trusts. Register
free with the site to access the EIN Finder. As reported
by virtualchase.com
How to Find Government Regulations
by Keyword or Federal Governmental Agency. Given the increasing frequency
of the passage of regulations by Federal Governmental Agencies,
it might be handy to have a database to search for such regulations,
either by keyword, or by agency for recent regulations. Try regulations.gov.