TLJ News from November 16-20, 2012

District Court Approves FTC Settlement with Google in Safari Circumvention Case

11/20. The U.S. District Court (NDCal) issued its order [9 pages in PDF] approving the Federal Trade Commission's (FTC) settlement with Google in its action regarding Google's circumvention of the Apple Safari browser's blocking of third party cookies, in violation of a previous consent order.

The FTC imposed a civil fine of $22.5 Million. Google did not admit wrongdoing. The Consumer Watchdog (CW) filed a memorandum opposing District Court approval. The District Court's order addresses, and rejects, the CW objections.

The FTC's David Vladeck stated in a release that "The court's approval of the Commission's record setting $22.5 million fine against Google is a clear victory for consumers and privacy. As this case and many others demonstrate, the Commission will continue to ensure that its orders are obeyed, and that consumers’ privacy is protected."

The CW's John Simpson stated in a release that "the decision makes two things clear: First, if consumers are to have any privacy at all and be able to control what data is gathered about them, tough Do Not Track rules must be implemented. Second, as we told the FTC last week, the Commission needs to file an antitrust suit against Google and take it to trial in U.S. District Court. The FTC should seek to force Google to divest its Motorola Mobility subsidiary, separate search from advertising, and undergo the same sort of regulation as a public utility."

See, stories titled "FTC Sues and Settles With Google for Circumventing Apple Safari Browser's Blocking of Third Party Cookies", "Commentary: Claims that the USA/FTC Did Not Bring Against Google", and "Reaction to the Google Settlement" in TLJ Daily E-Mail Alert No. 2,425, August 9, 2012.

Pew Internet Releases Survey on Teenager Online Privacy

11/20. The Pew Internet and American Life Project released a survey based report [29 pages in PDF] titled "Parents, Teens, and Online Privacy".

Pew surveyed 802 parents of teenaged children by phone and e-mail. Pew asked parents how concerned they are about "how much information advertisers can learn about their child’s online behavior", "how their child interacts online with people they do not know", "how their child’s online activity might affect their future academic or employment opportunities", and "how their child manages his or her reputation online". Pew found high levels of parental concern.

The report finds that 50% of respondents used parental controls or other means of blocking, filtering, or monitoring their child’s online activities.

The report finds that only 44% of parents respond that they have read a privacy policy for a website or social network their child was using.

And, only 39% parents of children who uses social network sites state that they have helped their child with privacy settings for those sites.

Kappos Addresses Software Patents

11/20. David Kappos, head of the U.S. Patent and Trademark Office (USPTO), gave a speech on software patents in Washington DC at the Center for American Progress (CAP).

He noted that "software patents have tended to be the focus of controversy and some critics go so far as to argue that software shouldn’t be patentable at all".

rightKappos (at right) argued that the patent system drives economic growth, that software implemented innovation should be patentable, that software should not be treated differently from hardware, and that the USPTO is effectively working to improve the quality of software patents.

He accused those who argue that for smart phone patents the system is broken are engaging in "flippant rhetoric".

He explained software patents. He said that "patents aren't issued merely for lines of code. Patents are issued for process and apparatus, which are determined to be novel and non-obvious. Patents are not granted for abstract ideas. But they are available to protect innovations, such as those enabling -- automated language translation, voice recognition, and video compression, all involving major technological advances, all of which can be implemented in software".

He stated that "patent protection is every bit as well-deserved for software-implemented innovation as for" other innovations. But, he added, such patent protection should be "properly tailored in scope, so that programmers can write code and engineers can design devices without fear of unfounded accusations of infringement", and so that there will not be "uncertainty in the marketplace".

He continued that "the various dire reports and commentary have omitted a critical component -- the facts". He elaborated the USPTO studies have shown that in litigation in the U.S. District Court over 80 percent of the software patent are construed as valid. Also, "rejections in software patent applications taken to our appeals board are upheld at a slightly higher rate than for the office as a whole, and those few decisions appealed to the Federal Circuit are affirmed 95 percent of the time". So, he concluded, the critics of smart phone patents who argue that the system is broken are not backed by the facts.

He next said that while the Courts have upheld the patentability of software, they have struggled with the "various tests for patent eligibility and functional claiming and inventiveness standards". But, software patents should not be treated differently from hardware patents.

He reviewed some areas, other than smart phones, where software patents have been important for creating incentives for innovators and investors. He then said that "Discrimination against a form of innovation that is increasingly critical to technological advancement, indeed that in many areas dominates technological advancement, makes no sense. So to those reporting and commenting on the smart-phone patent wars as if to suggest that the system is broken: let’s move beyond flippant rhetoric and instead engage in thoughtful discussion."

He argued that "Those who invest in breakthrough innovation have a right to expect others to respect their resultant IP. However, in the end, as history has shown time and time again, the players ultimately end up agreeing to pro-consumer solutions via licenses, cross-licenses or joint development agreements allowing core technologies to be shared." And, he named and discussed the history of some such technologies.

Nevertheless, the USPTO should strive to avoid issuance of "low quality" software patents. It grants "patents only for great algorithmic ideas worthy of protection". To this end, Kappos said that the USPTO assembled a task force that developed metrics. It strengthened the guidelines used by patent examiners to determine which inventions are eligible for patent protection. It has allowed examiners more time to review every patent application. It has "reached out to experts in the software industry to provide technical training to our patent examiners". And, it has opened a Silicon Valley office, and hired Michelle Lee to run that office.

He also discussed how the Supreme Court's 2007 opinion in KSR v. Teleflex, changes to the USPTO's reexamination process, and implementation of various provisions of the America Invents Act (AIA), most of which took effect in September, are improving the quality of software patents.

One provision of the AIA allows for third party submissions of prior art. He praised crowd sourcing of searches for software prior art. And, he said that "third-party submission provision of AIA has every prospect to improve the software patent landscape going forward".

He also discussed the January 11, 2013 workshop on requiring disclosure of the real party in interest. See also, story titled "USPTO to Host Roundtable on Requiring Real Party in Interest Disclosures" in TLJ Daily E-Mail Alert No. 2,483, December 5, 2012.

He said that "A root cause of problems with our current environment for software patents -- and indeed all patents -- is simply deciphering ownership. At the heart of a well-functioning innovation environment is accurate information about who owns what assets, so that license rights can be confirmed or sought, and unproductive effort simply avoided."

More News

11/20. The Government Accountability Office (GAO) released a report [21 pages in PDF] titled "Spectrum Management: FCC's Licensing Approach in the 11, 18, and 23 Gigahertz Bands Currently Supports Spectrum Availability and Efficiency".

11/20. Federal Reserve Board (FRB) Chairman Ben Bernanke gave a speech in New York City titled "The Economic Recovery and Economic Policy". He attempted to explain the "slow pace of economic recovery in the United States" over the last four years, including slow GDP growth and high unemployment. He stated, among other things, that "the commercial application of new technologies" (emphasis added) has been "impeded", and the "pace of productivity gains -- another key determinant of growth in potential output" has been "restrained". He still blames "the financial crisis" this this. He said that "the U.S. economy continues to be hampered by the lingering effects of the financial crisis on its productive potential".

11/20. The Executive Office of the President's (EOP) Office of Management and Budget (OMB) released a memorandum [4 pages in PDF] for the head of executive departments and agencies titled "Guidance for Agencies on Transfers from the Spectrum Relocation Fund for Certain Pre-Auction Costs".

DOJ and FTC to Hold Workshop on Patent Assertion Entities

11/19. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) announced that they will hold a day long workshop on December 10, 2012, titled "Patent Assertion Entity Activities". See, notice and agenda.

The two regulatory agencies also request comments. The deadline to submit comments is January 10, 2013.

The DOJ and FTC stated that this event "will provide a forum for industry participants, academics, economists, lawyers, and other interested parties to discuss the evolution of economic and legal analyses of PAE behavior, including patent acquisitions and licensing activity." The list of speakers is already fixed.

In addition, "The workshop will consist of a series of panels examining, among other topics, PAE behavior, the economics of IP licensing, industry experiences with PAE behavior, economic and legal theories and empirical work concerning PAE activity, and the potential efficiencies and harms to innovation and competition that this activity may generate."

This event will run from 9:00 AM to 5:30 PM in the FTC's, Satellite Building and Conference Center at 601 New Jersey Ave.,  NW. This event is free and open to the public.

Rep. Eshoo and Rep. Lofgren Complain to FTC about its Google Antitrust Investigation

11/19. Rep. Anna Eshoo (D-CA) and Rep. Zoe Lofgren (D-CA), who both represent Silicon Valley districts, sent a short letter to the five Commissions of the Federal Trade Commission (FTC) regarding its antitrust investigation involving Google.

Their complaint has two elements. First, they object to leaks from the FTC regarding the status of the investigation. Second, they complain that the FTC may be on the verge of bringing an action against Google under Section 5 of the FTC Act, rather than under an antitrust statute.

See, full story.

House Commerce Committee Democrats Seeks Hearing on AT&T Modernization Plans

11/19. Rep. Henry Waxman (D-CA), Rep. Anna Eshoo (D-CA) and other Democrats on the House Commerce Committee (HCC) sent a letter [3 pages in PDF] to Rep. Fred Upton (R-MI) and Rep. Greg Walden (R-OR) requesting a hearing on AT&T plans to modernize its facilities, including by replacing old technology cooper wire.

These Democrats wrote that the recent Hurricane Sandy may have had less impact upon "corded telephones running on copper-line networks" than on those "relying on wireless services or fiber-optic cables".

Therefore, they want a hearing "to investigate the reliability of the communications networks, to identify and highlight best practices and, where necessary, to address potential vulnerabilities in our communications infrastructure".

AT&T announced in a release on November 7, 2012 its "plans to invest $14 billion over the next three years to significantly expand and enhance its wireless and wireline IP broadband networks to support growing customer demand for high-speed Internet access and new mobile, app and cloud services." See, story titled "AT&T Announces Additional Investment in Its Wireline and Wireless Broadband Networks" in TLJ Daily E-Mail Alert No. 2,470, November 6, 2012.

Rep. Upton, the Chairman of the HCC, stated in a release on November 8 that "AT&T should be commended for increasing its already large commitment to broadband expansion, especially in this fiscal environment ... Private sector investment like this must be encouraged. That's why the committee plans to examine in the coming months whether we need to modernize our communications policies to meet the challenges and promises of the Internet era."

"Private investment in expanding broadband networks is essential to creating jobs and growing our economy by expanding broadband deployment, especially in rural areas," said Rep. Walden, Chairman of the HCC's Subcommittee on Communications and Technology. "As the committee looks to modernize our communications policies in the next Congress, such private investment is to be commended and encouraged."

People and Appointments

11/19. Intel announced in a release that its P/CEO, Paul Otellini, "has decided to retire as an officer and director at the company's annual stockholders' meeting in May, starting an orderly leadership transition over the next six months".

Go to News from November 11-15, 2012.