OVERNIGHT TECH: Concerns grow over House bill to curb patent threats

THE LEDE: There’s tension brewing over a draft bill set to be considered Thursday by the House Commerce Subcommittee on Trade. The panel will consider a bill from Chairman Lee Terry (R-Neb.) aimed at curbing abusive demand letters, the letters companies send threatening lawsuits over alleged patent infringement.

While various patent stakeholders initially rallied behind the bill, some patent reform advocates and regulators have expressed last-minute concerns as lawmakers begin to consider the bill.

{mosads}The bill, released as a discussion draft last week, would allow the Federal Trade Commission and state Attorneys General to go after companies that send deceptive demand letters. The bill defines deceptive demand letters as those that are sent in bad faith and include certain misleading information, such as who has the right to enforce the patent allegedly being infringed, or fail to include certain critical information, such as which patent is allegedly being infringed.

Terry stressed the “difficult” process of bringing together “so many stakeholders with differing perspectives,” but said his bill as currently written “strikes the appropriate balance.”

Rep. Fred Upton (R-Mich.) — chairman of the House Energy and Commerce Committee — also applauded the bill and it’s balance to ensure “we don’t make it overly burdensome for legitimate patent holders to protect their property rights.”

During opening statements Wednesday afternoon, Terry highlighted stakeholders’ concerns, including that the bar is set too high if the FTC wants to bring civil penalties against a company sending bad faith demand letters. Additionally, the FTC is concerned that the bill will inadvertently make it harder for the agency to get an injunction, Terry said. 

He expressed frustration about the FTC having concerns as the bill heads to markup despite being involved in conversations around drafting the bill. “We brought the FTC into our deliberative process on this bill, and I’m disappointed at the manner and timing in which these concerns were raised,” he said.

The FTC said that it looks “forward to continuing to work with Chairman Terry on this issue.”

Democrats on the panel echoed the concerns. It could “make investigations and enforcement far more difficult” for the FTC and would preempt the 15 states that have passed their own laws to curb abusive patent demand letters, Energy and Commerce ranking member Henry Waxman (D-Calif.) said in his opening statement. Rep. Jan Schakowsky (D-Ill.), ranking member of the Subcommittee, also expressed concerns but said she hopes “that by the time this legislation goes to full committee, the bill will effectively address the issue of patent trolls.”

Terry said he expects amendments to be introduced at tomorrow’s markup. “Don’t know what they would be but expect some,” he said, pledging to “absolutely” consider any amendments offered. “We’ll look at everything,” he said.

Waxman said off the House floor that he currently has no plans to introduce amendments to Terry’s bill. “Right now I’m just inclined to vote no,” he said.

 

DISH lobbies against $45B Comcast deal: Satellite television provider DISH is urging the Federal Communications Commission to deny the proposed $45 billion deal to combine Comcast and Time Warner Cable. In meetings with all five commissioners on Monday, DISH Chairman Charlie Ergen said the proposed deal “presents serious competitive concerns for the broadband and video marketplaces and therefore should be denied,” according to the company’s filing with the agency.

Ergen told commissioners and their staff that a combined Comcast-Time Warner Cable “would have an increased incentive and ability to leverage its control over the broadband pipe to undermine” online video services. DISH is planning to launch an online video service by early next year. Ergen expressed concerns about the merged Comcast’s increased leverage in negotiations for television programming “which, in turn, will force programmers to extract even higher rates from smaller pay-TV providers like DISH in order to compensate the programmers for lost revenue.” Ergen made a similar point about the proposed $49 billion AT&T and DirecTV merger but did not go so far as to oppose the deal.

House Judiciary preps for STELA vote: Leaders of the House Judiciary committee hoped their legislation to renew an expiring satellite TV law would move quickly, they said on Wednesday. The lawmakers’ “clean” reauthorization of the Satellite Television Extension and Localism Act (STELA) will keep rural Americans from missing everything from late-night TV to local news, committee Chairman Bob Goodlatte (R-Va.) said ahead of Thursday’s markup. “Without Congressional action to renew the expiring video license, access to these services could be in jeopardy, especially for rural Americans,” he claimed in a statement.

Rep. Howard Coble (R-N.C.), head of the intellectual property and the Internet subcommittee added that he looked forward to the bill’s “quick enactment,” before current law runs out at the end of this year.

Broadcasters back the bill: The National Alliance of State Broadcasters Associations threw its support behind the panel’s draft STELA reauthorization, which head Michelle Vetterkind called a “narrowly-tailored approach” that “will provide communities across America with the continued benefits of uniquely free and locally-focused programming on broadcast television.”

“A clean reauthorization will ensure that the satellite industry can continue to serve rural America, but does so without undermining the viability of the local broadcast framework to the benefit of all viewers,” she added.  

Franken writes regulators on AT&T-DirecTV: Sen. Al Franken (D-Minn.) is raising the alarm about the proposed $49 billion deal between AT&T and DirecTV in a new letter to the Justice Department and Federal Communications Commission (FCC). “If AT&T is permitted to acquire DirecTV, the combined entity will have enhanced power in virtually every corner of the telecommunications market—power that AT&T potentially could use to obtain an unfair advantage over consumers and competitors,” he wrote to the two regulators. “As such, I have some concerns about this deal.”

Franken has been one of the Congress’s most outspoken critics of the potential merger of the two companies, as well as Comcast’s plan to buy Time Warner Cable. In his letter on Wednesday, he feared that the deal would allow AT&T to force consumers into buying bundles of phone, Internet and TV service. He also feared that a combined AT&T-DirecTV could ignore “the spirit” of the FCC’s regulations on net neutrality, which it has pledged to live up to for three years, and suggested the company also commit to abide by the rules for mobile broadband.

“The enhanced bundling power that AT&T seeks to achieve from this transaction could strengthen the company’s already-dominant presence in the wireless market,” he wrote. “The potential for AT&T to become a gatekeeper of the mobile Internet has been looming for years.

Pittenger hits back over House NSA amendments: Rep. Robert Pittenger (R-N.C.) accused his lawmaker colleagues of creating a “blind spot” for the intelligence community by approving a measure to rein in the National Security Agency. The amendment to the defense spending bill preventing “backdoor” searches of Americans, Pittenger wrote in a Wall Street Journal op-ed, makes it harder for the NSA and other arms of government to guard against terrorist threats stemming from Iraq and Syria.

The amendment from Reps. Thomas Massie (R-Ky.) and Zoe Lofgren (D-Calif.) “makes the mistake of going much too far in protecting privacy,” he wrote. “My concern is that some House colleagues voted for this amendment with minimal understanding of its impact on national security or were acting under pressure from conscientious but poorly informed activists.” He asked lawmakers to remove the amendment when the House and Senate meet to reconcile their spending bills.

Tech giants announce patent deal: Giants in the tech industry — including Google, Dropbox, Canon and SAP — announced on Wednesday a cross-licensing patent partnership with the hopes of cutting down on abusive patent lawsuits. Through the partnership, participating companies receive a license to use the other companies’ patents when those patents are sold. That way, if the patent is sold to a company that uses it to go after companies with similar technology, the companies in the partnership are protected from that “patent trolling.”

The partnership “is a sort of arms control for the patent world,” said Google Deputy General Counsel for Patents Allen Lo. “By working together, we can cut down on patent litigation, allowing us to focus instead on building great products.”

FCC bulks up enforcement bureau: Former Maryland Chief Deputy Attorney General Katherine Winfree has joined the FCC’s enforcement bureau as chief of staff, the commission announced. As the No. 2 cop in the Free State, Winfree supervised the state’s 32 divisions and represented it in a case on DNA collection before the Supreme Court. Winfree previously served as a federal and state prosecutor, where she tried cases including the prosecution of the Beltway snipers, John Allen Muhammad and Lee Boyd Malvo. 

FCC spectrum official jumps to NAB: The National Association of Broadcasters is bringing on Robert Weller, the former FCC’s head of technical analysis, to focus on spectrum policy. Weller led an FCC group on spectrum rules and policy since 2008.

EBay, Sidecar add lobbyists: Thorn Run Partners is now lobbying for eBay regarding online sales tax bills and for Sidecar regarding “innovation in the transportation marketplace,” including ridesharing, according to new lobbying registrations.

 

ON TAP:

The Senate Judiciary Committee marks up its cellphone unlocking bill at 9:30.

The House Commerce panel finishes its review of the patent letter bill starting at 10:00.

At the same time, the House Judiciary Committee’s STELA markup gets underway. 

At 5:00 Reps. Kevin Yoder (R-Kan.) and Jared Polis (D-Colo.) will attend a Capitol Hill reception on email privacy. 

 

IN CASE YOU MISSED IT:

The White House is backing away from its reported choice to lead the U.S. Patent and Trademark Office after a backlash from the technology industry and rumblings of opposition from Capitol Hill. 

The NSA and FBI have been secretly monitoring top public Muslims in the U.S., according to revelations from documents provided by Edward Snowden. 

One of two Muslims in Congress had harsh words on Wednesday over government agents’ targeting of a handful of prominent American Muslims. 

Patent reform advocates are lining up to support a new House bill that would put restrictions on the “demand letters” companies send threatening patent infringement lawsuits. 

Bitcoin supporters are hiring up in Washington as lawmakers and regulators debate how to handle the digital currency. 

 

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