OVERNIGHT TECH: Trade groups demand change to ‘patent troll’ bill

THE LEDE: Major trade groups are calling for changes to the House’s bill to stem abuses of patent demand letters that accuse recipients of possible infringement.

Ahead of a House Energy and Commerce markup of the bill Wednesday, outside groups and Democrats have called for removing a provision that requires regulators to prove “bad faith” before taking action against so-called patent trolls who send abusive letters. 

But Rep. Michael Burgess (R-Texas), who leads the subcommittee with jurisdiction says that change might not be constitutional.

{mosads}”At best removing the definition of bad faith would give a gigantic grant of authority to the Federal Trade Commission and to state attorneys general to make determinations about the scope of patent law, and that would also invite constitutional challenge,” Burgess said in an opening statement ahead of the mark up. 

But Rep. Jan Schakowsky (D-Ill.) said the bad faith provision would make the bill “virtually unenforceable.”

Rep. Joe Barton (R-Texas) said he was “very troubled” that retail groups are opposing the bill. He said opposition he heard in meetings Tuesday is “something we need to pay attention to.” 

The bill would establish more disclosure requirements in patent demand letters and would give the FTC the power to fine companies that send abusive letters, which advocates say are a major tool of patent trolls. Republicans in a subcommittee approved the bill last week, but Democrats and some outside advocates pushed for changes that were not adopted. Burgess expressed a willingness to narrow the bad faith requirement last week, but said Wednesday removing it entirely raises First Amendment issues. 

DEMAND LETTER BILL OPPOSITION: A host of advocacy groups have come out against the demand letter bill. Four groups sent a letter to members of the committee on Tuesday opposing the bill. The groups cited the bill’s preemption of state laws as well as “unnecessarily strict requirements” on enforcing the law, including the bad faith provision. The letter was signed by the Electronic Frontier Foundation, Engine, Public Knowledge and R Street Institute. The group United for Patent Reform, composed of tech companies and retailers, has also come out against the bill. The Innovation Alliance, however, has said it is a “balanced and thoughtful bill.”

LINES DRAWN ON NSA REFORM: The new version of the USA Freedom Act unveiled on Tuesday has split privacy and civil liberties groups, some of whom say the legislation falls short of real surveillance reform. Soon after the bill was introduced in both the House and Senate, groups including the American Civil Liberties Union, Demand Progress and Credo Mobile lambasted it for failing to adequately stop government spying. Among other complaints, they chided it for failing to address government snooping under executive order 1233 or Section 702 of the Foreign Intelligence Surveillance Act.

Others, however, were more optimistic. “Although it is not the ideal surveillance reform bill–few compromises are ever ideal–today’s version of the USA Freedom Act is a much stronger bill than the version that the House of Representatives approved last year,” Kevin Bankston of New America’s Open Technology Institute said in a statement. The Brennan Center for Justice, Center for Democracy and Technology, R Street and TechFreedom also called the bill a good first step at reining in the National Security Agency, as did trade groups such as the i2 coalition and BSA | The Software Alliance. 

On Capitol Hill, the bill has the support of an equal cross-section of Congress as a similar effort did last year. In the Senate, the bill was co-sponsored by Sens. Patrick Leahy (D-Vt.), Mike Lee (R-Utah), Ted Cruz (R-Texas) ,Dean Heller (R-Nev.), Dick Durbin (D-Ill.), Al Franken (D-Minn.), Lisa Murkowski (R-Alaska), Richard Blumenthal (D-Conn.), Steve Daines (R-Mont.) and Charles Schumer (D-N.Y.). Sen. Ron Wyden (D-Ore.) also issued a statement of support. In the House, the list of co-sponsors included Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Reps. John Conyers (D-Mich.), Jim Sensenbrenner (R-Wis.) and Jerrold Nadler (D-N.Y.). Rep. Adam Schiff (D-Calif.) — the top Democrat on the Intelligence Committee — called it “an important milestone in the road to reform of our surveillance programs.”

LEAHY NEEDLES SUPREME COURT ON CAMERAS: On the day the Supreme Court heard arguments on state bans on gay marriage, Sen. Patrick Leahy (D-Vt.) made another call to allow television cameras in. Senate Judiciary Chairman Chuck Grassley (R-Iowa) who cosponsors legislation with Leahy on the issue, made a similar pitch Monday. “Americans should not have to camp out for days to watch historic #SCOTUS arguments,” Leahy tweeted, adding, “televising and live-streaming arguments is best way for all Americans to see their govt in action.”

PRICE TAG FOR FIRSTNET: The Government Accountability Office on Tuesday issued a report that found the First Responders Network Authority (FirstNet) has not fully assessed its risk or established conduct standards. FirstNet was formed three years ago to build a nationwide broadband network to help first responders communicate. In a summary of the 72-page report, the GAO noted the network could end up costing between $12 billion and $47 billion in the first 10 years. 

“As I stated at our committee’s recent hearing, FirstNet should leverage the sizeable taxpayer investment in early builder projects by implementing a detailed data-analysis plan. FirstNet must also more fully assess the risks it faces as it builds a network that provides public safety officials with a network to serve all Americans,” said Sen. John Thune (R-S.D.), who requested the report.

FRANKEN BEMOANS LACK OF BROADBAND COMPETITION: Sen. Al Franken (D-Minn.) said people should still be worried about the lack of competition in the broadband market, even after the deal between Comcast and Time Warner Cable fell through. Franken included the concern on a list of takeaways on his website from the failed merger. According to a recent Commerce Department study, only 37 percent of people have more than one option when it comes to broadband with speeds of at least 25 Mbps. 

ON TAP: 

Public Knowledge is holding an all-day event in the Capitol Visitors Center related to 3D printing. 

Senators are expected to introduce their patent reform bill on Wednesday 

At 10 a.m., the House Energy and Commerce Committee will mark up its own legislation to cut down on abusive patent demand letters. 

At 10 a.m., the House Judiciary Committee will hold a hearing on copyright, with testimony from Maria Pallante, the register of copyrights. 

At 2 p.m., the House Oversight subcommittee on Information Technology will hold a hearing on encryption and potential U.S. policy.

IN CASE YOU MISSED IT: 

A bipartisan group of lawmakers introduced legislation on Tuesday that would make major reforms to the National Security Agency while also extending three expiring provisions of the Patriot Act.

The Americans Civil Liberties Union on Tuesday quickly pulled support from a congressional bill to reform the National Security Agency. 

A federal judge in New York denied a new trial for the man convicted of owning and operating the Silk Road, a large online drug market. 

Dish network is in jeopardy of losing billions of dollars in discounts that it claimed in a spectrum auction earlier this year.

Major tech companies are joining with the U.S. Chamber of Commerce to urge lawmakers to extend American privacy protections to foreigners in Europe. 

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