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February 27, 2014, Alert No. 2,632.
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Sen. McCaskill Introduces Bill to Regulate Patent Infringement Demand Letters

2/26. Sen. Claire McCaskill (D-MO) and Sen. John Rockefeller (D-WV) introduced S 2049 [LOC | WW | TLJ], the "Transparency in Assertion of Patents Act".

This bill would direct the Federal Trade Commission (FTC) to write and enforce rules regarding unfair and deceptive practices in the sending of demand letters alleging patent infringement, and setting pleading like requirements for these letters. The bill would not preempt any state laws. It would give the states concurrent enforcement authority. It would create no private right of action.

The bill was referred to the Senate Commerce Committee (SCC), which promptly scheduled a mark up session for Wednesday, March 5, 2014. One consequence of such a hurried mark up is that opponents are left without sufficient time to mount a lobbying campaign against the bill.

Groups and Members of Congress who advocate the enactment of legislation to address abusive practices by "patent trolls" often cite the sending of abusive demand letters that allege patent infringement as one of the worst activities of these "patent trolls". They state that these letter are often sent in bulk, are vaguely worded, and/or are false or misleading.

HR 3309 [LOC | WW], the "Innovation Act", the patent bill passed by the House in December 5, 2013, does not address pre-litigation demand letter practices. Rather, it focuses on litigation procedure, including pleading requirements, limitations upon discovery, and fee shifting.

HR 3309 would amend 35 U.S.C. 285 to provide that "The court shall award, to a prevailing party, reasonable fees and other expenses incurred by that party in connection with a civil action in which any party asserts a claim for relief arising under any Act of Congress relating to patents, unless the court finds that the position and conduct of the nonprevailing party or parties were reasonably justified in law and fact or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust."

The just introduced S 2049, in contrast, does not address litigation procedure, but does address demand letters.

Sen. Claire McCaskill

Sen. McCaskill's Explanation. Sen. McCaskill (at right) stated in a release that "Patent trolls are stifling innovation, endangering jobs, and harming businesses and consumers". She added that her bill "will send a message to these bottom feeders".

Her release also contains this: "Patent trolls, formally known as patent assertion entities (PAEs), are companies that purchase patents and monetize them by demanding licensing fees or settlements-usually under the threat of litigation-from unsuspecting businesses using similar technologies. Unlike some businesses that assert patent rights over patents that they own and use, PAEs do not produce any goods or services with their patents."

Her release continues that "Until recently, the rampant growth of PAE demands was limited to patents in the technology sector, with PAEs aggressively targeting innovative technology startup companies that could be seen as violating the relevant patent. In a troubling development, PAEs have begun demanding payments from end users-including coffee shops and brick-and-mortar retailers-that use common technologies such as online shopping carts, Wi-Fi, and office scanners."

Sen. McCaskill also expressed concern that senders of demand letters are now targeting "small businesses, which often do not have the resources to engage in protracted and costly patent litigation. To bilk settlements or licensing fees out of small businesses, PAEs will sometimes send thousands of these demand letters-regardless of whether the targeted companies have actually violated any patents-threatening litigation for alleged patent infringement."

Moreover, "Despite their threats, these PAEs may have no intention of actually filing a lawsuit, and sometimes misrepresent or obfuscate the patents they own in the demand letters hoping only to intimidate a small business into making a payment for the alleged-but often not real-violation of a patent."

Bill Summary. This bill would require that the FTC write and enforce rules that regulate the content of demand letters that allege patent infringement.

The bill provides that the FTC "shall promulgate rules to prohibit unfair or deceptive acts and practices in the sending of written communication that states that the intended recipient of the written communication, or any person affiliated with the intended recipient, is infringing or may be infringing the patent of and bears liability or owes compensation to another."

The bill would not only prohibit unfair or deceptive demand letters. It would also set forth the mandatory requirements for the contents of patent infringement demand letters. These resemble heightened pleading requirements. Indeed, S 2049's enumeration of the mandatory elements of a demand letter resembles HR 3309's heightened pleading requirements.

The just introduced bill states that demand letters "must contain" a "detailed description of -- (A) each patent allegedly infringed, including the patent number; and (B) each claim of each patent that is allegedly infringed".

Demand letters must also contain "a clear, accurate, and detailed description, such as the manufacturer and model number, of each product, device, business method, service, or technology that allegedly infringes ..."

Demand letters must also contain "a clear, accurate, and detailed description of how a product, device, business method, service, or technology ... allegedly infringes a patent or claim ..."

Demand letters must also contain notice that the recipient may have the right to have the manufacturer of the allegedly infringing product defend against the alleged infringement. Demand letters must also contain "a description of any licensing commitment or obligation, such as reasonable and non-discriminatory terms, that applies to a patent or claim".

The bill would also ban falsely threatening litigation. Although, this is always a slippery concept that is difficult to regulate. Also, the bill would ban making assertions that lack a reasonable basis in fact or law.

The FTC would have authority to write rules under the quicker and simpler Administrative Procedure Act (APA) process, rather than under the Magnuson Moss process.

The bill would give the FTC civil enforcement authority for violation of rules promulgated under this new rule making authority. The bill would also give enforcement authority to states.

USPTO to Amend Rules Regarding Collective Marks

2/20. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register (FR) that announces, describes, recites, and sets the deadline for commenting upon, its proposed rules changes related to collective trademarks, collective service marks, and collective membership marks, and certification marks to clarify application requirements, allegations of use requirements, multiple class application requirements, and registration maintenance requirements for such marks.

The deadline to submit comments is May 21, 2014. See, FR, Vol. 79, No. 34, February 20, 2014, at at Pages 9678-9697.

The USPTO's FR notice states that the proposed changes will codify current USPTO practice as set forth in the USPTO's Trademark Manual of Examining Procedure (TMEP) and case law.

It adds that the proposed changes "will permit the USPTO to provide the public more detailed guidance regarding registering and maintaining registrations for these types of marks and will promote the efficient and consistent processing of such marks. Further, the USPTO proposes to amend several rules beyond those related to collective marks and certification marks to create consistency with rule changes regarding such marks and to streamline the rules, by consolidating text and incorporating headings, for easier use."

UK's GCHQ Engaged in Massive Interception of Yahoo Video Chats

2/27. The Guardian published a story by Spencer Ackerman and James Ball titled "Optic Nerve: millions of Yahoo webcam images intercepted by GCHQ".

It states that "Britain's surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing".

The article elaborates that "Optic Nerve, the documents provided by NSA whistleblower Edward Snowden show, began as a prototype in 2008 and was still active in 2012, according to an internal GCHQ wiki page accessed that year. The system, eerily reminiscent of the telescreens evoked in George Orwell's 1984, was used for experiments in automated facial recognition, to monitor GCHQ's existing targets, and to discover new targets of interest. Such searches could be used to try to find terror suspects or criminals making use of multiple, anonymous user IDs."

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "This secret capturing and storage of images taken from millions of video chats indicates government privacy violations have reached an alarming new level of intrusiveness. The size and audacity of this online spying is outrageous and shows how government surveillance officials will go as far as they can to gather data with minimal regard for privacy expectations, ethics or laws."

Black added that "These revelations also add to the evidence that citizens and policymakers around the world need much more information on surveillance programs as those devising and implementing surveillance programs cannot be trusted to make reforms without oversight."

People and Appointments

Eric Holder2/27. The Department of Justice (DOJ) announced in a release that Attorney General Eric Holder (at right) was admitted to hospital "after experiencing lightheadedness and shortness of breath" and "an elevated heart rate". He left the hospital after a few hours.

2/27. Rep. Ed Pastor (D-AZ), a senior member of the House Appropriations Committee (HAC), announced in a release that he will not run for re-election.

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In This Issue
This issue contains the following items:
  Sen. McCaskill Introduces Bill to Regulate Patent Infringement Demand Letters
  USPTO to Amend Rules Regarding Collective Marks
  UK's GCHQ Engaged in Massive Interception of Yahoo Video Chats
  People and Appointments
Washington Tech Calendar
New items are highlighted in red.
Friday, February 28

The House will meet at 9:00 AM for legislative business. It will consider HR 899 [LOC | WW], the "Unfunded Mandates Information and Transparency Act of 2013". See, Rep. Cantor's calendar.

The Senate will not meet.

Supreme Court conference day. See, October Term 2013 calendar.

9:00 AM - 5:00 PM. The Federal Aviation Administration's (FAA) Radio Technical Commission for Aeronautics (RTCA) Special Committee 228, Minimum Operational Performance Standards for Unmanned Aircraft Systems, will meet. See, notice in the Federal Register, Vol. 79, No. 28, February 11, 2014, at Page 8233. Location: RTCA, Suite 910, 1150 18th St., NW.

9:00 - 10:30 AM. The New America Foundation (NAF) will host a discussion of the book [Amazon] titled "It's Complicated: The Social Lives of Networked Teens". The speakers will include Dannah Boyd (the author), Amanda Lenhart (Pew Research Center, and Mary Madden (Pew). Webcast. See, notice. Location: NAF, Suite 400, 1899 L St., NW.

9:30 AM. The House Commerce Committee's (HCC) Subcommittee on Commerce, Manufacturing and Trade will hold a hearing titled "The FTC at 100: Views from the Academic Experts". The witnesses will be Howard Beales (George Washington University School of Business), Daniel Crane (University of Michigan School of Law), Geoffrey Manne (International Center for Law & Economics), Christopher Yoo (University of Pennsylvania Law School), Robert Lande (University of Baltimore School of Law), and Paul Ohm (University of Colorado Law School). See, notice. Location: Room 2123, Rayburn Building.

12:30 - 1:45 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Disgorgement as an Antitrust Remedy in State and Federal Enforcement Action". The speakers will be Dov Rothman (Analysis Group), John Asker (New York University), Geoffrey Oliver (Jones Day), and Eric Stock (NY Office of the Attorney General, Antitrust Bureau). Prices vary. No CLE credits. See, notice.

Deadline for the U.S. International Trade Commission's (USITC) to submit its report to the Office of the U.S. Trade Representative (OUSTR) titled "Trade Barriers That U.S. Small and Medium Sized Enterprises Perceive as Affecting Exports to the European Union". See, notice in the Federal Register, Vol. 78, No. 216, November 7, 2013, at Pages 66950-66951.

Extended deadline for the Office of the U.S. Trade Representative (OUSTR) to complete its Section 301 investigation of government of Ukraine regarding protection of intellectual property rights. See, notice in the Federal Register, Vol. 78, No. 231, December 2, 2013, at Page 72141.

Monday, March 3

The House will meet the week of March 3-7. See, 2014 House calendar.

The Senate will meet at 2:00 PM.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Tellabs Operations v. Fujitsu, App. Ct. No. 13-1226. Panel A. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in X2Y Attenuators v. USITC, App. Ct. No. 13-1340, an appeal from a determination of the U.S. International Trade Commission (USITC) that Intel and Apple did not infringe X2Y's patents involving microprocessor technology. Panel A. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Vehicle IP v. AT&T Mobility, App. Ct. No. 13-1380. Panel A+. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Align Technology v. USITC, App. Ct. No. 13-1240. Panel B. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Suffolk Technologies v. AOL, App. Ct. No. 13-1392. Panel B. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in VirnetX v. Cisco Systems, App. Ct. No. 13-1489. Panel B. Location: Courtroom 402, 717 Madison Place, NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "LinkedIn for Lawyers". Prices vary. No CLE credits. See, notice.

Tuesday, March 4

9:00 - 10:30 AM. The American Bar Association's (ABA) Section of Antitrust Law will host a webcast panel discussion titled "Vertical Issues in High Tech Industry". The speakers will be Joanna Tsai (Economic Advisor to FTC Commissioner Joshua Wright), Elizabeth Wang (Charles River Associates), Yao Feng (Broad & Bright, Beijing), and Daniel Sokol (University of Florida). Prices vary. No CLE credits. See, notice.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Compression Technology v. EMC, App. Ct. No. 13-1513. Panel C. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Operating Systems Solutions v. Apple, App. Ct. No. 13-1487. Panel D. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in MadStad Engineering v. USPTO, App. Ct. No. 13-1511. This is an appeal from the U.S. District Court (MDFla) in a constitutional challenge to the first to file provision of the America Invents Act, D.C. No. 8:12-cv-01589. Panel D. Location: Courtroom 402, 717 Madison Place, NW.

10:30 AM. The House Judiciary Committee (HJC) will hold a hearing titled "Exploring Alternative Solutions on the Internet Sales Tax Issue". The witnesses will be __. See, notice. Location: Room 2141, Rayburn Building.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "101 Cloud Computing: Legal Challenges and How to Address Them". The speakers will be Theresa Beaumont, David Bodenheimer (Crowell & Moring), Joe Pennell (Mayer Brown), Bennet Borden (Drinker Biddle & Reath). Prices vary. CLE credits. See, notice.

2:00 PM. The House Judiciary Committee's (HJC) Subcommittee on the Courts, Intellectual Property and the Internet will hold a hearing titled "Section 512 of Title 17". The witnesses will be __. See, 17 U.S.C. 512, and HJC notice. Location: Room 2141, Rayburn Building.

4:00 - 6:00 PM. The New America Foundation (NAF) will host a discussion of the book titled "Now I Know Who My Comrades Are: Voices from the Internet Underground". The speakers will be Emily Parker (the author) and Anne-Marie Slaughter (NAF). Webcast. See, notice. Location: NAF, suite 400, 1899 L St., NW.

Wednesday, March 5

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology will hold a hearing titled "Reauthorization of the Satellite Television Extension and Localism Act". The witnesses will be Marci Burdick (Schurz Communications), Michael Powell (NCTA), Mike Palkovic (DIRECTV), and Matt Zinn (TiVo). See, notice. Location: Room 2123, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Buysafe v. Google, App. Ct. No. 13-1575. Panel H. Location: Courtroom 203, 717 Madison Place, NW.

11:00 AM. The Cato Institute will host a panel discussion titled "Intellectual Property in the Trans-Pacific Partnership: National Interest or Corporate Handout?". The speakers will be Margot Kaminski (Yale University), Tom Giovanetti (Institute for Policy Innovation), William Watson (Cato), and Simon Lester (Cato). Free. Open to the public. Lunch will be served after the panel discussion. See, notice. Location: Cato, 1000 Massachusetts Ave., NW.

2:00 - 4:00 PM. The National Science Foundation's (NSF) Networking and Information Technology Research and Development (NITRD) Program's Middleware and Grid Interagency Cooridination (MAGIC) Team meets the first Wednesday of each month. See, notice in the Federal Register, Vol. 78, No. 226, November 22, 2013, at Page 70076. Location: NSF, 4201 Wilson Boulevard, Arlington, VA.

2:30 PM. The Senate Commerce Committee (SCC) will hold an executive session. The agenda includes consideration of HR 2052 [LOC | WW], the "Global Investment in American Jobs Act of 2013", and S 2049 [LOC | WW | PDF], the "Transparency in Assertion of Patents Act", introduced by Sen. Claire McCaskill (D-MO) on February 26, 2014. The SCC will also consider the nomination of Kathryn Thomson to be General Counsel of the Department of Commerce (DOC). Webcast. See, notice. Location: Room 253, Russell Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding regulation of wireless tower siting. The FCC adopted and released this NPRM on September 26, 2013. This NPRM is FCC 13-122 in WT Docket Nos. 13-238 and 13-32, and WC Docket No. 11-59. See, notice in the Federal Register, Vol. 78, No. 234, December 5, 2013, at Pages 73144-73169.

Thursday, March 6

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of Robin Rosenbaum to be a Judge of the U.S. Court of Appeals (11thCir). Webcast. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in EPOS Technologies v. Pegasus Technologies, App. Ct. No. 13-1330, an appeal from the U.S. District Court (DC) in a patent infringement case. Panel I. Location: Courtroom 201, 717 Madison Place, NW.

1:30 - 2:30 PM. The American Bar Association's (ABA) Section of Antitrust Law will host a teleconferenced panel discussion titled "Antitrust, Unfair Competition, and the Lanham Act: Recent Intersections in Litigation". The speakers will be Robert Wierenga (Schiff Hardin), Rebecca Tushnet (Georgetown University Law Center), and Randy Miller (Venable). Prices vary. No CLE credits. See, notice.

Friday, March 7

Supreme Court conference day. See, October Term 2013 calendar.

TIME? The George Mason University law school's Law and Economics Center (LEC) will host an event titled "LEC Research Roundtable on the Future of Privacy & Data Security Regulation". See, notice. For more information, call Jeff Smith at jsmithq at gmu dot edu or 703-993-8382. Location: GMU law school, 3301 Fairfax Drive, Arlington, VA.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Site Update Solutions v. Accor North America, App. Ct. No. 13-1458, an appeal from the U.S. District Court (NDCal) in a patent infringement case involving search engine technology and the issue of award of attorneys fees under 35 U.S.C. 285. Panel M+. Location: Courtroom 402, 717 Madison Place, NW.

12:00 NOON. The Cato Institute will host a panel discussion titled "TPA, TPP, TTIP, and You: When Will We Enjoy the Fruits of the U.S. Trade Agenda?". The speakers will be Daniel Ikenson (Cato), Simon Lester (Cato), William Watson (Cato), and Daniel Pearson (Cato). Free. Open to the public. Lunch will be served after the panel discussion. See, notice. Location: Cato, 1000 Massachusetts Ave., NW.