Amazon.com, Inc. has billed parents and other account holders for millions of dollars in unauthorized in-app charges incurred by children, according to a Federal Trade Commission complaint filed today in federal court.
The FTC’s lawsuit seeks a court order requiring refunds to consumers for the unauthorized charges and permanently banning the company from billing parents and other account holders for in-app charges without their consent. According to the complaint, Amazon keeps 30 percent of all in-app charges.
Amazon offers many children’s apps in its appstore for download to mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.
Congress is moving forward with at least some patent reform efforts this year, taking up the Targeting Rogue and Opaque Letters Act of 2014, which is scheduled to be marked up in the House Commerce, Manufacturing, and Trade Subcommittee on July 10, 2014. This Subcommittee is a subcommittee of the House Energy and Commerce Committee. This draft of the bill is as it existed earlier this week.
This draft legislation — creatively dubbed the TROL Act — addresses the sending of abusive and bad faith patent demand letters by clarifying that such activity may violate the Federal Trade Commission Act and authorizing that agency and state attorneys general to bring actions to stop the abusive behavior, among other things.
“The Commission shares this Subcommittee’s goal of stopping deceptive patent demand letters while respecting the rights of patent holders to assert legitimate claims, and recognizes that achieving this goal is not easy,” the testimony states.
Earlier today the Federal Trade Commission issued a second Federal Register Notice containing the revised information requests for its study on patent assertion entities (PAEs). The Commission vote approving the second Federal Register Notice was 5-0. The Notice is styled as a submission to the Office of Management and Budget (OMB) because under federal law federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor.
The second Notice also calls for additional public comments. As explained more fully in the Notice, the FTC proposes to collect information about Patent Assertion Entity (“PAE”) organization, structure, economic relationships, and activity, including acquisition, assertion, litigation, and licensing practices.
The study is designed to develop a better understanding of how PAEs may impact innovation and competition. PAEs are firms with a business model based primarily on buying patents and then attempting to generate revenue by asserting them against businesses that are already practicing the patented technologies. The FTC says it is conducting the study in order to further one of the agency’s key missions, which is to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.
The Federal Trade Commission filed an amicus briefin the U.S. Court of Appeals for the Third Circuit, urging it to reverse a district court dismissal in the case of Lamictal Direct Purchaser Antitrust Litigation. The district court found that agreements between branded and generic drug makers that include the branded firm’s commitment not to introduce an “authorized generic” cannot violate the antitrust laws under FTC v. Actavis, Inc., 133 S. Ct. 2224 (2013) because they do not involve the payment of “cash.” The FTC’s brief explains why the District Court’s conclusion is erroneous.
In Actavis, the U.S. Supreme Court held that “reverse-payment” patent settlements – agreements in which a brand-name drug manufacturer pays a would-be competitor to abandon its patent challenge and agrees not to sell its generic drug product for a number of years – are not immune from antitrust scrutiny and are to be evaluated using traditional antitrust factors.
The Federal Trade Commission charged the operators of the website “Jerk.com” with harvesting personal information from Facebook to create profiles labeling people a “Jerk” or “not a Jerk,” then falsely claiming that consumers could revise their online profiles by paying $30. According to the FTC’s complaint, between 2009 and 2013 the defendants, Jerk, LLC and the operator of the website, John Fanning, created Jerk.com profiles for more than 73 million people, including children.
In its complaint, the FTC charges that the defendants violated the FTC Act by misleading consumers that the content on Jerk.com had been created by other Jerk.com users, when in fact most of it had been harvested from Facebook; and by falsely leading consumers to believe that by paying for a Jerk.com membership, they could access “premium” features that could allow them to change their “Jerk” profile.
The FTC is seeking an order barring the defendants’ deceptive practices, prohibiting them from using the personal information they improperly obtained, and requiring them to delete the information.
“In today’s interconnected world, people are especially concerned about their reputation online, and this deceptive scheme was a brazen attempt to exploit those concerns,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.
On Thursday, March 27, 2014, the Senate Judiciary Committee held another meeting on patent reform legislation. A markup of Senator Leahy’s bill (S. 1720, “Patent Transparency and Improvements Act”) may happen as early as this week. During Thursday’s meeting Senator Leahy, who Chairs the Committee, indicated a willingness to incorporate in his bill other provisions from Senator Cornyn’s and Senator Hatch’s bills.
Momentum is clearly building for more patent legislation, but the myriad bills and provisions make it difficult even for folks close to Capitol Hill to keep track of them all. To fill that need, today’s post is part of a series of articles based on the white paper, Patent Reform 2014. IPWatchdog.com has already published articles on Joinder of Interested Parties and Loser-Pays Fee-Shifting. Today’s focus is on the proposed FTC enforcement provisions found in several pending bills.
In September 2013, Senator Klobuchar’s staff circulated draft language that would require the FTC to initiate a rulemaking proceeding, in accordance with 5 U.S.C. §553, to prohibit the assertion or enforcement of patents in a manner that is an unfair method of competition, or unfair or deceptive act or practice, under section 5 of the Federal Trade Commission Act (15 U.S.C. 45).
What follows below is a review of some of the biotech and pharma news stories that caught my attention during the month of January 2014. Please also see Protecting IP is NOT ‘Satanic Genocide’, written by Dr. Kristina Lybecker.
All-Oral, Interferon-Free Therapy for the Treatment of Hepatitis C Genotype 1
On January 31, 2014, AbbVie (NYSE: ABBV) announced the completion of its phase III clinical program and released results of four additional studies designed to assess AbbVie’s investigational all-oral, interferon-free therapy with and without ribavirin (RBV) in patients with chronic genotype 1 (GT1) hepatitis C virus (HCV) infection. These results described below confirm previously reported AbbVie data and further demonstrate high sustained virologic response rates 12 weeks post treatment (SVR12) and tolerability in these GT1 patients. Even in difficult-to-treat patients (cirrhotic patients) achieved 92-96 percent SVR(12) rates.
The AbbVie investigational regimen consists of the fixed-dose combination of ABT-450/ritonavir (150/100mg) co-formulated with ABT-267 (25mg), dosed once daily, and ABT-333 (250mg) with or without ribavirin (weight-based), dosed twice daily. The combination of three different mechanisms of action interrupts the HCV replication process with the goal of optimizing SVR rates across different patient populations.