The Federal Trade Commission today announced six enforcement actions, including one that imposes a $450,000 civil penalty and five that for the first time address biodegradable plastic claims, as part of the agency’s ongoing crackdown on false and misleading environmental claims.
The plastic cases include a complaint against a company that markets an additive it claims makes plastic products biodegradable and four complaints and proposed consent orders against companies that marketed various plastics with allegedly false and unsupported claims that their products were biodegradable. In the civil penalty case, the FTC filed a complaint and consent order against a company for violating a 1994 FTC order that prohibited it from making unsupported green claims for its paper plates and bags.
All of these cases are part of the FTC’s program to ensure compliance with the agency’s recently revised Green Guides. The Commission publishes the Guides to help businesses market their products accurately, providing guidance as to what constitutes deceptive and non-deceptive environmental claims.
Telecommunications has been a major growth field in intellectual property for a number of technological firms. Today on IPWatchdog’s Companies We Follow series, we’re taking a look at AT&T to see what developments we can expect from arguably the strongest American telecommunications corporation. As always, we have a great collection of patent applications and issued patents published by the U.S. Patent and Trademark Office to show you what’s in store.
Our featured patent application today describes a system of preventing illegal and criminal activities on gaming networks by preventing predatory users from being able to come into contact with others who are susceptible. Also, this patent application indicates that the same gaming environments could be adjusted based on local user information to resemble that player’s local terrain. Other patent applications of note include a system of targeting emergency messages to an exact geographic location for affected mobile device owners, as well as a method for transmitting high-grade video data across a cellular network.
Your quest is finally complete. After hundreds of hours of effort, thousands of dollars, and innumerable worries of failure, you’ve finally succeeded. Your idea has become a reality, with riches and fame just around the corner. With the hard work done – envisioning, developing, and protecting your invention – you approach potential investors and buyers for capital to manufacture and sell your product. In the process, you discover one or more of the following:
the majority of people don’t understand the value of your invention or have no interest in it
some claim it is their idea
others try to steal it
those who see its potential want to pay a pittance for the product and leave you standing on the sidelines
Such is life for an inventor. From the years 2002 to 2012, more than 4.6 million patent applications were made and 2.2 million patents issued according to the U.S. Patent and Trademark Office. Yet, only a small proportion of the products covered by the issued patents become commercial successes.
In their article entitled The Private and Social Costs of Patent Trolls, James Bessen, Jennifer Ford, and Michael Meurer present a study on patent litigation involving Non Practicing Entities (NPEs), which they define as firms that do not produce goods but rather acquire patents in order to license them to others. Bessen et al.’s conclusions are startling. The loss to defendants involved in NPE patent suits during the last four years “exceeds $83 billion per year, over a quarter of U.S. industrial R&D spending per annum;” and NPE patent litigation constitutes a “very large disincentive to innovation.” Bessen et al.’s article was prominently featured on the cover of the Winter 2011-2012 issue of Regulation magazine with a cover illustration of oversized humanoids with visible malign intent, armed with clubs, holding up innocent travelers for payment at a bridge, wherein the cover is titled “Patent Trolls – How NPEs harm innovation.”
In my full article “Questionable science will misguide patent policy,” I expose fundamental flaws in the methods that Bessen et al. apply in their studies and explain why their fantastic cost estimates should be dismissed as extremely biased and unreliable, and why their conclusions should be discarded as misleading for patent policy. An abridged version follows.
Bessen et al.’s stock return event studies on patent litigation
Bessen et al.’s thesis is predicated on “event studies” of lawsuit filings—what happens to an alleged infringer’s stock price around the filing of a patent infringement lawsuit, after taking into account general market trends and random fluctuations of the individual stock. Without providing any proof, these authors argue that during these “events,” stock value declines that are otherwise unaccounted for by estimated market trends (called “Abnormal Return”), reflect “the costs of lost business, management distraction and diversion of productive resources that might result from the lawsuit, possible payments needed to settle the suit, and the reduction in expectations of profits from future opportunities that are forestalled or foreclosed because of the suit.”
Enter Professor Robin Feldman, who has become the preeminent researcher on issues of patent litigation, particularly as it refers to so-called patent monetizers. Professor Feldman has found striking new data on patent trolling and the effects of the America Invents Act, which to me suggests that the AIA has clearly been successful in its intended goal of reducing the number of defendants in a single patent infringement litigation.
Professor Feldman’s new analysis was developed by breaking down the massive data set she collected into a month-by-month analysis of patent infringement lawsuits. The data examines all patent lawsuits over four key years, which represents approximately 15,000 patent infringement lawsuits and 30,000 patents asserted. Not surprisingly to those of us who have closely followed the America Invents Act, but there was an enormous spike in litigation leading up to the implementation of the AIA in September 2011. The following graph tells the story.
EDITORIAL NOTE: The black colored text below is taken from an FTC Press Release. I also provide my thoughts and comments in the format of comments from the peanut gallery, or perhaps as a patent attorney equivalent to Mystery Science Theater 3000. In order to differentiate my thoughts/comments from the FTC statement, my comments are italicized, colored, indented and tagged with the IPWatchdog logo.
Aaron’s, Inc., a national, Atlanta-based rent-to-own retailer, has agreed to settle FTC charges that it knowingly played a direct and vital role in its franchisees’ installation and use of software on rental computers that secretly monitored consumers including by taking webcam pictures of them in their homes.
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