Posts Tagged: "Federal Trade Commission"

This week in Other Barks & Bites: Huawei is in hot water with both the U.S. and UK governments, while Qualcomm has just completed a new patent licensing deal with Huawei; IBM tops a new global list for most artificial intelligence-related patent applications filed; Apple files another appeal of a major patent infringement damages award handed to VirnetX in the Eastern District of Texas; and see how the biggest IP players are doing Wall Street.

In May 2018, Scott Cooper and his companies, World Patent Marketing Inc. and Desa Industries Inc., agreed to a settlement with the Federal Trade Commission that bans them from the invention promotion business, and ordered payment of $25,987,192. The FTC charged World Patent Marketing with being nothing more than a scam, bilking millions of dollars from inventors. “The record supports a preliminary finding that Defendants devised a fraudulent scheme to use consumer funds to enrich themselves,” concluded United States District Judge Darrin P. Gayles as he issued a preliminary injunction in August 2017. Matthew G. Whitaker, the Acting Attorney General of the United States who ascended to the position with the resignation of Jeff Sessions, served on the advisory board of World Patent Marketing. Worse, Whitaker was involved in some of the egregious intimidation that led to the charges, issuance of an injunction and ultimately the settlement.

On Thursday, August 9th, San Diego, CA-based semiconductor developer Qualcomm Inc. announced that it reached a mutually agreed settlement with the Taiwan Fair Trade Commission (TFTC) which greatly reduces the financial penalty assessed to Qualcomm by the TFTC for antitrust issues. Although the TFTC will retain about $93 million USD in fines which have been paid by Qualcomm through July, the settlement eliminates the remainder of the original fine valued at $773 million USD and issued by Taiwan’s fair trade regulator last October.

Principe and Rudroff unfortunately regurgitate much of the misguided dialogue, which has done nothing to serve this country except to decimate its patent system in recent years. In the view of the authors, patent trolls, or patent assertion entities (PAEs) (which the authors note is the less pejorative term), provide no market value and often enforce software or business method patents which have questionable validity. Of course, it is worth noting that in its 2016 study on PAEs, the Obama Federal Trade Commission called the term “patent troll” both unhelpful and prejudicial, and also specifically recognized that PAEs can and do play a valuable role in the market. So the conclusions of Principe and Rudroff are not supported by even an FTC study commissioned for the purpose of condemning patent trolls. 

Some of the questions the FTC is interested in investigating and discussing during this inquiry include whether changes in the economy and evolving businesses have created competition and consumer protection issues in communication and information technology networks, market power and entry barriers in markets featuring “platform” businesses, the role of intellectual property in competition, and a variety of issues surrounding the security and use of big data… With networks, market power, platforms, intellectual property and big data being the focal point of the FTC inquiry, there is little doubt that the big tech giants of Silicon Valley are the targets of this FTC competition review. For those in innovator community the feeling will no doubt be that such a government inquiry is long overdue.

Missing for a while at the U.S. competition agencies has been an appreciation for how competition works in the real world — in particular, discounting the vital part intellectual property plays in sparking new competition and growing the economic pie. It can be easy to lock in a static view of the economic world.  Or misdefine “competition,” as Robert Bork noted in The Antitrust Paradox.  Fortunately, things are looking up. The Department of Justice’s Antitrust Division is now led by someone steeped both in antitrust and innovation.  This breath of fresh air is supplied by U.S. Assistant Attorney General Makan Delrahim.

Intel is not the only chipmaker feeling the pinch from Apple’s decision to move away from third-party vendors for its device components. Reports from last November indicated that Apple was also planning on developing its own power management chips for use in its iPhone products… News reports have indicated that Apple has poached engineering talent from firms like Imagination and Qualcomm, including the former head of Qualcomm’s core communications chip business, in recent years. While many will tout the superior nature of Apple’s computing chip products, there will likely be few who point out the damage wrecked on the company’s suppliers and the potential of intellectual property theft which might be enabling the consumer tech giant’s attempts to further consolidate the personal computing market into its own hands.

AbbVie’s maneuver worked like clockwork to induce regulatory gridlock, which prevented generic competition and kept the company’s profits high at public expense, for years. Fortunately, the FTC would have none of it. The agency filed suit against AbbVie in the Eastern District of Pennsylvania in 2014, accusing the company of illegal monopolization under the antitrust laws. The gravamen of the FTC’s complaint was that AbbVie wrongfully filed objectively-baseless sham litigations, to block generic competition.

In a telephone interview, Rep. Stivers noted that, while the AIA was intended as legislation that would make the patent system more efficient, the resulting differences in standards between the PTAB and the district courts have led to a large number of appeals from the PTAB. “Instead of living up to its billing as being more efficient and quicker, the PTAB has become just another stop which is more complicated, more expensive and exactly the opposite of what it was intended to do,” Stivers said. Although he noted that he was not an advocate of getting rid of the IPR process entirely, Stivers felt that the PTAB had to use the same standards of evidence used by district courts. “If that happens, then the PTAB can live up to the potential that it was sold on and you can get the same ruling no matter where you go,” Stivers said.

The Federal Trade Commission and the Federal Communications Commission want you — at least if you are an innovator with a solution for preventing illegal Robocalls. On April 23, the FTC and FCC will also co-host a ‘Stop Illegal Robocalls Expo’ at the Pepco Edison Place Gallery in Washington, D.C… It is wonderful that the FTC and FCC are looking for technology solutions to combat the ever increasing problem of Robocalls, but coming up with a technology solution as seems to be desired by the FTC and FCC will be all the more difficult in a world where the USPTO and federal courts are openly hostile to software related innovations.

AT&T Mobility argued in a motion to dismiss that they were exempt from the jurisdiction of the Federal Trade Commission (FTC) because they qualify as a “common carrier.” Specifically, Section 5 of the FTC Act gives the agency enforcement authority over “unfair or deceptive acts or practices,” but exempts “common carriers subject to the Acts to regulate commerce.” 15 U.S.C § 45(a)(1), (2). AT&T Mobility’s motion to dismiss the action was denied… The en banc Ninth Circuit agreed with the district court and overruled the previous three judge panel. The en banc Ninth Circuit ruled earlier today that “common carrier” immunity only attaches when a company is engaging in common-carrier services.

Chinese toymaker VTech recently settled charges with the FTC in the first-ever case involving internet-connected toys. VTech became a victim of cyber attackers back in 2015, when hackers got access to the company’s online database and compromised accounts of over 11 million, which included data for about 6.37 million children… Today, the key to compliance when dealing with IoT is to “know thyself,” Bahar explained. In other words, take the time to understand what truly is in these smart components, not only from a technical perspective but a legal one. In addition, make sure to make good on your promises. If you tell consumers that you are protecting their data or their privacy in certain ways, make sure you are making good on that commitment.

President Donald Trump announced his intent to nominate a tenth wave of judicial nominees. Among those nominated today for positions on the federal judiciary were Acting FTC Chair Maureen Ohlhausen, who was nominated to become a judge on the United States Court of Federal Claims.

Without the FCC’s ability to regulate ISPs under Title II common carrier regulations, there have been fears that ISPs could create bundled mobile packages such as are seen in Portugal, a country without the same kinds of net neutrality regulations which were seen in the U.S… And here, we return to the example of erstwhile Jedi knight Mark Hamill. Hamill’s viewpoints on the subject of net neutrality, specifically that FCC Chairman Pai is only acting in service to rich corporations, evidence a great lack of understanding of the net neutrality regime set up under former Chair Wheeler. It’s interesting to note that Hamill essentially sides with Google and the rest of the tech ruling class, companies which have much larger market caps and subscriber bases than the ISPs being regulated by the FCC. Those well-heeled members of the tech ruling class are the same ones that couldn’t be charged for their excessive use of bandwidth; that would be paid prioritization.

The Oil States v. Greene’s Energy Group case heard by the U.S. Supreme Court Nov. 27, 2017, has generated much ink, analysis and opinion. Rightly so, given the profound consequences for the security of exclusive private property rights of limited duration in patents. Among the worthy and constructive reflections, conservative experts and leaders have contributed a fair share… Heritage Foundation legal scholar Alden Abbott, whose background includes service at the Federal Trade Commission and as a senior corporate IP counsel, has summed up the shortcomings of PTAB “patent death squads.” Abbott suggests how the Supreme Court should rule in Oil States: “The best option to fix the Patent Trial and Appeals Board is to get rid of it. There is a powerful legal case that board review violates the U.S. Constitution, and therefore is invalid.”