Business groups, cybersecurity experts, free-market advocates and physicians came to the defense of LabMD CEO Michael Daugherty in his long-running fight against the FTC, which said that the medical-testing lab was liable for lax data security practices and exposing sensitive patient information (see 1610030016). In amicus briefs filed over the past two weeks in the 11th U.S. Circuit Court of Appeals, LabMD supporters argued the FTC exceeded its authority to regulate data security practices, doesn't provide companies with "fair notice" about security requirements and could stifle innovation.
Court of International Trade activity
The incoming administration of President-elect Donald Trump will mean changes for the FCC and FTC, but also hopefully will come with more certainty that can withstand the next administration shift, said panelists Thursday at an event hosted by the Information Technology and Innovation Foundation and the Technology Policy Institute. They singled out net neutrality and rules on privacy as critical issues that merit stable regulatory grounding.
Intergovernmental communication provisions embedded in the EU-U.S. Privacy Shield will ensure a “smooth continuation” of the agreement’s implementation after President-elect Donald Trump’s administration takes office in January, said International Trade Administration Data Flows and Privacy team lead Shannon Coe during a FCBA event Monday. Experts have been left guessing about how Trump will handle privacy issues, though FTC Chairwoman Edith Ramirez said she doesn’t believe the change in administration will affect Privacy Shield implementation (see 1611090016). Some believe the shield will need Trump administration backing to remain effective (see 1611100039).
CTA President Gary Shapiro, though “surprised” and “a little overwhelmed” by Donald Trump’s presidential victory, thinks “there’s a lot of positive there for us,” he said in a Wednesday interview. CTA also had “a really good night last night in terms of Congress,” Shapiro said.
Rovi patent infringement complaints against Comcast and Arris are moving from federal court in Texas to Manhattan. In an order Tuesday, U.S. Magistrate Judge Roy Payne of Marshall, Texas, approved motions by Comcast and Arris for a change of venue. In his order, Payne cited the forum-selection clauses that were part of the 2004 agreements between Rovi and Comcast for creating a joint venture to develop interactive program guides and the cable operator's 2016 lawsuit against Rovi in U.S. District Court in Manhattan, alleging Rovi's institution of patent infringement and International Trade Commission enforcement actions were a breach of their patent and license agreements. The judge also rejected Rovi's arguments that the technology and conduct in the patent infringement suits aren't covered by the software agreement that includes forum-selection language. Payne said he agreed with Rovi that Arris hasn't raised a nonfrivolous defense to patent infringement, but all of Rovi's infringement actions are being transferred to U.S. District Court in Manhattan. That's because of the Comcast/Rovi software agreement requiring the plaintiff to litigate the Comcast dispute there, and some infringement claims are based on divided or indirect infringement that involves defendants other than the operator. Rovi didn't comment Wednesday.
The DOJ and the FTC got praise and criticism in comments posted Tuesday for taking a high-level approach in their proposed update of joint guidelines for enforcing antitrust policy on IP licensing. The refresh, proposed in August, is meant to reflect IP-related court cases and changes since the original guidelines took effect in 1995 (see 1608120045). It doesn’t address hot-button copyright and patent issues such as patent assertion entities (PAEs), standard-essential patents (SEPs) and reverse payment settlements (see 1608180056).
The U.S. Court of Appeals for the Federal Circuit affirmed a lower court ruling saying cellphone cases imported by OtterBox are classifiable in the tariff schedule as generic “other” articles of plastic, dutiable at 5.3 percent, rather than as containers subject to a 20 percent duty rate. A three-judge Federal Circuit panel agreed last week with a year-old U.S. Court of International Trade decision that the cellphone cases don't meet most of the four criteria for classification as containers under heading 4202 -- organizing, storing, protecting and carrying -- and are also dissimilar from such containers because they're designed to allow use of the cellphone while inside the container.
Microsoft reported $2.07 million in lobbying spending for Q2, about a 7.6 percent dip from the same period last year, while IBM spent $1.52 million from April through June, a 16 percent decline. As of our deadline, they were the only two major technology companies to file Q2 lobbying reports that were due Wednesday. Among the issues that both lobbied on were cybersecurity, encryption, government access to customer data located in overseas centers, international trade agreements and patent and trademark issues.
Microsoft scored a victory Thursday against the government when the 2nd U.S. Circuit Court of Appeals ruled 3-0 that DOJ couldn't force the company to provide customers' electronic communications stored outside the U.S. The "Stored Communications Act does not authorize courts to issue and enforce against U.S.-based service providers warrants for the seizure of customer e-mail content that is stored exclusively on foreign servers," said the decision. Microsoft and privacy supporters hailed the ruling, while DOJ said it's mulling next steps.
Privacy Shield, the new arrangement for trans-Atlantic personal data flows, is now in effect, EU and U.S. officials said Tuesday, as expected (see 1607080001). Companies will be able to start certifying their programs with the Department of Commerce beginning Aug. 1, and the European Commission will publish a guide explaining the available remedies for Europeans who believe their data has been used in violation of data protection rules. Finalization hasn't quelled continuing concerns from consumer groups, some EU lawmakers and Max Schrems, who successfully challenged safe harbor, about U.S. mass surveillance and other issues, they said. The EC "adequacy" decision and related documents are here.