September 2011

Patent reform a letdown to some in tech

Some tech constituencies in Silicon Valley have a curious reaction to the first patent reform overhaul in 60 years that Congress appears poised to send to the White House: ho-hum.

The America Invents Act, which the Senate began considering this week after a cloture vote, will most likely be heralded as historic for updating patent laws and as a boon for innovators and job creators. Yet reaction in the tech industry, which has been the main driver behind patent reform since 2005, is decidedly mixed, with some arguing that the bill will make it harder for small entrepreneurs. Others say that for better or worse, the reforms will encourage people to go to the Patent and Trademark Office sooner with their intellectual property. And most agree the legislation is unlikely to put an end to the patent wars roiling the tech industry, particularly relating to mobile phone innovations. “Exhausted” is the word Mark Lemley, a law professor at Stanford University, used to describe the tech industry’s sentiment toward the bill. “Most of the significant bits of legislation have been whittled out of it,” he said. “Most of the things interesting to tech have been removed.” The legislation is unlikely to improve litigation abuse, which was one of the main drivers for reform, he said.

Cybersecurity is focus of new bills

House lawmakers have returned from the August recess resolved to fight the nation’s cyber adversaries with a flurry of new legislative proposals aiming to boost security of public and private networks and infrastructure. Key House members are readying a series of bills that address a variety of issues — from toughening law enforcement of cybercrimes to giving the Department of Homeland Security oversight of federal IT and critical infrastructure security to lessening liability for private companies that adopt cybersecurity best practices.

“The House is coming at the problem with a series of small steps,” said Alan Paller, director of cybersecurity research at the SANS Institute, a nonprofit research and education organization. “This reflects that a lot of members on the Hill see this as an issue that’s important to constituents.” By contrast, the Senate is continuing to pursue a comprehensive cybersecurity bill with several committees working to hammer out one piece of legislation. The House has chosen a different approach favoring piecemeal legislation to respond to the growing rash of cyberattacks against private companies — from Google to Sony to Epsilon — and government.

How high can fees for sports rights go?

Television networks combined pay about $3.1 billion a year for the rights to the National Football League's 16-game season, up 35% from their last deal. Although the NFL's contracts with CBS, Fox, NBC and ESPN still have two years to run, the league would like to have new deals wrapped up by the end of this season, in February.

The three broadcast networks could end up joining ESPN in paying 10-digit dollar figures per season in their next contracts. "It's not for the faint of heart," said Fox Sports Chairman David Hill when asked about the next round of NFL negotiations. Already, ESPN and the regional sports channels are the most expensive basic cable channels on the dial — often costing distributors such as DirecTV and Comcast three times more than what they pay for news or entertainment networks such as USA, TNT and Discovery. Distributors worry that continuing to pass along sports costs to their customers could drive more away. "The American consumer is screwed big time," said Rocco Commisso, chairman of Mediacom, a small cable operator with just over 1 million subscribers. For decades, the rising cost of sports rights has been among the biggest sources of conflict between programmers and pay-TV services, which occasionally have dropped sports channels for short periods rather than pay rate increases. The fees have gotten so big that even some of the NFL's own are wondering if a reality check is in order.

Amazon cuts deal on California sales taxes

Amazon cut a tentative deal with legislative leaders that would allow it to postpone collecting sales taxes from Californians for another year.

The company in turn would drop its battle to overturn the state's new law that required it and many other out-of-state online retailers to collect the taxes. Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said. The new law had mandated that Internet retailers start collecting state taxes in July if they had offices, workers or other connections in California. Amazon had refused to collect the taxes and poured $5 million into collecting signatures for a ballot referendum challenging the law. If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon's deal with California.

Too young to understand, 'Generation 9/11' embraces media for meaning

Many Americans who were too young to understand the events of 9/11 at the time are now using the avalanche of media coverage gain a deeper understanding of that brutal day in history.

LightSquared May Degrade Hurricane Tracking

The House Committee on Science will hold a hearing Sept 8 on LightSquared's wireless Internet service.

The National Oceanic and Atmospheric Administration, the Transportation Department and a federal advisory body will testify that LightSquared's service needs more testing because it may degrade precision services that track hurricanes, disrupting precise gear that reads data from the satellite-based global-positioning system. LightSquared is likely to say that its service and GPS can co-exist; it has proposed solutions, including initially using only part of its airwaves far from GPS users, that will resolve interference concerns for more than 99 percent of GPS receivers.

Operator Seeks to Block British Telecom Collaboration

The mobile phone provider Three UK asked the European Commission to block a joint venture of Britain’s three largest operators to sell a common mobile payment and advertising platform for retailers, arguing that the companies’ influence in the market would result in high fees for consumers.

Stephen Lerner, the regulatory affairs director of Three UK, said he had traveled to Brussels to deliver a letter of concern to European competition authorities, asking them to thwart the venture, a combined effort by Telefónica of Spain, which runs the O2 service in Britain, Vodafone and Everything Everywhere, the No. 1 operator owned by Deutsche Telekom and France Télécom. “Instead of competing for the benefit of consumers, the three operators that hold 90 percent of the U.K. market have engaged in a cozy collaboration and closed ranks against competition,” Lerner said. By combining resources and shutting out Three, an aggressive, low-cost seller of phone and Internet services, Lerner said the operators would impose high transaction fees on British consumers. He also said the venture could set a difficult precedent in Europe, where countries are beginning to grapple with the issues raised by national wireless payment networks.

The Internet and China's Rule-of-Law Games

[Commentary] Every day Beijing grows more uncomfortable with the degree of free communications it has accidentally allowed in China.

Witness a growing list of commentaries appearing in official media outlets directed especially at Sina's Weibo, the Chinese version of Twitter. The site sparked authoritarian concern in the weeks after late July's deadly high-speed train crash in Wenzhou. Weibo became a conduit for inconvenient truths and cynical speculations about the accident. The Communist Party sees a huge threat. This is as much a business story as it is a free-speech issue. In short, over the years Beijing has made certain decisions about how it would interact with the business world, especially concerning the rule of law. Those decisions are coming back to haunt the Communist Party. The Party won't or can't shut down Weibo. The real reason for all the worried official commentary about microblogging is that Beijing has reached a disturbing realization: While the authorities obsessed over controlling the supply of Internet services, they lost sight of the demand. That demand for the service Weibo provides has made it so popular that Beijing must fear a backlash if ever the service were cut off. Hence all the talk about "regulating" Weibo but no talk about the simplest and most clearly legal means of ending the nuisance. The problem is that in this instance, the rule of the party's law discouraging Internet investment would undermine the growth on which the party relies for legitimacy. Beijing needs businesses like Sina, whether it wants them or not. Having admitted this to itself more than a decade ago, Beijing finds it's too late to change its mind now.

Google inches closer to patent showdown with Apple

Google is apparently putting its new Motorola patents to work, transferring some of them to HTC, who has turned around and sued Apple for patent infringement.

The move by HTC escalates the fighting between the Apple and HTC, who have sued each other over patent claims. But it marks a more aggressive stance by Google, which is applying its growing patent strength in an effort to shore up the larger Android ecosystem. In its case filed in federal court in Delaware, HTC cited four patents, which came from Motorola. The Taiwanese device maker also amended its infringement case against Apple with the International Trade Commission to include three patents from Openwave and two that were originally issued to Palm. Bloomberg said Google, which obtained the patents within the last year, transferred the patents to HTC on Sept. 1. It’s unclear, however, how exactly Google obtained the patents. The move increases the likelihood of an eventual Apple-Google showdown.

Behavioral Targeting Comes To TV Ads

Companies targeting ads to consumers on TVs based on location, channel surfing activity and more might seem like a futuristic platform to some, but in reality companies offer the service today.

MStar and Channel Island have collaborated to advance TV advertising and applications in set-top boxes. The software supports profiling and geographic targeting for motion video ads. Network operators receive audience measurement and response metrics that includes behavioral information. Aside from targeted advertising, the MStar system-on-chip (SoC) semiconductor enables premium TV services on the Channel Island box such as video on demand, electronic program guides, widgets, personal video recording, voting, chat and other applications.

Benton

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