Intellectual Property Roundup

Congress Oks Bill to Legalize Cell Phone Unlocking (PC Mag)
Congress approved the Unlocking Consumer Choice and Wireless Competition Act, a bill that, if signed by President Obama, would reverse the Library of Congress’s decision two years ago that made cell phone unlocking illegal.

DOJ to Congress: Make Online Streaming a Felony (The Hill)
The Department of Justice is pushing Congress to increase the penalties for streaming copyright-infringing content online, so that online streaming of pirated content should receive the same consequences as illegal downloading.

House Returns to Patents (The HIll)
The House Judiciary subcommittee on intellectual property will hold a hearing this week on the state of the Patent and Trademark Office. The hearing comes after a concerted push from House Judiciary Committee Chairman Bob Goodlatte to reform the country’s patent system.

Infringement To Go: Pirate Bay Goes Mobile (Ars Technica)
The Pirate Bay has now debuted a new mobile service at http://www.themobilebay.org/, which will eventually have such features as personal RSS feeds so users can browse torrents on the go, and start the downloads at home.

UK Police Start Replacing Ads on Copyright Infringement Sites With Warnings(GigaOM)
Under a UK police initiative called Operation Creative, the police will now start replacing ads on copyright-infringing websites with official police banners that warn users that hte site is under investigation.


Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA. Follow Keith on Twitter at @keithkup and sign up for the Intellectual Property Roundup weekly newsletter here.

New Markey-Hatch Federal Student Privacy Legislation is Unnecessary

SIIA today issued a press release on the introduction of the “Protecting Student Privacy Act” by Sens. Edward Markey (D-Mass.) and Orin Hatch (R-Utah).

The current framework of robust federal regulations, industry best practices and binding contracts provides strong student privacy protections.  With these three layers of protection, we can give students access to revolutionary learning technology while ensuring that their information is used only for educational purposes. New federal student privacy legislation is not needed at this time.

The Markey-Hatch legislation is well-intended, but it contains provisions, such as a prohibition against the use of student information for targeted advertising, that already exist in current law and regulation. Other provisions, such as those related to data destruction, might not be workable in practice.

We share the privacy protection goals of Senators Markey and Hatch, but it’s critical to ensure that any new rules do not inadvertently create obstacles to the effective use of information. Innovative education technology is essential to improving education for all students and to ensuring U.S. economic strength in an increasingly competitive global environment.


Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

Should the Right to be Forgotten be Secret and Global?

Implementing the right to be forgotten was never going to be easy as earlier blogs in this series have pointed out.  But recent press reports show how tricking this implementing is going to be, revealing suggestions that search engines should take down the links globally and keep their actions secret.  Both of these ideas would be missteps.

The secrecy suggestion seems backed by common sense logic – it is self-defeating for search engines to announce to the world that they have taken down the links to stories that should be forgotten.  But that is not the concern, since search engines aren’t making such public announcements.  Rather they are informing the third-party publishers that a link to their content has been deleted from search results.  So the problem seems to be that if affected parties know that a link has been deleted they might object and this objection would direct attention to the topic that was to have been forgotten.

There is clearly room for debate on what the right policy is here.  Any added discussion of the take downs creates an added risk of creating exactly the kind of exposure the right to be forgotten is intended to avoid. But secrecy seems to be the wrong answer.  In fact, if search engines kept their deletions secret they would have faced accusations of lack of transparency! Publishers clearly have an interest in knowing that links to their content will no longer appear in certain search results.  For one thing it provides a check on the search engines getting it wrong, as apparently they did in the early days of implementing the take down program. And as long as the rest of the world isn’t simultaneously informed of the takedowns this seems a balanced approach.

The other concern seems to be that the new right to be forgotten will not be effective if the takedowns are purely local.  Why should people outside the EU be allowed to get search results that people inside the EU cannot get? So, the argument goes, search engines should delete links globally when they decide that they should be deleted under EU privacy law.

This is the wrong direction.  It improperly extends EU privacy law to the world. The impulse to limit information globally is understandable, but unworkable. We know this from other examples. For instance, it is easy to understand why Turkey objects to videos that denigrate the Turkish nation and would like to make sure that they are not shown anywhere in the world. But it goes too far to extend Turkish rules on hate speech to the entire world.  A reasonable compromise is to comply with Turkish law with respect to videos shown in Turkey.

This is the balance struck in many other areas of cross-border electronic commerce. Internet gambling rules are locally, not globally, enforced. British law permits and regulates Internet gambling, while US law prohibits it.  It would be an easy matter to structure US law so that global payment systems blocked all Internet gambling transactions. Bu that is not what US law does.  It provides for local enforcement. People in Britain can go on the Internet to gamble, while people in the US face restrictions, including restrictions on using payment cards at Internet gambling sites.  Examples are not hard to multiply – alcohol ads, for example, are not allowed in Saudi Arabia, but are permitted on websites available in other countries.

There is certainly nothing in the right to be forgotten decision that compels search engines to delete search results globally.  Moreover, earlier cases under EU law show a conscious desire to avoid the extraterritorial application of European privacy law. In the 2003 Bodil Lindquist case, for instance, the European Court of Justice rejected the idea that posting material on an EU website amounted to a transfer of data to other countries. It made this judgment precisely to avoid the implication that the entire Internet would be subject to EU jurisdiction.

Each country is entitled to its own privacy laws, Europe no less than the United States.  We should seek to make them sufficiently compatible at the edges so as to allow data transfers.  But simply extending European jurisdiction to the globe is the wrong way to go.


Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

Intellectual Property Roundup

Copyright Office Says Aereo Doesn’t Qualify for Compulsory License (Los Angeles Times)
The U.S. Copyright Office said in its opinion that Aereo does not qualify for a compulsory license that would allow it to continue to stream content from local television stations.

UK ISPs to Alert Suspected Pirates (GigaOM)
Major British Internet service providers will start sending out alerts to subscribers they believe to be unlawfully downloading copyrighted material, but there won’t be any consequences beyond that.

Secondhand eBookstore Tom Kabinet Can Stay Online, Dutch Court Rules (GigaOM)
In a significant upset for the European publishing industry, the Amsterdam district court has refused to order the closure of secondhand ebook store Tom Kabinet, saying EU law isn’t clear enough on digital media resale rights to take that step.


Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA. Follow Keith on Twitter at @keithkup and sign up for the Intellectual Property Roundup weekly newsletter here.

Digital Policy Roundup

DOC Announces Creation of Chief Data Officer, Private Sector Advisory Council

Last week, U.S. Secretary of Commerce Penny Pritzker announced that the Department of Commerce (DOC) is expanding its role as “America’s Data Agency” by hiring the first ever Chief Data Officer. The role of the new CDO will be to oversee improvements to data collection and dissemination, and to ensure that Commerce’s data programs are coordinated, comprehensive, and strategic. In coordination with the new CDO, the DOC will also soon create a data advisory council, comprised of private sector leaders, to advise the Department on how to best use and unleash more government data.

This announcement is a major step in the direction of meeting one of SIIA’s key policy priorities. As established in our 2013 paper on Data-Driven Innovation, , SIIA is a leading proponent of open data policies, to use public-private partnerships to provide access to critical public data, and to adopt enterprise architectures that enable sharing. Governments at all levels possess treasure troves of valuable data that have gone largely untapped for many years. More than ever before, citizens want access to government data, and they want it applied in innovative ways to which they are increasingly becoming accustomed.

Publication of European Commission “White Paper” on Copyright Delayed

The press report that a white paper on the future of copyright has been removed from the agenda of a meeting of European commissioners next week. The white paper, which is supposed to set out a roadmap for possible reform in the European Union, has elicited a great deal of interest among both pro-copyright and other stakeholders. Perhaps reflecting the current controversies surrounding copyright, Commissioner Barnier who is responsible for the Internal Market and Services, appears to have been outmaneuvered by the European Commissioner for the Digital Agenda, Nellie Kroes.

Kroes delivered a widely discussed speech on July 2 called “Our single market is crying out for copyright reform.” Her speech has been widely viewed as an attempt to force the Commission’s hand to propose reforms that some observers would consider a weakening of copyright protections. Kroes, for instance, made it quite clear that she would favor a European Union-wide copyright exception for non-commercial text and data mining. And she noted that Japan has introduced a text and data mining exception that includes commercial use. There have been reports of leaked versions of the white paper which suggest that Barnier has taken a neutral approach to many of the issues that critics of copyright cite as ripe for reform. This is what observers believe prompted Kroes to deliver her July 2 speech calling for reform now.

As a practical matter, given that there will be a new Commission in October, copyright changes are not likely before 2015 at the earliest. Moreover, even if Kroes is considered the “winner” now in terms of stopping the white paper’s release, the white paper will likely still be the base document the next Commission uses to start considering possible copyright changes.


David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy. Follow the SIIA public policy team on Twitter at @SIIAPolicy.

SIIA/OPEXEngine Report on U.S. Software Industry Shows Strong Revenue Growth & Renewed Focus on Investment

The private U.S. software industry is experiencing its biggest revenue gains since the recession, and both private and public companies are renewing their focus on investment in order to gear up for further growth.

The 2014 Software & SaaS Financial Benchmarking Report is produced by SIIA partner OPEXEngine, the leading aggregator of financial and operating benchmarks for small- and mid-sized software companies. To complete this eighth annual report, OPEXEngine surveyed several hundred private and public U.S. firms with revenues between $1 million and $450 million, with a focus on Software-as-a-Service (SaaS) metrics.

The report, which benchmarks 2013 financials and operating metrics, finds that median revenue for private software firms rose almost 42 percent year over year – the highest percentage increase since the 2008 recession, and almost 40 percent higher than last year’s revenue growth rate of 30.5 percent. Revenue for all public companies included in the survey rose an average of 18 percent in 2013, while revenue growth for public SaaS companies averaged almost 30 percent.

This year’s study also indicates that private and public firms – encouraged by  revenue growth – felt confident about increasing spending over current revenues, and were investing in operations and hiring to drive further growth.  See table below for more detail.

Private Companies Public Companies
FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13
Year-over-Year Revenue Growth 21% 27.8% 37.4% 30.5% 41.7% 12% 22% 37.5% 21.9% 18.3%
Operating Income/Loss -20.4% -13.2% -9.6% -4.1% -13.0% 11.5% 6.1% 6.1% 4.2% -8.2%

Further demonstrating this focus on investment, both private and public companies have budgeted to add jobs this year. Private firms plan to increase employee headcount by 26 percent (a 3.5 percent increase over 2013 plans) by the end of 2014, while public companies project a nearly 27 percent gain in 2014 headcount.

OPEXEngine also compares software firms in different geographic regions and finds that median revenue growth for private East and West Coast firms is twice that of private companies in the Central and Mountain regions. At the same time, average operating income for private firms in the Central and Mountain regions is positive (by nearly 3 percent), whereas  private firms based on the East and West Coast had operating losses of median 34 percent and  27 percent, respectively.

Other key findings from the 2014 Software Benchmarking Industry Report include:

  • Median revenue growth for private East and West Coast firms is 51-53 percent, compared to an average of 25 percent for firms in the Central and Mountain regions.
  • Median sales and marketing spending for West Coast firms is highest among the regions at 65 percent of revenue. Comparatively, East coast firms spent a median of 51 percent on sales and marketing, while Central and Mountain region firms benchmark at a median 33 percent in sales and marketing.
  • West Coast private firms utilize the most venture funding, at a median of $65 million.  East Coast firms follow, accepting a median of $23 million in venture funding, while firms in the Central and Mountain region access a median of $6.8 million in venture funding.

The 2014 Software & SaaS Financial Benchmarking Industry Report provides extensive financial and operating metrics for U.S.-based companies with 2013 revenues of between $1 million and $450 million. Benchmarks cover key financials, including detailed expense ratios, revenue and profit metrics, geographic break-outs, employee statistics, as well as customer and sales model comparisons. The report also looks specifically at Software-as-a-Service (SaaS) vendors and breaks out all the benchmarks for smaller, private companies as well as for larger, public, companies.

To learn more about this report, join the SIIA and OPEXEngine for a webinar on Tuesday, September 16, 2014 at 10:00am PT / 1:00pm ET.  Click here to register today.
__________________________________________________________________________________________

Rhianna Collier is VP for the Software Division at SIIA. Follow the Software team on Twitter at @SIIASoftware.

Intellectual Property Roundup

IP News

Google, Canon, Dropbox and Others Pool Parents to Ward Off Trolls (Re/code)
A coalition of technology companies have agreed to join the License on Transfer network, promising to grant licenses to one another whenever one of those patents is sold, in an attempt to defang patents before they get into the hands of patent trolls.

Copyright Office Ponders Aereo Fallout (The Hill)
The U.S. Copyright Office is asking the public to weigh in on what the Supreme Court’s ruling on streaming TV service Aereo means for the future of copyright law.

Aereo’s Plan C for Cable (ZDNet)
Aereo’s new plan after the Supreme Court ruled its service was illegal is to argue that it is a cable company and as such Section 111 of the Copyright Act grants it the “compulsory licenses” it needs to re-transmit over-the-air television content.

White House Pulls Plug on Controversial Patent Office Nominee (GigaOM)
The Obama Administration has backed away from an unpopular plan to name a Johnson & Johnson executive and patent reform opponent as head of the U.S. Patent Office.

House Panel Approves Bill to Curb Patent Threats (The Hill)
The House Commerce subcommittee approved Chairman Lee Terry’s bill, the Targeting Rogue and Opaque Letters Act, a bill aimed at increasing transparency and accuracy in the letters companies send to threaten patent infringement lawsuits.

File-Sharing Lawsuits Are a Waste of Mondy, Says the American Bar Association(VentureBeat)
The American Bar Association is recommending to its members that they stop filing file-sharing lawsuits since they “do not yield significant financial returns.”


Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA. Follow Keith on Twitter at @keithkup and sign up for the Intellectual Property Roundup weekly newsletter here.

Curated By Logo