Last week, FTC Chairwoman Edith Ramirez announced that the FTC should use its authority under Section 6(b) of the FTC Act to study patent troll activities and pledged the FTC’s commitment to protecting small businesses from deceptive patent troll practices, by using its authority under Section 5 of the FTC Act.

Ramirez explained that the patent troll problem “isn’t just growing.  It’s changing shape;” pointing out that “retailers and financial services providers that incorporate software into their products and services are now common targets” for patent troll lawsuits.  She voiced her concern that these trolls may be using false claims to target small businesses to induce payment of illegitimate licensing fees.  This happens when a troll asserts a patent that it “has no ownership interest in, or standing to assert, any patent rights; has only an expired patent; or makes false threats of litigation.”

For several years now, the FTC has played a crucial role in helping policymakers better understand the impact of patent troll behavior.  The Chairwoman’s remarks were an encouraging sign that the FTC remains committed to shedding more light on the patent troll problem and potentially joining the battle against patent trolls by bringing enforcement actions against them under its existing consumer protection authority.

Senator Leahy, Chairman of the Senate Judiciary Committee, followed up with Chairwoman Ramirez in a letter urging the FTC to “more aggressively pursue enforcement actions against patent trolls under its existing consumer protection authority and create a website for small businesses to report abuse.”  We join Chairman Leahy in urging the FTC to take action under Sections 6(b) and 5 of the FTC Act.  In doing so, however, we do raise a cautionary flag — action by the FTC should not be cause to delay potential legislative action to address this growing and significant problem.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.

SIIA Says Obama Administration’s IP Enforcement Strategy Will Advance Efforts on Software Compliance, Domain Name Expansion and Other Key Issues

SIIA commented on the IP Enforcement Strategy announced by Victoria Espinel, the Administration’s Intellectual Property Enforcement Coordinator. Keith Kupferschmid, senior vice president of intellectual property and enforcement for SIIA, commented:

“The new Administration plan addresses a wide range of IP enforcement issues, offering numerous specific actions by federal agencies aimed at helping to protect and advance creativity and innovation. We look forward to seeing the Administration move quickly on the actions they have proposed.

We are particularly focused on the plan’s continued call for software compliance throughout the federal government. While we commend the plan’s continued emphasis on software compliance, we are disappointed that it does not likewise address content compliance. We have pushed the Administration to act on both software and content compliance, and will continue to seek Executive action that includes content.”

Enforcement News

Public-Transit Group Files Suit Against Patent Trolls (The Wall Street Journal)
The American Public Transportation Association filed suit in federal court against a pair of foreign-chartered firms that have threatened or filed patent infringement claims against public-transit systems, alleging that the so-called patent trolls are squeezing cash out of the nation’s largest transit agencies by suing over schedule alerts.

Pirate Bay Founder Sentenced in Sweden (The New York Times)
Gottfrid Svartholm Warg, co-founder of The Pirate Bay, was sentenced to two years in jail on Thursday for hacking into computers at a company that manages data for Swedish authorities and making illegal online money transfers.

Intellectual Ventures Sues Motorola Mobility, Again (CNET)
Intellectual Ventures, the controversial company that has made headlines for accumulating a massive trove of software and design patents, sued Motorola Mobility again, accusing the company of violating several of its patents covering file transferring and image projection technology.

Appeals Court Upholds College Student’s $675,000 Piracy Penalty (The Hollywood Reporter)
In the long-running case of Joel Tenenbaum, who was ordered in 2009 by a jury to pay $675,000 for illegally downloading and sharing 30 songs online, the First Circuit Court of Appeals decided on Tuesday that the penalty should stand.

Pre-Roll Ads Can Be Patented, Appeals Court Rules in Hulu Case (GigaOM)
The Court of Appeals for the Federal Circuit, the country’s top patent court, has ruled that playing an ad before someone watches a piece of content on the Internet is not an abstract idea, but is the subject of a valid patent.

Western Union and the IACC Team Up to Help Prevent Online Counterfeit Sales (PYMNTS.com)
Western Union and the International AntiCounterfeiting Coalition announced an alliance to help identify and prevent the sale of counterfeit goods through the IACC Payment Processor Portal Program, which will provide a system for intellectual property rights-holders to report the sale of illegal counterfeit goods.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.

Baltimore Man Sentenced to Prison for Copyright Infringement (FBI.gov)
A Baltimore man was sentenced to 87 months in prison, followed by three years of supervised release, for conspiring to and infringing copyrights by illegally reproducing and distributing over 1,000 copyrighted commercial software programs totaling $4 million.

Photographer Sues BuzzFeed for $3.6M Over Viral Sharing Model (paidContent)
An Idaho photographer is suing BuzzFeed for $3.6M in copyright damages, claiming BuzzFeed is liable not only for the unauthorized photo that appeared on its site, but also for “contributory infringement” because the site’s viral news model encourages readers to share the content they find.

New Ebook DRM Will Change the Text of a Story to Prevent Piracy (paidContent)
German researchers are working on a new DRM system that would prevent piracy by changing the actual text of a story, swapping out words to make individualized copies that could be tracked by the original owner of the ebook.

This One Page Could End the Copyright War Over ‘Happy Birthday’ (NPR)
The birthday song is still under copyright protection, but a lawsuit filed in federal court last week seeks to change that. The complaint argues that the copyright to the song, if it ever existed at all, expired no later than 1921.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.