Proposed USA FREEDOM Act Seeks to Limit NSA’s Reach

Photo courtesy of Electronic Frontier Foundation 
(https://supporters.eff.org/shop/illegal-spying-eagle-sticker)

 On October 29, 2013, Senator Patrick Leady (D-VT) and Representative Jim Sensenbrenner (R-WI) introduced a new NSA reform bill into both the House of Representatives and the Senate.  As of this writing, the act has 16 co-sponsors in the Senate and over 70 in the House.  The bill is called the Uniting and Strengthening America by Fulfilling Rights and Ending Eavesdropping, Dragnet-collection and Online Monitoring Act, or the USA FREEDOM ACT for short.  The goal of the act is to drastically limit the ability of the National Security Agency to collect information of United States citizens.  As stated in the bill’s official summary:

The bipartisan, bicameral USA FREEDOM Act will rein in the dragnet collection of data by the National Security Agency (NSA), increase the transparency of Foreign Intelligence Surveillance Court (FISA Court) decision-making, provide businesses the ability to release information regarding FISA requests, create an independent advocate to argue cases before the FISA Court, and impose new and shorter sunsets on controversial surveillance authorities.

Introduction of the bill comes amidst increasing concern of the NSA’s surveillance practices conducted on both American soil and abroad.   Prior to the leak committed by former intelligence analyst Edward Snowden last spring, the true scope of the NSA’s operations was unknown.  Now, it has been revealed that many of the NSA’s operations are being conducted with little judicial oversight and may even breach constitutional boundaries.  So far, Snowden’s leak has revealed that the NSA collects the metadata of millions of American citizens.  Metadata is information about the time and location of a phone call or email.  Though the contents of the call or email are not surveyed, it has been argued that collecting metadata infringes on Americans expectations of privacy and can reveal facts many citizens would not wish to disclose.  Also, pursuant to the 2008 FISA Amendments Act, these collections can be conducted without a warrant as long as one end of the communications is a non-US citizen, or if surveillance is sought over a US citizen located outside the country.  For matters concerning U.S. citizens at home, the NSA must request a warrant from a FISA (Foreign Intelligence Surveillance Act) court.  The FISA court sits ex parte- meaning that only the judge and the government are present at the hearings.  There is no attorney present to advocate against the granting of a surveillance warrant.  Since the court was established in 1978, the court has rejected only .03% of all government surveillance requests.

It has furthermore been revealed that through a program known as PRISM, the agency can collect data from major Internet companies such as Google, Facebook, Apple, Yahoo, and Skype.  Through PRISM, the NSA can collect content such as e-mail, videos, photos, file transfers, social network details, and even voice samples.  Many of these Internet companies claim that they are compelled by law to release this data in cooperation with the NSA, and have lobbied Congress for the right to disclose to the public exactly how many of its members are affected by the NSA’s data collection requests.  The goal of this transparency is to help the Internet companies regain the trust of its users and dispel any notions that the government has direct access to these companies’ servers.

Ironically, much of the NSA’s current powers were granted under the Patriot Act of 2001, which was written in part by Representative Jim Sensenbrenner, co-writer of the USA FREEDOM Act.  The USA FREEDOM Act seeks to limit the scope of the NSA’s powers by amending certain sections of the Patriot Act as well as the Foreign Intelligence Surveillance Act (FISA).  The act seeks to end the bulk collection of American metadata, place a “Special Advocate” to be present at FISA court hearings to dispute government surveillance requests, and allow companies to disclose an estimate of the number of FISA orders and National Security Letters they have received, the number they complied with, and the number of users and accounts impacted.  

The USA FREEDOM ACT’s complete text can be found here.

(Blog entry written by Alex Diamond, IBLT/Carter DeLuca Entrepreneurship Support Fellow for the Fall 2013 semester)

A Pair of Patent Reform Bills Seek to Deter Patent Trolls

Illustration by David Saracino/New York Observer

On October 23, 2013, Representative and chairman of the House Judiciary Committee Bob Goodlatte (R-Va.) introduced a patent reform bill to the House of Representatives. The legislation is known as the Innovation Act and is co-sponsored by Democrats and Republicans alike. The bill seeks to curb abusive patent litigation most commonly associated with patent trolls. A patent troll (also known as a non-practicing entity or a patent assertion entity) refers to a patentee that does not make products or practice its own inventions and instead files suit against infringers to recoup royalties. A patent troll acquires patents solely for the purpose of extracting payments from alleged infringers and its entire business model centers on patent litigation. These non-practicing entities use the high cost of patent litigation as a threat to demand quick settlements. According to a May 2013 press release by New York Senator Charles Schumer:

In 2011 alone, patent trolls cost operating companies $29 billion. Under current law, a company hit with a patent suit only has two options – pay to defend the suit or pay a licensing fee or settlement agreement to make the suit go away. Both options are highly costly – the average troll settlement costs a small or medium company $1.33 million, while an in-court defense would cost the same company an average of $1.75 million per case.
Specifically, this has been an enormous problem among technology start-up companies: 62% of patents asserted by trolls from 1990-2010 were software patents; 75% were in computer and communications technology. And this is a particular problem for small businesses: 82% of companies targeted by trolls of annual revenues less than $100 million.

Furthermore, according to the Electronic Frontier Foundation, patent trolls only win 9.2% of the cases that are brought to judgment.

To stymie patent trolls from filing frivolous suits the Innovation Act has several key provisions pertaining to patent litigation. One such provision seeks to implement fee shifting in patent cases. Under current patent laws, each party to a patent litigation pays its own legal fees, regardless of the case’s outcome. However, the Innovation Act will allow courts to order the losing party to pay the victor’s legal fees. This would encourage defending companies with little money to take on the patent-assertion entities in court.

The Innovation Act will also allow manufacturers to defend their customers in patent litigation. This is in direct response to a familiar tactic employed by patent-assertion entities: instead of filing suit against a major manufacturer with the funds and ability to respond to the patent trolls in court, a patent troll will file suit against the manufacturer’s less wealthy customers. By allowing a manufacturer to defend their customers in patent litigation, the extent of financial resources available to the original defendant becomes a non-factor.

In addition, the Act requires a patent holder filing a lawsuit to disclose the names of everyone who has a financial interest in the affected patents. Often, a patent assertion entity is a shell corporation that is part of a much larger entity. These larger entities use these shell corporations to shield themselves from bad publicity. Requiring full disclosure of all those who have a financial interest in the affected patents will promote transparency and may discourage companies from filing frivolous lawsuits.

Furthermore, the Patent Litigation Integrity Act, brought before the Senate on October 30, 2013 by Senator Orrin Hatch (R-Utah) seeks to place even higher financial burdens on patent-assertion entities. The main provision of the Patent Litigation Integrity Act takes the fee-shifting provision of the Innovation Act one step further. Under the Patent Litigation Integrity Act, the company being sued could ask the court to require the company bringing the suit to post a bond for the cost of the defendant’s legal fees.

The full text of the Innovation Act can be found here.

The full text of the Patent Litigation Integrity Act can be found here.

(Blog entry written by Alex Diamond, IBLT/Carter DeLuca Entrepreneurship Support Fellow for the Fall 2013 semester)