OVERNIGHT TECH: Patent compromise continues

THE LEDE: Sens. Charles Schumer (D-N.Y.) and John Cornyn (R-Texas) have reached a patent reform agreement that would increase transparency around patent infringement lawsuits and threats of lawsuits and institute a “loser-pays” system for unreasonable lawsuits, according to a person familiar with the negotiations.

The lawmakers have been working over the last week to reach compromise on the more contentious patent reform provisions as the Senate Judiciary Committee repeatedly delayed consideration of Chairman Patrick Leahy’s Patent Transparency and Improvements Act. According to the person familiar with the negotiations, language of the compromise between Schumer and Cornyn is still being finalized and will be included in the updated version of the bill that the committee will consider when it returns from its two-week recess.

{mosads}Leahy’s bill takes aim at “patent trolls” — the companies that profit by bringing and threatening to bring frivolous patent infringement lawsuits — by requiring companies to be transparent about who owns a patent, allowing the Federal Trade Commission to go after companies that misleadingly threaten lawsuits and allowing tech companies to intervene when their customers are sued for infringement. Since introduced late last year, Leahy and other members of the committee have to worked to include additional provisions, some of which have proven contentious and delayed the process.

As the members negotiated over “fee-shifting” provisions, which allow courts to require the losing party of a meritless patent infringement lawsuit to pay the winner’s fees, and other measures, the Judiciary Committee has pushed back consideration of the bill four times. Leahy said last week that he was working with Cornyn and Sen. Orrin Hatch (R-Utah) on the measure and said he “hope[d] we are in the final stages of hammering out.”

While the negotiation was not ready for consideration for meetings on Tuesday or Thursday of this week, Leahy said Wednesday that members “have made enormous progress, and we now have a broad bipartisan agreement in principle.” He added that members “need additional time to draft the important provisions that have been the subject of discussion.”

According to the person familiar with the negotiations between Schumer and Cornyn, the compromise to be included in Leahy’s updated bill will require judges to force the loser of a patent infringement lawsuit to pay the winner’s fees if the losing party did not behave reasonably. The compromise also requires companies bringing lawsuits to provide more information about the patent and its alleged infringement, unless that information isn’t readily accessible, the person said. It puts similar transparency requirements on “demand letters” — the notices companies send threatening patent lawsuits — that are then used as part of a patent infringement lawsuit. Finally, the compromise limits, in certain cases, the discovery demands that plaintiffs can make on defendants before the patent is reviewed.

Cyber sharing deal earns praise: An Obama administration move to encourage companies to share information and fight hackers is garnering praise from Congress and business groups. The guidance, announced by the Federal Trade Commission and the Justice Department on Thursday, gives companies assurances that the information sharing won’t put them in violation of antitrust laws.

“Addressing this antitrust issue is a helpful step in encouraging effective, robust cybersecurity information sharing, a key component of the practice of cybersecurity,” said Mastercard CEO Ajay Banga in a statement. “We look forward to continuing our work with the administration and Congress to implement this policy statement and to enact meaningful legislation to deal with all liability issues necessary to facilitate cybersecurity coordination and innovation that only Congress can address.”

Banga is also the chairman of the Business Roundtable’s committee on information and technology.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) reiterated the praise, and said that it should prod lawmakers to take action up cybersecurity legislation.  

“Congress must also do its part and enact meaningful solutions to enhance cybersecurity,” he said in a statement. “Developing a comprehensive national cybersecurity strategy is one of the most serious and unmet needs confronting the nation today.”

The Senate failed to pass a sweeping cybersecurity bill in 2012 and has been unable to successfully resurrect the issue, despite urgent pleas from top military and intelligence officials. A rash of high-profile data breaches at major retailers like Target thrust the issue back into the spotlight earlier this year, but so far members of Congress have yet to coalesce around a single legislative response.

“I am disappointed that Congress has still not acted to promote information sharing through legislation, but congratulate the Obama Administration for taking action to address this important issue,” added Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.).

Lofgren volunteers to attend ICANN meeting: To better understand how the Internet is run, Rep. Zoe Lofgren (D-Calif.) suggested on Thursday that lawmakers attend an upcoming meeting of the international nonprofit corporation that manages domain names. In a House Judiciary Committee hearing on the administration’s plan to hand off oversight of a technical system for Web addresses, Lofgren said that “some alarmist voices out in the media world” have protested the move unnecessarily.

She suggested members of Congress check out an Internet Corporation for Assigned Names and Numbers (ICANN) meeting when it next comes to the United States.

“I don’t know that every member of Congress would want to go and sit through these meetings, but it might be a good experience for us,” she said. “The next time you meet in the United States, maybe we should do a little group and go see firsthand what it’s like to participate,” she told ICANN President Fadi Chehadé. “I’ll be the first volunteer to do that.”

The group’s next meeting in the U.S. is scheduled for October in Los Angeles.

Condoleezza Rice joins Dropbox board: Former Secretary of State Condoleezza Rice has joined the board of directors at file sharing site Dropbox. Rice, whom Dropbox CEO Drew Houston described as “brilliant and accomplished,” will help the company expand internationally.  

“When looking to grow our board, we sought out a leader who could help us expand our global footprint,” Houston said in a blog post.

Aereo, Google team up: Starting next month, subscribers of the video service Aereo will be able to watch live broadcast television through Google’s Chromecast device. The small gadget, which looks like a thumb drive, plugs into TV sets so that people can watch online shows and movies on television. With the announcement on Thursday, that will also include broadcast programming for Aereo users.

In two weeks, Aereo will battle broadcasters before the Supreme Court to convince the justices its service does not violate copyright law. The company uses a network of tiny antennas to beam broadcast programming to subscribers’ devices.  

ON TAP

The Atlantic Council will host a discussion about bitcoin starting at 10:30 a.m.

IN CASE YOU MISSED IT

The House Commerce subcommittee on Technology voted Thursday to halt the Obama administration’s plan to relinquish U.S. oversight of the Internet’s Web address system.

The Department of Justice and the Federal Trade Commission (FTC) announced Thursday that private companies can share information to prevent hacks without violating antitrust laws.

The FTC is warning Facebook to protect its users’ privacy as the company finalizes its $19 billion purchase of messaging application WhatsApp.

The Justice Department is charging three men with defrauding the FCC out of about $32 million.

The United States’s handover of a role overseeing a technical part of the Internet wouldn’t make it easier for regimes in Russia or China to control and censor the Web, according to the Obama administration.

Please send tips and comments to Kate Tummarello, katet@digital-stage.thehill.com, and Julian Hattem, jhattem@digital-stage.thehill.com

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