OVERNIGHT TECH: Court steps on Congress’s NSA plans

THE LEDE: Congress’s fight over the Patriot Act got a lot more complicated on Thursday.

A top federal appeals court’s ruling that the National Security Agency’s (NSA) phone metadata collection was not authorized by the Patriot Act had surveillance critics crying victory, but defenders of the agency are only digging in their heels. Senate Majority Leader Mitch McConnell (R-Ky.) sounded more set than ever on his plan to reauthorize the law without changes, and he got a major boost in floor remarks from hawks such as Sens. Tom Cotton (R-Ark.), Richard Burr (R-N.C.) and Marco Rubio (R-Fla.). “If our intelligence community cannot connect the dots of the information, we cannot stop this determined enemy from launching attacks,” McConnell said.

{mosads}Exactly how the court ruling affects the legislative debate remains to be seen. But one thing is clear: GOP leaders aren’t backing down, which points to a mounting showdown over the issue as the legislative sunset date on May 31 gets ever closer. While the House is all but assured to pass the USA Freedom Act next week — extending the expiring provisions of the Patriot Act while also ending the NSA’s bulk phone records collection — the outlook in the Senate is murkier than ever. Meanwhile, both the White House and former Secretary of State Hillary Clinton endorsed the USA Freedom Act on Thursday, in the wake of the court decision.

Given the insistence from most Democrats and a handful of libertarian-leaning GOP senators, there don’t appear to be 60 votes to move ahead with McConnell’s “clean” reauthorization legislation in the Senate. Even if some variation of that legislation moved forward, it’s unlikely the House would be willing to support a measure much weaker than the USA Freedom Act. Given the packed next two weeks — which will see lawmakers debating legislation on “fast-track” trade authority and highway funding in addition to the Patriot Act — the chances of a short-term bill appeared to rise in recent days.

SNOWDEN ‘THRILLED’ ABOUT RULING: Edward Snowden was “thrilled” about Thursday’s appeals court ruling, according to Glenn Greenwald, the journalist who was the recipient of Snowden’s massive leak of documents detailing U.S. surveillance programs. Greenwald said he talked to him after the ruling, noting it was Snowden’s leaks that spurred the current debate.

PAUL’S SILICON VALLEY OFFICE COMING SOON: Sen. Rand Paul (R-Ky.), a GOP presidential candidate, will open a long-awaited Silicon Valley office over the weekend, his campaign announced. Paul’s campaign said he is traveling to San Francisco on Saturday to form a “collaboration with” StartupHouse, which runs a shared workspace for emerging companies. Paul announced he would open up a Silicon Valley office last September, before he announced his candidacy.

AT&T FIRES BACK AT NETFLIX: AT&T this week argued it does not make economic sense for the company to degrade Netflix’s service if its merger with DirecTV went through, rejecting an assertion made by the streaming company earlier this week. As a condition of the merger, Netflix has called on the FCC bar AT&T from charging for interconnection.

“Amid all its recent protests, Netflix neglects to mention an important fact–Netflix has entered into a long-term agreement for direct access to AT&T’s network on terms that will allow Netflix to continue to thrive in the marketplace,” AT&T wrote in a filing with the FCC this week.

FTC, JUSTICE FILE COMMENTS ON PATENT QUALITY: The Federal Trade Commission and the Justice Department offered some advice to the U.S. Patent and Trademark Office as it works to increase the quality of patents it approves. While reform is working its way through Congress to thwart abuse, advocates have also said so-called patent trolls have been successful because of sometimes vague patent issues from the government.

“The Antitrust Agencies commend the PTO for its continuing efforts to enhance patent quality, and supports efforts to define more clearly the boundaries of a claimed invention. Clearer patent notice can encourage market participants to collaborate, transfer technology, or — in some cases — to design-around patents, thus leading to a more efficient marketplace for intellectual property and the goods and services that practice such rights,” the agencies wrote.

NY GRANTS VIRTUAL CURRENCY CHARTER: The New York State Department of Financial Services granted its first charter to a virtual currency company on Thursday. The first company out of the gate was itBit, which is based in New York City. “We have sought to move quickly but carefully to put in place rules of the road to protect consumers and provide greater regulatory certainty for virtual currency entrepreneurs,” Superintendent Benjamin Lawsky said in a statement.  

ON TAP:

At 2:30, the Advisory Committee on Transparency will hold a Capitol Hill panel on government surveillance, which will include Bob Litt from the Office of the Director of National Intelligence.

IN CASE YOU MISSED IT:

A federal court has decided that the National Security Agency’s bulk, warrantless collection of millions of Americans’ phone records is illegal. 

Candidates running for president in 2016 released divided statements following an appeals court ruling that found the National Security Agency’s mass collection of U.S. phone records is illegal.

A handful of Senate Judiciary Committee members on Thursday expressed lingering doubts about legislation to fight so-called patent trolls.

A sweeping appeals court ruling against government surveillance powers on Thursday could recast Congress’s fight over expiring provisions of the Patriot Act.

Sens. Mitch McConnell and Rand Paul are on opposite sides in the battle over government surveillance, putting the alliance between the two Kentucky Republicans to the test.

Please send tips and comments to Julian Hattem, jhattem@digital-stage.thehill.com  and Mario Trujillo,mtrujillo@digital-stage.thehill.com

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