Patent Office Exploring Keeping Patents Secret If They're 'Economically Significant'

from the wasn't-disclosure-the-point? dept

We're told, repeatedly, by some patent system supporters that the whole point of the patent system is really about "disclosure." Of course, this is a myth for a variety of reasons. The biggest, of course, is that in many industries patents are both completely useless to learn anything from and are never used to learn how things are done. This is especially true in software, where you will never hear about anyone learning how to do anything from a patent. A few years back, the US Patent and Trademark Office (USPTO) started publishing nearly all patent applications 18 months after the application came in. This is a pretty common practice around the globe. If a patent system is about disclosure, this makes sense -- and in theory, allows for people to point out prior art or protest certain patents before they're issued. There is a current exception for patents deemed in the interest of national security to keep secret (such as patents on nuclear energy).

However, as Francisco George points us to the news that the USPTO is now considering also keeping "economically significant" patents secret too (pdf and embedded below). They're exploring this after being directed by Congress -- and it's not hard to see the lobbyists' fingerprints on the specific request:

By statute, patent applications are published no earlier than 18 months after the filing date, but it takes an average of about three years for a patent application to be processed. This period of time between publication and patent award provides worldwide access to the information included in those applications. In some circumstances, this information allows competitors to design around U.S. technologies and seize markets before the U.S. inventor is able to raise financing and secure a market.

As far as I can tell, this directive seems to be saying that because patent applications might do what the patent system is supposed to do -- help disclose ideas -- we should keep the applications secret. The problem, of course, is that pretty much every patent applicant is going to think their patent is economically significant. The reality is that pretty much no one knows if their patents are economically meaningful until years later when a product is actually on the market. This proposal seems to serve no purpose other than helping companies not to disclose ideas while still letting them get patents.

Filed Under: congress, disclosure, secrecy, uspto

Juror Didn't Disclose MySpace Friendship With Defendant... Because It Was Just MySpace

from the talk-about-damning-myspace dept

Here's a fun one. An appeals court in West Virginia has granted a new trial to a defendant because one of the jurors failed to disclose that she was a "friend" on MySpace with the defendant and had sent him a message during the trial. The message itself was mostly meaningless ("I can tell ya that God has a plan for you and your life..." etc. and even mentioned "Hey, I don't know you very well"), but the juror never bothered to mention that she knew the defendant at all, let alone well enough to be a MySpace connection. When asked why, she answered:

I knew in my heart that I didn't know him . . . I should have at least said that . . . he was on MySpace, which really [wasn't] important, I didn't think.

Ouch for MySpace. Either way, a new trial has been ordered, and yet again questions revolving around social media in the courtroom need to be tackled in court.

Filed Under: disclosure, friendship, jurors, social networking
Companies: myspace

Why Is Product Placement Okay On TV Without Disclosure?

from the questions... dept

We're still wondering if the FTC is really going to go after blogs that don't disclose financial relationships concerning products they're pitching. So far, the only action the FTC has taken (publicly) has been to investigate retailer Ann Taylor for giving bloggers gift cards -- an action for which it was given a pass. In that case, it was worth noting that the focus was on the company, not the bloggers involved. However, there are still many questions about how arbitrarily the rules will be applied. Danny Sullivan is pointing out that with so much undisclosed product placement on TV, shouldn't that be a bigger concern than if a blogger mentions he or she got a free gift card before writing about a product? While I, like many people, tend to think disclosure is important for your own reputation, the ambiguity and subjectiveness of the FTC's rules is worrying. While I don't know for sure, my guess is that the FTC would say that most people already understand how TV product placement works, so they're not too bothered by it. That, at least, was the explanation an FTC person gave when questions were raised about why the FTC doesn't go after celebrities talking up products and services they were given for free... But it does seem kind of ridiculous that a celebrity is given more leeway not to disclose just because they're famous.

Filed Under: disclosure, ftc, product placement

FTC Gives Ann Taylor A Pass In First 'Blog Disclosure' Investigation

from the disclose-everything dept

We expressed some serious concerns with the somewhat ambiguous FTC disclosure rules directed at blogs and new media that went into effect last year, and we've been waiting to see how the FTC enforces those rules. We found it odd that the FTC apparently felt that celebrities could be held to different standards. There have been some questions about different activities -- for example, Viacom's actions in trying to make authorized uploads look as if they were bootlegs certainly appears to run afoul of the rules. And, more recently, there were some concerns over the NY Times' lack of disclosure concerning its relationship with Apple when reporting on the iPad.

However, back in February, some were wondering if retailer Ann Taylor's offer of gift cards to bloggers who covered their new line of clothing violated the rules. Apparently, the FTC did take notice, and Michael Scott points us to the news that last month, the FTC decided to give Ann Taylor a one-time pass, though it did express some concerns about the program: What strikes me as interesting here is that the FTC investigation focuses on the advertiser's actions, rather than the bloggers'. That is, most of the concerns about the program were about whether the FTC would take action against bloggers. But, here, it was focused on the advertiser and its actions. That does make more sense, but does leave open a questionable loophole: if an advertiser tells a blogger to disclose some information and then the blogger does not do so... is the advertiser still liable? In this case, the FTC even mentions that one of the reasons it's not taking action is because many (though not all) of the bloggers, who wrote about the event, disclosed the gift cards. But if they had not -- even though Ann Taylor had told them to -- then is Ann Taylor to blame?

Filed Under: advertising, blogs, disclosure, ftc
Companies: ann taylor, ftc

Software Patents Violate The Patent Bargain, Since There Is No Disclosure To Trade-Off

from the trade-away dept

It's always fun talking to big time patent system supporters, because it's easy to predict their arguments. After you point out all of the evidence that has shown absolutely no proof that patents increase innovation, the supporters always shift from "patents are necessary for innovation" to "patents are really about disclosure." The argument here is that part of the "bargain" for getting a government granted monopoly over your invention is that you have to describe the invention, so that those who are skilled in the art can replicate it from your description. Of course, as patent attorneys and software engineers admit, that's a myth. Patents are written these days to be incredibly broad, and really only understandable to other patent attorneys, rather than other engineers.

Reader brad points us to an interesting blog post by Lukas Mathis, who points out that, at least in the software world, disclosure is useless anyway, because any competent programmer can understand how to do something without needing to look at any patent:

This trade-off does not apply to many software patents. I only need to spend five minutes on Amazon's site to figure out how one-click shopping works. There is nothing useful I can learn from reading the patent. Likewise, I only need to turn on an iPhone once to figure out how to unlock it. This means that Amazon or Apple don't give up anything when they patent these ideas. There is no trade-off involved; the state grants these patents «for free», because nobody gains anything from the publication of these ideas. They are already public.

This is a really good point, and a great way of highlighting the ridiculousness of most software patents. The deal is supposed to be "we give you a monopoly, you tell us how to do this hard thing that we wouldn't figure out otherwise." But the latter half of the bargain isn't done because it's not necessary. And thus, those software patents are given away "for free," without the other half of the bargain. That would, you might think, bring their entire validity into question.

Filed Under: disclosure, patents, software

Will YouTube Case Lead To FTC Investigation Of Viacom's Questionable Marketing Practices?

from the be-careful-what-you-wish-for dept

Here's one more point concerning the motions filed in the YouTube case by Google and Viacom. We had mentioned in our analysis that Google highlights the details of Viacom's rather large "stealth marketing" campaign to upload videos to YouTube, but Eric Goldman points out that the practices Google uncovered certainly sound like they cross the line of what the FTC says is legitimate:

YouTube also scored points for its descriptions of Viacom's stealth marketing practices. Although these facts only help YouTube's legal posture a little, the lawsuit's discovery process has unveiled some non-public information about Viacom’s practices that should be interesting to the FTC and state attorney generals. Viacom's alleged stealth marketing practices are aggressive--close to the permissible line, if not over it. As a result, they might be exactly the kind of consumer misdirection and inauthentic online content that the FTC has been railing against, and we know the FTC is looking for test cases in this area. So, a lawsuit that began as Viacom v. YouTube might morph into FTC v. Viacom. This is one of the known risks of picking a fight--once started, you can't control where it goes.

Indeed, Google presents rather detailed evidence of the lengths Viacom went through to fool users into thinking that clips were uploaded by people other than Viacom. Among Viacom's actions:

• Hiring "an army of third-party marketing agents to upload clips on its behalf"
• Having the uploads come from names that are made to look like random users
• Using non-Viacom email addresses to sign up for accounts -- with the company admitting that it wanted to use email addresses that "can't be traced" back to the company.
• Leaving Viacom offices to go elsewhere to do the uploads (such as Kinkos) to avoid connecting the uploads to Viacom.
• Altering the footage of videos to make them appear unauthorized: "so users feel they have found something unique."

While certainly helping Google make the point that it's ridiculous to expect it to know which videos were legit and which were infringing, these also seem to certainly violate the spirit of the FTC's recent guidelines on questionable "stealth" marketing practices. As Goldman notes, if the FTC is looking for a high profile test case, they may have just been handed a ton of useful evidence.

Filed Under: advertising, disclosure, stealth marketing
Companies: ftc, viacom, youtube

FTC's Disclosure Rules Apply To Bloggers... But Not Celebrities?

from the double-standards... dept

The FTC's highly questionable disclosure rules have been in effect for a bit over a month now, and it appears that even the FTC doesn't understand who they apply to or how they apply. And that's the problem. Apparently, someone noticed that actress Gwyneth Paltrow lavished praise on a resort in Marrakech, Morocco, and wondered if Paltrow had paid for her stay there -- noting that it was the grand opening of the place, with lots of stars -- and Hollywood publicists asked about this said there was "not a chance in hell" that someone like Paltrow paid to attend. In fact, they wonder if Paltrow was even paid for her "appearance." So, how do the FTC rules apply? She was pitching a place that most likely gave her something quite valuable for free. That should be disclosed, right? That was the whole point of the FTC rules, right? Well, maybe not. When asked about it, the FTC hemmed and hawed and claimed that "celebrity endorsements are different." Why? Because consumers might "understand that celebrities are always getting free stuff." Right, but wasn't the whole reason that these new disclosure rules were instituted in the first place that bloggers and others were supposedly (though, I believe it to be exaggerated) "always getting free stuff" too? Basically, these FTC rules sound like the sorts of things that are totally subjective, whereby the FTC can crack down on someone they don't like if they have nothing else to use, but will leave others untouched.

Filed Under: bloggers, celebrities, disclosure, ftc, gwyneth paltrow

A Case That Has It All: Kim Kardashian, Twitter, Libel, Cookie Diets... And The New FTC Sponsorship Rules

from the i-want-a-cookie dept

Oh boy. Here's a fun one. You had to expect that there would be more defamation lawsuits about Twitter following the first one involving Courtney Love, but this one is quite impressive, considering of all the twists and turns that must be followed. It involves some company promoting something called "The Cookie Diet" (which appears to be exactly what you would think) suing Kim Kardashian for libel. If you don't keep up with pop culture, Kim Kardashian is one of those people famous for being famous. The details of the lawsuit, though, are somewhat complex, and it's difficult to figure out who to side with in this trainwreck in progress (and, yes, it seems pretty likely that the whole thing is a publicity stunt for all involved, but that doesn't mean it's not worth covering).

So, basically, the story is that this "cookie diet" supposedly has some fans in Hollywood, and a variety of media have covered the story. Some of those media reports claimed that Kardashian (among many others) were fans of the diet. The Cookie Diet people -- like you would expect -- have a page on their website that links to news coverage, including a story (which they had nothing to do with) that said Kardashian used the diet. At some point, they also sent Kardashian's publicist a box of the cookies.

At some point towards the end of last year, Kardashian saw the link on the website and got upset, posting two Twitter messages saying the following:

• "Dr. Siegal's Cookie Diet is falsely promoting that I'm on this diet. NOT TRUE! I would never do this unhealthy diet! I do QuickTrim!"
• If this Dr. Siegal is lying about me being on this diet, what else are they lying about? Not cool!"

After that, her lawyers sent the Cookie Diet people a letter demanding that it remove the link to the story. It's unclear on what legal grounds the demand was made, as the diet company insists it had nothing to do with the story, did not supply the information and, in fact, had no knowledge that Kardashian had tried the diet. However, they did remove the link. It was only then that they noticed the Twitter messages and... then we get the lawsuit.

OK. So far we've already got some confusion about whether a link to a news article is actionable, combined with a Twitter libel claim. But then the story gets even more bizarre. You see, there's been a lot of talk lately about Kardashian being the most high profile client of some company that gets people to post sponsored Twitter messages. In fact, reports claim that some companies are paying her $10,000 per sponsored message. This may or may not be true, but if it is true, then the companies paying that money are likely getting seriously ripped off because they don't understand how Twitter works and how follower counts are grossly inflated.

So, what does this have to do with the cookies? Well, the cookie people are noting in the legal filing that Kardashian is paid to promote QuickTrim, but that she failed to note this. How does that become important? Well... you may recall last year's kerfuffle over the new FTC "guidelines" about paid endorsements online. While the cookie people don't specifically bring this up, it's certainly implied that Kardashian's paid sponsorship had something to do with her messages against the cookie people.

It's hard to see either side as being worth defending here, but sit back, grab a cookie and enjoy watching the legal arguments fly.

Filed Under: cookies, diets, disclosure, kim kardashian, libel, sponsorships, twitter

AT&T Asks Employees To Hide AT&T Affiliation While Protesting Net Neutrality Laws

from the disclosure? dept

We've been having some discussions lately about the FTC's new guidelines for "disclosure," and some of our regular critics have been gleefully insisting that the reason I don't like those rules is because I don't disclose stuff, and I'm scared the FTC is going to crack down on the site. I find this pretty funny, because I am a huge believer in the importance of disclosing stuff, and on the rare occasion we've been in a situation where disclosure was necessary, we have no problem disclosing, even to the point that it's almost silly. Almost nothing in those rules impacts us directly. My real complaint with the rules is that the FTC rules aren't needed and raise serious First Amendment issues. First, most blogs and other social media efforts are conversational, not publishing, and a whole different set of social cues matter there. Second, anyone stupid enough not to disclose their affiliations on certain things is going to face pretty serious backlash when it comes out (as it certainly will).

Take, for example, the backlash today on the news that AT&T's chief lobbyist sent out an email to all AT&T employees urging them to protest any new net neutrality laws and hide their AT&T affiliation as they do so. AT&T has confirmed the email, which has numerous factual errors (and remember, I actually agree that net neutrality laws don't make sense). But, more importantly, the mainstream media is now calling AT&T out for this outrageous effort to have employees pretend they're not employees in protesting these rules.

Transparency on conflicts makes a lot of sense. It's something that people should do because it makes you more trustworthy -- not because the FTC threatens to fine you. The problem with the FTC rules is that it creates a weird chilling effect and threat of action on things where the rules aren't at all clear. As AT&T is learning today, trying to hide that kind of thing just creates a lot of backlash. It makes AT&T appear like it doesn't have a strong legitimate case, and needs to resort to underhanded techniques to make its argument.

Oh, and to make the FTC and our critics happy: Full Disclosure: I use AT&T DSL at home, and while I pay for it, a few years back there was a long outage, and AT&T agreed to give me a credit of $35 off my next bill. I also know some people who work at AT&T. My wife uses an iPhone, which I assume must run on AT&T's network, but it's provided by her employer (oh, crap, do I need to disclose who that is too?), and so we never see the bill -- so maybe the FTC thinks it's provided for free? I once sat on a panel with a representative from AT&T, and while I disagreed with him on most things policy-wise, I thought he was a nice guy, and at times I've talked to him about why AT&T should be more involved in online conversations (like this one!). Anything else?

Filed Under: disclosure, net neutrality, transparency
Companies: at&t

Athletes Can Start Endorsing A Brand In Hours... But A Blogger Does It And It's A Federal Issue?

from the hmmm... dept

As the FTC still wants to stick by its questionable guidelines concerning bloggers "endorsing" products, I found it interesting that the NY Times was profiling a new online service that more easily allows brands to sign endorsement deals with star athletes. Basically, they just need to fill out a few forms, and within hours, that athlete may be the face of the local car dealership. Now, I don't see anything wrong with this, but I'm curious as to why this is somehow okay, but when a blogger fails to mention that he or she got a book for free, the FTC will consider fining them? Does anyone actually believe that the star football player shops at the local Ford dealer?

Filed Under: athletes, bloggers, disclosure, endorsements
Companies: ftc