Drone Operator Sues North Carolina Over Its First Amendment-Violating Surveyor Licensing Laws

from the propping-up-the-good-old-boys-at-the-expense-of-people's-rights dept

It's always a problem when a private citizen starts horning in on the government's racket. The government has plenty of rackets and likes them to stay in their possession, undisturbed and unthreatened.

When the government feels threatened, it starts making threats. And, since it has almost all the power, its threats usually work. But sometimes it gets sued. That's what's happening here: a government regulatory body has decided the incumbent interests it has propped up for years is more important than little things like the First Amendment.

A drone operator in North Carolina is suing the state because it claims he can't fly drones over land and take pictures without the proper license. It's not a commercial drone operator license. (He has that.) It's a license that basically says the government has given him permission to photograph the land underneath the drones his company operates. (h/t Techdirt reader Vidiot)

Here's the impetus of the lawsuit being brought by photographer Michael Jones, as summarized by Miriam McNabb of Drone Life:

Hiring a surveyor is an expensive business, but necessary if you want to establish legal property lines. What if you just want to see what your property looks like, or create a visual map of your property or work place in order to help make decisions about new development or see what type of topography you have? While previously, you may have had to hire surveyors to make a map, now that information is readily available by using aerial images. Commonly available commercial drone software is designed to do exactly this: creating orthomosaic maps and 3D images.

Surveyors apparently don’t like the competition. In North Carolina, they’re trying to push drone operators out of business. “…drone entrepreneurs on the cutting edge are finding a very old industry standing in the way: land surveying. In North Carolina, the Board of Examiners for Engineers and Surveyors [the NC Board] sends warnings to drone operators saying that certain photography amounts to surveying without a license and threatens them with possible criminal prosecution.”

Michael Jones is being represented by the Institute for Justice. His lawsuit [PDF] claims that, first of all, he's not actually engaging in the land surveying that falls under the control of the North Carolina Board of Examiners. Or, at least, he shouldn't be, but the Board has engaged in some weird form of eminent domain, rolling up every possible definition of aerial drone photography and converting it into something it can sell licenses to engage in.

In North Carolina... drone start-ups have found themselves targeted by a centuries-old profession: land surveyors. As most people would understand it, “land surveying” involves establishing legal boundaries between tracts of land. Yet the North Carolina Board of Examiners for Engineers and Surveyors (Board) takes a far more aggressive view. According to the Board, capturing and disseminating data about the dimensions or elevations of land—or the size of objects on land—requires a full-blown land-surveyor license. Drawing even rough approximations of property lines on images requires a land-surveyor license. Even stitching aerial photos together using orthomosaic software requires a land-surveyor license.

So, the stuff many wouldn't associate with the licensed act of surveying is considered subject to Board rules and regulations. The Board's aggression manifested itself with an investigation of Jones' company, 360 Virtual Drone Services. The Board claimed Jones was engaging in unlicensed land surveying. But Jones has never presented himself as a "surveyor," nor has he offered surveying services to anyone. All he has done is take photos of land from the air at the request of customers. That didn't stop the Board from threatening him with civil and criminal "consequences" unless he was willing to open up his wallet and participate in the local government's licensing scheme.

Jones refused. And has greeted these threats -- ones delivered to at least another half-dozen drone companies in North Carolina -- with allegations that this regulation violates his First Amendment rights.

[B]oth the Board and the statutes it enforces violate the First Amendment at a bedrock level. Simply, the projects the Board targets—aerial photos, data, 3D digital models, and the like—are speech that is fully protected by the First Amendment.

As Jones points out in the lawsuit, the restrictions the board places on aerial photography are content-based. Some aerial photos are fine but those containing any sort of useful data, like the stuff that appears on sites like Google Maps (elevations, geographical coordinates, property boundaries), are considered to be land surveying even if -- as Jones has made clear to customers -- he does not offer surveying services. He has also made it explicit the photos customers purchased from him did not establish property lines and could not be used for legal purposes.

At this point, Jones' drone photography business is on hold. Hopefully the court will find in his favor and let him get back to work. If the state really wants to protect surveyors, it should nudge them towards getting commercial drone operator licenses. This would foster competition, rather than ensure surveyors who have been slow on the tech uptake still have a captive market.

Filed Under: 1st amendment, drones, michael jones, north carolina, surveyor

Newegg Battles World's Most Litigious Patent Troll Over Bogus Claims Of 'Inventing' E-Commerce Encryption

from the good-luck,-newegg dept

Joe Mullin is down in an East Texas court room, covering all the details of a key patent lawsuit, pitting the world's most litigious patent troll, Erich Spangenberg, against well-known electronics retailer, Newegg, a company that has vowed never to settle with patent trolls -- a strategy that has been quite successful so far. Spangenberg is infamous for his "sue first, license later" approach to patent trolling, but the details revealed during the lawsuit show how profitable it is. Spangenberg has sued a ton of companies over this very patent -- with nearly all of them settling for much less than it would cost to fight a patent suit in court (fighting is estimated to cost upwards of $1 to $2 million). Nearly all the settlements are for much less:

Target had a website; Target got sued by TQP. It got out of the case by paying $40,000.

Some paid less than that—but most paid more.

Dodge & Cox, a mutual fund, paid a bit more than $25,000. Pentagon Credit Union paid $65,000. QVC paid $75,000. MLB Advanced Media paid $85,000. PetSmart paid $150,000. PMC paid $400,000. Cigna paid $425,000. Bank of America paid $450,000. First National paid $450,000. Visa paid $500,000. Amazon, Newegg's much larger competitor, paid $500,000. UPS paid $525,000.

IBM paid $750,000. Allianz Insurance paid $950,000. Microsoft paid $1,000,000.

All in all, Spangenberg has squeezed $45.37 million out of licenses for this one patent, which almost certainly does not actually cover the encryption used in online shopping, as Spangenberg claims. Oh yeah: Spangenberg's deal with the original inventor of the patent? The inventor gets 2.5% of the money, plus $350/hour for consulting. End result? He's made $588,000, while Spangenberg keeps the rest -- all on a patent he bought for about $750,000.

And, yes, the patent (which has since expired) is highly questionable in the first place. While Spangenberg's lawyers (representing his shell company called TQP) tried to claim that the inventor, Michael Jones, was some sort of visionary genius who predicted the world of e-commerce, there's no actual evidence to support this. Newegg (thankfully) has famed cryptography expert Whitfield Diffie on hand to call bullshit on the claims that Jones (a) invented anything special or (b) that his invention is even remotely in use on e-commerce sites today. Diffie, of course, is one of the inventors of public key cryptography, which happened prior to Jones' invention, and is what is actually used online.

Jurors got a short dose of the conventional historical record when Newegg lawyer Kent Baldauf gave them a preview of Diffie's testimony. "It's Dr. Diffie's invention that allows credit cards to be encrypted today," explained Kent Baldauf. "He's the one that figured out how you could send information to some remote server that you've never had any contact with before without these keys somehow being pre-set and pre-arranged in a closed system."

Baldauf also raised the basic themes of Newegg's defenses. The patent described symmetric cryptography—two hard-coded modems talking to each other. It wasn't that different in theory than the code books that have been exchanged since ancient times. It had nothing to do with public key cryptography that kept Internet data safe; Newegg therefore does not infringe, he argued.

To boot, to the extent Jones is an inventor at all, he isn't the first. The RC4 cipher was designed two years before Jones' patent filing and was combined with Lotus Notes by Ron Rivest of RSA Security.

Of course, with a patent jury trial in East Texas, you never now how things are going to turn out. But, this case is at least interesting in helping to open the books on how patent trolling works -- getting tons of companies to pay up on questionable patents by offering "settlement" rates below what a lawsuit would cost, even if the patent is totally bogus. And, kudos, once again, to Newegg for fighting this. It could have easily settled like all those other companies, but is fighting this one out on principle -- and in the hope that it will stop the next patent troll from doing the shakedown game.

Filed Under: e-commerce, encryption, erich spangenberg, michael jones, patents, whitfield diffie
Companies: newegg, tqp