Immigration Reform: It’s Time for a Course Correction

The National Law Review recently published an article regarding Immigration Reform written by Susan J. Cohen with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.:

The first two months of 2013 have seen a flurry of activity relating to immigration reform. President Obama is pushing for comprehensive reform as are powerful factions within both the Senate and the House. And the political will and rising tide of opinion in favor of reform are making for unusual bedfellows, as exemplified by the recent joint statement of principles from the American Chamber of Commerce and the AFL-CIO.

But in this same timeframe, lawmakers anxious to change current immigration law to create new pathways for entrepreneurs and highly educated immigrants have introduced a number of bills designed for this purpose, including the Immigration Innovation (I²) Act of 2013 introduced by Senators Hath, Klobuchar, Rubio and Coons and the Startup Act 3.0, introduced by Senators Moran, Warner and Coons. These bills contain many excellent provisions that make tremendous sense, addressing shortcomings and deficiencies in our current law. For example, the I² bill would significantly increase the H-1B cap and would exempt graduates of U.S. advanced degree programs from the cap. It would authorize employment for the spouses of H-1B workers and would make it easier for those workers to move from one company to another. It would also streamline the green card process and eliminate the enormous backlogs in the current system. The Startup Act 3.0 would provide a new and much-needed work visa for foreign entrepreneurs who can attract angel or venture funding to their new U.S. ventures.

Our immigration laws are so broken and outdated that only comprehensive reform will correct our course. And the lawmakers who have introduced bills such as I² and the Startup Act 3.0 clearly hope that their prescriptions for specific improvements will be incorporated into any final comprehensive bill. But should comprehensive reform prove elusive, at a minimum Congress should pass some version of these bills, to attract and retain the best and the brightest of our foreign students and entrepreneurs, and help to boost and strengthen the U.S. economy.

White Collar Crime Institute – March 6-8, 2013

The National Law Review is pleased to bring you information about the upcoming White Collar Crime Institute:

The program will provide an in-depth analysis of three recent high visibility trials by the lawyers involved in the cases. The many topics covered will include: ethical pitfalls and blunders in white collar practice, conducting global investigations (including issues of competing laws), data privacy and blocking statutes, trial tactics in white collar cases, Brady obligations, international issues in white collar practice (including obtaining evidence abroad), handling of, and dealing with, issues related to electronically stored materials, sentencing guidelines and arguing for a departure, updates and trends in securities and FCPA enforcement, and more!

State Law Resale Price Maintenance: We’re not in Kansas anymore

Jason C. Hicks with Womble Carlyle Sandridge & Rice, PLLC recently had an article featured in The National Law Review titled, State Law Resale Price Maintenance: We’re not in Kansas anymore:

I recently participated in a roundtable discussion on state law resale price maintenance actions presented by the ABA Section of Antitrust Law.

The discussion focused on the Kansas Supreme Court’s decision in O’Brien v. Leegin, in which the court determined that vertical price fixing was still per se illegal under Kansas antitrust laws despite the fact that such conduct is analyzed under the rule of reasons under federal antitrust law. One of the participants suggested that the if the logic of the Kansas Supreme Court’s decision was extended, then all types of vertical restraints (i.e. geographic restrictions, non-compete agreements) which are typically analyzed under a reasonableness standard, may be subject to attack under the per se rule. Other participants dismissed such concerns, but noted that state antitrust law can be (and often is) more restrictive than federal antitrust law.

A Deputy Attorney General for the State of California described several post-Leegin developments in state prosecutions of RPM and MAP agrements, including New York’s action against Tempur-Pedic. The takeaway from that discussion seemed to be that, regardless of the outcome of those cases (which were resolved in favor of the manufacturer), state enforcers may still consider certain RPM and MAP agreements as per se antitrust violations. Additionally, state enforcers may take an especially narrow view of the Colgate doctrine, which allows a business to unilaterally announce the terms and conditions upon which it will do business with its retailers/resellers.

At the conclusion of the program, one participant suggested that attorneys practicing in this area should give advice to their clients as if Leegin were never decided. In other words, sometimes state law trumps federal law. That is exactly what we have been saying on this blog ever since the Leegindecision was announced.

White Collar Crime Institute – March 6-8, 2013

The National Law Review is pleased to bring you information about the upcoming White Collar Crime Institute:

Federal Court Rejects Americans with Disabilities Act (ADA) Suit Over Random Alcohol Testing of Probationary Plant Employees

The National Law Review recently published an article regarding Random Alcohol Testing written by Robert S. Nichols, Robert E. Sheeder, and Amy Karff Halevy with Bracewell & Giuliani LLP:

A federal judge in Pennsylvania has dismissed an Equal Employment Opportunity Commission challenge to U.S. Steel Corporation’s random alcohol testing of probationary employees at one of the company’s most safety sensitive facilities. The Court’s ruling in this carefully watched suit is significant for employers because it represents a forceful rejection of one of the more extreme positions the EEOC has taken in interpreting how the Americans with Disabilities Act (ADA) regulates workplaces.

EEOC’s Restrictive Interpretation of Employer Rights

The EEOC has adopted a very restrictive view of an employer’s right to conduct across-the-board medical examinations or inquiries of current employees even when the examination or inquiry is plainly motivated by workplace safety concerns. According to the EEOC, employers are prohibited in most circumstances from conducting generalized medical examinations, including random alcohol testing or periodic physical examinations of current employees.

The EEOC has pointed to a provision of the ADA that provides that an employer may not “require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.” 42 U.S.C. § 12112(d)(4)(A). Conducting random testing for the unlawful use of drugs, as opposed to testing for the use of alcohol, does not create the same legal impediments because a test for the unlawful use of drugs is generally not regarded as a “medical examination” under the ADA.

The very limited exceptions to this prohibition on across-the-board medical examinations or inquiries of current employees that the EEOC has recognized include examinations of certain public safety employees in police and firefighter positions as well as, of course, examinations or inquiries that are required by other federal agencies, such as the Department of Transportation.

EEOC Lawsuit Against U.S. Steel

In the U.S. Steel suit, the EEOC argued that across-the-board medical examination or inquiries, including random or other generalized alcohol testing, could not be justified by the business necessity defense even in a highly safety sensitive work environment. Rather, the EEOC has taken the position that alcohol testing can only be justified based upon individualized suspicion that the particular employee to be tested was under the influence of alcohol at work.

U.S. Steel argued in a motion for summary judgment that given the highly safety sensitive nature of the plant at issue, where employees work with materials that are at temperatures of more than 2,100 degrees, random testing was justified as a matter of business necessity.

The judge in the case granted U.S. Steel’s motion and dismissed the EEOC’s claims finding that the random alcohol testing of probationary employees was justified by the business necessity defense. The Court first pointed out that there was no disputing that safety in and of itself can be a matter of business necessity. As a result, according to the Court, the only question remaining was whether the policy of random alcohol testing served that asserted business necessity. After analyzing the facts at issue, the judge found that the alcohol testing policy plainly served the business necessity of workplace safety.

In doing so, the Court specifically rejected the EEOC’s position that across-the-board medical examinations or inquiries of current employees could only be justified in the case of law enforcement or firefighting employees. The Court explained that there was no legitimate basis for not extending the same rationale to employees in other highly safety sensitive positions. Also, the Court noted that in this instance selecting employees for testing based on individualized suspicion would not work effectively because personal protective equipment obscures the U.S. Steel employees’ faces and speech.

Additionally, the Court concluded that the random alcohol testing approach was not inconsistent with the ADA’s goal of preventing employers from targeting specific employees with disabilities based upon stereotypes and misconceptions. The Court pointed out that, after all, random testing, as opposed to individualized suspicion testing, was not potentially based upon conclusions about particular individuals with disabilities.

The Court also noted that the testing program at issue was the product of negotiations with the union representing plant employees and not a process unilaterally imposed by the employer.

Takeaways

The decision in the U.S. Steel case offers employers new hope that more federal courts will reject the EEOC’s very restrictive view of the right to conduct across-the-board medical examinations or inquiries, including, across-the-board random alcohol testing of employees in certain safety sensitive positions. While this decision is encouraging, employers need to recognize that the EEOC continues to adhere to its position regarding this issue and other federal courts may ultimately side with the EEOC. Nonetheless, the Court’s decision in the U.S. Steel suit is an encouraging sign for employers that courts, recognizing the importance of workplace safety, may adopt a far more reasonable and pragmatic view than the EEOC on this question of across-the-board medical examinations and inquiries of current employees.

Rainmaker Retreat: Law Firm Marketing Boot Camp

The National Law Review is pleased to bring you information about the upcoming Law Firm Marketing Boot Camp:

WHY SHOULD YOU ATTEND?

Have you ever gone to a seminar that left you feeling motivated, but you walked out with little more than a good feeling? Or taken a workshop that was great on style, but short on substance?

Ever been to an event that was nothing more than a “pitch fest” that left a bad taste in your mouth? We know exactly how you feel. We have all been to those kinds of events and we hate all those things too. Let me tell you right up front this is not a “pitch fest” where speaker after speaker gets up only trying to sell you something.

We have designed this 2 day intensive workshop to be content rich, loaded with practical content.

We are so confident you will love the Rainmaker Retreat that we offer a 100% unconditional money-back guarantee! At the end of the first day of the Rainmaker Retreat if you don’t believe you have already received your money’s worth, simply tell one of the staff, return your 70-page workbook and the CD set you received and we will issue you a 100% refund.

We understand making the decision to attend an intensive 2-day workshop is a tough decision. Not only do you have to take a day off work (all Rainmaker Retreats are offered only on a Friday-Saturday), but in many cases you have to travel to the event. As a business owner you want to be sure this is a worthwhile investment of your time and money.

WHO SHOULD ATTEND?

Partners at Small Law Firms (less than 25 attorneys) Solo Practitioners and Of Counsel attorneys who are committed to growing their firm. Benefits you will receive:

Solo practitioners who need to find more clients fast on a shoe-string budget. In addition to all the above benefits, solo attorneys will receive these massive benefits:

Law Firm Business Managers and Internal Legal Marketing Staff who are either responsible for marketing the law firm or manage the team who handles the law firm’s marketing. In addition to all the above benefits, Law Firm Business Managers and Internal Legal Marketing Staff will also receive these benefits:

Of Counsel Attorneys who are paid on an “eat what you kill” basis. In addition to all the above benefits, Of Counsel attorneys will also receive these benefits:

Associates who are either looking to grow their book of new clients in the next 6-12 months or want to launch their own private practice. In addition to all the above benefits, Associates will also receive these benefits:

What Constitutes an Abstract Idea in Intellectual Property?

Allan Z. Litovsky and Michaele Turnage Young of Greenberg Traurig, LLP recently had an article, What Constitutes an Abstract Idea in Intellectual Property?, published in The National Law Review:

On February 8, 2013, the United States Court of Appeals for the Federal Circuit (“CAFC”) reheard CLS Bank International v. Alice Corporation en banc. The en banc CAFC opinion that eventually results may clarify the long-unsettled question of what constitutes an “abstract idea” and is thus unpatentable under Section 101 of the Patent Act. The CAFC’s ruling is expected to have widespread implications, which may affect how courts, the United States Patent and Trademark Office, patent prosecutors, patent litigators, inventors, and patent holders analyze and value certain patents and patent applications. The opinion is expected to be of particular importance in the fields of software and business method patents.

I. What is the abstract ideas exception and why does it matter?

Section 101 of the Patent Act provides, “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101 (2006 & Supp. V 2011). These categories (i.e., processes, machines, manufactures, and compositions of matter) are subject to three exceptions – laws of nature, physical phenomena, and abstract ideas – that, while not apparent from the statute’s text, are judge-made law constituting “stare decisis going back [more than] 150 years.” Bilski v. Kappos, — U.S. —-, 130 S. Ct. 3218, 3225, 177 L. Ed. 2d 792 (2010) (citing Le Roy v. Tathum, 14 How. 156, 174-75, 14 L. Ed. 367 (1853)). Thus, a patent application may be denied, or an issued patent may be ruled invalid, if it is deemed to be drawn to an abstract idea.

II. The CAFC is deeply divided about what constitutes an abstract idea.

Plenty of ink has been spilled and much time has been spent analyzing past cases, yet the CAFC remains split about what constitutes an abstract idea. Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1327 (Fed. Cir. 2011) (“Both members of the Supreme Court and this court have recognized the difficulty of providing a precise formula or definition for the judge-made ineligible category of abstractness.” (citations omitted)), vacated sub nom. WildTangent, Inc. v. Ultramercial, LLC, — U.S. —-, 132 S. Ct. 2431, 182 L. Ed. 2d 1059 (2012). Neither the Supreme Court nor the CAFC has defined the word “abstract.” Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057, 1065 (Fed. Cir. 2011) (citing Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir. 2010), and Bilski, 130 S. Ct. at 3236 (Stevens, J., concurring)). As the CAFC put it,

This effort to descriptively cabin § 101 jurisprudence is reminiscent of the oenologists trying to describe a new wine. They have an abundance of adjectives – earthy, fruity, grassy, nutty, tart, woody, to name just a few – but picking and choosing in a given circumstance which ones apply and in what combination depends less on the assumed content of the words than on the taste of the tongue pronouncing them.

MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1259 (Fed. Cir. 2012). The waters are even murkier for business method patents. Id.

A. Points of agreement.

The U.S. Supreme Court has stated that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. —-, 132 S. Ct. 1289, 1293, 182 L. Ed. 2d 321 (2012). Moreover, while abstract ideas themselves are not patentable, the application of an abstract idea is patent-eligible. Id. at 1293-94 (quoting Diamond v. Diehr, 450 U.S. 175, 187, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981)). In addition, there is no per se rule against business method patents. Bilski, 130 S. Ct. at 3228-29. Furthermore, the machine or transformation test – wherein “‘[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing’”– while not the sole test of whether an invention is drawn to an abstract idea, is “a useful and important clue.” Bilski, 130 S. Ct. at 3225-27 (quoting In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008)). Also, an invention that can be performed entirely in one’s head or with pen and paper is unpatentable. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). In addition, a patent may not wholly preempt an abstract idea. Gottschalk v. Benson, 409 U.S. 63, 71-72, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972). Lastly, once it is apparent that the claims of a patent are drawn to an abstract idea, insignificant post-solution activity or an attempt to limit the claims to a particular technological environment are not enough to render the claims patent-eligible. Parker v. Flook, 437 U.S. 584, 590, 98 S. Ct. 2522, 57 L. Ed. 2d 451 (1978); Bilski, 130 S. Ct. at 3230 (citations omitted). While the foregoing principles are helpful, they have not made it clear for courts how various patent claims should be analyzed to determine whether they claim an abstract idea.

B. Whither goest ‘manifestly evident’?

In 2010, Chief Judge Rader, writing for a panel of the CAFC also composed of Judges Newman and Plager, declared: “this court . . . will not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.” Research Corp., 627 F.3d at 868. The current divide amongst the CAFC judges may center around whether to follow the “manifestly evident” line of precedent, thereby interpreting the abstract ideas exception narrowly (invalidating fewer patents), or whether to disregard it, thereby interpreting the abstract ideas exception broadly (thereby making it harder to satisfy the Section 101 requirements).

In particular, while Judges Rader, Linn, Plager, and Newman have construed the abstract ideas exception narrowly; Judges Prost, Schall, Mayer, Moore, Bryson, Wallach, and Dyk have construed the abstract ideas exception broadly; and Judges O’Malley and Lourie have ruled both ways. For example, in Myspace, Judges Newman and Plager held that it would have to be “clear and convincing beyond peradventure – that is, under virtually any meaning of ‘abstract’ – that the claim at issue is well over the line” for it to be well-advised for a court to address Section 101 in an infringement suit. 672 F.3d at 1261. In addition, in Ultramercial, which the Supreme Court has since vacated and remanded to the CAFC, Chief Judge Rader, writing for a panel also composed of Judges Lourie and O’Malley, held the claims patentable and wrote, “The eligibility exclusion for purely mental steps is particularly narrow.” Id. at 1329-30, vacated sub nom. WildTangent, 132 S. Ct. 2431. Similarly, in Classen, Judges Newman and Rader took a narrow view of the abstract ideas exception and reasoned that claims must be “manifestly abstract” to be found invalid, while Judge Moore, dissenting, would have invalidated claims that the majority held valid. 659 F.3d 1057.

In contrast, in PerkinElmer, Inc. v. Intema Ltd., No. 2011-1577, 2012 WL 5861658 (Fed. Cir. Nov. 20, 2012) (nonprecedential), Judges Bryson, O’Malley, and Wallach found claims invalid without even mentioning the “manifestly abstract” line of precedent. Judges Prost, Schall, and Moore did the same in Fort Properties, Inc. v. American Master Lease, 671 F.3d 1317 (Fed. Cir. 2012). Similarly, in Cybersource, Judges Dyk, Bryson, and Prost viewed the abstract ideas exception broadly. 654 F.3d 1366. Likewise, in Bancorp Services v. Sun Life Assurance Co., 687 F.3d 1266 (Fed. Cir. 2012), Judges Lourie, Prost, and Wallach held claims invalid, after distinguishing Research Corp. In addition, Judge Mayer advocated “a robust application of section 101 at the summary judgment stage” in his dissent in Highmark, Inc. v. Allcare Health Management Systems, Inc., 687 F.3d 1300, 1324 (Fed. Cir. 2012) (Mayer, J., dissenting).

IV. And then there was Alice.

At issue in Alice are Alice Corp.’s four patents, which cover a computerized trading platform for having a third party settle obligations between a first and a second party, thereby eliminating settlement risk – the risk that one or both parties would fail to perform. Alice, 685 F.3d at 1343.

Judges Linn and O’Malley found the claims patentable, and held, “when – after taking all of the claim recitations into consideration – it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101.” Id. at 1352. Judges Linn and O’Malley continued, “Unless the single most reasonable understanding is that a claim is directed to nothing more than a fundamental truth or disembodied concept, with no limitations in the claim attaching that idea to a specific application, it is inappropriate to hold that the claim is directed to a patent ineligible ‘abstract idea’ under 35 U.S.C. § 101.” Id. Judges Linn and O’Malley emphasized the importance of viewing the claim as a whole, writing, “nothing in the Supreme Court’s precedent, nor in ours, allows a court to go hunting for abstractions by ignoring the concrete, palpable, tangible, and otherwise not abstract invention the patentee actually claims.” Id. at 1351. Judges Linn and O’Malley continued, “It is fundamentally improper to paraphrase a claim in overly simplistic generalities in assessing whether the claim falls under the limited ‘abstract ideas’ exception to patent eligibility under 35 U.S.C. § 101.” Id.

Judge Prost disagreed. She issued a dissent stating that the majority ruling defied the “Supreme Court’s unanimous directive to apply the patentable subject matter test with more vigor.” Id. at 1356 (Prost, J., dissenting). Judge Prost continued, “Worse yet, it creates an entirely new framework that in effect allows courts to avoid evaluating patent eligibility under § 101 whenever they so desire.” Id. (Prost, J., dissenting). In addition, Judge Prost took a different approach to the claims, analyzing their patentability under Section 101 only after she stripped them of “jargon”. Id. at 1357-58 (Prost, J., dissenting) (setting forth what Judge Prost called a “plain English translation” of the claims). Judge Prost noted, “The majority objects that ‘[i]t is impermissible for the court to rewrite claims as it sees them.’ . . . But that is precisely what courts do in claim construction everyday.” Id. at 1358 (Prost, J., dissenting) (citation omitted).

V. The CAFC rehears Alice en banc.

Importantly, only judges in regular active service and any senior judge who served on the original panel could participate in the en banc rehearing of Alice. See 28 U.S.C. § 46 (2006 & Supp. V 2011). Thus, Judge Bryson, who just assumed senior status on January 7, 2013, and Senior Judges Mayer, Plager, Clevenger, and Schall did not participate in the rehearing, while Senior Judge Linn – who served on the original Alice panel – opted to participate. That left Judges Rader, Newman, and Linn, who have construed the abstract ideas exception narrowly; Judges Prost, Moore, Wallach, and Dyk, who have construed the abstract ideas exception broadly; Judges O’Malley and Lourie, who have ruled both ways; and Judge Reyna, who is so new that he hasn’t yet served on a panel construing the abstract ideas exception.

Despite active questioning from the CAFC judges, the en banc rehearing of Alice did not provide clear guidance as to how the eventual opinion will affect the Section 101 analysis. Rather, the en banc hearing put the CAFC judges’ differences of opinion on display. For example, while Judge Linn maintained his position that it is inappropriate to distill a claim down to its essentials, another CAFC judge (whose identity was not apparent from the audio recording) appeared to do just that, suggesting that the claim was to the goal that Alice Corp. sought to achieve, rather than to any particular way of achieving that goal. Similarly, Judge Moore read the claims in light of the specification, while another CAFC judge appeared to strictly limit his construction to the language of the claims. Several CAFC judges, including Judges Moore and Linn, expressed a concern that Section 101 should not serve the same function of screening for inventiveness as Sections 102 and 103. Other concerns raised by the CAFC judges included preemption, post-solution activity, whether the claims had been construed correctly as requiring computer-implementation, and whether Section 101 had to be addressed before Sections 102, 103, and 112.

VI. Conclusion.

The CAFC’s rift has left courts, patent litigators, prosecutors, patent holders, and inventors with no clear rules to define an abstract idea. The opinion that eventually results from the en banc rehearing of Alice may lend some clarity to this long-unsettled area of the law. Interested parties should also keep an eye out for what happens in Ultramercial v. WildTangent, No. 2010–1544, as that opinion may also have widespread implications regarding the fate of the abstract ideas exception. See WildTangent, 132 S. Ct. 2431, granting cert., vacating, and remanding Ultramercial, 657 F.3d 1323.

3rd Annual Upstream Oil and Gas Contract Management Conference – March 12-14, 2013

The National Law Review is pleased to bring you information about the upcoming 3rd Annual Upstream Oil and Gas Contract Management Conference:

March 12-14, 2013

Houston, Texas

Key Features

Pre-Conference Workshop A: Tactics to sustain the relationship between operator and service provider when drafting global contracts

Pre-Conference Workshop B: Drafting robust service level agreements in a post Macondo world with WeatherFord International

Event Focus

3rd Annual Upstream Oil and Gas Contract Management

As organizations go back to the Gulf for exploration, the allocation of liability in E&P projects have become vaster. The laws around the world have been unpredictably changing, leading the oil and gas industry question the quality of their contracts. The changes within the industry have all parties in a contract concerned about liability, risk and overall validity of their contracts. With contracts being the nexus of any successful job, it is important to review and analyze the changes within the industry.

The marcus evans 3^rd Annual Upstream Oil and Gas Contract Management Conference will go through the entire lifecycle of a contract. We will determine the after effects of post Macondo, demystify the changes in indemnity and warranty clauses and develop tactics to diminish risk in these contracts. By analyzing both domestic and international contracts, we will bring the most current and pressing issues to the forefront of this conference to help troubleshoot the core issues of contract.

Attending this Premier marcus evans Conference will enable you to:

Identify the changes in risk allocation since the Gulf reopened for exploration with Eni US Operating Company
Investigate insurance protection to ensure a more balanced and reasonable contract with Seneca Resources
Implement Preferential Rights to Purchase clauses in contracts and avoid pitfalls when drafting these clauses with Apache Corporation
Analyze issues in drilling contracts to mitigate risks with Occidental Oil and Gas Corporationand Superior Energy Services, Inc.
Review the positive and negative implications to contracts when an organization undergoes mergers and acquisitions with GE Oil & Gas.

Industry leaders attending this conference will benefit from a dynamic presentation format consisting of workshops, panel discussions, and industry-specific case studies that provide accurate, real-world knowledge. Attendees will experience highly interactive conference sessions, 10-15 minutes of Q&A time after each presentation, 4+ hours of networking, and exclusive online access to materials post-event.

Federal Trade Commission (FTC) Recommends Privacy Practices for Mobile Apps

The National Law Review recently published an article, Federal Trade Commission (FTC) Recommends Privacy Practices for Mobile Apps, written by Daniel F. Gottlieb, Randall J. Ortman, and Heather Egan Sussman with McDermott Will & Emery:

On February 1, 2013, the Federal Trade Commission (FTC) released a report entitled “Mobile Privacy Disclosures: Building Trust Through Transparency” (Report), which urges mobile device application (app) platforms and developers to improve the privacy policies for their apps to better inform consumers about their privacy practices. This report follows other recent publications from the FTC concerning mobile apps—including “Mobile Apps for Kids: Disclosures Still Not Making the Grade,” released December 2012 (December 2012 Report), and “Mobile Apps for Kids: Current Privacy Disclosures are Disappointing,” released February 2012 (February 2012 Report)—and the adoption of the amended Children’s Online Privacy Protection Act (COPPA) Rule on December 19, 2012. (See “FTC Updates Rule for Children’s Online Privacy Protection” for more information regarding the recent COPPA amendments.

Among other things, the Report offers recommendations to key stakeholders in the mobile device application marketplace, particularly operating system providers (e.g., Apple and Microsoft), application developers, advertising networks and related trade associations. Such recommendations reflect the FTC’s enforcement and policy experience with mobile applications and public comment on the matter; however, where the Report goes beyond existing legal requirements, “it is not intended to serve as a template for law enforcement actions or regulations under laws currently enforced by the FTC.” Nevertheless, such key stakeholders should take the FTC’s recommendations into account when determining how they will collect, use and transfer personal information about consumers and preparing privacy policies to describe their information practices because they reflect the FTC’s expectations under its consumer protection authorities.

At a minimum, operating system providers and application developers should review their existing privacy policies and make revisions, as necessary, to comply with the recommendations included within the Report. However, all key stakeholders should consider the implications of recommendations specific to their industry segment, as summarized below.

Operating System Providers

Characterized within the Report as “gatekeepers to the app marketplace,” the FTC states that operating system providers have the “greatest ability to effectuate change with respect to improving mobile privacy disclosures.” Operating system providers, which create and maintain the platform upon which mobile apps run, promulgate rules that app developers must follow in order to access the platform and facilitate interactions between developers and consumers. Given their prominent role within the app marketplace, it is not surprising that the FTC directs numerous recommendations toward operating system providers, including:

Just-In-Time Disclosures. The Report urges operating system providers to display just-in-time disclosures to consumers and obtain express, opt-in (rather than implied) consent before allowing apps to access sensitive information like geolocation (i.e., the real world physical location of a mobile device), and other information that consumers may find sensitive, such as contacts, photos, calendar entries or recorded audio or video. Thus, operating system providers and mobile app developers should carefully consider the types of personal information practices that require an opt-in rather than mere use of the app to evidence consent.
Privacy Dashboard. The Report suggests that operating system providers should consider developing a privacy “dashboard” that would centralize privacy settings for various apps to allow consumers to easily review the types of information accessed by the apps they have downloaded. The “dashboard” model would enable consumers to determine which apps have access to different types of information about the consumer or the consumer’s device and to revisit the choices they initially made about the apps.
Icons. The Report notes that operating system providers currently use status icons for a variety of purposes, such as indicating when an app is accessing geolocation information. The FTC suggests expansion of this practice to provide an icon that would indicate the transmission of personal information or other information more broadly.
Best Practices. The Report recommends that operating system providers establish best practices for app developers. For example, operating system providers can compel app developers to make privacy disclosures to consumers by restricting access to their platforms.
Review of Apps. The Report suggests that operating system providers should also make clear disclosures to consumers about the extent to which they review apps developed for their platforms. Such disclosures may include conditions for making apps available within the platform’s app marketplace and efforts to ensure continued compliance.
Do Not Track Mechanism. The Report directs operating system providers to consider offering a “Do Not Track” (DNT) mechanism, which would provide consumers with the option to prevent tracking by advertising networks or other third parties as they use apps on their mobile devices. This approach allows consumers to make a single election, rather than case-by-case decisions for each app.

App Developers

Although some practices may be imposed upon app developers by operating system providers, as discussed above, app developers can take several steps to adopt the FTC’s recommendations, including:

Privacy Policies. The FTC encourages all app developers to have a privacy policy, and to include reference to such policy when submitting apps to an operating system provider.
Just-In-Time Disclosures. As with the recommendations for operating system providers, the Report suggests that app developers provide just-in-time disclosures and obtain affirmative express consent before collecting and sharing sensitive information.
Coordination with Advertising Networks. The FTC argues for improved coordination and communication between app developers and advertising networks and other third parties that provide certain functions, such as data analytics, to ensure app developers have an adequate understanding of the software they are incorporating into their apps and can accurately describe such software to consumers.
Participation in Trade Associations. The Report urges app developers to participate in trade associations and other industry organizations, particularly in the development of self-regulatory programs addressing privacy in mobile apps.

Advertising Networks and Other Third Parties

By specifically including advertising networks and other third parties in the Report, the FTC recognizes that cooperation with such networks and parties is necessary to achieve the recommendations outlined for operating system providers and app developers. The recommendations for advertising networks and other third parties include:

Coordination with App Developers. The Report calls upon advertising networks and other third parties to communicate with app developers to enable such developers to provide accurate disclosures to consumers.
DNT Mechanism. Consistent with its recommendations for operating system providers, the FTC suggests that advertising networks and other third parties work with operating system providers to implement a DNT mechanism.

Trade Associations

The FTC states that trade associations can facilitate standardized privacy disclosures. The Report makes the following recommendations for trade associations:

Icons. Trade associations can work with operating system providers to develop standardized icons to indicate the transmission of personal information and other data.
Badges. Similar to icons, the Report suggests that trade associations consider developing “badges” or other visual cues used to convey information about a particular app’s data practices.
Privacy Policies. Finally, the FTC suggests that trade associations are uniquely positioned to explore other opportunities to standardize privacy policies across the mobile app industry.

Children and Mobile Apps

Commenting on progress between the February 2012 Report and December 2012 Report, both of which relied on a survey of 400 mobile apps targeted at children, the FTC stated that “little or no progress has been made” in increasing transparency in the mobile app industry with regard to privacy practices specific to children. The December 2012 Report suggests that very few mobile apps targeted to children include basic information about the app’s privacy practices and interactive features, including the type of data collected, the purpose of the collection and whether third parties have access to such data:

Privacy Disclosures. According to the December 2012 Report, approximately 20 percent of the mobile apps reviewed disclosed any privacy-related information prior to the download process and the same proportion provided access to a privacy disclosure after downloading the app. Among those mobile apps, the December 2012 Report characterizes their disclosures as lengthy, difficult to read or lacking basic detail, such as the specific types of information collected.
Information Collection and Sharing Practices. The December 2012 Report notes that 59 percent of the mobile apps transmitted some information to the app developer or to a third party. Unique device identifiers were the most frequently transmitted data point, which the December 2012 Report cites as problematic, suggesting that such identifiers are routinely used to create user “profiles,” which may track consumers across multiple mobile apps.
Disclosure Practices Regarding Interactive App Features. The FTC reports that nearly half of the apps that stated they did not include advertising actually contained advertising, including ads targeted to a mature audience. Similarly, the December 2012 Report notes that approximately 9 percent of the mobile apps reviewed disclosed that they linked with social media applications; however, this number represented only half of the mobile apps that actually linked to social media applications. Mobile app developers using a template privacy policy as a starting point for an app’s privacy policy should carefully tailor the template to reflect the developer’s actual privacy practices for the app.

Increased Enforcement

In addition to the reports discussed above and the revisions to the COPPA Rule, effective July 1, 2013, the FTC has also increased enforcement efforts relating to mobile app privacy. On February 1, 2013, the FTC announced an agreement with Path Inc., operator of the Path social networking mobile app, to settle allegations that it deceived consumers by collecting personal information from their mobile device address books without their knowledge or consent. Under the terms of the agreement, Path Inc. must establish a comprehensive privacy program, obtain independent privacy assessments every other year for the next 20 years and pay $800,000 in civil penalties specifically relating to alleged violations of the COPPA Rule. In announcing the agreement, the FTC commented on its commitment to continued scrutiny of privacy practices within the mobile app industry, adding that “no matter what new technologies emerge, the [FTC] will continue to safeguard the privacy of Americans.”

Key Takeaways

App developers and other key stakeholders should consider the following next steps:

Review existing privacy policies to confirm they accurately describe current privacy practices for the particular app rather than merely following the developer’s preferred template privacy policy
Where practical, update actual privacy practices and privacy policies to be more in line with the FTC’s expectations for transparency and consumer choice, including use of opt-in rather than opt-out consent models
Revisit privacy practices in light of heightened FTC enforcement under COPPA and its other consumer protection authorities

The IP Strategy Summit (TIPSS): Monetization – Harvesting Your IP

The National Law Review is pleased to bring you information about the upcoming Monetization: Harvesting Your IP conference:

April 23-24, 2013

New York

KEY TOPICS THAT WILL BE COVERED:

Evaluation of your IP
Monetization Models
Building a Monetization Strategy
Managing and communication across your organization
Selling your IP
Running a licensing program
Discover the Best Enforcement Strategies
Multi-National Litigation
Financial reporting of revenues

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