July 2015

Leading tech companies including Google, Facebook, Dell, and eBay are weighing in on Samsung’s side in the latest skirmish in Apple’s long-running patent war over Android. Earlier in July, a coalition of eight tech giants filed a friend of the court brief in the Federal Circuit court of appeals, which hears all appeals in patent cases. The tech firms agree with Samsung that a key damages calculation approved by a three-judge panel of the appellate court in May not only misread patent law, but if not reversed, would pose a serious risk to all high-tech inventions. “If allowed to stand,” the coalition argues, “that decision will lead to absurd results and have a devastating impact,” especially for tech companies “who spend billions of dollars annually on research and development for complex technologies and their components.”

The appeal was based on a 2011 case, in which a lower court attributed the entire value of several Samsung Galaxy smartphones and tablets to a handful of basic design features patented by Apple. The features at issue are as simple as the rectangular shape and rounded corners of Apple’s devices, as well as its translucent screen and colorful icons. Contradictory treatment of the same product features under patent and trademark law underscores longstanding doubts about the continued value of design patents, especially in software and consumer electronics, whose design and function are increasingly hard to separate. If rounded corners are too functional to be trademarked, in other words, why give them more potent if shorter-lived protection under a design patent, especially when the total-profit rule may apply? A majority of the Federal Circuit’s 12 active judge must agree to rehear the case en banc. If that fails, Samsung could try appealing the panel’s decision to the U.S. Supreme Court.

[Commentary] The hack of the "dating" site AshleyMadison.com, which threatens to expose the personal information of millions of people who may be cheating on their spouses, was initially met with snark. So what if some alleged cheaters are going to be exposed, right? But the hackers' reasons for holding the information hostage were not actually about the sanctity of marriage vows -- in fact, they point to a much deeper and more widespread issue. In short, can any data you hand over to a faceless online company ever truly be removed?

Americans want privacy online, and in the post-Edward Snowden/NSA era, we’re more vocal than ever about that, even if we may have no clue how to get what we want. According to a Pew Research Center study, 93 percent of adults said it’s important that they be able to control who can access information about them, and 90 percent said controlling what information is gathered about them is also important. It’s clear, though, that once we put information online, on banking sites, on medical sites, on dating sites, and on social media sites, we may lose that control. Ashley Madison promised to delete users’ information if they ponied up $19, but The Impact Team insists it fails to do so. In the end, it may well come down to a question of who do we actually believe when something like this -- the complete deletion of your data -- is so difficult to prove.

[Commentary] Earlier in July, the New America Foundation’s Open Technology Institute (OTI) released a short paper attacking usage-based broadband pricing. Provocatively entitled “Artificial Scarcity,” it purports to show “how data caps harm consumers and innovation.” But the report is short on evidence in support of its proposition, and overall it fails to present a balanced view of various broadband pricing strategies. While there are several points worth discussing, I will focus on five key errors:

Error 1: Using the term “data caps”: As an initial matter, the report leans heavily on the loaded term “data caps,” which is something of a misnomer. While there may be some Internet service providers that terminate a customer’s service upon reaching a monthly data threshold, most usage-based pricing plans may be more accurately described as “pay-for-what-you-use” plans.
Error 2: Thinking of fixed and wireless broadband markets as one and the same: OTI’s report commits a fundamental error endemic in broadband policy discussions: it conflates fixed and wireless broadband markets.
Error 3: Assuming that low-income households will be especially harmed by usage-based pricing: OTI argues that charging according to use disproportionately harms low-income and minority households, as they are more likely to rely on smartphones as their primary Internet access point. But the report itself shows otherwise.
Error 4: Perpetuating the myth of “artificial scarcity”: Fundamentally, the report’s basic claim that carriers create “artificial scarcity” though usage-based pricing is flawed. Even assuming a carrier would restrain capacity to charge supra-competitive prices, most economists would explain that it could only sustain this practice if it has market power.
Error 5: Concluding that revenue growth indicates a market failure: Similarly, OTI’s report suggests it is problematic that average revenue per user for retail postpaid data rose from 2009 to 2012.

Usage-based pricing may not be ideal for all network operators. The OTI report shows that most high-capacity fixed networks such as Comcast and Verizon have moved away from the practice. But as we’ve written before, it can help alleviate congestion on capacity-constrained networks and can allow for more efficient pricing, potentially narrowing the digital divide by allowing for lower-priced entry-level broadband plans. Trumped-up concerns about “artificial scarcity” should not drive a per se ban on a potentially consumer-friendly pricing model.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] '“Build on This” is a letter series between education leaders. Our second pair is Karen Cator, who leads the nonprofit Digital Promise, and David Liu, the Chief Operating Officer of Knewton, an educational technology company. This is the first of four letters.'

Dear David,

We are both working to solve the problem of equity in education. I’ve spent my career in education, first as a teacher, and then as a lifelong advocate of improving learning opportunities for EVERYONE through technology. But to actually realize the full advantages of learning, we have to close the Digital Learning Gap. This goes beyond the Digital Divide, which focuses on adequate access to technology. Closing the Digital Learning Gap means giving students the ability to learn how to use the technology in powerful ways. As a first step, educators, parents, and policymakers (that includes us) have to figure out how to enable access to personal technology and the Internet, both at school and at home. Second step: all learners and educators must gain sufficient digital literacy to participate fully and responsibly. Without knowing the whys and the hows, access can be meaningless. Third, students must ALL have ample opportunities to use the technology to solve, collaborate, research, design, create, and publish  --  so they can be lifelong learners. I’m guessing you will agree with this premise. If so, I am interested in your take on how we can best make this happen. Let’s be real about the bumps we need to be wary of along the way.

[Karen Cator leads the nonprofit Digital Promise]