Dave Noderer's Blog

March 2015 Entries

ACT Flyin Washington DC - 3/22-24/2015

This past week I visited Washington, DC to take part in the annual ActOnline.org "flyin". Each year this organization of ~ 5000 software companies hosts 50 software and app developers to visit Washington and give briefings to capitol hill staffers and members on a number of subjects.

This year we discussed patent reform, access to cloud data here and abroad, child safety and privacy, internet domain name policy, device encryption and net neutrality.

On Monday we had briefings and discussions on the current status and issues on these and some other topics. The briefings last all day and are led by the ACTOnline staff but are very interactive.

This was my 5th fly in so I'm almost an old pro at it. Approximately 25% of the people are new each year with 75% alumni. For various reasons some people skip years or stop coming but there were a lot of familiar faces, many of whom I knew from other software conferences and organizations. There is a wide variety of age, gender and actual working skill sets but all are entrepreneurs and do or cause software and apps to be developed.

Patent reform has moved along recently with house bill HR.9 (aka "The Innovation Act") introduced last year and re-introduced this year in the house. It does have a lot of bi-partisan support with some sticking points. The purpose of this bill is to try and control "Patent" trolls. These are shadow companies (layers of corporations) that prey on small companies trying to extort money.

While we all believe in a strong patent system and of protecting intellectual property there are some bad patents and people exploiting the process. What happens is that a patent owner creates a list of target companies, most likely thousands, who MIGHT be violating the patent and send demand letters, not to sue but to try and get the company to send say $10,000 to settle. The letters are very vague because the company sending the letter has no idea if the target company is using the technology or violating the patent.

It is estimated that it costs $650,000 to fight a patent claim for under $1,000,000. Especially for a small business, it is cheaper to just pay the money which many do. Those a bit more savvy just ignore it to wait and see what happens.

The major points of the bill are forcing the claim letters to have clear and specific indication of what the patent violation is, transparency in patent ownership and it can cost a lot to find any details. Finally there is a fee shifting provision to force the party losing a frivolous challenge to pay the winners legal fees. This is under control of the judge so is not automatic. We want to keep a strong patent system!

Another aspect of the patent system where we asked that congress support the patent office making sure that the patent fees are used to train existing and hire more patent examiners. Having clear patents in the system will make enforcement easier and clearer.

A second area we discussed was the LEADS (Law Enforcement Access to Data) Act. From our standpoint the cloud is essential for our business and government actions threaten the cloud. The Department of Justice claims they have the authority to access the data of ant US country no matter where in the world it is stored.

Our concern is that we will be put in a situation where we have a choice of breaking a US law or breaking a law in another country. One of our members is based in the US with a partner and servers in Sweden. This Act will clarify that US law enforcement must comply with the law of the country where the data resides. The Act also provides technical updates that will greatly improve the speed and efficiency of information exchange. There is long standing precedent for cooperation between countries in the case of criminal search requests, we just ask that electronic data be given similar treatment as physical property.

One example given is say a foreign national has committed a crime and US law enforcement wants to search the hotel room at a Marriot in Germany. We would not expect that Marriot, a US company would allow that unless German laws were followed.

Internet governance is another area we discussed. Startups, small businesses and in fact the entire internet economy relies on a free and open internet and the Domain Name System (DNS) to allow business to be conducted. We are in the process of transitioning the oversight of ICANN (Internet Corporation for Assigned Names) from the Department of Commerce to a consensus driven, multi stakeholder structure. We want to make sure that procedures are in place to handle potential meddling or blocking by bad actor countries. Our request is that congress keeps a close eye on this transition to make sure the new process is robust, we only get to let go of it once. During our meetings, ActOnline President Jonathan Zuk was in Istanbul working on this process.

Another important area is online privacy for children. There is a FTC rule called COPPA (Children's Online Privacy Protection Act) that anyone collecting information from children needs to follow. Our organization and Moms With Apps has established a branding of "Know What's Inside" that members pledge to follow a set of requirements that actually go beyond COPPA. Unfortunately the FTC has not been enforcing this act and a number of large companies are getting away with violations of COPPA. We are asking congress to compel the FTC to start enforcing the laws already on the books not come up with new restrictions.

There are a few other areas but these are the main topics we discussed…

Visit http://www.ActOnline.org for more information.