Jimm Phillips

The Senate Intelligence Committee is set to mark up the Cybersecurity Information Sharing Act (CISA) Thursday, but expectations about the result of that markup remain unclear even after months of behind-the-scenes revisions. The markup, closed to the public, is set to begin at 2:30 p.m. in Hart 219.

The FCC has at least some legal authority to justify its expanded focus on cybersecurity risk management in the communications sector, which parallels other agencies’ efforts to implement President Barack Obama’s 2013 executive order on the topic (CD Feb 14/13 p1), former FCC officials and industry observers told us. FCC Chairman Tom Wheeler has strongly advocated industry leadership of work to improve the sector’s cybersecurity, saying in a speech at the American Enterprise Institute (AEI) earlier this month that he’s seeking private sector participation but the FCC is prepared to regulate the issue if that fails (CD June 13 p1).

The Supreme Court unanimously ruled Thursday against financial software firm Alice, saying that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent eligible invention” (http://1.usa.gov/1lChQWR). The court affirmed a ruling at the U.S. Court of Appeals for the Federal Circuit that Alice couldn’t assert four of its patents on financial software against CLS Bank International because they were abstract. The case drew amicus briefs from multiple industry giants -- including Amazon, Facebook, Google, IBM, Microsoft, Netflix, Verizon and Twitter -- that mostly favored CLS Bank. The ruling, long expected to favor CLS Bank (CD April 1 p14), does not offer a clear delineation of what constitutes an abstract idea, experts told us. The Alice ruling does not constitute a wholesale rejection of abstract ideas’ patentability, but that the simple use of a computer to perform an abstract idea would “add nothing of substance to the underlying abstract idea,” Justice Clarence Thomas wrote in the court’s opinion. Had the court ruled otherwise, “an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept,” the opinion said. “We tread carefully in construing this exclusionary principle lest it swallow all of patent law.” Inventions that involve transforming abstract ideas “’to a new and useful end'” remain patentable, the court said. Microsoft, which had favored a narrow Supreme Court ruling, praised the court in a statement for having “distinguished the Alice patent from software inventions.” The Supreme Court “went the right way” in its ruling, and “that they went unanimously the right way is a great sign,” said Matt Levy, Computer & Communications Industry Association patent counsel. CCIA also filed an amicus brief siding with CLS Bank. The court’s ruling reaffirms its previous precedent in Mayo v. Prometheus that abstract ideas aren’t patentable and extends that into the software sector, he said. “It might have been nice if they were able to give a more detailed test, but I understand why they didn’t,” Levy said. “As with any Supreme Court decision, the devil is going to be in the implementation details by the district courts and the Federal Circuit.” Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor issued a short concurring opinion that appears to advocate for invalidating all business method patents, he said. The Alice ruling will likely eventually invalidate “the majority of all software patents in force today,” said Durie Tangri patent lawyer Mark Lemley. “You can patent particular improvements in computers, but you can’t patent using a computer or the Internet to implement your idea.” Lemley filed an amicus brief in Alice on behalf of a group of companies that included LinkedIn, Netflix, Rackspace, Twitter and Yelp (http://bit.ly/SWERXO), but noted he was not speaking to us on behalf of those companies. The ruling is likely to have the greatest impact on the Patent and Trademark Office’s Patent Trial and Appeal Board, where it had already “become much easier” to challenge patent eligibility with the implementation of the America Invents Act, said Miles & Stockbridge patent lawyer James Carmichael, former administrative patent judge at PTAB. “This is going to be a great sword in the quiver of patent challengers wanting to cancel patents at PTAB.”

Network congestion on the Internet “does not appear to be widespread” and is mostly confined to “recognized business issues” like Netflix’s complaints of streaming latency, a “preliminary” study by the Massachusetts Institute of Technology (MIT) and the University of California, San Diego (UCSD) said Wednesday. Congestion that does exist “can come and go essentially overnight” due to provider-initiated network reconfigurations and changes in content routing, the study said (http://bit.ly/1oGQoJG). The results are “very early” findings in a project that will eventually become an “atlas” of congestion on the Internet, said David Clark, senior research scientist at MIT’s Computer Science and Artificial Intelligence Laboratory, at a Congressional Internet Caucus Advisory Committee event marking the study’s release.

Netflix has stopped using on-screen messages to alert subscribers to video latency issues that the company claimed ISPs caused, but industry participants and observers told us they believe both content providers and ISPs should provide the public with data-driven information on interconnection issues. Netflix said last week that its “small scale test” of the latency messages would end Monday, soon after Verizon -- an ISPs referenced in the messages -- sent Netflix a cease-and-desist letter seeking an end to the messages (CD June 10 p14). Nondisclosure agreements mean “we outsiders cannot really tell whether Netflix properly complained about non-performance or unsatisfactory performance by Verizon,” said Pennsylvania State University telecom and law professor Rob Frieden.

Level 3 said it plans to buy tw telecom, reaching a deal worth about $7.3 billion, including debt. Tw telecom shareholders will get a 27 percent stake in the combined company, Level 3 said in a Monday news release (http://bit.ly/1siB73h). The deal, set to close in Q4, is unlikely to face major problems in obtaining federal and state regulatory approvals, industry analysts and observers told us. The deal also likely signals the start of a larger trend toward similar deals involving long-haul and metropolitan network providers, analysts and observers said.

The FCC wants the private sector to lead the communications sector’s “new paradigm” on cybersecurity risk management but “must be ready” with regulatory “alternatives” if that work fails, Chairman Tom Wheeler said Thursday. Wheeler’s remarks at an American Enterprise Institute event, billed as his first major cybersecurity policy speech as chairman, expanded on the FCC’s existing message within the sector this year that it preferred a voluntary industry-led effort to a regulatory approach (CD May 19 p4). The FCC released a prepared version of Wheeler’s speech after the AEI event (http://bit.ly/1oUaNIT).

The FBI is “piloting” use of facial recognition involving criminal mug shots as part of its Next Generation Identification (NGI) database, but that program will not involve collecting civilians’ photos from drivers’ licenses or other sources, said FBI Director James Comey Wednesday. The facial recognition pilot is limited to criminal mug shots “because those are repeatable, we can count on the equality of them and they are tied to criminal conduct, obviously,” he said. State governments occasionally send the FBI pictures of people who are licensed school bus drivers or have other sensitive professions, but such photos won’t be part of that database, Comey told the House Judiciary Committee during the hearing, which also touched on the effects the USA Freedom Act (HR-3361) would have on the FBI’s surveillance capabilities and cybersecurity work.

NTIA’s planned spinoff of its oversight of the Internet Assigned Numbers Authority (IANA) functions, along with debates on cross-border data flows and data localization, are top issues the U.S. communications sector is examining for potential effects on their overseas business, industry officials said Monday night. Those issues all fundamentally center on how the world will view the Internet in the future, given it wasn’t a jurisdiction-bound technology meant to be “defined by geography per se,” said David Weller, Google head of global trade policy, at an FCBA event.

Dueling claims from Netflix and Verizon about the true reason for Netflix’s buffering issues are inherently policy posturing, but they also highlight underlying questions about data transparency and whether stakeholders have effectively explained the issue to the public, industry observers told us Thursday. When videos buffer, Netflix has begun including messages on some users’ screens claiming that an ISP’s network “is crowded right now,” including for users on Verizon’s network. Netflix said it is phasing those messages in for users on all ISPs, regardless of the type of connection or agreement the company has with a particular broadband provider (CD June 5 p11).