GLS Capital, based in Chicago, has raised $345 million US for a litigation fund, which will include intellectual property litigation. It appears investor interest in IP litigation is high again. Here is the press release:
Friday, 21 February 2020
GLS Capital, based in Chicago, has raised $345 million US for a litigation fund, which will include intellectual property litigation. It appears investor interest in IP litigation is high again. Here is the press release:
CHICAGO--(BUSINESS WIRE)--GLS Capital, LLC today announced the completion of fundraising of its inaugural litigation finance fund, GLS Capital Partners Fund I, LP. Together with its affiliates, the Fund has investor commitments totaling more than $345 million.
GLS Capital raises $345 million for litigation finance fund. Trio of industry veterans launch fund to finance commercial and intellectual property litigation. . . .
The Fund’s diverse institutional investor base includes global financial institutions, endowments, foundations and family offices.
GLS invests in complex situations involving commercial litigation and arbitration, as well as intellectual property disputes in both the technology and pharmaceutical industries. The firm will structure creative and flexible solutions for businesses and law firms that are looking to better manage litigation and balance-sheet risks.
“We are excited to launch our first fund in a growing and dynamic asset class,” said David Spiegel, Managing Director of GLS. “Our fundraising significantly exceeded our initial target size, reflecting a high level of investor interest in our ability to be successful.”
Spiegel and his co-founders, Adam Gill and Jamison Lynch, stand out as an experienced and tested team in litigation finance. They previously executed and managed more than $400 million in investments at two of the world’s largest litigation finance providers.
Before entering litigation finance, they were litigators at elite international law firms. Lynch also served as the co-head of global patent litigation at a leading pharmaceutical company.
The firm intends to harness the deep experience of its founders to efficiently evaluate investment opportunities and streamline the underwriting process. The founders form GLS’ investment committee and have full investment authority.
About GLS Capital
Formed in 2018, GLS Capital is one of the world’s largest private investment firms focused on legal and regulatory risk. We provide bespoke financial solutions to meet the unique needs of each investment opportunity. For more information, please visit: www.glscap.com
A very promising use of artificial intelligence to identify new antibiotics has recently been published in Cell on February 20, 2020. The article, A Deep Learning Approach to Antibiotic Discovery, by lead authors Johnathan M. Stokes, MIT, and Kevin Yang, Broad Institute of MIT and Harvard, (there are nine coauthors), details how the researchers used artificial intelligence to relatively quickly find new antibiotics. Importantly, this paper provides some hope in the antibiotics field, which has seen few new developments and likely lacks adequate incentives to discover and produce new antibiotics. The paper is available, here.
Tuesday, 18 February 2020
In a Brookings Institute Report titled “How to Regulate Big Tech,” Anwar Aridi, World Bank, and Urška Petrovčič, VP Criterion Economics and Fellow at the Hudson Institute, review the differences between U.S. and EU competition law and the purported impact of those distinctions on EU policy development concerning technology companies and data usage. Notably, they frame the question for EU policy makers as whether to ease the EU’s regulatory scrutiny over technology companies to develop national champions or to continue existing regulatory scrutiny to develop an even-handed approach (another idea is to ratchet up scrutiny or develop new regulations). They seem to favor the even-handed approach. The framing of the issue is an interesting one. Clearly, China has taken a very different approach that was relatively protectionist in nature. And, what has happened? China has fought off U.S. company dominance in their market—many may argue unfairly—and has some powerful and innovative technology companies: Baidu, Alibaba and Tencent. (affectionately or maybe not so affectionately known as BAT in China). Moreover, China has a platform that is rivaling U.S. platforms in the U.S. market, particularly amongst youth—Tik Tok. The development of powerful non-U.S. based platforms may be what ultimately leads to increased regulation of all platforms in the United States, including more antitrust enforcement. However, I question whether incorporating additional values into antitrust analysis, such as national security, will be a good idea. National security as a value in antitrust analysis may be very difficult to cabin-in. Indeed, there are also other laws available to police national security.
Dr. Kai-Fu Lee, in his book, “China, Silicon Valley and the New World Order,” makes the case that the battle over artificial intelligence systems and data will be won by China over the United States—the advantage is China’s ambitious and win-at-all costs entrepreneurs that have had to operate in a Chinese system where the weak perish quickly and the Chinese are willing to part with their data. Is there a way to check behavior that antitrust regulators are having difficulty with keeping up with in the fast-moving technology environment? Perhaps the answer is private enforcement of intellectual property laws—with those laws structured to protect new entrants, and small and medium-sized companies to deter efficient infringement by large, entrenched companies. That’s perhaps still too slow. New state laws to protect privacy interests may be helpful as well—Facebook recently settled a case concerning violation of a state bioinformatic law for around $550 million.
Monday, 17 February 2020
In a bid to lower drug prices in California, Governor Gavin Newsom has proposed that the state of California create its own generic drug label and enter into partnerships to have generic drugs manufactured on behalf of the state. The details are located in the new proposed budget: http://www.ebudget.ca.gov/2020-21/pdf/BudgetSummary/HealthandHumanServices.pdf.
A group of health insurers in the United States also plan to manufacture generic drugs:
The Blue Cross Blue Shield Association (BCBSA), 18 independent and locally-operated Blue Cross and Blue Shield (BCBS) companies and Civica Rx (Civica, Inc.) announced today their partnership to create a new subsidiary dedicated to lowering the cost of select generic drugs. The subsidiary is being formed in response to the impact of high drug costs on the health of Americans and the overall affordability of health care. Other health plans, employers, retail partners and health care innovators who share the belief that patients and their needs come first are invited to join the initiative.
“We believe everyone should have access to health care, no matter who they are or where they live,” said Scott P. Serota, president and CEO of BCBSA. “Through this partnership, we will push toward the vital objective of providing greater access to much-needed medications. As BCBS companies and Civica embark on this important work, we hope others will join us to achieve the change Americans want to see in the health care system.”
Bringing together the brand that invented health insurance more than 90 years ago and an innovative nonprofit company that has already seen success helping to stabilize drug supplies within hospitals, the groundbreaking partnership between BCBS companies and Civica will expand on Civica’s mission by focusing on the affordability of generic medications outside of the hospital setting.
BCBS companies have decades of collective experience providing health insurance to members in every ZIP code across the country. As champions of health care affordability, the Blue companies continue to drive solutions that will increase access and improve health for their members and for the health of all Americans.
Nonprofit Civica was formed in 2018 by three philanthropies and numerous health care organizations in an effort to combat drug shortages and price spikes in hospitals.
“Civica’s mission is to make quality medicines available and affordable to everyone,” said Martin VanTrieste, Civica president and CEO. “Serving patients is our privilege and our responsibility—one that we are proud to share with BCBS companies who are committed to tackling one of the most important health care challenges of our time. Numerous studies confirm that medication costs can dictate whether individuals fill or ration their generic prescriptions. Together with BCBS companies, we are taking action to put patients first.”
In the partnership, BCBSA and BCBS companies are committing the capital to bring select high-cost generic drugs to market for consumers. The subsidiary will acquire and develop Abbreviated New Drug Applications (ANDAs) for select generic drugs and partner with Civica and manufacturing partners to bring more affordable generic drugs to uncompetitive markets in exchange for aggregated volume and multiyear purchasing commitments. Initially, several generic medications identified as having high potential for savings will be prioritized by the partnership and will evolve into a platform that can be used to enhance competition for additional generic drugs.
This partnership will result in meaningful savings for individuals and families, with the first generic medications becoming available by early 2022. The new partners welcome further participation from others in the health care industry who are united with their goal of promoting competition to spur production of affordable, quality medications.
“Civica is already bringing value—in quality, supply and price—to the in-patient hospital market and with BCBS will expand that mission to reach individuals and families buying generic prescriptions in hospitals and pharmacies,” said Dan Liljenquist, Civica board chairman. “Combining Civica’s mission with the commitment BCBS companies show to their members places us in a position to make a significant impact on lowering drug costs.”
More information is available, here.
Friday, 31 January 2020
While there is much uncertainty about the outlook for standard-essential patent royalty rates in court determinations, there are plenty of solid benchmarks in well-established comparable licenses (“comps”). The former rates are thin on the ground and have been made up based on some dubious and fiercely contested tenets as judges scrabble to set figures that are fair, reasonable and on-discriminatory. The latter rates have been agreed in droves through negotiation in licensing programs with dozens of licensors, hundreds of licensees and many thousands of patents. These are not meaningless asking prices with no takers —or just one or two transactions specifically conceived and executed to establish a desired marker— they are economically significant because they are underpinned by many billions of dollars of licensing trade over decades.
And, many players in the cellular industry have self-servingly colluded to cap aggregate royalties since the introduction of 3G twenty years ago. Unsurprisingly, these voices dominate because most, by far, of the interested parties, including OEMs, must become licensees to implement the standards legally. For only a few is licensing more an income generator than a cost in manufacturing.
Who is to say how much all the patents in devices are worth, how that valuation should be derived and how value should be divided among technology owners, implementers and end users? Weighing up all of this is significantly a matter of personal judgment—not of simply applying some supposedly pre-ordained formula. Vacating the District Court Judge Selna’s bench trial decision in TCL v. Ericsson on appeal, the Federal Circuit has prescribed retrial with a jury. This will recalibrate awards based on the subjective judgement of randomly selected non-experts. It will likely include consideration of bottom-up valuation methodologies reflecting consumers’ purchasing preferences, price sensitivities and the perceived value for smartphone features and performance improvements.
The math(s) is not easy or proven
Even using comps is not straightforward in many cases because most licenses are cross licenses and so the prices and monies paid typically reflect significant netting off between the notional royalty rates of the parties and also account for the respective trading flows of their manufactures. Where licensors do not have downstream manufacturing businesses, that need licensing—such as smartphone manufacturing—royalty rates can more easily be directly compared among licensees, in many cases, without adjustment. For example, Qualcomm and InterDigital do not make or sell devices, which account for most, by far, of the trading value in the cellular products (e.g. around $500 billion per year for mobile phones). Adjustments are also required in the comparison of licenses due to up-front lump sum payments, per-device caps, per device floors, total payment caps and other differences.
So how on earth could something as seemingly complex and difficult as valuing a portfolio of SEPs be left to a bunch of jurors? Judge Selna’s decision was extensive and 115 pages long. It applied two different methodologies —"top down” and “comparable license analysis” with the “unpacking” of two-way licenses—and disregarded a third—a bottom up “Ex Standard approach” designed to estimate the value of SEPs independent of any value arising from incorporation of SEPs into a standard. With his judgement vacated, Judge Selna’s analysis no longer has any legal authority; but it does reveal some of the methods and arguments that may continue to be applied in the valuation of SEPs and determination of royalties for these under FRAND terms.
The wisdom of lay folk
Perhaps the jurors will see through all the bluff and complexities, as they do in so many other trials. They can be unburdened by the weight of consensus, self-interested majorities and conventional wisdom. The Seventh Amendment constitutional right to a jury trial in civil proceedings has served the US well. It is probably one of the reasons why the nation is for centuries the most successful technological innovator in the world. If not, the US has evidently not been held back by its patent law and execution of this right.
Significantly, the New [December 2019] Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued by The U.S. Patent & Trademark Office (USPTO), the National Institute of Standards and Technology (NIST), and the U.S. Department of Justice, Antitrust Division (DOJ) offers views on remedies for standards-essential patents that are subject to a RAND or FRAND licensing commitment. This overturns interpretations of the 2013 policy statement by the USPTO and DOJ: ‘the agencies have heard concerns that the 2013 policy statement has been misinterpreted to suggest that a unique set of legal rules should be applied in disputes concerning patents subject to a F/RAND commitment that are essential to standards.’ In addition to saying a lot about how injunctions should become more readily available—an important issue, but which is outside the scope of my article— the new Policy Statement advises that ‘with respect to damages, the Federal Circuit has explained, “We believe it unwise to create a new set of Georgia-Pacific-like factors for all cases involving RAND-encumbered patents.” The court further stated that “[a]lthough we recognize the desire for bright line rules and the need for district courts to start somewhere, courts must consider the facts of record when instructing the jury and should avoid rote reference to any particular damages formula.”’ (Emphasis added and citations omitted.)
With the above developments, we are likely to see rather higher awards for SEPs than, for example, the paltry figure of somewhat less than one US cent per LTE SEP resulting from Judge Selna’s overturned decision.
Juries tend to award rather larger damages figures. In Qualcomm v. Apple, San Diego, March 2019, the figure of $1.41 per iPhone was awarded for infringement of three non-SEPs (i.e. 47 cents per US patent. A Los Angeles jury just awarded the California Institute of Technology (Caltech) $838 million from Apple and $270 million from Broadcom—totalling approximately $1.1 billion—for infringement of four patents used in the implementation of the WiFi standard (IEEE 802.11). Per device, this is equivalent to $1.40 (35 cents per patent) for Apple and 26 cents (6.5 cents per patent) for Broadcom.
Three different portfolio valuation and FRAND determination methods where presented by the parties for Ericsson’s 2G, 3G and 4G SEPs in TCL v. Ericsson.
“Reasonable, maximum aggregate royalties” with “proportionality”
I have already criticized at length Judge Selna’s top-down approach and so I provide no more than a summary of that here. When I wrote my critique of Judge Selna’s subsequently vacated Decision, I focused almost entirely on his top-down analysis; but indicated I might return to assess the other methods of FRAND rate determination and his analysis of them.
Top-down is fundamentally flawed for two reasons, and thirdly, Judge Selna’s corresponding determinations were biased and erroneous in his application of the methodology.
Firstly, the selected aggregate royalty rate caps—of 6 to 10 percent for 4G LTE and 5 percent for 3G— do not reflect the value of the underlying technologies. The figures are quite arbitrary and were only advocated by those who wanted to limit royalties to those levels. Why should the value of IP versus hardware in a smartphone be limited to such small percentages of its purchase price when the corresponding percentages for IP in music CDs, video DVDs, software CD ROMs or patented pharmaceuticals are more like 80 percent?
Judge Selna justified use of this approach on the basis that Ericsson and others had in 2008 encouraged the industry to allocate royalties based on a maximum aggregate rate and proportionality among licensors based on relative patent strength among portfolios. However, there were several in the industry that never subscribed to such an approach and were, instead, for good reasons, vociferously opposed to it. For example, in December 2008, Qualcomm publicly stated it was against such a formulaic approach because it ‘would arbitrarily limit the value of standards essential patents, discourage innovation, encourage the filing of marginal patents, complicate and delay the standardization process, and be impossible to implement in practice.’ There is no reason to bind these dissenters to such an approach. It should be possible for them and others to derive significantly higher royalties, if enough value is there.
Secondly, apportionments among patent holders are inaccurate. For example, patent-portfolio stand-essentiality determinations are cursory, inconsistent and patent counting methods typically assume all patents are of equal value, which is antithetical to valuation principles in patent law. Counting technical contributions to standard-setting organizations also has the shortcoming of rewarding quantity instead of quality.
Thirdly, Judge Selna erroneously whittled the rates down for Ericsson in several ways:
I. Regarding company and aggregate single-mode rates as multimode rates,
II. Using inaccurate, unreliable and likely biased patent assessments in apportionment of the aggregate rate to Ericsson with:
a. inflated patent counts in the denominator,
b. deflated patent counts in the numerator,
III. Regarding announced rates, including aggregate rates, as US rates rather than global rates,
IV. Discounting indicated rates based on patent expirations, even though indicated rates were based on certain expectations for these expirations,
V. Disregarding the value of standard-essential improvements and Ericsson’s share of these.
While the cap is purportedly to protect implementers from the “worst case” scenario with a “royalty stack;” in fact, nobody pays anywhere the maximum figure. On average, as I have shown and as others have confirmed, here and here, the aggregate royalty paid on mobile phones including smartphones is no more than around 5 percent including all generations of cellular SEPs, non-cellular SEPs and non-SEPs. That is net of cross-licensing, but even those with nothing to cross license are not paying much more. For example, TCL managed to hold out payment to Ericsson for 7 years before trial. There was no evidence presented in that case that TCL was paying anywhere near or above an aggregate of 10 percent, nor that it would be doing so with payment to Ericsson at the rates set in Judge Selna’s Decision. I have never seen evidence that anyone has paid an aggregate figure reaching or even approaching 10 percent for LTE licensing.
Fair shares for all
While the value created in an invention can be enormous, this is shared among various participants in the value chain. Ultimately, virtually all the benefits tend to flow downstream to end users. In the interim, some of the value is rightly captured in profits by technology developers, OEMs and service providers.
Judge Selna threw out the “Ex Standard” valuation methodology of Ericsson’s expert David Kennedy because, in Selna’s opinion, the values it derived were too high:
‘Ericsson's 4G Essential Patents confer $6.15 to $7.14 of value on a 4G handset. The Court finds that Kennedy's result are highly suggestive of royalty stacking; i.e, valuing individual components of a standard in manner that accedes the aggregate value of the standard.’
He also wrote: ‘it is simply not logical that two features could have a value in excess of Ericsson's entire portfolio.’
These statements confuse the concept of value to the user with the technology-licensing price to an OEM that is fair and reasonable or that would be negotiated commercially under market conditions. The above figures represent maxima — not figures demanded, let alone expected or likely to be anywhere near realised by licensors.
Consumer surplus is defined as the difference between the consumers’ willingness to pay for a good and the amount that they actually pay. On average, producers capture only small percentages of the total welfare gains from innovation, with consumers capturing the remaining surplus. Licensing rates determine how the licensors and licensees split the producers’ share of those total welfare gains.
The FRAND rate licensing price reflects two factors:
Value to consumer ($) x share of value to be accrued by licensor (%) = royalty to licensor ($).
Value to consumer ($) x share of value to be accrued by licensor (%) = royalty to licensor ($).
Bottom-up valuation methods, including Ericsson’s Ex Standard approach derive an upper limit to what features are worth. What licensors may yield from them in licensing fees is a question of rent splitting and how the economic surplus is shared among licensors, their licensees and downstream parties including mobile operators, over-the-top service providers (e.g. Google, Facebook and Netflix) and end users.
Economics and market dynamics tend to determine outcomes including how economic surpluses are shared. For example, while research has shown that the value a consumer derives from Google search may be tens of thousands of dollars per year per user, Google is happily making huge profits while generating, only, hundreds of dollars per person. Hypothetical choice experiments can derive consumer values, even for services such as Google that have zero pricing for consumers. Internet platforms—such as Google— are under intense scrutiny by competition authorities due to their dominance and how they might be abusing that rather than for their high profits per se. In litigation, such as in TCL v. Ericsson, jurors must decide how much of the large economic surpluses generated by SEP technologies are awarded in licensing fees.
While comparable licenses are potentially the very best valuation benchmarks because they reflect billions of dollars of trade with many licensing agreements over many years, not all of these can be employed directly before significant adjustments. Lump sum payments, differences between sales forecasts (most applicable because the assumption is that licenses should have been completed before trading) and actual sales (20:20 hindsight), and assumed “net present value” discount rates can all have significant effects on derivation of simple, one-way licensing rates from complex two-way licensing agreements including multiple terms and conditions.
I also explained the complexities and difficulties of “unpacking” comparable licenses to derive the effective one-way licensing rates in another article I published last year. One of the issues I discussed there is that licensing rates tend not always to be proportional to the number of patents— as assumed by both parties’ experts in TCL v. Ericsson—in unpacking Ericsson’s cross licenses to derive simple “one-way” licensing rates. Among many examples of that phenomenon, is IBM’s historic licensing approach, with pronounced non-linearity in licensing fees for more than five patents:
Number of Licensed Patents Covering the Product
Percentage of the Selling Price
5 or more
In a presentation I gave on the topic of top down and bottom up valuation methodologies at the Patents in Telecoms and the Internet of Things conference at Tokyo University in November 2019, I reused some analysis I have been presenting since 2015 showing how cellular functionality is priced by Apple at a much higher mark-up than other costs. Apart from the absence of cellular capabilities, the iPhone Touch 5th Generation had very similar specifications to the iPhone 5c. However, the latter was sold for $450, which was more than twice the price of the former, despite costing only around $32 more in manufacturing.
Even more remarkable from an economic perspective was the fact that sales volumes for iPhones in 2014 were more than 12 times greater volume terms and 46 times greater in revenue terms than for all iPods. Apple is free to price at any level it wishes and so its prices are only an indirect indicator of consumers’ perceptions of value. Relative sales performance is an outcome of its pricing. According to basic economic principles, if two products are close substitutes a much lower price for one would tend to result in much greater demand for versus the other product. The much higher demand for the cellular devices— despite the much higher price— underlines the premium value in cellular and that no iPods are close substitutes for iPhones.
Out on the range
FRAND rates are not as range bound or unique, as many might imagine they should be. It all depends on the circumstances, other licensing terms and market developments over the years. On appeal, Justice Birss’ Decision in Unwired Planet v. Huawei was largely upheld and partially annulled. The higher court ruled several different sets of rates and terms could all be FRAND and that there did not have to be only a single FRAND rate, as Birss had ruled.
I have been arguing here since 2013 that the FRAND rate range should be quite wide because, for example, patent pool participants legitimately tend to agree on relatively low rates in the interests of their downstream-oriented members versus legitimately agreed bilateral FRAND rates. I have not yet come across anyone arguing that royalty-free patent pools or “platforms”, such as that for the Bluetooth and USB standards, have rates that are non FRAND. Common sense suggests that royalty free is not an isolated incidence of what is FRAND where other licensing arrangements set a significant non-zero FRAND rate. The range of rates that are FRAND must at least span between these figures, subject to other licensing terms and conditions.
In my abovementioned Tokyo presentation, I also showed that FRAND rates for video codecs have varied enormously over time and between competing patent pools. It is remarkable that the maximum licensing cost (set in dollars rather than as a percentage of the product selling price) for the MPEG 2 standard technology pool was 10 times higher than the 20 cents maximum for its higher-performing successor MPEG 4 (AVC/H.264)—even over the years in which use of the two standards was substantially overlapping. Many commercial factors were at play, including the fact that the latter standard was adopted in much higher volumes by being software based rather than hardware based and being used mostly in smartphones rather than in the domestic CE products including TVs, set top boxes and DVDs into which MPEG 2 was primary introduced.
Have we had enough of experts?
As a testifying expert witness, I would be one of the last to propose getting rid of them: but none of them, nor their sponsors or acolytes, nor those who are swayed by them have a monopoly on wisdom or are infallible. Following those with prevailing views is a safe bet for those in the firing line of scrutiny with tricky and contentious decisions to make. But that does not make those views right. Bias towards consensus or the majority is not justice. As the New Policy Statement identifies, courts have misguidedly tended to follow a unique set of rules in dealing with FRAND disputes.
On account of it finally being Brexit Day, today, it is most fitting to paraphrase British Member of Parliament and outspoken Brexiteer Michael Gove—who maintains he was misrepresented when it was reported he had said ‘people have had enough of experts’ in the highly contentious debate about the merits and costs of Brexit. Rather than do away with experts, one should always look for the dissenting voice. When there appears to be a settled consensus, look at the people who are challenging it. If their arguments are well constructed, then pay close attention; if you think it is just bogus nonsense then reject it— but test alternative propositions. The notion that things should be taken simply on trust because of someone’s position is an invitation to intellectual conformity and what we need is a vigorous, debating, dissenting culture.
While all but a relatively small proportion of SEP portfolio licenses are negotiated to completion between or among parties, it is time for some fresh thinking and judgement on where value lies and how it should be shared when there is dispute. I am looking forward to seeing what jurors will come up with.
 A figure of 0.5 cents per SEP can be calculated by dividing Judge Selna’s 0.45% LTE royalty rate award by the figure of 125 patents declared essential and claim charted by Ericsson and then multiplying that figure by the approximate average selling price of $140 per LTE handset manufactured and sold by TCL in the relevant period from 2013 to 2015. The calculated figure increases to 0.9 cents if, as TCL’s Expert Dr Kakaes opined, only 70 of Ericsson’s patents are deemed standard-essential to LTE.
 As noted by Herbert Smith Freehills ‘One of the few points on which the Court of Appeal disagreed with Birss J was on the question of whether there can only ever be a single set of FRAND terms as between a potential licensor and licensee, as the judge had found at first instance. The Court of Appeal were of the view that it was ‘unreal’ to think that two parties will necessarily arrive at precisely the same set of terms as two other parties (all of them acting fairly and reasonably and faced with the same set of circumstances). Rather, the Court of Appeal held that a number of sets of terms may all be fair and reasonable in a given set of circumstances, finding that this approach was supported by the economic evidence.’
Friday, 24 January 2020
In an ambitious and relatively short book (290 pages) titled, "The Financing of Intangible Assets: TMT Finance and Emerging Technologies" (LexisNexis), editor and author Charles Kerrigan of CMS law provides a treatment of financing of intangible assets in the technology, media and telecom sectors. The book has wide breadth and selective depth in its coverage of the subject matter. Moreover, it is a practical book which discusses mitigating risk and anticipating potential issues, including focusing on potential problems that may arise with new and emerging technology. The book first opens with five chapters that provide an overview of various relevant agreements and the role of players in the field. The second part covers security and regulation, such as “Taking Security over Intellectual Property Rights,” and “Restrictions on Assignment, Floating Charges.” The next ten chapters cover financing in various industries, including Software, Telecoms, Gambling, Music, Biotech and Healthtech, Publishing, Advertising and Adtech, Technology, TV Broadcast Media and Media Technology, and Film. The next ten chapters ambitiously highlight specific countries’ law concerning the subject matter, which are each authored by practitioners from those respective countries, or Mr. Kerrigan in collaboration with law firms in the geographic area. Finally, the book ends with ten chapters generally dedicated to an area of new technology involving finance, such as Digital Money, Blockchain and Artificial Intelligence. This book is helpful as a resource for those who desire an overview of the field and those who need a relatively detailed treatment of a specific area. It is a welcome addition to the resources concerning the topic.
Thursday, 23 January 2020
California Attorney General Becerra has issued a press release concerning an “advisory” discussing the rights of consumers under the California Consumer Privacy Act, which is effective on January 1, 2020. The press release states:
CCPA grants new rights to California consumers
- Right to know – Consumers may request that businesses disclose what personal information is collected, used, shared or sold by the business, in both categories and specific pieces of information;
- Right to delete — Consumers may request that a business delete the consumer’s personal information held by both the business and by extension, the business’s service providers;
- Right to opt-out — Consumers may direct a business to cease the sale of the consumer’s personal information. As required by the law, businesses must provide a “Do Not Sell” information link on their websites or mobile apps;
- Rights for minors regarding opt-in consent — Children under the age of 16 must provide opt-in consent, with a parent or guardian consenting for children under 13; and
- Right to non-discrimination — Businesses may not discriminate against consumers in terms of price or service when a consumer exercises a privacy right under CCPA.
Businesses subject to CCPA
Not all California businesses are subject to CCPA. A business is subject to CCPA if the business:
- Has gross annual revenue in excess of $25 million;
- Buys, receives, or sells the personal information of 50,000 or more consumers, households, or devices; or
- Derives 50 percent or more of its annual revenues from selling consumers’ personal information.
In addition, as proposed by the draft regulations, businesses that handle the personal information of more than four million consumers will have additional record-keeping obligations.
Data Broker Registry
As required by California Civil Code section 1798.99.80, a data broker must register with the Attorney General at https://www.oag.ca.gov/data-broker/register. The law mandates that a data broker shall pay a registration fee and provide information including primary physical, email, and internet website addresses, as well as any additional information or explanation the data broker chooses to provide concerning its data collection practices. The registry is accessible to consumers.
Consumers’ private right of action in the case of a data breach
Businesses are required to implement and maintain reasonable security procedures and practices to protect consumers’ personal information, and CCPA authorizes a consumer to institute a civil action if their personal information, as defined in subparagraph (A) of paragraph (1) of subdivision (d) of Section 1798.81.5 is subject to an unauthorized breach as a result of a business’s failure to reasonably secure this data.
Consumers were able to begin exercising the rights listed above under the CCPA on January 1, 2020. Under Civil Code 1798.100 - 1798.199, businesses subject to CCPA were required to begin complying with the law on January 1, 2020.
The full press release is available, here.
The U.S. House Subcommittee on Antitrust, Commercial and Administrative Law recently held hearings concerning potential anticompetitive conduct by platforms against smaller companies who may offer services or products on those platforms at University of Colorado Law School. Notably, the congressmen on the committee were all concerned about the activities of the platforms. Here are a few of the notable points: 1) the relatively small companies do not spend a lot of money on lobbying; 2) some of the companies are very concerned about having to purchase their trademarks as keywords from Google; 3) there is concern about bargaining or the lack of it with Amazon; 4) there are concerns about the size of Apple’s cut of App Store sales as well as Apple using control over iOS to disfavor competitors of its own products; 5) there is potentially predatory pricing being conducted by some platforms; 6) there is fear that the platforms are using data about a smaller companies’ products or services created when they use the platform against them to compete; 7) none of the smaller companies could very clearly answer the question of whether the complained about conduct violated current antitrust law; and 8) the congressmen repeatedly thanked the smaller companies for their courage for speaking out against the platforms. There was some discussion concerning intellectual property. Sonos, the speaker company, noted that a platform was involved in “efficient infringement” against them. The smaller companies also complained about the cost of litigating against the platforms and how it diverts funding from research and development. At least one company noted that having the government pursue these cases would help them because of the cost. As previously mentioned, there was also concern expressed about trademarks, and additionally, how platforms use similar trade dress to competitor's trade dress on products that platforms use to compete against smaller competitors. Counterfeiting was also a concern. The full hearings can be found, here.
Wednesday, 8 January 2020
How innovative, competitive and well adopted was 4G LTE in mobile communications— implications for outlook in 5G?
4G Communications Power to the People
Every new decade, a new G
Consumer demand surges with smartphones and LTE
Mobile broadband data consumption has grown enormously in recent years
Smartphones predominate in U.S. handset purchases since 2011
Market dominance and concentration in supply
Market concentration in supply of baseband modem chips and handsets including smartphones
A lot more bang for your buck
Intel was too late in finding its voice
What was he smoking?
Voodoo economics II
Be careful what you wish for and be grateful for what you have
This article was originally published in RCR Wireless in a very similar form on 7th January 2020.
Keith Mallinson is a leading industry analyst, commercial consultant and testifying expert witness. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.