As The FTC Goes After Bloggers, Doctors Making Millions Promoting Drugs With Little Oversight

from the feeling-healthy-yet? dept

Clay Shirky points us to a column from a few months back by Marcia Angell, which explains why clinical research on drugs isn't even remotely trustworthy, as it all-too-often seems to involve doctors who have serious conflicts:

Or consider Dr. Alan F. Schatzberg, chair of Stanford's psychiatry department and president-elect of the American Psychiatric Association. Senator Grassley found that Schatzberg controlled more than $6 million worth of stock in Corcept Therapeutics, a company he cofounded that is testing mifepristone--the abortion drug otherwise known as RU-486--as a treatment for psychotic depression. At the same time, Schatzberg was the principal investigator on a National Institute of Mental Health grant that included research on mifepristone for this use and he was coauthor of three papers on the subject.

Angell notes that this is pretty common:

Indeed, most doctors take money or gifts from drug companies in one way or another. Many are paid consultants, speakers at company-sponsored meetings, ghost-authors of papers written by drug companies or their agents, and ostensible "researchers" whose contribution often consists merely of putting their patients on a drug and transmitting some token information to the company.

And as the relationship between doctors and pharma has gotten deeper and deeper, it means that the results of those all important "clinical trials" -- which the pharma supporters always insist are so important -- are highly suspect:

Because drug companies insist as a condition of providing funding that they be intimately involved in all aspects of the research they sponsor, they can easily introduce bias in order to make their drugs look better and safer than they are. Before the 1980s, they generally gave faculty investigators total responsibility for the conduct of the work, but now company employees or their agents often design the studies, perform the analysis, write the papers, and decide whether and in what form to publish the results. Sometimes the medical faculty who serve as investigators are little more than hired hands, supplying patients and collecting data according to instructions from the company.

In view of this control and the conflicts of interest that permeate the enterprise, it is not surprising that industry-sponsored trials published in medical journals consistently favor sponsors' drugs--largely because negative results are not published, positive results are repeatedly published in slightly different forms, and a positive spin is put on even negative results. A review of seventy-four clinical trials of antidepressants, for example, found that thirty-seven of thirty-eight positive studies were published. But of the thirty-six negative studies, thirty-three were either not published or published in a form that conveyed a positive outcome. It is not unusual for a published paper to shift the focus from the drug's intended effect to a secondary effect that seems more favorable.

And yet the FTC is more worried about a mommy blogger recommending a book that a publisher sent her for free?

33 Comments | Leave a Comment..

IAB Takes On FTC Over Silly Blogger Disclosure Rules

from the good-for-them dept

While more disclosure is generally a good thing, the FTC's new guidelines for blogging disclosure have some pretty massive problems, and probably aren't legal. As more and more people are recognizing this -- and interviews with the FTC folks in charge of this suggest they either haven't put very much thought into this issue or they don't quite know how the world works outside of their government cocoon -- the backlash is growing. Now, the Internet Advertising Bureau (IAB) has stepped in with quite the open letter to the FTC, asking them to scrap the rules, while noting (snarkily) how impossible they are to follow, in practice:

So there I was last Saturday, about to send out on my Twitter feed -- which automatically updates my Facebook page and links to my personal blog -- a photograph of this wonderful baked halibut dish I'd just made as a surprise for my wife. I was in the middle of typing a rave review of the recipe, which I'd pulled from my favorite cookbook, Delicioso! The Regional Cooking of Spain by Penelope Casas. But before I could press the "post" button, I stopped and canceled the whole thing.

I remembered that the book was a freebie, sent to me by an editor at the Alfred A. Knopf publishing house 13 years ago. And I didn't want you guys to haul me into court and fine me for violating the rules you've just promulgated to muzzle social media.

While this may seem silly, it really does highlight the problems with the FTC's rules. They're totally unclear and absolutely could concern things like this. Getting a free book here or there happens all the time -- and the FTC actually claimed that if people don't return them, then they may face sanctions. That's ridiculous. Last month, we ran a fun contest for people to win free copies of a Kevin Smith book. If the winners from our comments mention that book anywhere online, do they need to mention they got the book for free? If they mention it to a friend, do they need to do the same thing? Because most of the time when posting stuff online, people really are just talking to their friends.

Again, it's not clear why people can't just sort this out themselves. People who post bogus reviews of things because someone pays them to, or because of something "free," are going to get called out on it eventually and lose their credibility. When people talk amongst friends, they don't reveal where they got the products they talk about, or if they happened to get a promotional sample -- and that's fine. While you can understand where the FTC is coming from, it really has gone overboard with these rules.

20 Comments | Leave a Comment..

More Problems With The FTC's New Disclosure Rules: Free Speech And Liability Problems

from the disclose-everything dept

I've already noted my general problems the FTC's new disclosure rules, but as others look into the details, the worse they seem and the more you realize the unintended consequences may be pretty bad. Jeff Jarvis makes some key points concerning how this could be seen as a restriction on free speech. And that's because the FTC seems to be viewing blog posts as if they are media, rather than straightforward communication. As we've pointed out in the past, for many, blogging is often no different than a conversation. It's not journalism. It's not reporting. It's having a discussion with people:

Second, the FTC assumes -- as media people do -- that the internet is a medium. It's not. It's a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don't think they are doing anything remotely connected to journalism. I imagine that virtually no one on Facebook thinks they're making media. They're connecting. They're talking. So for the FTC to go after bloggers and social media -- as they explicitly do -- is the same as sending a government goon into Denny's to listen to the conversations in the corner booth and demand that you disclose that your Uncle Vinnie owns the pizzeria whose product you just endorsed.

As such, you could make a case that the new rules are an unconstitutional law hindering First Amendment guarantees on freedom of speech. As I noted originally, it seems like these things get sorted out in the marketplace of ideas -- whereby those who do something so stupid as to sell their "views" on things face the potential of a substantial loss in credibility. But suddenly demanding people reveal the sourcing of some product they mention in blogs leads to all sorts of silly results, amusingly mocked by Mark Cuban in a blog post, where he wonders what sorts of disclosures he'll have to make if he mentions a breakfast at IHOP where the managers comps the breakfast. And while he's mocking the overall situation, it's not so silly. You shouldn't have to confer with your lawyers to figure out how you mention any particular product, just because you got a freebie or a sample somewhere.

And, what's really scary? It appears that even the FTC isn't sure what the policy actually means, and hasn't thought through any of the unintended consequences or fuzzy borders.

Separately, Eric Goldman highlights another massive problem with the new guidelines that no one else seems to have picked up on yet: that in some cases it's the company providing the product that will be liable -- ridiculously blaming the company if a blogger makes claims about its products that are not true. As Goldman points out, there's no way the FTC would be successful in going after companies for that, as Section 230 clearly would protect the advertiser from bogus statements by someone else. But, even assuming that the FTC never considered the Section 230 issues, why would the FTC ever think it's reasonable to fine an advertiser for statements made by someone else?

Despite tons of feedback and discussion when the FTC first proposed these new rules a few months ago, it really feels like no one at the FTC put much time into actually thinking through what these sorts of rules would actually mean in the real world.

30 Comments | Leave a Comment..

FTC Shuts Down Popular Scammer ISP; But Doesn't Seem To Be Impacting Spam That Much

from the that-mole-got-whacked dept

A bunch of folks have been submitting the news that the FTC has shut down an ISP, called 3FN, known for actively recruiting scammers and spammers to use its services. The FTC noted "Anything bad on the internet, they were involved in it," and has pushed its upstream providers to cut off service. From the details, it sounds similar to the story from late last year when upstream service providers pulled the plug on another hosting firm, McColo (due to public pressure, not gov't intervention), and cut off huge amounts of spam, since so many spammers relied on botnets through McColo. While some scammers are apparently upset by 3FN going down, some folks are noticing that there doesn't seem to be a corresponding drop in spam as happened last time. Apparently, the spammers realized that having a single-point-of-failure wasn't a very good thing, and have built redundancy into their systems now. So, while many scammers and spammers did use 3fn, losing it hasn't been nearly as devastating as losing McColo. So, it's definitely reached that whack-a-mole stage, where taking stuff down makes for good press releases... but is it really stopping anyone?

15 Comments | Leave a Comment..

FTC Looks To Regulate Blogger Credibility

from the truthonline.com dept

The Federal Trade Commission is mulling over guidelines that would require bloggers to disclose when they're writing about products they've been given, sponsor's products, or are getting paid to write about a particular product. The FTC says the new rules are necessary because people are increasingly turning to blogs for product information, and their unregulated nature makes them ripe for abuse. But the things the FTC proposes, like mandated disclosure when a company has given a blogger a product, are things that most reasonable bloggers already do. Meanwhile, those who accept payment for posts -- as well as the companies doing the paying aren't likely to have much credibility with their audiences anyway. It's as if the FTC is trying to mandate credibility, and this raises a couple of interesting points. First, audiences generally seem pretty adept at rooting out when people are being paid to talk nice about a company or product, and there are plenty of examples of company's payola schemes getting found out and causing a backlash against them. Second, why do bloggers get singled out for special treatment? Plenty of old-media reporters get freebies tossed their way, but the FTC doesn't seem to think they deserve the same level of attention. That's not to say that newspapers are full of paid-placement articles or reports based on free products, but to think there's more scope for deception and advertiser influence on blogs than in any sort of print or other media is fallacious.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

33 Comments | Leave a Comment..

FTC Cracking Down On Car Warranty Robocall Scammers

from the about-time dept

It was just last week that we questioned why the FTC hadn't been able to track down the scammers behind the "this is the 2nd notice that the warranty on your car is about to expire" robocalls. Apparently, we were just a little anxious. On Thursday, the FTC filed complaints against two of the companies involved in the scam, noting that they were apparently placing 1.8 million calls per day, with no regard for the Do Not Call List. Apparently, the scam has already brought in $10 million from people who were duped, though the FTC is trying to get all that money back.

25 Comments | Leave a Comment..

New FTC Chair's Views On Google, Broadband Competition And Behavioral Advertising

from the sounds-decent-so-far... dept

We've been receiving a series of different reports from different folks about a recent interview that new FTC boss, Jon Leibowitz, gave on CSPAN. Leibowitz has been in the FTC for a while, though, he's yet another former entertainment industry lobbyist in the administration (he was VP of Congressional Affairs for the MPAA from 2000 to 2004). So far, however, he seems to be taking quite reasonable positions on a variety of topics (though, some questionable views on other areas). Questioned about Google's dominance in the market (something that the FTC has been investigating for a while now), he pointed out that dominance is "the American way" and not necessarily an antitrust violation:

Google has certainly has a dominant position in search advertising. There's no doubt about that. From our perspective, just having a dominant position doesn't in any way violate the law. It's if you do something -- as the Justice Department in the 1990s alleged that Microsoft did -- to exclude competitors illegally, that's when it becomes a problem.

If you get to a dominant position or a monopoly position by virtue of your own acumen, that's really the American way.

Then there's broadband competition, where he definitely does appear to be concerned about the lack of competition and the lack of transparency from current broadband providers:

We believe consumers need to have notice and consent about what they're getting. It's very, very important that these providers tell consumers about the speed they're getting, and whether (ISPs) are making any types of management decisions in terms of the network that affect consumers....

In a perfect marketplace where you had more competitors, you wouldn't need the government necessarily to be terribly involved. Particularly in the consumer protection area, we have a big roll to play. Broadband is a deregulated product. That's good, we like deregulation generally. But when you have deregulation, you also have law enforcement to make sure people do the right thing.

And, then, there's the question of behavioral advertising, where he believes that opt-in, rather than opt-out, makes a lot of sense:

I think some of the more enlightened companies do do opt-in. I think a lot of them don't. I think the better practice is always opt in.

On the whole, then, he seems to not be too quick to bash companies for being successful, and seems to recognize that competition and transparency are important issues. Those are all good things. There are some fears however, that he's a bit quick on the trigger when it comes to regulating over that behavioral advertising issue, and doesn't seem to mind metered broadband, so long as customers know what they're getting.

13 Comments | Leave a Comment..

Apparently Google's Lawyers Were Prepped For Google/Apple Antitrust Inquiry

from the just-look-at-our-website dept

With the (not particularly surprising) news coming out that the FTC was looking at the relationship between Apple and Google (specifically the ties between the Board of Directors of both companies), John Paczkowski noticed that Google's outside law firm (full disclosure: it's our outside law firm as well, though it's a big, big law firm), Wilson Sonsini Goodrich and Rosati had not only already prepared a presentation on the issue but had posted it to its website. Soon after noticing it, WSGR pulled down the presentation. So Paczkowski pointed to the Google cache of it... only to see that disappear quickly as well. Amusingly, Danny Sullivan noted that it's still available in Microsoft's cache. Either way, it seems like Google should be quite prepared for the issue, though Eric Schmidt's initial responses to questions about it don't seem very reassuring. You would think that he would have thought through a slightly more nuanced answer than saying that he hadn't even considered leaving Apple's board. Either way, it seems pretty clear that Google is going to spend an awful lot of time in the antitrust spotlight -- justified or not -- over the next few years, and the company better get used to it.

15 Comments | Leave a Comment..

Can The FTC Enforce Honesty As The Best Policy?

from the Truth-Be-Sold dept

The FTC's advertising-practices division is considering an update to ad guidelines that would hold bloggers liable for false or misleading statements, if they are compensated to promote or review a product. The FTC will vote on changes to its guidelines this summer, and the agency says it will review public comments beforehand. But is additional regulation really necessary?

While some ad agencies are worried about the "chilling effect" new regulations might have on nascent viral campaigns, other groups point out that transparency should be at the core of any social media campaign in the first place. And this is concept that should be recognized before any word-of-mouth ad campaign is even started: transparency and authenticity are the keys to a brand's marketing reputation. If a company thinks it can fool consumers with astroturf campaigns, it should really think twice about the potential damage such dishonesty can do. In fact, ultimately, running honest marketing efforts will be much more effective for winning over consumers. So although the threat of new regulations might force some companies to reconsider their sneaky viral ads plans, the more realistic penalty for disingenuous ads is the loss of trust from valued customers.

Assuming, though, that additional gov't regulations are actually instituted -- holding bloggers liable will not necessarily solve the "problem" of paid blog reviews. Presumably, the objection to paid reviews is that such content misleads consumers and that companies behind the fabricated opinions are free to create as much false info as they want. However, if the liability for this unsavory behavior is laid at the feet of bloggers, then the blame is shifted from the company (that is more justly at fault) to a possible multitude of bloggers. An evil corporation bent on promoting misinformation would love to spread the liability around, since the legal burden would be on individual bloggers. The unintended consequence might be that even more dishonest ad campaigns are encouraged since the liability does not lie with the corporations backing them.

So before the FTC begins regulating blog posts, some thought to the ramifications will hopefully be brought up. The goal of protecting consumers may be a noble one, but the side effects of bad regulations could potentially make things worse.

18 Comments | Leave a Comment..

Details On The FTC's DRM Workshop

from the don't-miss-it dept

At the beginning of January we noted -- with some amount of surprise -- that it appeared that the FTC was preparing a workshop on DRM. When I was in Washington, DC recently, I had the chance to meet some of the folks putting that workshop together, and now they've sent over a more detailed list of topics up for discussion at the session, and it does seem like a pretty good list -- covering pretty much the entire range of questions concerning DRM, specifically from a consumer perspective. It's definitely an encouraging sign that folks at the FTC are recognizing that DRM can be used to do harm, rather than just (as the industry would have you believe) to "open up new business models."

19 Comments | Leave a Comment..

Is The FTC Interested In Protecting Consumers From Bad DRM?

from the that-would-be-interesting... dept

We're so used to hearing the government fall for the industry propaganda about the need for DRM that it's almost... shocking, to hear that the FTC is even willing to consider the question of whether or not it should be involved in protecting consumers from DRM. However, as Game Politics is noting, that question appears to be on the agenda of an FTC town hall meeting about DRM in Seattle in March. Of course, it sounds as though that question is just a preliminary one, as the full agenda has yet to be set. That means, it could have just been put there by a random staffer charged with filling out a few bullet points about what to talk about concerning DRM. Still, it's at least interesting to see a hint of recognition from the government that DRM has its downsides.

11 Comments | Leave a Comment..

Who Should Be In Charge Of Patent Reform?

from the everyone-wants-their-cut dept

Every year for the past few years, Congress has put forth a patent reform bill. Every year that bill has had serious problems in that it might fix some of the problems of the patent system, but would exacerbate others. And then, of course, there's a big lobbying fight, and the pharmaceutical companies (who don't want any sort of patent reform whatsoever) win -- and the bill gets killed. It's an annual tradition. However, plenty of people still realize that patent reform is necessary, and now they're debating just how it's going to happen.

Apparently, everyone seems to think they should be the ones to determine how it works. At an FTC hearing on the matter last week, FTC Chairman William Kovacic suggested that the FTC should guide the process of patent reform. Meanwhile, Chief Judge Paul R Michel of CAFC (the appeals court that handles all patent cases) disagreed, suggesting (not surprisingly) that CAFC was perfectly capable of handling modifications to patent law, claiming that CAFC had a much better handle on the situation than Congress. Of course, that ignores the long series of problematic CAFC decisions over the past few decades that only slowed once the Supreme Court got involved and started overturning CAFC time and time again.

Of course, what this probably means is that despite plenty of hand-wringing and tons upon tons of evidence of harm done by the current patent system, nothing is going to change any time soon.

22 Comments | Leave a Comment..

FTC Shuts Down More Bogus Spyware Scan Companies

from the here-we-go-again dept

A few years back the FTC shut down some scam fake anti-spyware companies that would advertise "free scans" of your computer and would then (of course) tell you you had spyware. The scam, of course, was that for a fee of only $30 or $40, you could buy their "software" that would supposedly rid your computer of spyware. Of course, your computer probably didn't already have spyware, and the software you bought certainly wouldn't do anything towards ridding your computer of any actual spyware. It looks like some new scammers have picked up where the old ones left off, because the FTC is announcing, yet again, that it's been able to shut down some bogus anti-spyware operations. Apparently, this operation was slightly more scammy, because advertising networks have stopped accepting ads for such bogus anti-spyware. So, instead, they pretended to place ads for legitimate companies, but then used some code to swap out the "good" ad with the bogus anti-spyware ad.

10 Comments | Leave a Comment..

FTC Outlaws Pre-recorded Sales Calls

from the but-will-they-enforce-it? dept

Over the past few months, at least twice a week, I've received a phone call on my mobile phone with a stern (almost angry) recorded voice saying "this is your second warning that the factory warranty on your vehicle is about to expire." Of course, the factory warranty on my car isn't about to expire, and considering that I've received about 30 of these calls, it's difficult to believe it's the "second" warning. Apparently, I'm not the only one to receive these calls. An informal poll of friends found that more than 50% of them were all receiving the same bogus calls. While those already broke various telemarketing rules, it appears that the FTC is looking to further crack down, announcing that all pre-recorded telemarketing sales calls are banned without a signed, written agreement allowing the calls. Informational calls (non-sales calls) such as informing you that a flight has been delayed are allowed -- but sales calls are not.

Of course, the big question is whether or not the FTC will actually enforce the new rules and go after violators. Part of the rule change does give the FTC more leeway in going after those responsible for the messages, but until the FTC really does start shutting some of these operations down, you can bet they'll continue making the automated pre-recorded calls. I'm sure I'll be hearing about the imminent expiration of the factory warranty on my vehicle for some time.

43 Comments | Leave a Comment..

Zango May Have Worked Things Out With The FTC, But What About The MPAA?

from the out-of-the-frying-pan,-into-the-fire dept

We've pointed out for years the various questionable activities performed by adware firm Zango (or one of its earlier incarnations). The company has gone through so many changes it's tough to follow, but every time it insists that it has somehow "cleaned up" its act, it doesn't take long for researchers to find evidence to the contrary. For a while, the company was in hot water with the FTC for tricking people into downloading its adware. It eventually settled with the FTC, paying a hefty fine. These days, once again, the company insists that it's reinvented itself to focus on the "casual gaming market."

However, that doesn't appear to be the case. I recently saw a presentation from the company where it didn't mention casual gaming at all, but instead called itself a "publisher" of content -- though it was quite vague and evasive about just what kind of content. Perhaps that's because it doesn't want parties like the MPAA to know. As Ben Edelman had noticed a few months ago -- and now more and more security researchers are finding, Zango's software is being offered up by folks who are promising fully pirated movies.

It makes you wonder if Zango recognizes that dealing with the MPAA may be a lot less pleasant than fighting the FTC. Of course, maybe the MPAA recognizes that when pirated movies come with intrusive adware like Zango, it only gives pirated movies a bad name.

12 Comments | Leave a Comment..

Amazing, But True: FTC Doesn't Want To Rush Into National Privacy Standards

from the good-for-them dept

While there are plenty of gov't agencies that seem to rush into any chance to add more regulations that grant them more power, the FTC has a history of being quite reasonable and quite conservative about these things. You may recall that years ago, the FTC was against the idea of CAN-SPAM because it would effectively legalize plenty of spam, with one FTC commissioner noting that spam should be anything that you don't like -- and legislating against that is next to impossible. Specifically, he was worried (correctly, it appears) that in allowing lawmakers to define spam, it has merely opened up more possibilities for spamming.

That commissioner (Orson Swindle) is no longer with the FTC, but the Commission seems equally skeptical of any sort of national privacy standards, noting that any set standards would deal with the market we see today, not the markets of tomorrow, and that could create serious unintended consequences. It's so rare these days to see federal agencies not leap forward to try to regulate, and to actually worry about the unintended consequences of regulating too soon, that it's rather refreshing.

13 Comments | Leave a Comment..

Who's At Fault If The FTC Is Positioning A Press Release As A News Story?

from the details,-details dept

Broadband Reports points us to a confusingly written story about supposedly "deceptive" tactics by the FTC in repurposing a press release as a news article for newspapers to run. Unfortunately, since the article itself isn't entirely clear, it sounds like the real problem isn't the FTC, but the newswire service, North American Precis Syndicate, that appears to take press releases and so-called "Video News Releases" (VNRs) and distribute them as if they were straight news stories. There are plenty of news sources that will reprint press releases (usually, though not always, making it clear that it's a press release). However, in this case, it sounds like (at least from the article's description) that North American Precis Syndicate reformats these press releases to make them seem less like press releases and more like straight news articles. So, this hardly seems like the fault of the FTC, but of North American Precis Syndicate and the news publications that rely on it for news.

11 Comments | Leave a Comment..

'Free Software' Scammers Fined $2.2 Million

from the this-is-not-the-'free'-business-model-we're-talking-about dept

We've seen various incarnations of the scam (often found in infomercials) where a company offers you something for "free," but in the fine print, you're really signing up for an ongoing paid service. For years, some of the biggest "ringtone" companies made much of their money this way, offering "free" or cheap ringtones that actually involved the user signing up for a monthly service without realizing it. The infamous "Video Professor" has been accused of running a similar system, though the company vehemently denies this.

Either way, it appears that the FTC is starting to crack down on some of these practices, fining a competitor to "Video Professor," called ThinkAll, $2.2 million. Apparently ThinkAll took this scam to a new level. It offered "free" software, where you simply had to pay for the shipping and handling -- though, it sounds like that was really just so the company could get your credit card on file. After receiving that first free CD, customers were offered 3 more titles totally free (not even any shipping). If you decided to accept that software (and why wouldn't you?) it made you check a box saying you had read the terms of service. Of course no one reads the full terms of service, which include (hidden down in the 7th paragraph) the fact that in accepting this "free" software, you're actually agreeing to sign up for a monthly fee-based service. Quite sneaky... until the FTC stepped in. Hopefully other businesses take notice and start avoiding these types of scams.

32 Comments | Leave a Comment..

Companies To Be Held Liable For Selling To Online Criminals

from the seems-a-bit-extreme dept

One of the reasons why various safe harbor rules exist is to protect parties who really have nothing to do with any kind of law breaking from being liable for the activities of others. Thus, we don't blame an ISP for the activities of one of its users, even if that user breaks the law. That's both reasonable and fair. Those who want to blame those providers often do so just because it's easier -- or, more commonly, because they somehow think it's better for that service provider to somehow act in the role of the police to make things easier. Something similar seems to be happening with the FTC placing the onus on small businesses to make sure they don't sell to online criminals. Slashdot points us to the news that, starting November 1st, all companies are supposed to compare customer info with a "red flag" list of online identity fraudsters and money launderers. Firms that fail to check may be liable if they end up doing business with "known" criminals. You can understand the reasoning here. It certainly makes it a lot easier for the FTC to try to crack down on these crimes. But it adds significant expense and liability to small businesses for potential crimes in which they were totally uninvolved.

14 Comments | Leave a Comment..

Court Overturns FTC Ruling Against Rambus

from the bad-news-all-around dept

We've been covering the story of Rambus' tricks to get itself a patent that covered a standard by sitting in on standards meetings and then modifying its patents to cover the standard. The rulings on the various lawsuits have gone back and forth on this, and while Rambus has had some wins and some losses in court, last year the FTC stepped in and smacked the company down, noting that it had used questionable means to get itself an effective monopoly on the memory market. Unfortunately, that FTC ruling has now been overturned by an appeals court that said the FTC failed to show evidence of a monopoly. This is unfortunate for a variety of reasons. If the FTC's ruling had been allowed to stand, it would have shown how an ill-gotten patent would be the equivalent of an illegal monopoly. That seems like the proper result, as a patent clearly is a government granted monopoly. So, if the patent is gained through questionable means, then that monopoly should be considered an illegal monopoly. Unfortunately the appeals court disagreed, and that will make us all worse off, as it will give the government fewer tools to crack down on abusers of the patent system.

5 Comments | Leave a Comment..