7 Recent Updates to Tech Laws Consumers and Small Tech Companies Should...

7 Recent Updates to Tech Laws Consumers and Small Tech Companies Should Know About


As users of technology, American consumers and businesses rarely are aware of the different rules that are being proposed, have been implemented or being enforced nationally and internationally that may impact them and their bottom lines.  To help navigate some of the most recent laws impacting technology, below is a brief primer and summary of key laws, rules and directives:

What? The America Invents Act

Who is impacted? Small and large inventors

What does it say? The law updates the 1952 Patent Act , most notably the part  settling disputes that occur when two or more entities seek a patent for the same invention. The old law would have awarded the patent to the person who proved he actually invented first.  The new law, which passed in the U.S. Senate overwhelmingly (95-5) on March 8, 2011, awards the patent to the first to file the patent application.

What are the implications? Supporters of this change say it eliminates costly and time consuming procedures associated with having to prove who invented first and it aligns the United States with other industrialized nations.  Opponents say the law benefits larder companies over small ones and independent inventors who may not have the resources to win the race to file the patent application, writes Technology Law Resource. To address this concern, the new law would permit an applicant to claim a new invention derived from a previous claim, but that concession still benefits large companies who have huge innovation labs.


What? Creating Jobs Through Small Business Innovation Act of 2011

Who is impacted? Small businesses in the technology and innovation field and the large financial investors who want to invest in them

What does it say? The Act, which has gone through the mark-up stages and is on its way to becoming law,  reauthorizes and updates the Small Business Innovation Research Program (SBIR), first created in 1982.  The  SBIR awards grants in three phases to support research and technology that may result in innovation that benefit the economy and consumers.  The current law does not permit companies majority-owned by venture capital to receive grants.  Among other things, the bill would eliminate pre-selection processes which served as roadblocks and red tape.  It also increases the amount of money awarded, which hasn’t been raised since 1982.

What are the implications? In tough financial times, it permits leveraging through private investors and the streamlined application process will make it easier for small businesses to participate.  It also requires agencies to complete their review process within 90 days which would give small businesses more certainty as to when they can expect a decision on their awards.  House Small Business Subcommittee on Healthcare and Technology Chairwoman Renee Ellmers, R-North Carolina, said in a release, “This bill is a win-win for America — it will help small businesses across the nation create jobs and produce new technical and scientific solutions to meet the diverse needs of the government. As our economy is in the midst of a comeback, it is important for Congress to pass legislation that helps our nation’s most effective job creators, our small businesses.”


What? A UK Information Commissioner Office Guidance on amendments to the European Union Privacy and Electronic Communications Directive, referred to as the “Cookie Directive”

Who is impacted? American businesses that reach out to or are accessed by Europeans

What does it Do? In 2009, the  European Union issued a directive, since they can’t pass laws, requiring web companies to get permission from users before implanting electronic cookies that store and track users’ internet activities. Only two of the 27 countries that belong to the European Union had implemented the law because it was unclear. Well, on May 9, 2011, the ICO indicated the UK will beginning May 26, 2011. US Internet companies that have sites that target and/or reach European consumers will have to abide by the rules on a sliding scale basis. If the web cookie is very intrusive, websites should obtain consent perhaps through a pop-up window requiring consent.  However, the ICO recognizes that there are some cookies that do not intrude on users’ privacy at all.  For those, a less direct means of consent, perhaps through a notice on its website terms and conditions page.

What are the implications? “What we see is that the member states transpose it in a totally fragmented manner,”  Bloomberg News quoted  Kimon Zorbas, vice-president of IAB Europe, a digital advertising group whose members include Google, Yahoo and Microsoft Corp. (MSFT).  He added, “the law makes it difficult for web based companies to do business in Europe.” “The problem is how to implement it; the method of consent can differ from one cookie to another, with some being very intrusive while others are necessary for the operation of a service,” Quentin Archer, a technology specialist at law firm Hogan Lovells LLP in London told Bloomberg News. “Because there are so many different types of cookies it’s not really possible to give precise guidance, so businesses are left looking at the general principles.” Noncompliant companies may be subject to sanctions and the EU is already watching big companies like Google and Yahoo!


What? Electronics Communications Privacy Act– Senator Patrick Leahy, D-Vermont, introduced a bill that would update the law to incorporate current technology tools such as Facebook and Twitter; and clarify how the government can obtain copies of your Tweets and access to your Facebook information, for example.

Who is impacted? Consumers that use electronic media to communicate, including Facebook and Twitter

What are the implications? The bill would prohibit service providers from giving up email and other electronic communication to the government voluntarily, but instead would require the government to get a search warrant to obtain any electronic communications from a service provider. The government also would need an administrative or grand jury subpoena to get electronic communications records, including user address, name and session data.  In interest of disclosure, except when national security concerns are presented, the government would have to notify a user that it has access to their electronic communication by at least 90 days.  The FBI would only be able to get non-content data such as a user’s address, name and session-related numbers for counterintelligence purposes.  While providing users added security and privacy and limiting government access of their electronic data, in these tense times, the laws may have negative implications on the government’s ability to fight terror.


What? Inquiry into the SAT and ACT data collection — Currently, the nonprofit groups that give college entrance exams sell student’s scores to colleges for as much as $.33 per student, earning millions of dollars off of students information without clearly notifying parents.

What it does? U.S. Representatives Ed Markey, D-Massachusetts, and Joe Barton, R-Texas, sent  letters to the College Board, owner of the SAT college entrance exam and its competitor, ACT Inc., asking each  to explain how it collects and stores data from students.  The inquiry is part of an effort from the government to enhance teen privacy laws.  Earlier online privacy legislation that the two lawmakers introduced in May do not cover nonprofit companies such as the College Board and ACT.

What are the implications? The inquiry may result in the legislators amending their existing bills to require nonprofits like SAT and the College Board to more explicitly explain how they use students’ personal information to make money.  According to a recent Bloomberg article, the New York-based College Board had $63 million in revenue  in 2010, partly from sales of the 5.2 million names an email addresses in its databases.  Meanwhile,  Iowa City, Iowa-based ACT took in $7.5 million in revenue from its Educational Opportunity Service for the most recent year, which ended in August. It has a database of 2.4 million names of high school sophomores, juniors and seniors.  Colleges and Universities ordinarily would not be able to get academic records from schools without parental consent so purchasing this data from College Board and ACT, Inc. eliminates that hassle.


What? California Senate Bill 242 Facebook Privacy Bill

What  does it say? The bill, which failed last week, would have required social networking sites  like Facebook to make users’ default public information only their name and city of residence.

What are the implications? Usual adversaries, Google and Facebook, joined a  protest letter to California state rep Sen. Ellen Corbett which said the law would deeply impact the social networking revenue model which relies on advertisers.  They also argued the law would infringe on their commercial free speech rights and ultimately reduce state revenues.


What? Congressional hearings on Apple iPhones and Google Android phones’ collection of user geolocational data

What does it say? Last month, Congressional lawmakers summoned Apple and Google to a hearing on mobile privacy to explain revelations that iPhones and Android phones were recording information about owners’ locations, and, in some cases, transmitting that data to Apple and Google without sufficiently clear consent, a recent CNET article explained.  In a letter following- up from the hearing, Senator Al Franken, D-Minnesota, asked  Apple and Google to require that apps clearly detail their privacy policies so users can better understand what information is being collected.  Apple iPhone has a  tracking file, that contains information about Wi-Fi hot spots and cell towers, and Apple said it had no sinister plans for the information. Explaining that the file was a smaller part of a location database used by its devices to more quickly determine their location. Google said its tracking services are opt-in and it cannot control how third parties use data collected after users opt –in.

What are the implications?

Neither companies require application developers to have privacy policies, and several were discovered to not have links to privacy policies or have any policies at all.

“Requiring that each app in your stores have a clear, understandable privacy policy would not resolve most of the privacy concerns in the mobile market,” Franken wrote in the letter to Google and Apple. “But it would be a simple first step that would provide users, privacy advocates, and federal consumer protection authorities a minimum of information about what information an app will access and how that app will share that information with third parties.” Apple said it does not track users’ location and has no plans to do so.  CNET quotes Catherine Novelli, Apple’s vice president for government affairs.  It wrote that  “Apple will update its software to alter the way its iPhone stores location information  and fix bugs, including  one that caused crowd-sourced location information to be stored on and downloaded to the device even after Location Services had been turned off.”


What? Geolocational Privacy and Surveillance Act, or GPS Act

What does it say? The legislation which will soon be introduced by Senator Ron Wyden, D-Oregon, would provide new privacy protections for Americans by requiring police to obtain search warrants to track the locations of cars and cell phones.

What are the implications? The bill has support from a coalition of Internet companies, civil libertarians, and wireless carriers, saying location information should be accessed “only with a warrant.”  Law enforcement and the Obama administration have argued that consumers don’t have a “reasonable expectation of privacy” in the last place they’ve been and requiring a warrant in these cases would slow down the police’s ability to track child traffickers, for example.

The cut and dry? Privacy concerns are one thing, but do we want to slow down police work, cut off advancement because some are paranoid over what the government will possibly do?


  1. This article is very informative and resourceful — I've already added it to my "favorites" and will undoubtedly return to it from time to time. Thanks Ms. Ghatt!