E-Commerce Law Week, Issue 532

Federal Circuit Ruling Restricts Use of Method Patents

A recent ruling by the en banc Federal Circuit may make it more difficult for companies to patent "business methods" and processes for the manipulation of electronic data.  In In Re Bilski, the court upheld the Board of Patent Appeals and Interferences' rejection of a patent for "a method of hedging risk in the filed of commodities trading," finding that it was not "directed to patent-eligible subject matter under 35 U.S.C. § 101."  The court concluded that "[p]urported transformations or manipulations simply of ... legal obligations or relationships, business risks, or other such abstractions cannot [be patented] because they are not physical objects or substances, and they are not representative of physical objects or substances."

Court Rules that Private Search of Computer Does Not Give Government Carte Blanche to Search Hard Drive

Courts have frequently wrestled with the question of whether a person retains a reasonable expectation of privacy in stored data, such that the government would require a search warrant to examine the data, even if the data had previously been examined by the person's employer or another private party.  A federal court's recent ruling in United States v. Crist sheds some light on this issue, and suggests that a person may indeed retain his privacy rights as against a government search in such a scenario, at least where the scope of the private party's prior search was limited.

NIST Offers Guidelines for Securing Cell Phones and PDAs

The National Institute of Standards and Technology recently released a set of "Guidelines on Cell Phone and PDA Security."  These guidelines note that the size, portability, and wireless interfaces of cell phones and PDAs can expose these devices to loss, theft, unauthorized access, malware, spam, and electronic eavesdropping and tracking.  In an effort to mitigate these threats, the guidelines recommend that organizations encrypt any sensitive information stored on cell phones or PDAs, use passwords and other means of authentication to control access to these devices, and establish a "mobile device security policy," among other actions.  While the guidelines were prepared for use by Federal agencies, NIST notes that they may also be used by business and other nongovernmental organizations.  The guidelines could thus offer another source for future courts and regulators to consult when determining whether a company had "adequate" security measures in place when they suffered a data breach.

Questions and comments about E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.