US & Canada

US Supreme Court weighs data mining and privacy rights

Mixture of coloured pills courtesy: EyeWire Inc.
Image caption Information gained through data mining can be used to try to persuade doctors to prescribe certain drugs

The United States Supreme Court hears a case on Tuesday morning with enormous implications for the world of technology and commerce—and with significant privacy interests at stake for people all over the world.

The justices have been asked to determine whether and to what extent a state may regulate corporate data mining of information about the legal drugs doctors prescribe and patients use.

Here's how the relatively new practice of data mining works.

In Vermont, where the case Sorrell v IMS Health started, state law requires a patient to provide to the pharmacist the "prescriber's name and address, dosage, and quantity of the drug, the date and place the prescription is filled, and that patient's name and gender".

Selling data

Pharmacies then sell the data to data mining companies, which then aggregate the information and sell it to pharmaceutical companies, which in turn use it in marketing to doctors the drugs they are prescribing (or should prescribe).

At some early point in this process, information which would identify patients is said to be deleted by the companies.

But in 2007, Vermont took its concerns about this commercial paradigm one step further. It enacted a law designed to protect the privacy rights of doctors and patients and to encourage the prescription of non-generic drugs (whose makers generally do not use data mining as a marketing tool).

Arguing that such a law violated their first amendment "commercial speech" rights to the use of the information, the data mining companies sued.

Is it constitutional?

So far, two federal appeals courts have looked at the issue. A panel of the 2nd US Circuit Court of Appeals, which handles federal litigation arising in Vermont, ruled 2-1 last November in Sorrell that the state's anti-data-mining law was unconstitutional.

Vermont's effort to restrict the use of the information from its prescribers was not "narrowly tailored" and did not "directly advance" the state's goals, the appeals panel ruled.

It is this ruling that is the immediate subject of Tuesday's appeal before the Supreme Court.

But, in 2008, a panel of the 1st US Circuit Court of Appeals, which handles litigation out of New Hampshire, came to a different conclusion about a similar law in that state.

The 1st Circuit declared New Hampshire's data mining law to be constitutional because it regulated "only the conduct of data miners" and not any first amendment "speech" that would warrant protection.

And even if the law did implicate such commercial speech, the 1st Circuit ruled, New Hampshire's rationale for its restrictions passed the applicable constitutional test.

So the Supreme Court on Tuesday will be asked to broker this conflict between the two lower courts.

The 2nd Circuit viewed the Vermont law as an impermissible restriction upon "truthful" commercial speech that impacted the "marketplace of ideas" over medicine safety and effectiveness.

The 1st Circuit viewed the New Hampshire law as a permissible "elimination" of the data miners' "ability to use a particular information asset - prescribing histories - in a particular way".

Wider implications

Which way the Supreme Court justices view these laws will determine the outcome of the case.

Image caption The Supreme Court's ruling on data mining has wide implications and will be closely watched

So will what the justices think of their own precedent - a 31-year-old decision styled Central Hudson Gas v Public Service, which all of the parties and both of the federal appeals courts involved frequently cited.

It is not hard to see that the Vermont case is bigger than just a legal fight over what to do with information about prescription drugs.

Data mining obviously can be (and is) used elsewhere in the modern world, from giving retailers information about shopping patterns to giving the police information about crime to giving computer companies new weapons in the fight against spammers.

It can be (and is) used both as a corporate sword and as a commercial shield and the frequency of data mining will only increase as the technologies behind it improve.

This helps explain why many people both in and out of government, and not just in the United States, are paying close attention to the case as well.

A decision is expected from the court by the end of June.

Andrew Cohen is a national correspondent for and chief legal analyst for CBS Radio News

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