0

Will The Disruptors Be the New Dominants?: On Uber, AirBnB, and other seeming upstarts

Loving your online, decentralized model may not work when you care about safe drivers, clean rooms, and other real-world issues. Claire Cain Miller brings up this problem in today’s New York Times. She points out that AirBnB and Uber are trying to follow “a religion [from] Silicon Valley: Serve as a middleman, employ as few people as possible and automate everything. Those tenets have worked wonders on the web at companies like Google and Twitter. But as the new, on-demand companies are learning, they are not necessarily compatible with the real world.” I agree. In The New Steam: On Digitization, Decentralization, and Disruption, I point out that “transactions costs related to safety, quality, property rights, contracting, and knowledge may be more acute in a digitized, decentralized world.” Ms. Cain Miller (apologies if Miller is the preferred last name), hits on some great points about the differences between the types of harms in the online and offline world. As she looks at it, the lack of humans is a problem for the reality of the services and relates to politics: “The belief that problems can be solved without involving people is probably why many of these companies did not meet with regulators and officials before starting services in new cities.” I think there is something more going on here.

Yes, the big firms in the space will engage in lobbying, but part of their story (and practice) will have to be about how they meet the issues of labor, safety, and more that they affect. As I put it:

[E]ven with digitization, economic questions will remain, but we must understand what they are and why they persist to see what the future may be. Douglass North captures a paradox that goes with transaction costs. Greater specialization, division of labor, and a large market increase transaction costs, because the shift to impersonal transactions demands higher costs to: 1)measure the valuable dimensions of a good or service; 2) protect individual property rights; 3)enforce agreements; and 4)integrate the dispersed knowledge of society.26 Standardized weights and measures, effective laws and enforcement, and institutions and organizations that integrate knowledge emerge, but the “dramatic increase in the overall costs of transacting” is “more than offset by dramatic decreases in production costs.” Digitization forces us to revisit these issues. With digitization, we are seeing an abundance of person-to-person transactions, but with the problems of impersonal transactions.

In simplest terms, AirBnB , Uber, et al. may face some rocky times, but there is a good chance they will figure out how to address the current issues and end up being the dominant firm, not the small disruptor. As Ms. Cain Miller notes, AirBnB has added hotlines and insurance. Uber has also increased its insurance requirements. If the disruptors continue to address a decent amount of the issues North calls out, my bet is that “this era of disruption and decentralization will likely pass and new winners, who will look much like firms of old, will emerge, if they have not already.”

0

Makeup as the Killer App for 3D Printing?

A woman named Grace Choi seems to have come up with a way to 3D print “lipstick, lip gloss, eye shadow, blush, nail polish, brow powder—pretty much everything except foundations and face power” at home. Her company, Mink, uses FDA approved inks (vegetable or edible). The goal is that a consumer could take a picture or using an online image of the makeup, the software would match the color and print out just enough makeup for that application. If the prototype holds up, this product could be one to bring 3D printers into many homes. But is it the killer app for all of 3D printing?

Put differently, a fair question that comes up when I talk about 3D printing is will it really be a device in every home? The answer depends on what one means by the question. First, at this point, you need a different 3D printer for different outputs (e.g., makeup or something in plastic as opposed to metal or ceramic). If Mink takes off, yes, a type of 3D printer could be in many, if not a majority, of homes. But as Gerard, others, and I have said, this device is not a replicator. So until a 3D printer is able to have multiple mediums in one printer, the spread of the devices will probably vary depending on the medium of the output. As such the killer apps for each medium will be specific to the device. That said, Mink may have a larger importance for 3D printing and home technology.

Mink could be a sign of where home inventors and makers are headed. Ms. Choi hit on her idea and took about a month to work through 20 printer prototypes, sort the ink issues, and have her working Mink printer. Granted she is a Harvard MBA and apparently has family support, but her approach could lead to new players in her field and others. As reported by CNBC, Ms. Choi, “Much of the make-up sold by high-end labels starts with the same base substrates, or ingredients, as cheaper ones.” This point is part of what motivated Patents Meet Napster. The core things needed to make many products are easier and easier for anyone to obtain. If Mink is priced at $300 to start as promised, that price will likely drop over time. If women adopt the technology and then tinker with it to improve on the hardware or the design colors, they may be inspired to launch their own companies and tinker with other technologies to get there. Like car and computer enthusiasts, cosmetic enthusiasts may find that playing with making what they want and love can lead to new products and businesses. And if that happens at scale in one sector, it may spur adoption in others. So maybe 3D printed makeup is not a pure killer app for 3D printing, but maybe it does not have to be to still have some great effects.

9

William Jennings Bryan and the Bill of Rights

91px-W.J._Bryan_cropI’ve made an interesting discovery about the history of the Bill of Rights that I want to share.  In prior posts, I’ve noted that people did not start commonly calling the first set of amendments a bill of rights until around 1900.  One step in that direction was when Congress created a territorial government for the Philippines in 1902 and gave some of the guarantees of the first set of amendments to that colony (though the Act did not call this part of a bill of rights, the Supreme Court did in 1904).  More broadly, the Court’s cases on Puerto Rico and the Philippines define the bill of rights in the modern sense more often (though they did not speak to the importance of the bill of rights in the way that we do).

In observing all of this, my initial thought was that there might be a connection between the transformation of the bill of rights and colonialism.  The acquisition of colonies was controversial at the time, and extending basic rights could have been a way to satisfy critics and quell the rebellion that was ongoing in the Philippines.  But is there any evidence  that people cared about this issue then?

I think so.  A month after William Jennings Bryan was nominated for president by the Democratic Party in 1900, he gave his acceptance speech in Indianapolis.  (In those days, presidential candidates did not accept their nomination at the convention.)  Most of Bryan’s speech was an attack on imperialism, and he stated his line of attack this way:

There is no place in our system of government for the deposit of arbitrary and irresponsible power. That the leaders of a great party should claim for any president or congress the right to treat millions of people as mere “possessions” and deal with them unrestrained by the constitution or the bill of rights shows how far we have already departed from the ancient landmarks and indicates what may be expected if this nation deliberately enters upon a career of empire.

Why is this important?  As far as I can tell, this is the first time that any major presidential candidate said anything about the bill of rights as we understand that term.  Moreover, Bryan made the issue that Congress addressed two years later–colonies could not be governed without the protection of (at least part of) the bill of rights.  Bryan, in essence, made the definition of the first set of amendments as a bill of rights into a significant political issue.

 

0

Vanderbilt Law Review, Volume 67, Number 5

The Vanderbilt Law Review is pleased to announce the publication of our October 2014 issue:

ARTICLES

Mehrsa Baradaran, Regulation by Hypothetical, 67 Vand. L. Rev. 1247 (2014).

Matthew R. Ginther et al., The Language of Mens Rea, 67 Vand. L. Rev. 1327 (2014).

Anna Su, Speech Beyond Borders: Extraterritoriality and the First Amendment, 67 Vand. L. Rev. 1373 (2014).

NOTES

Philip L. Lu, Trademarked for Death? A Licensee’s Trademark Rights After an Executory Contract Is Rejected in Bankruptcy, 67 Vand. L. Rev. 1431 (2014).

Courtney J. Mitchell, Keep Your Friends Close: A Framework for Addressing Rights to Social Media Contacts, 67 Vand. L. Rev. 1459 (2014).

Tom S. Xu, Confrontation and the Law of Evidence: Can the Language Conduit Theory Survive in the Wake of Crawford?, 67 Vand. L. Rev. 1497 (2014).

1

Meat Market Ruminations

So, to all of those who are braving the Marriott today: welcome to the first step of a profession that can be personally satisfying, enriching, and challenging.  I thought I would capture a few thoughts about faculty hiring.
First, it is quite true that faculty hiring has become a bit of a pro-am conflagration, where many of the candidates that appear in the market show up with numerous significant publications and significant teaching experience to add to their already impressive credentials.  This is neither a bad thing nor a good thing, but rather a point in time where the hiring market has been unable to absorb many of those candidates in prior years into permanent tenure track position.  (We are all hoping for a turn around).  The outcome is that there are far more VAPS, Fellows, and other non-traditional academic positions that have been filled over the years, where people sit in waiting for a tenure track position. I would not be honest if I did not admit that they have a significant advantage over people who are coming out of law practice.   The presence of mentors on the host institution’s faculty, daily advice about the meat market and how to approach it, as well as time to think about how to make the best impression in a thirty minute screen are just advantages in an already competitive market.

However, even the best placed people blow it from time to time.  I recall overhearing from the hallway in the Marriott (the interview room I was going in left the room door cracked) someone in front of me say to the interview team “How do you handle teaching students who are significantly less intellectually equipped than you?”  I remember thinking — that was your one question. I don’t know what happened in that person’s case, but I can’t imagine they got the call back.  No one (and I mean NO ONE) wants to hear from someone on the outside that their students are less than adequate.  Sure we might talk about how they disappoint us in various ways.  But we never want to hear an outsider (much less someone we are interviewing to join our community) start that relationship by criticizing a major component of who we are.   Inferring that the students you propose to work with are anything other than thoughtful, astute and prepared to wow everyone they come into contact with comes off as arrogant and uninformed — after all, you probably haven’t even met a student from that school yet.

Second, personality matters way more than you think in these processes.  If you are someone that the faculty thinks it would like to have around on a daily basis, have big ideas about your area of expertise (whether its property, torts, or legal writing) and seem to be a serious, productive, and positive person, you are in the conversation.  The fact that you made it in the room signals that something on your CV made the committee think that there is something about this person that they would like to find out more about.   The best you can do is be yourself and play to your strengths.   I remember talking with someone who has become a good friend since I started teaching who had interviewed me at the Marriott several years ago.   That evening we ended up in a social setting and had a great conversation.  Since that time that person has told me that the person at the bar is someone they would have loved to get to know — the one that showed up in the room — the super serious, trying too hard candidate, not so much.  On this side, I completely see what he meant.

My last piece of advice relates to after the meat market.  Whether you land the job you want, a fellowship or just return to practice, find someone on the inside (preferably on your faculty that you are working with) to be a mentor.  Everyone can learn something from someone else.  It doesn’t matter if you are a Ph.D. that is several years older, the people in your new institution offer insights into the process and the views of faculty governance that you don’t have access to.

In short — Have fun.  Good luck.  Be you (unless you are someone that is imminently unlikable — then be someone else).

Reining in the Data Brokers

I’ve been alarmed by data brokers’ ever-expanding troves of personal information for some time. My book outlines the problem, explaining how misuse of data undermines equal opportunity. I think extant legal approaches–focusing on notice and consent–put too much of a burden on consumers. This NYT opinion piece sketches an alternate approach:

[D]ata miners, brokers and resellers have now taken creepy classification to a whole new level. They have created lists of victims of sexual assault, and lists of people with sexually transmitted diseases. Lists of people who have Alzheimer’s, dementia and AIDS. Lists of the impotent and the depressed.

***

Privacy protections in other areas of the law can and should be extended to cover consumer data. The Health Insurance Portability and Accountability Act, or Hipaa, obliges doctors and hospitals to give patients access to their records. The Fair Credit Reporting Act gives loan and job applicants, among others, a right to access, correct and annotate files maintained by credit reporting agencies.

It is time to modernize these laws by applying them to all companies that peddle sensitive personal information. If the laws cover only a narrow range of entities, they may as well be dead letters. For example, protections in Hipaa don’t govern the “health profiles” that are compiled and traded by data brokers, which can learn a great deal about our health even without access to medical records.

There’s more online, but given the space constraints, I couldn’t go into all the details that the book discloses. I hope everyone enjoys the opinion piece, and that it whets appetites for the book!

0

Another in the Stop, Be A Better Lawyer Posts

With all the focus on law in alleged decline, and the ease with which we can put our heads deep into a subject, too much can pass by. That is why on occasion I post about meteor showers, eclipses, and other wondrous fun. Fun can die. Wonder can fade. When I taught professional responsibility, I always tried to remind students that the profession can be tough (just look at substance abuse and divorce rates for lawyers), but that they should try to find part of the law that excited them. One had to know that even then the fight is long and difficult, but if you love the work, much of the burden is reduced. If you are lucky, you may be able to have the joy that these science folks share in the video below. And if the career is not giving you a way to find the wonder, find it elsewhere. That too can lift you up, and you will be a better lawyer. Yes, empathy matters, and I think it grows when we remember that are humans running through life trying to make things work and maybe a bit better too.

So I give you this video. I hope deGrasse Tyson is correct that we are all connected by logic. But even if he is incorrect, as Guru Sagan says, “The beauty of a living thing is not the atoms that go into it, but the way those atoms are put together.” Enjoy.

1

“Unpublished” Supreme Court Orders

Supreme Court watchers are expressing some consternation about the Court’s willingness to take significant steps in recent cases (same-sex marriage, abortion, and voting rights) without explanation.  This is especially true with respect to granting or denying stays, though in the same-sex marriage cases that concern extends to the denial of certiorari.  What in blazes is going on here, they ask?  Doesn’t the Court owe us some explanation?

I wonder if the Justices should consider an option used in the circuit courts–an unpublished order–to provide more transparency in these situations.  One can understand why the Court would not want to use a published opinion to explain a decision about a stay (which is only a preliminary or tentative act) or the denial of certiorari (as that would set a precedent without the benefit of full briefing and argument).  I can, though, imagine doing so through an order that says “this may not be cited as precedent” if the Court felt an explanation was necessary.  Granted, people would still try to cite these orders (as a law clerk, I often saw attorneys citing unpublished orders), but a norm could develop that would make these statements non-binding.

Most of the discretionary actions that the Court takes would not warrant an explanation (certiorari denials, petitions for rehearing, original habeas petitions), but there is the occasional exception.  Right now only a dissenter can open a window into what goes on with respect to these important choices.  I’m not sure that is always good enough.

0

The Leaked TPP: Some notes, and Criminal Copyright

Today Wikileaks released the latest leaked draft of the IP chapter of the Transpacific Partnership Agreement (TPP). The TPP is a plurilateral trade agreement being negotiated between select countries across the Pacific, and is the latest in a longish line of free trade agreements that address IP law in great detail.

Free trade agreement negotiations are subject to a surprising amount of secrecy, but select industry advisers have access to detailed US negotiating objectives. Today’s leaked text, dated May of 2014, allows public interest groups and the general public a chance to play catch-up to US industry advisers.

I suspect that the drafts are often leaked, or “pleaked“,  by negotiating partners seeking to activate US public interest groups more sympathetic to their negotiating positions than to the positions proffered by the US. The leaked text shows evidence that such pleaking can work: more controversial provisions from older leaked drafts, including one in direct conflict with the Supreme Court’s decision on first sale doctrine in Kirtsaeng, have been removed. And the repeated leaking raises the question of why the US doesn’t voluntarily open the process up earlier- if leaking is now so prevalent that we’re going to see what’s in the agreements anyway, why insist on the dirty haze of secrecy and keep the public one step behind?

A number of people at public interest organizations (KEI, Public Citizen) have criticized the leaked text’s patent provisions for blocking access to medicines. The text also contains extensive provisions on geographical indications, and public performance rights, each of which raise significant issues (especially performance rights in light of the controversial Ninth Circuit decision in Garcia- for more on this issue in the international context, see Jacob Victor’s just-released essay).

The leaked draft also contains language on trade secrets that could be read to require a private cause of action, and may end up being used to launder federal law in the current debates over whether the U.S. should create a federal trade secrets private cause of action.

But the portion of the draft I would like to highlight is its provisions on criminal copyright law. Criminal copyright is a large part of what got ACTA rejected in the EU. As many have noted, the United States does not have the greatest interface between its copyright law and free speech rights, thanks to Supreme Court decisions in Eldred and Golan. As a consequence, Congress has been able to legislate into existence criminal copyright law that impinges on free speech values both by defining a low level of infringement as criminal, and by employing enforcement tools (such as the seizure of websites) that restrict freedom of expression.

The leaked draft shows a fight between the US and Canada over the scope of criminal copyright infringement and enforcement. Canada wishes to clarify that countries may restrict the criminalization of infringement to truly commercial scale infringement (see fn 183), while the US, per our domestic statute (the NET Act), wishes to reach noncommercial acts. The US fought China on this exact issue at the WTO and lost, so has been using free trade agreements to try to raise the TRIPS standard. The TPP parties are evidently debating whether to include the following: “For greater certainty, “financial gain” does not obligate a Party to provide criminal procedures and penalties in cases of de minimis infringements.” My guess, given past FTA language, is that the US comes down strongly against this footnote.

The underlying standard for criminal copyright infringement matters because it brings with it a host of enforcement tools, and active involvement by the state, thus implicating privacy in addition to free speech.

And when the low standard gets exported from the US, it can result in unintended consequences abroad. In Colombia, which enacted its current criminal copyright law pursuant to its free trade agreement with the US, a graduate student was arrested for posting a fellow scholars’ academic paper online without permission. Annemarie Bridy points to this prosecution as the consequence of US trade policy. And while the EFF is optimistic that the student should be acquitted under Colombian law, the case shows that free-speech fears over criminal copyright enforcement are real.

Until enhanced criminal copyright law comes off the US trade agenda, free trade agreements will continue to face opposition from those concerned about free expression and privacy online.