Category: Uncategorized

By Victoria F. Phillips

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository. 

By: Ziyu Ma & Rita Xia

Films, like all cultural exports, are representative of a nation’s soft power. No industries have done better than Hollywood to effectively promote the U.S. soft power overseas. China, with its 1.4 billion people, is a prime market not only for Hollywood’s cultural exports but also for its generation of billions in revenue for U.S. businesses. China is currently the second largest box office market in the world and is projected to surpass the United States in 2020. The online film market is just as valuable with more than 800 million internet users in China, almost three times that in the United States.

However, the revenue also brings rampant piracy issues. Presently, many countries utilize a pre-agreed distribution system in which each form of exploitation of a theatrical film—such as a theatrical release, DVD release, or television screening—takes place in sequence with no overlap. This industry standard provides an “exclusive window of time” for each form of exploitation and is crucial to ensure that copyright owners or licensees are able to maximize their profits without having to compete with other media at the same time. However, this system is compromised when copies of the film become available to the public through other media without proper rights or licenses. With the advance of technology, film piracy on the internet is now the main challenge for U.S. businesses. In 2016, the United States suffered a $4.2 billion loss due to piracy in China, and that number is projected to reach $9.8 billion in 2022.

Policy barriers are a major factor behind the rampant film piracy in China. Despite China’s improved efforts in recent years to combat piracy, its regulations on foreign film imports and lack of effective penalties for copyright infringement continue to incentivize piracy activities. The Chinese government uses an annual import quota to control the influx of foreign entertainment products. Over the last two decades, China has eased up on the number of U.S. films imported into China, but the annual quota has not broken double digits.

China’s stringent censorship and review process create another hurdle for U.S. film businesses. All foreign films and TV shows must be approved by China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) before they can be shown or distributed in China, and the standard of review can often be arbitrary. In response, some U.S. studios made necessary edits or cuts in order to get the approval stamp. However, with public demand for original, uncensored Hollywood films remaining high despite and because of these barriers, people instead turn to illegal means.

Since its accession into the World Trade Organization (WTO), China has increased efforts to crack down on piracy, including starting initiatives by the National Copyright Administration of China (NCAC) to censure unlicensed films and TV shows. However, the level of piracy has not changed significantly in part due to loopholes created by low administrative penalties and virtually nonexistent criminal prosecutions for online piracy.

In light of the recent trade tensions between the U.S and China, there is pressure within the Chinese market to slow down the importation U.S. films. The halting of imports would be financial costly to U.S. businesses and will further limit Chinese consumers’ access to U.S. content. As data of prior years has shown, consumers will not have the patience to wait but will turn to illegal channels to watch their favorite films and TV shows.

There are a few options to mitigate the impending piracy challenges. Shifting to U.S.-China co-productions is a good short-term solution to bypass the import restriction, as these co-productions count as Chinese domestic films. Seeking intervention from the WTO is another possible solution. China’s current copyright enforcement and trade regulations are not compliant with its responsibilities as a member nation of the WTO. In fact, WTO has already created measures that can address China’s transgressions. Instead of threatening China with unilateral tariffs and inciting retaliations that will potentially harm U.S. businesses, the U.S. can allow WTO to step in and place more neutral pressure on China.

Nevertheless, long-term plans are needed to implement market and policy changes and to promote better public and judicial knowledge of copyright law. There should be discussions about the possibility of eliminating the foreign film import quota or at least drastically increasing the number of film imports allowed in the near future. Moreover, the Chinese government needs to improve its criminal and civil enforcement measures against infringers. China should also work to improve the judicial and public knowledge of copyright protection and enforcement, so more people will recognize and respect the value of intellectual property and learn to see piracy in a negative light.

By: Payton Hoff & Anis Houssein

In the middle of 2019, Capital One faced more than thirty federal class actions after the bank’s announcement of a data breach that uncovered the data of about 100 million customers in Canada and the United States. Class actions have been filed in federal courts in Virginia, where Capital One is headquartered, as well as Washington, D.C., Seattle, San Francisco, New York, Philadelphia, and Tampa.

On July 19, 2019, an unauthorized entry by a data thief allowed the acquisition of Capital One’s credit card customers’ personal information. The breach affected over 100 million individuals in the United States. The information exposed was information that the bank obtained between the period of 2005 through the first three months of 2019.

Capital One announced the breach on July 29, about two weeks after company officials claim they discovered the cyberattack. Capital One said it expected up to $150 million in costs because of the breach, including charges for legal support, and had $400 million in insurance coverage.

Capital One, after the discovery of the breach, directly notified by mail all individuals whose personal information was accessed. Capital One informed these individuals that it would continue to offer free credit monitoring and identity protection software to prevent any potential use of their data.

In their lawsuits against Capital One, the customers alleged that the banking company’s failure to honor its duty under the contract that required, as is required of any bank, to engineer effective cybersecurity systems, anti-hacking technological software, and to alert users of intrusion within an hour of detection and to maintain reporting systems sufficient to protect private information from unauthorized access. Another obligation that Capital One is alleged to have failed to honor is the duty to delete any private information the bank does not need, such as rejected applications.

Capital One is also subject to federal law under the Gramm-Leach-Bliley Act (GLBA). Banks under the act are subject to specific requirements in the area of protecting private information. The act requires banks to demonstrate their processes for sharing personal data, the necessity of using the information in the banking business to potential applicants and customers, and how they are going to protect the information.

Therefore, Capital One has allegedly breached its obligations to maintain appropriate technological and other systematic programs to prevent unauthorized access to customers’ data, failing to minimize the private information that any intrusion could compromise, and failing to notify its customers of the data breach at the right time. Customers allege that Capital One provided the means for a third party to access, obtain, and misuse their private information and that all the above duties were reasonably foreseeable to any bank in the business that this kind of breaches would expose the private information to criminals.

Moreover, the allegations stated that Capital One knowingly and deliberately enriched itself by saving the costs the banking company reasonably should have spent on data security measures and the best protection system in the market to secure private information. Instead of providing a reasonable level of security, Capital One utilized cheaper, ineffective security measures at the expense of their customers. The victims, on the other hand, suffered as a direct and proximate result of Capital Ones’ decision to prioritize profits over security. The victims suffered and will continue to suffer injuries in the form of identity theft, attempted identity theft, loss of privacy, nuisance, and the expenses of mitigating those harms.

What We Think

Capital One will most likely go through the same scenario that Equifax went through in 2017. Equifax paid about $650 million to settle most lawsuits against the company because of their 2017 data breach. Equifax’s settlement has been, so far, the largest settlement of a data breach case in dollars and number of victims.

The settlement covered almost half of the inhabitants of the United States. The settlement not only compensated victims who lost funds, but also compensated people who suffered through the hassles of bank phone and credit-card customer service lines at $25 an hour. Nearly half of the settlement, $300 million, went towards victims who lost their private information to the data breach. The company also paid fines to end the investigations. Equifax paid $275 million in penalties to the Federal Trade Commission, the Consumer Financial Customer Protection Bureau, and forty-eight states.

Additionally, in the settlement, Equifax agreed to provide up to ten years of free credit monitoring services for about seven million people. However, if another million victims decide to sign up, it would cost Equifax more than $16 million. If all 147 million victims were to take part in the case, Equifax would pay more than $2 billion in total. Mr. Norman Siegel, a lawyer representing victims in the settlement, stated that “if people wanted Equifax to pay more, they should sign up for credit monitoring.” Equifax was prepared and added $125 million to the claims fund in case the initial $300 million is depleted besides potential costs for credit monitoring.

Equifax’s situation will likely be the path that Capital One will follow. With these high-profile data breaches happening only within a few years of each other, one should wonder how prepared other financial companies should be to prevent large data breaches, as the ramifications have been shown to be costly for those companies.

By Cynthia L. Dahl

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository. 

By: Garrett Derian-Toth & Matthew Ritter

Over the past decade, there has been an explosion of discussion, emphasis, and interest in the regulation and adoption of cryptocurrency in some way in the United States government, and in various governments across the world. This is in part because internet-based transactions have amplified the dependency on network communications. In commerce, the need for security and the need to reduce the stress of performing financial transactions through traditional mediums will be essential to ensure that transaction costs are as low as possible. Currently, in the United States, when commercial transactions are made between parties, financial institutions are the middlemen, and behind them is the federal government. The presence of these parties is not baseless, it keeps commerce running smoothly with minimal disruptions. However, as the number of transactions increases and technology develops, financial institutions’ current functions becomes less efficient. Cryptocurrencies may be able to improve the efficiency of internet-based transactions in a number of ways. Cryptocurrency transactions allow a decrease in the transaction costs. Also, there is almost no delay in moving funds and less of a dependency on potentially outdated federal payment systems.

Despite these benefits, many governments have raised significant concerns over broad adoption of cryptocurrency, leading to suspicion of those utilizing the currency and a slower adoption of the cryptocurrency as a valid payment method. These suspicions are not without merit. In fact, the lack of traceability of some cryptocurrency transactions and the use of cryptocurrency as the medium of exchange on black markets does pose a substantial issue if a national cryptocurrency were to be adopted. As of today, in fact, the United States continues to consider cryptocurrency, or virtual currencies as described by the IRS, as a form of property and not a form of legal tender. In short, the United States government does not view cryptocurrencies as currency, but rather as something more similar to securities or stock, which can be exchanged and have some value, but cannot be used as true legal tender. While governments seem slow to adopt this form of currency, private entities have been pushing for both development of their own cryptocurrencies and for less regulation of cryptocurrency in general. The contention of these private entities seems to be that the market efficiency and decreased transaction costs, if coupled with the correct regulation, outweighs the potential negatives of this form of currency.

One potential solution for the concerns of the governments and the desires of the private marketplace would be to institute some form of a national cryptocurrency made by adopting a polycentric approach in which the government and private institutions create and adopt a cryptocurrency backed by the United States Dollar. The idea of developing a national cryptocurrency has been kicked around by a number of countries and has been adopted, and rejected, by some countries. The technical term for this form of cryptocurrency is a central bank-issued digital currency (CBDC). One potential positive for a national cryptocurrency would be that governments could avoid the erosion of lex monetae. The adoption of a national cryptocurrency, along with a preclusion of private cryptocurrency, would enable the United States and other countries with similar agendas to maintain control over the marketplace in the same way they currently do. Furthermore, a federal cryptocurrency would be easier to regulate and track in many ways than its private counterpart would be.

Recent incidents, such as Mark Zuckerberg’s Senate hearing on Libra (Facebook’s cryptocurrency in development with numerous other companies), point towards general skepticism of cryptocurrency by the United States government. While it may not be on the near horizon, companies like Facebook could force the governments’ hand in some way by adopting private cryptocurrencies and driving the market forward by themselves. While the adoption of a national cryptocurrency is only one potential solution to the regulatory issues cryptocurrencies pose to sovereign nations, it may be the best way to both drive the market forward, provide private and financial institutions what they want in regards to marketplace efficiency, and avoid the potential downfalls of unregulated cryptocurrency.

Season 3, Episode 1: Spark of Genius, The Case for Nationalized Cryptocurrency (Blog Post)

Season 3, Episode 2: Spark of Genius, The Likely Ramifications of Capital One’s Data Breach (Blog Post)

Season 3, Episode 3: Spark of Genius, U.S. Films in China – Reasons for Rampant Copyright Infringement and Proposed Solutions (Blog Post)

Season 3, Episode 4: Spark of Genius, .COM Trademarks – Booking.com Case May Change How We View Domain Name Trademarks (Blog Post)

Season 3, Episode 5: Spark of Genius, Tiger TrademarKing – How IP Took Down the ‘Tiger King’ (Blog Post)

By Megan Svedman

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

Artificial intelligence is becoming increasingly complex, and provides examples of compelling, human-like performances. One such artificial intelligence technology is known as Creative Adversarial Network (“CAN”) technology, which relies on inputs of preexisting pieces of art to create pieces of original art that pass as human-made. Whether the coders responsible for CAN-technology should be granted coverage for the resultant art remains an open question in United States jurisprudence. This paper seeks to explore why, given both software’s historical legacy in copyright law and bedrock copyright justifications, extending copyright coverage to the coders responsible for CAN technology would be a grave misstep in copyright policy.

By Ian C. Schick

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

When we think of a “production environment,” a law firm patent practice is not usually the first thing that comes to mind. But why not? Patent practices are highly process-oriented, and they certainly involve “manufacturing” work product, primarily in the form of new patent applications and office action responses. This article discusses how, with a production view on patent procurement, exploiting the principles of lean production can be a compelling way to adapt to tough issues presently roiling the patent ecosystem.

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by Dean Alderucci and Kevin D. Ashley

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

We describe how to use artificial intelligence (AI) techniques to partially automate a type of legal analysis, determining whether a patent claim satisfies the definiteness requirement. Although fully automating such a high-level cognitive task is well beyond state-of-the-art AI, we show that AI can nevertheless assist the decision maker in making this determination. Specifically, the use of custom AI technology can aid the decision maker by (1) mining patent text to rapidly bring relevant information to the decision maker’s attention, and (2) suggesting simple inferences that can be drawn from that information.

by H. Albert Liou and Jasper L. Tran

from Volume 9 (2019-2020)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

How can Internet research be used properly and reliably in law? This paper analyzes several key and very different issues affecting judges, jurors, and lawyers. With respect to judges, this paper discusses the rules of judicial conduct and how they guide the appropriate use of the Internet for research; the standards for judicial notice; and whether judges can consider a third category of non-adversarially presented, non-judicially noticed factual evidence. With respect to jurors, this paper discusses causes of and deterrents to jurors conducting Internet research during trials; and the recourse available to parties who are adversely impacted by such behavior. With respect to lawyers, this paper discusses reliance on and potential pitfalls of using free Internet resources to conduct legal research; the dangers of rotten Internet links; and evidentiary considerations in citing to Internet evidence.