Putting the Future On Hold: How Fundamental Patents Stifle Progress

There’s a worrying trend occurring in the world of patents. As Electronic Frontier Foundation’s Daniel Nazer points out, more and more patents are being filed for the application of relatively “fundamental machine-learning techniques” to new areas, such as food consumption. This issue represents a crossroads for the U.S. Patent and Trademark Office (USPTO). While the issue of simultaneous invention has been around since Isaac Newton and Gottfried Leibniz independently developed the field of calculus, never before in history has technology and learning advanced as rapidly as it is today. In the past, groundbreaking discoveries took years, even decades, to foment; today, groundbreaking discoveries—particularly in the technology sector—seem to occur every single day. What this means is that the chances of multiple people arriving at the same discovery is significantly increased. The more discoveries there are, the more likely it is that two people find the same one. This is especially true, as Nazer worries, for some foundational techniques in machine learning and artificial intelligence, likely two of the most important technology fields in the next few decades. The USPTO has a significant responsibility to be selective in their acceptance of patents for these emerging technologies. The issue is the same as it has always been: granting a patent may stifle not only competition, but technological evolution too. If a patent is granted for every miniscule new application of the basic techniques of machine-learning, the first to any new application will own the field. There is, of course, value in this—if it’s earned. If an inventor truly discovers a new way of understanding or applying machine learning, a patent is...

Should Lawyers be Afraid of Artificial Intelligence?

There is a 3.5 percent chance that lawyers’ jobs will be automated. That statistic seems appealing to those of us in the profession—especially relative to the chances for other “skilled” professions like financial advisers (58 percent of automation) and accountants (94 percent). However, this figure does not stand for the proposition that lawyer’ jobs will remain unchanged as the tendrils of artificial intelligence (AI) wind their way into jobs once thought too complex to be done by machines. Legal work is diverse. There are several categories of work, from litigation to transactional, from bankruptcy to investigations. Each brand of job entails routine work like document and contract review, but also cognitively complex tasks such as oral argument and negotiation. And it is the former type of work that will be first in line to be handled by a computer. Indeed, efforts in this space are already advanced. There’s LawGeex, a software company that handles contract review and approval that would otherwise be done by in-house counsel. LawGeex advertises substantial time and cost savings of 80 percent and 90 percent respectively. J.P. Morgan recently announced that its proprietary software COIN (short for “contract intelligence”) is now reviewing commercial loan agreements, saving 360,000 hours of legal work per year all while reducing mistakes. And then there’s ROSS, which uses machine learning to perform legal research. The software uses keyword analysis to sort among a database of documents and case law to deliver attorneys the answer to questions they’ve asked. Notice that these are exactly the type of tasks you’d expect to be automated: time-intensive, often repetitive work. In the large firm...

Health-Apps: Increasing Danger for Data Privacy

Wearable fitness trackers and wellness app technology use innovation to let consumers quantify and track their health. One burgeoning trend is the smartwatch. Smartwatches are equipped to track exercise, heart rate, GPS location of the wearer, and just about anything else. Apple released its new Watch Series that allegedly quantifies the number of stairs climbed per day. Fitbit also announced its new watch that more accurately measures: heart rate, blood oxygen levels, sleep, and activity levels of different exercises. Amidst market competition and growing consumer interest in tracking individual health, the market for wearable smartwatches has grown almost 70% in 2017. This increased interest and flourishing market for health insights, has consequently inspired scientific innovators to turn their attention to fashioning technology that can track actual medical conditions — such as asthma — and that can diagnose diseases. While this innovation introduces much needed preventative healthcare apps that can be accessible to a high volume of the population, it also raises serious questions about data privacy and fraud that must be considered. Several health and fitness app makers have already come under fire for fraudulent health claims and lax data security. New York Attorney General Eric Schneiderman fined three popular health app makers — Cardiio, Runtastic, and My Baby’s Beat — collectively $30,000 for making health claims not backed by data or FDA-approval and for collecting and sharing users personally identifying information with third parties without the user’s consent. Additionally, an app called the Pact that either rewarded or penalized consumers monetarily for achieving or failing at their weekly goals, was fined 1.5 million dollars for withdrawing money from...

Equifax and What It Means for Cybersecurity

On September 7, 2017 Equifax announced a data breach that compromised the personal data of over 143 million Americans. Despite this breach occurring in May, Equifax did not find out about it until July, after which it waited until August to report it to the FBI and September to report it to the public. To make matters worse, Equifax had been alerted about a potential vulnerability in its system by the Department of Homeland Security in March of that year, yet took no steps toward implementing the suggested fix. As a result, millions of people have been put at risk of identity theft. In the wake of this major breach, many have been left wondering what can be done to prevent similar future occurrences. Some government officials have suggested implementing stricter regulations on credit reporting agencies. Others, however, warn that adding more regulations will make it too hard for companies who already have to deal with state, local, and federal regulators along with federal and international laws. These officials instead suggest stronger penalties for cybercrimes, especially those against the United States government. Another suggested requirement for credit bureaus is that they obtain explicit consent before collecting or storing personal data from anyone. While this is already a requirement under the European Union’s General Data Protection Regulation, there is no such regulation in the United States. Although United States citizens technically may have given the credit bureaus implied consent to gather their information any time they have requested a credit report (or applied for anything that requires a credit report – credit card, loan, mortgage, etc), a strong argument can...

Tesla Unlocks Extra Range for Irma Evacuees: No Good Deed Goes Unpunished.

As Hurricane Irma headed toward Florida, thousands of people evacuated. Electric car owners were no exception, and some Tesla owners received an unexpected boon: a software update that unlocked the full range of battery power available on their vehicles, giving owners additional mileage in order to flee the coming storm. But Tesla’s actions also drew the eye, and the ire, of the internet community. It all started in 2016, when Tesla released a line of vehicles equipped with 75 kilowatt-hour battery packs. Customers had the option to purchase cars with a software cap which limited the amount of battery available to 60-70 kilowatt-hours of power. This reduced the mileage range of the cars, but it also reduced the price by up to $9,500. In the days leading up to Hurricane Irma, some Tesla owners worried about the impact of reduced battery availability on their evacuation plans. They contacted Tesla, which pushed through an over-the-air software update, temporarily unlocking the remaining battery power, for free, for Tesla owners in evacuation zones – allowing their cars to go farther on a single charge. With Irma bearing down on Florida, most people would agree that Tesla did the right thing by removing power caps. The flip side is that Tesla’s good deed put the spotlight on its use of paywalls to disable functionality of features already built-in to their cars, raising fears of future private sector extortion over our transportation system in times of crisis. Tesla, after all, has no common-law duty to act, and could easily charge desperate customers a fee for this service. But – importantly – they didn’t. Many...

“I See You ICO”: The SEC Regulates Tokens

Can tokens be securities? The SEC just weighed in.   Background: As a decentralized ledger, blockchain enables users to exchange digital assets — called tokens — without a middleman. The earliest tokens functioned as currency.  No entity issued this currency; instead, the algorithm underlying blockchain dispersed tokens to miners, compensating them for processing blocks.  As cryptocurrencies have proliferated, tokens have found broader uses. Now entities issue tokens to fund projects.   ICOs: Many businesses have launched “token sales,” “token launches,” “initial coin offerings,” or “ICOs” to quickly and cheaply raise money.  ICOs have become so popular that they are “surpassing traditional early-stage VC funding.”  The Decentralized Autonomous Organization (DAO), for example, raised $150 million by selling DAO Tokens; the organization avoided both the expense and delay of complying with the SEC’s reporting requirements for selling securities.  But the DAO ran into trouble.  Hackers stole the equivalent of $50 million from the organization shortly after the financing’s launch.  Though the funds were recovered, this loss prompted the SEC to investigate. On July 25th, 2017, the SEC issued a report.  The “Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The Dao” addresses the status of ICO tokens.   Securities? SEC says “It Depends”: The report disclosed when the SEC will consider ICO tokens securities and where they can be traded. According to the report, the SEC will consider the tokens offered in ICOs securities if the ICOs constitute investment contracts under the Howey test.  Under Howey, an investment contract involves the “(1) investment of money (2) in a common enterprise (3) with a reasonable expectation of profits...