15 December 2018

Digital Assets

Another piece on postmortem dealing with digital assets. 'The ‘New’ New Property: Dealing with Digital Assets on Death' by Heather Conway and Sheena Grattan in Conway and Hickey (eds), Modern Studies in Property Law (Hart, 2017) 99-115 comments 
Over the years, the law of succession has not been immune to the challenges posed by changing circumstances, whether social, economic or familial. In 1981, Professor Mary Ann Glendon published The New Family and the New Property, chronicling, inter alia, the move away from traditional property and family forms. Three years later, Professor John Langbein’s seminal article entitled ‘The Nonprobate Revolution and the Future of the Law of Succession’ highlighted the challenges posed to traditional succession law rules by alternative wealth forms such as insurance and life policies, joint assets, and pensions. More than three decades later, succession law continues to grapple with both changing family structures and the issues posed by so-called ‘will-substitutes’. However, it now faces another ‘New Property Probate Revolution’: the legal challenges generated by the so-called ‘digital footprint’ that virtually every citizen (old and young) leaves behind on death. 
As the time of writing, the latest available statistics suggest that almost 3.5 billion people worldwide (around 46% of the global population) are internet users. With the advent of the digital age, we spend increasing amounts of our time in the virtual world - creating not only an online personna, but leaving a trail of digital  assets in our wake. But what actually happens to digital assets when someone dies? This basic question raises a host of legal issues around ownership, privacy, access to usernames and passwords, and the duties of personal representatives when adminstering estates, which do not fit neatly within traditional succession law and property law concepts. The location of digital assets also leads to complex multi-jurisdictional legal issues, yet there is currently no ‘joined-up’ international law on the subject. 
This paper looks briefly at digital assets and how they are defined, before examining the challenges posed by this (apparently) new form of property from an estate planning perspective. Arguing that English succession law has so far failed to address these issues, the paper draws on the approach taken in the United States under the Uniform Fiduciary Access to Digital Assets Act and signposts some of the potential issues which any concerted attempt at law reform will have to embrace. ...  
 A major difficulty in this area is one of nomenclature: defining ‘digital assets’ is not straightforward,8 and there is no current definition in English law. Even outside the legal context, standard definitions are equally hard to find; what we have instead are collective descriptors of what typically falls within the realm of digital assets. 
Obvious examples include things like emails and email accounts, blogs, social media profiles and accounts (Facebook, Twitter, MySpace and LinkedIn), digital music collections (downloaded from iTunes or similar stores), repositories of digital photographs and videos (beyond those which have been uploaded onto social media sites), and online bank accounts and other financial investments. Online billing arrangements, subscriptions to magazines and gyms, Amazon accounts and Ebay seller profiles, as well as other registered shopping sites and loyalty schemes are also digital assets, as are business information lists (for example, client details and purchasing profiles) and domain names which an individual may have registered. In effect, any files stored or generated on digital devices are treated in this way. Several problems are immediately apparent. First, there is the seemingly endless list of things that can constitute a digital asset. Secondly, the value attached to specific types of digital assets will differ immensely; some (for example, bank accounts, financial investments, and domain names) will have an obvious monetary worth, while others (such as photographs, emails and social media profiles) have a purely emotional or sentimental value to the deceased’s surviving relatives. Thirdly, there is the issue of how to categorise digital assets, and the implications that this has. These problems all come to the fore in the succession law context, and are discussed at various stages throughout the following sections.

FDA, personhood and corporate speech

' The Lochnerized First Amendment and the FDA: Toward A More Democratic Political Economy' by Amy Kapczynski  in (2018) 118(7)  Columbia Law Review comments
“[T]he majority has chosen the winners by turning the First Amendment into a sword, and using it against workaday economic and regulatory policy. Today is not the first time the Court has wielded the First Amendment in such an aggressive way. And it threatens not to be the last. Speech is everywhere—a part of every human activity (employ­ment, health care, securities trading, you name it). For that reason, almost all economic and regulatory policy affects or touches speech. So the majority’s road runs long. And at every stop are black-robed rulers overriding citizens’ choices. The First Amendment was meant for better things.” Janus v. AFSCME, Justice Kagan, dissenting
The “Lochnerization” of the First Amendment is without a doubt one of the most important developments in constitutional law in recent years. This was so before the explosive end of the 2018 Term, and it is particularly evident after it.  As Justice Kagan laid bare on the same fate­ful day that Justice Kennedy announced his retirement, recent Supreme Court decisions have “weaponiz[ed]” the First Amendment, turning it into a powerful tool against a range of ordinary socioeconomic legisla­tion. There is little that can escape its reach, because we are crea­tures of speech, and governance and speech are inescapably intertwined. 
There may be no edifice of public regulatory power more immedi­ately threatened by this trend than the Food and Drug Administration (FDA). A key accomplishment of both the Progressive Era and the New Deal, the FDA is perhaps the most muscular of all federal agencies, and a key American instance of public power over market imperatives. It also has enjoyed extraordinarily high levels of influence and public trust throughout its long history.
Like many agencies, the FDA governs a great deal that is readily understood as speech, such as disclosures on food labels, warnings for tobacco, and advertisements for medicines and cosmetics.  But the core of its regulatory power runs much deeper and may seem far less obvi­ously susceptible to the acid bath of contemporary free speech law. For example, the FDA is a gatekeeper for new pharmaceuticals, forbidding any person from “introduc[ing] into interstate commerce” any unap­proved drug. This sounds like it constructs governmental power over conduct and products, and it does. But it also can be construed as con­straining speech. An introduction for sale, after all, is often accom­plished through nothing more than speech, such as an offer for sale or advertise­ment. A “drug” is, by law, anything “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease.”  Intended use is commonly construed via speech, such as advertisements or labels that suggest a particular use. A company may market furniture oil as a cleaning product. But if it markets it as a remedy for cancer, the same substance becomes a “drug” for purposes of the FDA. The FDA is a critical and revealing example, then, of the astonishingly broad reach of a weapon­ized First Amendment. 
As commercial speech protections have expanded, they have, in fact, begun markedly to encroach upon the FDA’s powers. Courts, speaking in the name of the First Amendment, are “freeing” us from regulatory approaches that have worked for decades to inform us about the prod­ucts we put in our bodies. How did we arrive here? And how might demo­cratic prerogatives over the webs of commodity exchange upon which our lives today depend be rebuilt, particularly if the Court continues down its current path? 
Part I offers a brief overview of the FDA. It traces the arc of the Agency’s construction in order to illuminate the importance of its work and to show the threat posed by recent First Amendment cases, particu­larly to the Agency’s oversight of drug and tobacco markets. 
Part II explores how the First Amendment, long understood as a protector of democracy, has come to pose a threat to democratic author­ity over markets. Using several landmark commercial speech cases, I show that commercial speech protection today is built upon certain distinctive and contestable conceptions of the nature of markets, states, and sub­jects. Markets are cast as neutral domains that must be kept free from democratic interference; the state is suspect and the locus of capture rather than democratic will-formation; and subjects have unitary “inter­ests” that allow no firm distinction between the realm of the political and the realm of the market. These ideas are not plucked from thin air. They are important components of the kind of market fundamentalist thought that gained prominence in the United States in the 1980s and thereafter, as has been elaborated in the literature on neoliberalism. The analysis here complements Professor Jed Purdy’s Beyond the Bosses’ Constitution and simi­larly contributes to the emerging “law and political economy” litera­ture. Law and political economy approaches are grounded in the premise that the economy and political life are not fully separable but mutually shape and influence one another.  Law constructs markets, and the distribution of economic power (and “private” power more broadly) deeply shapes law. Political economy analysis seeks to illuminate this fact and to map the relationship between markets and political life as it is figured across a wide range of legal domains.
Scholars elaborating political economy approaches to law also tend to engage a further question, one resonant with the aims of this Symposium: What new theories and institutions do we need to sustain and create a more genuinely democratic and equal society? Part III addresses this question as it appears in the FDA context. It shows that there is room within current doctrine to revive robust regulatory author­ity for the Agency. It also maps another way to rescue democratic pre­rogatives if courts continue down their current path: a pivot away from the model of private market regulation upon which the FDA’s approach is built. 
If courts thrust us into a world with more limited authority over pri­vate markets, we must envision a much more substantial role for the public—in this case, for example, by expanding public funding for health research. This approach could mitigate the harm done by recent court decisions and have far-reaching benefits for what we might call health democracy or health justice. It is also an instance of a broader point: As a commit­ment to market supremacy advances inside of constitutional doctrine, democratic control over our economy and society will demand new pub­lic infrastructure that displaces or routes around an increasingly ungov­ernable private sector. ... 
Though beyond the ambition of this short contribution, an explora­tion of the political economy of current commercial speech law must eventually lead us also to reconsider its scope. Courts have long been confused about why our Constitution might protect speech acts in the marketplace. Current law reasons increasingly in a market-supremacist idiom, suggesting, outlandishly, that the First Amendment exists to pro­tect market order from democratic governance. Protections for commer­cial speech must serve rather than subvert our democracy. Delineating a new political economy of the First Amendment that helps achieve this aim is an important task for those who seek a future that is more demo­cratic and equal than our present.

Charlatans?

'The success of university law schools in England and Wales: or how to fail' by Anthony Bradney in (2018) 52(4) The Law Teacher 490-498 comments
University law schools in England and Wales presently have a very successful model for providing undergraduate education. This model allows them to discharge their duties with respect to both teaching and research. Providing they are careful in their claims they can make sure that they are compliant with the standards sets by the Advertising Standards Authority. Any change to this model, involving them in trying to train solicitors in their undergraduate degrees, would see law schools fail in the same manner that law schools have failed in the USA and lead to potential cases before the Advertising Standards Authority. 
Bradney argues
 Legal academics in England and Wales are often neither optimistic nor buoyant individuals. Some of the reasons for this are to do with the present situation in higher education. Thus, for example, precarious employment is as much a feature of contemporary law schools as it is of their parent universities. A number of commentators have noted the degree to which systemic introduction of casual employment contracts for academics has taken place in United Kingdom universities.  With the move away from permanent employment comes “stress, [and] anxiety”. Another more longstanding change in universities and their law schools has been the introduction of an audit culture which measures performance with respect to an ever-increasing range of indicators. The introduction of a research audit in 1985 has been followed by a series of other forms of new audit processes at national, institutional and individual levels. The newest form of audit is the recent introduction of the Teaching Excellence Framework whose first results were announced in 2017. Each of these processes is significant in its own right but the cumulative result also needs to be considered. Burrows, for example, has argued that the metrics which are part of audit, taken together, produce “quantified control” of academic life.  It is not that audit in universities is either wrong in itself or even new. Self-examination for both institutions and individuals is a desirable process. The axiom “know thyself” has an ancient lineage.  Equally law schools and legal academics have not suffered from all of the adverse consequences of audit that are to be found in some other academic disciplines. s Nonetheless both the specific failings of particular examples of audit together with the general conceptual misunderstandings that lie behind the current mania for such audit in the public sector have had deleterious effects on the lives of some legal academics.  In this context it is perhaps not surprising that a number of contemporary legal academics report high levels of stress and anxiety.  However, an examination of the history of university legal education in England and Wales suggests that part of the reason for trepidation in legal academics may be deeper rooted than the problems of the present day.
In his obituary of Holland in 1975 Goodhart observed that
"… he [Holland] suffered from the same weakness to which a number of scholars at Oxford and Cambridge have succumbed – the fear of appearing in print in case they would subject themselves to criticism for some error of which they ought to have been aware."  
This “weakness” is not limited to Oxbridge legal scholars of the 1970s. Gardner has commented that “I’m sure all academics think that they are charlatans some days”.  Whilst his remark is an exaggeration it does point to an important truth about the nature of the academic psyche. A person who does not simply reject out of hand Hume’s argument that the proposition that the sun will not rise tomorrow is no less intelligible than that it will or who can comprehend the existential angst of Roquentin in Sartre’s Nausea will always query apparent verities.  The scepticism that lies at the root of the academic disposition makes doubt a prerequisite to every judgement. Everything we as academics do, say and write is continually in question. Academic freedom creates an obligation that makes us individually wholly responsible for all of our actions.   What is vaunted today may be damned tomorrow. The agreement of our peers may show no more than that they share our errors. And, moreover, what is at risk, the accuracy of our judgements, is central to who we are as academics. In almost every instance this pressure is all to the good, pushing us to do ever better work. However, as the example of Holland above shows, there are occasions when the converse is the case. In relation to some questions excessive caution can lead to inaccurate judgements. In this article I will argue that this can be the case in the present day when the academic discipline of law assesses the overall quality of its work and then plans its future.

Competition and Activism

'Misuse of Market Power in Australia and Abuse of Dominance in Canada: Two Legislated Effects Tests for Unilateral Conduct' by Katharine Kemp in (2018) 26 Australian Journal of Competition and Consumer Law 174 comments 
The new Australian law against misuse of market power (as amended in 2017) shares a number of similarities with the Canadian law against abuse of dominance. This article makes a comparative analysis of these laws against unilateral anti-competitive conduct, highlighting their similarities, including their focus on whether the impugned conduct has the effect or likely effect of substantially lessening competition. It also identifies important differences, including the Australian requirement to prove “purpose or effect” in contrast to the Canadian requirement to prove “purpose and effect” and the respective methods of addressing “legitimate business purpose” claims. It illustrates some of these differences with reference to a recent digital economy case in which the Canadian Commissioner of Competition succeeded in proving that a firm abused its dominance by imposing restrictions on access to data it controlled, notwithstanding the firm’s attempted justifications on privacy grounds.
'Incorporating Social Activism' by Tom C. W. Lin in (2018) 98 Boston University Law Review 1535 comments
 Corporations and their executives are at the forefront of some of the most contentious and important social issues of our time. Through pronouncements, policies, boycotts, sponsorships, lobbying, and fundraising, corporations are actively engaged in issues like immigration reform, gun regulation, racial justice, gender equality, and religious freedom. This is the new reality of business and social activism in America. This Article offers the first comprehensive legal examination of this new corporate social activism and its wide-ranging effects on law, business, and society. It begins by providing a brief history of corporations and social activism. Next, it establishes the legal and political foundations of contemporary corporate social activism. It investigates how the convergence of government and private enterprise, the rise of corporate social responsibility, and the expansion of corporate political rights have all fostered contemporary corporate social activism. Moving from origins to effects, it then examines the potential costs and benefits associated with this new dynamic. Finally, this Article offers pragmatic proposals for addressing the broader implications of contemporary corporate social activism on law, business, and society. Specifically, it discusses how such activism can impact corporate purpose, corporate governance, and public interest lawyering. Ultimately, this Article aspires to provide an original legal framework for thinking, speaking, and acting anew about corporate social activism in America.

Taxing IP

'Taxation of Intellectual Property Under Domestic Law and Tax Treaties: Australia' by Celeste Black in Guglielmo Maisto (ed), Taxation of Intellectual Property under Domestic Law, EU Law and Tax Treaties (IBFD, 2018) comments
 This chapter examines the operation of Australia’s domestic tax law and tax treaties in relation to transactions involving intellectual property (IP). It reviews the legal protections provided under Australia’s general law in relation to copyright, patents, trademarks and confidential information and considers the legal distinction between alienation of IP and granting the right to use IP (licencing). The application of domestic tax laws (income tax, depreciation rules and capital gains tax) to disposals and licencing transactions involving IP is considered before moving to cross-border transactions and the operation of royalty withholding tax. Australia’s tax treaty practice is then examined, specifically Article 12 (royalties) and the interaction with Article 7 (business profits). Special issues considered include: software, know how, equipment leasing, technical services and distinguishing royalties from payments for services.

Algorithms

'Algorithms, Correcting Biases' by Cass Sunstein in Social Research (Forthcoming) comments 
A great deal of theoretical work explores the possibility that algorithms may be biased in one or another respect. But for purposes of law and policy, some of the most important empirical research finds exactly the opposite. In the context of bail decisions, an algorithm designed to predict flight risk does much better than human judges, in large part because the latter place an excessive emphasis on the current offense. Current Offense Bias, as we might call it, is best seen as a cousin of “availability bias,” a well-known source of mistaken probability judgments. The broader lesson is that well-designed algorithms should be able to avoid cognitive biases of many kinds. Existing research on bail decisions also casts a new light on how to think about the risk that algorithms will discriminate on the basis of race (or other factors). Algorithms can easily be designed so as to avoid taking account of race (or other factors). They can also be constrained so as to produce whatever kind of racial balance is sought, and thus to reveal tradeoffs among various social values.
'Predictive Policing – In Defense of ‘True Positives’' by Sabine Gless in Emre Bayamlıoğlu, Irina Baraliuc, Liisa Janssens and Mireille Hildebrandt (eds). Being Profiled: Cogitas Ergo Sum. 10 Years of Profiling the European Citizen (Amsterdam University Press 2018) 76-83 comments 
Predictive policing has triggered a heated debate around the issue of ‘false positives’. Biased machine training can wrongly classify individuals as high risk simply as a result of belonging to a particular ethnic group and many agree such persons should not have to shoulder the burden of over-policing due to an inherent stochastic problem. The paper takes a pragmatic stand and argues that ‘true positives’, i.e. individuals who have been correctly identified as perpetrators, offer the best opportunity to address the issue of biased profiling. 
The first reason is purely pragmatic – they are already party to a criminal investigation and, as such, have a strong incentive to challenge law enforcement methods and scrutinize policing methods on an individual basis. The second reason is more general (and commonly subscribed to) – that discriminatory stops and searches are inherently unfair, threaten social peace, and frustrate targeted groups. 
To create an efficient legal tool against discriminatory law enforcement, defence should be entitled to contest a conviction for biased predictive policing, with a specific exclusionary rule protecting ‘true positives’ against the use of tainted evidence.

Veterans

The Productivity Commission's draft A Better Way To Support Veterans report on veterans administration comments
The key message of this draft report is that the current veterans’ compensation and rehabilitation system is not ‘fit-for-purpose’ – it requires fundamental reform. The system is out-of-date and is not working in the interest of veterans and their families or the Australian community. The system needs to focus on the wellbeing of veterans over their lifetime. This means more attention to prevention, rehabilitation and transition support.
Salient points are
• The veterans’ compensation and rehabilitation system is not fit-for-purpose — it requires fundamental reform. It is out-of-date and is not working in the interests of veterans and their families or the Australian community. 
• The system fails to focus on the lifetime wellbeing of veterans. It is complex (legislatively and administratively), difficult to navigate, inequitable, and it is poorly administered (and has been for decades), which places unwarranted stress on claimants. Some supports are not wellness focused, some are not well targeted and others are archaic, dating back to the 1920s. 
• In 2017-18, the Department of Veterans’ Affairs (DVA) spent $13.2 billion supporting about 166 000 veterans and 117 000 dependants (about $47 000 per client). And while the veteran support system is more generous overall than workers’ compensation schemes for civilians, money alone does not mean it is an effective scheme. 
• The system needs to focus on the wellbeing of veterans over their lifetime. This means more attention to prevention, rehabilitation and transition support, which in turn will produce better outcomes for veterans, their families and the Australian community. 
• To achieve this focus, the system needs to be redesigned based on the best practice features of workers’ compensation and contemporary social insurance schemes. 
• This will require new governance and funding arrangements.
– A single Ministry for Defence Personnel and Veterans should be established. 
– A new independent statutory agency — the Veteran Services Commission — should be created to administer and oversee the performance of the veteran support system. 
– DVA’s policy responsibility should be transferred to the Department of Defence within a new Veterans Policy Group. 
– An annual premium to fund the expected costs of future claims should be levied on Defence. 
• Responsibility for preparing serving veterans for, and assisting them with, their transition to civilian life should be centralised in a new Joint Transition Command within Defence. 
• DVA’s recent Veteran Centric Reform transformation program is showing early signs of success. It should continue to be rolled out to mid 2021 as planned, but adjusted where necessary to accommodate the proposed reforms. 
• The current system should be simplified by: continuing to make the system easier for clients to access (a complex system does not need to be complex for users), rationalising benefits, harmonising across the Acts (including a single pathway for reviews of decisions, a single test for liability and common assessment processes), and moving to two compensation and rehabilitation schemes by July 2025. 
– Scheme 1 should largely cover an older cohort of veterans with operational service and injuries that occurred before 2004, based on a modified Veterans’ Entitlements Act 1986 (VEA). Scheme 2 should cover all other veterans, based on a modified Military Rehabilitation and Compensation Act 2004 (MRCA), and over time will become the dominant scheme. 
• The way treatments and supports are commissioned and provided to veterans and their families also needs to change. There needs to be more proactive engagement with clients and providers and better oversight of outcomes. 
• The recent decision to expand non-liability coverage to mental health care was a positive one, however, the Veteran Mental Health Strategy needs to be updated urgently with specific attention to suicide prevention and access to supports for veterans.