Author: Deven Desai

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Sometimes the Parties Can Work Together and Even on an Environmental Issue

Given how often we see the utter dysfunction of Congress, when I see a sign of Congress working, it merits calling out. According to the Washington Post, “The Senate has passed a much-anticipated bill proposing broad reforms to an existing chemical safety law — one which environmentalists have long argued puts the American public at unnecessary risk of exposure to toxic substances.” The law, the TSCA, is about 40 years old and requires so much proof of harm that even a substance like asbestos was difficult to regulate let alone ban. Thus “The bill, dubbed the Frank R. Lautenberg Chemical Safety for the 21st Century Act, [and which] has been in negotiations for more than two years and finally went to a vote Thursday night, where it passed with bipartisan support” is a big step forward. The Post details that some groups dislike parts of the bill, and the House version is less broad, but it too has bipartisan support. If al goes well and the final version has teeth, that would mean both houses and the parties can fix a bill like this one, and that is a great sign.

As a general note, I am curious about the proof standard at issue. If folks who follow this area know what it is or have thoughts on what is should be, please share.

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Better Bar Design Means Better Revenue and Health for Bartenders

With the resurgence of cocktail culture, one may not think about a bartender’s work area, but it turns out that area is not well-designed so much so that bartenders have health problems and they can make fewer drinks. So in the age of let’s design and fix that, a bartender has come up with an “ergonomic, behind-the-bar workstation—which he calls the ‘race track’.” The new design lets the bartender stay in one place, have everything within forearm reach, and gets rid of the well (across which a bartender must lean and thus hurt his or her knees). The creator is seeking a patent, and the expected cost right now is five figures (they are hand built). The Wired piece covers some history of the bar and how ice changed the way we drink and how today the craft cocktail trend means efficiency is at a premium. As Wired notes

A good bar with a smartly built bartender station, on the other hand, is a blue-ribbon-prize-winning cash cow. Your typical cocktail den, Simó says, will rake in between $6,000 and $8,000 in sales in a night. At a nightclub, you more than triple that. A single bartender can ring in $10,000 in sales, by himself. That’s all contingent on how fast he can sling drinks, and Lafranconi says the race track is optimized for that kind of speed. “We can increase the output by about 10 to 15 drinks per hour.”

Throw in the health issues–“Tending bar in 10-hour shifts, night after night, can lead to injuries like tennis elbow, tendonitis, and plantar fasciitis”–and the future bar will let you be closer to the bartender, get your drink faster, and keep him or her in good enough health to be there the next time you visit. Pretty cool.

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Beatles in the Ether or Streaming

By now many may know that The Beatles catalog (or most of it) is available for streaming on the major services. I happen to love The Beatles and easily recommend Cirque du Soleil’s Love in Las Vegas. But the streaming option presents some questions to which I have not seen answers. First, did the services offer anything extra or special to get the rights (I can’t recall the state of streaming license law as far as flat rate or baseline rate to stream if the rights are granted)? Second, will the rights holders (I can’t recall where those have ended up) track the money from streaming versus selling the tracks and albums? If they do what will they find? Work on P2P music sharing and its effect on music and a study on the effect of free options for film may shed light on the future for Beatles revenues. The film study offered:

Together our results suggest that creative artists can use product differentiation and market segmentation strategies to compete with freely available copies of their content. Specifically, the post-broadcast increase in DVD sales suggests that giving away content in one channel can stimulate sales in a paid channel if the free content is sufficiently differentiated from its paid counterpart. Likewise, our finding that the presence of pirated content does not cannibalize sales for the movies in our sample suggests that if free and paid products appeal to separate customer segments, the presence of free products need not harm paid sales.

If music works in a way similar to film, The Beatles rights holders may expand their pie, not reduce it.

Either way I am happy to enjoy the streaming options while they last.

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AALS diversion – Jackson Pollock

The annual AALS meeting is in New York in 2016. A few folks have asked whether I will be there. I am not able to attend, but in the spirit of it’s good to get out and see more than the law (or take a friend and go for a good long chat about legal scholarship), I see that that MOMA is pulling out its Jackson Pollock collection. The write up in the New Yorker is short and captures his evolution and why you should go.

Pollock was always Pollock, though he was long in agonizing doubt, notably about his ability to draw. Dripping brought a rush of relief, as he found a steadying and dispassionate, heaven-sent collaborator: gravity. Drawing in the air above the canvas freed him from, among other things, himself. “Number 31” is the feat of a fantastic talent no longer striving for expression but set to work and monitored. He watched what it did. We join him in watching. Pollock redefined painting to make it accept the gifts that he had been desperate to give. Any time is the right one to be reminded of that.

Sorry to miss AALS and the exhibit, but there will be other chances to enjoy both.

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A Christmas Movie that Led to a Financial Reg (Sort of)

Trading Places is a Christmas movie in that it is set during the holidays and I suppose making hundreds of millions (or probably billions in today’s dollars) is a 1980s Christmas wish as compared to other Christmas wish movies. It is a heart-warming story of a young Eddie Murphy and Dan Akroyd taking on the entrenched elite by, oh well, by insider trading. The ending and the glory of frozen concentrated orange juice live on. First the full explanation of how the two manage to out maneuver the Dukes is a little tricky. But after the thirtieth anniversary a two years ago, a few places explain it nicely. NPR’s coverage is succinct. Business Insider is good and has better pictures. But the best is from Don’t Worry I am an Economist which has a step-by-step on short selling, and then applies it to the movie including explaining how the pricing worked (142 is in fact A $1.42 and 29 is $0.29 per pound but the contracts are for thousands of pounds thus “Trading begins at 102 cents per pound (at 15,000 pounds of F.C.O.J. per contract – size of a typical contract – the value of a single contract is $15,300).”.). So he shows that

How much have they made? Let’s see. In the movie Winthorpe says they’ve moved around 20,000 contracts. Assuming they’ve sold short at a constant pace from 142 down to 102, and that later they’ve bought them back while the price was falling from 46 down to 29, let’s say that the average sell price was around 122 cents per pound, where the average buy-back price was 37.5 cents per pound. The spread is therefore 122 – 37.5 = 84.5 cents per pound profit. Per single contract this is 15,000 pounds * 84.5 cents per pound = $12,675 per contract. Multiply this by roughly 20,000 contracts and their total profit was: $253,500,000.

Oh and here is the law and regulation part: The movie was explicitly invoked as the Eddie Murphy rule when the government finally made insider trading on the commodities market illegal. Per the WSJ when the rule passed CFTC Chief Gary Gensler explained:

We have recommended banning using misappropriated government information to trade in the commodity markets. In the movie “Trading Places,” starring Eddie Murphy, the Duke brothers intended to profit from trades in frozen concentrated orange juice futures contracts using an illicitly obtained and not yet public Department of Agriculture orange crop report. Characters played by Eddie Murphy and Dan Aykroyd intercept the misappropriated report and trade on it to profit and ruin the Duke brothers. In real life, using such misappropriated government information actually is not illegal under our statute. To protect our markets, we have recommended what we call the “Eddie Murphy” rule to ban insider trading using nonpublic information misappropriated from a government source.

Law and lit and reg I guess. Anyway Merry Christmas and in the words of Nenge Mboko “Merry New Year.”

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Cyberpunk Because You Forgot to Get Someone a Gift

OK Cyberpunk can be great for a range of reasons, but I saw this repost from i09 on The Essential Cyberpunk reading list and thought, “A great list with some books I have not read. Wait! It’s a list for folks who need to send a just in time Christmas gift (assuming they are available as eBooks, which I know some are). I easily recommend Neuromancer, Snow Crash, and Mirrorshades. I look forward to reading the rest (Accelerando did not work for me but I may try it again). Plus this genre really does a great job of positing worlds and issues that are pressing the tech-law space right now, so that is another reason to jump in.

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More Science Cheer – Microscopes for Everyone!

The New Yorker has a nice piece about Manu Prakash and his work on the Foldscope, a portable, paper-based microscope that costs about one dollar. As the author pointed out the whole thing can be put into “a nine-by-twelve-inch envelope.” Here are the details:

The paper is printed with botanical illustrations and perforated with several shapes, which can be punched out and, with a series of origami-style folds, woven together into a single unit. The end result is about the size of a bookmark. The lens—a speck of plastic, situated in the center—provides a hundred and forty times magnification. The kit includes a second lens, of higher magnification, and a set of stick-on magnets, which can be used to attach the Foldscope to a smartphone, allowing for easy recording of a sample with the phone’s camera. I put my kit together in fifteen minutes, and when I popped the lens into place it was with the satisfaction of spreading the wings of a paper crane.

The Foldscope performs most of the functions of a high-school lab microscope, but its parts cost less than a dollar.

So what? So Prakash and his colleagues are trying to deploy the device around the world to increase the way people gather and share data to understand the world. Folks use the device but also can go to “Foldscope Explore, a Web site where recipients of the kits can share photos, videos, and commentary. A plant pathologist in Rwanda uses the Foldscope to study fungi afflicting banana crops. Maasai children in Tanzania examine bovine dung for parasites. An entomologist in the Peruvian Amazon has happened upon an unidentified species of mite. One man catalogues pollen; another tracks his dog’s menstrual cycle.”

These seemingly far ranging interests thus connect to what Brett Frischmann, Mike Madison, and Kathy Strandburg have been studying: a knowledge commons. Just within Prakash’s interest in “biomimicry—understanding how and why certain organisms work so well, and using that knowledge to build new tools,” the project increases the ability to know about “Plants, insects, tiny bugs under the sink, bacteria,” that do amazing things. New species can be identified, and so the project creates thousands of eyes not only for Prakash’s work but others in the field.

As I read the article and the details of low-cost tech being used around the world for a variety of problems that locals identified, I thought of the way FabLabs and the work of Neil Gershenfeld have approached and supported the maker-movement. And as I went on, I found out that Prakash did his work with Gershenfeld’s Center for Bits and Atoms at MIT. Can you say school of thought?

Prakash’s group is looking for ways to aid in early detection of disease and water contamination using low-cost technology. At the same time, the world may be re-experiencing the wonder of the first tools that pushed our ability to understand the world. As the article described, Prakash and Jim Cybulski, (then Prakash’s student, now chief collaborator on the project) were in Nigeria studying malaria. They met with young students, caught a mosquito “that was feeding on one of the children and mounted it on a paper slide, which they inserted into the Foldscope.” The student looked at the slide and

“For the first time, he realized this was his blood, and this little proboscis is how it feeds on his blood,” Prakash said. “To make that connection—that literally this is where disease passes on, with this blood, his blood—was an absolutely astounding moment.” The exercise had its intended effect. The boy said, “I really should sleep under a bed net.”

Scale and change the world technology can be small, simple, and accessible. Folks who press the practical and tee up the skills and tools to learn and dream of bigger things are part of an ongoing season of giving that I dig. Happy holidays to all.

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Holiday Cheer – Creations for Good

A sister notices that her sister’s monitor for her blood sugar level has a weak alarm and does not work well to wake someone up at night, when the alert is critical. Sister decides maybe she can do something, and she does. Who is this mystery girl? Our own Danielle Citron shared with me (and let me share more) that her daughter, JJ, has been designing a new monitor to help diabetics (which her sister has).

JJ applied to a program to help high schoolers with STEM projects and was paired with folks at Northrup Grumman where she spent a day a month developing her idea. Along the way, JJ had to figure out what alarm noise worked best to wake someone up, program a code to link the monitor and bracelet devices, and then wired them. As her school reports

This year, Citron will continue to test and refine the design, creating the bracelet with the help of a 3D printer. When she’s finished, the bracelet will change color to let the user know immediately if their blood sugar is getting too high or too low. The detailed information from the monitor will also be linked to a smartphone app.

3D printing! Color coding! And JJ seems poised to go into computer science.

Although I am friends with Dani and have met JJ, the real point for me is that a teenager saw a problem and felt she had the room to try and fix it. Then she worked on it. Her success is lovely, but the fact of the chance is downright excellent and puts me in a great holiday mood. Of course, with Danielle as her mom, JJ may have to look forward to law professors wondering about patents, privacy, and data ownership, but those are what a good friend of mine once called “high quality problems.” Well done, JJ.

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Authentic Brands

What is authentic? The question seems to pop up in many areas. If a company or corporation claims authenticity, I am sure several folks I know would have a reflexive reaction that such a claim is absurd. Nonetheless, the Economist notes that “Authenticity” is being peddled as a cure for drooping brands. One part of the article notes that despite the ongoing difficulties in valuing brands, “when brands are sold as part of corporate takeovers, what price do investors put on them? They found that these prices, as a percentage of deals’ total value, have dropped since 2003. So, at least for those firms being taken over, the strength of their brands is becoming a smaller share of their overall worth.” That is interesting insofar as it suggests that 1) Brand value (and goodwill in that sense) can be measured and 2) That is has gone down.

What is driving the change? A key thing I have tried to show is that the issue of information or search costs is not as high as it used to be and that change brings into question many aspects of trademark law and policy. The Economist seems to agree and puts it this way

It is not hard to see why the old marketing magic is fading, in an age in which people can instantly learn truths (and indeed untruths) about the things they are contemplating buying. Online reviews and friends’ comments on social media help consumers see a product’s underlying merits and demerits, not the image that its makers are trying to build around it. The ease of accessing information makes consumers more likely to abandon their habitual brands because they have heard about something new, or learned that retailers’ own-label products are much the same, except cheaper. Depending on your perspective, people are either increasingly fickle or ever more impermeable to marketing bullshit. For brands that lack any truly distinguishing features, that is bad news.

Better information and new sources of it change the legal and brand landscape. Plus an old problem–trying to sell essentially the same goods–has returned. As Spencer Waller and I noted, “From the end of the nineteenth century to the middle of the twentieth century to today, companies have had to find ways to compete over selling essentially the same goods and manage excess production capacity.” So it is not surprising that the sectors most hit by the change The Economist discusses are consumer goods and imported goods that no longer offer difference from other, lower-cost options of the same or close to same quality.

So can a corporation be authentic? If a corporation is slinging its authenticity with Keebler Elves and Santa Claus in Coke Red, that is a harder sell. Those plays will be claiming authenticity based on cultural history and maybe a done deal in that sense (as Spencer and I discussed, the history of firms using events and education to build a sense of community and identity is old). But insofar as craft brewing, locally-made goods, and customized offerings are claiming authenticity, those may fit the authenticity claim; as long as that claim is that the item is not from a firm of a certain size or somehow to be distrusted because of size, for Scalia was correct in Citizens United that many firms of many sizes can be corporations. Assuming small and personal is a sort of authenticity, where I am not sure The Economist is correct is its example of Apple. The newspaper offers

for those firms that get the product right and have a genuine story to tell, the rewards can still be huge. The textbook example of this is Apple, whose devices’ superior design and ease of use make it a powerful brand in a commoditised market. Last year it had only 6% of the revenues in the personal-computer market, but 28% of the profits. That’s real authenticity.

If getting the product “right” is the key, then the competition is about old school “my goods and services are better quality than yours.” If the story is also key, then we have to start asking whether Apple’s claims are accurate or myth-making “bullshit” as the Economist might say. I like Apple products as they fit my needs. I buy them despite the over-claimed genius we are all tech saviors rubbish they sling. It is authentic as long as it authentic here means 100% Silicon Valley hubris. So pure it …

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Santa Coke? Goodwill to All and the Corporate Sources of the Man in the Red Suit

Many may know, but in case you don’t, the image of Santa Claus as a round man in a red suit traces its roots to a riff on St. Nick in brown and green. The linked video story via Fortune has Coca-Cola historians sharing why this creation is so great in their view. There were challenges such as increasing sales of Coke in winter and making an image of Santa that was as iconic as the Quaker Oats man. Vision, ingenuity (dare we say innovation? Dare. Dare.), and world-wide advertising spread the new Coca-Cola-red-wearing Santa far and wide. I wonder whether the idea of promoting this history is to remind folks of Coke in general and create an extra felling of warmth towards the company. And I wonder whether today Coke would try to lock down the image or let it be as ubiquitous as it is. Would the spread of polar bears wearing red and white scarves or hats be smiled upon or would the Cease and Desist letters fill lawyers’ heads and stockings as well? I hope that Coke and other corporate creators see that some of the work is cultural and can be let go without fear of losing value and maybe, just maybe, spreading goodwill to all.