Category: Trade

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Will We Be Ever Able To Go Off-grid Again? And Other Questions about the Electronic Silk Road

Will we ever be able to go off-grid again? What do we gain and lose if not? These questions came to mind as I was reading Anupam Chander’s Electronic Silk Road. The book is excellent. Indeed, these questions and the rest of this post’s ideas would not have come to mind had he not set out how the Electronic Silk Road operates and might operate. And my questions are perhaps prompted by a good book that addresses much and better still opens the doors to the next questions. Chander makes a strong case for benefits of a modern silk road where trust and trade work together and promote “net-work” which he defines as “information services delivered remotely through electronic communications systems.” This two way world facilitates labor shifted to Asia but also Google and Facebook spanning the globe with their services. His plea for new laws to address this change in trade makes sense. Our world of goods is fading to a world of digital things. Yet I wonder whether this new rule of trade maps to all the wonders we may want.

There may be unintentional irony here. Chapter One epigraph quotes Keynes “What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!” Does trade stop war or at least make countries less likely to war against each other? Maybe. To get there Chander points out that, “the characteristics that permit net-work trade might be deployed to create a robust infrastructure for such trade: real-time information transfer, low information and other transactions costs, the ability of individuals around the world to collaborate, and electronic identification.” But the same systems that may promote trade can lead to greater surveillance and repression.

In other words, the recent spying amongst countries may be a good thing. I fear greater coordination amongst countries rather than friction. Chander calls this issue “Stalinization—the imposition of the world’s most repressive rules on cyberspace, in aggregated form.” He acknowledges this point at p. 197. Nonetheless this greater connection and improved grid may be inescapable. The idea that local laws must balance global over-reach does not appear to address what happens when the big boys agree. The electronic silk road thus seems to kill the romance of the silk road.

The Silk Road evokes adventure, the ability to test, change identities, and yet somehow trade worked. Failure on the Silk Road or even mistakes or cheating could be hidden by moving from the Road to some other country. In that sense, a modern system of trade on a global scale seems to defeat the room for play that Julie Cohen has described in Configuring the Networked Self. To where would one go to experiment, reinvent, and rehabilitate? Even with greater freedom to communicate things can go awry. A WTO response may be futile if all agree on bad behavior. Public shaming of corporations may mean little when they are forced to comply. To be clear, I agree with much of what Chander offers and have hope that the mitigation he offers will take it root. At bottom it may be a faith that discourse and debate defeats evil in all forms. Part of me thinks this idea is true. Part wonders whether we have come that far from the days leading up to World War I or II. If not, tighter understanding and trade may do less than both Chander and I hope. Then again Chander may be setting us up for the next step in his ideas. I certainly hope so.

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Introducing the Electronic Silk Road Online Symposium

Silk Road coverThis week, a great group will be blogging about Professor Anupam Chander’s book, The Electronic Silk Road: How the Web Binds the World Together in Commerce. Professor Chander is a leading scholar on globalization and digitization. He is Director of the California International Law Center and Martin Luther King, Jr. Hall Research Scholar at UC Davis. He has been a visiting professor at Yale Law School, the University of Chicago Law School, Stanford Law School, and Cornell Law School. He is also a dear friend. Nonetheless, it is time for us to do what we hope to do well, and if lucky, our friends do for us. That is, it is time to press Professor Chander about his work as it tries to show us how the new Silk Road operates, what it promises, what is yields, and what it threatens. Work and services are now blending, if not blended. Old rules for trade struggle to adapt to new rules for information. Where will we go from here? Join Professor Chander and our panelists including Paul Berman, Miriam Cherry, Graeme Dinwoodie, Nicklas Lundblad, Frank Pasquale, Pierluigi Perri, Adam Thierer, Haochen Sun, Fred Tung, and of course Danielle Citron and me for the fun this week.

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Announcing Symposium on Orly Lobel’s Talent Wants to be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding

Talent Wants to be FreeThink you have enough to read? Think again! I am honored to announce that Concurring Opinions will host a symposium on Orly Lobel’s book, Talent Wants to be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding. The event will run from Monday, November 11 to Friday, November 15. I came to know Professor Lobel’s work as I shared some of my thoughts on intellectual property, property theory, and technologically mediated creation in her seminar, Work, Welfare, and Justice, in 2008. I was thinking about who owns your email? What about work place creation? Who owns what you come up with at work? Does it matter whether you used company technology to create and learn? Professor Lobel was digging into related questions, and it has been a blast seeing her run with them. Now we have the pleasure of her book. The accolades have been coming in from academics in law and other fields as well as the business world. Business Week, Fortune, and Harvard Business Review have run articles by Professor Lobel that draw on the insights from the book.

Professor Lobel argues that as we move deeper into a world driven by human capital and talent is in increasing demand, we have to understand that a lock-down approach to innovation is a losing strategy. Nonetheless:

Many companies embrace a control mentality—relying more on patents, copyright, branding, espionage, and aggressive restrictions of their own talent and secrets than on creative energies that are waiting to be unleashed.

Unlocking talent, setting it free as she puts it, sets up a system where everyone wins. Will our discussants or you agree? I think so, but I am sure there will be new ideas and challenges during the event. Our panelists include Professor Lobel as well as:

Matt Bodie

Anupam Chander

Danielle Citron

Catherine Fisk

Vic Fleischer

Brett Frischmann

Shubha Ghosh

Ron Gilson

Peter Lee

Frank Pasquale

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Upcoming Online Symposium on Professor Anupam Chander’s The Electronic Silk Road

Silk Road coverDanielle and I are happy to announce that next week, Concurring Opinions will host an online symposium on Professor Anupam Chander’s The Electronic Silk Road: How the Web Binds the World Together in Commerce. Professor Chander is a professor at U.C. Davis’s King Hall School of Law. Senators, academics, trade representatives, and pundits laud the book for its clarity and the argument Professor Chander makes. He examines how the law can facilitate commerce by reducing trade barriers but argues that consumer interests need not be sacrificed:

On the ancient Silk Road, treasure-laden caravans made their arduous way through deserts and mountain passes, establishing trade between Asia and the civilizations of Europe and the Mediterranean. Today’s electronic Silk Roads ferry information across continents, enabling individuals and corporations anywhere to provide or receive services without obtaining a visa. But the legal infrastructure for such trade is yet rudimentary and uncertain. If an event in cyberspace occurs at once everywhere and nowhere, what law applies? How can consumers be protected when engaging with companies across the world?

But will the book hold up under our panel’s scrutiny? I think so but only after some probing and dialogue.

Our Panelists include Professor Chander as well as:

Paul Berman

Miriam Cherry

Graeme Dinwoodie

Nicklas Lundblad

Frank Pasquale

Pierluigi Perri

Adam Thierer

Haochen Sun

Fred Tung

And of course

Danielle Citron and I will be there too.

Nordstrom on Global Outlaws

I was recently listening to a podcast by Carolyn Nordstrom of her 2008 Franke Lecture in the Humanities, Emergent(cies).  Nordstrom discusses the extraordinary power wielded by those in control of an underground economy of weapons, drugs, and human trafficking.  Paul Farmer attested to Nordstrom’s extraordinary dedication to ferreting out the transactions that knit together so many imperiled and privileged lives.  I look forward to reading her book Global Outlaws.  This excerpt describes her aims in it:

I am interested in the intersections of crime, finance, and power in activities that produce something of value: monetary, social, and cultural capital, power, patronage, survival. . . . Public media focus on . . . aggressive individuals under the sensational banner of “crime,” yet this interpersonal violence constitutes a small percentage of the universe of criminal actions. Smuggling cigarettes brings in far greater profits and economic repercussions. Robbing an entire country or controlling a transnational profiteering empire is the gold standard of crime.

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On Information Justice

Like the other commenters on From Goods to a Good Life, I also enjoyed the book and applaud Professor Sunder’s initiative in engaging more explicitly in the values conversation than has been conventionally done in IP scholarship. I also agree with most of what the other commenters have said.  I want to offer plaudits, a few challenges, and some suggestions about future directions for this conversation.

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What is a treaty? Is that the right question?

(Thanks to Danielle and the Co-Op crowed for letting me stick around a bit longer.)

I am interested in how we should think about treaties.  More specifically, I am interested in different ways we might think about treaties, and why different ways might be appropriate in different circumstances.  At one extreme we might think of treaties as establishing sacred duties, as being based on oaths with deep religious implications.  (Jeremy Waldon has a very interesting discussion of the history of this idea in his recent Charles E. Test lectures, “A Religious View of the Foundations of International Law”.)  I think that there’s a case to be made that supposed principle of international law (or of natural law, depending on one’s account), pacta sunt servanda, depends on this understanding, though I won’t try to make that case here.  (If so, this would be interesting in light of fact that Hans Kelsen at one point held, I believe, pacta sunt servanda to be the “basic norm” of international law, though he later abandoned this.) Read More

Neo-Feudalism: Shaxson on Tax Havens

Parag Khanna has frequently discussed the rise of a neo-feudal age, with power devolving from nation-states to cities. Why are nation-states losing relevance?

One important reason is that tax havens are diverting ever more revenue away from social needs. Powerless to confront the wealthy or powerful corporations which take advantage of them, states must tax their middle classes more or cut services. Many authors have noted the proliferation of tax havens in recent years. But one rarely sees the literal trappings of feudalism re-emerge, as Nicholas Shaxson describes in his provocative account of the “City of London Corporation:”

The term “tax haven” is a bit of a misnomer, because such places aren’t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering. The notion of elsewhere (hence the term “offshore”) is central. The Cayman Islands’ tax and secrecy laws are not designed for the benefit of the 50,000-odd Caymanians, but help wealthy people and corporations, mostly in the US and Europe, get around the rules of their own democratic societies. The outcome is one set of rules for a rich elite and another for the rest of us.

The City’s “elsewhere” status in Britain stems from a simple formula: over centuries, sovereigns and governments have sought City loans, and in exchange the City has extracted privileges and freedoms from rules and laws to which the rest of Britain must submit. The City does have a noble tradition of standing up for citizens’ freedoms against despotic sovereigns, but this has morphed into freedom for money.

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“Ten Times More Productive”

I respect Tom Friedman’s Cassandran efforts to curb American dependence on foreign oil. One can occasionally snicker at his exuberant style, but not the environmentalist substance. America needs more green hawks like him.

But I was taken aback by his casual comment on a radio show that American workers need to be “ten times as productive” as Indian or Chinese workers to maintain current earning levels. Over the past fifty years, we’ve seen CEO salaries go from about 50 times employee average pay to a 500-fold multiple. If anyone needs to become “ten times more productive,” it’s those at the top of the “value chain.”

But the myth of the coddled everyman persists, spreading to a “new global elite,” as Chrystia Freedland reports:

The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. . . . (emphasis added)

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

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HP v. Hurd as Complex, Despite NYT Nocera’s Op-Piece

Conventional talk says it’s impossible for HP to enjoin Mark Hurd, its ousted CEO, from misappropriating trade secrets, threatened by his employment with arch-competitor Oracle. People like Joe Nocera of the New York Times take the suit as further evidence of incompetence at HP’s board. The conventional talk is wrong—it’s a closer case than reported, contributes nothing to evaluating HP’s competence, and makes one wonder why a reporter at the New York Times offers opinions in the paper’s news pages.

Nocera writes that California law “frowns on” covenants not to compete, noting how “over the years,” its law has become settled that they are invalid.  Nocera doesn’t note that the statute driving this policy dates to at least 1872 and California is unusual among states in its hostility to the clauses.  But HP and Hurd didn’t sign any covenant not to compete, so that’s not an issue in the case.

What HP is asserting is a right under the confidentiality agreement it and Hurd did sign, and another California statute, of more modern vintage, that prohibits misappropriating trade secrets. The two statutes can be in tension, banning both non-competes and misappropriation, but not inevitably. A covenant is void per se, even when signed by someone incapable of misappropriation; misappropriation can be committed, even by a person signing no agreement at all—whether an invalid non-compete or a confidentiality agreement.

The tension is stark when competing work and appropriating trade secrets go hand-in-hand—as they may for Hurd working at Oracle while possessing HP trade secrets. When the statutory policies are in tension, the result is parsing facts. The per se bans on non-competes and misappropriation yield to analysis, akin to the rule-of-reason in antitrust law and balancing of contending equities when evaluating extraordinary remedies like injunctions.

The easiest case to resolve despite these tensions is where an employee hasn’t signed any agreement—no covenant not to compete and no commitment to confidentiality. Absent such a confounding agreement, under California law, the balancing may weigh against an injunction.  Skeptical judges may readily see a misappropriation cliam as an attempt to generate a de facto covenant not to compete or confidentiality agreement, when no actual commitment of either sort exists.

The harder case—which is the Hurd-HP case—arises when (a) the parties didn’t enter into a per se invalid non-compete, (b) the parties did enter into a valid confidentiality agreement, and (c) credible grounds appear that the former employee is poised to misappropriate trade secrets unless enjoined.

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