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Scents: The Unconventional Potential for Trademarks

Amber Peterson, MJLST Staffer

Trademarks are intended to create an immediate brand recognition in the consumer’s mind. Consumers who are satisfied with a product must have a way to easily distinguish it from nearly identical or similar products from competitors. Thus, trademarks play a powerful role in branding and marketing as seen in the Nike “swoosh” and the Target bullseye. These traditional marks or logos are what are typically thought of when thinking about trademarks. However, unconventional trademarks such as the catch phrase “Hasta la Vista Baby” from the film, “The Terminator” and the red color of Christian Louboutin soles can be just as effective to identify a product or service.

The key requirement is distinctiveness. If a product can be thought of as inherently distinctive, it can be trademarked. Thus, the United States Patent and Trademark Office allows the trademarking of a scent since scent is distinctive in that it is deeply tied to memory recognition. Although this option is available, few have accomplished the task since the Patent and Trademark Office has put strict boundaries around what smells qualify.

First, the scent must serve no important practical function other than to help identify and distinguish the brand. This means that those smells whose only purpose is smell-related, such as perfumes and air fresheners, cannot receive scent trademark protection. Second, a detailed written description of the non-visual mark is required to complete the registration process. The problem with scents is the subjective nature of them. The perception of smell can be very different among a number of noses and is thus open to interpretation. This creates difficulty in successfully representing the scent graphically which is required to determine whether something is or is not appropriate for a trademark.

To date, there are only about 12 scent trademarks in the United States (e.g., the flowery musk smell in Verizon Wireless stores and the pina colada scent that a ukulele company scents its ukuleles with). As evidenced, the process of registering a scent can be challenging. However, there are marketing advantages that may make it worthwhile if the product or service resonates more deeply with a consumer compared to a typical visual mark or logo trademark.


Fore! Golf Ball Fragments Found in Frozen Hash Browns

By Guest Blogger Tommy Tobin

While golfing at the local links may be a popular pastime for many Americans, consumers don’t expect that golf balls will appear alongside their sausage links on the breakfast plate.

In one of the most unusual food recalls in recent memory, consumers in multiple states are warned that their frozen hash browns may contain golf ball fragments. According to the voluntary recall notice, the potatoes used for these products may have inadvertently been harvested with golf balls.

As hard as the idea may be to swallow, consumption of golf balls or their fragments is not advisable. Golf balls aren’t even a good source of iron as they’re made of resin and rubber. McCain Foods USA warns that consumption of golf ball fragments “may pose a choking hazard or other physical injury to the mouth.”

The affected products were distributed after January 19, 2017 with the production code date B170119. They were sold in two pound bags of Southern Style frozen hash browns under two different labels: Roundy’s and Harris Teeter. The Roundy’s-branded products were shipped to multiple supermarket chains in Illinois and Wisconsin. The Harris Teeter brand “Southern Style” products were shipped to Delaware, Florida, Georgia, Virginia, North Carolina, South Carolina, Maryland, and the District of Columbia.

The recall notice urges consumers in possession of the affected product “not to consume them” and directs consumers to either throw the product away or return it to the store of purchase. No injuries have yet been reported with regard to this recall.

As the Washington Post recently noted, people enjoy hash browns in numerous different ways, with chefs and home cooks each “adding their own special ingredients, although never golf balls.”


The Best Process for the Best Evidence

Mary Riverso, MJLST Staffer

Social networking sites are now an integral part of American society. Almost everyone and everything has a profile, typically on multiple platforms. And people like to use them. Companies like having direct contact with their customers, media outlets like having access to viewer opinions, and people like to document their personal lives.

However, as the use of social-networking continues to increase in scope, the information placed in the public sphere is playing an increasingly centralized role in investigations and litigation. Many police departments conduct regular surveillance of public social media posts in their communities because these sites have become conduits for crimes and other wrongful behavior. As a result, litigants increasingly seek to offer records of statements made on social media sites as evidence. So how exactly can content from social media be used as evidence? Ira Robbins explores this issue in her article Writings on the Wall: The Need for an Authorship-Centric Approach to the Authentication of Social-Networking Evidence. The main hurdle is one of reliability. In order to be admitted as evidence, the source of information must be authentic so that a fact-finder may rely on the source and ultimately its content as trustworthy and accurate. However, social media sites are particularly susceptible to forgery, hacking, and alterations. Without a confession, it is often difficult to determine who is the actual author responsible for posting the content.

Courts grapple with this issue – some allow social media evidence only when the record establishes distinctive characteristics of the particular website under Federal Rule of Evidence 901(b)(4), other courts believe authentication is a relatively low bar and as long as the witness testifies to the process by which the record was obtained, then it is ultimately for the jury to determine the credibility of the content. But is that fair? If evidence is supposed to assist the fact-finder in “ascertaining the truth and securing a just determination,” should it not be of utmost importance to determine the author of the content? Is not a main purpose of authentication to attribute the content to the proper author? Social media records may well be the best evidence against a defendant, but without an authorship-centric approach, the current path to their admissibility may not yet be the best process.


Dastardly Dementor Dad Dupes Daughter

Tim Joyce, Editor-in-Chief, Volume 18

Between last week’s midterm exams and next week’s Halloween shenanigans, the Forum proudly presents some light-hearted and seasonally-appropriate issue spotting. In this week’s issue: Drone Dementors!

This story has been going around recently, of a Wisconsin man who pranked his daughter hard by retrofitting his unmanned aircraft (aka, a “drone”) with fishing line and some well-positioned strips of black cloth (video here). Apparently she’s a big fan of the Harry Potter books and films, and so we’re sure she recognized it immediately as a real-life incarnation of the soul-sucking guardians of the Wizard prison known as Dementors. Undoubtedly, the fact that it was hovering around her backyard elicited some kind of hilarious reaction. Twitter (*strong language alert*) is still guffawing, but we’re pretty sure not everyone would instantly have recognized this as a joke.

While it’s at least arguable that this flight complies with many/most of the FAA’s recently finalized drone regs, let’s take a moment to examine some more creative theories of potential liability behind this prankster parent’s aerial antics:

  1. Negligent Infliction of Emotional Distress. First, let’s admit that there are probably much more effective ways to punish your dad for scaring you than a lawsuit. But, for an exceedingly litigious daughter of average sensitivities, the argument could be made that dad should have known better. In other words, Cardozo’s proximate cause “foreseeability” analysis from Palsgraf rears its ugly complicated head once again! We’ll admit that the eggshell plaintiff argument might provide a decent defense for pops, but it sure seems risky to wait until after the claim to invoke it.
  1. Intentional Infliction of Emotional Distress. See above, except now dad knows what he’s doing. To the extent that it’s sometimes harder to prove intent than negligence, a plaintiff might want to avoid this particular type of claim. On the other hand, an intentional actor is definitely a less sympathetic defendant, and particularly so if the jury is full of those darned Harry Potter-loving Millenials. Of course they’ll have time to serve jury duty, what with all that free time gained from “choosing to” live at home, and their generally lax work ethic.
  1. Copyright Infringement. Trademark infringement doesn’t apply when you’re not using the good in commerce. But Section 106 of the Copyright Act gives an exclusive right to control derivative works. This drone-decoration does look an awful lot like the movies, and it’s pretty clear that no one affirmatively granted permission to use the characters in real life. Given the rightsholders’ propensity to vigorously protect the brand / expression, dad would be wise to cool it on the backyard joyrides. On the other hand, he could probably make some kind of fair use argument, arguing something along the lines of “transformative use” — again, much simpler to avoid the issue altogether.
  1. Some crazy-attenuated products liability claim. You can imagine a situation where the drone clips the tree, or the puppet gets tangled in the branches, and then spirals out of control, injuring a bystander. Should the drone manufacturer then be liable? Extending the chain of causation out to the drone assembly factory seems a bit tenuous, but should strict liability apply nonetheless? Does this situation violate the FAA’s prohibition on “careless or reckless operations” or “carriage of hazardous materials?” Should that fact make a difference?

Everyone with half a brain seems to agree that this is just a really great one-time use scenario. But there are real issues to consider with this, as with any, new technology. Plaintiffs may have to get creative when arguing for liability, at least until courts take judicial notice of the power of a Patronus Charm. From those of us here at MJLST, have a fun and safe Halloween!


Who Owns Your Tattoos?

Zachary Berger, MJLST Executive Editor

Tattoos are more common today than they have ever been. More than 20 percent of Americans have at least one tattoo, and among millennials nearly 40 percent have at least one tattoo. Most people probably assume that they are the owners of their tattoos. After all, tattoos are part of your body. How can you not own them? However, the answer is a bit more complicated than that. There have been a number of lawsuits relating to tattoo ownership over the years, but a recent one has brought the issue back into the news.

Take-Two Interactive Software is the parent company of 2k Sports and developer Visual Concepts, who create the popular NBA 2K video game series. Solid Oak Sketches is a company that is claiming ownership over a number of tattoos that appear in the game on several prominent players, including LeBron James and Kobe Bryant. Take-Two has licenses to the players’ likenesses, but Solid Oak claims they alone have the right to license the tattoos, which appear on the players in the game. Tattoos are very prominent in the NBA, and if the players had to appear without them, it would break the sense of realism the game is attempting to convey.Suits such as this one have occurred before, most notably in 2011 when Mike Tyson’s facial tattoo appeared on Ed Helms in the movie The Hangover Part II. However, all of these cases have settled, leaving tattoo ownership in a murky place.

In order to be eligible for copyright protection, a creation must meet three requirements. It must be a work of authorship, it must be fixed in a tangible medium of expression, and it must be original. It is up for debate whether tattoos meet all of these requirements but many believe they do.

The more interesting question, I think, is once that tattoo is finished, who owns it? Does it belong to the artist or patron? As is frequently the case in the legal field, the answer likely is that “it depends.” The default rule in copyright is that ownership is given to the artist. The University of Minnesota Law School’s own Professor Thomas Cotter is coauthor of one of the earliest and most extensive forays into the question of tattoo ownership. He concluded that there are three possibilities: 1) the artist owns the tattoo in the same way a painter owns what he or she paints on a canvas, 2) the work is a joint work, meaning that “it is prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent copyrightable expression,” or 3) the work is a work for hire. As explained by Timothy C. Bradley of the Coats & Bennet law firm, a “work for hire” applies when the work is 1) prepared by an employee within the scope of his or her employment or 2) specially ordered or commissioned for use in certain circumstances. A “work for hire” is owned by the party that commissions the work.

Take-Two recently won a dismissal of a potentially large damages claim when Judge Laura Taylor dismissed Solid Oak’s statutory damage claim because the tattoo designs Solid Oak claims ownership to were not registered with the U.S. Copyright Office until 2015, but Take-Two first used them in 2013 with the release of NBA 2k14. In order to be able to obtain statutory damages, a plaintiff must have registered their copyright before the alleged infringement. Solid Oak argued that each new 2K game is a separate instance of infringement, but the judge disagreed.

However, Solid Oak is still able to seek actual damages, so the case will continue. In their answer and counterclaim, Take-Two is relying in particular on the defenses of  de minimis use and fair use. De minimis is Latin for “minimal things” and essentially means that the infringement was insignificant and not worthy of judicial scrutiny. Fair use is an affirmative defense that allows limited copying without the copyright owner’s permission for the purposes such as criticism, comment, news reporting, teaching, scholarship, etc. The following factors (from 17 U.S.C. § 107) are used to analyze fair use:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Solid Oak v. 2k Games may be the first tattoo copyright infringement suit to settle on the merits rather than out of court and thus will be a very interesting case to watch going forward. The case is Solid Oak Sketches v. 2K Games and Take-Two Interactive Software, No. 16-CV-724-LTS (S.D.N.Y. filed Feb. 1, 2016).

 


Popular Perceptions May Hold Automated Vehicles Back

Alex Vilisides, MJLST Symposium Editor

Last October, when the Minnesota Journal of Law, Science and Technology (MJLST) co-sponsored a symposium entitled “Automated Vehicles: The Legal and Policy Road Ahead,” experts from a broad range of areas came together to discuss the challenges of self-driving cars. There was excitement that the technology was closer than ever, but also sober discussions of the many legal, ethical, and practical challenges that lay ahead. Recent media reaction to a new academic study emphasizes a very basic challenge: autonomous cars must overcome the challenge of being weird.

On April 9, 2015, University of Michigan announced in a press release the findings of a new study concluding that use of automated vehicles could increase the incidence of motion sickness. The study asked 3,200 adults what activities they would do in a car that drove itself. From the responses, such as reading, texting or watching television, the study concluded that “6-12 percent of Americans adults riding in fully self-driving vehicles” could expect to “suffer moderate or severe motion sickness.” Of course, the “frequency and severity of motion sickness is influenced” not by the inherent nature of an automated vehicle, but “by the activity that one would be involved in instead of driving.”

Outlets from NBC News to Popular Mechanics to The Guardian picked up the story. “Self-Driving Cars Might Make You Vomit,” declared a headline about the study on the Huffington Post. The cost-benefit imbalance is staggering. If people are able to implement technology that may be capable of making travel safer, cheaper, more accessible and less destructive to our environment it may come at a cost. That cost, these articles point out, is that if people choose to read or watch television in a self-driving car, some fraction of the population may be at greater risk to experience motion sickness. Despite this stark contrast, the dominant media narrative is served by focusing more on the weird, uncomfortable experience of riding in a self-driving car.

It is unlikely that any of the extraordinary articles published in MJLST’s upcoming symposium issue, focusing on automated vehicles, will receive this type of media attention. This is because an article about these vehicles making people vomit fits the dominant narrative: automated vehicles are weird. They a strange new technology and a harbinger of the robot-controlled dystopian future. Information that fits this narrative is far more affecting for an average reader than a rational cost-benefit analysis. And this weirdness has consequences. If the benefits are as great as advocates claim, the delay in adoption caused by social pressures and popularity has real consequences. The adoption of mass technologies is not pre-ordained. The weirdness battle is one that advocates of automated cars must fight if society is going to adopt this potentially transcendent technology.


The Development of Autonomous Vehicles

Kirsten Johanson, MJLST Staff Member

On a glorious Halloween day last fall, the Minnesota Journal of Law, Science and Technology (MJLST) co-sponsored its annual symposium entitled “Automated Vehicles: The Legal and Policy Road Ahead.” As the title implies, this symposium focused on one of the more exciting and innovative areas of the automotive industry–self-driving cars. Numerous academics, researchers, and innovators in the industry presented on the major issues that impact this industry’s future, specifically in terms of safety and other regulatory standards. Ensuring that proper standards are in place before these vehicles take to the roads is necessary to protect the pubic against everything from the cars’ operations in bad weather conditions to irresponsible human operators. Many of these standards require legislative involvement to craft state and national policy that strikes the delicate balance between safety and integration of new technology.

These issues are hugely important in the future development and integration of autonomous vehicle technology. In recognition of that importance, MJLST’s upcoming publication (Volume 16.2) is expected to include four articles written by experts and scholars in the autonomous vehicle field that address a number of major issues that arise in conjunction with the development of autonomous vehicle technology. Each of these articles expands on a particular idea presented at the symposium but, despite the differences in article topics, one recurring theme is the radical change that will develop upon a workable regulatory scheme and publicly available vehicles.

While numerous regulatory concerns require further development before these so-called self-driving cars are ready to hit the road with the general pubic at the wheel (or, in Google’s case, lack thereof . . .), none of the major car companies are missing the opportunity to participate in the development of autonomous technology. Every major car manufacturer in the world from Volkswagen to Audi as well as the ever technologically savvy Google is trying its hand at autonomous development (see depictions below). Not only does this competitive push for technological creativity result in a dynamic array of vehicle characteristics and (most importantly) awesome looking cars, it also indicates that, given the proper regulatory structure, the autonomous vehicle industry is poised to explode.

That being said, this is an area of the law that must continue to adapt with the changing technology. Regulators need to understand the impacts autonomous cars will have on the public from both convenience and safety perspectives and draft legislation accordingly. The symposium articles published in MJLST Volume 16.2 recognize this regulatory need and address specific issues that provide helpful insight to any interested party.

Self-driving cars might be one of the more futuristic ideas of the next generation and all of the decisions of today will impact the ultimate success of such vehicles. A basic Internet search for “autonomous vehicles” shows the potential is there and growing every day–even companies like Uber are getting involved! The wave of the future is sneaking upon on us and what that wave looks like is up to the initial responsive decisions made in the next five years. Check out MJLST Volume 16.2 for an in-depth analysis of what those decisions might look like and how they will impact various aspects of your life.

In the meantime, take a look at the following examples of autonomous vehicles, Volkswagen Autonomous Car; Autonomous Audi; Google’s Self-Driving Vehicle Prototype


Tesla’s Autonomous Vehicle Update is the First Step Toward Bright and Automated Future

Ian Blodger, MJLST Staff Member

Tesla Motors recently announced a software update to its Model S that will allow the vehicle to drive autonomously on highways. This development may be the first step toward an almost entirely autonomous vehicle fleet. This change to transportation could have profound implications on everything from city density to traffic safety.

Autonomous vehicles may eventually increase urban density by reducing the requirement for parking spaces in cities. Tesla’s update will give its vehicles the ability to drive completely autonomously from a parking spot to pick up the vehicle owner. While Tesla states that this feature should currently be used only on private property, the programming opens up the possibility of radical changes to the current cityscape. Under the current transportation model, people who commute to work in larger cities must also find a place to park their car during the day. Additionally, this location must be relatively close to the person’s place of work. With autonomous vehicles, however, commuters could be dropped off by their vehicle, which would then find parking outside the city. At the end of the day, the commuter would call their car to pick them up and drive home. This would allow developers to maximize the function of valuable real estate inside cities, currently being used only to park cars. Additionally, parking outside the city center could reduce costs for vehicle owners, since parking structures would have less financial overhead to account for in pricing. Essentially, the currently available technology will eventually allow for increased efficiency of valuable city real estate.

Moreover, autonomous vehicles could provide improved efficiency for commuters on their way to work. Since commuters will not need to concentrate on driving, they could pay attention to other tasks, like preparing for the workday. While Tesla’s updates may not quite allow the vehicle owner to divert their full attention from the road, it gets close. As the quality of autonomous vehicle programming improves and the number of autonomous vehicles increases, commuters will be able to invest their full attention in things other than driving.

Besides these general efficiency improvements, autonomous vehicles may have the added benefit of decreasing motorist deaths. According to the Association for Safe International Road Travel, the United States has more than more than 37,000 traffic deaths each year. Since many of these deaths are caused by driver error, allowing vehicles to take the wheel could save thousands of lives each year. Tesla’s updates are just the first step to improving the safety and efficiency of our roadways.

The Minnesota Journal of Law Science and Technology recently held a symposium on the legal and social implications of autonomous vehicle technology, and will be publishing a number of articles adapted from speaker’s presentations in the upcoming Spring 2015 issue of Volume 16. The articles vary widely in their analyses of the social and legal implications of autonomous vehicles, and will be a great resource for anyone interested in learning more about the subject.


Admission Of Scientific Evidence In Criminal Case Under The Daubert Standard

Sen “Alex” Wang, MJLST Staff Member

In Crawford v. Washington, the Supreme Court, in a unanimous decision, overruled its earlier decision in Ohio v. Roberts by rejecting the admission of the out-of-court testimony due to its nature as “testimonial” evidence. However, it was not clear if the constitutional right of confrontation only applied to traditional witnesses (like the statement in Crawford) or if it also applied to scientific evidence and experts. Subsequently, the Court clarified this point in Melendez-Diaz v. Massachusetts and Bullcoming v. New Mexico, where the Court upheld the confrontation right of the defendants to cross-examine the analysts who performed the scientific tests. However, compare to traditional testimony from eyewitnesses, scientific evidence (e.g., blood alcohol measurement, field breathalyzer, genetic testing) is a relatively new development in criminal law. The advancement of modern technologies creates a new question, namely whether this evidence would be sufficiently reliable to avoid triggering the Confrontation Clause.

This question is discussed in a student note & comment titled The Admission of Scientific Evidence in a Post-Crawford World in Volume 14, Issue 2 of the Minnesota Journal of Law, Science & Technology. The author Eric Nielson pointed out that the ongoing dispute in the Court about requiring analysts to testify before admitting scientific findings missed the mark. Specifically, scientific evidence, especially the result of an analytical test is an objective, not subjective, determination. In the courtroom, testimony of a scientific witness is mainly based on review of the content of the witness’s report, not his memories. Thus, according to the author, though Justice Scalia’s boldly statements in Crawford that “reliability is an amorphous, if not entirely subjective, concept[,]” may be right in the context of traditional witness, it is clearly wrong in the realm of science where reliability is a measurable quantity. In particular, the author suggested that scientific evidence should be admitted under the standard articulated by the Court in Daubert v. Dow.

As emphasized by the author, a well-drafted, technical report should answer all of the questions that would be asked of the analyst. Given that there is currently no national or widely-accepted set of standards for forensic science written reports or testimony, the author proposed the following key components to be included in a scientific report conforming to the Daubert standard: 1) sample identifier, including any identifier(s) assigned to the sample during analysis; 2) documentation of sample receipt and chain of custody; 3) analyst’s name; 4) analyst’s credentials; 5) evidence of analyst’s certification or qualification to perform the specific test; 6) laboratory’s certification; 7) testing method, either referencing an established standard (e.g., ASTM E2224 – 10 Standard Guide for Forensic Analysis of Fibers by Infrared Spectroscopy) or a copy of the method if it is not publicly available; 8) evidence of the effectiveness and reliability of the method, either from peer reviewed journals, method certification, or internal validation testing; 9) results of testing, including the results of all standards or controls run as part of the testing; 10) copies of all results, figures, graphs, etc; 11) copy of the calibration log or certificate for any equipment used; 12) any observations, deviations, and variances, or an affirmative statement that none were observed; 13) analyst’s statement that all this information is true, correct, and complete to the best of their knowledge; 14) analyst’s statement that the information is consistent with various hearsay exceptions; 15) evidence of second-party review, generally a supervisor or qualified peer; 16) posting a copy to a publicly maintained database; 17) notifying the authorizing entity via email of the completion of the work and the location of the posting.

Per the author, because scientific evidence is especially probative, the current refusal to demand evidence of reliability, method validation, and scientific consensus has allowed shoddy work and practices to impersonate dependable science in the courts. This is an injustice to the innocent and the guilty alike.


Mechanics or Manipulation: Regulation of High Frequency Trading Since the “Flash Crash” and a Proposal for a Preventative Approach

Dan Keith, MJLST Staff Member

In May of 2010, the DOW Jones plummeted to Depression levels and recovered within a half an hour. The disturbing part? No one knew why.

An investigation by the Securities Exchange Commission (SEC) and the Commodity Futures trading Commission (CTFC) determined that, in complicated terms, the Flash Crash involved “a rapid automated sale of 75,000 E-mini S&P 500 June 2010 stock index futures contracts (worth about $4.1 billion) over an extremely short time period created a large order imbalance that overwhelmed the small risk-bearing capacity of financial intermediaries–that is, the high-frequency traders and market makers.” After about 10 minutes of purchasing the E-mini, High Frequency Traders (HFTs) began selling this same instrument rapidly to deplete its own reserves which had overflowed. This unloading came at a time when liquidity was already low, meaning this rapid and aggressive selling increased the downward spiral. As a result of this volatility and overflowing inventory of the E-mini, HFTs were passing contracts back in forth in a game of financial “hot potato.”

In simpler terms, on this day in May of 2010, a number of HFT algorithms had “glitched”, generating a feedback loop that caused stock prices to spiral and skyrocket.

This event put High Frequency Trading on the map, for both the public and regulators. The SEC and the CTFC have responded with significant legislation meant to curb the mechanistic risks that left the stock market vulnerable in the spring of 2010. Those regulations include new reporting systems like the Consolidated Audit Trail (CAT) that is supposed to allow regulators to track HFT activity by the data it produces as it comes in. Furthermore, Regulation Systems Compliance Integrity (Reg SCI), a regulation still being negotiated into its final form, would require that HFTs and other eligible financial groups “carefully design, develop, test, maintain, and surveil systems that are integral to their operations. Such market participants would be required to ensure their core technology meets certain standards, conduct business continuity testing, and provide certain notifications in the event of systems disruptions and other events.”

While these regulations are appropriate for the mechanistic failures of HFT activity, regulators have largely overlooked an aspect of High Frequency Trading that deserves more attention–nefarious, manipulative HFT practices. These come in the form of either “human decisions” or “nefarious” mechanisms built into the algorithms that animate High Frequency Trading. “Spoofing”, “smoking”, or “stuffing”–there are different names, with small variations, but each of these activities involves a form of making large orders for stock and quickly cancelling or withdrawing those orders in order to create false market data.

Regulators have responded with “deterrent”-style legislation that outlaws this type of activity. Regulators and lawmakers have yet, however, to introduce regulations that would truly “prevent” as opposed to simply “deter” these types of activities. Plans for truly preventative regulations can be modeled on current practices and existing regulations. A regulation of this kind only requires the right framework to make it truly effective as a preventative measure, stopping “Flash Crash” type events before they can occur.