Articles by mjlst

EmDrives: The End of Newtonian Physics?

October 25, 2016
New Technology, Patents, Space Law

Peter Selness, MJLST Staffer

The EmDrive has been the center of much controversy over the past decade, and rightfully so.  But what exactly is an EmDrive, and why does it have the scientific community at odds with one another over the underlying science behind it?  The EmDrive is a type of propulsion system that was first designed by Roger Shawyer in 2001.  Essentially, it is a RF resonant cavity thruster that relies on electro magnetic radiation projected into the cavity of a cone to produce thrust.

The EmDrive was met with no small amount of criticism when first proposed because it is what is known as a propellantless propulsion system in that it consumes no fuel when producing thrust.  Not only does it consume no fuel, however, it also appears to only produce force in one direction, thus contradicting Newton’s third law of “for every action there is an equal and opposite reaction.”  Such a proposition has been compared to standing on the deck of a sailboat and pushing on the mast to propel it across a lake, or the old adage of “pulling yourself up by your bootstraps.”  The implications of such a device means that our understanding of physics as it relates to Newton’s third law (which has been relied upon for centuries) is either not entirely understood yet by humanity, or is completely wrong; which is largely why the EmDrive has received such criticism from the scientific community.

And yet, there are multiple confirmed reports of EmDrive testing resulting in this unexplainable thrust that have arisen independently from Roger Shawyer.  Even NASA conducted testing on EmDrives in 2014 and reported measuring a thrust produced by the device.  A similar experiment was then carried out by NASA again in 2015 to correct for some reported errors from the first test, but thrust was surprisingly recorded again despite the corrections.  Also, an EmDrive paper has finally been accepted by peer review by the American Institute of Aeronautics and Astronautics, granting the technology more authority from critics.

Interestingly enough, legal developments have also granted significant legitimacy to the EmDrive.  Roger Shawyer currently has three patents granted on the EmDrive, while two more are still going through the patent process.  Being granted three patents from the UK IP Office means that the physics behind the EmDrive has been thoroughly examined and was found to not violate the laws of physics, as such a violation would inevitably have lead to the patent applications being denied.  Furthermore, Shawyer’s most recent patent, as of October 12th, was filed more than 18 months ago, allowing the patent office to disclose the information contained to the public.  Such a public disclosure should in turn allow for greater scrutiny of Shawyer’s more recent efforts in developing the EmDrive.

The implications of the EmDrive being accepted as a legitimate technology are immense.  First of all, a working propellantless propulsion system would allow for future space craft to be much lighter and cheaper without requiring large amounts of rocket fuel for each take off.  It also would allow for much faster space travel, possibly allowing humans to reach the outer limits of our solar system in a matter of years and Mars within only a few months.  Furthermore, outside its space propulsion systems applications, there’s really no limit to what it may be applied to.

Despite passing several hurdles in recent years, however, the EmDrive is still a long way from leading us to interstellar travel.  The testing conducted by NASA, while showing positive results, also recorded thrust of a force just slightly higher than the magnitude of error for the experiment.  Also, while this positive result allowed it to pass peer review, that does not necessarily mean that the technology is sound and will not later be found to have flaws.  In all likelihood, the chances of a new technology being discovered that, for the first time, violates the laws of physics as we have known them for hundreds of years is a far less likely result than finding some sort of experimental error in the technology.  But maybe, just maybe, this could be the end of Newtonian physics as we know it.

A New Option for Investors Warry of High Frequency Trading

October 24, 2016
Administrative Law, Regulatory, Securities Law

Spencer Caldwell-McMillan, MJLST Staffer

In his recent paper, The Law and Ethics of High Frequency Trading, which was published in the Minnesota Journal of Law, Science, and Technology Issue 17, Volume 1, Steven McNamara examined the cost and benefits of a high frequency trading (HFT) on stock exchanges. He observed that problematic practices such as flash orders and colocation can provide HFT firms with asymmetrical information compared to retail or even sophisticated institutional investors.

In June, a new type of exchange was approved by the Securities and Exchange Commission (SEC). IEX Group Inc. was granted exchange status from the SEC. Before this designation the firm was handling less than 2% of all equity trades, with this new designation the exchange is likely to see volume increase as orders are routed to the exchange. IEX uses 38 miles of looped fiber optic cable to combat some of the information asymmetry that HFT firms exploit. IEX uses this coil to slow incoming orders down by about 350 microseconds. This is roughly half the time a baseball makes contact with a baseball bat. While this may seem like an insignificant amount of time, the proposal proved extremely controversial. The SEC asked for five revisions to IEX application and released the decision at 8 PM on a Friday.

This speed bump serves two purposes: to stop HFT firms from taking advantage of stale prices found on IEX orders and to prevent them from removing liquidity on other exchanges so that IEX’s customer are unable to fill their orders. Critics of this system claim that the speed bump violates rules that requires exchanges to fulfill orders at the best price. However, IEX pushes back on these points to arrangements like colocation that allows firms to pay for faster access to markets by buying space on the servers of the stock exchanges. These policies allow HFT firms to get information faster than even the most sophisticated investors because of their proximity to the data. IEX began operations as an exchange in August and time will tell whether it can generate profits without compromising their pro-investor stance.

This debate is likely to continue long after public attention has faded from HFT. Institutional investors are the most likely beneficiaries of these changes, in fact, in a letter to the SEC the Teacher Retirement System of Texas, claimed that using IEX to process trades could save the fund millions of dollars a year. More recently, Chicago Stock Exchange has submitted a proposal to include a similar speed bump on its exchange. Taken together these two exchanges would represent a small fraction of the order volume being processed by U.S. exchanges but these changes could have a lasting impact if they drive institutional investors to change their trading behavior.

Solving the “Patent Troll” Problem

October 21, 2016
Litigation, Patents

Travis Waller, MJLST Managing Editor

“Dovre: What’s the distinction between troll and man?

Peer: So far as I know, there is none, by my score.

The big want to roast you, the small ones to scratch you; —

same as with us, if they dare but catch you.”

Henrik Ibsen, Peer Gynt, Act II, ll. 903–06 (John Northam, trans., 2007) (1876).

In recent events, internet “trolling” has become something of a hot issue. This discussion will not address internet trolling (even tangentially), but will instead endeavor to shed light upon a different, often craftier member of troll-kind: the patent troll.

To begin, what is a “patent troll?” The term has taken a somewhat expansive usage since its original appearance in a 1990’s educational video released to corporations. Today, the term can refer to a broad range of practices, but most commonly is understood as the practice of an individual or corporation (sometimes with a large patent portfolio) that abusively uses the threat of enforcement litigation for overly broad, and probably invalid, patents that it has acquired to essentially extort licensing agreements from companies (often quite small) that do not necessarily have the resources to devote to patent litigation, and are likely not even infringing on the “trolls” patented invention to begin with.

Since that was a mouthful, let me provide an example:

Company A (the “troll”) purchases a patent on invention A3;

Company B independently creates invention ABC123, and acquires a patent;

Company A claims that patent A3 reads on patent ABC123, because it claims elements A3 are contained in Company B’s patent ABC123;

Company A sends a letter to Company B demanding that it licenses patent A3, or will face a “prompt” litigation action.

In this example, Company B, fearing that Company A may actually be within it’s legal rights, agrees to pay Company A the fee to license patent A3 for fear of Company A filing expensive patent litigation against Company B, even though a court would almost certainly find that invention ABC123 is nothing like patent A3, and therefore that Company B is not infringing on Company A’s rights (for a few “real world” examples, as well as a dash of technology industry gossip, see this article by Business Insider).

The question arising from situations like this that many courts and lawmakers have hemmed and hawed over is this: who is right? On the one hand, federal patent law strives to protect the rights of the legitimate inventor, and incentivize the very “progress of the useful arts”. On the other hand, how can the law protect companies and individuals like Company B from being bullied by the aggressive assertion of patent rights by companies like Company A?

The answers have manifested themselves mostly through federal and state law making, starting first with the enactment of the Lahey-Smith America Invents Act (the “AIA” for those in the know). This Act modified existing US patent law to allow for a process called “post-grant opposition,” which essentially allows individuals to challenge the validity of a patent after it has been issued by the USPTO, but without having to set foot in a courtroom (theoretically creating a much cheaper option than trial for individuals seeking to invalidate broad patents) (for more info on the process, see here).

The AIA is still relatively new (enacted in 2012), and it is hard to say for certain how this procedure has affected the act of “patent trolling”, however some have made the claim that the AIA has not had the effect of “starving patent trolls” that the lawmakers hoped it would (see here for more discussion on this point).

As such, individual states have taken the fore in this fight against the patent troll, and it is often the case that state consumer protection agencies make up the front lines, by way of various state unfair trade practice laws. However, many state legislatures have taken a much more targeted strategy, and have begun to arm their agencies with the ability to specifically bring actions against individuals and corporations for the “bad faith assertion of patent rights” (as of 2016, Minnesota became one such state).

This action gives state agencies a huge benefit in targeting “troll-like” behavior in the patent industry, but at what cost? Federal patent law preemption issues aside for right now (and yes, they are out there), how exactly will an agency define what “trolling” is? How will state agencies determine that the assertion of the patent right was “in bad faith?” Moreover, how will this effect an otherwise uniform protection that patent holders have across the US?

These questions, and many more, will no doubt need to be addressed by states adopting the “bad faith assertion of patent rights” statutes. For now, since I don’t have an answer off-hand to this incredibly intricate legal and policy question, I will simply eco the words of Henrik Ibsen: “what is the distinction between troll and man?” What is the distinction between patent troll, and legitimate inventor? And finally, are these definitions really something we want to leave in the hands of state agencies, which may or may not be relatively unsophisticated in the intricacies of federal patent law?

My initial impression is one of skepticism, but if the willingness of a great deal of state legislators to adopt such measures can be taken as some indication of a nationwide public demand for a new way to address these issues, maybe this is the start of a conversation that should have happened some time ago.

Crossing the Offensive Line

October 18, 2016
Constitutional Law, Trademark Law

Quang Trang, MJLST Managing Editor

In my opinion, Autumn is easily one of the top four seasons of the year. It is a season where pumpkin becomes a spice, the leaves change colors, I wear cardigans, and of course FOOTBALL. And yeah, the Supreme Court of the United States becomes a thing again.

During its next term, the Supreme Court of the United States will hear Lee v. Tam, a case that may determine the constitutionality of the U.S. Patent Office’s (“USPTO”) authority to refuse a trademark. The USPTO threw a yellow flag and refused to trademark the name of a band called “The Slants” after finding the name crossed an offensive line against Asians. The Slants threw a red flag challenge to have the decision reviewed. Under review, the Federal Circuit reversed the ruling on the field citing First Amendment protection. The USPTO Hail Mary’d the Supreme Court of the United States to protect its authority to reject offensive trademarks.

Under Section 2 of the Lanham Act (15 U.S.C. § 1052(a)), the U.S. Patent Office may refuse to register a trademark that “[c]onsists of or comprises a . . . matter which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” However, granting the USPTO such authority may violate the First Amendment, which states that “Congress shall make no law . . . abridging the freedom of speech.” The Federal Circuit found the band’s name to be private speech, and thus entitled to First Amendment protection.

At this point you may be wondering “why is Quang making all these football puns?”, “Does Quang think his puns are funny?”, and “will he stop making bad puns?”

A Supreme Court decision in Lee v. Tam may intercept a case in the Fourth Circuit. The Fourth Circuit is currently reviewing the USPTO’s refusal to trademark the Washington Redskins after finding the name offensive and disparaging to Native Americans.

If the Supreme Court finds Section 2 of the Lanham Act unconstitutional, then the Fourth Circuit must overturn the USPTO’s refusal to trademark the Washington Redskins. However, if the Supreme Court limits its decision in Lee v Tam to the facts of the case or if the court affirms the USPTO’s ruling, then the Washington Redskins’ challenge may be sacked for good.

If the Washington Redskins loses its challenge, the organization may still keep the name and seek state trademark protection. The team would still be financially impacted if it loses federal protection against copycat merchandising. Changing the team name may then become a financial decision.

The “Fourth Industrial Revolution”: Queue Chaos and Disarray

October 17, 2016
Economy, New Technology, Tax Law

Rhett Schwichtenberg, MJLST Staffer

We are all familiar with Hollywood’s drastic miscalculations when predicting the future. In Timecop, which took place in 2004, time-travel was the conventional means of transportation. In the world of Marty McFly, 2015 marked the year where hoverboards were the standard means of transportation. In 2001: A Space Odyssey, the moon was colonized by 2001. The list goes on. While we [unfortunately] see none of this today, perhaps Hollywood was not too far off.

Today, robots are shaping the way we live and have contributed a world of good to society. While Google Glass might have been an utter failure, Google’s Self-Driving Car Project is making fast advances to provide the world with hand-free, piece-of-mind driving. Taxi giant, Uber, has also entered the self-driving market with the implementation of self-driving Uber vehicles in the Pittsburgh market. Self-driving technology has the ability to eliminate the extreme and unnecessary amount of traffic deaths occurring every day in addition to providing a reliable mode of transportation for individuals that cannot operate a vehicle. Apart from the transportation industry, robots are growing rapidly in nearly every industry including the agriculture, food service, manufacturing, military, and rehabilitation industries.

Earlier this year, the EU made a proposal calling for the classification of autonomous  robots as “electronic persons.” If codified, this proposal could bestow legal rights upon robots, require companies to pay a social security tax for using them, and impose a liability insurance upon companies using robots in order to protect against any harm they might cause. While ridiculed by many, is there no merit in this proposal?

The age of robotics that is currently among us is being referred to as the “fourth industrial revolution” by economists. The first industrial revolution introduced steam power, the second, electric power, and the third, electronics and information technology. While the past three industrial revolutions have advanced at a linear rate (occurring approximately one-hundred years apart) the current revolution is advancing exponentially. Previous technology has threatened blue-collar jobs, but has never caused us to question whether jobs will even exist in the near future. With the implementation of quantum computing looming, the professionals in scientific and medical fields might experience issues of job security.

Alan Manning, leading author in labor economics and professor at the London School of Economics, seems to remain calm, cool, and collected when tasked with answering the question of how autonomy will affect the labor market. He strongly opines that such technology should not be taxed. Implementing the proposed tax will slow the advancement and use of such technology. Instead, Manning expects investment in modern technology to increase productivity and, at worst, leave the labor market where it currently stands. Manning believes the expert prediction that 47% of jobs will be threatened by autonomic robots is just that, a mere prediction. He retorts that such a prediction is grounded in ignorance rather than educated measures. Manning states that the entire job market must be looked at, not just the specific occupations that will see job reduction. Looking at the job market as a whole, Manning admits that jobs will be lost in some areas, but trusts that new jobs will arise due to an increase in companies’ spending power through the use of autonomic robotics.

So given that autonomic robotics and advanced computing technology is already written in our future, what are the implications of such technology? The simple answer is: we must wait and see.

Copycats to Copycows: The Cloned Livestock Industry Emergence

October 17, 2016
Biotechnology, Ethics, New Technology

Ryan Dowell, MJLST Staffer

In the two decades since Dolly, a comically named sheep, animal cloning has remained little more than fiction to the average person. Behind the scenes, however, the field has progressed tremendously.  Success rates today are estimated to be 70% or higher, compared to less than half a percent when cloning Dolly and her siblings. As the technique has been perfected, the obvious result has occurred: animal cloning has become a nascent industry.

Cloning has long been present in human society, in a form that many people may not recognize: plants. From simple home-garden cutting & replanting to industrial-scale cultivation from tissue samples; these techniques produce genetically identical individuals (i.e. clones) used as floral cultivars, tree planting, and especially foods. A large number of plants grown for human consumption are clones—which means that you, dear reader, have probably eaten a clone. Plant cloning has not encountered the same scrutiny as that with animals, perhaps due to its natural occurrence or millennia-long history of human use.

Dolly was merely the proverbial ‘dipping our toe into’ animal cloning. True to the writings of Michael Crichton (or the movies, if one so prefers), it didn’t take long for Jurassic Park-esque attempts to clone endangered and extinct animals. Cloning was not limited to such an idealistic use—a market emerged. Grieving pet owners could, at significant cost, get clones of their beloved pets. Despite the cost (still a five-digit price tag), a market for such services has continued to develop. Further demonstrating the human capacity for expensive animal-keeping hobbies, equine cloning has emerged as a means to “insure that prized horse and its unique qualities.” If one were to stop here, cloning seems to be a niche market for the wealthy.

The emerging cloning industry has not stopped at pets and exotic creatures. With the science complete and industrial production moving forward, livestock cloning is set to erupt in the coming years. A ‘cloning factory’ is opening in China. This factory is intended to produce not only pets and horses, but also prime beef cattle and drug-sniffing dogs. Following the same reasoning underlying farming’s predilection for plant clones, elimination of genetic variations could significantly improve farming techniques—maximizing yield, minimizing labor and resource inputs, matching strains to specific regions, and so on. In a world with mounting concern over the meat sustainability, improvements to production are key and cloning provides the means to significantly advance the field.

In many emerging fields, law and regulation react to the development and often impede progress. Fortunately, the issue of animal cloning has already been addressed—the FDA regulates the field & was essentially prescient. In 2008, the FDA released a guidance stating “meat and milk from cow, pig, and goat clones and the offspring of any animal clones are as safe as food we eat every day.” The FDA examined cloning (also known as somatic cell nuclear transfer or SCNT), under the umbrella of assisted reproductive technologies (ART), which have long been utilized by farmers. The analysis noted that these animals would have essentially identical genetics to the source, unless reprogramming occurred (which can be done with other ARTs); that risk associated with the cloned animals is no different than the source organism. It was noted that cloned offspring have higher risk of adverse health issues early in life compared to offspring from other ARTs. However, none of these issues are unique to clones and other than early-life issues, clones are as healthy as non-clones. Livestock cloning has passed FDA scrutiny  and manufacturing infrastructure is in place; it is poised to develop rapidly.

Public opinions may prove to be the final hurdle for livestock cloning. If one tells a fruit-eater that he or she is eating a clone (or as a botanist might put it the ovary of a clone), the fruit-eater will likely be unaware of this fact and less than pleased that his or her enjoyment of that fruit has been disrupted by the interjection. Alternatively, a substantial portion of the population believes GMOs are not safe for them to consume, which is untrue (see here, here, here, here, and here). A similar scenario to either of these might present itself here: (1) everyone blissfully consumes food without the need for nitty-gritty detail of its origin (since there is no discernable or material difference), or (2) misinformation is allowed to spread and ‘poison the well.’ The deciding factor will likely be education; the current state of affairs presents the opportunity to preemptively educate the public on the FDA’s findings and regulations.

Livestock cloning is poised to expand rapidly in the future and now we face a crucial time in its acceptance: a public educated on the issue will be equipped to fairly determine whether such livestock should be consumed, without a torrent of pseudo-science obscuring the decision. The FDA has examined clones and found them to be nearly identical to non-clones (pun very much intended) in regards to human consumption.

 

Food “Hot Off the Printing Press”: Insights Into 3-D Printed Food

October 15, 2016
3-D Printing, Biotechnology, Food and Agriculture

Theodore Harrington, MJLST Managing Editor

Would you food hot off the 3D printing press? In Jaspers Tran’s article, 3-D Printed Food, he explores the potential legal issues surrounding the commercialization of 3D printed food. (see here).

The article suggests that “. . . the 3D printer may become the fundamental daily appliance in every household . . . .” The pros are easy to see—As the demand for food increases at an exponential rate, the ability to create food quickly and avoid the current environmental impacts caused by food production would be a game-changer. The benefits here are fairly obvious and easy to wrap our heads around. However, large barriers still remain.

A tougher point for me to grasp is Tran’s suggestion that 3D printing will solve issues related to malnutrition, particularly over-nutrition, or obesity. Tran seems to leap from personalized nutritional food (tailored to an individual’s exact nutritional needs) to an obesity solution. This reminds me of the old adage, “you can lead a horse to water, but you can’t make him drink.”

Even if 3D printers end up in every household, my gut-feeling is that it will be a very long time before people are accepting of the idea of eating food that was just spit out of a machine (although there is a large amount of processing in today’s food, it goes on behind closed doors. Ignorance is bliss.). As Malcolm Gladwell suggests in his book Blink, the way we taste food is as much psychological as it is physical (see example of declining sales in a pork product when a life-like pig was placed on packaging instead of a cartoon pig).

Something to chew on.

Three’s a Crowd: Identifying the Shifting Parental Rights in Three-Parent Babies

October 3, 2016
Ethics, FDA, New Technology, Regulatory

Daniel Green, MJLST Staffer

Once again, science is spurring the law to adapt in ways it never could have predicted. A baby boy was recently born with genetic material of three different people. Aside from being born slightly premature, the now three-month-old child is very healthy. Even though three-parent techniques have been used before, this child marked the first healthy birth.

Given the obvious religious, safety, and ethical disputes behind such a medical procedure it may seem unclear as to why anyone would want to go through with it. The answer, however, avoids the arguments that the procedure is simply done to “play God” or for polyamorous relationships. The mother underwent the treatment to ensure both the happiness of parents and the health the child.

In this instance, the mother carried genetic defects identified to cause Leigh syndrome. This disorder which affects the brain resulted in the mother having had four pregnancy losses in addition to the death of two previous children at the ages of 8 months and 6 years. Leigh syndrome is caused by defects in a cells mitochondria, and the three-parent treatment was able to bypass the damaged mitochondrial DNA.

The process involves implanting the mother’s DNA into an egg from a donor. The egg has the donor’s main genetic DNA removed prior. The egg is then fertilized with sperm from the father. This process allows the DNA from the mother to pass down virtually unchanged since “mitochondrial DNA makes up less than 1% of the total cellular DNA.” However, small amounts of the donor’s mitochondrial DNA are still left throughout the child’s body.

The treatment was done in Mexico involving a team of fertility specialists from the United States and Great Britain. The procedure took place in Mexico since the treatment used has not yet been approved in the United States by the Food and Drug Administration, but this may not be the case for long due, in part, to recent successes. Another indicator of this possible change is that the treatment has already been approved in Britain.

Given this rapidly changing landscape, the law, in particular regarding parental rights, needs to somehow catch up quickly on an incredibly complex topic. As the donor parent will only be contributing 37 genes out of the total 22,000, it is likely that a donor’s right will be the most contested. Given the precedent already set forth, courts may adopt one of several strategies if and when three-parent babies are no longer barred in the United States.

  1. The donor parent has no legal claims: This would be similar to the mostly commonly accepted view concerning to sperm donors. In most states, if a sperm is donated through a licensed medical professional then the donor loses all legal claims to the child unless the parents are married. It seems logical that the treatment of an egg donor, in a three-parent situation, would be similar given what the term “donor” implies. Great Britain, which has already approved the three-parent treatment, has already adopted a stance similar to this. However, states are in contention regarding of parental rights and even custody of traditional style egg donors. Given the distribution of DNA it may be easier for a court to rule against the egg donor, but this is still very unclear.
  1. The donor parent has an equal claim to the child: California has already passed a version of a three-parent law, but this was mainly for same-sex couples who wish to have the donor on the birth certificate as well. However, the process leaves the door open for unintended parents, such as the donors, to assert claims over a child. In such a case, a court may find that, despite the objections of two parents, the donor has a right to be considered as a parent. Instances of this have already come up in traditional sperm and egg donation. Such conflicts could create a great degree of instability for the life of the child.
  1. The parties agree through a contract prior to the treatment as to what claims exist: The last apparent possibility is that parties may be able to contractually agree what their family is to look like. This would likely create the most amiable way to go about the process, but it is time-consuming and still may run into problems with the existing laws of certain states.

Clearly, there is no solid answer regarding three-parent babies even though three-parent birth certificates are already becoming more common in the United States. It seems like it is only a matter of time before three-parent babies are introduced into the culture as well. This leaves the question as to whether the law will be ready in time so as to hopefully create a circumstance that, whatever the family may look like, is best for the child.

Westward (And Then Some) Expansion: One Theory of Property Rights on the Moon and Mars

September 28, 2016
International Law, Property Law, Space Law

Jordan Rude, MJLST Staffer

Recently a friend of mine received, for his birthday, a deed to one acre of land on Mars. That’s right—he is the proud owner of property located approximately 34 million miles from Earth. This is possible thanks to the efforts of various (and often interconnected) websites such as Buy Mars, Buy Planet Mars, Lunar Registry, and Lunar Land. While selling extraterrestrial property is not a recent development (see here and here), and there does not appear to be any recent lawsuits regarding this practice, these methods still deserve scrutiny. With the rapid advancement of technology in recent decades and increasing participation by private companies in space programs (SpaceX recently tested a Mars-capable rocket), human settlement on the Moon and Mars is becoming a possibility (albeit a distant one) within our lifetimes. At that point, property ownership will become an important and possibly contentious issue. For the millions of people who have bought land on the Moon and Mars, the question of whether their claims will be recognized in such a situation is a not insignificant one.

Some of these websites claim to have legal standing for their ownership of property on Mars. Consider Buy Mars (owned by Lunar Land). Under the heading “Lunar Land’s Legal Right To Offer Planet Mars Land,” the site makes reference to the U.N. Outer Space Treaty of 1967 as well as the tradition “dating back to early U.S. settlers” of staking a claim on surveyed land through the U.S. Office of Claim Registries. The Outer Space Treaty has been previously discussed by this blog (in a different context). Suffice it to say that this treaty prohibits countries from claiming ownership of land on Mars and other extraterrestrial property, but says nothing about individuals or corporations. Thus, the argument would be that Buy Mars, because it is not a sovereign nation, is not subject to the treaty specifically prohibiting claims of ownership on Mars.

Beyond the lack of a direct prohibition, Buy Mars also claims historical precedent as an affirmative justification. This reference to historical precedent is problematic for two reasons: first, the U.S. Office of Claim Registries does not exist, and likely never existed; and second, this is not an accurate statement of the process by which the West was settled. In fact, the federal government sold the land—first as townships and other large plots, and later in smaller, more affordable plots, before finally offering land for free under the Homestead Act of 1862 (see Michael C. Blumm & Kara Tebeau, Antimonopoly in American Public Land Law, 28 Geo. Envtl. L. Rev. 155, 165–71 (Winter 2016)). That is, the federal government owned the land it sold to speculators and other settlers (though this ownership came more or less from the government declaring it to be so, not dissimilar to what Buy Mars has done). So, because the U.S. government does not own land on Mars that it could sell to Buy Mars (to then sell to us), on its face the claimed historical precedent is not in fact proof of the legality of the process.

However, setting aside the flaws in Buy Mars’ formulation of the argument, let’s assume that the principles of westward expansion can be applied to property on Mars—would this type of claim survive a legal challenge?

Most likely it would not. Construing the westward expansion analogy narrowly, the U.S. government would have to first own land on Mars and then distribute it to corporations like Lunar Land or individuals. This is clearly prohibited by the Outer Space Treaty. That being said, if a company like SpaceX lands on Mars, the Outer Space Treaty would potentially not restrict its ability to claim land. At that point, it is unclear what the legal policies governing ownership would be. In that situation, a process loosely similar to westward expansion could be utilized, wherein a larger entity (in this case a large company) distributes land to newcomers. The key difference between the Buy Mars argument and SpaceX landing on Mars would be the latter company’s physical presence on the planet—an important aspect of making such property claims and the most likely way to get around the Outer Space Treaty. This could be extremely lucrative for SpaceX but problematic for those who have already purchased land on Mars. Ultimately, the websites currently offering land on the Moon or Mars do not have legal standing to do so, and any person who bought such land is unlikely to find legal protections should the need arise. The law in this field is very uncertain, if it exists at all, and the day may come where a true answer is needed.

Of course, the legal implications of this process should not deter you from investing in extraterrestrial property for the fun of it. My friend’s deed comes from Buy Planet Mars, whose website makes quite clear, in the FAQ section, that the deed is “a novel gift and for entertainment purposes only.”

Halo Electronics v. Pulse Electronics: More Discretion of District Courts in Granting Enhanced Damages

September 25, 2016
Intellectual Property, Litigation, Patents

Tianxiang (Max) Zhou, MJLST Staffer

The recent US Supreme Court case, Halo Electronics v. Pulse Electronics, grants district courts more discretion in determining “enhanced damages.” The previous clear standard of the enhanced damages became murkier after this case and left much room for lower courts to decide what constitutes enhanced damages.

Section 284 of the Patent Act provides that, in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.” Enhanced damages are appropriate only when the patentee proves, by clear and convincing evidence, that the infringer “willfully” infringed the patent. Prior to Halo, courts adopted a bifurcated approach to enhanced damages established in In re Seagate: First, the patentee must show the infringer’s recklessness by clear and convincing evidence, that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” If the objective standard of recklessness is satisfied, then patentee must demonstrate that the risk was either known or so obvious that it should have been known to the accused infringer.

In Halo, the jury in the district court found a high probability that the infringement was willful. However, the district court refused to grant an enhanced damages based on the two-part test, and found as a matter of law, that the patentee did not prove objective recklessness of the infringer. The Federal Circuit Court affirmed the decision.

However, the Supreme Court reversed the Appeal Court’s decision, and rejected the two-part test set forth in In re Seagate. Specifically, the Supreme Court, citing Octane Fitness LLC v. ICON Heath & Fitness, Inc, found that the test is “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.” Though rejecting the two-part test, the Supreme Court did not give a clear guideline for lower courts to follow. Halo provides that, “[a]s with any exercise of discretion, courts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount.” According to the Supreme Court, district courts are “‘to be guided by [the] sound legal principles’ developed over nearly two centuries of application and interpretation of the Patent Act.” Besides, the Supreme Court found that the prior two-part test, which requires a finding of objective recklessness, excludes discretionary punishment of “wanton and malicious pirate” who intentionally infringes another’s patent, and a district may grant enhanced damages even in the absence of a finding such objective recklessness.

Overall,  Halo broadened district courts’ discretion in evaluating facts of patent infringement and granting enhanced damages. While the Halo decision will definitely increase the unpredictability of patent infringement lawsuits, it is still unclear whether the broad discretion of district courts will open the gate of flood of enhanced damages. Besides, before we think about the standard of enhanced damages, it is also worthy to consider the policy implications of enhanced damages, and to ask whether and when enhanced damages are appropriate. Anyway, it would be exciting to see a clearer standard of enhanced damages in future cases, or amendments of laws and regulations.

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