grellas

Silicon Valley was founded in a spirit of freedom and flexibility but that spirit is clearly and dangerously on the wane insofar as the political environment surrounding the Valley is concerned.

By the 1970s, American enterprise was in decline, a victim of the "big government/big business/big labor" trends glamorized by establishment types of that day. What this did was take away choice and flexibility.

Tech changed all that and it did so from the heart of Silicon Valley. Tech arose from a spirit of freedom and flexibility. Founders would get an idea and would have countless ways of experimenting with what they could do with it with the aim of building a venture. Many of the most wildly successful ventures came out of nowhere. No central committee could have planned for them. No overlords of big business could have had the imagination or risk-taking fortitude to push them at the expense of their established cash cows of that day. No union could comfortably impose rigid work rules onto such amorphous ventures (the first thing Intel workers did even after the company succeeded was to reject unionization). No minimum wage or overtime rules applied. Benefits packages of the type widely deployed in the analog-based large businesses of that day were unheard of.

Regulators and taxers of that era continually tried to realize their vision of locking people into situations by which they would have guaranteed security, ossifying the mature businesses over which they had control, but tech simply outran them through innovation. And, in time, upended them by disrupting their industries through innovation and risk-taking.

Today, the spirit of Silicon Valley has changed and is yielding to a belief system by which the overlords of politics believe they can dictate outcomes that will give people locked-in security forever. Want to do something as an independent to earn a livelihood? Sorry, AB5 forbids that and will penalize the hell out of any venture that seeks to use fleelancing and flexibility as a foundation for innovation and growth. Your choice to act an an independent is frozen out by dictates that, if you act at all to make a living, you must do it within rigid systems that guarantee minimum compensation, regulate overtime, prescribe minimum guaranteed benefits, and the like. If this kills opportunities, no problem: there will be other rules that guarantee basic income, limit the rent you have to pay, and otherwise regulate society such that people are guaranteed a risk-free existence courtesy of decrees enacted by political proclamation.

This new mindset is precisely the one of the 1970s-era leaders who managed to choke off innovation and growth in old-line businesses and gave a massive opening to tech innovators, particularly those in Silicon Valley.

pg's modeling of the effects of a wealth tax is spot on. And it confirms that such a tax is an innovation-killing idea that would destroy the spirit of Silicon Valley. Of course, tech innovation will not cease. It will just move elsewhere to escape the tax. Europe in the 1990s had a couple of dozen or more countries that imposed wealth taxes. Today it has three, if I recall. There is a reason for that. It is a highly pernicious tax that kills enterprise and that veers from a capitalist (even progressive) philosophy into one that is directly of a Marxist/communist variety that has left so many nations in rubble once fully implemented. Smart, innovative people are not going to stick around for the con game. They will leave.

I have watched Silicon Valley grow and flourish for decades now and have been directly involved in working with thousands of entrepreneurs who have been a part of it. There have been a lot of political changes over those decades but one thing remained constant: the foundational thinking in California always assumed a capitalistic structure. Once that is abandoned, Silicon Valley will be no more.

I know that the vast majority of HN'ers are progressive in their thinking and we all can have our own ideas about what makes for a good and just society. I am not commenting on that here.

There is a line that cannot be crossed, however, without killing the Valley itself and all that it stands for. The wealth tax clearly crosses that line and, if things are allowed to go that way, the consequences may not be what you expect them to be. It doesn't take much to switch from a tax of .4% on assets over $30M (bad as that is in itself) to a tax of a much higher rate on a much lower threshold of assets. Once that monster is unleased, who knows where it will go. It will be fundamental transformation of the Valley, and not a good one.

As I said, just my two cents.

My prior comment at the time of the Federal Circuit decision: https://news.ycombinator.com/item?id=20064289

But it is not.

It is a potentially huge development and not a good one for tech startups and innovators.

Setting aside fine points, what we have had until just the last few years in the tech world is an insane pattern dating back to the 1990s - thanks to the Federal Circuit Court's seriously flawed interpretation of then-existing caselaw - by which the legal test for patentable subject matter essentially became "anything new under the sun."

An orgy of frivolous software patents followed and this bedeviled tech innovation for well over a decade and allowed patent trolls to run wild with patent claims that swarmed authentic technical innovation and clogged it with endless junk consisting of patents on what were essentially abstract ideas or on what were long-established innovations done "on a computer" with nothing else added and similar claims on which the lawyers feasted and the public suffered.

Fortunately, in recent years, the U.S. Supreme Court stepped in and reined in the Federal Circuit decisions, narrowly restricting what constituted patentable subject matter under Section 101 of the patent laws. The Bilski case started this reining-in process and many other important cases followed, culminating most recently in the Alice case. (See my elaboration of this trend here: https://news.ycombinator.com/item?id=4633163#4633950)

This reining, coupled with liberal use of inter partes review to allow for a relatively swift and efficient procedure by which frivolous patents could be challenged and swatted away, has brought some sanity back to the field in recent years. (See my comments on this procedure here: https://news.ycombinator.com/item?id=16913013#16915378)

So, junk patents have become much more vulnerable to attack in recent years. This reform has been judge-driven - primarily by the U.S. Supreme Court. It has been an imperfect sort of reform but hugely important. The orgy of junk software patents that so burdened the tech industry was radically curtailed.

True reform was to await an act of Congress. Congress sets the bounds of how patent law is implemented and a clean resolution of the issues depends on its acting to fix things definitively.

However, far from fixing things, the Senate is in the process of enacting a bill that would radically do away with the recent Supreme Court reforms and open the way for a new patent system that once more makes junk patents freely grantable and sustainable.

The article I posted here is from a conservative source.

But this is an issue that is critical to all who oppose junk patents. For example, here is EFF's take on the proposed Senate effort (known at Tillis-Coons, after the two Senators sponsoring it): https://www.eff.org/deeplinks/2019/04/tillis-coons-patent-bi.... For other critical commentary, see https://www.eff.org/deeplinks/2019/04/tillis-coons-patent-bi...

The proponents of this bill attempt to dress it up as a valuable protection of property rights. Speaking as one who strongly supports IP rights, but also as a lawyer who knows how rights become meaningless if lawyers are permitted to litigate everything to death, I would suggest that this attempt to codify within the patent law a regimen that allows virtually anything to be patented, with few meaningful checks on what is eligible for patentability, will serve only to arm the trolls and litigators at the expense of true innovation.

It is a disaster in the making for tech innovators and startups and ought to be stopped. Let us hope it can be.

Another note or two:

1. Damages might be reduced on appeal but, if not, this will really sting for Oberlin. Why?

2. Its insurer apparently is denying coverage because the wrongs committed were intentional and that removes them from coverage.

3. The legal fee award approved by the jury is likely tied to a contingent fee arrangement and will likely add as much as $10 million to the final price tag.

Bottom line for the risk to Oberlin: $11.4 million compensatory damages; $22.8 million punitive damages; $10 million attorneys' fees = $44.2 million judgment, an astounding number for something the college could easily have quelled at or near inception for almost nothing. Again, this could be reversed or modified on appeal but who in the world would want to be fighting from that position?

1. The student "protests" erupted the day after the 2016 election results came in, with a corresponding politically inflammatory element at work in the background.

2. The underlying incident involved an underaged black student who attempted to buy a bottle of wine, was refused, and was then found to have 2 other bottles under his coat as he walked out. When the owner's son chased him out, an altercation ensued and, as police arrived, they found the owner's son on the ground being hit and kicked by three persons, including 2 female friends of the shoplifter.

3. I use shoplifter, instead of "alleged shoplifter," because a guilty plea was entered admitting to the crime and also acknowledging that racial profiling had nothing to do with the incident.

4. Protests immediately erupted and were so volatile that the local police chief said he felt he had to call in outside help from a riot squad.

5. The students who did the protests claimed that Gibson's bakery not only had engaged in racial profiling in the particular incident but also that it was a long-time racist presence in the local business community. (Gibson's had been founded in 1880 and was strictly a family owned business, with the business supporting 3 generations of the family at the time of the incident).

6. The Oberlin dean of students (Merideth Raimondo) appears to have joined in the protests directly, shouting through a bullhorn and handing out fliers calling Gibson's racist. She claimed she used the bullhorn for 1 minute only and only to tell the students to observe safety precautions. Multiple other witnesses at the trial claimed she did so for a half hour and that she was a direct participant in the events. The jury obviously did not believe her. Also, she denied that she had handed out any fliers, was contradicted by a local reporter who said she had handed one to him, called that reporter a liar, and (at trial, once under oath) later admitted that he was telling the truth that she had handed him a flier knowing him to be a reporter.

7. The college immediately joined in the affair by terminating its long-term contract with Gibson's. A couple of months later, it reinstated that contract. Then, when the Gibson family filed suit, it terminated the contract permanently.

8. The college took the position that the matter would be dropped if Gibson's dropped the shoplifting charge and if it committed in the future to bring all incidents involving students directly to the college before it got the police involved. Gibson's refused to comply with this condition.

9. Gibson's in turn offered to forego any and all legal claims if the college sent out a mass communication stating that Gibson's had not engaged in racist activity and had no history of being racist. The college declined to do this.

10. Gibson's took a huge financial hit as a result of all this, barely managing to stay in business. It had to lay off all of its 12 employees and the family owners continued to operate the business without salary for 2 years.

11. Gibson's sued the college and its dean of students alleging libel, intentional infliction of emotional distress, and interference with business relations.

12. Throughout the trial, the college took the position that it had done nothing wrong, was only protecting the students' right to free speech, and had no responsibility for what happened. It also took the position that Gibson's was worth no more than $35,000 in total value as a business and that such amount should be the maximum awarded in any damages award.

13. The jury award $11.2 million in compensatory damages, $33 million in punitive damages, and also said that Oberlin had to pay Gibson's attorneys' fees. Under state law, there is a 2x cap on punitive damages (2x times the amount of compensatory damages awarded) and thus the punitive award will be set at $22 million. The judge is still determining the attorneys' fees question. All in all, though, the jury basically slammed Oberlin to the max and also awarded major damages against the dean of students.

14. Oberlin sent a mass email to its alumni association essentially saying that the jury disregarded the clear evidence showing it had done nothing wrong and vowing to fight this through appeal. It also formally announced that it will be filing an appeal.

15. Oberlin has had a long-time "townie" vs. "gownie" culture but this far transcends the small tensions that have historically existed.

William Jacobsen at Legal Insurrection has been on this case in great depth from inception, believing it is a case of major significance concerning college activism run amok. Here is a link to his reporting on the original verdict that contains a ton of links to the prior coverage: https://legalinsurrection.com/2019/06/verdict-jury-awards-gi...

The article here is by Jonathan Turley, a distinguished liberal law scholar, who is pretty critical of Oberlin's handling of the case, as I think most people are.

My comment at the time the decision was rendered: "This ruling will do what its [the Federal Circuit's] prior expansive reading of patent law did: it will set up a legal standard that invites lawyers and litigants to engage in endless second-guessing over copyright and fair use in areas of connectivity and inter-operability in the computing world and this in turn, as a standing invitation to litigate, cannot be good for future development." (See https://news.ycombinator.com/item?id=16691774 for fuller analysis)

The Supreme Court quite often fails to take up discretionary appeals even if the issues loom large for a particular industry or even if an important case was wrongly decided. Sometimes it does so to resolve conflicting rulings among lower federal courts on an important issue; other times, because a case raises important issues of public policy. Don't know if this case will fit the criteria (it didn't on its first cycle of appeal - see my comment here: https://news.ycombinator.com/item?id=9801251#9802457; also, https://news.ycombinator.com/item?id=4050490#4051761).

I have long been an advocate for solid protection of IP rights but the Federal Circuit here has almost fetishized the idea of copyright protection to the point where it has, in the API and fair use areas, become a caricature of itself. Strong correction is needed on the legal merits of the case.

Let us hope that the high level of interest in the tech community, as revealed by the number and quality of amicus briefs filed, will prompt the Supreme Court to intervene and bring soundness and clarity to an important area of law that affects the tech world in profound ways.

Uber is contractually required to pay the up-front arbitration fees so that the JAMS arbitrations can move forward. I super-slow-walks the process. What is the remedy?

Well, JAMS itself does not really have a remedy. It is a private organization that moves forward with the arbitration process as its rules are complied with and as it gets paid.

Nor is there an obvious remedy in the courts for individual failings in this or that arbitration procedure. Courts normally are not even involved in such processes.

Only when a clear pattern emerges (as it now has) can a court intervene to remedy a problem such as this.

In the meantime, what has happened? A lot of time has passed. A lot of the claimants (I am sure) have become discouraged and have possibly lost their motivation to move forward with their claims. And Uber has moved well along the path toward ultimate success in winning it all in its market, currently resting on a valuation of $120B.

Is any of this defensible? No. Will Uber try to defend it? Yes, through double-talk and prevarication. Will it be doing so in good faith? Not at all. Will the aggrieved drivers be able to overcome it? Perhaps, but they will likely get too little, too late. And, for Uber, it will be a historic liability that vanishes into the ether as it looks backwards on eventually settling the claims while basking in its massive success.

In a just world, things like this should not happen and perhaps Uber will be upended by something or other along the way anyway. But this sort of cynical abuse of legal processes in neither rare nor the exception in cases where modern litigants have the means and opportunity to gain massively from the abuses. It is not the exception but the rule.

And this in turn illustrates the obvious limits of using law as a solution for society's problems. The law can and does help solve problems to a point. But it is always subject to abuse and, in the end, money, power, and corrupt motives often work to undercut its effectiveness. This sort of case is Exhibit A to prove the point.

For example, you sell a business to someone who pays you a big premium for your goodwill value usually tied to the value of the customer base. It is entirely fair that, having taken the money in exchange for the sale of your goodwill interest, you not be able to turn around the day after the close and effectively steal it back from your buyer by setting up a competing business and conducting raids to get back your old customers. A reasonable restriction on your ability to compete in that case makes eminent sense and is not in any way unfair.

So too if you exit a professional practice and get bought out. Same principle. You get paid for the goodwill value and you should not be able to capitalize on the payment and simultaneously raid the goodwill of your former practice by competing against it. Fair and reasonable even though it restricts you in your livelihood.

Thus, even states like California, which basically ban the use of non-competes in an employment context, will fully enforce them in the situations noted above.

On the bad side, non-competes tend to operate unfairly and to burden ex-employees by preventing them from engaging in their normal livelihood even when they have been paid nothing for the privilege. Many jurisdictions do enforce them in that context and the only way to challenge them is to argue that they are unreasonably broad, which (if fought out) takes a tidy six-figure sum to prove in court.

So, yeah, all jurisdictions should adopt the California rule that largely bans non-competes in an employment context. But I don't see this happening anytime soon.

In the meantime, as an employee, you should try to avoid these if you can, negotiate to be paid for any non-compete if you have the leverage, or, if you have no choice, live with them as best you can until the law comes to a better place. As long as the law enforces them, you are sometimes just stuck.

One might sum this up by saying "Silicon Valley" but it really is most anywhere in the modern world where any modicum of freedom prevails, though Silicon Valley still offers unique advantages in my view.

The odds of failing are still stunningly high and those who make it to success are often bloodied by the process but the door is open today in a way it never has been before.

Another way of saying this is that, in the founder/investor partnering that is typically necessary to succeed, no arrangement was even possible for all but a rare few in mom/dad's ancient days, a reasonable arrangement that skewed heavily toward investors was possible just 20 years ago, and an even more reasonable one with founders and investors in near parity (when the founders are strong) is readily achievable today.

I actually don't believe that the story told in this blog post conveys a typical situation but what I have just said does so based on my having worked in depth in this world since the mid-1980s.

No one signs up to a loan charging 350% annual interest who is not desperate.

No doubt the arrangement is structured in a way that also circumvents usury laws of various jurisdictions.

The confession of judgment form is an integral part of the abuse inflicted on borrowers here. This is indeed a long-standing legal vehicle, perfectly legal in itself, by which a lender can go to court and get an ex-parte judgment (that is, a judgment following an application process by which only one party appears and no one is there to oppose the application or contest it in any way) in highly expedited fashion. With a confession of judgment, actual review by a judge is bypassed altogether in most cases and a clerk performs a ministerial act to enter it. By ministerial, I mean that no one attempts to evaluate anything other than to determine that the form itself is indeed a confession of judgment and that is it signed by the party purporting to confess judgment. Once such a judgment is entered, it has all the attributes of any other judgment and can be used to seize assets and otherwise employ the full range of means by which it can be enforced against a judgment debtor.

A confession of judgment can serve a legitimate purpose. Very often, when litigation is settled, a party cannot pay a given amount in full but agrees that he owes it and promises to pay it over time in installments as part of the settlement. Rather than entering into a stipulated judgment that becomes public record to document the debt, the parties will agree, in effect, to keep it off the public record by signing both a formal settlement agreement and also a confession of judgment providing that the debtor confesses judgment for the full amount of the debt. The settlement agreement will in turn define the conditions by which the confession of judgment may be filed and an actual judgment obtained. Typical terms provide that it can in no case be filed as long as payments under the arrangement are being timely made but can be filed (either with no notice or with a very short notice) if the debtor defaults under the arrangement (even then, any payments actually made must be credited to reduce the amount of the balance that becomes part of any judgment). If the debtor pays everything off in full and on time, then the confession of judgment can never be filed or used in any manner. If someone tries to file it and obtain a judgment contrary to the agreement, severe consequences follow to punish the party abusing the process.

That sort of limited use is helpful in resolving disputes while limiting harm to debtors who wind up having to sign such things. Attorneys are typically involved who, in effect, assume fiduciary duties not to abuse the process. In this sense, and for such uses, the confession of judgment is a tried, tested, and useful part of our U.S. legal system. It goes back many decades, if not centuries, in the English common law.

In contrast, what is described in this article makes a mockery of our legal system. There you have a shady business that incorporates the confession of judgment into every loan as a matter of routine and effectively sets up a process where even a minor missed payment can result in devastation and ruin to a debtor with no notice, no opportunity to be heard, and no defense. When you add to this their institutional practices of conveniently fabricating evidence to justify use of the confession, you turn the full force of the law against a hapless and defenseless debtor who innocently assumed that normal loan rules would apply.

If this is technically legal under New York law (don't know), it is a practice that can be banned by legislative action. There are all sorts of cases in which a technically binding contract is nonetheless barred from enforcement because it violates public policy. I suppose there may be arguments on the lender's side to support this sort of practice but I can't imagine they would be compelling. Time for lawmakers to apply a fix either by banning the practice or, at the least, by requiring some strong form of disclosure of the risks.

Of course, the real issue here is the problem with being a desperate borrower. The more life experience I get, the more I am dismayed by how vile people can sometimes be. It is truly depressing to watch.

A modern B corp permits a board to balance this traditional fiduciary duty to act for the benefit of the shareholders with other specified goals defined in its charter and agreed to by those shareholders.

At no point in any of this does any type of governmental authority have any say whatever concerning how the company should be managed and for whose benefit (government has a role in a technical sense only in providing a state charter giving the corporation a legal existence and in non-management aspects such as having the power to tax the entity and to enforce broadly applicable criminal and regulatory laws against it, e.g., laws against securities fraud or illegal securities offerings).

In other words, the whole modern corporate structure assumes that private actors using a state-chartered mechanism (the corporate entity) can arrange their affairs freely to optimize the management of the entity to further the economic interests of the owners of that entity. As to that part, government has no say whatever.

The Warren proposal would substitute a range of public dictates for the private choice that characterizes the current system. It would initially apply to large cap companies but there is no limiting principle preventing the idea of such public dictates being applied to any manner of corporation or, for that matter, to any other limited liability entity, whether large or small. Taken to an extreme, this sort of regime could easily be implemented in a way that transforms most forms of private enterprise into entities restricted or burdened by whatever dictates the politically-organized forces who happen to hold sway at any moment might want to decree.

Of course, none of that might happen. It is certainly possible to adopt the Warren proposal and keep it limited to a narrow sphere of enterprise (large-cap companies) where its impact might be limited. But I wouldn't bet on it. With no restraining principle behind it, the proposal could easily be the foundation for completely transforming the notion of enterprise in the United States and I for one don't want to see a day where bureaucrats, lawyers, and second-guessing judges are gnawing termite-like at the foundations of what today are vibrant and healthy businesses in the name of other goals having nothing whatever to do with the economic interests of shareholders.

If a local government dictates that your base wage rate for a labor-intensive industry has to increase by 40% within less than a 5-year period and, on top of that, further dictates that you as an employer must provide those same employees with above-average health benefits together with paid leave of varying types above and beyond what market norms have been, well, at the end of that process, you are obviously having to pay a hell of a lot more for those employees than you did just a few years back, perhaps as much as 50% more.

Real wage increases tie to rising productivity. I well remember representing highly-talented UNIX engineers during the early 1990s who were earning around $60K per year (adjusting for inflation alone, that number would still not be in the six-figure range today). Today, engineers of that caliber easily command six-figure salaries plus great perks. The best of them easily command $250k+ salaries. For employers trying to find such engineers, they have to open their wallets big time and, yet, they do. Why? Because, if you are a Google or a Facebook or a Twitter or an Apple, or any other preeminent company needing the services of such engineers, you are not trying to eliminate those positions simply because they cost a lot more today than they did in the early 1990s. You are desperately trying to add such people to your payroll because of what they can do for you. The changing tech world has magnified the productivity and value of what such engineers can do and therefore the salaries and perks they can command are far higher. But this is market-based and justified because the profits you can earn as an employer are also much higher owing to their work. The engineers of the early 1990s were just as talented as those today but their value was relatively less to employers than is the value of their counterparts today. Their productivity has vastly increased. Hence, so has their compensation.

Compare that to what the city officials in San Francisco are doing with waiters and similar restaurant staff. Essentially, they have decreed (in the name of worker protection) that the cost to the employer of such employees shall increase by 50% or more over a short period when nothing whatever has occurred to increase their productivity. I went years working my way through school doing such work and it is very hard work indeed. The people doing it earn every penny. Yet those who did it 5 years ago at considerably less cost to the employer than those who do it today worked just as hard as their counterparts today. If those doing such work today are doing the same work, and their productivity has not materially increased, yet they are getting paid 50% more, something has to give.

This article basically dances around the obvious by tying the discussion to the considerable expense of living in SF and to collateral issues affecting the city's living environment. In doing so, it does not discuss the obvious: when supply and demand dictates what people will do, and you arbitrarily raise the cost of something, it will affect demand by lessening it.

That is why SF restaurants are moving to less labor-dependent models of doing business. Not all will do so but the laws of supply and demand have given them an incentive to do so and it should surprise no one that a good number of them are adapting.

Perhaps this is all worth it because those who are now working as waitstaff in SF restaurants are doing much better financially and this is worth the trade off. But no one should pretend that this does not come at a price, perhaps a very high one, for those whose jobs have vanished along with the new business models. (By "new" here, I mean not that no one has had self-serve models before, which they obviously have, but "new" in the sense that restaurants that would before have never considered such models are now adopting them).

This decree, of course, does not do all that but instead covers a narrow class consisting of one product (new homes) with one requirement (solar roofs). It does not affect existing homes. It does not affect homes in Nevada, Arizona, or anywhere else in America. It does not affect homes in any other part of the world. It therefore can be guaranteed, in itself, to have the most trivial of all impacts on the real world global environment. But it will have a very real impact on people living in the affected jurisdiction, not the least of which will be severely limiting their choices concerning new homes and also adding to the price they pay for such homes. On top of all that, it empowers politicians and bureaucrats who will be further incentivized to find new ways to limit choices in the future in the name of symbolic gestures done in the name of environmental concerns. Today, new homes. Tomorrow, existing ones. Next week, cars. After that, whatever experts and technocrats decree should be the subject of new coercive restrictions. Perhaps this is justified because of some ideal that it promotes or perhaps it is just a sell out to the solar lobby. But, justified or not, it certainly curtails freedom and choice and for what? A symbolic gesture at best or some hidden less-than-noble purpose at worst.

One could argue that there are definite limits to a state potentially abusing its authority in extending such powers. After all, there is a transcending principle behind it having to do with the environment. Yet, that is a very elastic principle that can be bent and shaped in ways that cannot readily be contained.

And so we are left with less choice, more expense, and prospects for a more restrictive future. It may or may not be good, but the animating principle, unless it is subject to clear limits (which do not appear here) is one that poses self-evident risks for a free society.

Ultimately, law is about power.

Under the U.S. Constitution and the Bill of Rights, the federal government is one of limited powers, meaning (at least it theory) that the federal government cannot lawfully act beyond the scope of its enumerated powers as expressly set forth in the constitution.

So, consider how profound (again, I know it sounds quaint) is the responsibility of those elected officials to act responsibly in how they legislate about such enumerated powers.

Copyright is part of the legislative power defined in Article I of the constitution. Right there in Article I, Section 8 you can see it among the fewer than 20 items set forth for what the Congress is supposed to do: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States . . . To borrow Money . . . To regulate Commerce . . . To establish a uniform Rule of Naturalization . . . To Coin Money . . . To provide for the punishment of Counterfeiting . . . To establish Post Offices . . . To promote the Progress of Science and Useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries . . . To constitute Tribunals inferior to the supreme Court . . . To define and punish Piracies . . . To declare War . . . To raise and support Armies . . . To provide and maintain a Navy . . . And To make Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

I elided a few of the enumerated powers but the above sets forth the great majority of them.

Thus, while it might be and often is argued that copyright protection does not actually achieve the things ascribed to it (promoting creative works, protecting artists’ rights in their creative works, etc.), the fact is that our laws are profoundly to the contrary: the idea of promoting the progress of science and useful arts via copyright protection (and patent protection) is right there among the fundamentals defining the essence of the legislative power of the federal government. And, to be listed at all among such powers is in itself profound because the states that formed the United States and ultimately ratified the constitution as a compact among them were jealous not to give any more authority to the federal government than was absolutely necessary.

That authority was granted only on the biggest of issues and was checked and balanced by and among the legislative power (Article I), the executive power (Article II), and the judicial power (Article III).

And yet there it stands: the power to promote the progress of science and useful arts, "by securing for limited Times to Authors . . . the exclusive Right to their respective Writings". Right there among the powers to print money, to declare war, to lay and collect taxes, to establish federal courts, and the like.

And that is why it was so utterly reprehensible when in 1998 the Congress took existing copyright terms that were to have run for 75 years and retroactively made them 95 years. Yes, the 1923 copyrights were to have expired in 1998 and, here we are, 20 years later, grateful to have them come into the public domain at last.

And in what sense did this retroactive copyright extension serve to promote the progress of science and useful arts? Well, in no sense at all. It imposed new rules retroactively. It provided for absurdly long lengths of copyright protection. It had no bearing at all on the idea of promoting the arts. As such, it constituted nothing more than a crude exercise of naked power utterly divorced from the principled reason for having copyright protection at all.

I believe in the value of copyright protection. I think there are excellent arguments to be made in its favor. But the cause of copyright protection was not promoted by the 1998 extension. It was significantly set back because people looking at what that Congress did are rightly revolted by the cronyism that cynically gave special favors to a privileged few and, suffering from the pain thereby inflicted on those who were needlessly burdened by completely arbitrary restrictions on being able to use works that deserved to be in the public domain, concluded that copyright protection itself is a great evil burdening society for no good purpose.

To repeat, principled application of the law is vital to a free society. What happened with copyright in 1998 was a gross departure from that important truth. Let us hope it does not happen again as the 2018 expirations are about to occur.

This one does not involve the question of patentable subject matter but instead a question of process: in layman's terms, if Congress has set up a relatively quick and painless process by which junk patents can be sent packing without the pain, turmoil, and delays of going to court, can this process be shot down as being unconstitutional because patent validity, "from its nature," must be decided by a court? In answering this question no, the Court upheld the power of Congress to better police junk patents and rid the world of them with dispatch.

In short, this decision upholds the lawfulness of the process known as inter partes review, by which the PTO can reconsider and reverse the validity of dubious patents that it previously had granted.

Score this as a victory for those who support patents but who do not want the currency cheapened, so to speak, by junky ones that only serve to undercut what a legitimate patent even means.

The legal reasoning here (both in the majority and the dissent) is refined, principled, and arcane, dealing with the nature of a patent right, how it evolved under English law through the 18th century, and what this meant for the definition of the judicial power under Article III of the U.S. Constitution when it was adopted in 1789 (https://www.supremecourt.gov/opinions/17pdf/16-712_87ad.pdf).

All justices agreed (as the Constitution says) that the federal judicial power vests exclusively in the Supreme Court and the federal courts as established by Congress and that, if inter partes review is an exercise of such federal judicial power, it is unconstitutional.

In deciding that this sort of review is not an exercise of federal judicial power, the majority held that the grant of a patent is a "public franchise" that essentially can be determined in the reasonable discretion of the granting authority (the government) without need of a judicial determination. So, just as Congress (legislative) set up the PTO (executive) to grant or deny patents based on criteria defined by Congress via statutes (legislative), Congress could also set up procedures (inter partes review) based on criteria that it defined (invalidity if patent failed novelty and non-obviousness tests in light of prior art) by which the same executive branch (PTO) can reconsider and invalidate the previously granted patent. Yes, Article III vests the exclusive judicial power of the United States in the Supreme Court and in the inferior courts established by Congress but inter partes review is not a judicial power given that a patent is a public franchise that can be shaped and altered by the government without regard to the courts. In dissent, Gorsuch argued that a patent grant is not a public franchise but a vested private property interest that could be abrogated under the U.S. Constitution only by an exercise of judicial power and not by the PTO acting extra-judicially.

Both the majority and the dissent are basically originalist justices and so the disagreement between them is, I think, not as large as may appear. For the majority, Justice Thomas went out of his way to emphasize how exceedingly narrow his holding was (ruling does not involve infringement claim, is tied to the idea that there is ultimate judicial review after the process is complete, does not address any constitutional challenge such as retroactive application not raised by the party filing the appeal). Based on this, I would suspect that, in other contexts, these justices would all agree that patents do involve significant elements of private-property protection. But, for this case, and in upholding a hugely helpful procedure for ridding the world of junk patents, the majority was willing to say, in effect, "nothing at all wrong with that, have at it." The decision is a correct one and continues a welcome trend toward reestablishing sanity in the patent world.

When private parties transact business in a free society, the law of contracts steps in to provide rules enabling them to do so in a well-defined and orderly manner. Contract law has some fundamental principles that anchor it and, beyond those, has a vast number of intricacies that potentially can come into play in individual circumstances. Concerning fundamentals, for most executory contracts to be enforceable, you need to have mutual consent and some exchange of consideration. That is, a meeting of the minds on material terms and an exchange of value. When these elements exist, the law considers a contract to be binding and imposes legal consequences for any breach or failure to perform. In order to avoid chaos, it further stipulates that the core principle (meeting of the minds) is not based on purely subjective factors but on what a reasonable person would believe in the circumstances. This objective standard enables commercial transactions to proceed without endless second-guessing about what the parties might have desired or meant when they contracted in any given transaction. Because of this, while it can easily become messy in any given case, most contract situations can be legally evaluated with a fair degree of certainty and parties can plan their affairs and determine their rights accordingly.

The above describes what might be called a very high-level summary the central tenets of the common law of contracts in the Anglo-Saxon legal tradition. If someone reasonably can be said to have consented to a given transaction involving some exchange of value, legal rules applied to govern how that exchange took place and what would happen if some breached his or her agreement.

When it comes to terms and conditions in online commerce, the law generally applies this body of contract law but does so via what might be called the fiction of mutual consent between the contracting parties. It is well known that the vast majority of persons do not bother to read such terms and conditions when they click on the "Agree" button. Nonetheless, the terms and conditions are legally binding upon such persons. Why? Because it is assumed that the person read and understood them in clicking. And that assumption is what makes it a fiction. In effect, the law says, "we will pretend that the person read through the terms and knowingly agreed to them." Given that this legal fiction effectively substitutes for a true consent, the law can proceed along its merry way and treat this contract as it would any other, i.e., treat it as binding and enforceable upon the "contracting" party. In effect, to preserve orderly rules of contract in such transactions, the law effectively says that the terms and conditions are legally binding if they are such that a reasonable person who had taken the time to read through them would have understood them to have a certain meaning (that is, the "reasonable person" meaning that the law will enforce upon the person doing the clicking).

This fundamental approach to terms and conditions in online transactions has not changed one bit in some years and is under no risk of being changed. Because, without it, you could not practically have any semblance of legal orderliness in online transactions.

Moreover, while it is often said that dense legalese is undesirable in such situations, courts generally enforce such legalese without hesitation, even if a complaining consumer says until he is blue in the face that it could have been put in easier-to-understand plain English. There is no legal rule that requires contractual language to be put into plain English and there are some types of contracts where an attempt to express the legal requirements in that way would cause a loss of precision or lead to other problems. Whether something is expressed in plain English or not, then, typically does not affect its enforceability in online transactions.

Again, nothing pervasive is happening in the law affecting online transactions so as to require use of plain English to make terms and conditions enforceable.

None of this is to say that there are no protections in existing law when people try to use weasel language to defraud others or use language that is so imprecise as to mislead consumers or use language that is so ill-defined or vague as to leave important matters uncertain to the other contracting party. In all such cases, existing common law has remedies of varying kinds to say that such contracts are unenforceable or that some remedy applies in favor or an aggrieved or defrauded consumer. But, in practice, these are edge cases, the ones that wind up in dispute or in court. The vast bulk (99%+) of the commerce that occurs is covered by the general contract rules and proceeds in an orderly way because the rules are known and predictable.

Against this background of the common law contract rules, it is possible for persons to want to modify the existing rules on grounds that such rules are unfair to the consumer and or are not based on true consent by that consumer or for some other public policy ground.

This is where special public-policy-driven enactments come in to modify the standard contract rules. Legislatures can adopt special laws dictating outer bounds to how businesses can use the private data of consumers as such data may entrusted to them. In this area, perhaps, a form of "reckoning" may occur if it is determined that companies such as Facebook ought not to be able to sell or misuse private data to the detriment of their users. This is an important development and serious changes may be afoot affecting such special areas. But this does not affect the general principles by which online contracting occurs.

There could also be proposals mandating that plain English be used in terms and conditions or requiring this or that form of mandated disclosure to help ensure greater consumer understanding but all such proposals come with decided trade-offs that typically make them impractical. The reason for the fiction of legal consent in the current system is the supreme utility that comes from allowing millions of online transactions to occur every day without incident based on orderly rules known to all. You can change all that through legislative enactments saying that public policy requires a different system that is more fair to consumers. But at what price? That is why the current system is and remains solidly in place.

To underscore the importance of utility, I have been legally trained and have years of experience such that I could easily read through and comprehend the legalese that is found in most online terms and conditions. Yet, with rare exceptions, I am just like everybody else and will click "Accept" or "Agree" without reading anything and without a second thought. As a lawyer, I can't say that I am proud of this but I can say this is human nature. The issue is not primarily that legalese or plain English will make a difference in understandability. It is that we take the path of least resistance when not much is at stake and we don't want to be bothered. Try as we might, no law will solve that problem.

The military application in question is legal and is approved by a duly elected government that supports it politically. In earlier days, employees generally would see this as just doing their jobs in developing technology that their employers wanted developed and would not concern themselves about ultimate uses and applications. In other words, doing your job is personal and, as long as you do it honestly and work hard, you should not be faulted for doing it as requested by your employer. That was always the standard. What then is the new element from which this sort of employee-driven demand arises? Is it morality? In other words, if I help develop A.I. that can be used for all sorts of things, one of which happens to be military-related, is the effort "evil" if the employer for whom I develop it agrees contractually to provide it to the government for a wartime/military use that can kill people? Do I really make a difference for the good if I convince my employer not to do this if all this means is that the company down the street gets the contract and the military gets the same results, albeit from a different vendor? If this is so, then I assume that you as an employee can make no practical difference in making the world better by insisting that your employer forego this particular form of contracting opportunity. If you succeed, your employer misses an opportunity but the evil you see being released into the world still gets released. It just means that you do not personally contribute to the development effort by which it is made possible.

Of course, it might theoretically be possible to persuade all persons working in the field of A.I. to ban further work that directly helps the military. But that would seem a practical impossibility. Many people in all countries believe that military technology of all kinds is proper, legal, and politically supportable for purposes of self-defense or for some other overriding purpose they deem proper. And certainly, there are bad people throughout the world who are eager to use any technology that comes their way for overtly evil purposes such as misuse of an atomic bomb. Unless and until human nature is fundamentally transformed, that will never change.

So, what is the answer in a country such as the United States where people and companies have the freedom to develop A.I. for any lawful purpose and where some inevitably will do so for a military purpose of which you disapprove?

You are then left only with a political solution: use political means to gain control of the government and the military and apply the force of law to ban the military use of which you disapprove.

So this is either a personal act of futility by the Google employees or it is a case by which they cannot separate the personal from the political and thereby insist that their employer sacrifice particular economic opportunities to ensure that your personal actions do not support a political outcome of which you disapprove.

Even then, does this mean that your employer should cease working on A.I. altogether? For, just as cash is fungible, so too is technology. Every improvement you make in A.I. might have an immediate use of x for your employer but, as humans collectively do this for all sorts of improvements, the results are there for the taking in the future for military applications of all kinds. In other words, you cannot put your improvement in a box or control it so as to limit its future uses (at least not in a free society). The computing technology of recent decades undoubtedly has bettered many aspects of life but it has also greatly magnified the lethality and utility of military applications so as to make the world far less safe. And this was inevitable unless a supervening agency were to have used forcible and totalitarian means to suppress such technological development from inception. Since no such supervening agency existed or even can exist in a free society, does this mean that all engineers and technical developers have blood on their hands because, ultimately, things they have done were used for applications of which they disapproved? Of course it does not. Nor would people today working on A.I. be held morally or legally responsible for ultimate downstream uses made of their work of which they would not morally approve today.

But this brings us back full circle. In the long run, you cannot stop such uses (or misuses) made from your technical development work. Nor can you be held responsible for them even though you contributed to them in some remote degree through your work efforts. Why then should it make a difference if your direct work efforts for a company like Google are applied to a military application of which you do not approve but which is legal, politically approved by the governing authorities, and will happen anyway regardless of whether Google is involved?

The puritans of old tried controlling the morality of others by shunning and shaming and doing it to an extreme degree. They failed miserably in their efforts because humanity is what it is and followed its own course without regard to external religious constraints.

This sort of effort by Google employees is obviously different in that it is not religiously driven but does it amount to anything more than a shunning-and-shaming method for trying to impose one's sense of morality on others by signaling that this way lies righteousness and everywhere else lies evil?

If this is what "don't be evil" now means, then Google will need lots of help going forward because every cause under the sun can be used in the same way to shun and shame. We then have management by a corporate board as may be swayed to and fro by any organized protest of the moment.

Whatever this is, and however it might be defensible in "sending a message" or whatever, it is a sure way to put a company at a competitive disadvantage while accomplishing nothing practically. It may further political goals but, if those are the goals, better just to try to advance them directly and not by attempting to shun and shame your employer (and your co-workers who may disagree with you) into submission. The personal need not be political. If it does become that way, a new form of puritanism will hold full sway to the detriment of all.

There is a reason for this: if it were the rule that an appellate court could easily step in and second-guess how a jury weighs evidence, there would be little room for finality with jury verdicts because lawyers are very skilled (and become very tiresome) endlessly arguing why this or that fact is better than another and why a court should weigh things differently than the way a jury did.

In this case, the Federal Circuit Court did what amounted a wholesale second-guessing of what the jury concluded about the facts here.

I am not saying the issues were not complex and that it had absolutely no basis for coming to different conclusions.

But the zeal with which this particular court upholds IP absolutism is truly a marvel.

This is the court that gave us the frivolous patent bonanza dating back to 1990s by which "everything under the sun" became patentable and many suffered for years from the consequent harm.

So too with the way it is handling copyright law in this Oracle/Google dispute. Yes, by all means, let us protect the hell out of APIs and invite endless future litigation that ensures that easy connectivity in the computer world will no longer depend on engineers but on lawyers. And let us say that "no reasonable jury" could possibly conclude that copying even a tiny amount of code could possibly be "quantitatively insignificant" so as to shield the one doing the copying from claims of copyright infringement, all the better to ensure that future lawyers can conjure up infringement claims from all sorts of seemingly quantitatively trivial copying.

I deliberately exaggerate in how I characterize this decision knowing that it glosses over all sorts of fine points that are the subject of profound argument among lawyers. But I do so to capture the spirit of this decision and what decisions like this mean for computing generally.

Yes, a very broad theory of what is patentable can readily be defended in the name of protecting IP rights and lawyers can come up with endless arguments for why this should be so. So too can lawyers make convincing arguments for very broad theories of copyrightability and very narrow readings of fair use. In both cases, the law protecting IP gets an expansive reading.

Well, speaking as one who has tilled this soil for a long time and who very much supports and sees the need for strong support of IP rights, I can only say that the Federal Circuit Court has proven to be a largely counter-productive force in serving as a specialized court dealing with IP among federal courts. This ruling will do what its prior expansive reading of patent law did: it will set up a legal standard that invites lawyers and litigants to engage in endless second-guessing over copyright and fair use in areas of connectivity and inter-operability in the computing world and this in turn, as a standing invitation to litigate, cannot be good for future development.

Legislative, executive, judicial - those are the three branches under the Constitution that are supposed to check and balance one another.

The legislature passed the federal arbitration act almost 100 years ago. It was signed into law by the president. And it has been consistently upheld by the U.S. Supreme Court in the face of many and varied court challenges.

In essence, the result of this century-old jostling is a body of duly enacted law that says that binding arbitration clauses are truly binding and therefore can be used in contracts to foreclose judicial proceedings by requiring that disputes covered by such clauses be resolved through arbitration. Moreover, a massive court challenge resulted in a holding of the Supreme Court saying that waivers of judicial class-action rights in favor of arbitration are also binding - meaning, it is neither unjust, unfair, nor against public policy (legally speaking) to say that consumers can be required to waive such rights and be required in all cases to arbitrate their disputes.

Now, one may believe that all of this is repugnant and grossly harmful to consumers. Others may disagree and may in particular believe that class-action lawsuits are primarily vehicles that help the trial bar and do little with their nickel-discount coupons to actually further the interests of consumers. Either way, the existing law is the existing law. The proper way to change it is to gain control of the legislative and executive branches and to repeal or amend the federal arbitration act. In that way, the law could easily and properly be shaped to forbid making arbitration mandatory and binding or limit the ability to use binding clauses in specific areas of law, etc.

The problem with CFPB is that it sought to carve out its own view of what is right and proper for consumers of financial services without regard to the intent of Congress in having enacted the existing arbitration laws. As established, CFPB is not accountable to Congress or any other form of traditional oversight of its bureaucratic functions (its structure was declared unconstitutional by the D.C. court of appeals). It is in that sense an organization that could be characterized as "rogue" based on traditional rules of governance and it is certainly seen as such by those who disagree with its particular actions in using its power to attempt to regulate arbitration clauses, payday loans, etc.

So CFPB essentially stuck its thumb in the eye of Congress in pushing forward with these measures.

Now Congress has struck back, saying, in effect (with its authority under the Congressional Review Act), "we don't like what this regulation does and this is our domain - therefore, we rescind it."

So, while one can try to say this is good versus evil, it is basically the legislature asserting itself on a matter of policy against a bureaucrat who it believes overstepped his proper role.

The result is to keep the status quo, nothing more. The rules in effect as a result of this action by Congress are the same ones that have governed arbitration clauses in every walk of life in American business for nearly a century.

For those who don't like it, that is fine. The ballot box is open as the prescribed means to effect a change. All this recent action amounts to is a declaration by Congress saying that this should not happen by bureaucratic edict. That may be bad policy, or it may be good policy, but it does uphold the rules of law favoring the electorally-accountable legislative branch over the authority of an unaccountable bureau chief.