2018—First Potentially Unauthorized Satellites Launched into Space

by Gabrielle Daley

There have been a lot of significant firsts in the history of space exploration: 1957—first artificial satellite, 1961—first man in orbit, 1969—first man on the moon. But now one company may have earned a first that is not so prestigious. On March 7, 2018, the FCC accused a Silicon Valley start-up company named Swarm Technologies (Swarm) of launching unauthorized satellites into orbit. If the allegations are correct, Swarm would be the first company to put unauthorized commercial satellites in orbit.


Space exploration and communications have been undergoing a revolution in technology over the past 20 years. New commercial players like SpaceX have taken aim at the stars and pioneered developments, like compact satellites, reusable launch vehicles, and small launch vehicles, that promise to make it easier to access space by lowering costs.

However, given the complex legal and regulatory environment of space, it’s not as simple as brewing up a batch of homemade rocket fuel and shooting for the moon. The Outer Space Treaty of 1967 placed responsibility for launched objects on their country of origin. Therefore, when U.S citizens or entities want to put something into orbit, they first have to ask permission from the United States authorities that govern space access. Those authorities are the Federal Aviation Administration (FAA) —for launch—and the Federal Communications Commission (FCC)—for communications technologies.

As innovators have persevered they have begun to critique the complex layers of regulatory permissions necessary to launch something into space and called for streamlining the process. In October of 2017, President Trump reconvened the National Space Council, and in February of 2018, the National Space Council approved several recommendations to modernize the licensing process for launches.

Swarm Technologies

Swarm Technologies is a start-up company  founded in 2015 by ex-Google engineer Sara Spangelo and Benjamin Longmier, an adjunct professor at the University of Michigan and entrepreneur who has helped build several space technology companies.  In April of 2017 Swarm applied for an FCC license  to launch four small satellites, about the size of hardback books, into orbit, apparently as a proof of concept of their proposed internet network  that would provide connectivity for internet of things (IoT) devices.  Swarm technologies contracted with Spaceflight Industries, which coordinates and manages space launch and ridesharing for payloads. Spaceflight found a place for the tiny satellites on a Polar Satellite Launch Vehicle, which launched 31 satellites into orbit on January 12, 2018. However, on December 12, 2017, the FCC’s experimental licensing branch denied Swarm’s application on the grounds that the satellites posed too great a risk to other spacecraft, because they were too tiny to accurately and reliably track.

If confirmed that Swarm’s technology launched without the proper regulatory clearance, this would be the first ever unauthorized launch of commercial satellites. While some disruptive start-ups have notoriously disregarded laws and regulations as part of their business models, these kind of actions have increasingly been critiqued. In the space sector, where national security is paramount, this strategy does not seem likely to be tolerated.


In the aftermath of the allegations of unauthorized launch of these satellites, the FCC has denied Swarm technologies permission for subsequent launches and operation of ground stations. But the exact long-term consequences of this incident both for Swarm Technologies and the space industry more broadly are uncertain.

The question remains, how did a launch take place with a payload that lacked regulatory clearance? Spaceflight’s official response to the story of the alleged unauthorized launch has been that “Spaceflight has never knowingly launched a customer who has been denied an FCC license. It is the responsibility of our customers to secure all FCC licenses.” However, it’s unclear the extent to which the launch provider was concerned with ensuring that all the satellites launched had obtained such clearances.

As policymakers study this incident and look to prevent such events from occurring in the future, parties are sure to ask what lessons we can take away from this new space ‘first’. Regulators may consider placing greater responsibility on launch providers to ensure that the proper authorities have approved the payload before launch. Entrepreneurs, on the other hand, may point to this launch as an example of the need for greater regulatory coordination to ensure clarity for businesses trying to be good corporate citizens.

While Swarm may become merely a cautionary tale for launch providers and startups alike, this episode may also be the catalyst for regulatory change.

Watch this space . . . .

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

It’s Official: The End of Net Neutrality

by Cierra White

On February 22, 2018, the final rule rolling back net neutrality was published by the Federal Communications Commission in the Federal Register. This rule makes official the reversal of an Obama-era rule requiring that broadband access be classified as an information service rather than a telecommunications service under the Telecommunications Act of 1996. What this essentially means is that internet service providers could slow down, speed up, or block delivery of certain content to consumers.

Those in favor of the roll back of net neutrality believe that the new rules will improve the overall internet user experience by allowing internet service providers to prioritize quality sites and activities that require faster access, thus encouraging innovation. While some say that with the rollback should come with guidelines for how content can be prioritized or restricted, others believe that competition between service providers will be sufficient to regulate how those providers manage content.

Those in favor of net neutrality argue that this rollback will have dire consequences for consumers, businesses, and the internet as we know it. The American Civil Liberties Union fears that internet service providers will prioritize bigger companies who can afford to pay more for faster service while restricting smaller sites or possibly blocking disfavored content. If companies pay more to acquire faster delivery of their content, this added cost would likely be passed on to consumers in the form of increased subscription prices. In addition, in most places in the United States, consumers have access to only one or two broadband internet service providers in their area. Service providers’ management of content cannot be regulated by competition if there is no competition.

The day the final rule rolling back net neutrality was published, a coalition of 23 Attorneys General filed a petition for review asking the court to block the rule from going into effect. Led by New York Attorney General Eric Schneiderman, the Attorneys General argue that the rule is illegal. The petition claims that the rule is arbitrary, capricious, and unconstitutional. Attorney General Schneiderman argues that the rule fails to justify the FCC’s long-standing policy and practice of defending net neutrality, and that the rule wrongly reclassifies broadband internet as an information service rather than a telecommunications service.

Back in 2015, the FCC effectuated net neutrality when it reclassified broadband internet as a telecommunications service rather than an information service. The classification meant that internet service providers could not favor certain content over other content. In other words, the providers must remain neutral. But this too was a reclassification, just as the new rule is a reclassification.

In 2005, the Supreme Court in the Brand X decision confirmed the FCC’s authority to interpret the classifications from the Telecommunications Act that are at issue now. That case stemmed from an FCC rule classifying broadband internet as an internet service provider, just as it has done again.

Civil liberties and consumer groups, some internet companies, and nearly half of the country’s attorneys general have come out in opposition to the FCC’s new rule. They argue that the people have a right to a free and open and neutral internet. A free and open internet is ideal for many. And it is quite possible that the rollback of net neutrality will be detrimental to consumers and the internet once the new rule goes into effect. It is also true that only a handful internet service providers control broadband access in America and most areas have access to only one or two provider options, so depending on competition to keep the system in check may not be prudent.

However, as a legal matter, the opponents of the FCC’s new rule may not succeed on their petitions to block the rule. As the Supreme Court has held, the FCC has the authority to determine this classification. And agencies are permitted to change their minds. Perhaps the continuing evolution of the internet since Brand X, and especially since the passage of the Telecommunications Act, will lead Congress to revisit this type of classification and settle this issue.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Reconciling DRM in Video Games

by Jordan Demo

Like many young kids who grew up playing video games, I can recall the excitement of going to the store to wait in line for hours just to buy a new game that was set to be released at midnight. It’s amazing how things have changed in the last ten years. Long gone are the midnight waits for games at the store. Now, computer games have primarily become digitized, which means you can create an account on a platform, such as Steam, Uplay, or Origin; purchase a digital copy of the game; and download it directly onto your computer the second it is released. The digitization of video games has created an ease of access for consumers. However, it has also sparked an ongoing debate about how the intellectual properties of digital games are protected by Digital Rights Management (DRM).

DRM is an approach taken by the gaming industry to protect its digital media. This protection occurs at the coding level, where code is embedded to limit copying of the game, the number of computers the game can be installed on, or the number of accounts that can be associated with the game. The basic rationale behind gaming companies using DRM in their games is to combat and prevent piracy.

As it pertains to the legality of DRM, the anti-circumvention provision in the Digital Millennium Copyright Act (DMCA) provides protection for developers who incorporate DRM into their games and outlines some of the technological barriers for those wishing to copy different forms of intellectual property. One clause within this provision pertains to the circumvention of access controls. In essence, this means that, if some form of technology is in place to restrict or control access to the work, then it would be illegal for an individual to circumvent or bypass the technology. If a user were to be caught violating the DMCA by circumventing DRM, they could face harsh penalties.

The widespread incorporation of DRM into computer games has been met with continuous criticism. Recently there have been complaints of the overuse of DRM in particular games where developers are using new forms of DRM, such as Denuvo. Gamers are complaining that this DRM is hampering the performance of games. Moreover, some DRMs require gamers to be continuously online for “check-ins,” and other developers are getting creative in using malware as a form of DRM, where only genuine copies of the game would remove the malware during installation. While studies on DRM affecting performance are thus far inconclusive, the question still remains as to whether this is a necessary practice. In other words, is the overly stringent use of DRM really that effective against piracy, or is it actually encouraging it? From a traditional gaming perspective, the DMCA anti-circumvention provision limits certain aspects of digital gaming, such as sharing games with your friends, reselling old games on the secondary market, and requiring that a user always be connected to the internet in order to play even a single player game. Any attempt to circumvent the DRM to do any of these things places you in violation of the DMCA.

While there are genuine concerns about using DRM, developers argue that there is a justification for doing so. As previously mentioned, piracy is of grave concern, as many take the attitude of “well, these big companies already make a lot of money, so I will just illegally download a cracked DRM version of the game.” However, in computer gaming there are many indie or small game developers who can be negatively impacted by piracy, thus there seems to be a logical reason for these types of developers to use DRM. The problem seems to lie in the fact that digital forms of intellectual property are easier to duplicate and distribute than physical copies of games. Moreover, there are software tools being developed to circumvent the DRM in games, and which violate the anti-circumvention provision. But many of these individuals developing the software or distributing the games freely online are outside the jurisdiction or resources of gaming companies and law enforcement officials. Therefore, this creates a desire for developers to use more sophisticated DRM protection, such as Denuvo.

Overall, it is likely that a practicable solution lies in a balance between using some type of DRM protection, but not so much protection that it places an ease-of-access burden on gamers. It will be interesting to see how this debate plays out in the near future, as DRM is getting more sophisticated and there is more pushback from the gaming community.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Skating on the Edge of Copyright

by Sophie Galleher

First, think figure skating. Then, watch this. At minute 2:45 Jimmy Ma brings it, unzipping his jacket and giving a tongue wag à la Michael Jordan circa 1998 as his music breaks into a hip hop-electronic dance mix of “Turn Down For What” by DJ Snake and Lil Jon. Surprised? Welcome to figure skating in 2018, where Tchaikovsky’s “Swan Lake” and Beethoven’s “Moonlight Sonata” are things of the past.

Ma’s routine epitomizes the impact of a 2014 rule change where the International Skating Union, attempting to inject life into a sport with waning popularity, repealed a rule that prevented figure skaters from using music with lyrics in their routines. And the move has proven to be a success. In the past week, the PyeongChang Olympics—the first since the rule change—has seen media outlets light up with commentary, as the event has featured artists such as Beyoncé and Ed Sheeran and songs such as Despacito. In 2017 a French pair team’s bone-chilling performance set to Disturbed’s heavy metal rendition of “Sound of Silence” went viral, generating millions of views.

But while figure skating is enjoying its revival, a host of copyright issues are simmering. The pieces of classical music that skaters historically performed to—the Boléros, the Carmens, and the Swan Lakes—generally fell within the public domain. More recent performances, on the other hand, are often set to songs by artists who are alive and keen to enforce their copyrights. The result: figure skaters may unwittingly be violating copyright law.

As a threshold matter, ice arenas likely qualify as public or semi-public places, which are subject to the Copyright Act. To mitigate liability under copyright law, ice arenas and other public venues often enter into a blanket licensing agreement with performance rights organizations (PROs), such as BMI or ASCAP. However, these licensing agreements are designed for venues where the owners, not the skaters, control the music played.

As a result, these agreements are limited.

First, some of these licenses don’t authorize dramatic performances. This is problematic because, as ASCAP states, “Copyright law does not define the terms “dramatic” or “nondramatic” . . . . [T]he line between “dramatic” and “nondramatic” performances . . . is often unclear and depends on the facts pertaining to a particular performance.” Against that backdrop, it is unclear whether skating routines would qualify as a “dramatic performance” under copyright law.

Second, the license does “not convey the right to publicly perform . . . musical works . . . to persons outside of the Licensed Premise.”  As such, the reproduction of skating routines performed in ice arenas, whether on the television or through YouTube likely implicates the Copyright Act. To that end, from selecting music to performing routines, copyright law is potentially implicated at several junctions in the figure skating “chain of production.”

The next issue is whether skaters and coaches implicate copyright law when they first select the songs for their routines. Generally, the coach or the skater will download songs from iTunes or a similar platform and edit them, often merging two or more songs together, onto a single CD. The skaters and coaches then make multiple copies of this CD to use at practice and competitions. In some cases, the coaches charge the skaters for the copies. This process of downloading of music and creating new CDs may implicate copyright law.

The final issue is who should be responsible for obtaining copyright permission: the skater who performs the routine, the arena that plays the music, or the broadcasters who distribute the performance to a mass audience.

Notwithstanding these copyright issues, the dearth of copyright infringement actions against figure skaters has led some to consider whether figure skaters have carved out a new exception in the fair use doctrine. The more likely scenario, however, is that figure skating has yet to encounter serious copyright enforcement issues.  But the buzz about figure skating routines at the PyeongChang Olympic Games could raise copyright questions that have ramifications that extend well beyond the figureskating world.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

The Driverless Future May Solve the Truck Driver Shortage

by Gina Sbarbaro

With the successful test drive of a self-driving semi from Los Angeles to Jacksonville, the trucking industry is going to see some major changes. This technology has the potential to make a major impact, since the trucking industry brings in annual revenue of over 7 billion dollars and makes up over 81% of the entire revenue of the commercial transportation industry. Compared to train, plane, and boat transportation, the trucking industry made up sixty-five percent of all freight transportation in North America in 2016.

San Francisco start-up Embark Trucks announced that the 2,400 mile coast-to-coast trip was completed in five days for “hours at a time with no disengagements.” The autonomous technology located inside the truck relies on cameras and sensors to avoid obstacles, collect data, and map its surroundings. On this trip, a driver did sit behind the wheel of the truck in case any issues arose. Embark’s long-term goal is to create an autonomous truck that is self-driving on freeways, but needs manual guidance to travel through small towns or cities and to get on and off exits. While this technology would help the trucks cover more distance in a shorter time, the limits on the technology would also allow truck drivers to keep their jobs.

But it’s hard to imagine with this growing technology that all 7.3 million trucking related jobs in the U.S. are really safe. While Embark currently promises job security by ensuring the trucks need human drivers for specific tasks, as the technology continues to develop in both trucks and cars, it is not a stretch to say the roads may soon be occupied with self-driving vehicles that do not require human assistance. Perhaps the majority of the 7.3 million jobs will be safe, since there remains a need for unloaders, warehouse staff, and administration. However, the 3.5 million jobs currently occupied by the truck drivers themselves are in danger.

The median annual salary for truck drivers is $40,000, while truckers that work for private companies can make over $70,000 a year. Eliminating these jobs could save companies millions of dollars while simultaneously creating safer roads, saving on fuel, and increasing speed of delivery. However, as advancements continue to take place, keeping drivers employed becomes challenging.

Nevertheless, a compelling reason to implement the technology is the driver shortage. With more than 70% of goods consumed in the US moved by truck, it appears that the industry is full of available jobs.  In fact, as recently as January 2018, there was a need for almost 900,000 more drivers. This shortage is not a new problem and has been an issue for the past 15 years. In addition to the many safety and efficiency benefits that self-driving semis offer—and Embark’s plan to keep truckers employed—the combined circumstances suggest it is just a matter of time until the benefits favor advancing the technology to create fully-independent self-driving semis.

As for Embark Trucks, the company will continue developing its autonomous technology and plans to install the technology in 40 more trucks by the end of 2018.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Drunk Driving & Self-Driving Cars

by Julian McLendon

The future of American 5G wireless networks was in the news again recently, which set me to thinking about all of the potential use cases for an expansive 5G network. One of those is self-driving cars, which are poised to revolutionize huge parts of our economy and the way we live our lives.

An important way that self-driving cars will change our lives, hopefully, is that they will drastically reduce the number of people who drive under the influence of drugs or alcohol. Indeed, there is at least one case of someone who has already tried to rely on their assisted driving system in order to drive under the influence. Now, clearly, the technology is nowhere near reliable enough without an attentive and sober driver, but that won’t always be the case. Legislatures should start thinking now about how they want to handle the future of self-driving cars and intoxicated “drivers,” who are really no more than passengers along for the ride.

Before anything else, Congress must resolve two issues related to self-driving cars and DUIs.

First, Congress needs to determine at what level of automation they would consider applying a DUI exemption. This question of levels of automation is something that Congress is already addressing while they work on the SELF DRIVE Act. Once they determine how they want to classify the automation of automobiles, then they can move forward with determining if they want to exempt those vehicles from DUI laws. Obviously, only vehicles that are fully automated should be considered for DUI exemptions.

Another issue that must be considered is the possibility of an intoxicated driver taking over for the automated system in the middle of their ride. To combat this problem, Congress may want to require a certification program for car manufacturers confirming that their cars are eligible for the DUI exemption. Such a program could ensure that there is a special mode of operation, which disallows any human control once the car is in motion, when there are no sober passengers. The use of such a mode could also be a prerequisite for any drunk driver pulled over, if they want to avoid being charged with a DUI.

Thankfully, both the United States and Australia are already considering how the rise of automation should affect the legal landscape. If we want to fully reap the benefits that automated driving can bring to society, the law should encourage people to feel comfortable allowing their cars to take care of them when they cannot take care of themselves. Providing DUI exemptions for fully automated cars furthers that goal and will greatly increase the benefits of 5G going into the future.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Science Nonfiction: The Rise of Artificial Intelligence

by Susan Miller

The futuristic TV show Black Mirror explores various potential technological advancements and their consequences. For example, in the episode “Be Right Back,” the character of Martha recreates her recently deceased boyfriend, Ash, using artificial intelligence (“AI”) technology that uses social media and text history to imitate him. Other books, movies, and TV shows have also explored the possibilities of AI. In some alternate worlds and futures, AI leads to subservient and helpful robots, such as R2-D2 in Star Wars, Baymax from Big Hero 6, and the robots in WALL-E. Other futures are darker, where humans are enslaved or destroyed by their own creations, such as in The Terminator, The Matrix, and 2001: A Space Odyssey. These fictional futures are enjoyable to watch and think about, but as AI creation becomes the focus of many of large tech companies, concerns about the effects of AI become a greater reality.

AI in the real world is often defined as machine learning or the ability of computers to learn difficult tasks, especially after changes to their environment. While consumers might cringe at the idea of Martha in “Be Right Back” communicating with technology that acts as her deceased boyfriend after it learned his speech patterns and habits, these same consumers might tell their Amazon Echo or Google Home to pause or play the next episode. Companies such as Apple, Amazon, and Google have already created and marketed intelligent personal assistants that can play music, answer questions, follow directions, and open and use apps. While these technologies don’t allow the imitation of real people, the creators of Siri have programmed in many sarcastic or sassy answers to immature or trick questions, which gives Siri a personality without being self-aware.

These intelligent personal assistants are quite beneficial to society. For example, they provide a greater form of accessibility to technology to many people. Additionally, the ability to make calls or find recipes with intelligent personal assistants helps with multitasking in the kitchen or when doing chores. And self-driving cars, another form of AI currently in production, could potentially reduce the number of accidents and provide easier transportation for those unable to drive. (However, the use of Siri while driving may not prevent accidents caused by distracted drivers since transcribing to Siri may be almost as distracting as actually using a phone.) Perhaps one day a Baymax-like assistant will exist, providing answers, medical care, transportation, and meals.

As these technologies develop and we continue to rely on their abilities to make our lives easier, it is important for creators and for government regulators to think about not only their effectiveness but also their effects on society. For example, how might the reliance on Alexa and Siri by families affect the way people consume information? The internet and availability of information has already impacted the way people research and read. How might the reliance on speech to gather information affect writing, research, and typing skills? Another concern that has been expressed by parents and educators is what children will learn or not learn from interacting with the Alexas and Siris of the world. For example, there are no consequences for shouting or demanding answers from Alexa or Siri. There’s currently no need to ask with a “please” or end a conversation with a “thank you” with Alexa, which could influence how a child learns to interact in a conversation. And unfortunately, these social concerns are unlikely to have any sort of regulatory or legislative solution.

Other concerns raised by AI can be regulated or influenced by legislation. For example, concerns regarding how these devices further broaden the global digital divide as developed countries race ahead in technological innovations might be alleviated by national or international regulation. This regulation might concern AI directly or more broadly encompass access to the internet and technology. Additionally, twenty-one states have enacted legislation regarding testing and pilot programs for self-driving cars. Federal agencies, such as the National Highway and Transportation Safety Administration, have issued guidance on autonomous cars as well. As legislators turn to regulating AI, they should think about the regulation’s effects on innovation and whether they have enough information about the technology before offering solutions.

Science-fiction is an enjoyable genre that provides wonderful opportunities for discourse on a variety of real-life problems. While hopefully much of the dystopian predictions remain fiction, it is important for innovators and regulators to consider not only the efficiencies and benefits of AI but also the unintended consequences.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Cryptocurrency: Just a Speculative Bubble, or a Valuable Tool for Internet Law?

by Lucas Ewing

In the waning months of 2017, it was difficult to ignore the events surrounding bitcoin and a handful of other cryptocurrencies. During what many called a “bubble,” trading volume in cryptocurrencies skyrocketed, with bitcoin leading the pack. At its height, a single bitcoin could be traded for about $20,000—nearly 25 times its value just one year prior. While other cryptocurrencies fetched a much lower dollar value, they followed the same trajectory. The price of crypto has fallen substantially since its apex in December, but the price remains many times greater than this time last year.

During this crypto-craze, many economists and financiers have warned against investing in crypto, claiming that the recent events represent a speculative bubble and that cryptos have no socially beneficial value. While the rapid rise and fall in the price of crypto does bear the typical signs of a bubble, there may be more value to be found in these new technologies than mere speculation; blockchain and decentralized networks have the potential to create new legal frameworks and enforcement.

In this post, I offer an explanation for why cryptocurrencies may not be in ‘a bubble.’ Specifically, two factors may cause the value of cryptocurrencies to remain stable: increased transparency and reduced need for third-party enforcement.

Fraud and Transparency

The major development that ushered in the crypto revolution and crypto’s subsequent popularity was the invention of the blockchain. In a now-famous white paper, Satoshi Nakamoto proposed a solution to the problem of double spending by floating the idea of tying a currency to a public ledger containing every transaction and the wallet address of every existing coin. To use this currency, a user must possess a ledger that matches every other ledger in the user base. By ensuring that every user agrees on the location of every bitcoin, it is both impossible for any single user to double dip on a transaction and unnecessary to maintain a centralized intermediary. While large scale thefts are still possible, was revolutionary in that it helped garner the trust of its user base without relying on a centralized authority. By changing the architecture of the network, Nakamoto eliminated the need for coercive enforcement in this area. The benefits of this development are made manifest from the fact that a user’s coins are not beholden to a third party, and that users do not have to support the costs of an enforcer, as no enforcement is needed.

The blockchain, with its inherently transparent nature, spawned further development on top of it. Innovators began to think, “if we can ensure strictly monetary transactions on a decentralized network, maybe we can do the same for more complicated transactions.”

Smart Contracts

Every cryptocurrency is backed up by a public ledger (i.e., the blockchain), which contains an exhaustive history of every coin that exists and every time that coin has changed hands between users. The ledger is populated by a list of wallet addresses (crypto coins are stored in users’ wallets), which are encoded by a randomly generated string of letters and numbers. Accordingly, users can permanently encode any string of letters into the blockchain by presenting it as a (fake) wallet address. For example, a user can enter a transfer of .000001 BTC to the address “15gHNr4TCKmhHDEG31L2XFNvpnEcnPSQvd.” That “transfer” never goes through because the wallet address is not valid (wallet addresses are randomly generated when a user acquires a wallet, so the odds of this string correlating to a real user’s wallet are infinitesimally low), but the ledger encodes this address as a hex code (334E656C736F6E2D4D616E64656C612E6A70673F). In this example, the hex code is translated to Unicode, and reads as “3Nelson-Mandela.jpg”.  Now you have successfully encoded a picture of Nelson Mandela into every bitcoin user’s ledger for the entire future of the bitcoin community.

In the same way, two users can encode the terms of a contract directly into the blockchain where payment is only transferred upon fulfillment of those terms. Alternatively, under what some have dubbed a “smart legal contract,” the legal terms are outlined in a real-world contract, and only the enforcement mechanism is coded into the blockchain. Again, by using the blockchain, there is no need for a third party to enforce the contract.

In addition, the blockchain has numerous other advantages. First, certain parties may derive value from the fact that the blockchain allows contracting parties to remain largely anonymous—they are only identified by their wallet addresses.  Second, blockchain technology could allow users to enter into contracts with a machine. For example, the blockchain could permit a self-driving car to receive payments from passengers or pay for its own fuel. Third, the blockchain may facilitate the creation of unique organizational structures; entities like OpenBazaar already run on the blockchain. OpenBazaar is similar to Ebay, but because it runs on the blockchain, there is no corporation at the center that processes transactions. Instead, sellers transact directly with buyers. Last, the prospect of smart contracts is so alluring that programmers have designed cryptocurrencies with the express goal of facilitating commercial agreements using blockchain technology. Ethereum is the most well-known of these, and although it is only 2 years old, it has quickly garnered popular support with a market cap second only to that of bitcoin. The Canadian government even announced on January 20 that its National Research Council will begin publishing funding and grant information on the Ethereum blockchain. One of the tenets of democracy is transparency for its citizens, and democratic institutions are starting to take note of how blockchain technology can promote that goal.

Along with Cardano and NEO (5th and 8th largest market caps, respectively), the newest and most popular cryptocurrencies are those that focus on the prospect of smart contracts and are designed to facilitate their use. It is clear from market behavior that investors find value in crypto, not necessarily as a store of value, but as an advanced medium of exchange that represents an improvement on services like Paypal or Venmo.


It is hard to argue that the recent trends in crypto are not a bubble, but it is equally difficult to argue that crypto does not have value. Blockchain technology allows a cryptocurrency’s user base to assess, approve, and enforce transactions. By relying on the community, crypto eliminates the need for middle-men, and creates the potential for smart contracts, which replace law with code. As such, crypto creates value by reducing fraud and eliminating the costs of intermediaries.

One positive result of the recent “bubble” is that it increased financial backing for innovators and programmers who are interested in improving the original bitcoin technology. A slew of altcoins (cryptos that are not bitcoin) have recently arisen, claiming faster and cheaper transactions, better privacy, and more tailored purposes than traditional currency. Certainly, the bullish prices are not likely to last, but claims that crypto has no value may be overblown.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Virtual Casinos: Are Video Games Preying on Our Addictive Tendencies?

by Trevor Bervik

Mix Star Wars with . . . well, anything, and you have instant recognition for your product. Under the licensing prowess of Disney, who purchased the franchise for just over $4 billion in 2012, the beloved Star Wars characters have graced such diverse products as boxes of macaroni and cheese, fishing equipment, and inflatable Christmas decorations. From these innocuous products, it seems unlikely that Disney would find themselves in the middle of a political controversy, but that’s exactly what has happened in the wake of the new video game Star Wars: Battlefront II, developed by EA DICE and published by video game company Electronic Arts (EA).

In Battlefront II, Electronic Arts—the exclusive producers of Star Wars video games— implemented a “loot-box” system where players could purchase in-game loot-boxes with real-world dollars. Opening these loot-boxes would unlock digital features, such as new characters or weapon upgrades, but the purchaser would not exactly know what feature they would unlock until the purchase was completed and the “box” was opened. Even iconic characters, such as Darth Vader and Boba Fett, were initially unavailable to gamers unless either an exorbitant amount of time was spent playing—about 40 hours per locked character—or by opening a large number of loot-boxes.

Gamers instantly complained about the system, calling the system “pay-to-win” and pushing back against spending additional money to unlock new content, especially after spending a minimum of $60 for the core game. The controversy exploded in the all-time most heavily downvoted post on the popular social-media site Reddit after Electronic Arts attempted to defend their practices.

However, the problems for EA didn’t stop at social media. Regulators in Belgium have begun looking into whether the loot-box system should be considered a form of gambling. Even in the United States, politicians are beginning to take notice. Hawaiian State Representative Chris Lee has described loot-boxes as a type of predatory behavior, even comparing the system to an “online casino” for kids.

Conversely, those in the industry disagree with the belief that loot-boxes are a form of gambling. Recently, Karl Slatoff, the president of game publisher Take-Two Interactive, has come out in defense of loot-boxes, saying the loot-box system is all about content and “[y]ou can’t force the customer to do anything.” Others in the industry compare loot-boxes with buying packs of cards, reasoning that since every loot-box contains “something” each purchase delivers actual content to the player, while true gambling doesn’t come with such guarantees.

But these industry reactions may be missing the point. Content from loot-boxes generally can be separated into three categories: 1) common low-level content; 2) rare mid-level content; and 3) extremely rare high-level content.

The type of content that falls into category 1 is typically uninteresting, like a short voice clip or a marginal upgrade for a character. Category 1 content is freely given from loot-boxes and players may receive duplicates in each successive loot-box.

Category 2 content is slightly more interesting and can include thing like costumes and better upgrades. This content is still given in nearly every loot-box, but usually at only one item in each box (out of the five total items given in each loot-box).

Category 3 content includes things like high-powered characters, elaborate costumes, and other highly sought-after content. This is where the gambling may be implicated. As category 3 content generally provides players with the largest competitive advantage, items in this category are highly coveted. While each loot-box does contain some content, players must purchase a large number of loot-boxes to obtain the specific upgrade that they want. Gamers have even reported spending upwards of $90 on loot-boxes and still failing to unlock certain items.

This arrangement “rewards” players for opening a lucky box. Imagine, as an analogy, a casino that charges poker players an entry fee of $500 dollars. Under the loot-box model, industry leaders would argue against a “gambling” classification for a casino which gives a losing poker player a stuffed-animal “reward” for participating while giving a winning player a gold bar. The losing player still gets “something,” but it defies logic to say that this “something” precludes the poker game from being considered gambling.

The industry naturally wants to keep its income stream strong, and profits from loot-boxes are healthy. But the gambling comparisons are strong, and legislatures may want to consider direct action to avoid these possibly predatory practices.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.

Technology Competency in a Brave New World of Legal Practice

by Emily Dreiling

The Evolution of “Competence”

A lawyer’s “Duty of Competence” has been around for a long time. Model Rule 1.1 provides that “[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Generally, lawyers have understood competence to mean their substantive knowledge of a certain area of law, in addition to their ability to adequately represent a client. The scope of this competence, however, has changed.

In 2012, the American Bar Association edited its Model Rules to emphasize that lawyers have a duty to not only to be competent generally, but also to be “Technology Competent.” Specifically, it amended Model Rule 1.1, Comment 8, “Maintaining Competence,” to read as follows:

To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject. (Emphasis added.)

Just this year, Nebraska became the 28th state to adopt Comment 8; a majority of states now require a duty of Technology Competence. According to legal tech expert Robert Ambrogi, in a recent interview with the legal tech podcast “The Digital Edge,” this duty will likely soon be adopted by all states.

So, what does it mean to be “Technology Competent?”

Lawyers didn’t need this amendment to understand the importance of technology in the legal profession. The fact that you’re here, reading my post on a Tech Law blog, shows you understand the importance of, or at least value the use of, technology in the law.

Yet, when Lawyers Casey Flaherty and Darth Vaughn administered basic technology assessments to hundreds of law school students in 2016, asking them to complete several tasks in MS Word, only about 33% of the students could perform these tasks on their first attempt:

  • accept/turn-off track changes;
  • cut & paste;
  • replace text;
  • format font and paragraph;
  • fix footers;
  • insert hyperlink;
  • apply/modify style;
  • insert/update cross-references;
  • insert page break;
  • insert non-breaking space;
  • clean document properties; and/or
  • create comparison document (i.e., a redline).

It seems reasonable that, to be tech competent, lawyers should know the above skills—and arguably even more. Yet, if I am being completely honest, I do not think that I could complete at least several of these tasks on my own, on the first try, without the aid of Google. Most law students, like myself, can get through school without ever having to do most of the above tasks. This limited exposure leads to a more limited tech competence. If we lack basic competence in MS Word, however, what sorts of roadblocks may we encounter when we enter the legal profession?

Given the increasing adoption of mandatory e-filing, service via email, and eDiscovery, lawyers can no longer get by living in technological ignorance. Furthermore, prevalent professional use of modern technologies—such as case-management software, document-management software, billing software, e-mail, PDF systems with redaction, and the MS Office Suite—emphasizes the need for lawyers to be tech competent, at least when it comes to these programs.

So, if students are lacking this competence, how do they get it?

Here’s a call out to the law schools. Despite the prevalence of tech in the legal profession, few law schools offer any substantive training in its use. This may be due to a fear of tech, or a belief that tech is reserved for the STEM curriculum. Moreover, academic faculty may lack an understanding of tech, and therefore feel uncomfortable teaching it, or may be ignorant to the shifting landscape of the legal profession, causing them to dismiss the importance of tech courses altogether.

Regardless, with the new ethical duty of technology competence, it is vital that law schools begin to teach these basic competencies to their students. Whether in one of the 28 “Comment 8” states or in one of the states that has not yet adopted this change, law schools should not only provide substantive courses on the use of prevalent legal technologies, but require them. And students, in turn, should demand these courses.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.