Cyber-Technology Torts and Insurers’Ambiguous Obligations to Defend Professionals and Business Entities Under Evolving Cyber-Insurance Contracts: Statistical and Legal Inferences from Traditional Insurers’ Declaratory Judgments, 1940-2019
By Willy E. Rice
Innovative technologies increased in the 1940s. In the wake, personal injuries and property losses also grew. Insurers responded―selling liability insurance and promising to defend manufacturers and sellers against “personal injury” lawsuits. Today’s widely marketed commercial general liability (CGL) insurance contract originated in the 1940s. Like early-twentieth-century technologies, cyber-technologies are producing injuries and losses. Again, insurers are responding―marketing modified 1940s-vintage CGL contracts and promising to defend merchants and professionals against cyber-technology claims. To assess the veracity of cyber insurers’ promises, the author conducted an empirical study of courts’ declaratory judgments (N=1840)―focusing on courts’ dispositions of duty-to-defend disputes between 1940-2019. Legal and statistical analyses uncovered several statistically significant, newsworthy and surprising findings: 1) Cyber-liability insurers are more likely to breach their promises―refusing to defend businesspersons and professionals against cyber-technology claims; 2) Cyber-risk insurers are more likely to engage in bait-and-switch schemes―promising only an “illusion of coverage”; 3) Courts are substantially more likely to resolve duty-to-defend controversies in favor of insurers; and 4) State and federal courts are more likely to allow questionable extralegal factors―rather settled legal doctrines―to influence the dispositions of cyber-related controversies. In recent years, the American Bar Association as well as most business, trade and professional associations have established an additional licensure requirement: Practitioners must assess and defend against the risks associated with using various office and cyber-related technologies. Certainly, business and professional associations are encouraging their members to purchase and understand cyberinsurance. This Article also encourages knowledgeable “cyber” merchants and professionals to avoid several provable and arguably “ultrahazardous” risks: 1) the risk of receiving severe punishment and sanctions for illegally and unethically using cyber technologies, 2) the risk of purchasing cyberinsurance, asking the insurer for a legal defense and receiving a rejection, 3) the risk of having to defend against cybertechnology lawsuits and paying substantial out-of-pocket damages, and 4) the risk of purchasing debatably more expensive cyber-liability insurance―which provides only an illusion of coverage.
* * * * * * *
Best Practices for Managing
By James M. Theo and James A. Dimitrijevs
Managing international trademark portfolios in the age of globalization can be a fickle endeavor. E-commerce has blown the top off traditional thinking as it relates not only to advising clients on what and where to file, but also regarding how to strategically maintain those filings in the face of an increasingly crowded and adversarial global marketplace. Uncertainty in the market, such as the U.S. Chinese trade war, has caused its share of concern. However, there are still opportunities to expand brands globally.
When a brand attempts to gain a foothold with an emerging clientele, fortune tends to favor the strategically bold.1 For this reason, companies often try to establish their intellectual property rights in countries where actual use or implementation may not be in the cards for years. In the case of trademarks, the benefits are obvious: If/when a product is launched, a service begins, or a brand is introduced, a strong and enforceable portfolio is waiting to greet and protect it. However, in some jurisdictions around the world, such a strategy leaves open the possibility of an attack on these rights, most commonly in the form of a non-use cancellation action.2 Such an action is when a third party challenges your right to maintain a registration, betting on the fact you have not used your trademark for the prescribed length of time under local law.3 Thus, when considering a trademark filing strategy for international clients, it is important to contemplate a workable scheme to protect the filings from eventual vulnerability.
* * * * * * *
Comprehensive Artificial Infringement in China’s Drug Regulatory Review
By Yaohong Zhang
The Hatch-Waxman Act struck a balance between branded drug manufacturers and generic drug manufacturers through an elaborate set of procedures, such as allowing generic drug companies to make or use the brand manufacturer’s patented drugs for preparing to list generic drugs without permission of the patent holders, while treating the generic drug application for listing as an act of “artificial infringement” subject to court review.
Most Chinese scholars propose to directly transplant this approach into China, regardless of the different national systems between the two countries. In contrast, this article proposes the adoption of a comprehensive artificial infringement, which contains restrictions to drug innovators and precaution against pay-for-delay settlements. These restrictions are inspired by the Canadian system, including the requirements that drug innovators bring actions in due time and compensate generic drug manufacturers if they lose in a lawsuit. Pay-for-delay settlements, which are a challenge in the U.S., refer to the payments made by drug innovators to generic drug manufacturers in order to delay the listing of generic drugs. This article explains how Chinese administrative agencies can use the proposed comprehensive artificial infringement to prevent such unlawful settlement agreements in China.
As shown in this article, this proposal would be more applicable to China and hope- fully implement well, since it takes into sufficient consideration the Chinese national system and empirical experiences of the U.S. and Canada.
* * * * * * *
The Same Problem, Different Outcome: Online Copyright Infringement and Intermediary Liability Under US and EU Laws
By Lia Shikhiashvili
The protection of copyright owners’ rights online is much more challenging with the significant increase of the digital marketplace. Although the problem is same for both the United States and European Union, their approach how to solve it is hugely different. Recently, the European Union adopted a new Copyright Directive, which, in Article 17 (formerly Article 13) indirectly introduces filtering and monitoring obligations to online platforms that allow users to upload content. It creates the “de facto strict liability regime” for internet intermediaries to root out copyright-infringing content. In contrast with this approach, in the United States internet intermediaries still benefit from the legislative immunities that exclude them from copyright-infringement liability uploaded by their users. This article compares the new European Union directive with the United States approach and shows that these differences might create uncertainties in the digital marketplace. This article also reviews potential consequences of Article 17 and demonstrates the need for a harmonized secondary liability regime to Internet Service Providers at the European level, without sacrificing safe harbor provisions. The article proposes the adoption of the “fair use doctrine” and “fair remuneration” provisions as an effective and alternative tool to protect the rights of all players in the digital scene and simultaneously tackles the so-called “value gap” problem.
* * * * * * *
The 3D Blueprint File Dilemma: The Inherent Dangers of Digital Creative Expression and A Techno-Logical Approach to Regulation
By Robert D. Edelson
The technological advancements in 3D printing have led to the proliferation of non- commercial 3D printing in a variety of non-traditional settings. As the digital DNA of 3D- printed objects, blueprint files are capable of creating both myriad and non-myriad real- world objects. As a result, there has been an influx of legal controversy surrounding this technology. The first proverbial “3D-printed chips to fall” are firearms, leaving unsettled the greater issue of government regulation and individual First Amendment rights. The case of Washington v. United States Dep’t of State and District Court Judge Robert Lasnik’s comments highlight the greater blueprint file debate and the need for a proactive approach to address this issue.
This Article discusses the prevailing individual, state and federal interests at stake, evaluates the current federal regulatory system pertaining to blueprint files, and proposes the creation of a scheduling system that delineates why non-myriad blueprint files require threat levels, based on their propensity as digital instructions, to cause substantial and irreparable harm to the general public and to national security.
* * * * * * *
Taking Your Medicine: Applying the Fifth Amendment to Pharmaceutical Patents During Inter-Partes Review
By Leanne Livingston
The rate of patent invalidation has climbed since the America Invents Act’s creation of the Patent Trial and Appeals Board. Some see this as a victory against large corporations who attempt to patent obvious inventions to create large monopolies. On the other hand, opponents advocate for small-time inventors by claiming the new process disenfranchises them of their original ideas. These debates tend to revolve around the idea that patents possess strong private property interests and invalidating a patent results in an unconstitutional regulatory taking. This comment discusses whether the Fifth Amendment’s Takings Clause should apply when the PTAB invalidates patents through PTAB’s inter partes review, specifically using the pharmaceutical industry as an example.
* * * * * * *