Consumers Beware: How Are Your Favorite “Free” Investment Apps Regulated?

By: Siqi Wang The proliferation of free or low-cost investment apps has disrupted the financial industry in recent years. Major brokerage firms have been pressured to go to zero fees due to intense competition from their fintech counterparts. While these apps have extended their products and services to those underserved by traditional brokers, some of their practices raise consumer protection concerns. Namely, the practice of “payment for order flow,” which helps fintech startups sustain a zero-commission model, could lead to subordinating customers’ best interest to market makers who acquire their retail orders from these fintech startups. Further, “cash management accounts,” newly popular among fintech startups with an ambition to compete with chartered banks raise questions about the use of idle customer assets and the protections afforded to these accounts in case of liquidation. This Note considers the products and services of these investment apps in the context of existing U.S. regulations and regulators for broker-dealers, investment advisors, and chartered banks. To illustrate this, this Note analyzes the potential consumer financial protection issues arising out of these fintech-based investment platforms’ distinctive business models and the services they provide. Download Full Article (PDF) Cite: 19 Duke L. & Tech. Rev. 43

Cyber and TRIA: Expanding the Definition of An “Act of Terrorism” to Include Cyber Attacks

By: Nehal Patel The 9/11 terrorist attacks brought on financial losses that caused insurers and Congress to reevaluate how the United States approaches terrorism risk coverage. Congress quelled concerns of insurers evading coverage of future terrorist attacks by enacting the Terrorism Risk Insurance Act in 2002. This Note considers the difficulties presented by the out-of-date language employed by Congress in 2002 and proposes amendments so that the Act more clearly covers acts of cyberterrorism, which are ever-growing in their destructive potential. Download Full Article (PDF) Cite: 19 Duke L. & Tech. Rev. 23

Ripple Effects: How in Re Ripple Labs Inc. Litigation Could Signal the Beginning of the End of the Payment Platform

By: Lindsay Martin Ripple Labs provides an international payment network that allows financial institutions to transfer money more cheaply and quickly than traditional international payments. Ripple’s native digital currency, XRP, supports global payments by acting as intermediate currency between different currencies, eliminating correspondent bank’s need to hold deposits in foreign currencies. In an ongoing class action lawsuit, XRP purchasers claim that the digital asset qualifies as a security under federal securities laws and that Ripple illegally offered and sold XRP as an unregistered security. Given Ripple’s rising prominence as a tool for financial institutions, this pending case will impact cryptocurrency markets and international payments. Because XRP is most likely a security subject to regulation by the Securities and Exchange Commission (SEC), this matter poses an existential threat to the Ripple network. This note examines the legal issues leading up to the Ripple litigation and explains why XRP is most likely a security. It concludes by discussing the SEC’s likely approach to Ripple’s unregistered Initial Coin Offering (ICO). Download Full Article (PDF) Cite: 19 Duke L. & Tech. Rev. 1

Careers in Intellectual Property

Interested in a career in intellectual property law? Please join us for a panel discussion featuring Garrett Levin and Joshua Stowell, moderated by Professor Jennifer Jenkins, Clinical Professor of Law and Director of the Center for the Study of the Public Domain. Garrett Levin (JD/MA ’06) is President and CEO of the Digital Media Association (DiMA), a trade organization comprised of the world’s leading streaming companies and the leading advocate for pro-innovation policies that promote growth, consumer choice, and creativity within the music industry. Joshua Stowell (JD ’06) is a Partner in the Orange County office of Knobbe Martens and co-chair of the firm’s trade secrets litigation group. Presented by the Duke Law & Technology Review. For more information, please contact Andrew Lindsay at andrew.lindsay@duke.edu. Join at https://duke.zoom.us/j/92192155874 or with Meeting ID 921 9215 5874. Date: Monday, October 26, 2020 at 12:30 PM (Virtual)

High Health Care Spending and Developing Technology: Proton Beam Therapy

By: Yoojeong Jaye Han Rising health care spending is a source of concern in the U.S. With new, high-cost health care technology, paying higher prices for the use of new technology without considering cheaper, equally effective alternatives leads to inefficient spending. This Note focuses on proton beam therapy (“PBT”) for treatment of prostate cancer to explore several causes that contribute to high health care spending in the U.S. In treating prostate cancer, PBT has not been shown to be more effective than its cheaper alternative, IMRT. Yet, investors and many states continue to encourage its use for prostate cancer. This Note argues that inefficient use of PBT increased because existing standard for review of new health care technology and its reimbursement often suggest new health care technology will be reimbursed at a prime rate. Hence, private investors fueled the development of PBT Centers indiscriminately, expecting a high return on their investment. Then, this Note proposes several ways to encourage a more efficient use of PBT. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 369

Any Safe Harbor in a Storm: SESTA-FOSTA and the Future of § 230 of the Communications Decency Act

By: Charles Matula Section 230 of the Communications Decency Act not only allows the internet to flourish by shielding web platforms from liability for user-created content but also lets these companies off the hook for facilitating crime. SESTA-FOSTA, designed by legislators to target internet sex traffickers, attempts to chip away at this liability shield in order to maintain some form of accountability. This Note discusses this law, its motivations, and its implications for freedom of speech on the internet. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 353

A Copy of a Copy of a Copy: Internet Mimesis and the Copyrightability of Memes

By: Elena Elmerinda Scialabba Memes have become a staple of Internet culture. They provide a crucial form of cultural interchange by allowing billions to communicate and commiserate about all facets of life through the sharing of amusing and relatable phenomena. However, many memes are created from copyrighted images, making it unclear whether their use constitutes copyright infringement actionable by the original copyright owners. This Note considers memes in the context of U.S. copyright law and proposes that memes could be protected against copyright infringement by the fair use doctrine, which excuses infringement if the would-be infringer’s use is socially desirable and aligned with the basic aims of copyright law. To illustrate this, this Note analyzes the “typical meme” through a thorough examination of the four statutory factors of fair use. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 332

Autonomous Systems as Legal Agents: Directly by the Recognition of Personhood or Indirectly by the Alchemy of Algorithmic Entities

By: Dalton Powell At its core, agency law governs fiduciary relationships between two distinct parties (the principal and agent) in interactions with third parties. The three separate relationships within agency (principal-agent, agent-third party, and principal-third party) create binding legal rights and obligations. To be a principal or agent, one must be a person. The Restatement (Third) of Agency’s definition of person attempts to distinguish legally recognized persons from purely organizational entities and mere instrumentalities. The emergence of AI computing, and the ongoing development of truly autonomous computer systems, will test traditional agency law with questions like who or what can be a person. At present, the Restatement views computer programs as mere instrumentalities of the using person and thus not a separate person capable of being a principal or agent. This Note will analyze the tension created within agency law’s definition of personhood by the existence of autonomous systems. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 306

Opting Out: Biometric Information Privacy and Standing

By: Michelle Jackson Biometric technology promises to reshape the modern economy. With the increased prevalence of biometric technology comes a heightened risk of data breaches and identity theft. To protect consumers, state legislatures have enacted biometric privacy laws. As more state legislatures define the intangible harm of data misuse, some federal courts have restricted what constitutes an injury sufficient to create Article III standing. This analysis misapplies Spokeo and undermines legislative efforts to protect individual privacy. Because of the important interests at stake with biometric information privacy, federal courts should follow the Ninth Circuit and recognize the misuse of that data as a sufficient injury to constitute standing. Consumers usually cannot opt out of new biometric technologies implemented at airport gates, shopping centers, and workplaces. The federal courts also should not use standing doctrines to opt out of the intangible harms characterizing the information age. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 293

Measuring Baseball’s Heartbeat: The Hidden Harms of Wearable Technology to Professional Ballplayers

By: John A. Balletta After two-and-a-half decades of labor peace in Major League Baseball, storm clouds of a player strike are brewing as the operating Competitive Bargaining Agreement comes under fire. That same CBA includes Attachment 56, the most expansive allowance of wearable technology of the four major American professional sports. While the privacy of the athletes’ data might be the foremost concern under Attachment 56, there are a myriad of untapped arenas involving the use and dissemination of data from wearables, including issues in good-faith contracting and contract and trade negotiations. After situating the wearables provisions in the context of the CBA and describing the approved technologies, this Note will identify three infrequently discussed problems in Attachment 56 before positing ways around these concerns. Download Full Article (PDF) Cite: 18 Duke L. & Tech. Rev. 268