Minding Your Business

Proskauer’s perspective on developments and trends in commercial litigation.

From Cryptic to (Some) Clarity: English Law and Policy Rising to the Challenge of Cryptoassets (Part 3)

In the first two instalments of our series we examined the progress of English law to provide a secure and certain legal infrastructure for cryptoasset investment and management. In particular, we looked at how recent English case law has addressed the following questions:

(1) Are cryptoassets property and (2) Can cryptoassets be held on trust? (see Part 1 here)  (3) Where are cryptoassets located for the purposes of securing jurisdiction over claims and remedies? (see Part 2 here).

In this third (and final) part of the series, we preview potential legal initiatives which are designed to continue building the legal infrastructure for digital assets in the UK, including initiatives such as the UK Law Commission’s Digital Assets Project and the UK Jurisdictional Taskforce’s (UKJT) Digital Dispute Resolution Rules. Read the third part of the series on our Blockchain and the Law blog.

Price Gouging Updates: Federal Price Gouging Legislation; Addressing Infant Formula Shortages; Resolution of Online Merchants Guild

Two federal price gouging bills were recently introduced in Congress. Senator Elizabeth Warren led the introduction of the Price Gouging Prevention Act of 2022. The bill prohibits “unconscionably excessive price[s]” at any point in a supply chain or distribution network during an “exceptional market shock” triggered by a range of events – including public health emergencies. The law would apply to any good or service offered in commerce, and would authorize the Federal Trade Commission and State Attorneys General to enforce the prohibition.  Additionally, during “exceptional market shocks,” the law would require public companies to disclose and explain changes in pricing and gross margins in quarterly SEC filings—raising the specter of SEC enforcement with respect to those disclosures.

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The Sound of “Silent Attorneys”: DOJ Alleges Google Fakes Attorney-Client Privilege by CCing Lawyers Who Never Respond

If a request for legal advice goes unanswered, is it really a request for legal advice?  According to the U.S. Department of Justice and several state attorneys general (“DOJ Plaintiffs”) in an antitrust action against Google, United States, et. al. v. Google, in the U.S. District Court for the District of Columbia, the answer to this question should be “no,” at least where the unanswered request for legal advice is part of an internal company practice intended to conceal sensitive, non-privileged documents from discovery.

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From Cryptic to (Some) Clarity: English Law and Policy Rising to the Challenge of Cryptoassets (Part 2)

In the first part of this series of articles, we examined the progress of English law to shape and build an infrastructure to support the development of a secure and certain environment for investment in digital assets. We considered how recent English case law has addressed the questions of whether cryptoassets are property, and whether they can be held on trust.

In this second instalment, we review jurisdictional issues relating to digital assets. Read the second part of the series on our Blockchain and the Law blog.

From Ireland to Iceland to Groban? Supreme Court Leaves in Place Circuit Split Regarding Approach for Assessing Substantial Similarity in Copyrighted Works

The United States Supreme Court recently denied certiorari in Johannsongs-Publishing, Ltd. v. Peermusic Ltd., et al, bringing an end to a copyright infringement suit relating to Josh Groban’s 2003 song You Raise Me Up. Notably, in declining to hear a challenge to the Ninth Circuit’s ruling that Groban’s song did not constitute infringement, the Court left in place a circuit split as to the applicable test for assessing substantial similarity between two works of authorship.

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Changes to Rule 702 Cement Judge’s Role as Gatekeeper for Expert Testimony

A proposed amendment to Federal Rule of Evidence 702, which governs the admissibility of expert testimony in federal court, could clarify the evidentiary burden on proponents of expert testimony and a court’s role regarding its admissibility. Motions under Rule 702, frequently called Daubert motions after the Supreme Court’s opinion Daubert v. Merrell Dow Pharmaceuticals Inc., are used to limit or otherwise exclude an expert’s testimony to a jury. These motions are often critical to a case’s success, especially in fields that rely heavily on experts such as antitrust, product liability, toxic torts, and environmental litigation. An amendment to Rule 702 currently under consideration looks to clarify the proper evidentiary standard for such motions.

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From Cryptic to (Some) Clarity: English Law and Policy Rising to the Challenge of Cryptoassets (Part 1)

Sir Geoffrey Vos, the Master of the Rolls, wants English law to be at the forefront of developments relating to cryptoassets and smart contracts. In his thought-provoking foreword to the government-backed UK Jurisdictional Taskforce’s (UKJT) Legal Statement on Cryptoassets and Smart Contracts, he explained that English law should aim to provide “much needed market confidence, legal certainty and predictability in areas that are of great importance to the technological and legal communities and to the global financial services industry” as well as to “demonstrate the ability of the common law in general, and English law in particular, to respond consistently and flexibly to new commercial mechanisms.” He returned to the same theme in a speech on 24 February 2022 at the launch of the Smarter Contracts report by the UKJT in which he said “[m]y hope is that English law will prove to be the law of choice for borderless blockchain technology as its take up grows exponentially in the months and years to come”.

The law defines whether and how an owner can find and recover a stolen asset, whether a contract about an asset can be enforced and whether rights are owed between parties in relation to an asset.  English law has traditionally been very flexible in fashioning remedies to uphold contracts and to allow parties to preserve and follow (trace) assets – by interim protective relief in the form of injunctions, disclosure orders against third parties (Banker’s Trust orders), by recognising trusts over assets and by the English Courts accepting jurisdiction over claims in the first place.  If English law allows owners of cryptoassets to access these remedies, it should provide the “market confidence, legal certainty and predictability” described by Sir Geoffrey Vos.

In this article, we explore the extent to which recent developments in English law have furthered these objectives and address in turn:

  • Are cryptoassets property?
  • Can cryptoassets be held on trust?

Read the first part of the series on our Blockchain and the Law blog.

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