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NCLC Tells FCC “Callers can easily avoid making calls to telephone numbers that have been reassigned….” – But Is it That Simple?

The National Consumer Law Center is at it again.

In response to the Department of Health and Human Services’ recent letter to the FCC seeking clarity on whether the TCPA applies to texts it would like to make to alert Americans of certain medical benefits, the NCLC–an organization that nominally represents consumers, but really seems to represent the interests of the plaintiff’s bar–has filed a comment.

Unsurprisingly, the NCLC takes the position that HHS needs no relief. Government contractors are covered by the TCPA–it says–but the texts at issue in HHS’ letter are consented, so they’re fine. (Although it later clarifies that only “many” but not “all” of the enrollees whom HHS wishes to call have “probably” given their telephone numbers as part of written enrollment agreements–so perhaps not.)

Hmmmm. Feels like a trap. But we’ll ignore that for now.

The critical piece here though is what the NCLC–very powerful voice, for better or (often) worse–is telling the FCC about the effectiveness of the new Reassigned Number Database:

3. Callers can easily avoid making calls to telephone numbers that have been reassigned to someone other than the enrollee

A primary source of TCPA litigation risk has been calls inadvertently made to numbers that are no longer assigned to the person who provided consent. Courts have held the caller liable for making automated calls to a cell phone number that has been reassigned to someone other than the person who provided consent to be called.29

The Commission has implemented the Reassigned Number Database specifically to address that risk of liability, as well as to limit the number of unwanted robocalls:

The FCC’s Reassigned Numbers Database (RND) is designed to prevent a consumer from getting unwanted calls intended for someone who previously held their phone number. Callers can use the database to determine whether a telephone number may have been reassigned so they can avoid calling consumers who do not want to receive the calls. Callers that use the database can also reduce their potential Telephone Consumer Protection Act (TCPA) liability by avoiding inadvertent calls to consumers who have not given consent for the call.31

The database has been fully operational since November 1, 2021. It provides a means for callers to find out before making a call if the phone number has been reassigned. If the database wrongly indicates that the number has not been reassigned, so long as the caller has used the database correctly, no TCPA liability will apply for reaching the wrong party. 32 Thus, as long as HHS’s callers make use of this simple, readily available database, they can be confident that they will not be held liable for making calls to reassigned numbers.

While I steadfastly support both the creation and use of the RND, it also must be observed that there are myriad problems with the RND as it currently exists. Most importantly, the data sets in the RND are only comprehensive through October 1, 2021 and spotty back to February, 2021 (beyond which there are no records!)

So for folks like HHS–and servicers of mortgages, and retailers, and credit card companies–who want to reach customers who provided their contact information before 10/2021 or 2/2021 the RND is simply not helpful.

The NCLC’s over simplification of a critical issue is not surprising. They once told Congress that the TCPA is “Straightforward and Clear” after all.

Full comment here: NCLC Comments-c3

We’ll keep an eye on developments on HHS’ letter and all the FCC goings ons.

Article By Eric J. Troutman of Troutman Firm

For more TCPA and communications legal news, click here to visit the National Law Review.

Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Implementing Effective Data Security

Autonomous vehicles can be vulnerable to cyber attacks, including those with malicious intent. Identifying an appropriate framework with policies and procedures will help mitigate the risk of a potential attack.

The National Highway Traffic Safety Administration (NHTSA) recommends a layered approach to reduce the likelihood of an attack’s success and mitigate ramifications if one does occur. NHTSA’s Cybersecurity Framework is structured around the five principles of identify, protect, detect, respond and recover, and can be used as a basis for developing comprehensive data security policies.

NHTSA goes on to describe how this approach “at the vehicle level” includes:

Protective/Preventive Measures and Techniques: These measures, such as isolation of safety-critical control systems networks or encryption, implement hardware and software solutions that lower the likelihood of a successful hack and diminish the potential impact of a successful hack.
Real-time Intrusion (Hacking) Detection Measures: These measures continually monitor signatures of potential intrusions in the electronic system architecture.
Real-time Response Methods: These measures mitigate the potential adverse effects of a successful hack, preserving the driver’s ability to control the vehicle.
Assessment of Solutions: This [analysis] involves methods such as information sharing and analysis of a hack by affected parties, development of a fix, and dissemination of the fix to all relevant stakeholders (such as through an ISAC). This layer ensures that once a potential vulnerability or a hacking technique is identified, information about the issue and potential solutions are quickly shared with other stakeholders.

Other industry associations are also weighing in on best practices, including the Automotive Information Sharing and Analysis Center’s (Auto-ISAC) seven Key Cybersecurity Functions and, from a technology development perspective, SAE International’s J3061, a Cybersecurity Guidebook for Cyber-Physical Vehicle Systems to help AV companies “[minimize] the exploitation of vulnerabilities that can lead to losses, such as financial, operational, privacy, and safety.”

Article By Adam J. Brody, John J. Rolecki, Jeffrey M. Stefan II, Andrea M. Gumushian, and Justin M. Wolber at Varnum LLP

For more transportation legal news, click here to visit the National Law Review.

The Metaverse: A Legal Primer for the Hospitality Industry

The metaverse, regarded by many as the next frontier in digital commerce, does not, on its surface, appear to offer many benefits to an industry with a core mission of providing a physical space for guests to use and occupy. However, there are many opportunities that the metaverse may offer to owners, operators, licensors, managers, and other participants in the hospitality industry that should not be ignored.

What is the Metaverse?

The metaverse is a term used to describe a digital space that allows social interactions, frequently through use of a digital avatar by the user. Built largely using decentralized, blockchain technology instead of centralized servers, the metaverse consists of immersive, three-dimensional experiences, persistent and traceable digital assets, and a strong social component. The metaverse is still in its infancy, so many of the uses for the metaverse remain aspirational; however, metaverse platforms have already seen a great deal of activity and commerce. Meanwhile, technology companies are working to produce the next-generation consumer electronics that they hope will make the metaverse a more common location for commerce.

The Business Case for the Hospitality Industry

The hospitality industry may find the metaverse useful in enhancing marketing and guest experiences.

Immersive virtual tours of hotel properties and the surrounding area may allow potential customers to explore all aspects of the property and its surroundings before booking. Operators may also add additional booking options or promotions within the virtual tour to increase exposure to customers.

Creating hybrid, in-person and remote events, such as conferences, weddings, or other celebrations, is also possible through the metaverse. This would allow guests on-site to interact with those who are not physically present at the property for an integrated experience and possible additional revenue streams.

Significantly, numerous outlets have identified the metaverse as one of the top emerging trends in technology. As its popularity grows, the metaverse will become an important location for the hospitality industry to interact with and market to its customer base.

Legal Issues to Consider

Select the right platform for you. There are multiple metaverse platforms, and they all have tradeoffs. Some, including Roblox and Fortnite, offer access to more consumers but generally give businesses less control over content within the programs. Others, such as Decentraland and the Sandbox, provide businesses with greater control but smaller audiences and higher barriers to entry. Each business should consider who its target audience is, what platform will be best to reach that audience, and its long term metaverse strategy before committing to a particular platform.
Register your IP. Businesses should consider filing trademark applications covering core metaverse goods or services and securing any available blockchain domains, which can be used to facilitate metaverse payments and to direct users to blockchain content, such as websites and decentralized applications. Given the accelerating adoption of blockchain domains along with limited dispute resolution recourse available, we strongly encourage businesses to consider securing intellectual property rights now.
Establish a dedicated legal entity. Businesses may want to consider setting up a new subsidiary or affiliate to hold digital assets, shield other parts of their business from metaverse-related liability, and isolate the potential tax consequences.
Take custody of digital assets. Because of their digital character, digital assets such as cryptocurrency, which may be the primary method of payment in the metaverse, are uniquely vulnerable to loss and theft. Before acquiring cryptocurrency, businesses will need to set up a secure blockchain wallet and adopt appropriate access and security controls.
Protect and enforce your IP. The decentralized nature of the metaverse poses a significant challenge to businesses and intellectual property owners. Avenues for enforcing intellectual property rights in the metaverse are constantly evolving and may require multiple tools to stop third-party infringements.
Reserve metaverse rights. Each Business that licenses its IP, particularly those that do so on a geographic or territorial basis, should review existing license agreements to determine what rights, if any, its licensees have for metaverse-related uses. Moving forward, each brand owner is encouraged to expressly reserve rights for metaverse-related uses and exercise caution before authorizing any third party to deploy IP to the metaverse on a business’ behalf.
Tax matters. Attention needs to be paid to how the tax law applies to metaverse transactions, despite the current tax law not fully addressing the metaverse. This is particularly the case for state and local sales and use, communications, and hotel taxes.

Ready to Enter?

As we move into the future, the metaverse appears poised to provide a tremendous opportunity for the hospitality industry to connect directly with consumers in an interactive way that was until recently considered science fiction. But like every new frontier, technological or otherwise, there are legal and regulatory hurdles to consider and overcome.

Article By Charles B. Ferguson, Jr. and Kimberly A. Wachen of ArentFox Schiff LLP

For more technology legal news, click here to visit the National Law Review.

Comparing and Contrasting the State Laws: Does Pseudonymized Data Exempt Organizations from Complying with Privacy Rights?

Some organizations are confused as to the impact that pseudonymization has (or does not have) on a privacy compliance program. That confusion largely stems from ambiguity concerning how the term fits into the larger scheme of modern data privacy statutes. For example, aside from the definition, the CCPA only refers to “pseudonymized” on one occasion – within the definition of “research” the CCPA implies that personal information collected by a business should be “pseudonymized and deidentified” or “deidentified and in the aggregate.”[1] The conjunctive reference to research being both pseudonymized “and” deidentified raises the question whether the CCPA lends any independent meaning to the term “pseudonymized.” Specifically, the CCPA assigns a higher threshold of anonymization to the term “deidentified.” As a result, if data is already deidentified it is not clear what additional processing or set of operations is expected to pseudonymize the data. The net result is that while the CCPA introduced the term “pseudonymization” into the American legal lexicon, it did not give it any significant legal effect or status.

Unlike the CCPA, the pseudonymization of data does impact compliance obligations under the data privacy statutes of Virginia, Colorado, and Utah. As the chart below indicates, those statutes do not require that organizations apply access or deletion rights to pseudonymized data, but do imply that other rights (e.g., opt out of sale) do apply to such data. Ambiguity remains as to what impact pseudonymized data has on rights that are not exempted, such as the right to opt out of the sale of personal information. For example, while Virginia does not require an organization to re-identify pseudonymized data, it is unclear how an organization could opt a consumer out of having their pseudonymized data sold without reidentification.

ENDNOTES

[1] Cal. Civ. Code § 1798.140(ab)(2) (West 2021). It should be noted that the reference to pseudonymizing and deidentifying personal information is found within the definition of the word “Research,” as such it is unclear whether the CCPA was attempting to indicate that personal information will not be considered research unless it has been pseudonymized and deidentified, or whether the CCPA is mandating that companies that conduct research must pseudonymize and deidentify. Given that the reference is found within the definition section of the CCPA, the former interpretation seems the most likely intent of the legislature.

[2] The GDPR does not expressly define the term “sale,” nor does it ascribe particular obligations to companies that sell personal information. Selling, however, is implicitly governed by the GDPR as any transfer of personal information from one controller to a second controller would be considered a processing activity for which a lawful purpose would be required pursuant to GDPR Article 6.

[3] Va. Code 59.1-577(B) (2022).

[4] Utah Code Ann. 13-61-303(1)(a) (2022).

[5] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[6] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[7] Utah Code Ann. 13-61-303(1)(c) (exempting compliance with Utah Code Ann. 13-61-202(1) through (3)).

[8] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[9] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[10] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[11] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[12] Utah Code Ann. 13-61-303(1)(c) (exempting compliance with Utah Code Ann. 13-61-202(1) through (3)).

[13] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-574).

[14] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-574).

Article By David A. Zetoony of Greenberg Traurig, LLP

For more data privacy and cybersecurity legal news, click here to visit the National Law Review.

Alabama Enacts New Telemedicine Law

Alabama Governor Kay Ivey recently signed SB 272 into law, setting forth telemedicine practice standards and abolishing Alabama’s previous “special purpose license” that allowed physicians licensed in other states to practice across state lines into Alabama. The law is effective July 11, 2022.

The law creates a new article in the Code of Alabama (Sections 34-24-701 through 34-24-707 of Chapter 24, Title 34). The statutory language is lengthy, but the key provisions are summarized below.

Medical License

Unless the physician meets an exception to licensure (e.g., peer-to-peer consultations, irregular or infrequent services), a physician must obtain either a full Alabama medical license or a license via the Interstate Medical Licensure Compact in order to provide “telehealth medical services” to a patient located in Alabama.

Telehealth medical services means “[d]igital health, telehealth, telemedicine, and the applicable technologies and devices used in the delivery of telehealth. The term does not include incidental communications between a patient and a physician.
The term “irregular or infrequent” services refers to “telehealth medical services” occurring less than 10 days in a calendar year or involving fewer than 10 patients in a calendar year.

Defined Terms and Allowable Modalities

Telehealth is defined as “[t]he use of electronic and telecommunications technologies, including devices used for digital health, asynchronous and synchronous communications, or other methods, to support a range of medical care and public health services.”
Telemedicine is defined as “[a] form of telehealth referring to the provision of medical services by a physician at a distant site to a patient at an originating site via asynchronous or synchronous communications, or other devices that may adequately facilitate and support the appropriate delivery of care.” The term includes digital health, but does not include incidental communications between a patient and a physician.
Digital Health is defined as “[t]he delivery of health care services, patient education communications, or public health information via software applications, consumer devices, or other digital media.”
Asynchronous is defined as “[t]he electronic exchange of health care documents, images, and information that does not occur in real time, including, but not limited to, the collection and transmission of medical records, clinical data, or laboratory results.”
Synchronous is defined as “[t]he real-time exchange of medical information or provision of care between a patient and a physician via audio/visual technologies, audio only technologies, or other means.”

Physician-Patient Relationship

A physician-patient relationship may be formed via telehealth without a prior in-person exam.

Telemedicine Prescribing of Medications and Controlled Substances

A practitioner may prescribe a legend drug, medical supplies, or a controlled substance to a patient via telehealth. However, a prescription for a controlled substance may only be issued if:

The telehealth visit includes synchronous audio or audio-visual communication using HIPAA compliant equipment;
The practitioner has had at least one in-person encounter with the patient within the preceding 12 months; and
The practitioner has established a legitimate medical purpose for issuing the prescription within the preceding 12 months.

In-Person Visit for Unresolved Medical Condition

If a physician or practice group provides telehealth medical services more than 4 times in a 12-month period to the same patient for the same medical condition without resolution, the physician must either see the patient in-person within 12 months or refer the patient to a physician who can provide the in-person care within 12 months. This in-person visit requirement does not apply to the provision of mental health services.

The Alabama Board of Medical Examiners and the Alabama Medical Licensure Commission are currently developing administrative rules in accordance with the new law.

Article By Kristen A. Murphy and Jacqueline N. Acosta of Foley & Lardner LLP

For more health law legal news, click here to visit the National Law Review.

ARPA-E: Biden’s Proposed FY 2023 Budget Boosts Investment in Clean Energy Technologies

On March 28, 2022, the Biden-Harris Administration sent the President’s Budget for Fiscal Year (FY) 2023 to the United States Congress (“Congress”). The President’s proposed $5.8 trillion budget for FY 2023 allocates billions of dollars toward combating climate change and boosting clean energy development. Biden’s budget requests $48.2 billion for the Department of Energy (“DOE”), with $700 million of those funds allocated to the DOE’s Advanced Research Projects Agency-Energy program (“ARPA-E”).[1] With these increased funds, the Biden administration plans for ARPA-E to expand its scope beyond energy technology–focused projects to include climate adaptation and resilience innovations.[2]

What Is ARPA-E?

ARPA-E is a United States federal government agency under the purview of the Department of Energy that funds and promotes the research and development of advanced energy technologies. ARPA-E was recommended to Congress in the 2005 National Academies report Rising Above the Gathering Storm: Energizing and Employing America for a Bright Economic Future, which published recommendations for federal government actions to maintain and expand U.S. competitiveness.[3] In 2007, ARPA-E was officially created after Congress implemented a number of the report’s recommendations by enacting the America COMPETES Act.[4] The 2007 Act was superseded by the America COMPETES Reauthorization Act of 2010, which incorporated much of the original language of the 2007 Act but made some modifications to ARPA-E structure.[5] In 2009, ARPA-E officially commenced operations after receiving its first appropriated funds through the American Recovery and Reinvestment Act of 2009 —$400 million to fund the establishment of ARPA-E.[6]

ARPA-E’s mission is statutorily defined as overcoming “the long-term and high-risk technology barriers in the development of energy technologies.”[7] This involves the development of energy technologies that will achieve various goals, including the reduction of fossil fuel imports, the reduction of energy-related emissions, improvements in energy efficiency, and increased resilience and security of energy infrastructure.[8] The statute directs ARPA-E to pursue these objectives through particular means:

Identifying and promoting revolutionary advances in fundamental and applied sciences;
Translating scientific discoveries and cutting-edge inventions into technological innovations; and
Accelerating transformational technological advances in areas industry is unlikely to undertake because of technical and financial uncertainty.[9]

The Impact of ARPA-E

Since 2009, ARPA-E has provided approximately $3 billion in R&D funding for over 1,294 potentially transformational energy technology projects.[10] Publishing annual reports to analyze and catalog its influence, the agency tracks commercial impact with key early indicators, including private-sector follow-on funding, new company formation, partnership with other government agencies, publications, inventions, and patents.[11]

Many ARPA-E project teams have continued to advance their technologies: 129 new companies have been formed, 285 licenses have been issued, 268 teams have partnered with another government agency, and 185 teams have together raised over $9.87 billion in private-sector follow-on funding.[12] In addition, ARPA-E projects fostered technological innovation and advanced scientific knowledge, as evidenced by the 5,497 peer-reviewed journal articles and 829 patents issued by the U.S. Patent and Trademark Office that sprung from the ARPA-E program.[13] ARPA-E recently announced that it is starting to count exits through public listings, mergers, and acquisitions. As of January 2022, ARPA-E has 20 exits with a total reported value of $21.6 billion.[14]

How Does Biden’s FY 2023 Budget Affect ARPA-E?

Biden has requested a 56% increase for ARPA-E, to $700 million.[15] The budget also proposes expansions of ARPA-E’s purview to more fully address innovation gaps around adaptation, mitigation, and resilience to the impacts of climate change.[16] This investment in research and development of high-potential and high-impact technologies aims to help remove technological barriers to advance energy and environmental missions.[17]

The request provides that ARPA-E shall also expand its scope “to invest in climate-related innovations necessary to achieve net zero climate-inducing emissions by 2050.”[18] Given the increasing bipartisan support for alternative energy funding and ARPA-E’s continuing and rising commercial impact, it is likely that ARPA-E’s funding and support of the research and development of early-stage energy technologies will continue to pave the way for the commercialization of advanced energy technologies.

Endnotes

https://www.law360.com/articles/1478133/biden-budget-provides-billions-for-clean-energy
https://www.energy.gov/articles/statement-energy-secretary-granholm-president-bidens-doe-fiscal-year-2023-budget
https://doi.org/10.17226/24778
Id. at 22
Id.
Id.
42 U.S.C. § 16538(b)
42 U.S.C. § 16538(c)(1)(A)
42 U.S.C. § 16538(c)(2)
https://arpa-e.energy.gov/about/our-impact
Id.
Id.
Id.
Id.
https://www.science.org/content/article/biden-s-2023-budget-request-science-aims-high-again
https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf
Id.
https://www.science.org/content/article/biden-s-2023-budget-request-science-aims-high-again

Article By Kaoru C. Suzuki of Mintz

For more environmental legal news, click here to visit the National Law Review.

Episode 2: The Importance of Data in Legal Business and Legal Marketing with Laura Leopard of Leopard Solutions [PODCAST]

Rachel and Jessica speak with Laura Leopard, the Founder and CEO of Leopard Solutions: a service that provides law firms with data to improve hiring and marketing for the business of law.

Be sure to take the Women Leaving Law Survey HERE and sign-up for the Women Leaving Law webinar on June 2, 2022 to hear the results of their survey.

We’ve included a transcript of our conversation below, transcribed by artificial intelligence. The transcript has been lightly edited for style, clarity, and readability.

INTRO 00:00

Well, hello, and welcome to Legal News Reach the official podcast for the National Law Review. Stay tuned for a discussion on the latest trends, illegal marketing, SEO, law firm best practices, and more.

Rachel 00:15

My name is Rachel,

Jessica 00:16

And my name is Jessica.

Rachel 00:18

And we’re the co-hosts for the podcast. Today we’re speaking with Laura Leopard Founder and CEO of Leopard Solutions. Laura, would you like to tell our listeners a little bit about yourself and your organization?

Laura Leopard 00:28

Of course, of course, we are a legal intelligence company that monitors law firms and attorneys. And we have been doing it for nearly 20 years. And we have grown from a simple attorney list to a detailed current and historical account of attorneys and their movements. And of course, we now offer competitive and business intelligence for law firms and the market in general. And I have been at the helm for nearly 20 years.

Rachel 01:02

We’re excited to get your insight into some of those more data-driven trends here in the industry. So the first thing that we want to focus on is the importance of data and legal marketing and legal business. One of the things that I hear pretty often is that law firms are data-rich and information poor. So can you explain a little bit about why that is and how law firms can solve for that problem?

Laura Leopard 01:26

Well, I think that was more generally true in the past. But today, many law firms are correcting that issue, because they’re hiring intelligence professionals to come in and help them mind and understand their own data. The other side of the coin is gathering external data on their competitors so that they can benchmark their own shortcomings and successes properly. And that’s where we come in. We measure law firms across the board, and we deliver those benchmarks that they need. Well, several years ago now, we had prepared a detailed report on a law firm and the top 200, about their ROI on lateral hiring and entry-level hiring. And we showed it to you know, prospective law firm. And we offered to write one for their firm, and then also a list of their competitors, you know, of their choice. And their response was, “this is very interesting, but I’m not sure what we could do with it.” And it just proved to me at that time that firms and leopard both needed to do a better job of explaining the value of the data, and how it could be used. So we developed firm scape, which is our competitive intelligence platform. And it’s filled with great data. And people were very excited to see it. But then again, only people who could readily understand what it offered, really benefited from it in really meaningful ways. So when we wrote our Business Intelligence platform, we wanted to just carefully lay out what everything meant, in clear, concise terms, so that meaningful measurement would be readily understood. You know, everyone gets very excited about data. You know, “big data, big data, data-data-data.” But not everybody understands the application of that data, what that data could mean. And that’s where we have hoped to sort of democratize data in a sense of laying it out in a way that anybody can understand it, not just data people.

Rachel 03:36

Yeah, I think just being empowered to look at it is also really great. Because I think some people can get a little intimidated by data like, “Oh, it’s just a lot of numbers,” like what the numbers mean. So one of the trends that we’ve seen, and that we’ve talked about recently is women leaving the legal industry and what that means for the profession. We published a Q&A that you did with Stefanie Marrone, about this topic. We’ve had her on the podcast before; I was curious if you could dive into this trend and talk about why this is happening and how law firms can respond to it?

Laura Leopard 04:07

So we did a survey, and it’s still in progress. We’ve had about 170 responses so far. And I have to tell you, it was incredibly depressing to read the comments and the answers that they had about why they left their top 200 law firm. And a lot of it was much of what you might suspect, you know, lack of opportunity, lack of mentorship, a feeling of not being included, you know, in the group and just really lack of opportunity stood out, you know, a great deal. So we decided, well, we can’t just we can’t just, you know, do a report. We’re gonna do a presentation in May about this at the Art conference. We really wanted to dig in deeper. So we’ve been doing interviews with women who have succeeded in the top 200 Who are partners at their firm, and they’re leading women’s initiatives, and they’re doing some really great things. And we’re learning a lot in the whole process, I didn’t want to just say, here’s a big problem, you should fix it. It’s like, Here are ideas about how you can fix it. And here are examples of where those ideas are actually succeeding in top 200 law firms. But I think the really important thing that we took away after reading a lot of this was these same problems exist for attorneys who are also underrepresented, and from who are ethnically diverse. And there are also, you know, white men at the firms that have issues because they have a family members who is ill, and they have to step away. And there’s lots of there’s, there’s lots of problems here. But there are ways to fix them. And that’s what we’re working on. Right now. We are doing some great interviews, we’re coming away with some really positive ideas. And we have some firms that are really doing some great work. And we want to share that with everyone. This is not a problem that cannot be fixed. This is a problem that can be fixed, if one wishes to fix it, and everyone is determined to see it through. And for us, it’s really important to talk about this topic, we are a woman-owned business. I’m a woman entrepreneur, we have all experienced, you know, sexism, we have all experienced some lack of opportunity in our lives. And this is really important for us to start this conversation again, or remind people this conversation needs to be ongoing and continuing. So after our presentation, we’re going to we’re going to do a webinar at leopard, we’re going to invite some great folks to speak at that webinar, we’re also going to do a full white paper. But this is one of one of something that’s really, really important to us. And I really hope it can open a lot of eyes and help move the needle to helping women succeed in those top 200 firms and in law in general.

Rachel 07:13

We talked on the show before about how COVID has sort of given people the opportunity to make change that their law firm their ongoing, I think, you know, we did speak in the past year about how COVID did push women out of the workplace. But like, I think moving forward past that and not using that as like an excuse to go back to the way things were and to make long-lasting change, I think is really important. So I was curious if you could share maybe some of the solutions that you know, law firms could implement to help remedy this problem, or if that’s something that will come later with with your white paper and after your presentation?

Laura Leopard 07:48

You know, having a strong mentorship program is really important. And you can have assigned mentors, but you also have those sort of like those volunteer mentors on the side. And not just not just women mentoring women, but men also being mentors to women. The same problem exists for those who are ethnically diverse, if you have a program in place, or everyone is assigned a mentor, then you’re you’re going to help them overcome that hurdle, flex time paternity and maternity leave and not just saying we offer maternity leave, but by saying we encourage you to take maternity leave, right? If as many men took maternity leave, as women take maternity leave, it sort of removes that stigma from a woman having to take that time off, there are some really concrete things that can be done that can make a huge difference. And, you know, the women did not just leave these firms due to COVID. They left because it became untenable to stay for many different reasons. And a lot of it had to do with flexibility on the job, right? Yes, they were. Some of them were home with children. But a lot of people that answered this survey didn’t have children at home. But this entire pandemic caused people to think differently about their lives and their situations. Women are not alone in feeling this way. Right. So there are lots of young people now that are coming, you know, coming into law firms that are saying, I don’t I don’t want to work 80 hours a week. I like being home. I like having time to myself, that’s important to me. And the pandemic showed a lot of people how important that other part of your life is, right? It’s it’s a big bargain to make when you say I’m gonna work this hard for this long and I’m gonna make partner but some of the people that responded to our survey says, here’s here’s a here’s a newsflash when you make partner, that doesn’t get any better. If anything, it gets worse. worse, there are more responsibilities on top of you, you have to continue to work those crazy hours. And you have to do business development and you have administrative duties. And and and so if you are questioning, you know if this is the lifestyle for you. And I actually did have someone say that. So if you really care about having a lifestyle with your family and friends that may be this, this choice isn’t for you, I’m gonna flip it back on its head and say, Do you really want well rounded, happy, well adjusted people working for you, somebody that’s working 80 hours a week is not going to fit that bill, right? Because that’s all they do. That’s their single focus. And they’re going to burn out, and they’re going to leave you just when you need them. So taking a more holistic view, and saying, you know, and this was this was a quote, I had a partner say, I was told when I, you know asked for flex time, my partner said, I would rather have you at 50% of your normal time than many of the people that work for me at 100%. Because you do the job that I need you to do. It’s it’s time that law firms start thinking about the future, things never stay exactly the same, right? The whole hierarchy of law firms that we know now was created, what 100 years ago, when men were the only people that were lawyers, and they had wives and housekeepers and stuff at all. Right? That’s not the world we live in anymore. And we’re also beginning to question, you know, all the young people coming up are questioning everything. They’re questioning authority, they’re questioning why they have to do this and why they have to do that. And when they say, this isn’t a life, that’s for me, I don’t want to be partner. What does it do to that old model? You know, you’re there, there’s going to have to be an inflection point where they start to think about what is going to happen at their firm five years from now 10 years from now, when this generational divide, you know, really takes place. And here’s another newsflash. According to our data for the last three years ago, I think entry level hiring coming out of law school was about 5050 men and women, then the women edged out the minute, then the women rose again, there are far more women in college and far more women in law school than there are men, and they are outnumbering men being hired on that entry level position. But if those women don’t stay, and if those women leave, because you are asking, you’re creating an untenable situation for them, what’s going to happen to your partner track, then what is going to happen to that wealth of knowledge that that person brought to your firm, and she’s gonna walk away with, there’s, there’s going to be a reckoning in the industry, because times have changed, and people have changed. And it’s going to be interesting to see how it plays out. But we can see by looking in the data that they’re, they’re going to be, there’s going to be some shockwaves. And as we start, at the Women’s seminar, we’re going to be, you know, measuring all kinds of exit data and comparing it, you know, one against the other. But it’s time that firms really start to have more of a forward view about what kind of law firm they’re going to be 10 years from now, because that’s really going to impact one thing they care about most. And that’s their bottom line.

Rachel 13:46

What has been the impact that you’ve seen, like this, this lack of information?

Laura Leopard 13:54

I think we all can say, you know, pretty clearly, if you are not using data to make decisions, you’re gonna pay a price for it. You know, data improves decision making, and it can help you predict, you know, competition stresses, and then by tracking industry trends, you can begin to predict future moves a little more successfully. Of course, you have to be, you have to have really, really good data, right? If you’re using bad or incomplete data to make decisions, you might as well not use it at all. So, data quality has been very central to our business. Our data is checked and rechecked and continually updated in order to offer the best possible dataset. But I think data itself should be demystified you know, to a certain extent, by making it clear why a particular dataset matters, right? firms should care about employee turnover because it costs their bottom line and I’m not just talking about a few dollars here and there. I’m talking about Millions of dollars. And firms should care about where their competitors are opening new offices because it shows possible opportunity that they didn’t see, firms should care about who their competitors hire, to see where their next focus will be. And perhaps they should look there as well. Are, is there a competitor building up a practice that competes directly with them in their city? Are they looking at your people to possibly, you know, recruit out of them? Lack of data and insight just leaves a firm operating blindly, just by their instincts and granted, instincts are great, but they can go horribly wrong. If you look in our growth decline report now, which kind of shows that winners and losers by you know, headcount, you will see firms in the bottom of that tear that you never would have guessed would be there just a few years ago, those other firms saw an opportunity that the others didn’t, and they seized it. So data can really make or break, you know, your company, relying on your gut and anecdotal data that people bring you. It’s just not effective. I, you know, law firms love to call around and ask a recruiter. So what’s hot right now? Or what’s what’s going on right now, this was one of my favorite stories. They they talked to a recruiter, the recruiter said, Oh, the Chicago market is so hot right now. It is so hot. It’s just on fire. And I look back and I looked at our data and and like, it’s, no, it’s not, there isn’t more movement, there isn’t more job openings, that one recruiter happened to be a lot busier in Chicago than anybody else. So all of that anecdotal data like that is meaningless when you can compare that against really hard, true facts. And that’s what they really need to start doing.

Jessica 17:00

Without giving away the “secret sauce” if you will, the metrics that these firms are using for hiring specifically is that, you know, the number of job openings, like you said. I mean, what are what would you say are maybe 1-2-3 of the big numbers they’re paying attention to with hiring specifically?

Laura Leopard 17:16

Well, you know, on our platform, one of one of everyone’s favorite, you know, reports is, is that growth decline report so they can see who is who is growing quickly, and adding a lot of people to their firm. You also can see firms who who are in churn, right, they lost 100 people, they hired 100, people, and firms will use that report to find firms that it might be easier to pry people away from, right. So if you have a firm, that’s negative 15, in headcount, and people are exiting that firm like crazy, well, you have an opportunity to go pick up those people there. You also can look at our lateral reports. And you can see where the hot markets are, you can slice and dice it by practice area by specialty, you know, by far by all different kinds of metrics. You even can look at, you know, gender movement, and those who are ethnically diverse, there’s lots of different ways to look at it, but it gives you a good market view. And of course, we do have, we have a job program where we are looking at over 1000 law firms every day in real time. And I’ll tell you, you know, when the pandemic happened, we normally had like six to 7000 jobs and our job program. During the pandemic, I think in like July of 2020, that number went down to about 3000. And most of them, I don’t think were really real openings. Anyway, there were openings, they just sort of left on their website. And now we have over 12,000, approaching 13,000 openings in a program. So that will just tell you the velocity, they also can. And our job program is great for CIA too, because you can go in and see how what your competitors are looking for how they’re framing that position, like right now, we know everyone’s looking for corporate m&a people, right? How are they framing that job? How can you make yours look more attractive? What can you do to you know, sort of get an edge in that market. And there’s lots of other reports that we have that can help them gain advantage. But those are probably, you know, the top the top three, just seeing what’s going on in the market.

Jessica 19:31

With all the changes in the legal industry, I think there’s a huge focus right now, not only in just data and the services you guys offer, but also diversity in the workplace. So I would love to know–I know you mentioned a little bit of it, but being able to see you said gender maybe changes are hiring, how to make it attractive to certain diverse populations of people so that you know, the law firms represent their communities, if you will. Could you explain a little bit more of that? I would love to definitely learn more.

Laura Leopard 20:00

For years, we had been asked to have diversity information in our database. But we just thought it would be incredibly hard, we weren’t sure how we wanted to do it, it was it’s it, you know, having that kind of information in the database is a little risky. To a certain extent, you have to be really careful and really think things through. Then the summer of George Floyd happened, we were in the middle of a pandemic, things were kind of crazy. But when that happened, we all you know, on our, our, you know, our little community of folks at leopard said, we have to do something, we have to do something. So we put all of our heads together. And we said, well, here’s how we might do it. And we knew about the Mansfield rule and, you know, diversity lab who are great folks. And we knew how they handled their data. And they really, were asking for data, they really wanted law firms to be able to go in and find people that were diverse in order to bring them into the hiring game. So we took a page out of their playbook, and we said, Okay, if we put diversity in our database, we’re only going to show it to people who we think are going to use it correctly. So if a law firm is a member of the Mansfield rule, they get the diversity data, we don’t charge an extra penny for any of this, we spent months doing research on every single person in the US in our database, to see if they might be ethnically diverse. And what we did was we, we went on a probability score. So if we look at where they’re from languages, they speak committees that they belong to, like we sort of look at all of their data points, then we can come back and say, Okay, we think there was a high probability, this person could be ethnically diverse. If you are a member of the Mansfield rule, you can access and you can view those attorneys. If you’re not, then you can sign the leper diversity pledge. And with that, you are promising to use that data in the correct way, which is to include not exclude, and to really look at these people, you know, in order to bring them in front of the hiring committee of a law firm, in order to move that needle. We also put safeguards in the database in place, so that those people could never be excluded from a search, they could only be included, you can only see them when you want to find them. And we did the same thing for gender. So we moved because there were other gender issues that we wanted to recognize and acknowledge. So you have a high probability of being gender diverse or low probability of being gender diverse. So now, because because we took those steps, we are also able to report on diversity, and every single law firm in our system. And that means if you are a diverse candidate, you’re going to you’re going to be able to know, you know, or a recruiter can show you or the law firm can show you what their diversity score is, in comparison to the other law firms that they may be considering. Everyone. Everyone gets a score, everyone sees you know, how well they’re doing or how poor they’re doing. And law firms can use this in their conversations with people that they want to bring in. And let them know that they are growing diversity within their firm, you can see it in the growth decline report, you can see who’s growing in ethnic diversity numbers, who’s growing in women numbers, it’s all right there for the world to see. And we use the same scoring across the board for every firm. So it’s so it’s all equal. But that was an incredibly important thing for us to do. We spent months with, you know, all hands on deck, getting this data in, and it’s something that we continue to work on all the time. You know, there are people that we have as, as we consider sort of, we don’t have enough information to go either way. Well, we continually go back to see if there’s more information that’s available about that attorney, so we can label them properly, high or low. But being able to do that also led us fold in diversity into our leopard law firm index. So we decided that the normal way that firms are assigned, you know, a grade of excellence, where those scores coming from a once a year list, you know, are really not helpful in today’s fast paced world. We have always seen firms go out of business in the top 200 of emerging they, you know, they go away, they go under, and we wanted something that was real time that would go up as the firm was improving and if the firm Um, you know, hit a bad patch than their score would also show that we have firms in the leopard top 250 that are not in the top 200. We have, we also have firms that are in the top 200 that are not in the leopard top 250 Because our scoring scoring methods are very different. And they’re really database and one of those data points is a diversity number, how well are they doing with diversity. So it is become a part of everything that we do in almost every single report. And in our last leopard law firm index, how well a firm is doing on ethnic diversity is incredibly important. And we wanted to show that by using it as many as many different ways as possible.

Jessica 25:49

I think it’s great to have so many different options of metrics, because I think casting that wide net, as far as what you’re able to keep track of for your firm, allows you to pick up any alarm bells of things that maybe aren’t going as well, like you said of, you know, growth, maybe it’s going down in this area or what have you. So I’m curious to know what some of those alarm bells would be or like red flags in the data that maybe law firms should pay attention to or could affect their business model and moving forward for their growth?

Laura Leopard 26:22

Well, I think all those items that are in that, you know, law firm index, and the score that we give because of it. So we look at metrics that really don’t change over time in the in the sense that we do look at only one little tiny piece of the financial puzzle, which is the revenue per lawyer, but it’s scored over a five year period, because that is really there just to show Oh, it’s going up, oh, it’s going down. So that is available there, and part of that index, but we also use items, the growth decline and attorney headcount, we use the average attorney tenure increases or decreases in that RPL, as I just mentioned, and the ROI, the success and lateral recruitment, and the success and entry-level recruitment. And for the index, we only look at it in the prior 12 months. Because if you are having problems retaining people, the first year they join that firm, we see that we think that is a red flag of something going on at the firm, which is why it’s in the index, we also look at promotions to partner and we look at ethnic diversity within the firm. And one reason that we do that is that companies have said over and over again, they care about ethnic diversity, and they want to work with firms that have a good ethnic diversity number, if that’s true, and if they hold their feet to the fire, then that really must be in the index. And there are other items that we’re looking to fold into that index. But those are the ones that help give that score. There are so many other things, that ROI that I talked about, like in the index, we look at the past 12 months, but you can go back and look, look three years ago, how well did you do in your hiring three years ago? How well did you do that the year before that, because we’re talking about millions of dollars that these firms are losing because they only have a 70% retention of people that they just hired two years ago. And and that is a huge red flag that they really must pay attention to. So then the question is, you know, where’s my problem? Right? So we wrote a report in the in the BI Suite, that really helps you break it down? Is it a practice area issue? Is it a particular office that has an issue, and you can benchmark your firm against your competing firms? I think sometimes when people say, Oh, we have a 80 80% retention rate, that’s pretty good. Well, it’s good until you compare it against some of your competitors who have a much higher number. And it’s also good until you realize exactly how much that attrition is costing your firm, millions and millions of dollars. You know, I’ve also I once had a recruiter and a law firm say, they really didn’t mind the attrition because it was sort of job security for them. Because they kept busy. But really, job security for them is not just it’s making sure you have a successful hire. It’s making sure that those people are happy and they’re getting what they need, is looking to see, you know who might be on the cusp of leaving. We have something in our attorney database called the probability The move, right? So we’re looking at people that have moved in the past and similar circumstances and JD, your range, practice area and all that good stuff. So you can run it on your own firm. And you can see who has a very high probability at your firm that allows you to play defense with those people and help to see if they’re getting what they need, are they happy? Do they need to look at some new kind of schedule? Are they unhappy in their practice area, and they’re not getting an opportunity to change it, there’s a lot, a lot of things that firms can do, if they start to use that data to help see where they might have a problem. And we’ve written many reports that could help them do that, again, again, even with the law firm index, it’s not about calling out oh, this is the big winner, this is the big loser, it’s like, you might have a problem. And we’re gonna help you find where your problem is, because this report will show you where you are, you know, far beneath your competitors, this is an area that you have to look at. And that’s what it’s there for is to really help them do better. And we can show them the metrics that say, this is where you should begin looking.

Rachel 31:15

We’d spoke a little bit about at the beginning of our conversation, how law firms are starting to really start to adopt this technology to integrate more data and things like that into their business. I was curious to get your thoughts on how the legal industry has changed over the course of your career in terms of how this technology has been adopted? Have you seen like a paradigm shift in the past couple of years? Or how has that been?

Laura Leopard 31:37

They certainly have changed, but it hasn’t been a change overnight, you know, law firms, both now. And then they use several different kinds of technology for several different purposes. And, you know, data was housed in silos, you know, with multiple programs used by multiple people. And today, you see firms hiring technology teams, to better integrate and manage that data. So that’s a step in the right direction. You know, I have seen firms that have very little data about their own firm, and about, you know, their own alumni. And they’re beginning to recognize that, that puts them at a disadvantage, right. So that recognition is a huge step, and getting the task of just getting all the data in a proper form, and then the right system, that’s a really big undertaking, and only the largest firms can really, you know, kind of take those steps and hiring that technology department, you know, lucky for others, we can kind of step in and provide that market data that CEI intelligence for them. And even for the firms that have, you know, their own CI department, they still need data on their competing firms to use to create that proper analysis and benchmarking. And that’s where we step in to fill that bill. But technology has been getting much, much better in in many law firms, but not all law firms, there will always be some that are sort of lagging behind.

Rachel 33:11

I wonder, you know, when is going to be the point where these people who are lagging behind will start to realize that, you know, if if you don’t change, then you die, essentially, you know, it’s because eventually just not going to be able to keep up with everyone else around you. So I think one of the technologies that in addition to data that we’ve been hearing about is the use of artificial intelligence in you know, recruiting and and other operations. I was wondering if you could speak a little bit about like your experience in using artificial intelligence and recruiting and things like that, and how it can improve those processes.

Laura Leopard 33:46

We have a product that uses AI, that sort of analyzes a possible merger, right, so it can produce possible candidates. And then when you select one, we use all of the data from all the past mergers that we’ve seen in our database, to really say, Well, this is how we think this merger would go based on attrition rates. And then we highlight all the risks points, you know, of that particular acquisition or merger. And that’s, that’s in the BI Suite. An AI for hiring is kind of tricky. So while it sounds like you know, oh, we’re going to use AI and it’s going to eliminate bias. The problem is there will be inherent bias baked in, depending upon the data set that AI is based on. And the legal industry has historically been predominantly white and male for decades. So an AI hiring system based on that data set is going to have bias unless you work to overcome it. If you’re parsing resumes and cover letters is going to need to be trained on you know, being neutral on titles and verbiage. And you know, was key words. Now we like to look at data patterns, which can prove to be, you know, maybe even more helpful than that kind of AI. You know, there’s different processes that firms do almost without thinking, you know, firms do a lot of institutional hiring. And we can show that in data and tell that story. And these are the types of data patterns that you know, I would like to see kind of shake up that hiring model, the one that, you know, may not be serving the firm as well as they thought. But an AI for hiring has always been tricky. And we’ve, we’ve explored some of this ourselves. And then at the same time, we said, Well, wait a minute, it could very well be that the best person at the firm, the one that succeeds the most is always going to be that white male partner that came on 30 years ago. So this is something that we’re working on. And we’re working to see how we could eliminate bias in that kind of report. But it’s, it’s a tricky thing. And it’s I know, a lot of companies outside of law firms have used it. And there have been a lot of issues with using AI in that process. So it’s something you have to watch very closely.

Rachel 36:17

Yeah, I think there’s this misconception that AI is just like, you know, it’s not a person. So how can it you know, make these questionable decisions. But the problem is that, like a person has to build the AI. And it has to be based off of, you know, it has to learn these things from something else. So I can see how that would be a slippery slope. So with that in mind, like do you see…Or I guess, like what technologies do you see changing these processes moving forward? What do you expect the role of technology will be like, in the future?

Laura Leopard 36:49

There are many, there are many hiring issues. And we are working now on a really cool piece of technology. To help with one of those, you know, I talked to I talked to a lot of law firm people who have to do a lot of work, before the hiring partner sits down with the candidate. Because so often that hire can be blown if that hiring partner doesn’t know what to say that I care. So much about lateral hiring is about convincing that person to join your firm. And competition right now is at an all-time high. So what sets your firm apart? You know, why would this top-notch corporate m&a attorney, choose your firm over the five others that he’s looking at, you really have to tell them and you can’t just say, Oh, we’re a great firm with great people and a great culture, you really have to say, how your firm has, you know, grown over your competitors. Let’s say you’re interviewing a woman who’s an IP associate and wants to make partner, well let her know how many women IP partners you have in your firm in relation to her current firm. And if that number isn’t as great, maybe the percentage of growth is great, right? Just convince them that your firm is the best choice by using data to confirm that back. There are always good stories that can be told with data. And we are trying to help firms uncover those and help that hiring partner convey those really positive things. And right now, you can do that. But you’d have to run several reports. And then you’d have to write the analysis and then hand it to the to the hiring partner. So we are developing a tool called the Coach’s Corner, that’s going to do just that. And it’s going to analyze the firm that seeking to hire against the firm with the attorney currently works. And it’s going to map out all the positives that we have in the data for your firm. And that is a really important part of the conversation. Right now the competition is so tight, and it’s so everything is moving so quickly, that they all need, you know, as as much help as they can to paint their firm in the right light if they’re gonna get that higher. So there’s a lot of power on the job seeker right now, especially in certain practice areas and in certain areas of the country. And they want to make sure that they’re making the right choice. All that there’s a lot of strange decisions going on out there. There’s, there’s a race for, you know, who’s getting paid the most. But if you’re all paying the most, how do you decide between one and the other, you have to look at all of that other data to say overall, our firm would be the better choice for you because of a B, C, D, and E. And that’s what we’re trying to do is give them the data for all of those points. So you may see people making decisions based on all of those metrics, and all of those things that that firm offers, as opposed to just monetary decisions, right? Am I going to be happy where I go? Am I going to be able to live the kind of life that I want to leave, all of that’s going to happen and that those firms that are doing that are going to change the dynamic of the rest. So it’s not all about starting salary, and it’s not all about the PPP. There’s a lot more in the mix now. And there may be a reshuffling of firms, as some firms begin to realize they need to change how they do business in order to have, you know, people that stay with them and people who want to join them.

Rachel 40:48

There will be an interesting thing to watch here in the coming years, especially as your company continues to roll out these new tools.

Laura Leopard 40:54

As a group as a women working in law firms, as men working in law firms, we have to look and demand and ask for that change to happen.

Rachel 41:04

Excellent. Well, that’s why we’re so excited to have you on as a guest today to get these ideas and these topics out there! So special. Thanks to you, Laura, for joining us today. We really appreciate it.

OUTRO 41:19

Thank you for listening to The National Law Review’s Legal News Reach podcast. Be sure to follow us on Apple podcasts, Spotify, wherever you get your podcasts for more episodes for the latest legal news. interested in publishing and advertising with us visit WWW dot NAT law review.com. We’ll be back soon with our next episode.

Article By Rachel Popa and Jessica Scheck with The National Law Review/The National Law Forum LLC.

For more episodes of Legal News Reach, please visit the podcast page.

Apple Smartwatch Antitrust Case Survives, Showing ‘Freedom of Design’ is Not Absolute

Judge Cites ‘Associated’ Anticompetitive Conduct Claims

It’s a case that challenges the limits of the “freedom of design” usually enjoyed by companies accused of product design changes alleged to harm competition. Ordinarily, a design change is not the kind of conduct that runs afoul of the antitrust laws, but on March 21, U.S. Judge Jeffrey S. White from the Northern District of California denied Apple Inc.’s motion to dismiss an antitrust case brought against it by AliveCor Inc. The suit alleges that Apple unlawfully maintained its monopoly in the market for heart rate analysis apps by updating WatchOS, the Apple Watch operating system on which AliveCor’s heart rate analysis app runs. (AliveCor, Inc. v. Apple Inc., No. 21-cv-03958-JSW, N.D. Calif.).

Heart rate analysis apps analyze the user’s heart rate in real time using a sensor close to the user’s wrist and determine whether the user’s heart rate is normal or irregular. The app runs constantly while the device is worn and alerts the user when a situation arises requiring an ECG recording and medical analysis. AliveCor also sells an electrocardiogram-capable wrist band for the Apple Watch and related WatchOS software that analyzes reading from the band. AliveCor claims that its products—the ECG-wristband hardware and software and its heart rate analysis app—“helped change the perception of the Apple Watch from an accessory to a personal health monitoring tool.”

AliveCor calls its heart rate monitoring app “SmartRhythm.” According to AliveCor, when sales of SmartRhythm took off Apple was inspired to announce an update to WatchOS with its own heart monitoring app designed to exclude AliveCor from the U.S. market for WatchOS heart rate analysis apps.

SmartRhythm works by using data from the Apple Watch’s heart rate algorithm. According to the complaint, Apple’s update to WatchOS altered the heart rate algorithm in a way that prevents third-party developers from being able to detect heart rate fluctuations and irregularities. As a result of these changes, SmartRhythm could not provide accurate heart rate analysis, and AliveCor removed it from the market.

Consequently, Apple is a monopolist in the WatchOS heart rate analysis app market, which AliveCor claims Apple is maintaining with exclusionary design changes to WatchOS, in violation of Section 2 of the Sherman Act, California’s Unfair Competition Law, and Section 17200 of California Business and Professions Code.

The court denied Apple’s motion to dismiss AliveCor’s monopolization claim in what it characterized as the “[single brand] aftermarket for WatchOS apps.” Applying the factors enumerated by the court in Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1044 (9th Cir. 2008), the court found that the WatchOS app aftermarket was wholly derivative from the primary smartwatch market, the alleged restraint applied only to the aftermarket, Apple’s aftermarket power was not obtained through contract terms reached in the primary market, and that competition in the smartwatch market does not discipline anticompetitive practices in the WatchOS app aftermarket. Accordingly, the court ruled that AliveCor’s market definition met the Newcal standards for a “single product” relevant market.

Apple argued that a company that improves a product to the benefit of consumers does not violate antitrust laws “absent some associated anticompetitive conduct,” citing the leading “freedom of design” case of Allied Orthopedic Appliances Inc. v. Tyco Health Care Group LP, 592 F.3d 991, 998-99 (9th Cir. 2010). The court quoted the holding of Allied: “If a monopolist’s design change is an improvement, it is necessarily tolerated by the antitrust laws, unless the monopolist abuses or leverages its monopoly power in some other way when introducing the product.”

Apple argued that its update to WatchOS was purely a design change that benefitted users, with no associated anticompetitive conduct. It observed that AliveCor hadn’t established that consumers use Apple’s app instead of some third-party app, or that Apple rejected any third-party apps, or that no other third-party heart apps are available to Apple Watch users. But the court rejected those arguments, noting that Apple failed to provide any legal authority that would require such allegations.

Apple ignored AliveCor’s allegations that Apple abused or leveraged its monopoly power “in some other way” by changing its heart rate algorithm to make it effectively impossible for third parties to inform a user when to take an ECG. AliveCor contended that Apple’s updated heart rate algorithm, which was pushed out to all earlier Apple Watch models, did not improve user experience. Its purpose was to prevent third parties from identifying irregular heart rates and offering competing apps based on that data. “These allegations present the type of ‘associated conduct’ that makes product design changes cognizable under antitrust law. Plaintiff’s allegations plausibly establish that Apple’s conduct was anticompetitive,” Judge White held. A case management conference set for May 20.

Commentary

It is truly difficult to see how some separate, “associated” conduct by Apple other than its design change to WatchOS violates Section 2. It seems more straightforward to consider the design change itself to be a cognizable anticompetitive act. It may be time to drop the fiction maintained in Allied v. Tyco that design changes are “never” antitrust violations unless accompanied by some “other” conduct. Here, Apple has created the market itself in the form of an OS platform used by millions of consumers who depend on it to access all manner of competing complementary products. Under those circumstances, it should be uncontroversial to hold a platform operator liable under the antitrust laws for design changes that exclude competitors or foreclose participants from the market, without indulging in the fiction of “associated” conduct.

Article By Jonathan Rubin of MoginRubin

For more antitrust legal news, click here to visit the National Law Review.

French Insider Episode 12: Navigating the Metaverse with Jim Gatto [PODCAST]

Joining host Sarah Aberg is Jim Gatto. Jim joins us today to discuss the metaverse, the technology and business models involved in these virtual worlds, the role of NFTs and cryptocurrency in the digital economy, and the legal, regulatory, and governance issues that can arise when companies seek to enter that space.

Jim Gatto is a partner in Sheppard Mullin’s Washington, D.C. office, where he leads the Blockchain & Fintech Team, Social Media & Games Team, and Open Source Team. Jim’s practice focuses on blockchain, interactive entertainment, digital art, AI, and online gambling. He advises clients on IP strategies, development and publishing agreements, licensing and technology transaction agreements, and tech regulatory issues. Jim has been involved with blockchain since 2012 and has been recognized as a thought leader by leading organizations including as a Cryptocurrency, Blockchain and Fintech Trailblazer by the National Law Journal.

Sarah Aberg is special counsel in the White Collar Defense and Corporate Investigations Group in Sheppard Mullin’s New York office. Sarah’s practice encompasses litigation, internal investigations and white collar defense. Her areas of focus include financial services and securities, as well as corporate fraud in a variety of industries, including technology, construction, and non-profits. Sarah’s regulatory practice encompasses market regulation, foreign registration and disclosure requirements, supervisory procedures, and sales practices. Sarah represents corporations, financial services companies, and associated individuals in connection with investigations and regulatory matters before the U.S. Department of Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission, FINRA, the New York Stock Exchange, the New York State Department of Financial Services, and the New York Attorney General’s Office.

What We Discussed in This Episode:

What is the Metaverse?
How Do Metaverses Differ from Earlier Virtual Worlds?
What Role Do NFTs Play in the Digital Economy?
Investing in a Metaverse: What are the Risks?
What are Legal, Regulatory, and Tax Considerations?
What Governance Issues Exist for Brands Operating in a Metaverse?
What are the Inflationary and Deflationary Aspects of the Virtual Economy?
How Might Blockchain and Cryptocurrency Alter International Financial Transactions?
Is the World Moving into a Virtual/Digital Economy?

Article By Sarah E. Aberg and James G. Gatto of Sheppard, Mullin, Richter & Hampton LLP

For more technology and internet legal news, click here to visit the National Law Review.

How Businesses Can Use LinkedIn Company Newsletters in Their Marketing Efforts

LinkedIn has added what I think is the most helpful tool in a long time for businesses to engage with and bring value to their followers – the ability for LinkedIn Company Pages to publish email newsletters right through LinkedIn.

This underscores the importance of having a company page and how it can be used as a content hub for marketing and recruiting your business.

Linked Company Page newsletters are available to businesses with more than 150 followers that actively maintain their LinkedIn presences.

You can create a LinkedIn Company Page newsletter in three simple steps:

Create: Start writing an article on and select “Create a Newsletter.” Give it a title, add a header image (it prompts you with the dimensions) and cut and paste your text. You can add hyperlinks and images for each article too.
Publish: When you publish your newsletter it will post to your feed and LinkedIn will notify your followers. They can opt in to receive email and in-platform notifications when you publish new content.
Review performance: View the analytics of each newsletter sent out and see the number of subscribers. The number increases pretty quickly which is awesome. And it’s opt in so you don’t have to worry about GDPR rules.

There’s a lot of opportunity here because it is a new feature (for companies – it’s been available to individuals for a short time) and most companies don’t know about it yet (and certainly aren’t using it yet), so being an early adopter is to your benefit.

Even if you send out an email newsletter, you should still utilize the LinkedIn platform to send out a newsletter because you will reach a different audience and cast a wider net for your content.

In addition, people are opting into this newsletter, so it’s not building an audience from scratch, and if you haven’t ever sent out an email newsletter, this is a great way to start. If email marketing programs and CRM management tools overwhelm you, this is a great way to test out the waters.

It’s also really easy to repurpose content you already have. I would include hyperlinks to your website or blog with the full text (in order to keep the newsletter short and to drive traffic to your site).

You can embed links from YouTube into the newsletter to play. Check out my LinkedIn newsletter to see how it looks.

Here are some content ideas for what you can include in your LinkedIn Company Page Newsletter:

Article snippets with links to your latest blog posts or client alerts
Links to past webinars (provide a synopsis too)
Links to recent podcasts and videos (with shownotes)
Recent case studies
Q&As with your employees
Highlights of your community service/pro bono work
Announcements of your recent hires
Recent press coverage (this would be the only place where I would recommend including self-promotional items in the newsletter – the rest of it should be client-focused)
Upcoming events/webinars – this is a great way to promote them
Open jobs – why not promote them through this newsletter? It’s a competitive job market
News about your diversity and women’s initiatives programs – clients care a lot about this

Check out this new feature and let me know what you think of it. With nearly 800 million people on LinkedIn and the fact that your competitors are very likely not using it yet, it’s at least worth trying out.

Article By Stefanie M. Marrone of Stefanie Marrone Consulting

For more business of law thought leadership, click here to visit the National Law Review.

Category: Technology

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