Low & Hara on Cryptoassets and Property

Kelvin F.K. Low (National University of Singapore – Faculty of Law) and Megumi Hara (Chuo University Law School) have posted “Cryptoassets and Property” (Sjef van Erp & Katja Zimmermann (eds), Edward Elgar Research Handbook on EU Property Law (Forthcoming)) on SSRN. Here is the abstract:

The concept of property has always been, and remains, a vexed notion. Within civilian systems, the difficulty of incorporating the basic idea of ownership – surely fundamental to any idea of property – within the Gaian and other schema demonstrates the elusiveness of property. Its elusiveness lies in part in the intersection of various distinct ideas within the law of property. In civilian schema, these distinct ideas are often distinguished by discrete vocabulary. For example, a modern French schema distinguishes between biens (assets), choses (things), and droits (rights). Within common law systems, the comparative lack of attention to classification, and relative paucity in vocabulary for discrete concepts has led to much confusion. With this background in mind, it is perhaps unsurprising to find that cryptoassets have been more readily accommodated within common law systems’ vague notions of property than those of civilian systems. Within the civil law, Francophone systems, with looser conceptions of chose than Germanic Pandectist systems’ strict conceptions of Sach (thing), are more accommodating of cryptoassets as property but even so, it may more accurately be said that they are biens or droits. Accordingly, depending on one’s conception of property, cryptoassets may (or may not) be property.

Low, Wan & Wu on The Future of Machines: Property and Personhood

Kelvin F.K. Low (NUS Law), Wai Yee Wan (City University of Hong Kong), and Ying-Chieh WU (SNU Law) have posted “The Future of Machines: Property and Personhood” (The Cambridge Handbook of Private Law and Artificial Intelligence, Forthcoming) on SSRN. Here is the abstract:

The use of tools was once believed to be a distinguishing feature of human intelligence which allowed us to deny personhood to animals, which like tools, were property rather than persons. As we get increasingly dependent on our increasingly sophisticated tools, the law will need to consider when (if ever) machines cease to be mere tools and become a part of our person. Could they even increase in sophistication to the point when they may be conferred legal personhood? Or will rapidly advancing machine intelligence first strip us of our personhood? Might the law of property prove to be a bulwark against such an outcome?

Fox on Tokenized Assets in Private Law

David Fox (School of Law, University of Edinburgh) has posted “Tokenised Assets in Private Law” on SSRN. Here is the abstract:

Tokenisation is a recent development in distributed ledger technology (“DLT”) systems. Assets that exist off the ledger system, such as securities or rights to the delivery of a service, are represented as tokens issued on DLT system. The tokens evidence the holders’ claims against the issuer of the assets. The system serves as a platform for trading the tokens and the off-ledger assets they represent.

Tokenisation presents many analytical difficulties for private law. My concern in this paper is to outline some of the problems – and possible solutions – of mapping traditional rules of property and transfer onto transactions with tokenised assets on a DLT system. Much depends on the legal analysis used to explain the transactions with tokens on the system, and on the possibility of recognising a legal link between the on-chain token and the off-chain asset that it represents. The paper develops the argument that digital transactions can be analysed as the expression of the parties’ intentions to make an assignment or novation of the rights represented by the assets.

Recommended.

Huq on The Public Trust in Data

Azziz Z. Huq (University of Chicago Law School) has posted “The Public Trust in Data” (Georgetown Law Journal, Vol. 110, 2020) on SSRN. Here is the abstract:

Personal data is no longer just personal. Social networks and pervasive environmental surveillance via cellphones and the ‘internet of things’ extract minute-by-minute details of our behavior and cognition. This information accumulates into a valuable asset. It then circulates among data brokers, targeted advertisers, political campaigns, and even foreign states as fuel for predictive interventions. Rich gains flow to firms well positioned to leverage these new information aggregates. The privacy losses, economic exploitation, structural inequalities, and democratic backsliding produced by personal data economies, however, fall upon society at large.

This Article proposes a novel regulatory intervention to mitigate the harms from transforming personal data into an asset. States and municipalities should create “public trusts” as governance vehicles for their residents’ locational and personal data. An asset in “public trust” is owed and managed by the state. The state can permit its use, and even allow limited alienation, if doing so benefits a broad public rather than a handful of firms. Unique among the legal interventions proposed for new data economies, a public trust for data allows a democratic polity to durably commit to public-regarding management of its informational resources, coupled to judicially enforceable limits on private exploitation and public allocation decisions. The public trust itself is a common-law doctrine of ancient roots revived in the Progressive Era as an instrument to protect public assets against private exploitation. Both federal and state courts, including the U.S. Supreme Court, have since endorsed a variety of doctrinal formulations. The result today is a rich repertoire of rules and remedies for the management of common property. Personal data, usefully, has many similarities to assets long managed by public trust. And familiar justifications for creation of a public trust logically extend to personal data. Indeed, municipalities in the United States, Europe, and Canada have started to experiment with limited forms of a public trust in data. Generalizing from those experiences, this Article offers a more general ‘proof of concept’ for how personal data economies can be leashed through the public trust.

D’Onfro on The New Bailments

Danielle D’Onfro (Washington University in St. Louis – School of Law) has posted “The New Bailments” on SSRN. Here is the abstract:

The rise of cloud computing has dramatically changed how consumers and firms store their belongings. Property that owners once managed directly now exists primarily on infrastructure maintained by intermediaries. Consumers entrust their photos to Apple instead of scrap-books; businesses put their documents on Amazon’s servers instead of in file cabinets; seemingly everything runs in the cloud. Were these belongings tangible, the relationship between owner and intermediary would be governed by the common-law doctrine of bailment. Bailments are mandatory relationships formed when one party entrusts their property to another. Within this relationship, the bailees owe the bailors a duty of care and may be liable if they failed to return the property. The parties can use contract to customize the relationship but not to disclaim entirely.

Tracing the law of bailment relationships from its ancient roots to the present, this Article argues that cloud storage should be understood as creating a bailment relationship. The law of bailment, though developed in the Middle Ages, provides a robust framework for governing twenty-first century electronic intermediaries. Though the kind of stored property has changed, the parties’ expectations and incentives have not. Yet the decline of litigation, the rise of arbitration, federal diversity jurisdiction, and the ever-growing dominance of contract has thus far prevented courts from applying the law of bailments to these new services.

Recognizing cloud storage as a bailment would have significant implications. Most immediately, it would suggest that important provisions in many cloud storage services’ contracts are unenforceable. A hand-collected dataset of 61 cloud storage contracts, reveals that most have include general disclaimers for any liability for lost data. These disclaimers are inconsistent with the duty of care that is the foundation of the law of bailment. In addition, understanding cloud storage as a bailment would have important implications for both the law of consumer protection and Fourth Amendment protections.

Recommended.