Emerging Tech Law Issue #1

Crashing Teslas, Facebook faces terrible, horrible, no good, very bad week and more ...

Welcome to the first (!) issue of Emerging Tech Law — a slightly irreverent view of regulatory developments (and other interesting stuff) relating to emerging technologies including AI, IoT, robotics, blockchain/crypto, 5G, artificial/virtual/extended reality, biotech and quantum computing.

In this issue:

  • Tesla is stirring up trouble again, and it’s not for owners flexing the falcon doors of their Model X in the school pickup line.

  • Facebook faces a major outage worldwide and a major bashing on Capitol Hill, but don’t expect any regulatory changes to result.

  • US DOJ sets up a super team to go after crypto crooks.

  • Investors in failed crypto exchange Mt. Gox vote on a rehab plan under which they might receive refunds totaling billions in Bitcoin.

  • Did biotech star Allogene Therapeutic’s gene editing cause a chromosomal abnormality in a patient in a clinical trial of a cancer drug and does this signal a broader concern with the safety of gene-editing therapies?

  • Longtime NIH Director Francis Collins announces he’s leaving. His successor will face the challenge of molding a new biomedical innovations incubator.

Quote of the week: “If you’re not embarrassed by the first version of your product, you’ve launched too late.”

-Reid Hoffman, co-founder of LinkedIn

AI

Jesus, Take the Wheel: Federal investigators are examining why Tesla’s AI-based autopilot hasn’t learned one of the fundamentals of driving – if you’re gonna crash, don’t crash into a police car. The National Highway Traffic Safety Administration (NHTSA) is looking into more than a dozen similar episodes in which Tesla vehicles ran into stationary police cars, firetrucks, ambulances and other emergency vehicles. The accidents injured 17 people and killed one. A group of cops in Texas (soon to be the location of Tesla’s corporate HQ) recently filed suit against Tesla after they were allegedly struck by a Tesla Model X while they were engaged in a traffic stop.

Unphased and Unbothered: Facebook took a pounding this past week, with a lengthy outage that affected access for millions of users, but also from a former product manager, Frances Haugen, who testified before the Senate that Facebook’s AI-driven algorithms promote destructive content.

 “Facebook … knows—they have admitted in public—that engagement-based ranking is dangerous without integrity and security systems but then not rolled out those integrity and security systems in most of the languages in the world,” Haugen told the Senate. “It is pulling families apart. And in places like Ethiopia it is literally fanning ethnic violence.”

But don’t expect big regulatory changes to result. Paul Gallant, managing director of a DC policy shop told Barron’s: “I don’t know if Washington’s current flare-up over Facebook will materialize into a market-affecting government move, but history suggests it won’t.”

Blockchain/Crypto

Avengers: Age of Crypto: The U.S. Justice Department announced the creation of a special enforcement team to bring crypto criminals to justice, recover their plunder and return it to the rightful owners.

“Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department’s cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish — and quite frankly to profit — from abusing cryptocurrency platforms,” said Deputy Attorney General Lisa Monaco.

They tried to make me go to rehab but I said no, no, no?: Voting on a rehabilitation plan by claimants of the infamous Mt. Gox cryptocurrency exchange ended on Oct. 8. Votes are still be tabulated, but if a majority of the claimants voted yes, the plan could release up to 150,000 Bitcoin (worth about $8,286,870,000 as of 10/09 prices). If a majority vote “no,” the funds could be tied up in litigation for years. At one point, Mt. Gox was handling over 70% of all Bitcoin transactions, but after the exchange announced the loss of about $450 million in Bitcoin, it filed for bankruptcy in Japan, where it was based, and in the U.S. The rehab plan is being overseen by a Japanese court.

Biotech

Ruh Roh: The FDA put a hold on biotech star Allogene Therapeutics cancer drug clinical trials after a report of a “chromosomal abnormality” in a lymphoma patient treated with the company’s ALLO-501A CAR T. CAR T-cell therapy (from chimeric antigen receptor) is a way to get immune cells called T cells – a type of white blood cell –  to fight cancer by changing them in the lab to turn them into super seekers/destroyers of cancer cells. It is a form of gene therapy that involves altering the genes inside T cells to help them attack cancer. The key question is whether the chromosomal abnormality resulted from Allogene’s gene editing, and the concern is that this could signal a broader issue with all gene-editing therapies.

Thanks for Your Service: Longtime head of the National Institutes of Health, Francis Collins, will be stepping down from his post by the end of 2021. Collins led the agency under Presidents Obama, Trump and Biden and managed through the turmoil of the Covid-19 pandemic and the turmoil of the anti-science climate during the last presidential administration. President Biden will nominate Collins’ successor. One of the biggest challenges for the new director will be developing the Advanced Research Projects Agency (ARPA-H), a Biden administration proposal to create a biomedical discoveries incubator within the NIH that will enable short-term, high-risk special projects, not normally funded by NIH.

Share Emerging Tech Law

Obligatory disclaimer: Any opinions are those of the cited source or the author of this newsletter, not the author’s employer. If for some reason you think any legal advice is given in this newsletter, you’re sadly mistaken.