Welcome to the 10th issue of Emerging Tech Law .

In this issue:

Make sure that thing connected to my brain has an off switch: policy & tech recommendations on brain-computer interfaces.
Small Nukes: An Answer to Climate Change?

Trouble in the Metaverse: Meta hits snags already.

Note: The newsletter will take a brief break for the holidays, but will resume with a feature on the land grab for virtual real estate. Enjoy the holidays and stay safe!

Quote of the week:
Patients would say, “My husband can now read the headlines and talk about them. He had lost that ability. This makes a complete difference to our day.”

-Rachelle Doody, M.D., Ph.D. a Genentech executive said about the early days of development of drugs to treat Alzheimer’s.

Neurotechnology

Brain-computer interfaces

Make sure that thing connected to my brain has an off switch!

Imagine an electric wheelchair or a drone that users could maneuver with their minds rather than hand-operated controls.

Or a game in which players using virtual reality gear are able to try to escape from a make-believe prison using tools they select through their electrical brain impulses.

Or a communications system that allows firefighters or soldiers in noisy, challenging environments to communicate via unspoken thoughts via system that makes mental telepathy real.

These are just a few of the use cases that are under development for what is called brain-to-computer interfaces (“BCI”).

In fact, some BCIs are already in use including devices that stimulate the brains of people with Parkinson’s Disease to help aid some of the rigidity, slowness, and tremors common in Parkinson’s patients. A company called Smart Cap offers a headband that can alert long-haul truckers (and their employers) when they are drowsy. And when he’s not building electric cars, rockets or solar panels or boring tunnels, Elon Musk, through his Neuralink company, is developing a chip that would be implanted in people's brains to simultaneously record and stimulate brain activity.

And, although these systems offer the potential to improve and even save lives, they carry risks including the potential for extremely personal information to get into the wrong hands and even for hackers to take over control of brain-connected devices. (And you thought it was bad when they got your Equifax data!)

To address some of these risks The Future of Privacy Forum and the IBM Policy Lab recently released a report called “Understanding the Data Flows and Privacy Risks of Brain-Computer Interfaces.”

The report outlines potential use cases and risks associated with BCIs and also provides practical guidance for policy makers and developers.

“Emerging innovations like neurotechnology hold great promise to transform healthcare, education, transportation, and more, but they need the right guardrails in place to protect individuals’ privacy,” said IBM Chief Privacy Officer Christina Montgomery in a statement issued along with the report.

Near-Term Use Cases

The Report identifies the following as the areas in which near-term uses may be made of BCIs:

Healthcare: BCIs can assist in diagnosing medical conditions, stimulating
or modulating brain activity and controlling prosthetic limbs and external devices.
Gaming: BCIs may augment existing gaming platforms and offer players new ways to play using devices that record and interpret neural signals.
Employment and Industry: BCIs could monitor worker engagement to improve safety during high-risk activities, alert workers or supervisors to danger, modulate workers’ brain activity to improve performance, and provide tools to more efficiently complete tasks.
Education: BCIs could track student attention, identify students’ unique needs and alert teachers and parents of student progress.
Smart Cities: BCIs could provide new ways of communication for construction teams and safety workers and enable potential new methods for connected vehicle control.
Neuromarketing: Marketers could incorporate the use of BCIs to understand consumers’ moods and to gauge product and service interest. (Author’s Note: Please, God, no!)

Military: Governments are researching the potential of BCIs to help rehabilitate soldiers’ injuries and enhance communication.

The Report focuses on controlling and protecting “neurodata,” data that comes from the brain or other parts of the nervous system and is generated by BCIs.

The Report notes that BCIs “also raise important technical considerations and ethical implications, related to, for example fairness, justice, human rights, and personal dignity.”

Although there are already frameworks in place in some areas – including Europe’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and China’s newly enacted Personal Information Protection Law (PIPL) and biometric laws in some U.S. states, these frameworks may not fully capture some of the considerations that are specific to neurodata.

Policy Safeguards

Accordingly, the Report recommends the following policy safeguards:

Ensure BCI-derived inferences are not allowed for uses to influence decisions about individuals that have legal effects, livelihood effects, or similar significant impact such as assessing the truthfulness of statements in legal proceedings, inferring thoughts, emotions or psychological state, or personality attributes as part of hiring or school admissions decisions, or assessing individuals’ eligibility for legal benefits;

Employ sufficient transparency, notice, terms of use, and consent frameworks to empower users with a baseline understanding around the collection, use, sharing, and retention of neurodata;

Engage Institutional Review Boards and other independent review mechanisms to identify and mitigate risks;
Facilitate community input prior to and during BCI system design, development and rollout;
Create dynamic technical, policy, and employee training standards to account for gaps in current regulation;
Promote an open and inclusive research ecosystem by encouraging the adoption of open standards for neurodata and the sharing of research data under open licenses and with appropriate safeguards in place.; and
Evaluate the adequacy of existing policy frameworks for governing the unique risks of neurotechnologies and identifying potential gaps prior to new regulation.

Technical Safeguards

The Report also makes a number of technical recommendations including the following:

Provide on/off controls when possible— including hardware switches if practical;
Provide users with granular controls on devices and in companion apps for managing the collection, use, and sharing of personal neurodata;
Provide heightened transparency and control for BCIs that specifically send signals to the brain, rather than merely receive neurodata;
Design, document and disclose clear and accurate descriptions regarding the accuracy of BCI-derived inferences;
Operationalize industry or research-based best practices for security and privacy when storing, sharing, and processing neurodata;
Employ appropriate privacy enhancing technologies;
Encrypt personal neurodata in transit and at rest; and
Embrace appropriate protective and defensive security measures to combat bad actors.

“We have a prime opportunity now to implement strong privacy and human rights protections as brain-computer interfaces become more widely used,” said Jeremy Greenberg, Policy Counsel at the Future of Privacy Forum. “Among other uses, these technologies have tremendous potential to treat people with diseases and conditions like epilepsy or paralysis and make it easier for people with disabilities to communicate, but these benefits can only be fully realized if meaningful privacy and ethical safeguards are in place.”

For a deeper dive: “Understanding the Data Flows and Privacy Risks of Brain-Computer Interfaces.”

ENERGY

Are small nuclear plants part of the solution for climate change?

An Oregon-based company with plans to make small power-generating nuclear reactors announced this week that it will go public through a combination with a “blank check” company.

NuScale Power of Portland plans to combine with Spring Valley, a publicly traded special purpose acquisition company (a “SPAC,” which has been a popular way over the last year or so to quickly accelerate the process of taking private companies public).

NuScale is one of a number of companies seeking to provide the technology for small modular reactors (SMRs). NuScale’s SMR design has received approval from the U.S. Nuclear Regulatory Commission, but no plant using the design has actually been built yet.

A Critical Component

Some believe nuclear power will be a critical component to fighting climate change, as fossil fuel electric power plants contributed about a quarter of the greenhouse gas emissions in 2019, according to the EPA.

“Nuclear power is an important source of low-carbon electricity and heat that can contribute to attaining carbon neutrality and hence help to mitigate climate change,” said UN European Economic head Olga Algayerova.

NuStar and others believe that SMRs will be an important part of the contributions that can come from nuclear power.

“NuScale is building the next generation of nuclear power technology that is safer, more versatile and more cost-efficient than ever before,” said NuScale President & CEO John Hopkin in a press release. “The scale of our ambition is only matched by the world’s enormous decarbonization needs, and now is the right time to accelerate and expand our efforts to bring our trailblazing SMR technology to more customers around the world. Spring Valley will be a highly complementary strategic partner for NuScale as we enter this next phase of growth, with leadership that brings deep expertise in sustainable energy and a strong operating and investment record in the energy sector, including in nuclear power.”

Others agree. The U.S. Department of Energy claims, “small modular reactors offer a lower initial capital investment, greater scalability, and siting flexibility for locations unable to accommodate more traditional larger reactors. They also have the potential for enhanced safety and security compared to earlier designs. Deployment of advanced SMRs can help drive economic growth.”

SMRs carry a much smaller footprint than traditional reactors (and can even be mounted on barges) and may be built more cheaply and quickly, in part because a substantial amount of the construction can be done offsite in factories.

Joanne Liou of the International Atomic Energy Agency notes that “in comparison to existing reactors, proposed SMR designs are generally simpler, and the safety concept for SMRs often relies more on passive systems and inherent safety characteristics of the reactor, such as low power and operating pressure. This means that in such cases no human intervention or external power or force is required to shut down systems, because passive systems rely on physical phenomena, such as natural circulation, convection, gravity and self-pressurization.”

Small Isn’t Always Beautiful

Nevertheless, the disasters at Chernobyl, Fukushima and near disaster at Three Mile Island stand as warnings.

The Union of Concerned Scientists released a report in 2013 called “Small Isn’t Always Beautiful” that questioned some of the claimed safety attributes of SMRs. The group continues to raise concerns. Its director of nuclear power safety noted in a Scientific American article that there are safety gaps in the NuScale design that may be used as the blueprint for many reactors.

Shanlai Lu, a scientist at the Nuclear Regulatory Commission, wrote a report in 2020 that detailed a concern about a potential issue in the NuScale design. Because of this issue, Lu wrote, “it is [the] author’s view that the reactor could reach fuel failure and prompt criticality condition for a wide range of initial conditions.”

Cost Concerns

Others have raised concerns about the cost of SMRs, particularly in comparison with other sustainable energy sources.

According to the BBC, NuScale is offering power at 6.5 cents per kilowatt hour as an incentive for an initial project. The price of solar and wind energy, though, have dropped dramatically with onshore wind power costing less than 4 cents per kilowatt hour and solar costing less than 6 cents per kilowatt hour, according to a 2020 report.

“Renewable power generation costs have fallen sharply over the past decade, driven by steadily improving technologies, economies of scale, competitive supply chains and improving developer experience. Costs for electricity from utility-scale solar photovoltaics (PV) fell 85% between 2010 and 2020,” according to the International Renewable Energy Agency.

For a deeper dive: First U.S. Small Nuclear Reactor Design Is Approved, Benefits of Small Modular Reactors, What are Small Modular Reactors (SMRs)?, The Countries Building Miniature Nuclear Reactors, Small Isn’t Always Beautiful, Renewable Power Generation Costs in 2020.

METAVERSE

Meta hits snags already

Just a few weeks after Meta (f/k/a Facebook) announced it is going all-in on building the three-dimensional virtual world known as the metaverse, the company’s efforts are already hitting potential regulatory and policy snags.

1. Antitrust Concerns: The U.S. Federal Trade Commission is scrutinizing Meta’s planned acquisition of VR fitness app Supernatural, according to a new report by The Information.

Meta announced the deal with the developer of Supernatural, LA-based Within studio, in October. The FTC is seeking to unwind Meta’s acquisition of both Instagram and WhatsApp on the ground that Meta is violating the antitrust laws with monopoly power. The agency originally permitted the Instagram and WhatsApp acquisitions, and Meta’s other acquisitions in the VR space have been permitted or not received scrutiny.

The scrutiny of the Supernatural/Within deal could block the transaction, lead to its approval only under certain conditions or, at a minimum, delay its closing.

As noted previously, if regulators block Meta’s ability to acquire missing pieces of the metaverse platform it seeks to build, Meta will have to build these pieces organically, which may put it at a disadvantage relative to competitors.

2. Groping in the Metaverse: A beta tester in Meta’s virtual reality social media platform, Horizon Worlds, reported that she had been groped by a stranger, according to the MIT Technology Review.

“Sexual harassment is no joke on the regular internet, but being in VR adds another layer that makes the event more intense,” the beta tester wrote according to an article in The Verge. “Not only was I groped last night, but there were other people there who supported this behavior which made me feel isolated in the Plaza (a central gathering place in Horizon Worlds).”

Meta conducted a review of the incident and concluded that the tester could have blocked the attacker using a safety feature. A Meta executive said the company may make the feature more readily accessible to users.

3. Ownership of the Metaverse: Shortly after Facebook announced its name change to Meta and its focus on building the metaverse, an Australian artist and technologist found herself locked out of her Instagram account @metaverse, which she had used for nine years.

Thea-Mai Baumann had posted years of her work on Instagram and initial efforts to recover her access were unsuccessful. Eventually, though, after negative publicity spread, Instagram restored Baumann’s account.

The incident highlights Meta’s power to lay claim to the metaverse, a platform that many are hopeful will have decentralized control.

Meta filed an application to register the trademark Meta in the U.S. that is impressive (or frightening depending on one’s perspective) for its scope. The nearly 17,000-word application seeks exclusive rights to use the term for everything from “organizing, promoting and conducting exhibitions, tradeshows and events for business purposes” to search engine and artificial intelligence software, according to an article on Gamesindustry.biz.

If the Patent & Trademark Office approves the trademark registration, the question will be how aggressively Meta pursues others who use the term “meta,” particularly in conjunction with other words and whether Meta will pursue others who use the term metaverse.

ALSO NOTEWORTHY

The FDA announced that it will begin unannounced inspections of drug manufacturing plants in China and India soon. The Covid-19 pandemic had halted the surprise inspections, which the agency uses to ensure the safety of drugs produced overseas and sold in the U.S.

Skyward, a sub of Verizon, announced it is taking pre-orders for a drone that can be controlled via the Verizon 4G/LTE wireless network. Full utilization of such drones will depend on the FAA relaxing its rules against operation of drones beyond the line of sight of the person controlling them, which is a key step toward a realization of the opportunities presented by the commercialization of drones. (Disclosure: The Author was previously head of strategy for the group within Verizon that included Skyward.)

Former Securities and Exchange Commission Chair told CNBC that he is a “a huge believer” in cryptocurrency technology. “The efficiency benefits in the financial system and otherwise from tokenization are immense.”

Parting Thought:
“With a high-bandwidth brain-machine interface, we can actually go along for the ride. We can have the option of merging with AI.”
-Elon Musk

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.

Subscribe now

Emerging Tech Law

Emerging Tech Law Issue #10