I was very fortunate, once more, to be on the faculty of the OII summer doctoral program (SDP) that – for the first time – took place at Harvard Law School (and, no, there hasn’t been an attempt to bring it to St. Gallen, rumors to the contrary…). My friends at the Berkman Center did a fantastic job in pulling together a very interesting summer program with a terrific line-up of contributors. Most importantly, however, the Berkman team led by John Palfrey and Colin Maclay selected a fantastic group of 30 PhD students from various disciplines and from across the world. I have been attending all except one of the doctoral programs since 2003, but this group impressed me in particular. We had a series of excellent discussions on a number of fascinating topics, covering meta-, methodological, and substantive issues. Among my favorite debates were the discussions about ICT4D, digital natives, identity, privacy, and peer production, and I very much enjoyed JZ’s talk about academic charisma and communication. In addition, I had the pleasure to moderate four student sessions in which the PhD candidates presented their research, and was naturally especially fascinated by Joris van Hoboken’s dissertation on search engine regulation. He, among several others (check out the aggregator), provided also excellent blog coverage of the SDP 2007 (here, his final post).

A second highlight, doubtlessly, were great conversations about our ongoing digital natives project. I had several thought-provoking discussions with my colleague John Palfrey (whom I admire so much not only for being a gifted teacher, brilliant mind, and thoughtful leader, but equally for being a truly amazing collaborator and friend), about the scope of our early-stage research project, about methodologies, the goals of our project, and the message(s) we want to send in the book that we’re currently co-authoring. Also the various contacts with the members of our Berkman/St. Gallen digital native research team, including Erin Mishkin (team leader), Chen Fang, Nadine Blaettler (from our St. Gallen team, currently in Boston), Tony Pino, and Miriam Simun (who has spent the past few weeks here in St. Gallen), among others, made this trip a particularly exciting one. Similarly enjoyable were excellent interventions (including some push-back) from my colleagues Ethan Zuckerman and danah boyd.

Another interesting experience was a symposium hosted by the Harvard Business School on the Internet as a Public Good. A number of great scholars and activists were invited to think about the question as to what extent the Internet can be seen as a public good. I was invited to give a brief talk from the legal/policy perspective, but did unfortunately not a great job in framing the discussion – despite my well-known love for coherent frameworks. In any event, it was an intellectually challenging workshop that also made it clear how even the brightest people in one room may sometimes face difficulties to really enhance a discussion in a structured way. The co-organizers Colin Maclay, Karim Lakhani, David Weinberger, Amar Ashar, Frank Hecker and Zak Greant deserve a great thank you for running this experiment with an immensely complex and equally fascinating workshop topic.

In sum, a wonderful time in Cambridge and yet another illustration why I really do think that MA 02318 is the best place in the world. Thanks to Catherine Bracy, Seth Young, Amar Ashar, Becca Tabasky, and all other Berkman staff members who helped me planning this trip and took care of the logistics.

Now back in St. Gallen, I will spend most of August on the book I mentioned above, on a text with Prof. Herbert Burkert on the information law approach vs. the business law approach as applied to technological innovation, an article about Google, a book chapter on corporate social responsibility/sphere of influence, a piece on IPR and neuro-science, and – last but not least – an overdue commentary on the new Swiss GmbH-Law. Besides, I’m working on our upcoming study trip to Shanghai and try to adjust to the Chinese mentality: “panta rei”. So, please forgive me if I’m a slow responder (and blogger, for that matter) over the weeks to come.

• First, media literacy and education of digital natives. While media education in the digital environment has become an important topic especially in the U.K. through the work of Ofcom and experts like Professor David Buckingham and Professor Sonia Livingstone, it’s still in its infancy in many other parts of the world. From all I’ve learned now in the context of our digital native project – and from what I know about the current state of neuroscience with regard to cognitive and emotional development – its seems crucial to start with media education at pre-school or primary school level at latest. If anyone has pointers to good web resources, case studies and/or curricula in this area, please drop me a note.

• Second, users rights and responsibilities in the digital environment. This issue is obviously related to the first one and concerns the question as to what extent our societies do provide mechanisms to have a discourse about our rights, but also responsibilities (and that’s where it gets tricky from a political perspective) as empowered users in the digitally networked environment. While great work has been done with regard to the “rights”-part of the discussion – largely driven by NGOs and consumer protection organizations (see here for a recent example) – we may need to figure out in the near future how to address also the question of the new responsibilities as “speakers” that are associated with the fundamental shift from passive consumers to active users. Interestingly, the role of citizens as producers of information has reportedly been addressed in a (if I recall correctly: still unpublished) draft of an information freedom act in an Eastern European country. Legislation, however, is most likely not the right starting place for such a discussion, I would argue.

In short, more food for thought – and additional research tasks for our digital native team. (Thanks, Rebecca, for a great conversation.)

In the last session before “flyout” week, Silke Ernst and I had a first cut at a synthesis aimed at tying together several of the core themes we’ve been discussing so far. At the core of the session was the question as to what extent the law & economics approach can help us to deal with the complex IPR-questions that are triggered while transitioning from an analog/offline to a digital/online information environment. The students contributed to the session by presenting their views on the promises of and limits on a law & economics approach to IPR in the digital age. Using the time while traveling from Oxford back to Zurich, my recollection of the in-class discussion looks as follows (alternative interpretations, of course, encouraged and welcome) – starting with the argument that the law & economics approach to IPR serves at least two functions:

• On the one hand, it provides a toolset that helps us to frame, analyze, and evaluate some of the complex phenomena we observe in cyberspace (such as, for instance, large-scale file-sharing over P2P networks or the user-created content), and enables us to gain a better understanding of the interaction among existing rules and norms and these phenomena. We might want to call it the “analytical function” of law & economics (this aspect gets close to – but is in my view not exactly identical with – what has traditionally been described as the “positive” strand of discussion in law & economics.)

• On the other hand, law & economics may guide us at the design level (again, this gets close to what has been termed “normative” law & economics. For reasons I don’t want to discuss here, I don’t want to work with this distinction in the present context.). First, it can help us to identify the need for law reform by showing that the existing rules have a negative impact on social welfare. Here, the design function intersects with the previously mentioned analytical function. Second, law & economics provides a consistent framework to evaluate the impact of alternative means of regulation on the (economic) behavior of individuals and compare costs and benefits of different approaches aimed at solving a particular problem.

At a more granular level, we might identify the following promises and limitations of a law & economics approach with regard to the respective functionality:
Analytical function

• Promises: coherent framework, consistent and shared set of criteria, rational and quasi-objective analysis, …
• Limitations: Bounded rationality/areas of non-rationale behavior, lack of transparency regarding underlying causalities, limited possibilities to quantify phenomena, lack of empirical data, …

Design function:

• Promises: Cost-benefits analysis of alternative policy choices, taking into account perspectives of different actors in an ecosystem, at least ideal-type predictions based on models, …
• Limitations: Complexity of real-life situations, non-economic perspectives, motives, and effects, non-economic values, …

We reached some sort of consensus that the law & economics approach indeed provides a great toolset to analyze at least some of the trickiest IPR-related policy questions in cyberspace. However, the large majority seemed also to agree that some of the limitations of such an analysis become particularly visible in the digitally networked environment with phenomena such as commons-based peer production of content based on intrinsic motivations. Most of us also agreed that it would be dangerous to attempt to answer the IPR policy questions only against the backdrop of law & economics theory. Indeed, many of the decisions to be made in this space ultimately include choices about core values of our society that do not easily translate into the frameworks of law & economics, like for example informational justice, equal access, participatory culture, or semiotic democracy.

I’m very much looking forward to continuing the discussion about the role of law and economics in the digital age with my colleagues, the teaching team, and – most importantly – with the wonderful group of students enrolled in this seminar.

Recently, I have been heavily involved in the law and economics program (I should mention that St. Gallen doesn’t follow the rather traditional approach to law and economics that is predominant among U.S. law schools. Click here for a brief description of the St. Gallen interpretation of law and economics). Today is a special day for the program’s faculty and staff, because the first generation of students enters the final 10th semester of the Bologna-compatible Master program. Arguably, this 10th semester is rather unique as far as structure and content is concerned. Instead of providing the usual selection of courses for graduate students, we have designed what we call an “integrating semester” in which all students are required to take three (but only three) full-semester courses aimed at “integrating” the knowledge, skills, and methods they have acquired over the past few years. All three seminars – together worth 30 credits – are designed and taught by an interdisciplinary group of faculty members from the University of St. Gallen and beyond, including legal scholars, economists, business school profs, technologists, etc. The first seminar, led by Professor Peter Nobel, Thomas Berndt, Miriam Meckel and Markus Ruffner, is entitled Law and Economics of Enterprises and deals with risk and risk management of multinational corporations. The second seminar, led by Professor Beat Schmid and me, concerns legal, economic, and business aspects of intellectual property rights in the digital age. Professors Hauser, Waldburger, and van Aaken, finally, are teaching the third seminar entitled Law and Economics of Globalization, addressing issues such as world market integration of low-income countries, foreign investments, global taxation, and regulation of multinational enterprises.

My seminar on law and economics of IPR in the digital age starts with a discussion of basic concepts of economic analysis of intellectual property law and a stock-taking of the main IPR-problems associated with the shift from an analog/offline to a digital/online environment. It then follows a module in which we will explore three key topics in greater detail: digital copyright, software and business methods patents, and trademarks/domain names. Towards the end of the semester, we will then try to tie all the elements together and develop a cross-sectional framework for economic analysis and assessment of IPR-related questions in the digitally networked environment. In this context, we will also be visiting the Swiss Federal Institute of Intellectual Property (in charge, among other things, with working on IP legislation in Switzerland), where we will discuss the promises and limits of economic analysis of IP law with the Institute’s senior legal advisor and the senior economic advisors.

Clearly, we have a very ambitious semester ahead. I’m particularly thrilled that a wonderful group of colleagues from Europe and abroad is helping me to do the heavy lifting (of course, my wonderful St. Gallen team is very involved, too, as usual.). My colleague and friend John Palfrey, Clinical Professor of Law at Harvard Law School, the Berkman Center’s executive director, and member of the board of our St. Gallen Research Center for Information Law, will be discussing with us thorny digital copyright issues and future scenarios of digital media. Klaus Schubert, partner of WilmerHale Berlin, will be guiding us through the software patents and business methods patents discussion. Last but not least, Professor Philippe Gillieron from the University of Lausanne will be speaking about trademark law in the digital age, focusing on domain name disputes.

All sessions are (hopefully) highly interactive. The students will contribute, among other things, with discussion papers, term papers, group presentations, and will participate in mock trials (one on Google’s recent copyright case in Europe), Oxford debates, and the like. Unfortunately, the Univ. of St. Gallen is still using a closed online teaching system called StudyNet, but if you’re interested in the Syllabus, check it out here. Comments, thoughts, suggestions, etc. most welcome!

From September 3 to September 8, a group of 40 students of the MBL Program and 30 alumni will be visiting Shanghai and studying at Fudan. Allen Chan, Managing Director of LGT Investment Management (Asia) Ltd. and Senior Financial Consultant to the President of Fudan University, and an old high school friend, Nathan Kaiser, partner of Shanghai and Taipei-based law office Wenfei, have helped me to put together an interesting curriculum and a wonderful line-up of speakers. The goal of the Shanghai Module is to offer our students an introduction to “Law and Business in China”.

We will start with an introduction to Chinese culture and business culture, an overview of Chinese economy (past and present), and an introduction to the Chinese legal system. We will then focus on certain hot topics at the intersection of law, business, and economy, including WTO accession, IP Law, arbitration and litigation, corporate law and corporate governance, and taxation, among others. Our lecturers will include professors from Fudan University’s School of Management and Law Faculty, partners with local and international law firms, accountant companies, as well as inhouse counsels of multinational companies in China.

In addition to lectures and in-class discussions, we also organize field trips and informal dinners with practionners. We will be visiting the production facilities of Georg Fischer Automative, a Swiss manufacturer with 1800 employees in China and among the first companies with extensive (and successful) Joint Venture experience in China. We are also working on a field trip to Intel, where the General Counsel Asia will give us his take on IP law issues.

Among our special guests are Professor Anna Wu, former Head of the Equal Opportunity Office in Hong Kong, William Frei, Consul General of Switzerland in Shanghai, and Dr. Hans J. Roth, Consul General of Switzerland in Hong Kong. Lecturers include Michelle Gon, Parter with Baker & McKenzie, Daniel Fink, the Georg Fischer Delegate of the Corporate CEO in China, Regula Hwang, Credit Suisse, and Intel’s Chen Gong. Professor Carl Baudenbacher, president of the EFTA COURT in Luxembourg, will lead the Swiss delegation.

• ’82 e-2-e arguments in system Design (Saltzer, Reed, Clark paper) – technical argument
• Fast forward to ’96: Internet no longer a medium of academics, geeks, etc.
• 1996 two strong political arguments emerged. 1) John P. Barlow at WEF, Davos: Declaration of Independence of Cyberspace: Governments have no place in cyberspace; out of reach 2) David Johnson/David Post: Law & Borders: similar argument, framed differently – libertarian view of government; claim more descriptive than Barlow’s. (Internet is different)
• Lessig’s “Code”: Johnson & Post are wrong, Barlow too. Internet is not unregulable. It’s regulated all the time. Four means of regulation, incl. law (“east coast code”), code (“west coast code”), social norms, and markets. (originally three, added markets.) Interplay among the forces (indirect regulation). Framework of four modes of regulation a.k.a. New Chicago School.
• 2002/03: Rise of the wisdom of the crowd. Yochai Benkler. 1) “Hourglass architecture” arguments: different layers of the Internet. It’s not only about the regulation of dots (cf. Lessig’s illustration of the four modes of regulation), it’s also about the question how it is regulated at the different layer (physical, logical, content) = refining Lessig & e-2-e principle; 2) Coase’s Penguin. Nature of firm has changed (OSS); emergence of third mode of production (commons-based peer production); non-compensated works.
• Emergence of these forms of interaction is a reason not to regulate.
• Means of regulation: the crowd itself could become a regulatory force, beyond the individual/social norms mode.
• Here, Zittrain comes into play. Z-theory: Four key claims. 2 descriptive, 2 normative arguments:
• Extraordinary security threats exist (so far, focus of regulators has been on different things, e.g. porn): threat of a “digital 9/11”; e-2-e network design is one that leaves network open and makes it vulnerable. Viruses (worms, etc.) could wipe up everything.
• Response to that real security threat: “code” in form of lock down of the PC.
• TiVo-izatin of PC/Internet (other example: mobile phones, come out of the box, are not programmable)
• What to do about it? So far: leave the net alone (e-2-e argument). However, we need a better argument for what the response should be. Argument of generativity. What we care about is not the e-2-e principle, but about systems that are generative (e.g. MS operating system, on which you can run a .exe file). Positive principle: if it’s generative, it’s good.
• Way to get there: Think of new solutions that build upon Benkler’s second argument: wisdom of the crowd (”5th mode of regulation”). Peer production of governance.
• E.g. stopbadware.org
• Challenges (e.g.): what does it mean for institutional design and institution building? Implications of the approach: privacy concerns (see JZ’s paper)

Now discussion. Job well done, JP, as always.

• Expansion of what law is
• Expansion of what law might apply to you
• Responses to changes in tech
• Linkages among the core themes
• Internet exceptionalism
• Business decision-making: mitigation of risk
• Role of the lawyer in this tech / law / policy story

John also summarizes the three key frameworks we’ve been working with in this course: four modes of regulation (markets, law, norms, code), the three layers of the Internet (physical, logical, content), and the three functionalities of law (law as constraint, enabler, leveler).

In the second half of the first hour, John will look ahead and discuss future trends, emerging issues as well as core values. Among the issues covered are comparative filtering, innovation (incl. P2P production, generativity), and creativity (free culture, semiotic democracy).

In the second hour, I will present my take on the course, approaching it from a slightly different angle. In essence, I’m suggesting a possible future shift from a (regulatory) paradigm of exponential growth to a paradigm of quality in digitally networked environments.

The starting place is the fact that Internet speech is different. John makes three points:

* Net creates potential for aggregation of data where none was possible/economically feasible before
* Internet has made it easier (although it might get much more difficult in the future) to speak anonymously.
* Access becomes possible over great distance at any time – speech that is posted here can be heard around the world.

John now describes the growth of online communities back in the times (i.e. mid 90ies) where ISP offered not only access to the Internet, but were in the business of creating online communities and providing content for their users. The communities were idea and issues focused, town-meeting like with a benevolent dictator style government (aka ability to exclude/terminate access.)

Fade. John tells us the story of (Ken) Zeran v. American Online (In this context, we briefly discuss CDA sec. 230) and Jake Baker to illustrate how things, at some point, turned from good to tricky. The in-class discussion is now on how the results of the two cases can (if at all) be reconciled.Break.

Back to second half of class 6.

Uups, we get a cold call from JP. He asks his TAs and co-teacher how First Amendment and equivalents work in the U.S., Canada, and the EU. Tim gives us a great 1-minute overview of First Amendment law in the U.S. and makes clear that it is primarily a right that protects against governmental viewpoint-censorship. Courts, at the outset of a case, have to make a judgment what standard of review applies to restrictions on free speech – strict scrutiny (e.g. political speech/content-based restriction) or lower standards of review.

Susie talks about Canadian law that is similar re: state-actor requirement. Presumption: Free Speech, everything is protected. Only exemption: violent action (expression through action). But: Government is allowed to restrict fundamental rights if seems legitimate in a democratic society. There’s a five-step-balancing test that looks, inter alia, into individual rights and state interests. Approach is different in Canada, but principles similar.

I now talk a bit about European approaches. My point is, I guess, that the U.S. approach to Internet-harmful speech regulation is, roughly, more speech, i.e. a pro-speech approach. Europe has taken an alternative approach, i.e. an anti-hate approach. Measures have been taken at the national level (e.g. German Penal Code), but also at the level of international law (e.g. European Convention on Human Rights, and, Internet-specific, Convention on Cybercrime, Additional Protocol.) How can we explain these different approaches? There are many elements, e.g. historical facts (e.g. Nazi propaganda in Europe vs. imprisonment of American during WW I for criticizing US participation in war); political/cultural system (i.e. relativistic conception of democracy in the US); trust/distrust in courts; different interpretations of individualism.

John now presents a couple of examples of what we can find on the Net – a slide entitled “The Good, The Bad, and the Ugly (literally). The list includes Nuremberg Files, Babes of the Web, free porn, free music, how to make a bomb, how to make/grow various drugs, etc. — The point is certainly that there are downsides to the shift from passive receivers to active users and creators, respectively.

John now introduces a new set of themes, asking what we cannot avoid on the web: SPAM (potentially a form of protected commercial speech), pornography, Viruses/Affects of viruses, advertising. Possible solutions: The resurgence of online communities reformulated around social networks, ability to exclude, feeling of living room rather than information bazaar. Social software such as Friendster, The Facebook. Technological approaches such as filtering, Pop-up blockers, SPAM blockers, family-friendly user agreements.

We end with a list of issues on the current agenda (”What are the problems?):

* US: 1996 – today: Protecting children online
* Companies: trade secrets (Apple, Diebold)
* Protecting citizens from seeing harmful information: religious; moral (porn); politics; drugs/alcohol; women’s issues.

Finally, John presents not-yet-released Berkman research (sorry, can’t blog: censorship) and, in different context, circulates the Grokster amicus submitted by HLS faculty members.

Interesting class, thanks to all.. Have a safe ride home.

As my students must have realized by now, I have a bias to think and — worse — talk in abstract concepts (call it the European blind-spot). Tonight, however, I won’t talk much about theoretical frameworks, promised. Rather, I would like to present a couple of examples illustrating the above-mentioned shift from passive receivers to active users and discuss them in an open format. While looking at the examples, please keep the following questions in mind:

1. What are the opportunities and challenges associated with the shift as illustrated by each example?
2. What are specific areas of concern or emerging legal/regulatory issues?
3. Do we need to address these concerns? If yes, what’s the appropriate regulatory approach (social norms, markets, law, technology)?
4. What are potential effects — also side-effects — of regulatory intervention?

Okay, that being said, here are the examples that we will use in class tonight. Please note that I provide positive examples, nice stories, but — of course — also at least problematic examples, some of which you might find disturbing. (Again, we’ll discuss these examples in class and provide enough context to make sense of these illustrations; however, I want to include the examples here so that our distance students can easily access them.)

(1) Research and Knowledge

• Wikipedia (1, 2, 3) [update: for a wonderful illustration how wikipedia works, click here. Via Luis Villa]
• Health information (1, 2)

(2) News Reporting & Journalism

• CBS saga
• “Every citizen is a reporter” (1, 2)
• North Korea zone
• Dean campaign and the Bloggers

(3) Entertainment

• Music & video clips [e.g. mash-ups] (1, 2, 3)
• Fan fiction (1, 2)
• Online Games (1)

(4) Social & Corporate Criticism

• Endless love
• State of the Union (1, 2)
• Media enterprises (1, 2)
• VictoriasSecret (1, 2)
• Other illustrations (1, 2)

(5) Commerce

• Online Reputation Systems (1, 2)
• Advertising (1, 2, 3, 4)

We’ll end the class with some big-picture-questions, including:

1. What are the normative dimensions and criteria to assess the shift from passive receivers to active users?
2. What are key areas of concern across the examples we’ve discussed?
3. Applying old laws or need for shift in the legal/regulatory paradigm?
4. Issues down the road?

The teaching team is looking forward to discussing these and other questions with you tonight.