Focusing on Law Facilitating Technological Innovation

As has been reported widely, the White House Big Data review was released last week. Paul provided initial analysis. While the report does not seem to counsel dramatic action, several of the recommendations suggest that there will be increased consideration of regulating the U.S. technology industry than there has been, at least, to date. Relatedly, as I mentioned last month, the interplay between both U.S. and foreign laws governing surveillance, and the technology industry more broadly, is getting more attention. So it turns out that the day after the Big Data report came out, I happened to be doing some reading on the plane while traveling to a panel at Stanford Law School’s conference on Governing Intelligence: Transnational Threats and the National Security State, and I came across UC Davis Professor Anupam Chander’s recent article, How Law Made Silicon Valley. Chander says that the emergence of today’s Silicon Valley (and the U.S. more generally) as the hub of technological innovation (which led to extraordinary economic achievement) was no accident. Instead, he suggests that U.S. law and policymakers made deliberate decisions in the past twenty or so years to foster a legal environment that provided technology companies the freedom to innovate---freedom that was not available to them in other countries due to more regulated environments. Here is the abstract of his article published in the Emory Law Journal:

Explanations for the success of Silicon Valley focus on the confluence of capital and education. In this Article, I put forward a new explanation, one that better elucidates the rise of Silicon Valley as a global trader. Just as nineteenth-century American judges altered the common law in order to subsidize industrial development, American judges and legislators altered the law at the turn of the Millennium to promote the development of Internet enterprise. Europe and Asia, by contrast, imposed strict intermediary liability regimes, inflexible intellectual property rules, and strong privacy constraints, impeding local Internet entrepreneurs. This study challenges the conventional wisdom that holds that strong intellectual property rights undergird innovation. While American law favored both commerce and speech enabled by this new medium, European and Asian jurisdictions attended more to the risks to intellectual property rights holders and, to a lesser extent, ordinary individuals. Innovations that might be celebrated in the United States could lead to imprisonment in Japan. I show how American companies leveraged their liberal home base to become global leaders in cyberspace. I argue that nations seeking to incubate their own Silicon Valley must focus on freeing speech, and so must the United States, if it hopes not to break this new industry.

Given that the surveillance issues are seemingly morphing into a broader conversation of how not just the government, but also the technology industry handles data, the article is well worth a read.