Digest 69

April 26, 2017 Subscribe

SPBILF News

St. Petersburg, former capital of the Russian Empire, is one of the most beautiful cities of Russia and Europe and the biggest northern city in the world. It was founded in 1703 on the banks of the Neva River and the Baltic Sea and became a window through which one can look at Russia and, at the same time, Russia looks at the world. Don’t lose your chance to learn more about St. Petersburg during St. Petersburg International Legal Forum!

We are glad to introduce you optional tours that discover St. Petersburg from the absolutely new perspective. You will see the city being substantive, magic, romantic, get acquainted with wonderful stories of its citizens, to read more, please, visit Sightseeing Tours.

The tour Venice of the North: boat trip along rivers and canals of St. Petersburg is included to the delegate package. To apply for the tour please forward the request via Personal Office menu «Tour included in the Delegate Package. The deadline for applications is April 30th, 2017.

Registration for the SPBILF is available till 10 May

The VII St Petersburg International Legal Forum starts on May 16. The Agenda is published on the Forum’s site and is open for download. Please note that the registration for the VII SPBILF is available till May 10, 2017. Register for the Forum ►

Invitation from Moderators

A new column «Invitation from Moderators» provides details of discussion sessions. In this issue:

  • Yuliya Bondarenko, Legal Counsel, New Products Commercialization Latin America and Canada, Philip Morris International, Member of the Executive Board, Corporate Counsels’ Association of Russia, Moderator of Discussion Panel “What Challenges Face the Legal Departments in an Era of Disruptive Technologies?”;
  • Igor Drozdov, Chairman of the Executive Board, Skolkovo Foundation, Moderator of Discussion Panel “Code Vs. Lex: Law as Algorithm – The Life of the Laws in a New Technological Order”;
  • Alexander Zavtrik, Head of Legal Department, PJSC 'MMC 'Norilsk Nickel', Moderator of discussion session “Development of the Legal Mechanisms of Environmental Activities of Enterprises”;
  • Mikhail Kazantsev, Deputy Director, Head of the Corporate and Property Relations Department, Rosgeologiya JSC, moderator of discussion session “Specifics of Joint Stock Company Management under Shareholder Agreement with a Governmental Unit as One of the Parties Thereto”;
  • Georgiy Omelyanyuk, Deputy Director, Russian Federal Centre of Forensic Science of the Ministry of Justice of the Russian Federation, moderator of discussion session “Meeting of the Interstate Technical Committee 545 'Forensic Science' – 'Problems of Standardization in Forensic Science Activity'”;
  • Svetlana Smirnova, Director, Russian Federal Center of Forensic Science of the Ministry of Justice of the Russian Federation, moderator of discussion session “Standardization of Forensic Services, Forensic Initiative, Creative Approach to Forensic Activity: Opportunities and Limitations”;
  • The Future now: can AI generated works qualify for copyright protection? – the article by Baker McKenzie, organizer of the business lunch “Artificial intelligence”.

“This will help many lawyers rise up to the technological challenges of the day”

Yuliya Bondarenko, Legal Counsel, New Products Commercialization Latin America and Canada, Philip Morris International, Member of the Executive Board, Corporate Counsels’ Association of Russia, Moderator of Discussion Panel “What Challenges Face the Legal Departments in an Era of Disruptive Technologies?”.

What makes the topic of your discussion panel relevant?

This is the second time the Corporate Counsels’ Alliance of Russia (CCAR) is hosting a discussion on disruptive technologies as part of the St. Petersburg International Legal Forum. The success of the CCAR roundtable at SPILF’2016 proved that the topic is viewed as highly relevant by legal professionals. Indeed, the roundtable topic - Disruptive Technologies: Are Corporate Counsels Ready? – met with much interest and provoked a lively debate among the event participants.   The answer to the key question posed by the CCAR roundtable at SPILF’2016 – are corporate counsels ready for the challenge? – was obvious. The speakers and debate contributors alike showed a high level of readiness not only to tackle the challenges as they arise, but also to take a leadership role in shaping an enabling legal regulatory framework for innovation.

This year CCAR plans to further elaborate on the subject of disruptive technologies and innovation, focusing on the unique challenges created by the unprecedented leap in digital technology and technological progress overall for corporate legal departments. Would the leader of a modern in-house legal department consider full automation of specific workflows? Why is it that such concepts as information technology and digital innovation, as well as certain other terms that until recently used to belong in the province of narrowly specialized technical lingo, are now part of the everyday vocabulary of corporate counsels? Is it possible to delegate some of the paralegal work to robots? These and other questions will be brought up at the CCAR panel by heads of the in-house law offices of some of the leading Russian and international corporations.

Some of the brightest innovators among corporate counsels will share their views on the challenges that confront in-house legal offices in the era of disruptive technology at the discussion session due to take place on 17 May 2017. Ruslan Igragimov, Member of the Board and Vice President for Corporate and Legal Affairs, Mobile TeleSystems, will attempt to illuminate some of the pivotal aspects of the “battery limits” between human and artificial intelligence, drawing up a prototype “design specifications brief” for a “law-bot.” Olga Teplova, Chief Legal Officer at Google Russia, will share the company’s experience of a user test that helped it build a client-oriented legal services utility. Igor Kondrashov, Vice President and Chief Legal Officer at Sberbank, will tell the story of the bank’s existing lawyer robot. CCAR President Alexandra Nesterenko will explain the role of the association in the innovation drive of in-house counsels. Konstantin Rychkov, Senior Analyst with IDС, will supply the audience with useful statistics on how automation decision-making proceeds within corporate legal offices.

Which legal professionals would you especially recommend to attend your panel session?

Chief Legal Officers and corporate counsels, as well as representatives of law firms, if the firm’s aspirations go beyond gleaning together a general idea of what IT solutions work in the legal services business, and if it’s ready to jump into a heated debate on how to use those solutions with maximum effect, or how they themselves or their peers can use them.

Apart from lawyers, the panel may be useful to IT solution providers, i.e. the people who develop software for lawyers to use. By attending the talk, the legal and corporate automation solution providers stand to get a better idea of lawyers’ needs, so they can work this new understanding into their products.

The practical acumen which distinguishes the CCAR audience is conducive to consolidating the positions of in-house counsels working for corporations in many different fields of business, from mining to telecommunications. Given the inevitability of the advent of disruptive technologies into the legal profession, members of the professional services community can only benefit from discussing the related issues with those corporate counsels who have already harnessed disruptive technologies as their trusty allies. This will help many lawyers rise up to the technological challenges of the day.

“Only one in 500 lawyers will still have a job twenty years from now, while the rest will have been replaced by artificial intelligence”

Igor Drozdov, Chairman of the Executive Board, Skolkovo Foundation, Moderator of Discussion Panel “Code Vs. Lex: Law as Algorithm – The Life of the Laws in a New Technological Order”

In today’s world, digital reality already pervades every aspect of our life, but its pervasive presence is only growing with technological progress. The capabilities of artificial intelligence are being upgraded, and the penetration of the Internet of Things is increasing with every passing day. New technological realities surpass the existing legal frameworks, necessitating an update of the scientific approaches applied in the fields of law and institutional development, but they also create new opportunities. Businesses and government agencies alike are increasingly keen on seeing the legal and rulemaking processes placed on an algorithmic footing, which would reduce transaction costs, make intermediaries redundant, and boost efficiency. Indeed, analysts predict that only one in 500 lawyers will still have a job twenty years from now, while the rest will have been replaced by artificial intelligence.

Given this outlook, the legal community seems to have no other choice but to step up to the helm of the strident changes and rethink the vehicles and language of legal regulation in line with the demands of the new technological order and the possibilities of the “automation of law.” The role of professional lawyers in this new system is yet to be identified.

The subject of placing legal regulation on an algorithmic basis is fraught with a range of challenges, which are yet to be discussed in a serious, systemic fashion in our country. We plan to discuss the theoretical and practical aspects of the automation of law together with members of the Russian and international expert community, Russian government officials, and high-tech entrepreneurs involved in legal tech development.

It appears that our discussion panel would be of interest to a broad audience of professionals, as the issues to be discussed bear on the future of law and the legal profession in its entirety.

The Future now: can AI generated works qualify for copyright protection?

The business lunch “Artificial Intelligence”, organized by Baker McKenzie, will take place on May, 19 from 1 PM till 3 PM at the General Staff building as a part of the Satellite Events of the VII SPBILF.

Participation is by invitation only.

By Birgit Clark, Julia Dickenson and Alex Morgan, Baker McKenzie London

Over the past ten years we have seen astounding developments in artificial intelligence ("AI") and machine learning. AI is growing increasingly sophisticated and rather than being limited to "operating functions" and "machine learning" (e.g. autonomous cars; machine translators; speech, handwriting and image recognition systems etc.), we are now in a world where machines are being used to (help to) create different types of content which would traditionally have fallen under the header "art", i.e. music, paintings and poetry. This leads to various questions, including who owns AI generated works, and are they even protectable by copyright at all?

What is AI?

AI is sometimes defined as the science of making computers do things that require intelligence when done by humans. Falling within this definition are systems that understand and learn from observations without requiring additional programming. Often these systems are designed to perform human-like cognitive tasks, improving their performance by learning from data, but without further human input.

United States

At first glance, the legal situation regarding AI generated works in the US is relatively clear. In the wake of a US copyright infringement court ruling involving a selfie-taking monkey, the US Copyright Office in 2016 updated its interpretation of “authorship” under the US Copyright Act. In its updated guidance in the third edition of the Compendium of US Copyright Office Practices, the Office expressly clarified that it would not register works produced by a machine and only register an "original work of authorship, provided that the work was created by a human being". Referring to a Supreme Court decision in Burrow-Giles Lithographic the Office stressed that copyright law only protected “the fruits of intellectual labour” that are “founded in the creative powers of the mind.” In this context it is important to recall that US copyright law rewards "originality, not effort", therefore rejecting the idea of copyright protection solely as "reward for the hard work" of creating a work.

How US copyright law would assess works created with the assistance of AI, rather than solely by AI, is a more opaque question and indeed the lines between AI generated and AI- aided works are blurred and will shift further in time. In the absence of case law several approaches are conceivable, including that authorship should rest with the human "creator" who is utilizing the AI and/or joint ownership between the user of the AI and the creator/owner of the AI depending on the circumstances.

United Kingdom

In the UK the law already includes a provision that specifically addresses "computer-generated works". Section 9(3) CDPA provides that for computer-generated literary, dramatic, musical or artistic works (legally defined in Section 178 CDPA as works that are generated by computer in circumstances such that there is no human author of the work), the author is the person "by whom the arrangements necessary for the creation of the work are undertaken".

However, Section 9(3) CDPA only considers who is deemed to be the author of a work, and not whether a computer-generated work is "original" so that it should be afforded copyright protection. In the UK the traditional test for originality is whether the work is an expression of the author's skill, labour and judgment. Although deemed equivalent to the EU harmonised test for originality (i.e. whether a work is the author's own intellectual creation), the UK test arguably sets a slightly lower threshold.

While UK case law has not considered it in detail, one way to approach this issue is to consider if the deemed author (i.e. the person who made the arrangements for the creation of the work by a computer) uses his/her skill, labour and judgment in the arrangement. It should also be recalled that UK case law to date on computer-generated works focuses on very simple computer generation of content. In the case of more sophisticated AI, such as machine learning where a machine teaches and adapts itself, it may be harder to view the person who originally created the AI algorithm(s) as the person who undertook the 'arrangements necessary for the creation' of the end resulting work. On that strict analysis there would always be someone who made the original 'necessary arrangements' and would therefore be deemed co-creator. With AI technology evolving further however, this strict analysis will lead to increasing legal uncertainty. It is therefore foreseeable that technology developments may stretch the current legal framework too far and updated AI legislation will eventually become necessary; a fact which has already been acknowledged by the UK government.

European Union

For the EU as a whole (as opposed to the national laws of its member states), showing that a 'work' created by a machine will be protected by copyright, even if the work is something that would traditionally be protected by copyright e.g. a piece of music.

There are no harmonised EU provisions for the protection of computer-generated works and the EU test for subsistence of copyright as set out in the CJEU's Infopaq decision focuses on whether the work is the author's own intellectual creation. This test thus clearly envisages an 'author' being a human person, and is generally interpreted as such. Therefore, in order to qualify for copyright protection the work itself needs to be a human author's own intellectual creation. Even though this test could potentially be stretched to cover human beings "using" computers and/or AI tools to create their own intellectual creation(s), it is difficult to reconcile this with content created by advanced AI such as machine learning, where a human commences the process but does not put his/her own intellectual creation into the final work itself.

Acknowledging the insufficiency of the current EU legal framework regarding the use of robotics and AI, inter alia, in relation to issues of ownership of intellectual property rights, the European Parliament in February 2017 adopted a resolution containing recommendations to the Commission on civil law rules on robotics. The resolution also included a call for the EU Commission to assess and develop the criteria for an 'own intellectual creation' for copyrightable works produced by computers or robots.

The Future now?

While the US Copyright Office has - for the time being - taken a clear decision not to regard machine generated works as protectable by copyright, the UK and pan-European copyright laws have so far not caught up with the reality of AI: the law either does not anticipate (and explicitly protect) content being created by the application of AI or does not fully deal with the detail and nuances of the current state of technology.

While the US, UK and EU have all indicated they will further review this area of law, other jurisdictions are already one step ahead: in Japan an intellectual property task force is currently developing an updated legal framework in order to protect AI-created works from unauthorized use, and to ensure a fair compensation of the developers of AI systems.

With the Fourth Industrial Revolution (4IR) in full swing, it will be a major challenge for legislators everywhere to ensure that the law adapts to the changing technological landscape in order to protect and at the same time foster innovation.

“Ensuring the best regulatory environment to maintain a sustainable balance between economics and ecology is one of the key priorities of the state”

Alexander Zavtrik, Head of Legal Department, PJSC 'MMC 'Norilsk Nickel', Moderator of discussion session “Development of the Legal Mechanisms of Environmental Activities of Enterprises”

Why is the topic of your panel discussion relevant?

In recent years, man-made impact on the environment has risen to such a level that scientists are now talking about an age of anthropocene, a new geological era in which the level of human activity plays a significant role for the ecosystem.

A significant part of such impact results from industrial activities inevitably affecting the environment. Realizing its environmental responsibility, both the Russian state and businesses concentrate great efforts on addressing the environmental challenges.

To raise the awareness of the issues of environmental development of the country, 2017 has been declared the Year of Ecology.

However, despite the attempted measures that include improvement of legislation and regulatory compliance, the majority of Russian manufactures still do not meet the present-day environmental requirements.

One of the state’s principal tasks in this regard is establishment of an optimal regulatory environment to maintain a stable balance between economy and ecology, steady industrial growth and quality of the environment.

For these purposes, we propose to discuss legal mechanisms that help to minimize the negative environmental impact of industrial plants, their practical application, foreign regulation experience of greening the economy together with possible areas of further legislative improvement.

Which legal experts in particular should attend your session?

We believe that the discussion will be relevant for all lawyers who are interested in the implementation of the state’s environmental policy.

To share hands-on experience and enable a comprehensive review of regulatory challenges arising in environment-related activities of businesses, we have invited public officials, businesspersons, legal consultants and academics to speak at our panel.

“The evolution of top-down approach to corporate governance of state-owned joint-stock companies meets global modification trends of corporate governance in developed legal systems”

Mikhail Kazantsev, Deputy Director, Head of the Corporate and Property Relations Department, Rosgeologiya JSC, moderator of discussion session “Specifics of Joint Stock Company Management under Shareholder Agreement with a Governmental Unit as One of the Parties Thereto”.

Why is the topic of your panel discussion relevant?

The proposed discussion topic is relevant because the existing mechanism of corporate governance of state-owned joint-stock companies (company’s charter and internal documents) can be updated to create a flexible and effective governance model that would meet the demands of dynamically developing market economy with mixed composition. The evolution of top-down approach to corporate governance of state-owned joint-stock companies through de-centralization, enhanced discretionary and dispositive nature of corporate governance meets global modification trends of corporate governance in developed legal systems. A particular example of such trend is when a public-law entity enters a shareholders’ agreement primarily to protect the public interest for the purposes of governance of the state-owned joint-stock company.

Which legal experts in particular would you recommend to attend your panel discussion?

We believe that this discussion will be relevant primarily to in-house lawyers of Russian state companies and public authorities, as well as legal consultants specializing in PPP (aspects related to corporate practice).

“The aim of the meeting is to discuss the current state and prospects of international cooperation in forensic services standardization”

Georgiy Omelyanyuk, Deputy Director, Russian Federal Centre of Forensic Science of the Ministry of Justice of the Russian Federation, moderator of discussion session “Meeting of the Interstate Technical Committee 545 'Forensic Science' – 'Problems of Standardization in Forensic Science Activity'”

Why is the topic of your session relevant?

Technical Committee on Standardization 134 Forensic Science (TC 134) was created on the basis of the Russian Federal Centre of Forensic Science of the Ministry of Justice of the Russian Federation and mirrors the International Organization for Standardization’s international committee ISO/TC 272 Forensic Science. Russian Federation is a full-fledged participating member of the ISO/TC 272. TC 134 is devoted to the same topics as the ISO/TC 272. Apart from international cooperation, ISO works closely with representatives of the CIS countries on promoting cooperation in forensic services standardization in the Eurasian space. For instance, the Interstate Technical Committee 545 Forensic Science (ITC 545) was established by the decision of the Interstate Council on Standardisation, Metrology and Certification of June 28, 2016. Russian Federation provides the ITC secretariat.

The first ITC 545 meeting will take place at the Forum and will address implementation of standardization mechanisms in forensic services. The aim of the meeting is to discuss the current state and prospects of international cooperation in forensic services standardization.

The discussion will be attended by representatives of forensic institutions and national standardization bodies and members of the ITC 545 Forensic Science from Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. It is planned to discuss the following topics:

  • standardization of forensic services as one of the mechanisms of promoting a uniform research and methodology approach to expert procedures;
  • role of the Interstate Technical Committee on Standardization (ITC 545) Forensic Science in formation of the Eurasian forensic space;
  • standardization experience of international accreditation of forensic organizations;
  • specificities of national legislation on standardization for performing forensic services in the Eurasian space;
  • harmonization of judicial proceedings requirements and development of international and national standards of forensic examination: opportunities and limitations.

Which legal experts in particular should attend your panel discussion?

I believe the ITC 545 meeting will be particularly interesting to representatives of forensic expert institutions and national standardization bodies. We invite legal experts dealing with evaluation of evidence, management and didactics in the law to participate in the session.

“Severe modern challenges and increasing demands of contemporary judicial proceedings present an urgent need for forensic support of law-enforcement to move to a completely new level in the entire global community”

Svetlana Smirnova, Director, Russian Federal Center of Forensic Science of the Ministry of Justice of the Russian Federation, moderator of discussion session “Standardization of Forensic Services, Forensic Initiative, Creative Approach to Forensic Activity: Opportunities and Limitations”.

Why is the topic of your session relevant?

Severe modern challenges and increasing demands of contemporary judicial proceedings present an urgent need for forensic support of law-enforcement to move to a completely new level in the entire global community. Globalization of the rule of law issues, as well as requirement for expert reports in both foreign and international courts stimulate standardization of forensic services. At the same time, forensic initiative and creative approach to choosing necessary methods and means of solving current expert tasks are traditionally important for forensic examination.

Legislation and law enforcement present more and more complex criteria for forensic objectification, which has increased the role of the principles of adversariality and equality of parties in modern judicial proceedings. Careful attention is being paid to scientific validity and objectivity as basic principles of forensic activities, not only because expert research and conclusions are to be made according to a common scientific and methodological approach and common technical terms, but also to actively prevent a large number of pseudo-scientific methods penetrating into modern forensic practice.

Various countries and legal systems have their own way of addressing the issue of harmonization and standardization of forensic services, opportunities for forensic initiative and creative approach to forensic activity. It seems that such a high-profile platform as the Forum is a very appropriate place for an academic discussion and review of the specifics of these definitions in order to combine the efforts of leading scholars and exchange best practices. We believe that the overall results of the discussion will help to promote fair trial by resolving issues that require expert knowledge.

Which legal experts in particular should attend your session?

We believe that this session will be interesting to all members of the legal profession whose work is in any way associated with the issues of special knowledge application in judicial proceedings, including both direct subjects of judicial proceedings in general and subjects of forensic services in particular. It might also interest lawyers who study issues related to the evaluation of evidence, management and didactics in the law.

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