Battle of the Bike Trainers: Following the Patent War Within the Cycling Community

October 26, 2022October 26, 2022 / Washington Journal of Law, Technology & Arts / Leave a comment

By: Zach Finn

The move to integrate physical activity with rapidly changing technology is not a new endeavor. In the last ten years, gadgets such as smartwatches and smart mirrors, and companies like Peloton have advanced the ways we exercise and track our personal fitness. With this emerging field combining technology and exercise, a new market space has opened, causing companies to quickly create innovative equipment or fall behind to more inventive competitors. With the downfall of Peloton starting in March of 2021, the cycling industry has seen an uproar of technological innovation ranging from E-bikes to online virtual reality racing and exercising. With all the excitement and novelty that this brings, comes a battle for market dominance in this developing smart biking space. This has produced an exhilarating and dramatic patent war.

Wahoo Fitness (“Wahoo”) is a fitness technology company based in Atlanta, Georgia. In April 2022, the hardware developer acquired RGT Cycling, a virtual cycling platform, thus acquiring new software to help develop an indoor cycling and gaming program through a subscription service known as Wahoo X. Using Wahoo’s KICKR and KICKR CORE trainers, hardware that one attaches to the rear of a cycling bike making it stationary while connecting it to virtual software, Wahoo transformed its company to produce smart bike trainers that deliver a “realistic, accurate, and quiet indoor cycling experience.” Wahoo acquired patents for their hardware.

Zwift, a software company, owns and operates a multiplayer online cycling and running physical training program, enabling users to interact, train, and compete in a virtual world. In an effort to capitalize on the booming indoor cycling frenzy, Zwift partnered with JetBlack, a hardware developer, to develop its own bike trainer. This trainer, known as the Zwift Hub, became available in the United Kingdom and the United States on Oct. 3rd, 2022, and on that same day, Wahoo filed suit against both Zwift and JetBlack for patent infringement.

35 U.S. Code § 271, “Infringement of a Patent”, states that “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” The U.S. Patent system is founded on protection which incentivizes businesses and people to continue to innovate and develop new products and ideas, with less threat from copycats. Wahoo alleges that Zwift has rebranded the JetBlack Volt Trainer, which they believe, in layman’s terms, is a rip-off of their KICKR CORE trainer. Wahoo has filed three patent infringement claims.

United States Patent No. 10.046.222, entitled “System and Method for Controlling a Bicycle Trainer” was issued by the United States Patent and Trademark Office on August 14, 2018. United States Patent No. 10.933.290, entitled “Bicycle Trainer” was issued on March 2, 2021. United States Patent No. 11.090.542, entitled “System and Method for Controlling a Bicycle Trainer”, was issued on August 17, 2021. Wahoo owns all rights and interests for each patent, including the sole and exclusive right to prosecute and enforce the patent against infringers. They have the right to collect damages against those who have infringed upon the patents. The KICKR and KICKR CORE practice the invention claimed by all three patents. Pursuant to 35 U.S.C § 287, Wahoo gives notice of the patent by listing them on its website.

Should the court find that Zwift has infringed upon Wahoo’s patent, Wahoo is seeking injunctive relief. This means Wahoo is pushing the courts to forbid Zwift from releasing the Hub in the United States retail space. Wahoo is also seeking compensatory damages for any harm the company endured from the release. Winter v NRDL (2008) is the leading case for requirements for preliminary injunctive relief. To obtain a preliminary injunction as Wahoo is currently seeking, the company will need to show 1) the likelihood of success of a permanent injunction based on the merits of the claim, 2) irreparable harm caused by Zwift, 3) a balance of equities (what would be fair), and 4) what is in the interest of the public. We should expect to see how the court rules on a temporary injunction very soon, and a permanent injunction down the line. It seems plausible for Wahoo to get a preliminary injunction against Zwift, if they establish the requisite likelihood of success on the merits, demonstrate an irreparable harm like monetary loss caused by Zwift, articulate the dangers of patent infringement, and portray how an injunction is to the betterment of public interest.

To thicken the patent war drama even more, in June 2015, Wahoo was sued for patent infringement over the very same stationary trainer that the company is suing Zwift and JetBlack for using. Powerbahn, another hardware company, sued Wahoo for patent infringement, seeking at least $1 million in lost royalties. Powerbahn licensed its patented hardware to a company called Nautilus Inc. In Powerbahn’s filed claim, Nautilus Inc.’s executive took the technology when he left the company to join another. The company he joined then licensed the patent to none other than Wahoo. The case was dismissed in April 2021, but it illustrates the theatrical and dramatic timeline of the trainer patent.

In summary, it is an exciting time at the intersection of the technological, cycling, and legal communities. As this new development in the patent war over biker trainers ensues, one must wonder the means and reasons for patent litigation today. In my opinion, as an avid cyclist enthusiast and law student, I question the motives behind Wahoo’s patent infringement claims against Zwift. If the JetBlack Volt Trainer, the hardware Wahoo believes Zwift developed and used for their Hub, was released in 2020, why did Wahoo wait until Zwift partnered with JetBlack, acquired the hardware, produced, and released it to the public? My thought is that Wahoo wanted to strategically undercut one of its biggest rivals, hoping that this patent infringement will lead to an injunction, which would severely destabilize Zwift’s success in the technological exercise market space. If this is the case, those who have interest in antitrust might also want to follow this development. Until then, we can only sit back and watch as this patent war unfolds like a soap opera, as Zwift had until October 24, 2022, to respond to Wahoo’s complaint.

Self-Driving Automobile Accidents—Who Should be Liable?

October 24, 2022 / Washington Journal of Law, Technology & Arts / Leave a comment

By: Elliot Min

Ever since the gasoline shortages and soaring oil prices during the 1973 Arab Oil Embargo, many automakers have been exploring options for alternative fuel vehicles, including electric vehicles. Unfortunately, it took almost 30 years after the Arab Oil Embargo until technological innovations in electric and hybrid electric vehicles made it so that these vehicles could be a legitimate alternative to their gasoline counterparts. Technological innovations in electric vehicles have not only made it so that they rival their gasoline counterparts, but they also offer unique services and options that gasoline vehicles don’t have the capability of. For example, the significantly stronger battery packs in electric vehicles provide a stable power source that is necessary for the numerous complex sensors and computer systems used for autonomous driving.

Alongside these technological advances came complex legal issues as these autonomous driving services began to create scenarios and situations in unchartered territory. As technology keeps moving forward at a breakneck pace, the law has struggled to match, especially with its heavy reliance on precedent. A huge legal issue arose: “who holds liability when an autonomous vehicle is involved in an accident?”

Who is currently liable?

Currently, no case law definitively places liability at the feet of the automobile companies, the individual(s) using the self-driving technology, or the individual(s) not using the technology. Instead, the contemporary legal system is very analytical and fact specific. Though this may appear to be an equitable method it is not realistically sustainable. With the rise of the number and complexity of these lawsuits, there needs to be a more solidified standard that courts can uniformly rely on. The problem intensifies when considering that the accident rate of self-driving cars is more than two times higher than in human-driven vehicles (though the severity of injuries is much lower than in human-driven vehicles).

The National Highway Traffic Safety Administration has recently announced that it will be updating the regulations on self-driving vehicles so that they won’t need traditional controls like steering wheels or pedals. This change is immensely significant for the legal evolution of transportation and motor vehicle safety standards. Though no fully automatic vehicles are currently being industrially produced for the public, colossal corporations such as Google, Apple, and Tesla are all pushing to launch fully self-driving electric cars shortly. In addition to these influential companies entering the autonomic vehicle product market, the United States Department of Energy is incentivizing residents to purchase all-electric and plug-in hybrid vehicles. The Biden administration also secured a Bipartisan Infrastructure Law which is investing over 14 billion dollars in expanding electric vehicle charging infrastructures and critical minerals supply chains (which are necessary for batteries, components, materials, and recycling).

Who should be liable?

The unfortunate reality is that it is inevitable that accidents will continue to happen on the road. Even with academic experts predicting that there will eventually be an extinction of human-driven vehicles on the road, accidents will continue until then (and potentially even after).

Though the United States Department of Transportation has issued a series of guidelines for automakers, they have purposely left a bunch of autonomy to individual state courts to determine the liability of any accidents that involve autonomous vehicles. The Washington State Legislature has not considered any solidified policies regarding autonomous vehicles, but rather has created the Washington State Transportation Commission. This commission gathers information and develops policy recommendations for the Legislature to prepare for the operation of autonomous vehicles on public roadways across the state.

There is precedent to show that the courts will look into each accident and analyze the facts to determine what directly or indirectly caused an accident. Was it a defect in the code or the product? Was it the mistake of the human driver? Was it a combination of factors that led to the accident that an average human driver could have avoided? These are just a few of the complex questions that the courts will have to answer before placing liability. Especially considering that this is the genesis of the autonomous vehicle law, the courts will have to be careful about where they place liability and how much liability (since it will serve as a landmark precedent for future cases). It could serve as a huge deterrent for individuals and corporations to innovate if the courts continue to place the bulk of the financial liability on the autonomous vehicle producers. On the other hand, consumers may be hesitant to purchase these vehicles if they view them as coming with a high legal risk (which could also influence the willingness of market competitors to enter this market).

Why does this matter?

These lawsuits will be extremely expensive as autonomous driving systems involve millions of lines of source code, the lives of every individual that uses public roads, and the corporate powerhouses that are willing and able to join the autonomous vehicle marketplace. These outcomes could also lead to expensive vehicle recalls which are common in defective automobiles because of their high safety concerns. Punitive damages can also come into play as the United States has allowed for punitive damages for outrageous conduct in the designing and/or manufacturing of a defective product. The future will likely be dominated by autonomous vehicles. The contemporary courts and legislature working in this field will be the original sculptors of the legislation that may become extremely important in the future.

Code is Law: The Importance of Legal Engineering in DAOs

October 20, 2022 / Washington Journal of Law, Technology & Arts / Leave a comment

By: Stephen Cromwell

Decentralized Autonomous Organizations (“DAOs”) are a revolutionary new way of conducting business, earning an income, and distributing profits to participants and investors. DAOs are, in essence, companies or organizations built on decentralized and permissionless blockchains using smart contracts. Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met, and can be customized to execute different business functions. Just as a company maintains one or more bank accounts in the real world, DAOs maintain one or more cryptocurrency wallets governed by smart contracts.

The governance of the company is typically commanded by documents and legal precedents dictating standard procedures for the formation, fundraising, employment, and operations of the company. Company governance may take many forms depending on how the company is structured, and there are a multitude of legal considerations for differing corporate structures, such as tax implications, fiduciary agreements of officers and board members, and profit distribution mechanisms. Each of these considerations are affected by the conduct of individuals and are dictated by corporate charters and contracts, which typically assign power in a hierarchical way. Although some forms of partnerships may mandate a democratic process for business purposes, typically they still maintain a board to simplify control and gain efficiency in decision making.

DAOs, however, are entirely governed by the terms of the smart contract and money cannot move without the terms being met. This concept is commonly referred to as “code is law.” This means the charter can be automatically executed, and dividends and wages can be paid without necessary authorizations coming from officers or employees. Additionally, the issuance of governance tokens, much like traditional shares of equity, are issued in a predetermined way in accordance with the code of smart contracts. This enables much greater flexibility with respect to compensation schemes, ways to earn shares, or how DAO voting is conducted. For example, a DAO may issue governance tokens to its employees or contributors, much like an employee stock option. This issuance may be done in a more traditional, scheduled manner by issuing tokens in a specific quantity for a given period of time. However, the DAO could choose to issue governance tokens in a less traditional way, such as automatically awarding tokens for work performed, almost distributing equity through micro contract arrangements. Therefore, after a X amount of work is done, a contributor may receive Y amount of shares. This incentive structure may produce greater work efficiency as the contributor is incentivized to work as hard as possible and maximize both the wage and dividend they might receive. Since smart contracts monitor work products automatically, efficiently, and without bias, this form of compensation may prove to be more fair and allow for changes in productivity given a dynamic workforce.

However, DAOs are not exempt from the law, and it is critically important that DAO founders think about building compliance into their smart contracts. For example, Merit Circle is a DAO that develops play-to-earn video games in which assets within the game can be bought and sold on open markets. To get off the ground, Merit Circle raised $4.5 million dollars in a seed round of funding composed of 10 investors in October of 2021, including another DAO named YieldGuild and YieldGuild’s founder. Merit Circle and YieldGuild entered a Simple Agreement for Future Tokens (SAFT), constituting a $175,000 investment at a price of $0.032 for 5,468,750 Merit Circle governance tokens. Then on May 5, 2022, a member of the Merit Circle DAO named “HoneyBarrel” posted a governance proposal titled “MIP-13” on the DAO’s forums requesting that YieldGuild’s ownership in seed tokens be refunded prior to the public unlocking of the tokens, effectively canceling their investment. Many of the members of the DAO expressed support for the action while a few members criticized the action. Given the public nature of decision making that is inherent in DAOs, the proposal was set for voting on the DAO’s governance protocol and passed with 86% of the vote. This vote forced the DAO to refund the investment and remove the governance tokens. In response, the Merit Circle administration issued a counter proposal to buy back the tokens at a price of $0.32 for a total purchase of $1,750,000 under a settlement agreement. This vote passed with 100% support of the DAO’s voting members. Both parties decided it was in their best interest to settle the matter and avoid litigation, and YieldGuild accepted Merit Circle’s settlement offer. However, if YieldGuild had decided to litigate instead, it is likely the DAO founders would have been liable for the resulting roughly $3 million dollar loss.

Harm, such as the case above, is avoidable so long as DAO founders consider the agreements or laws they might be held to during development. However, doing so is extremely difficult given the need to diagnose complex legal agreements, determine what law applies, and build statutory interpretation into code. Therefore, a new class of lawyering has arisen. A lawyer that can practice and code is referred to as a Legal Engineer. As the importance of smart contracts grows and Web3 expands, the demand for competent legal engineers will grow as well. Some lawyers are actively embracing this new class and are beginning to set certifications and standards for this new kind of work. Additionally, there is opportunity for the development of legal applications that can add ease, certainty, and dispute resolution to Web3 transactions, something that has been missing in the world of immutable crypto transactions. So whether you’re a lawyer, law school administrator, or law student, adding Legal Engineering skills to your skillset is a must-do as the nature of transactions and contracts begins to evolve around the world of Web3.

Immersive Crime: A Call for Action to Regulate Crime in the Metaverse

October 18, 2022October 20, 2022 / Washington Journal of Law, Technology & Arts / Leave a comment

By: Talia Cabrera

TRIGGER WARNING CONTAINS STORIES REGARDING SEXUAL ASSAULT

The concept of video games offering an alternative life is not a new idea. As technology advances, games like a Second Life, Sims, and even Club Penguin have adapted to new interfaces to allow players to continue to create a supplemental life that differs from the one they live off-screen. The Metaverse is now expanding this alternate universe through virtual reality (VR) by creating an immersive platform where you can do anything you can imagine.

Immersive technology, like VR, allows users to see a panoramic view of the image in front of them on their devices. Headsets and handheld controls enhance the simulation by making it more natural and vivid. It can feel like you are in these experiences without physically being there. Metaverse’s social networking app, Horizon Worlds, is a digital environment built around people and how they hope to interact with each other in the virtual world. A user can create an avatar, teleport around with a click of a button, and feel the presence of other users. Your avatar, a 3D impression of what you represent, can outwardly show facial expressions and body language when interacting with one another. Meanwhile, you are physically waiving your arms in your living room with a blocky Oculus system over your eyes while your avatar travels around the world. The immersive technology of VR makes the line between your physical and virtual worlds blurry. However, the violent interactions in Metaverse feel too much like the physical world.

Harmful behavior thrives in a largely unregulated space. The Metaverse’s failure to moderate content in Horizon Worlds has caused high rates of users being harassed, virtually groped, and gang rape. Online abusers are attacking female appearing avatars immediately after they are logging onto the platform. Researchers from SumOfUs, a nonprofit dedicated to researching Horizon Worlds, have all separately experienced male-appearing avatars making suggestive and lewd remarks. In one case, a researcher’s avatar was led into a private room where she was told to turn around so he could “do it from behind” while other users in the room could watch. Several other people have reported racial and homophobic slurs being used in the metaverse highlighting the rapid growth of harassment in a dangerous world.

Are the abuses to our virtual bodies causing the same amount of harm to our physical bodies to be criminalized? It’s hard to have an affirmative answer, but with recent allegations surfacing from the Metaverse, action needs to be taken.

The studies around Metaverse users point out the difficulty of prosecuting harassment in this virtual world. Its difficult to punish virtual sexual assault of avatar through law, but the harm it causes to the user may be as dangerous to the actions in the real world. Surely, Meta needs to restrict abusive behavior, sexual violence, and hate speech through policies on their platform to reduce the amount of harassment, but other solutions need to catch up to technology. These seriously immoral acts done in the Metaverse may call for the user to get banned from the game, but is that enough? With Meta’s goal to reach a billion people in the next decade, concerns about integrating the law, privacy, and protection for users across state lines and around the world will continue to be a point of concern until regulators hold Meta accountable today.

Sexual harassment, verbal abuse, and racial slurs are not isolated to the Metaverse. Online harassment through social media continues to be a place where violent interactions occur through a screen. However, Metaverse is created to be more than interaction through a screen. This immersive technology is uncharted territory that enables users to create a toxic environment with no rules. Metaverse may be advertised as an alternative world, but it is simply a mirror to the gender, class, and racial hegemonic society we live in today.

Transforming the Litigation Experience with Virtual Reality

May 20, 2022 / Washington Journal of Law, Technology & Arts / Leave a comment

By: Abigael Diaz

As technology advances and evolves, so should our legal system. The legal system can use technology to increase efficiency and accessibility to justice, while also decreasing costs for courts. Allowing modern technology such as virtual reality into the courtroom will likely have a strong influence on participation by increasing the number of people who can take part in the judicial system as well.

Virtual reality is a computer-generated simulated experience that takes over users’ visual and auditory perceptions and allows them to enter a completely new virtual environment. There are various types of virtual reality, including but not limited to first-person immersion, augmented reality, and desktop view. In a first-person immersion setting, the user is completely engaged in the virtual environment, with as many senses as possible co-opted to maximize the experience. In augmented reality, which is frequently used in medical practice and aviation training, there is a virtual overlay of the environment the user is in; computer-generated visuals superimposed on a human body or plane controls can allow for better reinforcement of skills and more consistent results. Desktop view is a first-person virtual experience accessed through a desktop computer using a standard keyboard and mouse to navigate the experience.

First-person immersion virtual reality can be used with a headset or head-mounted display that covers a user’s eyes, but some headsets also cover ears or have gloves to increase the sensory experience. Virtual reality often engages sight, hearing, and touch, but some systems have even experimented with virtual smell applications. The headset is frequently tethered to a computer using USB or HDMI chords to increase the system’s capabilities. Using tethered headsets will be imperative in the legal field in the next couple of years because currently, cordless headsets make sacrifices in the quality and accuracy of information delivered through the syste,. Nevertheless, even cordless headsets will eventually have a satisfactory quality with advancing technologies.

Covid-19 has required courts to adapt to the pandemic and use new technologies to facilitate litigation, many courts opting for two-way live video options like Zoom. Simple video chat programs are a satisfactory solution for the pandemic but using virtual reality would enhance the experience. Virtual reality differs from two-way live video because it attempts to mimic life-like experiences within a 3D virtual space while applications like zoom create 2D face grids for users to view. The judicial system can use virtual reality to simulate a 3D social interaction that gives users a virtual experience similar to what the experience would be like in person.

Virtual reality offers an alternative way to interact with the justice system as a party, judge, jury, or bystander. Virtual reality can increase accessibility to the justice system for all, which will result in a more diverse law system. The employment of virtual reality in the legal system will likely result in many benefits, and most importantly, it will radically change how individuals participate in litigation.

Benefits from Virtual Reality in the Legal System

Increasing accessibility to the various stages of litigation will result in a more diverse courtroom experience. The American Bar Association believes a diverse legal profession will result in a more productive, just, and intelligent system on both a cognitive and cultural level. Diversity in the law is a good thing, as supported by legal psychologist Samuel Sommers’ experiment from 2006 that used over 200 mock jury participants and demonstrated that racially diverse juries deliberate longer, discuss facts from the case more, make fewer factual errors, and are more open talking about race’s role in the case. Having a diverse judicial system is necessary to ensure that the system is truly working for all people.

Virtual reality can increase efficiency and, in turn, lower costs throughout the legal system. With virtual reality, travel costs can be saved by allowing people to meet remotely rather than in person. For example, legal teams could save money bringing by mailing witnesses virtual reality headsets and courts could save travel expenses by providing them to jurors when theyare required to travel to crime scenes. Saving the courts time and money will result in the ability to accept more cases at each level of the court’s system and increase the number of people able to render justice for themselves. Lower legal fees can increase the number of people who can afford lawyers and increase access to the judicial system as well. Currently, not everyone in the United States has access to an attorney or legal services, so lowering legal fees would diversify the client pool to include those experiencing poverty who frequently from either Black, Indigenous, or other communities of color.

Increasing efficiency is a potential opportunity for the court systems to catch up on cases too. There is currently a large case backlog, primarily in sexual assault and immigration cases, and the effects of Covid-19 have further exacerbated this problem. Some are describing the pandemic as a “double disaster.” In addition to the disease, there is also an increase in gender-based violence, impaired reproductive and sexual health, a loss of jobs and livelihoods, and increased forced marriages, migration, and human trafficking. Covid-19 is slowing down the efficiency of the courts and increasing the frequency of litigation as a factor of new arising cases. Those harmed most by the case backlog are disproportionally from marginalized communities, including immigrants, people of color, women, and nonbinary and trans individuals.

Virtual reality can do more than increase the racial and class diversity in the courts and diversify the ability of people involved, as more disabled people could participate in a virtual reality system that accommodates their needs. The Center for Disease Control and Prevention reports that one in four adults in the United States is living with a disability. Virtual reality can accommodate people’s individual needs to increase participation.

Virtual reality has even been known to help improve senses for some, and many people with low vision report that virtual reality technology actually improves their ability to see. Alex Lee lost his sight to a rare disease, but he was able to see again using virtual reality technology after five years. Lee went from seeing everything as an indecipherable blur to being able to see and play in a 1940’s virtual world. Lee’s sight improvement is made possible because of the high color contrast that virtual reality implements as well as intense magnification of objects that occurs from placing virtual reality screens so close to the eyes.

Automatic and instant language translation for all court members is possible with virtual reality in addition to the benefits already discussed. Automatic interpretation for the variety of languages spoken in American courtrooms can remove language barriers that previously prevented individuals from accessing the legal system and might save courts significant money by reducing the need to pay for in person interpretation experts. It would also allow for more access to the courts. Another benefit to the adoption of such technology includes automatic closed captioning that might allow persons hard of hearing or the deaf to participate to a greater degree. It might also be helpful, or even imperative, for the neurodivergent community such that it could encourage people to remain focused and process their surroundings more effectively.

Virtual reality generally increases the understanding of those using it. Users can have words defined for them instantly, leading to a better-informed population that can participate in a legal system that better caters to the individual’s understanding and information needs. Furthermore, automatic definitions could be useful for defining unfamiliar legal terms to non-lawyers who find themselves in an environment replete with “legalese” terminology. And moreover, virtual reality in certain contexts can allow individuals to more accurately recall important memories, which promotes increased accuracy in factfinding and prevents court reliance on fallible memories. For example, it would likely be possible for a jury member to rewatch a portion of a witness’s testimony before deliberating. As such, virtual reality can promote justice by increasing the quantity and quality of informed participants in the judicial system.

Virtual reality has the ability to increase access to justice, lower costs, and improve participants’ understanding of all aspects of the judicial system. An overall increase in accessibility to the judicial system from many demographics that usually cannot access legal services or lawyers will be the likely result, and as such virtual reality may contribute to the diversification of the pool of people who can use the law, participate in it, and benefit from it.

In the coming years, virtual reality will very likely change the legal system for the better. The law should use virtual reality technology to increase efficiency and accessibility while decreasing costs. Allowing modern technology such as virtual reality into the courtroom will diversify the law and litigation process, making revolutionary changes in the litigation experience at all stages.

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