Addison Cameron-Huff, Blockchain Lawyer

Canada's equivalent of the NSA, CSEC, is always on the hunt for new talent. There's a job listing today for a "Telecom Technologist & Network Analyst". One of the job requirements: “Experience in administration of remote network endpoints where there is little to no assistance at the remote end.” I wouldn't expect too much help from the other end when you're doing foreign signals intelligence.

The pay for CSEC jobs is surprisingly good for Ottawa civil service but probably not competitive with the private sector right now. Posted salaries for experienced people range from $70k-$100k. Most private sector jobs for similar roles don't have posted salaries but appear to be about $30k/yr higher.

Last week I attended a roundtable put on by CIGI in Toronto titled “Regulating Blockchain & Distributed Ledger Technologies: Challenges and Opportunities for Canadian Innovation”. Speakers included key people from industry, government and academia. I've distilled my notes about speakers' thoughts and my own reflections into 18 questions. Please note that the roundtable was conducted under a rule of not crediting speakers - the thoughts below are mostly not my own.

1. When we talk about regulation, what are we talking about? (Smart contracts, industry standards, technical standards, regulations, acts, common law, etc.?)
2. What are the benefits of blockchains right now? What will the future benefits be? What might the downsides be?
3. Who should be trusted? Banks? Bitcoin exchanges? Programmers?
4. Do parties that require trust also require government-created rules?
5. Will we still have banks in 30 years? What about other intermediaries?
6. Who will take a cut of future blockchain transactions? Which intermediaries? Government authorities?
7. Will government authorities take a cut of transactions directly? (i.e. X% of each transaction goes to the CRA)
8. Governments have an impulse to regulate. Will new regulations mean giving up the benefits of blockchain or giving up Canada's place in the global market?
9. What are the implications of "programmable trust"? Will we have a future where government functions are transferred to private interactions (i.e. smart contracts) administered through blockchains?
10. What role is there for the (Canadian) government to play as a partner rather than a regulator?
11. Which activities should be governed by criminal law and which by a lighter touch (fines, AMPs, etc.)?
12. Is a lack of a regulation in the blockchain space a "gap" in the law or an opportunity for entrepreneurs?
13. Can regulatory "gaps" be filled with common law and economic behaviour rather than government-prescribed rules? Are there any gaps that cannot be filled by private actors or court-created law?
14. Should blockchain developers be expected to assist government in their traditional roles of law enforcement and taxation?
15. Are the differences between "public" and "private" blockchains important to regulators?
16. What are the jurisdictional challenges to a decentralized global economic system enabled by blockchains?
17. Is there a breaking point in which blockchain benefits (in the form of talented humans making these systems) migrate to less regulated countries?
18. What can be done to ensure that "good" regulations are made by the federal and provincial governments?

The presence of interveners doesn't seem to affect an appellant's chance of success at the Supreme Court of Canada.

I took a look at 844 recent Supreme Court of Canada cases that proceeded to the stage in which there was an appellant (as opposed to applicant). There doesn't seem to be any discernible pattern in the data.

I've analysed 1871 Supreme Court of Canada factums (88902 pages in total) to determine statistical information about factums for appellants, respondents and other parties (i.e. intervenors). This analysis was done using a program.

Appellants & Respondents

I've compiled a list of Toronto-based legaltech startups & established players:

30 Toronto-based Legal Technology Startups

The Canada Business Corporations Act requires that companies hold regular shareholder meetings but the statute allows companies to dispense with the requirement of physical meetings by using written resolutions instead (s. 142(b)).

Written resolutions are a great tool for corporations owned by a single shareholder or a small team of co-founders but it's important to note that all of the required business of a shareholder meeting must be addressed in the written resolutions.

The foot pad on my Macbook Pro Retina fell off the other day. The Apple Store didn't have a replacement part but an eBay seller in Shenzhen, China did. For $3 with free shipping.

The cheapest international shipping option with Canada Post is $5.35 for up to 100g (without tracking). How can a store in China sell me anything for $3, including shipping?

The CEO of BlackBerry blogged last week about how “our privacy commitment does not extend to criminals”. He accused Apple of placing “their [reputation] above the greater good” when the company explained to a court why they can't and shouldn't provide access to encrypted iOS devices.

John Chen would like companies to go beyond the law and do what's “ethical”, citing the responsibility of citizens to “help thwart crime when they can safely do so”.

CanLII's robots.txt file provides preferential access to its database of laws & cases to users of Google vs. other search engines. This blog post explains how they're doing it and why that is inconsistent with CanLII's privileged position in the Canadian legal publishing landscape.

As a preface to this post: I'm a big fan of CanLII's service and use it regularly for my legal practice. Just because something is great doesn't mean it can't be better.

Which lawyers have represented the most number of clients before the Supreme Court of Canada in recent years?

In order to answer this question I analysed the most recent 6984 cases before the Supreme Court of Canada (approximately ten years of cases) and extracted the named counsel for each case. The results are given below.

Google announced last week that they will start defending some of their users in court when "fair use" ("fair dealing" in Canada) is at stake.

Google is promising to, with consent of the video creator, “keep the videos live on YouTube in the U.S., feature them in the YouTube Copyright Center as strong examples of fair use, and cover the cost of any copyright lawsuits brought against them.”. Although this will only be for a “small number of videos”, this is a big step forward for fair use/fair dealing. Establishing important precedents in favour of creators will help the public and YouTube.

Continuing my work on Supreme Court data mining, I've extracted the firm names from the last ~7000 Supreme Court of Canada cases (going back about 10 years). This analysis was done by taking the first line of the address for each party, which is almost always the firm name. Below are the top 14 firms + the Attorney General of Canada.

Uber B.V. (the Dutch company that licenses the Uber application to end users) changed their "Terms of Use" agreement in Canada on November 19th. I was notified of this by an email from Uber Canada (shown below).

I often advise startups about running what I term "marketplace" businesses. That is, companies that connect customers with other businesses on a digital platform. The key challenge for these businesses is not being seen as the entity making the sale but rather as the entity connecting two independent entities (customer and supplier). These businesses are at the cutting edge of a change in the way that business is done as we move ever more towards a world of smartphones, contracting and reduced transaction costs. Uber is the most prominent of this new breed of startups.

This past summer's case of City of Toronto v Uber Canada Inc. et al., 2015 ONSC 3572, 126 O.R. (3d) is an incredible win for this business model and should encourage anyone interested in exploring marketplaces. Why is this case important?

SecondMarket has been acquired by NASDAQ.

SecondMarket is the main tech company private share marketplace in the US. I wonder if NASDAQ plans on expanding its presence in other markets.

New Zealand has an interesting offence on the books:

“No person may—
(a) carry out any nuclear weapon test explosion or any other nuclear explosion; or
(b) cause, encourage, or in any way participate in, the carrying out of any nuclear weapon test explosion or any other nuclear explosion.”

Ontario grocery stores will be allowed to sell up to 46 million six-packs of beer per year in Ontario, according to the Toronto Star. This sounds like a lot of beer but according to the beer trade association, Beer Canada, Ontarians purchased 7.9 million hectolitres of beer in 2014 (790,000,000 litres of beer).

46 million six packs of beer is, at 355mL per bottle (0.35L), 16,330,000 litres of beer (163,300 hectolitres of beer). So of the 8.9 million hectolitres of beer consumed in Ontario, grocery stores will be able to sell a maximum of 163,300 - around 2% of total beer sales.

One of the first applications of Bitcoin was online gambling because gambling companies have a hard time with a) chargebacks; and, b) the legality of their services. The earlier pioneers in Bitcoin gambling all suffered from a problem of centralization: there was always a single website that gamblers had to use and trust. Recent innovations like Augur and Ethereum are changing the dynamic.

A new service called Augur (built on top of Ethereum) has been getting a lot of media attention and apparently racing bookies are concerned: http://www.racingpost.com/news/horse-racing/tom-kerr-augur-could-become-racing-s-worst-nightmare/1953992.

As a lawyer and programmer I have long thought it would be useful to have a search engine for world laws. I run several specialized legal/legislative information services (e.g. OntarioMonitor.ca) that have taught me quite a bit about how hard it is to gather legal information and present it to users. After years of consideration and many months of hard work I'm pleased to announce the launch of Global-Regulation.com.

Global-Regulation is a law search engine that currently has a database of 212,000 laws from all over the world (some are machine translated from China, French and German). Searching this 12 gigabyte database of laws takes seconds because of a dedicated in-RAM search application that is in front of the MySQL database (hosted on Google Cloud for speed, redundancy and ease of scaling). If the current database were printed out it would be approximately 7 million pages (and completely unusable).

Let's say I have a company that sells gravel in Canada. I buy gravel wholesale for $500 per ton then sell it retail at $1000 a ton. I make approximately $500 per ton in profit. That means I would have to pay corporate tax on the $500 per ton in profit (assuming I had no other costs). What if I set up an offshore subsidiary (e.g. Cayman Islands) that buys the gravel from my supplier for $500 per ton then sells it to me for $1000 per ton and then I sell it to the customer for $1000 per ton? If that were possible, I'd effectively shift the profit I make from gravel sales from Canada to a no-tax offshore country and thus escape corporate tax while still making just as much money (and if I had any other costs, I'd then have a loss that I could apply to past year's gains).

"Transfer pricing" is the term given to the price set between related entities (e.g. a Canadian company and its Cayman Islands subsidiary). The rules for how companies can set their prices internally are complicated but attempt to stop would-be tax cheats from moving profit from one country (that has taxes) to another country (that doesn't, or has very low taxes). A key principle is that the price that a company should pay to its subsidiary is the price that they would pay an "arms-length" company. This principle is hard to apply and the rules create opportunities to pay very little tax on very large sales.