Wizards & Prophets Blog

Legal Tech and Comparative Legal Reform in Germany

by Shubha Ghosh, Crandall Melvin Professor of Law and Driector, IP and Technology Commercialization Law Program

Continued research in the legal tech environment in Germany brought me to several innovative changes in the tech and legal professions landscape. Just as the emerging applications are fun to learn about, so the legal challenges are vexing.

FlightRight is one application that allows for consumers to vindicate their legal rights when law firms may find it difficult to provide representation. German law provides compensation for passengers from airlines when there are extended flight delays due to the weather. Compensation tends to be in the range of several hundred euros per passenger and is not available if the delay was due to force majeure. Unfortunately German law firms do not find it profitable to represent clients seeking vindication of their rights, especially as the class action mechanism does not exist in Germany. Injured passengers must vindicate their own rights. While some are successful, often the airlines deny compensation, claiming force majeure such as weather. As weather data and other technical information relating to flight travel may not be readily accessible, airlines often prevail. FlightRight, an app based company, obtains the right to pursue claims for passengers with the advantage that the company has access to the relevant data. The application effectively allows for claims aggregation and a challenge to the superior information of the airlines.

Does FlightRight interfere with the practice of the law? German bar councils and legislatures are debating this question. Legal services have to be provided through a law firm under German regulation. So is FlightRight providing a legal service or is it just another plaintiff with standing, deriving its rights from passengers? Adding to the complication, FlightRight’s business model is based on the success-fee: the passenger does not pay unless the claims are successful. German law does not allow law firms to enter into contingency fee arrangements. Outside the field of law, Uber is restricted in Germany in part because of the strength of taxi companies and in part because of the company’s publicly aggressive stance, flaunting relevant regulation. AirBnB, while subject to regulations, has been more successful in entering the German market. FlightRight, by contrast, has fallen under the radar of legal profession regulators while demonstrating success in the consumer market.

Other apps are also stradding the lines set by regulations. MyRight arose in light of the prosecution of a decades long cartel among truck manufacturers. Under European and German laws, purchasers of the overpriced trucks can receive compensation for their overpayments. Small business purchasers, however, find it difficult to vindicate their claims. Enter MyRight, an app based company, that aggregates claims and relevant data to pursue judgments on a success-fee basis. Unlike FlightRight, MyRight has successfully pursued venture capital financing as it seeks to expand its scope. German law does not allow law firms to seek external financing. This law may pose a problem for MyRight if it functions as a law firm. Another venture emerged in the shadow of the Volkswagen fraud regarding compliance with regulatory standards for diesel. Consumer claims accummulated as the fraud allegations came to light, and German law firms satisfied the demand despite the costliness in document preparation and document review required for these million claims. Litigation support companies emerged and were engaged by law firms to process the flood of documents. Is this unauthorized practice of law? German law firms developed creative business structures and contracts to allow outside firms to provide legal services under the law firm’s aegis. As many of these litigation support firms use legal tech, these structures may provide models for how legal tech and legal tech companies can be integrated into traditional law firm practice, presuming the regulations allow for it.

Dr. Philipp Plog, a partner with FieldFisher in Hamburg offers some valuable insights on legal tech and the legal profession. Futzure blog posts will engage with these ideas, especially as I delve into the issues of legal tech and risk management, which is the principal subject of my current research. Here, just some brief comparative comments to conclude.

The United Kingdom and Australia have relaxed their regulations on law firm management and the unauthorized practice of law. Perhaps Germany will follow this model. These issues take on a different flavor in the United States, in part because we allow class action and other claim aggregation mechanisms, in part because we have fewer statutory rights protecting consumers analogous to the passenger protection legislation in Germany, and in part because many law firms have incorporated legal tech in their practice already. Legal tech in the United States is nonetheless disruptive for the legal profession. Law oriented apps can aid pro se clients, obviating the need for law firms and licensed attorneys in some instances. For apps adopted or developed by law firms, delegation of decision-making may raise questions about unauthorized practice of law or at the minimum issues of legal malpractice. Furthermore, as apps expand their domain beyond legal questions to assess questions of business risk, the problem of legal malpractice may potentially be a broader issue. As with other technological development in the United States, insurance markets, especially as they operate through tort law, will shape implementation and use of legal tech. As in Germany, legal professional regulation may do little to forestall the progression of legal tech, but certainly will shape what the tech landscape will look like on our smart devices and in society.

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French Law Criminalizing Data Analytics of Judicial Decision Making

by Shubha Ghosh, Crandall Melvin Professor of Law and Director, Intellectual Property and Technology Commercialization Law Program

France a month ago enacted a new legislative provision criminalizing the use of information about judges and their decisions to make predictions about judicial behavior. The provision is an amendment to a statute that protects the identity of litigants and is justified in part as a need to protect the privacy of judges. Slate has a good article summarizing the legislation: French Law Kicks Data Scientists Out of Court.

More than judicial privacy and reputation is at stake, however. Professor Dana Beldiman of Hastings College of Law and Bucerius Law School in Hamburg shared with me an editorial from the Legal Tribune Online, with the headline “Fruit of Knowledge is Forbidden Not Only in Paradise” (apologies for my translation). The editorial is highly critical of the law and also reveals perhaps the real impetus for the law: research by attorney, Michael Benesty, on the decision making by judges in asylum cases. His story details the response by judges and legislators to his disturbing findings.

Some people I have talked to about this law describe it as a response to the fears of big data and automation. This moral panic (la panique morale?), as I would describe it, may explain the reaction. Perhaps, the motivation is just plain embarassment for revelation of bias. Such a statute would be unconstitutional under US law, in light of the Supreme Court’s 2011 decision, IMS v. Sorrell (dealing with state statutes limiting access to prescription data used by pharma companies to promote their brands).

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Legal Tech: Some Initial Perspectives from Germany

by Shubha Ghosh, Crandall Melvin Professor of Law and Director, IP and Tech Commercialization Law Program and Syracuse Intellectual Property Law Institute

As in the US, law firms, businesses, and bar associations are grappling with issues of legal tech. My preliminary conversations over the past week with attorneys and academics in Hamburg, Germany, particularly at Bucerius Law School, reveals a vibrant debate over the design of legal practice, the unauthorized practice of law, and the bundling of legal services with technology. The Center for Legal Professions and the Center for Transnational IP, Media, and Technology Law and Policy at Bucerius are active hot spots for research and activism on these ongoing issues.

Recent developments in the US demonstrate the role of legal tech in document and case management. Wilson Sonsini’s announcement last month about a shift in its document software is one example. Axiom, a San Francisco based company that bridges in house and law firm representation, illustrates how new business forms address new ways for providing flexible legal services to business clients.

In Germany, the use of software applications to address compensation issues have challenged conventions on the delivery of legal services. Flight Right, software based services designed to protect consumers who are harmed by flight cancellations, has raised questions about the unauthorized practice of law. Software based services designed to compensate workers and renters who have been overcharged also have had bar associations at the federal and state levels concerned. Various working groups have made proposals for reforms to allow for more flexible provisions of legal services. I am studying these various proposals now and will comment on them in future posts.

In the meantime, innovative legal firms like Schnittker Möllman in Hamburg are leaders in integrating these new software and proto-AI approaches to legal services with traditional models of legal practice. One lesson from both the US and Germany is while legal software might empower clients, there is still a need to bundle the software with legal services. Trained attorneys help to make the applications more effective, a point that some may challenge but, in my assessment, will remain true. How such bundling occurs, however, is a matter of the market for and regulation of legal services.

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Artificial Intelligence and Legal Practice–A Developing Project

by Shubha Ghosh, Crandall Melvin Professor of Law and Director, IP & Technology Commercialization Program and SIPLI

One ongoing project beginning this Summer is a comparative study of legal tech in Germany, conducted with colleagues at Bucerius Law School in Hamburg, Germany. Bucerius is the first private law school in Germany and is an innovator in legal and tech startups. The school is dedicated not only to broadening legal education but also to reforming the legal profession to make it more flexible and responsive to modern needs. I will be posting on my progress on this project over the next several months.

One impetus for the project is the recent strategy paper from the German Federal Government on how to make Germany an AI-Hub in Europe. The Strategy Paper proposes goals and funding paths to develop AI research and startups in German universities and research centers. As guiding principles for the initiative, the Federal Government commits to responsible use of artificial intelligence to serve the good of society by developing the technology to respect the inviolability of human dignity, respect for privacy, and principle of equality. Reforms to competition law, the funding of AI research, the sharing of data for research purposes, and other policies aim to support expansions to the infrastructure for real-time data transmission in the giga-bit society. I will be discussing some of these reforms in future posts, especially proposals for greater data sharing and promotion of industry competition.

One issue not discussed in the draft strategy paper is the need for reforms to the legal profession, a subject of active debate in Germany, as in the United States. Proposals to change the meaning of the unauthorized practece of law, as enforced by both federal and state bars are desirable to meet the needs of legal tech startups, especially ones the seek to integrate novel software applications with legal services. Future posts will describe these efforts as well as new startup firms in Germany. Worth noting is the brief discussion of the potential for AI to improve the efficiency of government administration, the subject of a recent report in the US from the National Academyof Public Administration. The US report focuses on technological approaches to streamlining government administration in agencies and in courts and exhibits a more tech-frinedly approach. In contrast, the German approach is more cautious while emphasizing the potential broad impact of AI on the economy.

More to come…

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Recent and Ongoing Activities

by Shubha Ghosh, Crandall Melvin Professor of Law and Director, IP and Technology Commercialization Law Program and SIPLI

The year 2019 has been incredibly busy with teaching, scholarship, and service, the three pillars of this job. Blogging has low priority, but I will try to catch up over the next several months. Activities over the past several month include

* collaboration with the Faculty of Law on intellectual property issues pertaining to biotechnology at the University of Tasmania in Hobart, Australia

*presented research on custom fit design, standardization, and measurement at NYU Law School conference on intellectual property law

* finishing an extended book chapter on patented technologies for the visually impaired

* developing projects for students in the IP and Technology Commercialization Law Program on professional ethics, licensing, and FDA approval issues confronting start-ups (a project involving development of a therapeutic app)

* updates to treatise “Understanding Intellectual Property,” to be published in its fifth edition by Carolina Academic Press

* drafting a book manuscript on Law & Entrepreneurship for the Advanced Topics Series published by Edward Elgar

* collaboration with colleague at Hastings Law School and Bucerius Law School on developments in AI in Germany

* presentations on “Exhausting Intellectual Property Rights,” published by Cambridge University Press in 2018.

More news to follow…

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Technologies to Aid Visually Impaired: Subject of My Recent Article

by Shubha Ghosh, Crandall Melvin Professor of Law and Director, IP & Technology Commercialization Law Program and SIPLI

Professor Michael Stein of Harvard Law School asked me to draft a chapter on technologies to aid the visually impaired as a contribution to an edited volume on technology and disability law. Very exciting to work on as perhaps you can tell from this excerpt:

This section presents a high-level landscape of published patents targeting the visually impaired population. While a full landscape could not be reported given the constraints of this Chapter and Volume, the following findings gives some sense of available technologies and the scale of research and development effort. The data reported here provides background for the analysis in the remainder of this Chapter and is the foundation for future research.
As background, WIPO has released a Patent landscape report on ‘Assistive Devices and Technologies for Visually and Hearing Impaired Persons’ in 2015 “to provide patent-based evidence on the available technologies, patenting and innovation trends in the area of assistive devices and technologies for visually and hearing impaired persons.” The landscape has been divided into three concepts- (i) restorative, (ii) assistive and (iii) enhancement technology. The report revolves around the development under these concepts in developed and developing economies across the world.

Based on a search of Espacenet, the patent database of the European Patent Office, I identified 195 published patents between 2015 and 2019 that either contained the phrase “visually impaired” in the patent’s title or abstract. While a search of this kind can be expected to yield spurious results, a study of all 195 documents shows that each are relevant to technologies designed to assist the visually impaired. I do not present a systematic tally here, but do make some general observations.

First, the inventors come from a range of countries, including Russia, China, Japan, Taiwan, Korea, the United States, India, Mexico, Brazil, and Spain. The patent applicants are a mix of individual inventors and business entities, such as Toyota (US), Sony (Japan), Samsung (Korea), Redbox, Novo Nordisk, Mitsubishi, Microsoft, LG Electronics (Korea), Lenovo (Singapore), Kyocera, Konica Minolta, Intel, IBM (US), Hitachi, AT&T, Airbus, Apple, and various universities throughout the world. However, there has been a shift in patent filings since 2008 in the developed economies like US, EMEA, Japan. Innovation in the technologies for visually impaired have increased in the last half century but there has been a decline in the patent filings in few countries. According to WIPO, patent activity in BRICS countries and countries in Asia Pacific region is increasing and perhaps in the near future it will reach or exceed the level of the developed economies. China has seen the highest growth and ranks second after US in this technology area.

Since India will serve as a case study for this Chapter, the ten patents from India will provide a detailed look into the types of technologies that are being patented. What follows is a summary of these inventions.

Filed and invented by Gaurav Mittal, a solo inventor, is a patent entitled “System and Method for Aiding a Visually Impaired Person to Navigate.” The system consists of an image capture device, a processing device, and a feedback device which function together to warn a visually impaired individual about obstacles in the footpath. Another solo inventor and filer is Sumit Dagar whose invention, “Device Input System and Method for Visually Impaired Users,” enhances a smart phone device to enable communication with and by a visually impaired user. Omkar Sanjay Dhavate, a coinventor with several colleagues, filed by himself an application for an “Andro-Electronic Bracelet for Security and Direction Sensing for Visually Impaired People with Reduced Cost and Increased Precision.” This bracelet, as summarized in the abstract, “will detect obstacles with the help of sensors (IR) and it will give vibration alert by motor, voice alert (as commands) on android mobile for appropriate obstacle detection, location of visually impaired person by sending SMS to registered mobile and will give more safety to respective visually impaired person comparatively white cane.” Dr. Khan Ekram and his colleagues filed an application for their invention, “Systems for Assisting Visually Impaired,” which is described in too general terms to perhaps survive patentability. A more specific invention is offered in the application filed by co-inventors, Hitarth Narsi Patel and Bharati Singh for a “Braille Enabled Wrist Watch And Cell-Phone For Blind.” Finally, solo inventor Rohan Madan Valvekar filed an application for a device to assist a visually impaired person to cross streets through a sensor device.

The remaining four applications in this sample were filed by universities. The Indian Institute of Technology, Kharagpur, filed an application for “Venucane: an Electronic Travel Aid for Visually Impaired and Blind People,” which provides “wireless or wired technology and is directed to serve as a low-cost, robust, reliable, and user- friendly solution for blind or visually impaired navigation.” Researchers at Bharat University invented “Index Finger Scanner and Reader for Blind People,” which “contains a scanner and reader that is worn as a ring on the finger of the user” that converts text to audio. G.H. Raisoni College of Engineering has filed an application for “A Real Time Cognitive Assistance for the Visually Impaired,” a navigational device that relies on neural networks to identify external obstacles and their trajectory to guide visually impaired users. Language in the abstract suggests that the invention is still in experimental stages. Finally, the Indian Institute of Technology, Delhi, filed an application for a patent entitled “A Split Grip Cane Handle Unit With Tactile Feedback For Directed Ranging.” The abstract elaborates on the title: “The present invention relates to a cane handle unit for the visually impaired person. The handle is having split design architecture with a cross-sectional cut within the interior of interconnectable halve sections. Handle unit fits to almost any type of cane tops. Handle unit in its outer periphery includes a detection module which has multiple sensors for detecting distance of the object in a direction and produce different vibratory patterns according to the position of object.”

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Collaborations on Developments in IP and Technology in Poland, May 12-19, 2019

by Shubha Ghosh, Crandall Melvin Professor of Law and IP & Tech Commercialization Law Program

Thanks to colleagues at Adam Mickiewicz University (AMU) in Poznan, Poland, for organizing a solid week of activity from May 12-19. AMU is a partner school for Syracuse University. Here are details from my visit as reported by my colleague Professor Rafal Sikorski:

Prof. Shubha Ghosh visited Poland between 12-19 May, 2019. During his stay in Poland, he visited the Law Faculty of the Adam Mickiewicz University in Poznań, the Institute of Legal Studies of the polish Academy of Sciences in Warsaw and the Intellectual Property Chair at the Jagiellonian University in Cracow.

On May 14, 2019 Prof. Ghosh took part in a seminar at the Law Faculty in Poznań. The seminar was devoted to the changes in the European Union copyright directive. During the seminar there were three presentations followed by a discussion. The topics included: rights of publishers (presented by Prof. Katarzyna Klafkowska-Waśniowska), new copyright exception for data mining (presented by Prof. Rafał Sikorski) online content sharing platforms (presented by Piotr Ruchala). The seminar was also joined by Prof. Tatsuhiro Ueno from Waseda University in Tokyo.

More information on the seminar can be found here.

On May 15, 2019 also at the Law Faculty in Poznań, Prof. Ghosh gave a lecture entitled: Exhausting Intellectual Property Rights. The lecture was open to students and doctoral students, researchers and practitioners. Prof. Ghosh presented some of the topics covered in a book on exhaustion of IP rights published recently with Prof. Irene Calboli by Cambridge University Press.

More information about the lecture can be found here.

On May 16, 2019 Prof. Ghosh took part in a seminar: Divergent standards of IP protection in the post-TRIPS era. The seminar was held at the Institute of Legal Studies of the Polish Academy of Sciences. During the seminar Prof. Ghosh discussed selected aspects of IPR exhaustion, Dr. Karolina Sztobryn talked about Unstandardized protection of non-conventional trademarks after TRIPS, Dr. Łukasz Zelechowski discussed the Legal framework of combating unfair competition in an international and comparative perspective, and Dr. Zaneta Pacud discussed Protection of regulatory data in TRIPS and after TRIPS. The seminar was open to students, academics and IP practitioners.

More information about the event can be found at: https://www.inp.pan.pl/seminarium-naukowe-16-05-2019-r-divergent-standards-of-ip-protection-in-the-post-trips-era/.

On May 17, 2019 Prof. Ghosh visited the Jagiellonian University, one of the oldest universities in Europe. There Prof. Ghosh lectured at the Intellectual Property Law Chair, one of the oldest and most prominent institutions dealing with IP law in Poland. At the IP Chair Perf. held an open lecture where he again discussed some of the issues discussed in his recent book on PIR exhaustion with the IP community in Cracow.

Finally, on May 18, 2019 Prof. Ghosh joined his colleagues in Poznań to celebrate 100th Anniversary of the Faculty of Law of the Adam Mickiewicz University, one of the most prominent law schools in Poland.

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Vivacell, biotech start-up in Chicago, receives FDA approval for Phase IIa Clinical Trials

by Shubha Ghosh, PhD, JD, Crandall Melvin Professor of Law and Director, IP and Tech Commercialization Curricular Program & SIPLI

Harven DeShield, JD, PhD, and general counsel for Vivacell, a Chicago biotech start-up, visited us October, 2018, to talk about his academic and legal work that led to the technology underlying the company, which recently received FDA approval for Phase IIA Clinical Trials.

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Political Innovation at Heart of Discussions at Recent Conference

Comparativists, constitutional law aficionados, and global citizens were the perfect audience for the conference on “The Future of Liberal Democracy,” held at The University of Texas at Austin on February 21-23, 2019. Professors Richard Albert and Sanford Levinson assembled leading scholars from across the globe for a two-and-a-half day symposium exploring whether the current emergence of authoritarian regimes, here and abroad, is a sign of a dark future or the strident cries of an imploding conservatism. What follows is a distillation of the dialogue at this conference, with brief mentions of some of the many scholars who participated. Apologies to those not mentioned.

Part-festschrift, part-book talk, part-panel discussion, the Texas symposium placed Trumpism in the broader context of European authoritarianism, as playing out in Hungary and Poland. A forum on the forthcoming “Democracy and Dysfunction,” by Sanford Levinson and Jack Balkin opened the proceedings. This unique book brings together letters between Levinson and Balkin written from 2016 and 2018, tracing the events leading up to the surprising results of November 2016 and the aftermath. Panels on “Illiberal Constitutionalism,” “The Erosion of Constraints on Executive Power,” Managing Difference and Diversity,” “The Trump Phenomenon: American Exceptionalism or Global Trend?,” and “Constitutional Replacement by Constitutional Amendment” followed. In the midst of these heated discussions was a festschrift to political scientist Gary Jacobsen and his 2010 book Constitutional Identity (with reference to his forthcoming, Constitutional Revolution). Four critical themes emerged from the symposium which this blog space allows for exploration.

First is the theme of the current upheaval as a transition from one political regime to another. This sense of transition is apparent in the rise of Trump, who identified and capitalized on weaknesses in the Republican Party to win the presidency. His success also signals weaknesses in the Democratic Party, the electoral process, and the constitutional structure, all of which created a perfect storm for the 2016 vote. Within the United States, Trumpism may be a transition to a new regime from the order created by the Reagan election in 1980. What we cannot predict is the shape of this new order. Some, like Professor Balkin, suggested a possible new progressive era, where government takes a more active role in curing the ills of a free market. Others, like Professor Issacharoff, suggested the possibility of darker times with the repressive policies we have witnessed just being the beginning. Others still, like Professor Tushnet, expressed doubt on predicting where the political process will land, emphasizing a basic indeterminacy in government, a theme I return to at the end of this post.

The second theme of constitutionalism, law, and norms highlight the differences of Trumpism from the deceptively similar movements of Brexit in the UK and the authoritarian regimes of Orban in Hungary, Duda in Poland, and Erdogan in Turkey. While challenges to principles of separation of powers, federalism, and the free press appear in varying degrees across these cases, there are particular differences that reflect national and regional differences. In Europe, including the UK and Turkey, the tension is between the centralization of power in European institutions and regional political power grounded in national institutions and culture. While Trump beats the anti-federal government drum and plays loudly nationalist dog whistles, his attack on the judiciary, the press, and established political figures is a means for concentration of federal executive power.

Against these regional differences, the challenge is to identify the core principles of constitutionalism and liberalism as bulwarks for resistance. Professor Scheppele decried the autocratic legalism of regimes like Hungary and Poland that appeal to “rule of law” formalistically to consolidate state power. Professor Sadjurski embraced the concept of “illiberal constitutionalism” as an analytic tool to identify aberrant forms of constitutionalism that counter norms of democracy. Professor Perju contrasted nationalism with liberalism in favor of liberal democracy that captures the deliberative process described by Habermas and Rawls. “Illiberal constitutionalism,” argues Professor Sadjurski is not an oxymoron but a valuable analytic tool for identifying aberrant constitutional orders. What current authoritarian moves demand, Professor Chaudhury suggested, is a re-understanding of the fundamental values of constitutionalism, much as the Hart-Dworkin debate asked us to examine what constitutes law. “Constitutional identity,” as Professor Jacobsen coined, captures this foundational inquiry even as “identity” is a fluid, dynamic concept.

The third theme of populism refocuses debates over the meaning of liberal constitutionalism. Populism entails direct engagement in politics, whether the post-apartheid activism in South Africa described by Professor Klug, the demonstrations against the evisceration of judicial review in Poland as described by Professor Sadjurski, judicial checks in Colombia recounted by Justice Bernal, or the movement for constitutional reform in the United States as described by Professor Dinan (at the state level) and Professor Levinson (at the federal). Authoritarians exploit populism much as they engage in “autocratic legalism,” as means to consolidate power. But populism should offer resistance to authoritarian movements from the basic act of voting to organized expressions of protest. Scholars can invigorate our understanding of populism through addressing questions of the meaning of citizenship, as approached by Professor Shachar; through revealing the politics of rights talk, as exposed by Professor Shilt in her paper on legal prohibitions of animal sacrifice; through connecting the definition of peoples to territories and the movement for integration, as discussed by Professor Chaudhury. What populism captures is the day to day activism of people as they persuade through deliberation, work within existing norms, and strive to create institutions that are responsive to their needs and wants.

Which brings us to the fourth, and final, theme of the symposium: indeterminacy. To define democracy as “institutionalized uncertainty,” as Professor Muller reminded us, is to recognize that the face of authoritarianism is homogeneity and predictability. Democratic institutions are ones that are unpredictable, echoing Professor Jacobsen’s representation of constitutional identity as fluid and dynamic. But indeterminacy is troubling for reformers who seek to resist current authoritarian tendencies. Just as the results of the 2016 US election were a surprise to many, so liberal constitutional politics can produce illiberal results that threaten constitutionalism itself. What provides some hope is the freedom to continue acting, to move on to the next election, to the next legal battle. Reformers must remember that legal determinacy would obviate the need for action, and action is the fuel for liberal constitutionalism. One would have missed the point of the Texas symposium if one left it feeling either optimistic or pessimistic about the future of liberal constitutionalism. Instead, one can speak to the need for continued action, deliberate and reflective, such as the engaged scholarship demonstrated at this robust conference.

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