Canadian Lawyer InHouse

35 CANADIANLAWYERMAG.COM/INHOUSE JULY/AUGUST 2019 than 200 firms in research and develop- ment, are to some extent filling the void by developing common standards. But that can lead to legal issues, says Bram Abramson, former general counsel at Decentral. "They have to be very focused on building tools that will advance the industry as a whole and not be misused as a way for competitors to collaborate improperly," says Abramson, who recently gave a talk about this very sub - ject at the Canadian Bar Association. Liability is yet another issue with which in-house counsel may have to wrestle. If something goes awry, such as code errors, data errors and just plain glitches, it can prove to be a real headache for the courts to establish liability. "One of the reasons why that's a difficult legal question to answer is because we are taking processes that used to be executed by different parties, often intermediaries who would take on the role of either reconciling data or being the trusted third party between two counterparties," explains Friedman. "If that risk is now being distributed among that [blockchain] network of players, there is the question of where does liability rest when things go wrong in this new construct?" Pinpointing, therefore, where a breach or failure occurred will likely be complicated and could lead to jurisdictional confusion. Further, the courts have yet to provide guidance because implementation has not gone far enough for major disputes to come to a head and be resolved, says McCoomb. The status of intellectual property rights within a blockchain also needs to be resolved, and it is something that in-house counsel should be aware of. Blockchain technology itself is not pro - tectable, but certain aspects of the block- chain application, code or deliverables may be protected by patent, copyright or trade secret laws. That is another question that has yet to be resolved. Through it all, in-house counsel will also have to be aware of non-legal issues as the organization looks to operationalize blockchain. There needs to be board and broad man - agement buy-in; otherwise, legal counsel runs the risk of receiving different direc- tions in terms of the investments and pace that will be poured into the endeavour. "There's senior management who are bullish and others are bearish," says Sheik. In-house counsel have their work cut out for them, and they are going to have to do their homework, says Cameron-Huff. "At the heart of grappling with these le - gal issues is understanding what the subject matter is because these files will come to counsel for legal advice," says Cameron- Huff. "But if you don't understand how this technology works, they might not be able to render the right advice." IH I n d u s t r y S p o t l i g h t ATTENTION IN-HOUSE COUNSEL! Weigh in on relationships with external law firms. Survey is open from August 8 – 26 canadianlawyermag.com/surveys The annual Canadian Lawyer Corporate Counsel Survey COMING SOON

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