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Welcome to The Fineprint, where we convert business babble into cocktail party chatter.

True or false… In Pennsylvania, Sorority houses are classified as brothels.
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Now let’s take a look at the most interesting legal developments since we last saw you.

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FRAUD

HP's Relentless $4B Case Against Deceased Entrepreneur's Family

Why we’re paying attention… HP’s pursuit of Michael Lynch’s estate despite his acquittal shows how legal battles can extend beyond individuals and impact their estates, raising important considerations for asset protection in business deals. It also highlights the need to balance the potential gains of winning lawsuits against the risk of reputational damage, as aggressive legal actions can harm a company’s public image.

Hewlett-Packard (HP) announced on Monday that it will continue its $4 billion damages case in the UK against the estate of British entrepreneur Mike Lynch. 

Lynch, who founded Autonomy, an AI data analytics company, was often called “the UK’s Bill Gates.” 

Autonomy was bought by HP for $11 billion in 2011, but HP later accused Lynch of inflating the company’s value, leading to an $8.8 billion write-down just one year later. 

Lynch was facing a potential 20-year prison sentence in a U.S. fraud trial over the dispute but was acquitted shortly before his death in August when his yacht sank off Sicily.

While there was evidence of accounting malpractice (Lynch’s former CFO, Sushovan Hussain, was previously found guilty and sentenced to 5 years in prison), Lynch himself successfully argued that he had nothing to do with it. 

Ultimately, the prosecution was unable to produce any evidence that Lynch was directly involved in Autonomy’s financial skulduggery. 

But the combination of Hussain’s jail time and over a decade of legal headaches for Lynch stands as a stark reminder that fudging your numbers is a slippery slope towards a free orange jumpsuit and a very small room.  

This fact is reinforced by HP’s fresh attempts to seize billions from Lynch’s estate. 

But HP, meanwhile, may want to reflect on Disney’s recent PR disaster before suing a grieving family. 

Back in 2023, Disney was sued by a doctor after his wife died from anaphylaxis following a meal at a Disney Springs restaurant, despite assurances the food was allergen-free. 

Disney initially tried to settle the case outside of court by forcing “arbitration,” a process with no judge, jury, or chance to appeal. 

Disney argued that the man had agreed to this when he signed up for a Disney+ free trial years ago, even if he wasn’t aware of it at the time.

But after public backlash, Disney backpedaled, announcing two weeks ago that it will allow the case to proceed in court. 

Similar outcry has already began to surface against HP, with a close friend of Lynch describing HP’s decision as showing a “complete lack of humanity.”

So that’s two key lessons for those of you who are counting:

1. Don’t cook the books

2. Sometimes sacrificing the legal L for the reputational W is the smart move

SNIPPETS

Elon Musk and Tesla win dogecoin lawsuit dismissal. A federal judge in Manhattan tossed out a $258 billion lawsuit accusing Musk and Tesla of defrauding investors by hyping the cryptocurrency dogecoin. Investors claimed Musk used Twitter posts, a "Saturday Night Live" appearance, and other publicity stunts to manipulate dogecoin's price for profit. The judge ruled that Musk's tweets about dogecoin were "aspirational and puffery, not factual," and that no reasonable investor could rely on them for a securities fraud claim. The lawsuit was dismissed with prejudice, meaning it can't be refiled. Musk's lawyer called it "a very good day for dogecoin." The case highlights ongoing scrutiny of Musk's social media activity and its impact on financial markets.

TikTok is set to face a lawsuit over the tragic death of a child. In May 2022, Nylah Anderson filed a lawsuit against TikTok alleging that the platform's algorithm promoted the dangerous "Blackout Challenge" to her daughter, ultimately leading to her daughter’s death. A Philadelphia Circuit court judge initially ruled back in October 2023 that TikTok was immune from the lawsuit under a provision of the federal Communications Decency Act, which protects publishers of user-generated content. However, a U.S. appeals court revived the lawsuit on 29th August, arguing that Section 230 of the Communications Decency Act of 1996 only provides immunity for content created by users on TikTok—but not for the TikTok algorithm that serves that content to users. If upheld, this unprecedented legal argument would shape how all social media platforms and providers of algorithmic content are held responsible for the content circulating on their sites.

Invisalign maker settles antitrust lawsuit for $27.5 million. Align Technology, the company behind Invisalign clear teeth aligners, agreed to pay $27.5 million to resolve a class action lawsuit alleging it engaged in an illegal antitrust conspiracy with rival SmileDirectClub. The lawsuit claimed Align agreed not to enter the direct-to-consumer market in exchange for a stake in SmileDirectClub, allowing the latter to charge higher prices. Align denied wrongdoing but settled to avoid prolonged litigation. The settlement covers nearly 1.45 million purchasers of SmileDirectClub aligners between October 2017 and August 2022. Align will also offer each class member a $300 coupon for Invisalign treatment. The plaintiffs' law firm plans to seek up to $8.25 million in legal fees. But before any dollars change hands, the settlement requires approval from a federal judge in San Francisco.

Google faces revived privacy lawsuit over tracking. A San Franciscan appeals court revived a class-action lawsuit against Google, alleging the tech giant tracked users' internet activity even when they were in "private browsing" or incognito mode. The court ruled that Google may have violated federal wiretap law by collecting data on users who thought their browsing was private. Google argued it disclosed its data collection practices, but the court found the company's disclosures insufficient. A jury will be asked for their verdict on whether a “reasonable user,” after being presented with Google’s privacy disclosure, would sufficiently understand that their data would still be collected despite being in incognito mode.

Trump's campaign hits a sour note with musicians. The former president is facing a crescendo of legal challenges from artists over unauthorized use of their songs at political events. Jack White, ABBA, and the estate of Isaac Hayes Jr. are among those taking action, with a federal judge who ordered Trump to stop using "Hold On, I'm Coming" on 4th September, at least for the duration of the legal proceedings. Despite the chorus of disapproval, it is rare for musicians to succeed in their attempts to stop politicians from using their music.

The EU faces legal challenges over "green" transport labels. On 28th August, the European Union was sued by environmental groups over its green labeling of aviation and shipping investments. The lawsuit claims that the EU is “greenwashing” by giving these fossil fuel reliant sectors a deceiving stamp of eco-approval. It seems sustainability is more expensive than the EU anticipated, especially now you factor in the legal fees.

ARTIFICIAL INTELLIGENCE

The World’s First AI Treaty: A Global Framework Open To Local Interpretations

Why we're paying attention… The Council of Europe has officially opened an AI Treaty to global participation, and numerous nations are already signing on. The treaty's principles are broad and open to interpretation but they offer a preview of where international AI governance is heading. Given that each jurisdiction can interpret the treaty differently, the treaty may present businesses with the challenge of adjusting their AI services to meet local rules.

On 5th September the UK, EU, and US became the first signatories of a groundbreaking new AI Treaty.

The 12 page document was in the making for 2 whole years and developed by the 46 Council of Europe member states (including the UK), alongside the EU and 11 non-member nations like Australia and Japan.

This new treaty looks similar to the EU's “AI Act,” a series of regulations that have gradually come into force over the past year, but extends its guidelines to a global scale.

Its goal is “protecting human rights, democracy, and the rule of law” in the context of AI.

But what does that mean exactly?

POLICING THE BOTS

The language of the document makes it clear that each nation who signs the treaty has room to interpret its guidelines.

But each country is generally committing to uphold several recommendations including:

• Testing large scale AI systems and demonstrating them to national authorities before being made public

• Ensuring that AI-generated content is clearly labelled as such and warn people when they are interacting with an AI system that may otherwise seem human

• Ensuring that AI does not interfere with the privacy rights of citizens and their right to be protected from discrimination

• Ensuring that AI outputs can be “trusted” and intervening where necessary

How exactly will these rules be enforced?

That’s where things get a little hand wavy…

OPEN TO INTERPRETATION

The treaty asks nations to make sure they’re monitoring AI systems but doesn’t tell them exactly how they’re supposed to do that.

It also says that countries must create mechanisms by which citizens can lodge complaints but no penalties or fines have been outlined for any organization that is found to be in breach of the rules.

Ultimately, many are interpreting the treaty as a somewhat vague commitment to making sure that AI doesn’t interfere with human rights, democracy, or the rule of law.

It’s like the pithy mission statement you find on the wall of a corporate lobby.

But the vagueness of the AI Treaty at this stage is probably a good sign for businesses.

No one wants excessive regulation to stifle innovation, especially before the risks of AI are fully understood.

However, the treaty signals that global authorities are committed to developing their own interpretations and rules on AI, inevitably creating a complex legal landscape for businesses to navigate in future, especially those who sell and use AI technology in multiple jurisdictions.

MEME

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The answer to today’s “did you know” is…

False. There is a common but false belief that Pennsylvania has a brothel law prohibiting a certain number of women from living together in one house.

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