Russia/Ukraine conflict
The Russia/Ukraine conflict is accelerating de-globalisation
… I really do think that de-globalisation is the big change you might see in the next coming decade.
ESG issues, Covid and the Ukrainian war are changing business models. This is because:
- Mounting geopolitical pressures
- Supply chain disruption – causing companies and factories to shut down temporarily, and sometimes permanently
- Difficulty paying staff
- Environmental issues
- Growing sense of nationalism (eg. take back control, make America great again etc)
This has led to decentralisation, and implementing redundancies in the supply chain:
- Localise production to where the consumers are
- Vertical integration (if you can afford it)
- Buffering the inventory (if you can afford to)
- Maybe less stock market floatation – less dependent on quarterly results, and more flexibility
- Use of new technology to plug supply chain gaps (eg. 3D printing)
Viasat – satellite communication service provider subject to cyber attack
…Viasat is a service provider to Ukrainian military. It also provides services to Germany and the attack has disconnected approx. 6000 wind turbines there.
Ukraine’s “Digital Blockade” – approach to and use of crypto is so carefully thought out
…First, it is trying to adopt cryptocurrencies fast:
- On the second day of invasion, official government wallets set up to receive cryptocurrency
- Implementation of legal structures (this week – yes, amid war):
- Passes bill to legalise virtual assets such as cryptocurrency
- Provides consumer protection against fraud
- Appointment of regulators (National Bank of Ukraine, National Securities and Stock Market Commission) with the following powers:
- Ability to create policies
- Issue licences to businesses that deal in crypto
- Act as financial watchdog
- Crypto exchanges required to register with the government
- Banks allowed to open accounts for crypto firms
- Ukraine crypto exchange Kuna will be able to convert crypto to fiat [at the moment, Bahama based exchanged FTX is converting crypto to fiat for then to be deposited into the National Bank of Ukraine]
- Accelerating the creation of Central Bank Digital Currency
- Setting up agreements with military suppliers so that transactions can be done using crypto currency
- Setting up official Ukrainian Aid website to enable doners to send money in 9 different cryptocurrencies – previously, the call for donations was confined to Twitter.
- Gavin Wood, co-founder of crypto currency Polkadot (DOT) had previously said if Ukraine wallets would accept DOT, he will personally donate $5 million. He stuck to his word.
- Issuing NFTs – which apparently now has the working title Meta History: Museum of War – NFTs of footages of the invasion with art work relating to the incidents of each day. It will result in an immutable record of the war.
Second, its dealings in cryptocurrencies donations (over $100million) is clever.
- Using half in non-military use so as not to deter future donors such as bullet-proof jackets, food rations, medicines.
- Reaching out to Russians on the ground by use of media campaigns on social networks
Ukraine’s vice Prime Minister and minister of Digital Transformation says government will resemble tech companies in the future. This is something I have not thought about.
David Beckham hands over Instagram account to a Ukrainian doctor working amid Russian shelling
…He has 71 million followers and he has handed over the Instagram account to highlight the good work doctors and nurses are doing, risking their lives. It will no doubt reach so many fans (possibly also Russians – but Instagram is banned in Russia) who may have paid little notice to the Ukrainian crisis. He has called to donate, setting an example by donating £1million.
Starlink becomes most downloaded free app in Ukraine
…It is incredible that Starlink (which requires hardware into Ukraine for it to work) has actually been reported to work.
Popular Ukranian App Reface uses its clientbase to spread information about the invasion
…The top rated face swap app have used its popularity asking users to disseminate information about the war by easy uploading of videos of footages, making it easy to call for donations.
Deepfake of President Zelensky surrendering ridiculed by Ukrainians
…Fortunately, the mock up was unconvincing and so easily detected, but the Ukrainian government had already warned its citizens that this may well happen. Platformers have promptly removed it but it has also led to criticisms as to why they aren’t moving as fast on other pieces of misinformation that remain on the platforms.
How do we know when it’s authentic?
IP Rights owners (particularly brands) face copycat TM applications and usage in Russia as the country decides that IP Rights of owners from unfriendly countries cannot be enforced
…Quite predictable. These include McDonalds, Starbucks, Peppa Pig….
Artificial Intelligence
AI-created toxins
…If AI has capability of discovering new drugs, it can also have the ability to discover toxins. It is proving to be pretty adept. Obviously much easier than developing new medicaments in which you have to prove efficacy (actually tackling the illness) and safety.
Autos
Porsche to build own EV charging stations
…They are to have a lounge nearby for Porsche owners to relax (as has Audi). It is a departure from plans to have shared charging points with other auto makers. Tesla started off with own supercharging stations but it has opened up its infrastructure to other EVs.
Covid
Pfizer and Moderna sued for patent infringement by Alnylam Pharmaceutical for using their mRNA technology
…The technology in question is the creation of lipid nanoparticles that protect the fragile mRNA. Pfizer’s website is claimed to have said that without lipid nanoparticles, there would have been no mRNA vaccine.
Data
UK Online safety bill – what does it mean?
Objective: Prohibit online harms such as scamming, bullying and child abuse but also protecting free speech.
Penalty for not complying: executives may be jailed, 10 percent of global annual turnover
Regulator: Ofcom
Powers of Ofcom:
- Audit algorithms of outputs of searches and social media posts
- Legal but harmful abuses such as bullying to be set out in secondary legislation
- Cannot mandate the implementation of proactive tools on private messaging or legal content
- Prevention of fraud through paid adverts
- Criminalisation of cyber-flashing
- Ability of users to block anonymous accounts
Australia’s competition authority sues Meta for misleading crypto- ads
…Cause of action is breach of consumer and investment laws. This sort of issue would fall squarely within UK’s online safety bill. The charge concerns unauthorised celebrity (loosely defined – can include business leaders) images used to advertise crypto schemes. Facebook is liable as publisher of these ads, it is claimed.
Meta fined €17 million for breaching GDPR by Irish Data Protection Regulator
…This is in relation to Meta’s response to data breaches, which was said not to meet GDPR’s standard.
Meta was found to have been in breach of GDPR Articles 5(2) [such as processing data in a manner that ensures appropriate security of the personal data] and 24(1) [implement appropriate technical and organisational measures to ensure and to be able to demonstrate that processing is performed in accordance with GDPR].
White House inching closer to the EU on Data policies – sort of?
…President Biden has issued an executive order mandating those running critical infrastructure to report cyber attacks. Obama had failed to get US companies to collaborate (it felt to be forced to share data was anti free-market), but the Ukranian/Russian conflict has catalysed the initiative. Note that under EU rules, member states are to share cyber attack information.
Brazilian Supreme Court orders the suspension of Telegram for spreading misinformation
…Apple and Google were ordered to ban the Telegram app. This was in response to Telegram failing to respond to orders to remove profiles of President Bolsanaro’s supporters for spreading misinformation. Bolsanaro had been encouraging people to migrate from Meta to Telegram. Apparently the Supreme Court sent the order to the general email address, and the outcome is rather disastrous. To be fair to Telegram, there are all sorts of actions going on concerning Ukraine/Russian conflict. The Supreme Court email probably got accidentally missed off…Telegram did say they will set up a special take down email address. Telegram has apologised for not handling requests more promptly.
50% of Brazilian users are said to have installed Telegram [it may well be because in the past WhatsApp got suspended temporarily owing to owner Facebook’s IT configuration change]. Telegram is said to account for Bolsanaro’s popularity.
Ban now lifted. Knock on effects on Ukranians too (including the government) that uses Telegram.
Drones
UK Civil Aviation Authority to consider implementing an open access regulatory framework for drones
…One vision is to create a drone superhighway linking towns across the UK.
Metaverse
Sony backed start up H2L displays arm strap that stimulates muscles to mimic pain
…There are no elaborate gloves to put on, just a strap on the arm. It is a contender for a closer physical experience in virtual reality/Metaverse.
Google buys Raxium, a Micro LED start up – turns up the heat on the AR race
…Raxium develops LEDs for use in AR/VR, no doubt for Project Iris, the AR headset project. Micro LEDs are apparently the next thing after OLEDs. Samsung is already selling Micro LED TVs. Meta is partnering with Plessey for Micro LED projects. Apple bought screen-tech start up LuxVue in 2014 and have been since developing its own AR/VR products.
NFTs
Former Disney chief Bob Aiger joins board of Genies – a digital avatar and accessories company
…Bob Aiger, formerly CEO and then Chairman of Disney’s first venture since retiring from Disney has been to bet on Genies. This is significant because Aiger is a celebrity CEO, and for good reason. Disney grew internationally and changed tack into digital (Disney+) under his leadership. Anyone wanting to learn about being a better leader is recommended his book The Ride of a Lifetime. I have heard many business leaders quote snippets from it.
Anyway, he is an expert in monetizing IP, which is what Disney is successful at, and it is suspected this is the reason why he has decided to join the customisable avatar making company [see the popularity of this service in China – In the Spotlight, below]. Plus, despite its issues he must see potential in NFTs. Genies have very interesting partnerships in place:
- With Giphy (company that provides short animated GIF images to social media platforms – Facebook bought Giphy but UK Competition Market Authority has ordered that the deal should be unwound, also US antitrust investigations ongoing): This is how it works:
- User downloads Genies app–> Create customisable avatar–>Giphyd–>Use in Social Media (Facebook)d
- With Dapper Labs: blockchain company, which is responsible for creating NFT collectibles, for example the popular NBA Top Shot
- With Warner Music group: Genies to create NFTs of say, Ed Sheeran, Bruno Mars, Daft Punk etc for people to use. The partnership can also enable these artists to further monetize their brand. An artist can sell limited NFTs with their concert ticket – those with the NFT can have access to backstage, for example. Profits from this highly priced concert tickets could enable cheaper seats for the hoi pollois.
Plus in the future, it would seem logical if the vehicle moved into NFTs in gaming. Gamers are spending so much on avatars’ accessories/ costumes (called skins). It is a matter of time that gamers start building their own avatar AND own the underlying Intellectual Property. Key is Genies’ stake in that IP. How will the rights be structured? Readers interested in this area should take a look at Honnverse (see also In the Spotlight, below).
Spotify to sell NFTs
…Spotify’s aim is to support creators, as most of the licensing revenues go to record labels. Kings of Leon and Grimes have sold NFTs of their music.
This craze will be with us for some time, despite a lot of “pumping” (inflating prices based on pure speculation and wash trading (where you buy your own NFT repeatedly to give the illusion that it is worth something) going on; Instagram, Reddit and Twitter are all working on web 3.
Did you know? Warner and Universal have partnered with NFT projects, including a virtual band featuring Bored Ape Yacht Club.
Bored Ape owner releases ApeCoins in a high profile “airdrop”
…Many will know Bored Ape NFTs have become very high profile collectibles which includes celebrity owners having purchased them for enormous prices. A consortium, in which Bored Ape creator Yuga Labs has majority single shareholding, has released 1 billion ApeCoins in a high profile “airdrop” – which is the process by which free tokens are given away to stakeholders of a project. Thus, ApeCoins were distributed following consultation with stakeholders and industry experts:
- Yuga Lab (150 million tokens – worth more than ($2.2 billion)
- Investors (such as well-known Andreessen Horowitz)
- Owners of NFTs (150 million tokens)
- Environmental charity
- ApeCoin organisation ((ie: a DAO) treasury, 470 million)
- Founders of Yuga Labs who were thus far known by their pseudonyms such as Gargmel and Gordon Goner (8%).
Some figures
- $9 billion worth of ApeCoins traded within 24 hours on crypto exchanges
- Bored Ape token has sold for $250 initially to $250,000.
- Ape Coins swung [pun intended] from $7 to $39
- Yuga Labs gain about 2.5% royalty for every Bored Ape that gets traded thereafter
Patent
Which law applies to determine disclosure? – AutoStore v Ocado
…AutoStore (Norway) has sued former business partner Ocado for the infringement of 4 patents concerning grid robotics systems. Ocado had purchased AutoStore’s system in 2012 for use in the UK, which came with various technical details and software. Ocado then developed its own system using those details.
Ocado says that the patents lack novelty because AutoStore disclosed critical information (for the purposes of the patent case) to the Central Russian bank in relation to supplying its system to them. Information was sent by email without an NDA. It is saying that Russian law should apply whilst AutoStore consider that Norwegian law should.
Streaming
Amazon buys MGM
…With the addition of MGM, Amazon’s Prime Video will be able to compete more effectively with Disney+, Netflix, Sky etc with titles like James Bond and Rocky among the 4000 film titles (it also comes with 17k TV episodes). Lack of overlap in business between the two was key to clearing antitrust hurdles. MGM titles available on competing streaming services are likely to be withdrawn.
However, Amazon has been put on notice by the FTC that, depending on how Amazon behaves, it could always think about unwinding the deal…
Supply Chain
Apple proves to be king of supply chain resilience as Chinese Shenzhen lockdown hits tech businesses hard
…Even before the pandemic, Apple always had multiple suppliers. This kept the suppliers on their toes (in terms of quality, price) and it meant that its supply chain was resilient. Apple displayed its might when Apple iPhone 12 launch was delayed by only a month amid shut down of the entire country from Covid.
Following the temporary Shenzhen shut down owing to covid last week, Tesla shut its factory down for two weeks. But Apple has managed to sustain its business better. The secret is the multiple assembly centres situated close to production (Airpods – in Vietnam, lower iPhone models – Brazil and India), weeks of inventory built in to cushion any supply chain disruptions.
Semiconductor supply chain
When it comes to the most critical chip supply chain, we see the reporting of not one but two of Chinese iPhone assemblers (Luxshare and Goertek) pivoting into semiconductor packaging space. Semiconductor packaging is not the same as normal packaging you see on everyday products; it is highly specialised. These two companies are names we do not hear often, but are really rather successful:
- Luxshare: Assembler of iPhones, AppleWatch
- Goertek: Manufactures Meta’s VR headsets, Sony PlayStation 5. It has spun off its chip related division, Wingtech which has floated in the Shenzhen stock market.
ASE (world’s biggest chip packaging and testing service in Taiwan – it has an affiliate called Universal Scientific Industries), Intel, Samsung, TSMC and Qualcomm are setting up a consortium to standardize chip packaging called Universal Chiplet Interconnect Express (UCIe) concerning how to combine chiplets to create more powerful chips. Google, Microsoft and Meta will also join.
Trade Marks
EUIPO and OECD publish a report saying 60 percent of counterfeit goods imported into EU is dangerous
…Products include pharmaceuticals and cosmetics
EU Advocate General says Denmark in breach for not prohibiting ex-EU exports of Danish cheese under PDO protected Feta
…So held the opinion whilst acknowledging the importance of free trade.
Trade Secrets
Qualcomm sues former engineer for stealing trade secrets by screenshotting
…Confidential information is said to contain chipset software architecture and design.
In the Spotlight
The Metaverse in China: Who are Zheli, Honnverse, what’s the score?
…BigTechs have dominated news relating to the Metaverse but what’s going on in China? It’s not the BigTechs of China (the so called BATH – Baidu, Alibaba, Tencent and Huawei) that are creating the headlines, but newcomers, though as you can see, hopefuls are backed by BATH (rather, Baidu and Tencent in the main). No reason why new entrants can’t make it outside China, but we haven’t come across much headline news from them thus far. Having said this, watch this space as regulatory authorities in China may step in to restrict things going out of hand.
- Who are Zheli?: In short, it’s a social networking app for Avatars. An App which enables users to make customisable avatars (lots of fashionable outfits) and share basic information such as where they are, what they are doing (at school, shopping mall etc). Users can add friends via the app.
- What’s the big deal?: Replaced WeChat [China’s answer to Whatsapp] as the most downloaded App from the Apple App Store only one month after launch. WeChat had held the number one spot since 2019.
- What’s the issue?:
- Operational issues [probably can’t cope with so many people wishing to use] has meant use is being suspended.
- Privacy concerns – Zheli has denied it has collected data when users use third party messaging tools like WeChat to make friend referrals.
- Technically constrained – not possible to upload short videos, long texts, emojis.
Honnverse / Rainbow Universe (in English) created by Tianxa Show
- Who are Tianxa Show?: Developed Honnverse, which is a 3D virtual life community. You can buy virtual property within Honnverse. Oceanfront house has sold for around $100k. Residents include superstar influencer Fish Too Free.
- What’s cool?: Users can build own IP Rights [I would say this as an IP lawyer – I think this is key to success in the metaverse] by building own avatar and building content which would be converted into digital assets and recorded on a blockchain.
- What’s the issue? Similarly to Zheli, too many users owing to popularity has somewhat crashed the service.
Chinese government led metaverse industry group: The Metaverse Industry Committee
- Committee set up under the auspices of China Mobile and Communication Association (CMCA)
- CMCA members include state run companies such as China Mobile and China Unicom
- Tasks include
- Strengthening technological innovation
- Application integration
- Training of professionals
- Thought leadership
- Focus on developing infrastructure such as:
- Cellular networks
- Wifi 6
- Blockchain
- Cloud computing
- Edge computing
- AI + GPU
- VR/AR
- Wearables
Other metaverse related Chinese companies
- ReWorld: Easy to create games and share among users. A bit like Roblox. Backed by parent of TikTok, Bytedance.
- Soul: Matches people depending on likes and hobbies via avatars. Backed by Tencent.
- Pico-technologies: makers of VR devices. Now acquired by Bytedance.
- Baidu: Makers of Chinese metaverse platform XiRang. It hosts virtual events and sightseeing capabilities.
- Tencent: other than backing other up and coming Chinese companies related to the metaverse space, it has a stake in Epic (makers of Fortnite).
Points to Note: Metaverse and China:
- Over 16000 Trade Mark applications across the industry for metaverse relating products and services, including the auto and financial sectors.
- Financial payments within metaverse though is tricky because crypto transactions are banned. Perhaps e-Yuan (Chinese Central Bank Digital Currency) is being used.
- Privacy issues concerning behaviours of avatars.
Delving Deeper
Next Semiconductor Technology: 3D stacking for performance and efficiency
Chip stacking is the next frontier of Semiconductor advancement. Why?
As this article explains, in order to stuff huge amounts of data into a small space, you need a high “degree of integration” in semiconductors. Degree of Integration means the extent of circuits that performs logical computations that can be fitted into a chip. This is why, you want to aim to make a chip which embodies as narrow circuit width as possible – leading to chips with higher capacity, performance and efficiency [note I do not profess to understand the exact physics underlying this – but this is a fact which is universally accepted]. The higher end semiconductors of today tend to be utilised for AI and EVs.
However, there is a limit to how narrow you can make a circuit – so leading businesses are trialling the stacking idea.
- AMD (US): company showcased in CES (one of the large expos for tech companies, in Vegas) two separate chips (one for temporary memory and the other for processing) stacked on top of each other. It led to an increase in capacity by three fold, and increased performance for gaming by 15%
- Graphcore (UK): created semiconductors for servers, stacking Intelligence Processing Unit and Power Supply chip, leading to an increase in performance by 40% and efficiency by 15%. Graphcore chips are used for US Energy department’s cyber security projects.
All are made by TSMC the leading semiconductor foundary. Stacking technologies require what is called Interposers which integrate the connections between multiple chips.
Blockchain Name Use – Risks
There are things called blockchain domain name. For example, not www.ABC.com but ABC.eth via NFT issued by blockchain domain name service (eg. Unstoppable Domains, Ethereum name Service) – the blockchain domain name (e.g. ABC.eth) is linked to the address on blockchain, which is a unique crypto wallet for storing NFTs and crypto assets. You can design the blockchain domain name to refer to a web address.
Uses of Blockchain Domain Names
- Transfer of crypto assets without having to use a long text string that make up the crypto wallet address [as anyone who dabbles in crypto would know].
- Use as a username for applications
- Use as an address for websites – for example to connect to the decentralised internet system.
Issues
- Cybersquatting – you could apply for a blockchain domain name with a TM embedded into it. Though the blockchain domain name service providers have blocked out some well known TMs or celebrity names
- Blockchain domain name service has no ability to transfer the blockchain domain name to the rightful TM owner.
- Difficult to enforce (cf ICANN) – anonymity, jurisdictions
- May be possible to ask for an order against the blockchain domain name service provider.
- Possible to use NFT marketplaces’ take down procedures to limit loss.