# Weekend Law: H-1B Visa Fee Struck Down & How Lawyers Use AI

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 12 Jun 2026, 37 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/8c377f54-539d-4194-a92e-b46701740170/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

On this edition of Weekend Law, Amy Morris fills in for June Grasso. Leon Fresco, immigration law expert and partner at Holland & Knight discusses the latest headlines as the Trump adminstration cracks down on immigration, including a federal judge striking down the President's $100,000 fee for H-1B visas. Bloomberg's Annelise Levy joins to talk about her reporting on a program Amazon uses to weed out copyright violators that might be overstepping. And AI and technology law expert Justin Daniels, a shareholder at Baker Donelson talks about how lawyers are using and sometimes abusing artificial intelligence. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: This is Bloomberg Law.
[0:02] Speaker 2: Employers frequently exploit the weaknesses in the law.
[0:05] Speaker 3: Courts are going to be asking questions about separation of powers.
[0:08] Speaker 4: One by one, Google settled with all of these other plaintiffs.
[0:11] Speaker 1: Interviews with prominent attorneys and Bloomberg legal experts.
[0:14] Speaker 2: Joining me is immigration law expertly on Fresco, First Amendment
[0:17] Speaker 2: law expert Caroline Malick.
[0:19] Speaker 1: Corbin, and the analysis of important legal issues, cases and
[0:23] Speaker 1: headlines that.
[0:23] Speaker 4: Trial judge, you may well want to hold a hearing.
[0:26] Speaker 5: They have never said this case.
[0:28] Speaker 3: Should never have been brought in the first place.
[0:30] Speaker 1: Bloomberg Law with June Grosso from Bloomberg Radio.
[0:37] Speaker 4: Welcome to the weekend edition of Bloomberg Law. I'm Amy
[0:40] Speaker 4: Morris in for June Grosso. June is off this week.
[0:44] Speaker 4: Coming up this hour, how Amazon is using a special
[0:47] Speaker 4: program to decide the fate of sellers with very little oversight.
[0:51] Speaker 4: We'll also take a look at how lawyers and others
[0:53] Speaker 4: in the legal system are using and sometimes abusing artificial intelligence.
[0:58] Speaker 4: All of that on the way on Law, But first
[1:01] Speaker 4: we start with a roundup of the latest headlines in
[1:03] Speaker 4: immigration law. Earlier this week, a federal judge struck down
[1:07] Speaker 4: President Trump's one hundred thousand dollars fee for H one
[1:10] Speaker 4: B visas. They're often used by large tech companies to
[1:13] Speaker 4: bring in skilled workers from overseas. Joining us now is
[1:16] Speaker 4: Leon Fresco, a partner at Holland and Knight. Leon, thank
[1:20] Speaker 4: you for taking the time with us today. We want
[1:22] Speaker 4: to start with the H one B visas. The Trump
[1:24] Speaker 4: administration has already said that it will appeal that ruling.
[1:28] Speaker 4: So what happens now.
[1:30] Speaker 5: Well, what happens now is that the case will then
[1:33] Speaker 5: now go to the First Circuit Court of Appeals. There's
[1:36] Speaker 5: also a case that's happening where we're waiting for a
[1:39] Speaker 5: decision from the DC Circuit. And this is a decision
[1:43] Speaker 5: that was entered into in the District Court of Massachusetts
[1:48] Speaker 5: where there was a lawsuit filed by the state of
[1:50] Speaker 5: California and twenty other states saying that there was a
[1:54] Speaker 5: one hundred thousand dollars fee that the Trump administration had
[1:59] Speaker 5: placed into the H one B visa program. The H
[2:03] Speaker 5: one B visa program is a program where employers want
[2:07] Speaker 5: to hire skilled workers from abroad, and there's a two
[2:10] Speaker 5: pronged test. The test is, first of all, is the
[2:13] Speaker 5: occupation one that requires a specific university or master's or
[2:19] Speaker 5: PhD degree in order to perform that job. For instance,
[2:23] Speaker 5: does you know, for lawyer that requires a law degree
[2:26] Speaker 5: in order to do that job? And then the second
[2:29] Speaker 5: prong of the test is does the person have the
[2:31] Speaker 5: degree that's necessary in order to perform that job. And
[2:36] Speaker 5: so what the Trump administration did is that they use
[2:39] Speaker 5: their same authority that they have under the travel ban,
[2:42] Speaker 5: which is an authority to ban people from entering the
[2:45] Speaker 5: United States, meaning people from abroad. And what they said was,
[2:49] Speaker 5: let's see if we can use this not to ban
[2:52] Speaker 5: people who want to come in from abroad on H
[2:54] Speaker 5: one B, but instead say they can only come in
[2:57] Speaker 5: if they pay a one hundred thousand dollars fee. So
[3:01] Speaker 5: it'd be like a quasi band. So it's a ban
[3:03] Speaker 5: unless you do something, which is in this case, pay
[3:06] Speaker 5: a one hundred thousand dollars fee. And so what the
[3:09] Speaker 5: twenty States did is they used the Supreme Court president
[3:13] Speaker 5: that happened in the Tiraffs litigation, where they said that
[3:16] Speaker 5: when the President was imposing these tariffs pursued to the
[3:20] Speaker 5: statutory authority that the President claimed he had, he was
[3:23] Speaker 5: actually in fact levying attacks that only the Congress could
[3:28] Speaker 5: actually levy. The President couldn't actually sort of create a
[3:31] Speaker 5: new tariff out of nowhere, and so they said that's
[3:34] Speaker 5: what he was doing here, and the District Court of
[3:37] Speaker 5: Massachusetts agreed. The District Court said, yes, in fact, this
[3:41] Speaker 5: one hundred thousand dollars fee isn't a band. The ban
[3:44] Speaker 5: could be done because the ban has been approved by
[3:47] Speaker 5: the Supreme Court in the context of the original Night
[3:51] Speaker 5: twenty seventeen travel band that was in the Trump versus
[3:54] Speaker 5: Hawaii case. But instead ban is okay. But a one
[3:59] Speaker 5: hundred dollar fee is not okay because that's actually a tax,
[4:03] Speaker 5: and so the tax couldn't be done unless Congress passped okay.
[4:07] Speaker 4: There are a lot of immigration related cases from the
[4:11] Speaker 4: Trump administration, many policies that the administration is putting forth
[4:15] Speaker 4: that are facing court time. One judge has blocked a
[4:19] Speaker 4: series of those policies. They were adopted after the shooting
[4:23] Speaker 4: of National Guard members in DC last year. Those policies
[4:27] Speaker 4: were about holds on work permits and asylum grants, keeping
[4:30] Speaker 4: people from being able to work, or at least those
[4:33] Speaker 4: permits and grants being stuck in limbo interminably until a
[4:39] Speaker 4: judge ruled that that would be illegal as well. Are
[4:42] Speaker 4: you finding that there are so many cases and so
[4:45] Speaker 4: many things coming up because the Trump administration seems to
[4:48] Speaker 4: keep pushing stuff forward that keep facing challenges in court.
[4:53] Speaker 4: That is correct.
[4:54] Speaker 5: Every week there is a new administrative effort, whether it
[4:58] Speaker 5: be a regulation or a policy memo, or a proclamation
[5:02] Speaker 5: under the ISNA Section two twelve f travel ban statute,
[5:06] Speaker 5: or a pause. So in that case, this was a
[5:10] Speaker 5: combination of things. So first, after that shooting near the
[5:14] Speaker 5: White House, there was a ban that was issued for
[5:18] Speaker 5: over thirty nine countries for their individuals to come into
[5:22] Speaker 5: the United States. But then what the administration tried to
[5:25] Speaker 5: do is to say, fine, we know we have the
[5:28] Speaker 5: authority to ban people from those thirty nine countries from
[5:31] Speaker 5: entering the United States again for the same reason we
[5:34] Speaker 5: discussed earlier, which was the original twenty seventeen Trump versus
[5:38] Speaker 5: a Y travel baned US Supreme Court decision. Let's see
[5:41] Speaker 5: if what we can also do is to then ban
[5:45] Speaker 5: the internal processing from inside the United States for people
[5:49] Speaker 5: with those cases. And so what was happening is or
[5:52] Speaker 5: it continues to happen because this decision hasn't really yet
[5:55] Speaker 5: been implemented, so there's going to need to be further
[5:59] Speaker 5: litigation here. But what ended up happening is you have
[6:02] Speaker 5: a lot of foreign students who are already here from
[6:05] Speaker 5: a lot of these countries, and a lot of foreign
[6:07] Speaker 5: people on other visas like H one B, the work
[6:10] Speaker 5: visa we talked about, or l visas, which is that
[6:13] Speaker 5: they were transferred from abroad into the US for specific work.
[6:17] Speaker 5: They were already here. There was tens of thousands of
[6:19] Speaker 5: people already here, and they've been trying to renew statuses
[6:23] Speaker 5: that they have or change from student visa to other workers'
[6:27] Speaker 5: status applications, and all of those applications have been put
[6:31] Speaker 5: on hold. They've simply been tucked into a drawer and
[6:34] Speaker 5: nothing has been done. So people finally sued saying, what
[6:37] Speaker 5: are you going to do? You can't just take how
[6:40] Speaker 5: you can't have taken all of these people's fees and
[6:43] Speaker 5: decided not to do anything with it.
[6:45] Speaker 4: Well, exactly because even as some cases are in appeal,
[6:50] Speaker 4: it appears that the administration is finding other ways to
[6:52] Speaker 4: go around it. For example, the Department of Homeland Security
[6:56] Speaker 4: just this past week said it would be restricting certain
[6:58] Speaker 4: immigrants access to permits because they would have to demonstrate
[7:03] Speaker 4: economic necessity for their employment, putting more restrictions on allowing
[7:08] Speaker 4: immigrants to work in the US regardless of what their
[7:11] Speaker 4: status is. It seems almost like whack a mole for
[7:15] Speaker 4: the court system to try to figure out which case
[7:17] Speaker 4: is going where and at what time, and who is
[7:20] Speaker 4: bringing this one, and then which agency is involved with
[7:22] Speaker 4: that one.
[7:23] Speaker 5: Yeah. Correct, It's very complicated. And the fact is there
[7:27] Speaker 5: are many lawsuits having to be filed all throughout the
[7:30] Speaker 5: United States. Because the Supreme Court ended earlier this year
[7:34] Speaker 5: the process where you could file one case that would
[7:37] Speaker 5: sort of have a nationwide injunction and then you could
[7:41] Speaker 5: then just take that case directly to the Supreme Court.
[7:43] Speaker 5: The Supreme Court said you had to file different cases
[7:46] Speaker 5: for different parts of the United States, and then those
[7:50] Speaker 5: cases would work their way up to the Supreme Court.
[7:53] Speaker 5: So what ends up happening is you end up having
[7:55] Speaker 5: a slower and also fragmented area where it perhaps in
[8:00] Speaker 5: one part of the country something is legal and in
[8:03] Speaker 5: another part of the country something is illegal. You see
[8:06] Speaker 5: that now, for instance, with regard to whether the administration
[8:10] Speaker 5: can detain you and your human body while you are
[8:13] Speaker 5: in deportation proceedings. In some circuits that's allowed, meaning if
[8:19] Speaker 5: you are here and you are in a removal proceeding,
[8:22] Speaker 5: they can keep you detained without any possibility of bond
[8:26] Speaker 5: at all. And in other parts of the country that's
[8:28] Speaker 5: not possible because those circuits have said, no, they have
[8:30] Speaker 5: to give you a bond. And so this is the
[8:33] Speaker 5: same with the work permit case that you've talked about,
[8:36] Speaker 5: which is that the administration is now trying to say
[8:39] Speaker 5: to about a million people who currently have work permits
[8:42] Speaker 5: that their renewals are going to be taken away unless
[8:45] Speaker 5: they can show an economic necessity for their work permit.
[8:49] Speaker 5: And that's going to be completely discretionary decision that the
[8:53] Speaker 5: agency makes. And so now all of these individuals are
[8:56] Speaker 5: going to have to file different lawsuits in different parts
[8:59] Speaker 5: of the country unless and until finally one of the
[9:03] Speaker 5: cases makes it up to the Supreme Court.
[9:05] Speaker 4: Is this such a tangled web that this is probably
[9:09] Speaker 4: something the courts are going to still be dealing with
[9:11] Speaker 4: even after this Trump administration is done.
[9:14] Speaker 5: Obviously will depend who the next president is. But let's
[9:17] Speaker 5: say the next president is from a different party than
[9:20] Speaker 5: President Trump's party and tries to unwind a lot of
[9:24] Speaker 5: the Trump administration's efforts. What you will actually end up
[9:28] Speaker 5: seeing is so, yes, some of them will be more
[9:30] Speaker 5: easily unwound than others. But then you'll have people from
[9:34] Speaker 5: the perspective of President Trump who will sue saying that
[9:38] Speaker 5: the unwinding of the efforts that the Trump administration implemented
[9:43] Speaker 5: also violate the Administrative Procedure Act. And so all of
[9:48] Speaker 5: this is going to be so tangled that it won't
[9:50] Speaker 5: just be so easy for some future president to deactivate
[9:54] Speaker 5: what President Trump did.
[9:55] Speaker 4: What is the bottom line for the courts? Then they
[9:57] Speaker 4: just have to keep on keeping on through this. Is
[10:00] Speaker 4: any recourse I mean, can they? I don't know. I
[10:03] Speaker 4: don't think Congress can get involved at this point because
[10:05] Speaker 4: now this is firmly within the jurisdiction of the courts.
[10:09] Speaker 4: But the way you described it, it's not just the
[10:12] Speaker 4: Supreme Court, and it's not just the state supreme courts.
[10:15] Speaker 4: It is now down to the different district levels.
[10:19] Speaker 5: Well, absolutely, the courts. I think the best thing that
[10:22] Speaker 5: the courts can do in these situations is work through
[10:25] Speaker 5: these cases as quickly as possible to try to get
[10:27] Speaker 5: people finality on all of these important issues. As quickly
[10:31] Speaker 5: as possible, even if that turns the court system into,
[10:34] Speaker 5: you know, an immigration focus system, but that is where
[10:37] Speaker 5: a lot of the case law and a lot of
[10:41] Speaker 5: the memos and a lot of the policies are being
[10:44] Speaker 5: focused on. To other administrations have other focuses, but this
[10:47] Speaker 5: administration has an immigration as a very very large focus.
[10:51] Speaker 5: So that means that a lot of the cases that
[10:52] Speaker 5: the courts are going to need to be doing are
[10:55] Speaker 5: immigration related. That certainly wasn't what a lot of the
[10:58] Speaker 5: Supreme Court justices ever came on the bench to do,
[11:01] Speaker 5: or a lot of these appellate court or district court justices.
[11:04] Speaker 5: But now that this is the highest area of regulation
[11:07] Speaker 5: that the government is engaging in, they're going to have
[11:10] Speaker 5: to move these cases faster.
[11:11] Speaker 6: Now.
[11:11] Speaker 5: One thing interesting, Congress can actually get involved in fixing
[11:16] Speaker 5: a lot of these policies and saying that certain memos
[11:18] Speaker 5: can or cannot be done. But the problem is they
[11:22] Speaker 5: refuse to sort of get involved in that as part
[11:25] Speaker 5: of the appropriations process to say we're going to defund
[11:29] Speaker 5: a certain memo or say you can't do a certain policy.
[11:34] Speaker 5: And so it'll be interesting to see if the Congress
[11:38] Speaker 5: changes hands, will there be more of this attempt for Congress,
[11:43] Speaker 5: in terms of future appropriations bills, to say that they
[11:46] Speaker 5: will not fund. Now here's the problem. They can't say
[11:49] Speaker 5: they're not going to fund the Department of Homeland Security
[11:51] Speaker 5: because now that's been funded for the remainder of the
[11:55] Speaker 5: Trump administration. But perhaps they can say that they won't
[11:58] Speaker 5: fund other parts of the government unless certain appropriations memos
[12:04] Speaker 5: happen that say, hey, look, you can't just refuse to
[12:08] Speaker 5: do immigration applications anymore, or you can't refuse people from
[12:12] Speaker 5: certain countries, or you can't refuse to do work permits,
[12:16] Speaker 5: that kind of thing. So we'll have to see where
[12:18] Speaker 5: the Congress wants to go.
[12:22] Speaker 4: Our thanks to Holland and Knight partner Leon Fresco for
[12:25] Speaker 4: joining us fascinating discussion. Now up next, we're going to
[12:28] Speaker 4: turn to Amazon and a special program designed to protect
[12:31] Speaker 4: sellers against copyright infringers and how it could be overstepping
[12:35] Speaker 4: a bit. You're listening to Bloomberg Law. I'm Ami Morrison
[12:38] Speaker 4: for June Grosso. This is Bloomberg. You're listening to Bloomberg
[12:54] Speaker 4: Law with June GROSSEO from Bloomberg Radio. Thank you for
[12:58] Speaker 4: listening to the weekend edition of Bloomberg Law. I'm Amy
[13:01] Speaker 4: Morris and for June Grosso. Amazon has a special program
[13:05] Speaker 4: that's designed to quickly weed out sellers that violate patent
[13:08] Speaker 4: law and maybe ripping off other legitimate sellers. But Amazon
[13:12] Speaker 4: size as the largest online retailer and the lack of
[13:15] Speaker 4: oversight on the program has some legal experts worried that
[13:18] Speaker 4: the company may be wielding too much power. Bloomberg Legal
[13:22] Speaker 4: reporter Annalie's Levy has a story on this. She joins
[13:25] Speaker 4: us now, Analise, thank you so much for taking the
[13:27] Speaker 4: time with us.
[13:29] Speaker 6: Of course, I'm really excited to talk about that story.
[13:32] Speaker 4: It's a great story. First, let's get some background on it.
[13:35] Speaker 4: It's the Amazon Patent Evaluation Express. How does this work?
[13:39] Speaker 4: You and your story refer to this as a pseudo court.
[13:44] Speaker 2: Yes. So it starts by a patent owner, and this
[13:47] Speaker 2: can be a patent owner that does not sell products
[13:50] Speaker 2: on Amazon. It can be anyone who owns a patent
[13:53] Speaker 2: files a complaint against a seller, and the seller only
[13:57] Speaker 2: has three weeks to respond, and their options include opting
[14:02] Speaker 2: in to Amazon's patent court, which severely limits the defenses
[14:06] Speaker 2: that they're able to present. They can take it to
[14:10] Speaker 2: federal district court, which is an extremely expensive process to
[14:15] Speaker 2: litigate a patent infringement claim, or they don't respond and
[14:19] Speaker 2: their products are immediately taken down.
[14:22] Speaker 4: Okay, So is it an actual court with all the
[14:26] Speaker 4: rights and responsibilities and the legal that goes along with
[14:29] Speaker 4: it or does it just work like that?
[14:31] Speaker 5: Like?
[14:31] Speaker 4: How does this work?
[14:33] Speaker 2: There is a neutral evaluator is what Amazon calls it,
[14:38] Speaker 2: who serves as the judge over these proceedings. It's an
[14:42] Speaker 2: attorney that does not work at Amazon. They work at
[14:45] Speaker 2: outside firms and Amazon selects them and assigns them to cases.
[14:49] Speaker 2: And it is very similar to a court. Each party
[14:52] Speaker 2: files briefs, they do not exchange evidence though, and like
[14:57] Speaker 2: I said earlier, the defendants are very limited and what
[15:00] Speaker 2: defenses they can present, So that is different from what
[15:05] Speaker 2: would happen in a district court case. And it moves
[15:09] Speaker 2: extremely quickly. These decisions are usually issued within a matter
[15:13] Speaker 2: of weeks, whereas a case in federal court usually takes
[15:19] Speaker 2: years for patent infringement allegations.
[15:23] Speaker 4: Is that why the participants may be more inclined to
[15:27] Speaker 4: use this evaluation process or quote evaluation express because it's
[15:31] Speaker 4: faster and maybe doesn't cost as much as a regular
[15:34] Speaker 4: district court.
[15:35] Speaker 2: Yes, that's definitely one of the reasons that many parties
[15:38] Speaker 2: opt in, and Amazon says that that's why they've received
[15:42] Speaker 2: so much good feedback about the program. Another thing that
[15:47] Speaker 2: is very big for patent owners is that they can
[15:51] Speaker 2: essentially receive relief that they don't often receive in federal
[15:57] Speaker 2: district court. And by that, I mean an injunction by
[16:01] Speaker 2: having their competitors or this acused infringers' products permanently taken down.
[16:08] Speaker 2: Federal courts do not issue those. Often patent owners have
[16:14] Speaker 2: to meet a very high bar to qualify for those.
[16:16] Speaker 2: They have to show that monetary damages would not be
[16:19] Speaker 2: enough to compensate them if a defendant is shown to
[16:25] Speaker 2: have infringed. But Amazon, they can get that relief.
[16:29] Speaker 6: In a matter of weeks.
[16:30] Speaker 2: And because so many businesses rely on Amazon as their
[16:36] Speaker 2: number one sales venue, it essentially serves as an injunction
[16:42] Speaker 2: that a federal court would issue.
[16:44] Speaker 4: And you know, that's one of the pieces that you make,
[16:47] Speaker 4: or one of the points that you make in your
[16:48] Speaker 4: piece is that Amazon is really big. It has almost
[16:51] Speaker 4: as much power as a federal judge. Because of the
[16:54] Speaker 4: relief that it can give patent owners, and where is
[16:57] Speaker 4: the danger in that? Though in your report, what have
[17:00] Speaker 4: you found?
[17:02] Speaker 2: I mean the danger is that they're wielding all of
[17:07] Speaker 2: this power to essentially destroy sellers without the benefits that
[17:15] Speaker 2: accused infringers typically have in federal court. And you know,
[17:18] Speaker 2: there's no public docket for these cases. Amazon is pretty
[17:23] Speaker 2: secretive about it. They make each party that participates agree
[17:27] Speaker 2: that they'll keep everything that happens in the process confidential.
[17:31] Speaker 2: The briefs aren't public, the decisions that their quasi judges
[17:36] Speaker 2: issue are no public. So, as one law professor I
[17:40] Speaker 2: spoke to you said, there could be a lot going wrong,
[17:43] Speaker 2: but we don't know because we can't see it.
[17:46] Speaker 5: Right.
[17:46] Speaker 4: That was another point that you made in your piece
[17:49] Speaker 4: is that the secrecy is pretty right. No public documents,
[17:53] Speaker 4: You don't even know who the judges are when you
[17:56] Speaker 4: enter this system. It also seems like it automatically favors
[18:01] Speaker 4: the rights owner without really considering the story behind the
[18:05] Speaker 4: alleged infringer, because, as you mentioned, there's only so much
[18:10] Speaker 4: evidence that the defendant can present. Is that correct?
[18:14] Speaker 2: Yes, the patent owners walk into these proceedings with huge leverage.
[18:18] Speaker 2: One because they know that the risk for the accused
[18:22] Speaker 2: infringer is potentially losing their business if all of their
[18:26] Speaker 2: products are taken down. And two, they know that the
[18:30] Speaker 2: accused seller can't argue that their patents are invalid, which
[18:35] Speaker 2: is often a big argument that comes up in federal
[18:40] Speaker 2: core cases. And the parties do know once a judge
[18:45] Speaker 2: is assigned to their case, the parties are informed of
[18:48] Speaker 2: who that is, but Amazon does not disclose who those
[18:52] Speaker 2: judges are to the public. And the only reason we
[18:55] Speaker 2: were able to get these documents is because parties that
[18:59] Speaker 2: ride trying to avoid the Amazon process or we're upset
[19:03] Speaker 2: with the decision that it handed down, filed these documents
[19:06] Speaker 2: as exhibits once they moved the fight to federal court.
[19:10] Speaker 4: Because this is all in the Amazon ecosystem and in
[19:13] Speaker 4: the Amazon bubble. Is this legal? I mean, they can
[19:16] Speaker 4: do this because it's their house right.
[19:19] Speaker 2: Yes, they're policing their own platform. There are other large
[19:25] Speaker 2: retailers that have IP complaint systems that patent inners can
[19:32] Speaker 2: also use. Walmart has one, I believe eBay has one,
[19:37] Speaker 2: but those don't appear to create a court, a mini
[19:43] Speaker 2: court system, if you want to call it that. They
[19:46] Speaker 2: don't hire outside attorneys to serve as evaluators. I don't
[19:49] Speaker 2: believe the parties exchange briefs like they would in court.
[19:54] Speaker 2: They're much different than why Amazon has created.
[19:56] Speaker 3: Here.
[19:57] Speaker 4: You go into a case between Lack and our Vlock,
[20:02] Speaker 4: and these are folks who make locks for recreational vehicles,
[20:05] Speaker 4: and our Vlock accused Latchet of infringing on their product,
[20:11] Speaker 4: and they went to this case. When they went to
[20:15] Speaker 4: this through this process with Amazon and Latch it lost.
[20:18] Speaker 4: Is there recourse beyond that? I mean at that point,
[20:22] Speaker 4: can they take it to a regular court? Is there
[20:24] Speaker 4: an appeals process within Amazon?
[20:27] Speaker 2: There is not an appeals process within Amazon. But Amazon
[20:30] Speaker 2: has made it clear that if a party receives a
[20:34] Speaker 2: conflicting decision, either from a federal court or from the
[20:39] Speaker 2: patent office, that they will respect that decision. And I
[20:43] Speaker 2: believe one of it, one of Amazon's vice presidents has
[20:47] Speaker 2: testified at a congressional hearing about this and said, you know,
[20:51] Speaker 2: we are aware that our decisions don't hold up like
[20:56] Speaker 2: a federal court decision would, so we respect those if
[21:00] Speaker 2: they conflict with the decision we've issued.
[21:03] Speaker 4: So then the onus is on the defendant to come
[21:06] Speaker 4: up with the money and the time and the lawyers
[21:09] Speaker 4: to go to a regular court and then take all
[21:12] Speaker 4: the time that may that they may not have then
[21:16] Speaker 4: they certainly didn't have when they went into the patent
[21:18] Speaker 4: evaluation express. That's why they went the Amazon route because
[21:22] Speaker 4: it's cheaper and faster.
[21:24] Speaker 2: Yes, And they if they even do go to federal
[21:29] Speaker 2: court and decide to go that route, they know that
[21:32] Speaker 2: they're losing money every single day that these products are down.
[21:36] Speaker 2: I mean, one seller who had their products deed listed
[21:38] Speaker 2: said they were losing upwards of seventy thousand dollars per day.
[21:42] Speaker 2: So even if a party does want to take this
[21:46] Speaker 2: bite to federal court, if they're upset with Amazon decision,
[21:49] Speaker 2: they know that's going to be a huge financial investment
[21:52] Speaker 2: and they're not receiving the revenue that they're used to
[21:55] Speaker 2: from Amazon because their products are gone, Which is why
[21:59] Speaker 2: men many parties appear to just settle these cases. They
[22:04] Speaker 2: understand the huge threat of their products being delisted and
[22:09] Speaker 2: come to the decision that it's probably cheaper to pay
[22:12] Speaker 2: up than maybe bite a patent that they strongly believe
[22:17] Speaker 2: is invalid.
[22:19] Speaker 4: So they have the option then of settling, and they
[22:23] Speaker 4: can still remain listed.
[22:25] Speaker 2: Yes, that is one of the options that Amazon provides
[22:29] Speaker 2: if a complaint is filed, if the parties work it
[22:32] Speaker 2: out amongst themselves, then the patent owner can retract the complaint.
[22:38] Speaker 2: But again, they only have three weeks to do that.
[22:43] Speaker 4: So what's the bottom line here? What is are other
[22:47] Speaker 4: attorneys kind of getting involved in this and kind of
[22:50] Speaker 4: and red flagging it and hey, wait a second, let's
[22:52] Speaker 4: let's see if there's a better way to do the system.
[22:56] Speaker 2: I mean, many attorneys are definitely concerned that so many
[23:01] Speaker 2: infringement decisions are being made by a quasi court with
[23:06] Speaker 2: no oversight whatsoever. A good amount of attorneys I spoke
[23:11] Speaker 2: to you said that they caution their clients about opting
[23:16] Speaker 2: into the Amazon court because again, they don't know who
[23:20] Speaker 2: these judges are until they're assigned. They may not have
[23:24] Speaker 2: a background in the specific technolical area that their products
[23:29] Speaker 2: are within.
[23:30] Speaker 6: There's no appeals process.
[23:32] Speaker 2: Within Amazon, so they're very wary about it, but they
[23:37] Speaker 2: do acknowledge the why it's so enticing with the speed
[23:41] Speaker 2: and price.
[23:43] Speaker 4: Annalie's LEVI want to thank you so much for your
[23:45] Speaker 4: time on this matter. This is a fascinating subject and
[23:48] Speaker 4: it is a great article on the Bloomberg terminal. Thank
[23:51] Speaker 4: you so much for taking the time with us. Annalise Levy,
[23:53] Speaker 4: reporter for Bloomberg Law. She joined us and now up
[23:56] Speaker 4: next we do a deep dive on the pros and
[23:58] Speaker 4: cons of AI adopt in the legal world. I Amy
[24:02] Speaker 4: morris in for June Grosso. This is Bloomberg.
[24:12] Speaker 1: You're listening to Bloomberg Law with June Grosso from Bloomberg Radio.
[24:18] Speaker 4: You're listening to the weekend edition of Bloomberg Law. I'm
[24:21] Speaker 4: Amy morris in for June Grosso. June. We'll be back
[24:23] Speaker 4: next week. The legal world is using artificial intelligence more often,
[24:28] Speaker 4: but two mixed results so far. Bloomberg recently reported on
[24:31] Speaker 4: two lawyers sanctioned over using AI in a federal case
[24:35] Speaker 4: and failing to catch those mistakes. Justin Daniels is a
[24:38] Speaker 4: shareholder at Baker Donaldson and focuses on technology and artificial intelligence.
[24:43] Speaker 4: He joins us now for a deep dive on how
[24:46] Speaker 4: AI is reshaping how lawyers work. Justin, it's a pleasure.
[24:50] Speaker 4: Thanks for joining us today. You start your piece saying
[24:53] Speaker 4: that when it comes to AI, the legal profession is
[24:56] Speaker 4: measuring the wrong thing.
[24:58] Speaker 3: What do you mean, well, everyone is focused on fewer
[25:03] Speaker 3: billable hours. Work gets done faster, it's more efficient. And
[25:07] Speaker 3: I think they're asking the wrong question.
[25:10] Speaker 4: What's the question they should be asking.
[25:12] Speaker 3: The question that they should be asking is how do
[25:16] Speaker 3: I leverage AI tools to enhance judgment.
[25:22] Speaker 6: To lead to better outcomes.
[25:25] Speaker 3: I think the key thing is when I do work
[25:31] Speaker 3: like I had a recent opportunity to help a client
[25:34] Speaker 3: create a library of AI clauses for their new agentic
[25:41] Speaker 3: AI offering, and their clients are in a regulated industry,
[25:45] Speaker 3: I was able to leverage AI to create a better
[25:49] Speaker 3: work product in less time than if I had no
[25:55] Speaker 3: AI tool.
[25:56] Speaker 6: But here's the key. If all the client sees is
[25:59] Speaker 6: an bill with fewer hours.
[26:02] Speaker 3: They don't see what they almost didn't get, which was
[26:05] Speaker 3: a work product that isn't as good quality because I
[26:08] Speaker 3: leveraged AI to improve my judgment, not substituted.
[26:13] Speaker 6: And that's a really key distinction.
[26:14] Speaker 3: When we talk about the two lawyers in this case
[26:17] Speaker 3: that got sanctioned in a court case.
[26:21] Speaker 4: I want to get some clarity on that. Of course,
[26:25] Speaker 4: AI can be used to enhance a judgment and not
[26:28] Speaker 4: substitute a judgment. That makes perfect sense. Where is the
[26:32] Speaker 4: risk that those two might become conflated. It seems like
[26:36] Speaker 4: it would be clear for an attorney to say, this
[26:38] Speaker 4: is not my brain, this is just helping my brain
[26:41] Speaker 4: do a better job.
[26:43] Speaker 3: So I think where this is coming up and in
[26:47] Speaker 3: litigation is a great example because let's step back and
[26:50] Speaker 3: look at that process. When you're in litigation and you
[26:54] Speaker 3: have to file court briefs with a court, the court
[26:58] Speaker 3: is the umpire, so you necessarily have a human in
[27:02] Speaker 3: the loop being the court to review all of what's
[27:05] Speaker 3: filed with it to ensure authenticity, accuracy, and that these
[27:11] Speaker 3: arguments in these court cases are truthful. So now lawyers
[27:16] Speaker 3: and law firms have to have processes in place to
[27:19] Speaker 3: make sure that if you're going to leverage AI, that
[27:22] Speaker 3: you're going behind the AI to make sure that they
[27:25] Speaker 3: don't hallucinate court sites or they don't hallucinate rulings, because
[27:32] Speaker 3: if you don't do that, you have an actual umpire
[27:35] Speaker 3: the court who.
[27:36] Speaker 6: Is going to fact check because it's the role that
[27:39] Speaker 6: they play.
[27:40] Speaker 3: And so I think what's happening here is when you
[27:43] Speaker 3: hear about these sanctions in these court cases, the real
[27:47] Speaker 3: issue is the governance over the process to produce the
[27:51] Speaker 3: briefs or whatever it is that's getting filed with this
[27:54] Speaker 3: neutral umpire. I have a different set of issues as
[27:57] Speaker 3: a corporate m and a in tech practice, So when
[28:00] Speaker 3: I use this, I don't necessarily have that court as
[28:05] Speaker 3: an umpire. I really need to be doing that myself
[28:08] Speaker 3: because the client may not know enough to be able
[28:11] Speaker 3: to check, and candidly they're relying on.
[28:13] Speaker 6: Me to do it. So I'm dealing with a different
[28:16] Speaker 6: set of circumstances. But the reason you see it come
[28:18] Speaker 6: up in the context of these court cases is because
[28:21] Speaker 6: you're in a system where the court is playing the
[28:24] Speaker 6: role of this neutral umpire ensuring veracity and authenticity of
[28:29] Speaker 6: what's put before it.
[28:31] Speaker 4: Do attorneys have to disclose to either the court or
[28:34] Speaker 4: their client that they're using AI.
[28:36] Speaker 3: So I think the answer to that is a lot
[28:39] Speaker 3: of particularly enterprise organizations may have outside council guidelines that
[28:46] Speaker 3: require it. But I also have other clients of mine
[28:49] Speaker 3: who say, whether you use AI or not, my expectation
[28:53] Speaker 3: is you're giving me accurate thought through work product, because
[28:58] Speaker 3: ultimately it's the lawyer's job to be providing competent representation,
[29:04] Speaker 3: and with our ethics rules, you know we're supposed to
[29:06] Speaker 3: be leveraging technology, but we're supposed to be doing it
[29:09] Speaker 3: in a way that conforms to our ethical obligations of competence.
[29:13] Speaker 3: So the answer to your question is yes, some organizations
[29:17] Speaker 3: have guidelines where they want it disclosed, but I've seen
[29:19] Speaker 3: plenty of instances where they're like, hey, you have ethical obligations,
[29:23] Speaker 3: whether you use AI or not, I expect the work
[29:25] Speaker 3: product to be consistent with your ethical requirements under state law.
[29:31] Speaker 4: So it sounds like the concern is that AI might
[29:34] Speaker 4: make some attorneys I don't want to use the word lazy,
[29:39] Speaker 4: but not quite as diligent as if they were doing
[29:42] Speaker 4: the work themselves.
[29:44] Speaker 3: I think that's a fair characterization because the opportunity with
[29:48] Speaker 3: AI is it's so confidently wrong sometimes and if you're
[29:53] Speaker 3: under time pressure, people might rely on it. To me,
[29:57] Speaker 3: it's no different than when I'm doing a deal and
[30:00] Speaker 3: we're going to wire, and I'm like, we are not
[30:03] Speaker 3: wiring until we confirm the wire instructions. We call somebody.
[30:08] Speaker 3: But when you're under the pressure of a deal or
[30:10] Speaker 3: maybe litigation, maybe people don't go through that next step
[30:13] Speaker 3: and then they end up filing something and you get
[30:18] Speaker 3: hallucinations and you get courts who are now sanctioning lawyers.
[30:21] Speaker 4: For it, explain to hallucinations when you use it in
[30:24] Speaker 4: that context.
[30:25] Speaker 3: So here's what I think people need to know. The
[30:30] Speaker 3: best way to describe artificial intelligence at a understandable level
[30:36] Speaker 3: is it is insanely good at pattern matching. It is
[30:41] Speaker 3: great at predicting connections between words, paragraphs, documents. But you
[30:49] Speaker 3: don't want to confuse probabilities with certainties. So AI is
[30:54] Speaker 3: designed to try to be helpful. So I've had instances
[30:57] Speaker 3: where AI will tell me, hey, in this negotiation, negligence
[31:01] Speaker 3: is fine.
[31:02] Speaker 6: That's a good standard. But I know in my.
[31:04] Speaker 3: Experience as a lawyer, in most commercial transactions it is not.
[31:10] Speaker 3: And so because of the way that AI is built
[31:14] Speaker 3: and they're trying to do better, hallucinations are inherent in
[31:18] Speaker 3: its design because it's ultimately based on probabilities, which are
[31:23] Speaker 3: never certainties. So you're always going to have that kind
[31:27] Speaker 3: of area of uncertainty, which is where the lawyer's judgment
[31:31] Speaker 3: becomes so important.
[31:34] Speaker 4: It sounds almost as though if you use AI, you
[31:37] Speaker 4: got to be even more on your toes than if
[31:39] Speaker 4: you were just doing all of the work yourself without
[31:42] Speaker 4: the AI.
[31:43] Speaker 3: I look at it as how can I use AI
[31:47] Speaker 3: as a decision support tool to enhance my judgment, because ultimately,
[31:52] Speaker 3: I think that's what clients are paying for. So what
[31:55] Speaker 3: that means is I have to have the ability to
[31:58] Speaker 3: ingest all the information that the AA is providing and
[32:01] Speaker 3: be able to honestly evaluate it and push back where necessary.
[32:06] Speaker 6: And I think that's the area where we.
[32:10] Speaker 3: As a profession, law firms, lawyers, in house counsel and others.
[32:14] Speaker 6: It's a real struggle.
[32:15] Speaker 3: In my view, we're in like a Steve Jobs moment
[32:18] Speaker 3: when it comes to clients.
[32:20] Speaker 4: What sort of safeguards, though are in place? You talked
[32:22] Speaker 4: about the ethics, you talked about the client expectation, you
[32:25] Speaker 4: talked about the court's role, But what sort of hardcore
[32:29] Speaker 4: safeguards are in place, guardrails that are there to protect
[32:33] Speaker 4: the legal profession and the clients where AI may be involved.
[32:37] Speaker 3: So when we talk about those guardrails, I think what
[32:41] Speaker 3: you're really talking about is what is your AI governance program.
[32:46] Speaker 3: One of the things I've seen consistently amongst the different
[32:50] Speaker 3: clients that I work with and I'm out talking to
[32:52] Speaker 3: a conferences, is there have been such a pressure to
[32:56] Speaker 3: deploy AI systems that this entire around AI governance. Where's
[33:02] Speaker 3: the IP, where's the data privacy security? That conversation didn't
[33:09] Speaker 3: really happen. So now you've got all this stuff going on,
[33:12] Speaker 3: and now you're trying to build your AI governance while
[33:15] Speaker 3: the AI plane is in flight. But those are your
[33:18] Speaker 3: guardrails because let's talk about my process or a litigator's process. Sure,
[33:24] Speaker 3: you have to build into that process, how am I
[33:27] Speaker 3: fact checking the information? How am I making sure these
[33:30] Speaker 3: court cases are legitimate?
[33:32] Speaker 6: It may be they.
[33:33] Speaker 3: Create AI tools that will do that, but where we're
[33:36] Speaker 3: at now, that's where the human has to be in
[33:38] Speaker 3: the loop. To me, that is the key part of
[33:40] Speaker 3: the AI governance. So everything that AI helps create in
[33:44] Speaker 3: support of my practice, I'm reading it. I'm using it
[33:48] Speaker 3: in areas where I already have a good level of expertise,
[33:51] Speaker 3: Like nobody wants to hire me to do depositions, so
[33:54] Speaker 3: I would never think to use AI for that purpose.
[33:56] Speaker 6: I try to keep to things that I have an.
[33:59] Speaker 3: Level of that expertise, so that I'm the human in
[34:01] Speaker 3: the loop who can evaluate that output.
[34:04] Speaker 4: Where would it be appropriate then to use the AI.
[34:08] Speaker 3: So in my practice, I negotiate for a living and
[34:12] Speaker 3: so what I ended up doing and we use Harvey,
[34:16] Speaker 3: So that's our approved AI tool. I've built my own
[34:19] Speaker 3: AI negotiation agent, and so what that does is is
[34:23] Speaker 3: I stress test before I ever step into the room
[34:26] Speaker 3: to negotiate the issue, the expected arguments of the other side,
[34:32] Speaker 3: surfacing motivation that might be seen or unseen, and then
[34:37] Speaker 3: tailoring the negotiation framing mind going to use to the
[34:41] Speaker 3: personality of my counterparty. You know, everyone has a different
[34:44] Speaker 3: kind of way they like to negotiate, and so it
[34:46] Speaker 3: allows me to stress test that. So, as I said before,
[34:49] Speaker 3: AI is enhancing my judgments so that I can negotiate
[34:54] Speaker 3: better and get a better outcome than had I not
[34:56] Speaker 3: been able to stress test and have this tool to
[34:59] Speaker 3: help me be so much better prepared.
[35:02] Speaker 4: Is this an example of the legal industry or the
[35:05] Speaker 4: legal profession now in a position trying to catch up
[35:08] Speaker 4: with the technology? You sort of use the analogy of
[35:11] Speaker 4: building the plane in the air while you're flying it.
[35:14] Speaker 6: I think what's happened is Chat came out in November.
[35:18] Speaker 3: Of twenty twenty two, and now we're talking here in
[35:21] Speaker 3: June of twenty twenty six.
[35:22] Speaker 6: It's just four years. I mean, it's like going to college.
[35:26] Speaker 3: And in my mind, where the technology is becoming so
[35:30] Speaker 3: disruptive is it's taking tasks like doing legal research or
[35:34] Speaker 3: drafting a memo that used to take hours and days
[35:38] Speaker 3: and now it's minutes and hours. So to me, it's
[35:41] Speaker 3: kind of making the legal profession reflect How do we
[35:45] Speaker 3: add value?
[35:46] Speaker 6: How do clients perceive that?
[35:48] Speaker 3: And that's the real issue that we're really struggling with
[35:52] Speaker 3: because in private practice, you know you have the billable hour,
[35:56] Speaker 3: and what does that really measure? It measures how long
[35:59] Speaker 3: it took you to do something. It doesn't necessarily measure
[36:03] Speaker 3: the quality of the output. And if you've got AI
[36:05] Speaker 3: that now helps you do a better work product in
[36:08] Speaker 3: less time, that measurement doesn't really apply anymore. So then
[36:12] Speaker 3: how are you going to show clients the Steve Jobs moment,
[36:15] Speaker 3: show them the value that you are creating by making
[36:19] Speaker 3: better decisions because you've been enabled by AI tools that
[36:25] Speaker 3: enhance judgment, not substitute for it. That to me, is
[36:28] Speaker 3: the key distinction.
[36:30] Speaker 4: Our thanks to Justin Daniels for joining us. He is
[36:33] Speaker 4: a shareholder at Baker Donaldson. You can read Justin's piece
[36:36] Speaker 4: on the Bloomberg terminal that does it for this edition
[36:39] Speaker 4: of Bloomberg Law, I'm Amy Morris and for June Grosso.
[36:42] Speaker 4: Stay with us. Today's top stories and global business headlines
[36:46] Speaker 4: are coming up right now

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