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Guest post by Jacob Kojfman (Vancouver Tech Law Blog)

This past summer, I wrote about how slow the law is to catch up to changing technologies.  Companies, such as private-limousine operator Uber and Airbnb are finding their attempts to disrupt their industries to be faced with legal challenges.

By its very nature, innovation will always be one step ahead of the law; most laws are usually written as a reaction to some change in the markets.  Even old-fangled laws, such as Glass-Steagall, or the more contemporaneous Dodd-Frank legislation, were a result of changes in the market, albeit, not necessarily innovations.

For those companies, such as Uber, Airbnb, Getaround, their founders have all tried to solve a problem that was facing them; and in certain instances, there’s been a lot of hiccups along the way. Getaround couldn’t operate until it finally got an insurance company to agree to insure it, which also required a change in the laws regarding insurance.

A lot of times these start-ups operate in a grey-area of the law because no one is sure what area of the law to apply to them.   Of course, some times, there’s good news.  Recently, Pandora Media received some good news when a bill proposal in Congress would change the royalties Pandora pays.   The proposed law would put Pandora’s royalties on par with its pre-Internet competitors, including Sirius XM. Pandora shows how laws that negatively affect a technology company should sometimes be changed to give everyone an even playing field.

New tech companies find themselves not only innovating industries, but also sometimes caught in a legal crossroads.  Personally, I have to question if something can really be called innovative if its competitive advantage is based on skirting legal regulations in place; if an innovative idea comes to market and there’s changes in the laws already in place designed to help this disruptive idea flourish, then I think that is truly innovative and disrupting.

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