Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Weds 1/24 - $62M Ivy League Settlement, Google's AI Patent Case Resolved, Spellbook Raises $20m and new SEC Rules Target SPACs

Legal News for Weds 1/24 - $62M Ivy League Settlement, Google's AI Patent Case Resolved, Spellbook Raises $20m and new SEC Rules Target SPACs

$62M lawsuit settlement, Google's AI patent case resolution, Spellbook's $20M funding, and new SEC rules for SPAC deals.

Thurgood Marshall, pencil sketch

This Day in Legal History: Thurgood Marshall Dies

On January 24, 1993, the United States lost one of its most influential legal figures, retired Supreme Court Justice Thurgood Marshall. His death in Bethesda, Maryland, marked the end of an era in American jurisprudence. Born on July 2, 1908, in Baltimore, Maryland, Marshall's journey to becoming the first African American Supreme Court Justice was paved with groundbreaking legal battles and an unwavering commitment to civil rights.

Before his appointment to the Supreme Court in 1967 by President Lyndon B. Johnson, Marshall had already made a significant impact as a lawyer. He served as the chief counsel for the National Association for the Advancement of Colored People (NAACP), where he strategized and won a series of critical court cases that chipped away at the legal foundations of racial segregation. His most famous case, Brown v. Board of Education of Topeka in 1954, ended with the Supreme Court's unanimous decision declaring state laws establishing separate public schools for black and white students to be unconstitutional, effectively overturning the "separate but equal" doctrine of Plessy v. Ferguson.

During his tenure on the Supreme Court, Marshall became known for his passionate advocacy for individual rights and his opposition to the death penalty. His legal opinions, both majority and dissenting, reflected his deep-seated belief in equality and justice for all. He often stressed the importance of viewing the Constitution as a dynamic, living document, capable of adapting to changing societal needs and values.

Marshall's impact extends beyond his legal victories; he paved the way for greater diversity in the legal profession and on the bench. His life and career remain a testament to the power of the law as a tool for social change and continue to inspire generations of lawyers, activists, and citizens.

His death was not just the loss of a great legal mind but also the end of an era that saw significant strides in civil rights and social justice. As we remember Justice Thurgood Marshall on this day, his legacy serves as a reminder of the ongoing struggle for equality and the enduring power of dedicated individuals to bring about change in society.

Brown, Yale, and Columbia universities, along with Emory and Duke, have agreed to pay a total of $62 million to settle a lawsuit accusing them of favoring wealthy applicants, bringing the total settlements in the case to $118 million. This lawsuit, filed against several U.S. universities, alleges they conspired to restrict financial aid and violated a pledge to not consider students' financial status in admissions, effectively giving an advantage to wealthy students. The universities, including those that have settled, deny any wrongdoing. The settlements vary, with Yale and Emory paying $18.5 million each, Brown $19.5 million, and Columbia and Duke $24 million each. The lawsuit, still involving 10 other universities like Cornell and the University of Pennsylvania, is pending approval from U.S. District Judge Matthew Kennelly, who previously declined to dismiss the case in 2022.

Brown, Yale, Columbia among latest to settle financial-aid lawsuit | Reuters

Google has settled a patent infringement lawsuit with Singular Computing, averting a trial that was set to begin with closing arguments. The lawsuit, filed in 2019, sought $1.67 billion in damages, accusing Google of misusing Singular's computer-processing innovations in its artificial intelligence (AI) technology. Singular, founded by Joseph Bates, alleged that Google incorporated its technology into processing units used in various Google services like Google Search, Gmail, and Google Translate.

The dispute centered around Google's Tensor Processing Units (TPUs), introduced in 2016 to enhance AI capabilities in tasks like speech recognition and ad recommendation. Singular claimed that the second and third versions of these units, released in 2017 and 2018, infringed on its patents. According to the lawsuit, Bates shared his inventions with Google between 2010 and 2014, suggesting that Google's TPUs copied his technology.

Internal emails revealed during the trial indicated Google's interest in Bates' ideas, with the company's now-chief scientist, Jeff Dean, acknowledging their potential utility. However, Google maintained that its employees who designed the TPUs had never met Bates and developed the technology independently, arguing that its tech was fundamentally different from what was described in Singular's patents.

Details of the settlement have not been disclosed, and representatives from both Google and Singular have confirmed the settlement without providing further information. Google spokesperson Jose Castaneda expressed satisfaction with the resolution, emphasizing that Google did not violate Singular's patent rights.

Google settles AI-related chip patent lawsuit that sought $1.67 bln | Reuters

Google Settles AI Chip-Design Suit That Had Sought Billions

Spellbook, a Canada-based legal software company specializing in contract management, has secured $20 million in Series A funding, led by Montreal's Inovia Capital. Other investors include The Legaltech Fund, Bling Capital, and Thomson Reuters Ventures. The company's product, built on OpenAI's GPT-4, assists corporate and commercial lawyers with contract drafting and review by suggesting language and negotiation points.

The legal AI sector is experiencing a surge in investment as startups introduce tools designed to integrate generative AI into legal processes. However, the market remains highly competitive with no clear leader yet emerging. Spellbook's CEO, Scott Stevenson, highlighted the company's focus on serving small to midsize law firms and solo practitioners, though it has also attracted larger firms and in-house legal teams.

Spellbook's clientele includes diverse organizations such as Addleshaw Goddard, KMSC Law, Carbon Chemistry, and ATEM Capital. The company, initially named Rally at its inception in 2019, rebranded to Spellbook after a $10.9 million seed round in June 2023 and shifted focus from automating routine legal tasks to AI-driven contract management.

The legal technology sector is witnessing increased investor interest, particularly since the advent of generative AI technologies. Other firms in the sector, such as Norm AI and Robin AI, have also recently raised substantial funding, indicating a growing trend in the investment and development of legal AI tools.

Legal AI startup Spellbook raises $20 mln as sector draws more investments | Reuters

The Securities and Exchange Commission (SEC) has introduced new rules for deals involving special purpose acquisition companies (SPACs), aiming to enhance investor protections and align these transactions more closely with traditional initial public offerings (IPOs). This regulatory change comes as SPACs, which surged in popularity during the COVID-19 pandemic as an alternative public listing method, have recently lost favor. The new rules revoke certain legal protections previously afforded to SPAC sponsors, making them more susceptible to lawsuits over exaggerated statements. These regulations also demand increased disclosures, particularly concerning forward-looking projections in the later stages of SPAC deals.

By way of very brief background, a SPAC is an alternative to the traditional IPO process for a company seeking to go public. A SPAC is essentially a shell company that raises funds through an IPO with the sole intent of acquiring or merging with an existing private company, thereby taking that company public. Unlike traditional IPOs, where a company goes public based on its own assets and operations, a SPAC has no commercial operations and is created solely for the purpose of acquiring a private company. This process allows the target company to become publicly traded more quickly and with potentially less regulatory scrutiny than the traditional IPO route. Additionally, SPACs offer more certainty regarding valuation and financing compared to traditional IPOs.

SEC Chair Gary Gensler emphasized the need for robust investor protections, regardless of the method used for going public. The SEC's heightened scrutiny and macroeconomic factors like rising interest rates have already cooled the once-booming SPAC market. Major financial institutions such as Goldman Sachs and Bank of America reduced their involvement in SPACs following the SEC's initial proposal of these changes.

The SEC's new requirements include detailed disclosures from SPAC sponsors about potential conflicts of interest, compensation, and dilution. Companies targeted by SPACs must now register with the SEC and fulfill additional disclosure obligations before merging. Furthermore, these target companies are now jointly liable for the information shared with investors and must provide independently audited financial statements. The SEC's Republican Commissioner Mark Uyeda criticized the rules as overly burdensome, suggesting they might effectively end the SPAC market. The new regulations will take effect in over four months, with additional financial reporting and accounting requirements for SPAC transactions also being implemented.

SEC Imposes New Rules on Blank-Check Deals as SPACs Fizzle (2)

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at