Axon, the company formally known as Taser, offered a deal too good to resist. Free police body-worn cameras for all police officers for a year. In one wildly successful public relations flourish, Axon offered a potential solution to the crisis of police accountability in America, and created a profitable new income stream.
The catch: all of the video footage must be stored on Axon’s cloud data service Evidence.com. As a business plan, Axon sees profit in the back-end cloud storage, not the cameras. Every police officer, every day, for every criminal case equals a lot of video. First quarter financial results for the company showed a 43% increase in revenue due to the changed focus on data storage and related services.
But, what if a single lawyer could thwart this entire business model? What if an ordinary criminal case could bring down a multi-million-dollar technological innovation?
This is not a hypothetical problem as one defense lawyer in California representing his juvenile client refused to agree to Evidence.com’s terms and conditions. Rick Horowitz is the lawyer who objected to Axon’s requirements to gain access to the video relevant to his client. Horowitz’s argument was simple: the police video footage was a public record in a criminal case that he had a constitutional and statutory right to receive from the State (without restrictions). Equally problematic the information was also confidential, as it concerned a juvenile client and apparently Axon did not have statutory authority to handle juvenile records. The fact that the State had outsourced access and storage to a private third party in the form of Evidence.com did not change Horowitz’s claim to unfettered access or confidentiality. He should get it, Axon shouldn’t have it, and defense lawyers shouldn’t be required to agree to a private company’s demands that might conflict with their client’s interests.
The story was picked up by the Washington Post and the relevant Axon documents were posted on Techdirt.com. Horowitz’s refusal to sign the agreement turned a small legal argument into a big business problem. If courts chose to side with Horowitz, it could jeopardize thousands of criminal prosecutions in California and the future of Evidence.com.
Axon is just one of the numerous companies entering the police tech business space. And, hopefully with a few tweaks of its terms and conditions, the company can solve the access problem relevant to millions of future criminal cases across the country. (The juvenile confidentiality issue may be more difficult to solve).
But, the problem exposes a more fundamental risk – a risk largely underappreciated by entrepreneurs and venture funds eagerly investing in police technology companies. Unlike many other industries or enterprises, policing and criminal justice is a tradition-bound and law-bound world, where legal rules, requirements, and practice can thwart innovation.
How many CEO’s understand the rules of criminal procedure, constitutional requirements or evidence rules? How many entrepreneurs know it is a criminal offense in some jurisdictions to share confidential juvenile records? As a VC, would you bet a company on your ignorance?
These legal issues will not go away. Constitutional rights do not bend in the face of disruptive innovations. Zealous lawyers with obligations to protect statutory rights do not care about cost efficiencies or actionable analytics. Judges – not infrequently uncertain about new technologies – will likely side with defendant’s rights over corporate innovation.
The open question is how start-ups should respond. Axon is a well-resourced company that will likely weather this legal storm, but the issue should terrify early stage start-ups and VCs in the policing space. Without understanding the low-level litigation risk from ordinary cases, the millions of dollars chasing new big data policing technologies could be wasted. And, while white shoe lawyers are routinely hired to perform general corporate risk analyses, few VCs think about the decidedly unsexy run-of-the mill criminal discovery issues that could upend a company.
The point here is to start a conversation about “policing risk” – to direct attention to front end strategies to determine how new policing technologies will work within existing criminal justice systems. Constitutional rights and statutory rules exist and can be accounted for by thoughtful investors. Evidence.com’s problem was foreseeable to anyone thinking about how a third-party police video storage system would interact with criminal discovery rules and juvenile confidentially laws. The Axon story offers a helpful warning to other companies who should be thinking about these future problems now. After all, it only takes one lawyer to disrupt the next disruptive policing innovation.
Policing Risk is an ongoing project to examine the litigation risk facing new law enforcement technology. As more start-up companies enter the criminal justice space and gain venture funding difficult questions will arise about how innovative products can navigate the reality of a tradition-bound criminal justice system.