Lookzy: all your daily legal news in 0.1 billable hours. Plain English coverage of deals, litigation and legal trends trusted by lawyers at Cravath, Latham, Skadden, Gunderson and elsewhere.

Welcome to Lookzy. In today's Lookzy:

• Sue Reddit; ask for legal advice regarding suit on Reddit

• The DOJ will start offering "discounts"

• Multiple massive AI funding rounds

• Baker McKenzie partner steps down amid racism probe

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ECON SNAPSHOT

The difference between special bonuses and layoffs

THE VERDICT

Arguing today's litigation news

Discounts for Signal. The US Department of Justice announced that it will take a tougher stance on companies that fail to produce evidence from personal devices and messaging apps in criminal investigations. The DOJ’s Criminal Division will offer discounts on fines to companies that have clear policies and procedures to preserve and collect such data, and impose harsher penalties on those that do not. The new policy aims to address the challenges posed by the widespread use of encrypted and ephemeral communication platforms by employees.

Ripple v. SEC. Ripple Labs Inc., the company behind XRP cryptocurrency, has invoked a recent Supreme Court ruling to bolster its defense against a high-profile lawsuit filed by the SEC. Ripple Labs filed a notice of supplemental authority citing the Supreme Court's recent ruling in Bittner v. United States, which in part hinged on 'fair notice' under the Due Process Clause. One of Ripple Labs' arguments similarly hinges on the fair notice defense. Kellogg Hansen and Debevoise are representing Ripple Labs.

Cyberattack liability. President Biden released a national cybersecurity strategy that seeks legislation to hold software makers liable for data breaches. The plan aims to address the growing threat of cyberattacks by foreign adversaries and criminal groups. Currently, software providers often escape legal liability by pointing to contracts that limit their responsibility for cyber incidents. The plan is supported by some lawmakers and cybersecurity experts, but opposed by some industry groups and software companies that argue it would stifle innovation and increase costs.

WallStreetBets. The founder of WallStreetBets, the Reddit community which exploded in popularity during the retail 'meme stock' trading phase of early COVID, posted on the r/law subreddit on Reddit seeking help in understanding details about IP ownership related to his recent suit against Reddit. In his suit, the WSB founder claims that Reddit wrongfully banned him from moderating the WSB subreddit which prevented him from trademarking the brand, which other subreddit-based brands have successfully done.

THE DEAL

Wheelin' and dealin' today's corporate news

AI funding #1. Stability AI Ltd., an OpenAI rival that created AI model Stable Diffusion, is reportedly seeking to raise funds at a $4 billion valuation. The company claims its models are more efficient and scalable than OpenAI’s GPT-3, Codex and DALL·E. The fundraising round is led by Sequoia Capital and includes Andreessen Horowitz and Founders Fund as investors. It isn't yet clear how much the company is seeking to raise in this round.

AI funding #2. Character.ai, a generative artificial intelligence chatbot company, has raised more than $200 million in a funding round led by Andreessen Horowitz, valuing it at $1 billion. The company uses natural language processing and deep learning to create realistic and engaging conversations with users across various domains.

Italian broadband. Italy’s state-backed lender Cassa Depositi e Prestiti SpA and Macquarie Group Ltd. have made a 20 billion Euro offer for Telecom Italia SpA’s landline network. The offer matches a rival bid by KKR & Co. that values the network at €20 billion ($22 billion), but offers more in cash. The deal would create a single national broadband operator in Italy.

Juul exit. Altria Group, Inc., the maker of Marlboro cigarettes, has exchanged its 35% stake in Juul Labs Inc., the e-cigarette company, for intellectual property rights to some of Juul’s heated tobacco products. The deal marks the end of Altria’s investment in Juul, which has faced regulatory scrutiny and lawsuits over its role in the youth vaping epidemic. Altria had paid $12.8bn for its stake in Juul in 2018, but wrote down most of its value after Juul’s sales plummeted.

BUSINESS OF THE FIRM

Industry News:

• The managing partner of Baker McKenzie's Belgium offices has reportedly stepped down and left the firm a racism probe in the firms Belgium offices initiated due to a departing associate's tell-all email.

BOILERPLATE

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