What’s an Algorithm? (… to a lawyer)

Xalgorithms follows, discusses, and as required, identifies requirements for and contracts out, innovative legal research to help bring clarity regarding the status of computational algorithms in public law and in commercial law.

Current statute and case law amongst juridictions is not particularly clear in how to conceptualize the algorithm. Following are some working notes of the Xalgorithms team. Feedback is invited.

Very generally, our current working view of a computational algorithm in public and commercial law is to consider it as a method to convey a data message for a purpose. These three elements are addressed by different types of law, and each can potentially involve the rights and responsibilities of a different party:

  • purpose (This is analogous to the meaning that an author intends to convey through a story)
  • method (This is analogous to a physical book, which is a method for conveying the story)
  • data (This is analogous to the story expressed in the book, distinguished by the way information is conveyed)

A “data message” is defined in the UNCITRAL Model Law on Electronic Commerce, Article 2, as “information generated, sent, received or stored by electronic, optical or similar means”. Article 13(3)(b) “Attribution of data messages” then provides that:

  1. A data message is that of the originator, if it was sent by the originator itself.
  2. As between the originator and the addressee, a data message is deemed to be that of the originator if it was sent:
    • (a) by a person who had the authority to act on behalf of the originator in respect of that data message; or
    • (b) by an information system programmed by, or on behalf of, the originator to operate automatically.
  3. As between the originator and the addressee, an addressee is entitled to regard a data message as being that of the originator, and to act on that assumption, if:
    • (a) in order to ascertain whether the data message was that of the originator, the addressee properly applied a procedure previously agreed to by the originator for that purpose; or
    • (b) the data message as received by the addressee resulted from the actions of a person whose relationship with the originator or with any agent of the originator enabled that person to gain access to a method used by the originator to identify data messages as its own.

Consequently, it seems consistent with this excerpt to assert that when an algorithm is used in a transaction:
* a purpose is provided by the originator of the data message;
* a method is provided by the supplier of the algorithm;
* some data is provided in a certain way to the addressee.

The purpose of this conceptual framing is to reflect the “functional equivalent approach” expressed in section 16 of the Guide to Enactment of the Model Law on Electronic Commerce: “…which is based on an analysis of the purposes and functions of the traditional paper-based requirement, with a view to determining how those purposes or functions could be fulfilled through electronic-commerce techniques”.

Accordingly, Xalgorithms Foundation is preparing a “Recommendation regarding the interpretation of Article 13(3)(b) [Attribution of data messages] of the Guide to Enactment of the Model Law on Electronic Commerce.

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