John M. Golden
89 Texas L. Rev. 1041
In this Article, Professor Golden argues that Congress should expand the USPTO’s rulemaking authority so that it encompasses substantive questions of subject-matter eligibility. This proposal would explicitly split “interpretive authority over substantive patent law between the USPTO and the federal judiciary,” which would “further hybridize patent law’s legal regime and break from a common paradigm under which primary interpretive authority of the substance of a statutory regime lies either wholly with the courts or wholly with an administrative agency.”
Golden first describes the already hybrid nature of U.S. patent law’s legal regime. Next, he presents the case for giving the USPTO binding interpretive authority over subject-matter eligibility as a means toward patent law’s commonly accepted utilitarian ends. He does this by describing the nature of subject-matter inquiries and developing mathematical models that help justify their continued use as patentability filters.
Golden then argues that the generally categorical nature of questions of subject-matter eligibility suggests that they are especially appropriate for agency rulemaking, an argument which is bolstered by an analysis of comparative institutional competence. Golden finds a lack of judicial facility for resolving such problems. Moreover, Congress lacks the sustained interest, time, and knowledge to resolve subject-matter eligibility’s bounds. The USPTO thus appears to be the best potential institutional candidate, having both the expertise and the incentive to deal with the issue.
However, as an administrative agency the USPTO is also vulnerable to concerns of capture and bias. But Golden argues that such concerns are not as great as is often contended and they can be further diluted through additional institutional reforms. Indeed, Golden points out that the USPTO already has an established record of developing nonbinding but influential interpretive rules on matters of substance. Granting the USPTO primary interpretive authority over subject-matter eligibility issues might allow it to clear doctrinal tangles generated by the courts. The recent U.S. Supreme Court decision in Bilski v. Kappos, writes Golden,does not indicate otherwise.
F. Gibbons Addison
89 Texas L. Rev. 1179
In this Note, the author addresses the U.S. system of wealth redistribution. According to Addison, the present wealth inequality between the rich and the poor is due to unequal opportunity, meaning an individual’s ability to pursue her objectives without interference from arbitrary obstacles.
Addison finds a solution to this problem in the revenue sharing system of professional sports leagues. Sports leagues employ such a system to increase the competitive balance of the league, which increases profits in the long run, even for high-revenue teams that contribute a portion of their revenues for distribution to low-revenue teams. Similarly, Addison argues that the U.S. should address wealth inequality by substituting the goals of equality and fairness for competition.
Addison begins with an overview of wealth redistribution in the U.S., starting in the colonial period with the influence of Adam Smith and continuing through the New Deal and the civil rights movement until arriving at the present system. Addison turns to an overview of revenue sharing in American professional sports, discussing the importance of cooperation in order to increase competition, ticket-sale sharing, and the potential problem of teams’ ability to exploit sources of local revenue.
Next, the author analyzes wealth redistribution in sports leagues. Addison notes some possible imperfections to the systems but argues that the leagues need low-revenue teams to be successful. The goal of revenue sharing, writes Addison, is not perfect competition but competitive balance.
Joshua H. Packman
89 Texas L. Rev. 1229
In this note, Packman discusses the pending Parliamentary Voting Systems and Constituencies Bill (PVS Bill), which is aimed at British electoral reform in response to the 2010 hung parliamentary election. The PVS Bill provides for a referendum on switching from the first-past-the-post electoral system to the alternative vote and would also reduce the size of Parliament to 600 members.
Packman first examines the effect of the PVS Bill on the British Constitution by virtue of the referendum. One important part of the British Constitution, according to Packman, is the doctrine of the sovereignty of Parliament. Packman discusses different aspects of this doctrine, and notes that he is taking a simplistic view for the purposes of the Note that Parliament is the supreme legislative authority and its sovereignty is the core principle of the British Constitution.
Packman then introduces Bruce Ackerman’s thoughts on an alternative source of constitutional legitimacy: the referendum. This would potentially vitiate parliamentary sovereignty, but Packman argues that this outcome is not preordained. Packman finds that the PVS Bill as a referendum only partly diminishes the sovereignty of Parliament.
Packman then analyzes the constitutional effects of switching the electoral system to the alternative vote, which he argues represents a major reform of the British Constitution and a threat to parliamentary sovereignty. He first provides an overview of the system and theory of government that exists under the current British Constitution. He then looks at how the PVS Bill would change this system. As such, Packman writes that the PVS Bill, by substantially reducing the number of seats won by the majority party, would effectively transform Parliament from a government of “front benchers” into a government of “backbenchers” by increasing the relative power of each member of the majority party vis-à-vis the Prime Minister and the Cabinet.
This is not the first time that Parliament has attempted to change the voting system, concludes Packman. And if it fails, it will surely not be the last. Such alterations reflect underlying changes in the values embodied in the British Constitution, and the alternative votes represent a change from government based on parliamentary sovereignty to government based on popular sovereignty.
Gregory R. Baden
89 Texas L. Rev. 1203
This Note proposes a third-party obviousness specialist in patent litigation in response to the challenge of practically determining this requirement in a technically and legally consistent manner.
Making consistent determinations of obviousness is a challenge at all levels of the patent system, from patent examiners to the U.S. Supreme Court. An erroneous determination can be costly, due to the cost of the disputes. The root of the challenge of determining obviousness is its doctrinal positioning as a mixed question of fact and law, according to Baden. One problem with this positioning is whether a judge, jury, or some combination of the two should be responsible for making the determination.
In response to the challenges of the obviousness determination, Baden proposes a third-party obviousness specialist, and situates the role of this specialist within the concepts of patent law. Rather than supplanting the judge or jury, the “obviousness master” would assist the court in establishing the boundaries of the obviousness factual inquiries. Baden notes that there is support for such a master in both academic commentary and existing legal doctrine, which he discusses.
He then addresses the options for practical implementation of the obviousness master. He provides two possible forms. First, the obviousness master could be implemented in a manner similar to that employed for a traditionally titled special master in claim construction or interpretation hearings. Second, the role could be developed via a specialized incarnation of an expert witness, which would include the use of a double-blind selection method for choosing the individual. Baden addresses each form in detail.
Lastly, Baden presents the benefits and challenges of, and arguments for and against, implementing an obviousness specialist. Baden concludes that an obviousness specialist would allow the parties, the court, and, importantly, the jury to focus on the primary task of navigating the defined waters of the invention without venturing into the unmapped sea of innovation.
Jesse M. Fried
89 Texas L. Rev. 1113
Executives of public companies receive most of their pay in equity compensation, which is intended to better align their interests with those of the firm’s shareholders. However, most equity compensation is tied to the short-term stock price, which may shift the executives’ focus from long-term value. Professor Fried identifies a different problem, which arises when the executive is free to sell stock in the short-term or must hold it for the long-term. Tying payoffs to the stock price, argues Fried, fails to align executives’ interests with the maximization of aggregate shareholder value, which is the amount of value flowing to all the firm’s shareholders over time. Fried shows that tying payoffs to the future stock price can even encourage executives to take steps to destroy aggregate shareholder value.
Two distortions result from tying executives’ payoffs to the future stock price. When the current price is below its actual value, executives whose pay is tied to the future stock price are rewarded for funding bargain-price share repurchases rather than making productive investments in the firm. When the stock price is higher than its actual value, these executives are rewarded for issuing new shares even if the firm cannot productively use the consideration received in exchange. Fried calls these “costly contractions” and “costly expansions.”
These distortions arise because the executives’ interests are aligned only with investors who do not buy or sell shares until the executive cashes out her equity. Executive interests are not aligned with those shareholders that either sell or purchase shares before the executive cashes out.
Fried proposes a mechanism that would perfectly tie executive pay to aggregate shareholder value, which he calls the “constant-share” approach. Accordingly, executives must adjust their equity holdings in the firm whenever it purchases or sells its own shares to keep them constant through the transaction, selling shares whenever the firms repurchases its own stock and buying whenever it issues new equity.
Fried acknowledges that problems with this approach exist. It will make it more difficult for executives to personally benefit, so they can be expected to resist its adoption. Also, it may lead to a lower stock price, which could in turn increase the likelihood of a takeover attempt or proxy fight. So, directors may also be against adopting it.
Mark L. Ascher
89 Texas L. Rev. 1149
As a result of intense lobbying, problematic legislative trends have developed over the last several decades in the law of the dead (as Professor Ascher refers to the law of wills and trusts). Here Professor Ascher reviews Dead Hands: A Social History of Wills, Trusts, and Inheritance Law by Lawrence M. Friedman, which explores the reach and longevity of the Dead Hand.
Ascher outlines and discusses four important changes in the law of the dead included in Friedman’s book. These involve changes in family structure, record keeping, demographics and culture, and societal attitudes toward wealth and the wealthy. One important change in family structure, for example, is a shift from focusing on the bloodline family to the family of affection and dependence. Another example is that the surviving spouse once only received limited inheritance, while today the surviving spouse is usually the primary if not exclusive taker. Although Friedman thinks this reflects a change in the family structure, Ascher argues that it is “attributable to and emblematic of the ever-increasing stature of women in American society.”
Ascher also examines the development of dynastic trusts and how such trusts concern societal attitudes toward wealth, in particular of the dynastic kind. Friedman thinks that in the beginning, Americans were initially skeptical of such wealth, but the end of the nineteenth century saw much more acceptance for it. Ascher, however, argues that the Progressive Movement was yet to come, which embodied a continued skepticism of dynastic wealth. Ascher then discusses other aspects of trusts and the changes thereto, some of which are troubling. But Friedman’s book, according to Ascher, lacks a sense of outrage over these developments, even though Friedman is critical of other issues, which is Ascher’s biggest criticism.
Ascher then looks at Friedman’s treatment of charitable gifts and foundations, and later, “death” taxes. He also returns to Friedman’s argument that our collective attitude toward wealth has changed, which Ascher does not believe to be the case. Ascher notes that we have strayed far from Thomas Jefferson’s warnings against establishing an aristocracy. Both the estate tax and the rule against perpetuities have been the primary means of preventing the accumulation and propagation of dynastic wealth. It is troubling then that both have recently been curtailed. Yet, Ascher concludes, it would not be difficult to get back on the right path, with a few sensible changes to the rules.