Aligning the Incentives to Disclosure of Relevant Information to the USPTO: How the Jury Instruction Standards in Microsoft Corp. v. i4i Could Aid the Examination Process

Michael C. Deane

92 Texas L. Rev. 439

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The United States Patent and Trademark Office (USPTO) relies on applicant-submitted disclosures to aid examiners in deciding whether a patent should issue from a patent application.  However, the legal doctrines governing those disclosures have not resulted in an ideal system.  The problem stems from the fact that both underdisclosure, resulting from no duty to actively search for prior art, and overdisclosure, resulting from the constantly shifting standards of inequitable conduct, have come to be legally accepted.

Mr. Deane proposes a rule change in the Manual of Patent Examining Procedure (MPEP) that harnesses the patent applicant’s private incentives related to disclosure as seen in the recent Supreme Court decision, Microsoft Corporation v. i4i Ltd. Partnership. That decision held that if the USPTO had no opportunity to review a prior art reference during prosecution, a defendant opposing a patent in litigation will be afforded a jury instruction that tells the jury of this fact and further suggests to the jury that the presumption of validity is harder to sustain if the USPTO had not considered a new reference presented by the defendant.

Mr. Deane proposes a system that attempts to tie this jury instruction to the practice of disclosure at the USPTO and deny a defendant opposing the patent the jury instruction for certain references, chosen and marked by the patent holder during the prosecution of the patent application.  Mr. Deane proposes that the USPTO could have an optional rule whereby patent applicants point out a certain number of prior art references (Mr. Deane proposes up to three) that the examiner will guarantee to scrutinize.  Those references, along with other references actually used by the examiner, as evidenced by the patent prosecution history, would not be subjected to the otherwise factually-determined jury instruction proffered by i4i.  Therefore, for those references the applicant chooses, the patent holder would reduce uncertainty in litigation, obtain summary judgment more easily, and facilitate pretrial settlement discussions.  By increasing the patent applicant’s incentives to disclose prior art through these procedural mechanisms, the USPTO can achieve a better system of disclosure that potentially results in shorter prosecution time and stronger patents that can survive litigation.

Buchanan v. Warley and the Limits of Substantive Due Process as Antidiscrimination Law

Brent M. Rubin

92 Texas L. Rev. 477

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In Buchanan v. Warley, the Supreme Court struck down a Louisville, Kentucky ordinance mandating residential segregation in the heart of the Lochner era.  Rather than rely on the Equal Protection Clause, as our modern antidiscrimination jurisprudence most often does, the Court employed substantive due process and found that the ordinance violated both African-Americans’ and whites’ right to own, use, and dispose of property.

Mr. Rubin begins by briefly reviewing the relevant libertarian and segregationist jurisprudence that came into conflict in Buchanan and outlining the history of residential segregation ordinances from their inception in Baltimore to the Supreme Court’s decision in Buchanan.  Mr. Rubin continues by examining several scholars’ perspectives on Buchanan.  Next, he presents his criticism on substantive due process as antidiscrimination law by arguing that while the libertarian thrust of the theory proved helpful in combatting discrimination via statute, its emphasis on contractual freedom advanced the restrictive covenants that perpetuated residential segregation.  Further, doctrinal weaknesses in substantive due process aided cities that enacted segregation ordinances after Buchanan.  Finally, Mr. Rubin attempts to sketch the foundations of a social history of Buchanan that examines its impact on and the role of socioeconomic class within the contemporary African-American community.  He argues that Buchanan and its emphasis on property rights dovetailed with certain African-American social institutions and forces, such that all but the direst legal needs of working-class blacks were left unattended.  In contrast, the legal and economic needs of middle- and upper-class blacks received a relatively greater deal of attention during this era.  Thus, Mr. Rubin concludes that the events following Buchanan show that while substantive due process can, in some cases, provide relief from discriminatory legislation, the doctrine as a whole has significant weaknesses as antidiscrimination law.

The Anti-Injunction Act and the Problem of Federal–State Jurisdictional Overlap

James E. Pfander & Nassim Nazemi

92 Texas L. Rev. 1

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Ever since Congress decided in 1789 to confer jurisdiction on lower federal courts over matters that the state courts could also hear, the nation has faced the problem of how to allocate decision-making authority between the two court systems.  Central to this body of concurrency law, the federal Anti-Injunction Act of 1793 (AIA) was enacted to limit the power of the federal courts to enjoin state court proceedings.  Justice Felix Frankfurter decisively shaped our understanding of those limits, concluding in Toucey v. New York Life Insurance Co. that the statute absolutely barred any such injunction.  Much of the law of federal–state concurrency has been predicated on Toucey’s account.

In this Article, Professor James E. Pfander and Ms. Nassim Nazemi offer a new account of the AIA that challenges prior interpretations.  Rather than a flat ban on injunctive relief, they show that the AIA was drafted against the backdrop of eighteenth century practice to restrict “original” federal equitable interference in ongoing state court proceedings but to leave the federal courts free to grant “ancillary” relief in the nature of an injunction to protect federal jurisdiction and to effectuate federal decrees.  It was this ancillary power that gave rise to the exceptions that Toucey decried and Congress restored in its 1948 codification.

Professor Pfander and Ms. Nazemi draw on their new account of the 1793 and 1948 versions of the Act to address current problems of jurisdictional overlap.  Among other things, they raise new questions about the much maligned RookerFeldman doctrine; offer a new statutory substitute for the judge-made doctrine of equitable restraint; and suggest new ways to harmonize such abstention doctrines as Burford and Colorado River.  Curiously, answers to these (and other) puzzles were hiding in the careful decision of the 1793 drafters to restrict only the issuance of “writs of injunction” and otherwise to leave federal equitable power intact.

Regulating Ex Post: How Law Can Address the Inevitability of Financial Failure

Iman Anabtawi & Steven L. Schwarcz

92 Texas L. Rev. 75

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Unlike many other areas of regulation, financial regulation operates in the context of a complex interdependent system.  The interconnections among firms, markets, and legal rules have implications for financial regulatory policy, especially the choice between ex ante regulation aimed at preventing financial failure and ex post regulation aimed at responding to that failure.  Regulatory theory has paid relatively little attention to this distinction.  Were regulation to consist solely of duty-imposing norms, such neglect might be defensible.  In the context of a system, however, regulation can also take the form of interventions aimed at mitigating the potentially systemic consequences of a financial failure.  Professors Anabtawi and Schwarcz show that this dual role of financial regulation implies that ex ante regulation and ex post regulation should be balanced in setting financial regulatory policy, and they offer guidelines for achieving that balance.

Self-Government and the Judicial Function

David Rudenstine

92 Texas L. Rev. 161

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Rudenstine reviews J. Harvie Wilkinson III’s Cosmic Constitutional Theory: Why Americans Are Losing Their Inalienable Right to Self-Governance.

The Arbitral Judgment Rule: Using the Business Judgment Rule to Redefine Arbitral Immunity

Matthew Bricker

92 Texas L. Rev. 197

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In the United States, arbitrators enjoy an absolute immunity from civil liability provided that they perform the arbitral acts within their jurisdiction.  Accordingly, arbitrators can only be held liable when they fail to render a decision at all or when they no longer assume responsibilities that are functionally comparable to those of a judge.  In this respect, arbitrators are unique in the world of professionals.  Other professionals (e.g., doctors, lawyers, and accountants) incur civil liability for breach of contract, and tort liability for professional misconduct, i.e., failing to follow the proper standard of care.  This prompts an obvious question: why are arbitrators immune from suit while other professionals are not?

In this Note, Mr. Bricker argues that the distinction is mainly the result of the superficial comparison between judges and arbitrators, and as such, there is no persuasive justification for absolute arbitral immunity.  Hence, Mr. Bricker proposes a new rule of arbitral liability that better holds arbitrators accountable for the professional services they provide.

Mr. Bricker begins by examining the origins and development of judicial immunity and traces its extension to arbitrators.  Mr. Bricker then analyzes the justifications for arbitral immunity and argues that the functional comparison between judges and arbitrators is unpersuasive.  He also argues that, while it is important to protect the independent judgment of the arbitrator, doing so does not require absolute immunity.  Mr. Bricker next crafts a new rule of arbitral liability that better holds arbitrators accountable by first acknowledging the difficulties of the problem and then applying a familiar solution––the business judgment rule.  Finally, Mr. Bricker defends the new rule of arbitral liability against contractual-based criticisms by exploring what would occur if the liability of the arbitrator were to be increased or decreased.

Off-Label Drug Promotion and the Use of Disclaimers

Dina McKenney

92 Texas L. Rev. 231

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Under the current enforcement system, promoting a drug for unapproved, “off-label” uses is a violation of the Federal Food, Drug, and Cosmetic Act (FDCA).  Ms. McKenney’s Note begins by examining the current regulatory scheme in place for off-label promotion and the possible benefits and consequences of allowing the promotion of off-label uses.  Ms. McKenney then discusses how current case law regarding commercial speech threatens the government’s off-label promotion prosecution scheme.  Finally, Ms. McKenney proposes a two-tiered disclaimer system that reconciles the potential harm with the noted benefits and addresses widespread concerns about the constitutionality of the current system.  Under this system, basic disclosure requirements would apply to all off-label promotions of drugs.  A heightened, second level of disclosure requirements would apply if a pharmaceutical company is not currently seeking FDA approval for the off-label use.  The effect of such a system would be to increase data transparency about the claims of off-label efficacy while simultaneously encouraging drug companies to seek FDA approval for off-label uses.

Introduction: Footholds of Constitutional Interpretation

Alexander Tsesis

91 Texas L. Rev. 1593

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As the oldest functioning constitution in the world, the United States Constitution contains many ambiguities that do not lend themselves to easy, much less irrefutable answers.  Constitutional theory is the method of unpacking the text of the Constitution, understanding its relation to society, determining the role of the three branches of government, and developing a consistent and predictable interpretation.  As with many areas of the law, there is much disagreement on the proper theory of interpretation.  Yet, as irresolvable as the different points of view seem to be, we as a people are left with the need to better understand this ancient Constitution in the context of contemporary disputes of tremendous significance, from gay marriage to welfare benefits and from executive power to judicial authority.  Debate on these matters seems not only inevitable but necessary in a pluralistic, representative democracy.

This introduction to the University of Texas School of Law Symposium on Constitutional Foundations highlights many of the difficult and debated questions in constitutional law today and summarizes the essays submitted.

Maxim Constitutionalism: Liberal Equality for the Common Good

Alexander Tsesis

91 Texas L. Rev. 1609

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In this Article, Professor Tsesis argues that the central purpose of U.S. constitutional governance is the protection of individual rights for the common good.  Members of all three branches of government must fulfill that public trust through just policies and actions.  The maxim of constitutional governance establishes a stable foundation for the rule of law, requiring government to function in a nonarbitrary manner.  It provides the people with consistency and predictability about the scope of governmental powers and responsibilities.

The foundational dictate of governance is incorporated into the U.S. constitutional tradition through the Declaration of Independence and the Preamble to the Constitution.  Those two documents reflect the national commitment to promulgating laws that are conducive to both the public good and the personal pursuit of happiness.  The federal legal system must integrate protections of rights for the common good into statutes, regulations, and judicial opinions that address a plethora of social demands and problems.

The project of maxim constitutionalism runs counter to positivist skepticism about the validity of fundamental constitutional principles.  This Article seeks to demonstrate that maxim constitutionalism reflects the normative underpinning of legal order that is compatible with pluralistic self-governance.  The protection of rights for the common good facilitates the workings of a polity that tolerates debate and deliberation.  The administration of laws for the public benefit enjoins tyrannical majoritarianism and abuse of state authority.

Like originalism, maxim constitutionalism utilizes historical analysis.  But it departs from originalism by denying that the original meaning of the Constitution’s text should be determinative.  Maxim constitutionalism is a binding norm that is independent of any individual mind frame, whether past or present.  In addition, though the forward progress of constitutionalism is informed by judicial opinions, it is not defined by them alone.  Congress must also play a central role in identifying rights and promulgating statutes for their protection.  Recognizing this bedrock purpose of governance distinguishes maxim constitutionalism from prominent strands of living constitutionalism by furnishing an objective and enduring standard for evaluating the legitimacy of governmental actions.  The assessment of public conduct is not procedurally neutral but substantively rich in its account of how governmental actors should further the public good through a legal system designed to secure life, liberty, and the pursuit of happiness for an equal citizenry.