Law Commons^™

Institutionalized Disruption: The Rise Of The Reformer Startup, Abraham J.B. Cable

UC Law Business Journal

This essay emerges from a joint symposium of the Hastings Business Law Journal and the Hastings Science and Technology Law Journal entitled “Regulating the Disruption Economy: Tech Startups as Regulatory Reformers.” The symposium featured panels on virtual currency, crowdfunding, and the sharing economy.

Drawing from the symposium, this essay considers why startups are increasingly taking up the mantle of regulatory reform, how they are achieving their successes, and whether this is a positive development for our political economy. It tentatively proposes that: (1) features of the current venture capitalist market and startup ecosystem, rather than the pace of technological advancement, …

Crowdfunding Delusions, Reza Dibadj

UC Law Business Journal

Beyond all the hype surrounding crowdfunding there is a curious incongruity. On the one hand, there exist apparently successful crowdfunding sites; on the other hand, more than three years after the Jumpstart Our Business Act (“JOBS Act”) mandated an equity crowdfunding exception, we are still waiting for final regulations from the Securities and Exchange Commission.

This essay explores this irony, arguing that existing crowdfunding sites carefully manage around a fundamental ambiguity in the securities laws—a surprisingly fuzzy definition of what a “security” is. It then shifts to understanding the existing regulatory framework: the federal crowdfunding statute and proposed rules, as …

Employee Perks In Silicon Valley: Technology Companies Lead The “Arms Race” As Corporate Law Trails In Representing Shareholder Interests, Thuy Nguyen

UC Law Business Journal

Within the last decade, Silicon Valley technology companies have increasingly engaged in a practice of providing nontraditional perks to employees, in what has been characterized as an “arms race” to attract engineering talent. As this practice expands throughout Silicon Valley, so do the costs associated with providing these perks. While companies view the practice as a tool to recruit talent, boost productivity, and increase efficiency, the IRS’s renewed interest in scrutinizing the tax laws casts doubt on whether these stated objectives would remain robust in the future.

This Note focuses on the practice of providing employee perks from a shareholder …

Activist Compensation Of Board Nominees And The Middle Ground Response, Adam Prestidge

UC Law Business Journal

Shareholder activism has taken an increasingly high-profile and polarizing role in investing and corporate governance. Moves by shareholder activists, and the policy behind those moves, constantly appear in corporate headlines. One of shareholder activists' primary methods of enacting changes in companies is to nominate directors to the board, and often those director nominees are highly compensated by the shareholder activist itself. Some in the corporate world oppose this practice, arguing that it creates a significant conflict of interest and can damage the company in the short term, while others argue that the practice is a necessary tool for investors that …

A Look At Tradekey: Shifting Policing Burdens From Trademark Owners To Online Marketplaces, Ashley Bumatay

UC Law Business Journal

This note addresses contributory counterfeiting within online marketplaces. Contributory counterfeiting arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for the direct counterfeiting carried out by a third party. This note argues that online marketplaces should be required to take a more active role in combating counterfeiting through their platforms. This note proceeds in five parts. Part I serves as an introduction to the issue. Part II provides background information regarding trademark counterfeiting and gives an overview of the case law regarding contributory counterfeiting in online marketplaces. Part III looks at the implications of the TradeKey …

Evading The Transparency Tragedy: The Legal Enforcement Of Corporate Sustainability Reporting, Chloe Ghoogassian

UC Law Business Journal

Although sustainability reporting is a mechanism for improving labor and human rights practices in global supply chains, it has had limited effects to date because of its voluntary nature. Embracing a uniform reporting standard and making companies legally accountable for the veracity and completeness of their disclosures could enhance the efficacy of sustainability reporting. Generally, this Note explores how such a system could be structured.

Part II of this note describes the Global Reporting Initiative ("GRI") as a case study of sustainability reporting and some of its shortcomings. Specifically, Part II will address how the voluntary nature of GRI's Reporting …

The Delaware Carve-Out's Carve: Examining And Repairing Slusa's State Law Exception, Kenneth Hsu

UC Law Business Journal

The "Delaware carve-out” is a carefully written savings clause that preserves state law claims that would otherwise be dismissible under SLUSA preclusion. The carve-out's broad statutory language, however, does not provide much clarity for parties litigating its applicability. While three circuit level opinions have addressed particular portions of the carve-out's text, none have offered a controlling understanding of the statute. The carve-out's precise scope instead remains largely defined by an assortment of lower court decisions relying on different interpretations of the statutory language and of related case law. Amid such uncertainty, this note seeks to discern some clarity to the …

The Treaty Shopping Practice: Corporate Structuring And Restructuring To Gain Access To Investment Treaties And Arbitration, Julien Chaisse

UC Law Business Journal

This article analyzes the magnitude of the treaty shopping practice and draws relevant theoretical and policy implications for proper rule-making. This fills the gap in the literature, as it is based on a comprehensive survey of tribunal awards to assess the real prevalence of treaty shopping. Also, observing that in all systems of law, whether domestic or international, there are concepts framed in order to avoid misuse of the law; reference may be made in this respect to "good faith" ("bonne foi"), "détournement de pouvoir" (misuse of power) or "abus de droit" (abuse of right), this Article seeks to identify …

Corporate Governance In Japanese Law: Recent Trends And Issues, Hideki Kanda

UC Law Business Journal

This article discusses recent trends and issues concerning corporate governance in Japanese law. The purpose of this article is to offer brief overviews on selected topics, including empirical studies, recent scandals, board structure, rule making by the stock exchange, disclosure rules under Japanese securities regulation, and the forthcoming reform of Japanese corporate law.

"Was The Deal Worth It?": The Dilemma Of States With Ineffective Economic Incentives Programs, Randle B. Pollard

UC Law Business Journal

Federal subsidies to state and local governments have been substantially reduced due to public opinion prioritizing the reduction of the federal deficit, the recent "fiscal cliff" legislation, and the federal budget "sequester cuts." In addition, in many states, revenue collection from individual and corporate income tax is below prerecession levels. To address the reduction in federal funding and reduced revenue collections, state and local governments will increasingly rely on economic incentive programs to grow their economies through increased job creation and private capital investment within their jurisdictions. These economic incentive programs are no longer comprised of simple tax reductions for …

Goodwill And The Excesses Of Corporate Political Spending, David Rosenberg

UC Law Business Journal

This article argues that legislation that provide "special rules" is not necessary because the business judgment rule should not be interpreted to protect corporate directors' decisions to donate to political campaigns in the same way that it protects ordinary corporate charitable contributions or decisions based on CSR. The rule protects donations in the public interest even if they are profit- sacrificing because courts are not in a position to judge whether or not a particular act of giving is designed to maximize profits or is simply an acceptable act of charity with no obvious financial benefit to the corporation itself. …

The 2013 Symposium On Corporate Governance In Japan, David Makman

UC Law Business Journal

The 2013 Symposium on Corporate Governance in Japan was organized by the University of California, Hastings College of the Law, the Japan Society of Northern California, and the Pacific Pension Institute. The goal was to provide a forum where academics and practitioners could meet to exchange information and ideas relating to corporate governance. The Japan Society of Northern California and Pacific Pension Institute have been covering corporate governance issues together since 2001, and have held several conferences on the issue. The Symposium was the first joint program with the University of California, Hastings College of the Law in this area. …

Japanese Corporate Governance Reform: A Comparative Perspective, Bruce E. Aronson

UC Law Business Journal

Japan has been widely criticized as being slow to reform a corporate governance system that seemingly remains fixed on the interests of employees over shareholdersand unresponsive to recent global trends such as the spreadof fidependent directors.This article seeks to present a more nuancedand balanced view of the ongoing evolution of Japanese corporate governance.

This article discusses how analysis of Japanese corporate governance is hamperedby the lackofboth anagreed-uponstandard for evaluating change in Japan and data concerning important governancepractices,such as the actualrole of company auditors (kansayaku). The main focus, however, is on describing and evaluating experimentation at leading individual Japanese companies that …

The Long Tail And Demand Creation In The Legal Marketplace, Kristen E. Killian

UC Law Business Journal

This note examines new legal technology companies that are innovating transactional legal products, but not legal services. Legal Tech Innovation Companies (LTICs) represent an innovative leap in how companies that are not law firms provide legal products directly to a consumer. Although these companies are not yet disrupting the core of the legal marketplace, they are meaningfully lowering cost and increasing efficiency through both simplification and speed.

This note describes the type of legal consumers for whom LTICs are creating demand for their legal products and discusses several LTICs in greater detail. It further addresses policy considerations for the transactional …

Privacy: An Issue Of Priority, Stephanie Segovia

UC Law Business Journal

This note highlights the competing stakes in the online privacy debate. It provides an overview of the U.S. business model of companies that participate in data gathering and analysis, and why they do so (namely because of the emergence of Big Data technologies), and discusses examples of how online privacy has eroded in recent years, in turn highlighting the need for federal action. This note also discusses the current status quo of online privacy in America, and why current legislation is inadequate to address online privacy issues. It further includes a discussion of why the U.S. should let the new …

A Software Patent War: The Effects Of Patent Trolls On Startup Companies, Innovation, And Entrepreneurship, Sonia Karakashian

UC Law Business Journal

This note analyzes the effects of patent trolls on startup companies and the issues that software patentability under 35 U.S.C. § 101 impose on this highly controversial area of intellectual property. This note elaborates on the current patent reforms as well as the common law struggles addressed in Supreme Court decisions. Further, it discusses the software patent war and the controversial issues raised in § 101 of the patent system followed by the issues of patentability and its effects on startup companies. Lastly, this note discusses short-term and long-term progress in the patent system, as well as address the current …