Business Organizations Law Commons^™

The Interconnections Between Entrepreneurship, Science, And The Patent System, Amy Landers

Utah Law Review

This Article considers several related points about the recent changes to the patent system and the opportunities for entrepreneurship. The concern about the adverse effect of the recent changes to patent law on innovation may be overstated. As a practicalmatter, the concept that patents are a necessary input to innovation is built on a model that does not account for the complex relationship between this legal system, science, and innovation. Although it can be expected that there may be some adverse impacts from these decisions, this trend opens up the opportunity for entrepreneurship. By releasing more foundational information into the …

Alice Was No Rabbit Hole: Why Software Inventors Should Be Neither Surprised, Nor Alarmed, Sherman Helenese

Utah Law Review

Trade secrets offer an alternative to patent - ineligible innovations and to the problems and perils of protecting, defending and enforcing patents. Although there is currently limited trade secret legislation on the national level, nearly all states have adopted, with little substantive variation, the Uniform Trade Secrets Act. Unlike patent - eligibility requirements that precluded software in Gottschalk, Diehr, Alice, and Tenon from patent protection, no trade secret is automatically deemed out of scope. Trade secrets encompass anything of value, so long as it is not generally known and reasonable steps are taken, such as the use …

International M&A And Joint Ventures, Vanesa Balda, Marilen Figueroa, Gordon N. Cameron, Laura Fraser, Francisco Ugarte, Lucille Barale, H. Jayesh, Aditi Bagri, Aaheree Mukherjee

The International Lawyer

No abstract provided.

Caselaw Developments 2015, William O. Fisher

Law Faculty Publications

This report was prepared for the ABA Business Law Section’s Federal Regulation of Securities Committee, Subcommittee on Annual Review. The paper contains sections on relevant Supreme Court decisions, SEC rulemaking, SEC enforcement actions, proxy solicitation, forward-looking statements, insider trading, materiality, duty to disclose, Scienter and scienter pleading, and the Securities Litigation Uniform Standards Act ("SLUSA").

The Law And Policy Of People Analytics, Matthew T. Bodie, Miriam A. Cherry, Marcia L. Mccormick, Jintong Tang

All Faculty Scholarship

Leading technology companies such as Google and Facebook have been experimenting with people analytics, a new data-driven approach to human resources management. People analytics is just one example of the new phenomenon of “big data,” in which analyses of huge sets of quantitative information are used to guide decisions. Applying big data to the workplace could lead to more effective outcomes, as in the Moneyball example, where the Oakland Athletics baseball franchise used statistics to assemble a winning team on a shoestring budget. Data may help firms determine which candidates to hire, how to help workers improve job performance, and …

Short-Termism And Long-Termism, Michal Barzuza, Eric L. Talley

Faculty Scholarship

A significant debate in corporate law and finance concerns the role of activist investors (especially hedge funds) in corporate governance. Activists, it is often alleged, imprudently privilege short term earnings over superior (but less liquid) long term investments. Activists counter that they target managers who unjustifiably cling to questionable strategies. While this debate is hardly new, it has grown increasingly fractious of late. We analyze the activism debate within a theoretical securities-market setting. In our framework – which draws from an emerging literature in empirical and experimental finance – managers are differentially overconfident (causing them to favor long-term projects), while …

A Wolf In Sheep's Clothing: Unocal And The Defensive Mechanism Hidden In Corporate Benefit Purpose, Sean W. Brownridge

Villanova Law Review (1956 - )

No abstract provided.

Designing Corporate Bailouts, Antonio E. Bernardo, Eric L. Talley, Ivo Welch

Faculty Scholarship

Although common economic wisdom suggests that government bailouts are inefficient because they reduce incentives to avoid failure and induce excessive entry by marginal firms, in practice bailouts are difficult to avoid for systemically significant enterprises. Recent experience suggests that bailouts also induce litigation from shareholders and managers complaining about expropriation and wrongful termination by the government. Our model shows how governments can design tax-financed corporate bailouts to reduce these distortions and points to the causes of inefficiencies in real-world implementations such as the Troubled Asset Relief Program. Bailouts with minimal distortion depend critically on the government’s ability to expropriate shareholders …

Follow The Money: Essays On International Taxation – Introduction, Michael J. Graetz

Faculty Scholarship

Publicity about tax avoidance techniques of multinational corporations and wealthy individuals has moved discussion of international income taxation from the backrooms of law and accounting firms to the front pages of news organizations around the world. In the words of a top Australian tax official, international tax law has now become a topic of barbeque conversations. Public anger has, in turn, brought previously arcane issues of international taxation onto the agenda of heads of government around the world.

Despite all the attention, however, issues of international income taxation are often not well understood. This Introduction outlines a collection of essays, …

The Abstract Void In Practice: Has The Statutory Business Judgment Rule Changed The ‘Acoustic Separation’ Between Conduct And Decision Rules For Directors’ Duty Of Care?, Sergio Alberto Gramitto Ricci, Jake Miyairi

Faculty Works

A recent outpouring of director sentiment claims that the stringency of directors’ duty of care is stifling entrepreneurial growth. This article explores whether the statutory business judgment rule has enhanced directors’ protection for legitimate commercial decisions, or clarified their liability for due care — the two express justifications behind its enactment. Directors’ protection for entrepreneurial decision-making cannot be amplified without broadening the pre-existing abstract void between the duty of care — as a conduct rule — and the general law ‘business judgment principle’ — as a decision rule. But Parliament’s desire to clarify and confirm the existing general law business …

New Kids On The Blockchain: How Bitcoin’S Technology Could Reinvent The Stock Market, Larissa Lee

UC Law Business Journal

Bitcoin is the first and most successful digital currency in the world. It polarizes the news almost daily, with either glowing reviews of the many benefits of an alternative and international currency, or doomsday predictions of anarchy, deflation, and another tulip bubble.

This article focuses on the truly innovative aspect of Bitcoin - and that which has gone mostly unnoticed since its inception - the technological platform used to transfer Bitcoin from one party to another. This technology is called the Blockchain. The Blockchain eschews a bank or other intermediary and allows parties to transfer funds directly to one another, …

Fully And Barely Clothed: Case Studies In Gender And Religious Employment Discrimination In The Wake Of Citizens United And Hobby Lobby, Suneal Bedi

UC Law Business Journal

In 2010, the Supreme Court handed down its decision in Citizens United v. Federal Election Commission. The Court held that for-profit corporations could receive First Amendment protection for political speech. Then, in 2014, the Court held in Burwell v. Hobby Lobby that closely held for-profit corporations could be considered persons under the Religious Freedom Restoration Act. These cases have spurred much scholarship focusing on the treatment of corporations as people and citizens. While supporters argue that these cases are consistent with corporate and First Amendment law, critics argue that the implications of these decisions could be perverse.

This article contributes …

The Elephant In The Room: An Empirical Study Of Piercing The Corporate Veil In The Jurisdictional Context, King Fung Tsang

UC Law Business Journal

No abstract provided.

Credit Bidding: Expanding The “For Cause” Exception Under Section 363(K) Of The Bankruptcy Code, Austin Harms

UC Law Business Journal

As auctions have become more prominent in Chapter 11 proceedings, credit bidding has bolstered the multi-decade trend of secured creditor dominance, which the Supreme Court sustained in 2012. Since this 2012 decision, bankruptcy courts have attempted to level the playing field by progressively expanding the interpretation of Section 363(k) of the Bankruptcy Code, which permits courts to limit secured creditors' ability to credit bid "for cause." The conflict between the Supreme Court's 2012 decision and the bankruptcy courts' recent interpretation of Section 363(k) created an uncertainty that currently plagues the market for secured claims of distressed companies. This Note reviews …

The Restatement (Fourth) Of Foreign Relations Law: Discouraging State Courts From Recognizing Foreign- Country Money Judgments In Absence Of Debtor’S Assets, Debashish Bakshi

UC Law Business Journal

No abstract provided.

The Corporation’S Place In Society, Gabriel Rauterberg

Michigan Law Review

The vast majority of economic activity is now organized through corporations. The public corporation is usurping the state’s role as the most important institution of wealthy capitalist societies. Across the developed world, there is increasing convergence on the shareholder-owned corporation as the primary vehicle for creating wealth. Yet nothing like this degree of convergence has occurred in answering the fundamental questions of corporate capitalism: What role do corporations serve? What is the goal of corporate law? What should corporate managers do? Discussion of these questions is as old as the institutions involved.

The Freedom To Pursue A Common Calling: Applying Intermediate Scrutiny To Occupational Licensing Statutes (Note), Alexandra L. Klein

Faculty Articles

After the devastation of Hurricane Katrina, the monks at St. Joseph Abbey in Louisiana sought a new source of income. They began producing simple wooden coffins priced at much lower rates than caskets sold in funeral homes. After the Abbey had made a large investment in its business, St. Joseph Woodworks, the Louisiana State Board of Embalmers and Funeral Directors ordered it to close. Although the monks did not provide funeral or embalming services, a Louisiana statute regulating the funeral industry prohibited the monks from selling coffins.

Under the statute, "funeral directing" included "any service whatsoever connected with... the purchase …

Do The Merits Matter: Empirical Evidence On Shareholder Suits From Options Backdating Litigation, Minor Myers, Q. Curtis

Faculty Scholarship

No abstract provided.

Merger And Acquisition Due Diligence Part Ii- The Devil In The Details, James A. Sherer, Taylor M. Hoffman, Kevin M. Wallace, Eugenio E. Ortiz, Trevor J. Satnick

Richmond Journal of Law & Technology

Our prior scholarship examined the legal and technical challenges involved in modern Merger & Acquisition ("M&A") due diligence practices associated with transactions ("Deals"), given recent but steady advances in technology and related increases in sophistication seen in Deal participants-primarily the organizations or assets targeted (the "Targets") as part of the Deal, and the organizations that pursued and/or resulted from the Deal (the "Acquirers"). We then proposed a framework addressing five particular verticals of interest and concern: data privacy ("DP"), information security ("IS"), e-Discovery, information governance ("IG"), and the due diligence and record keeping associated with the Deal itself ("Deal Information") …

General Jurisdiction 2.0: The Updating And Uprooting Of The Corporate Presence Doctrine, Edward D. Cavanagh

Faculty Publications

(Excerpt)

For well over a century, state courts have exercised personal jurisdiction over foreign corporations if they engage in commerce within the state “not occasionally or casually, but with a fair measure of permanence and continuity.” This assertion of judicial power, referred to as general jurisdiction and also as the corporate presence doctrine, permitted courts to entertain claims that had no nexus with the forum state against foreign companies “doing business” within that state. The United States Supreme Court, however, sent this line of cases “careening into the abyss” in Daimler AG v. Bauman, wherein the Court held that …

The Challenge Of Fiduciary Regulation: The Investment Advisors Act After Seventy-Five Years, Roberta S. Karmel

Brooklyn Journal of Corporate, Financial & Commercial Law

Seventy-five years after its enactment the Investment Advisers Act of 1940 has advanced from a relatively weak statute merely registering advisers with the Securities and Exchange Commission (SEC) to a more robust law imposing fiduciary responsibilities on advisers. Over the years, the number of investment advisers and the number of their clients have increased greatly. The SEC therefore has been pressured by Congress to develop a harmonized fiduciary standard for broker-dealers and advisers and also to develop and enforce a greater degree of oversight over the advisory industry. These developments have raised the questions of how to fund such efforts …

Open Sesame: The Myth Of Alibaba's Extreme Corporate Governance And Control, Yu-Hsin Lin, Thomas Mehaffy

Brooklyn Journal of Corporate, Financial & Commercial Law

In September 2014, Alibaba Group Holding Limited (Alibaba) successfully launched a $25 billion initial public offering (IPO), the largest IPO ever, on New York Stock Exchange. Alibaba’s IPO success witnessed a wave among Chinese Internet companies to raise capital in U.S capital markets. A significant number of these companies have employed a novel, but poorly understood corporate ownership and control mechanism—the variable interest entity (VIE) structure and/or the disproportional control structure. The VIE structure was created in response to the Chinese restriction on foreign investments; however, it carries the risk of being declared illegal under Chinese law. The disproportional control …

Another Bite At The Apple For Trade Secret Protection: Why Stronger Federal Laws Are Needed To Protect A Corporation's Most Valuable Property, Alissa Cardillo

Brooklyn Journal of Corporate, Financial & Commercial Law

Trade secrets are one of a corporation’s most valuable assets. However, they lack adequate protection under federal law, leaving them vulnerable to theft and misappropriation. As technology advances, it becomes easier and less time consuming for individuals and entities to access and steal trade secrets to a corporation’s detriment. Most often these thefts involve stealing trade secrets in an intangible form. Current legislation fails to adequately protect intangible trade secrets, leaving them vulnerable to theft. An amendment to the National Stolen Property Act that encompasses intangible trade secrets would close a loophole that currently exists relating to intangible assets, allowing …

A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine

Brooklyn Journal of Corporate, Financial & Commercial Law

Optimism is an indispensable element of effective salesmanship. It is therefore quite natural for the directors of public companies to want to optimistically tout the potential long-term benefits of investing in their companies. After all, directors of public companies must be empowered to attract the attention and money of American investors. But what happens if these long-term projections fail to come true? Who is to blame for long-term projections that are simply unrealistic? A doctrine called the “bespeaks caution” doctrine has emerged in order to govern these inquiries, and holds that these optimistic forward-looking statements are legally immunized provided that …

Personal Injury Victims As Insurance Collection Agents: Erisa Preemption Of State Antisubrogation Laws, Jonathan P. Connery

Journal of Law and Policy

The Employee Retirement Income Security Act (ERISA) was enacted in 1974 to protect the pension rights of employees nationwide. However, due to its broad preemptive powers, ERISA has since developed into a tool used by health insurers to recover millions of dollars in tort damages meant to benefit employees with ERISA health plans. This practice, known as subrogation, has been met with legislative backlash in the form of state antisubrogation statutes, which attempt to limit the enforceability of subrogation clauses found in almost all ERISA health plans. However, many courts have held that ERISA preempts these antisubrogation statutes, thereby affirming …

Share And Share Dislike: The Rise Of Uber And Airbnb And How New York City Should Play Nice, Alexandra Jonas

Journal of Law and Policy

Uber and Airbnb are two companies in the emerging “sharing economy” that provide individuals with a means to become entrepreneurs and benefit from a laissez-faire business model. The problem, however, is that while the benefits to users are great, so too are the risks. The dangers of operating without restraint and circumventing existing law are not only potentially harmful to unapprised users, but also adversely affect the continued use of these businesses. Every aggrieved user complaint has the potential for a lawsuit and every violation creates an opportunity for penalties. Left over are attempts by the courts and city government …

Corporate Darwinism: Disciplining Managers In A World With Weak Shareholder Litigation, Randall S. Thomas, James D. Cox

Vanderbilt Law School Faculty Publications

Because representative shareholder litigation has been constrained by numerous legal developments, the corporate governance system has developed new mechanisms as alternative means to address managerial agency costs. We posit that recent significant governance developments in the corporate world are the natural consequence of the ineffectiveness and inefficiency of shareholder suits to address certain genre of managerial agency costs. We thus argue that corporate governance responses evolve to fill voids caused by the inability of shareholder suits to monitor and discipline corporate managers.

We further claim that these new governance responses are themselves becoming stronger due in part to the rising …

Manufactured Consent: The Problem Of Arbitration Clauses In Corporate Charters And Bylaws, Ann Lipton

Publications

No abstract provided.

The Social Boundaries Of Corporate Taxation, Sloan G. Speck

Publications

Historically, the tax law distinction between corporate and conduit treatment drew primarily on doctrinal understandings, treating state-law corporations as corporate for tax purposes and classifying unincorporated legal entities based on their resemblance to conventional state-law corporations. More recently, commentators and Treasury have abandoned these doctrinal touchstones in favor of efficiency, broadly construed, as the guiding principle in determining an entity’s tax classification. This Article argues that, while important, efficiency considerations should not function as the sole arbiter of the boundary between corporate and conduit tax treatment. First, classical corporate taxation is, in many ways, deeply embedded within a larger network …

The Way We Pay Now: Understanding And Evaluating Performance-Based Executive Pay, David I. Walker

Faculty Scholarship

Over the last ten years, performance-based equity pay, and particularly performance shares, have displaced stock options as the primary instrument for compensating executives of large, public companies in the U.S. This article examines that transformation, analyzing the structure and incentive properties of these newly important instruments and evaluating the benefits and risks from an investor’s perspective. Notable observations include the following: Although technically “stock” instruments, performance shares mimic the incentive characteristics of options. But performance shares avoid the tax, accounting, and other constraints that have led to uniform grants of non-indexed, at the money options. Performance share plans can be …