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Category: Courts

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Software Patent Eligibility

This post reflects my initial impressions of an important Federal Circuit development in patent law, which is my primary area of scholarly focus. On Friday, the Federal Circuit, sitting en banc, ruled on a controversial and divisive patent law issue, whether software inventions are patent eligible subject matter. Unfortunately, I find the decision in this case, CLS Bank v. Alice Corp., quite unsatisfying.

The court, sitting with 10 judges, issued 7 separate opinions spanning 135 pages. The court only agreed upon a very brief – 55 words – per curiam opinion affirming the district court ruling that the asserted patents were invalid. The per curiam opinion explained that the “method” and “computer readable media” claims were deemed not patent eligible by the Federal Circuit, while the court was equally divided on the status of the “system” claims. (Basically, there are several different ways that a software invention can be claimed in a patent, including as a process/method of performing steps; as software embedded upon a computer readable medium (i.e., a DVD); and as a system (i.e., software running on a machine/computer).) None of the remaining substantive opinions garnered more than 5 votes – thus, none are binding precedent. Although a majority of the Federal Circuit judges found the method and media claims invalid, a majority could not agree upon the reasoning. Below I will briefly provide a few preliminary observations about the opinions.

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Justice Ruth Bader Ginsburg headlines Thomas Jefferson Law School Women and Law Conference

Last Friday, Justice Ruth Bader Ginsburg spoke at the 13th Annual Women and Law Conference at Thomas Jefferson Law School. A packed house listened as panelists discussed a variety of issues relating to women in the judiciary, and the highlight of the day was an extended and candid Q&A with Justice Ginsburg herself. Read More

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DPAs and Corporate Governance

In this season’s law review submission process, I am circulating an article about deferred prosecution agreements (DPAs) and corporate governance.    DPAs are controversial tools increasingly-used to settle corporate criminal cases, usually without indictment. Targets admit facts, pay fines and promise governance reforms—such as replacing officers, adding directors and prescribing reporting lines.

Some view DPAs as coerced extractions of overzealous prosecutors, while others say they are mere whitewash that let corporate crooks off the hook. The weight of commentary urges prosecutors to get out of this business, to avoid corporate governance entirely, while some wonder why the intrusions are not deeper and more frequent.

I explain why prosecutors should invest in corporate governance and take a measured approach to reforming it. Ignoring governance can be perilous and embracing it can produce more effective reforms.

My diagnosis indicates a lack of both investment and transparency so I make two prescriptions: prosecutors should profile the corporate governance of businesses they target at the outset and publicly articulate rationales for reforms when settling.

The paper first surveys the landscape of contemporary corporate governance, stressing two normative points. First: one-size-does-not fit all. Corporate governance varies enormously from company to company, depending on such factors as ownership structures, management characteristics and employment policies. Second: failure to appreciate that poses serious risks, always to given companies, and sometimes to the economy at large.

That is the proper lesson to draw from the 2002 case of Arthur Andersen, where an indictment destroyed the auditing firm because it was a partnership owned and managed by its members in the veracity business.

Instead, prosecutors took a broader and cruder lesson: that they should always be averse to indicting any large business. The result of that aversion has been the proliferation of DPAs—which, despite controversy and criticism, is not necessarily a bad effect, so long as these lessons are incorporated into their production.

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Zelinsky on the Federal Law Clerk Hiring Crisis

My colleague Aaron Zelinsky, who is visiting with University of Maryland School of Law before heading off to the Supreme Court to clerk, has written an incisive post at the Huffington Post on the federal judiciary’s failure to stick to the hiring plan, the troubles defection causes, and his recommendation for what we ought to do about it.  The entire post is here.  For a bit of his wisdom:

So what’s to be done?

If judges are serious about creating a new plan to fix this race to the bottom, there’s an easy solution: use the old plan. The old plan worked just fine. It only had one problem; it was voluntary, so it unraveled. The solution is simple: make the plan mandatory.

Remember the story of Odysseus, who wanted to hear the song of the Sirens but was worried that doing so would cause him to sail too close to the rocks and wreck his ship? To get around the problem he had his crew tie him to the mast.

The judicial branch tried this solution with the old hiring plan, but they made a critical mistake: Odysseus didn’t tie himself to the mast. He had his crew do it. That way he couldn’t get the knots undone. Otherwise, tying yourself up is about as useful as putting that piece of chocolate cake in the back of the refrigerator. Sure, it helps for about ten minutes, but then you open the door, move the mayonnaise to the side, and there it is.

Instead of voluntary compliance, the judicial branch should ask someone else to tie them to the mast. In the context of our constitutional system, the term of art for this is one you may remember from middle school civics: the separation of powers.

Congress has the power of the purse. It allocates funds for building courthouses, keeping the lights on, and employing staff. For instance, law clerks are employed under 28 U.S.C. 752 (for district courts) and 28 U.S.C. 712 (for circuit courts). If the judiciary really wants to fix the hiring plan, then judges should request that Congress condition salaries for law clerks upon them being hired in compliance with the judicial hiring plan. In other words, if you don’t play by the rules, you don’t have law clerks.

But wait, isn’t that unconstitutional? Nope. The Constitution prevents Congress from lowering the salaries of federal judges, but says nothing about their staff (anyways, such a law could be written to apply only to those hired in the future, not those already employed). And Congress isn’t infringing on the judicial power in any way – this law does not effect how judges make use of their clerks, just the timing of how they hire them. And it would leave the actual formation of the plan up to the judiciary.

Federal judges could ask Congress to make the hiring plan mandatory via a proposal from a special judicial working group, or even in Chief Justice Roberts’s year end report to Congress. And they should. A new, mandatory plan would be fairer for less-advantaged law students and late-bloomers, more efficient for federal judges, and maybe even better for you.

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The Stanford Law Review Online: Defending DOMA in Court

Stanford Law Review

The Stanford Law Review Online has just published an Essay by Matthew I. Hall entitled How Congress Could Defend DOMA in Court (and Why the BLAG Cannot). Professor Hall argues that the Bipartisan Legal Advisory Group lacks standing to defend DOMA:

In one of the most closely watched litigation matters in recent years, the Supreme Court will soon consider Edith Windsor’s challenge to the Defense of Marriage Act (DOMA). The Court surprised many observers by granting certiorari, not only on the merits of Windsor’s equal protection and due process claims, but also on the question whether the defendants—the United States and the Bipartisan Legal Advisory Group of the House of Representatives (the BLAG)—have Article III standing to defend DOMA. The United States has agreed with plaintiffs that DOMA is unconstitutional, prompting the BLAG to intervene for the purpose of defending DOMA’s constitutionality. No lower court has yet addressed whether the BLAG has standing, so the Supreme Court will have the first crack at the issue. But it turns out that the answer is straightforward: Under settled precedent, the BLAG lacks authority to represent either the United States or Congress, and having claimed no interest of its own, it therefore lacks Article III standing.

He concludes:

Congress could solve these problems by statute or resolution, but until it does so the BLAG is a mere bystander, with no stake in defending DOMA. This lack of standing may play a decisive role in the Windsor litigation. Both the BLAG and the executive branch defendants appealed the District Court’s judgment to the Second Circuit, and petitioned the Supreme Court for certiorari. If the BLAG lacks standing, however, then it had no authority to appeal or to seek Supreme Court review, and the Court’s jurisdiction must turn on whether the United States, which has agreed with the plaintiff that DOMA is unconstitutional, has standing to proceed with the case. Interestingly, the BLAG itself has argued that no such standing exists—a controversial position that is beyond the scope of this short piece. But if the BLAG is correct, then there is no case or controversy before the Court, and the Court will have to dismiss for lack of jurisdiction. The widespread expectation that Windsor will be a significant decision appears to be well-founded. But it remains to be seen whether its significance will lie in the area of individual rights or in the areas of federal court jurisdiction and the separation of powers.

Read the full article, How Congress Could Defend DOMA in Court (and Why the BLAG Cannot) at the Stanford Law Review Online.

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The Good Life and Gun Control

Like many of you, I’ve been horrified by the events in Newtown, and dismayed by the debate that has followed.  Josh Marshall (at TPM) thinks that “this is quickly veering from the merely stupid to a pretty ugly kind of victim-blaming.”  Naive realism, meet thy kettle!  Contrary to what you’ll see on various liberal outlets, the NRA didn’t cause Adam Lanza to kill innocent children and adults, nor did Alan Gura or the army of academics who helped to build the case for an individual right to gun ownership.  Reading discussions on the web, you might come to believe that we don’t all share the goal of a society where the moral order is preserved, and where our children can be put on the bus to school without a qualm.

But we do.

We just disagree about how to make it happen.

Dan Kahan’s post on the relationship between “the gun debate”, “gun deaths”, and Newtown is thus very timely.  Dan argues that if we really wanted to decrease gun deaths, we should try legalizing drugs.  (I’d argue, following Bill Stuntz, that we also/either would hire many more police while returning much more power to local control).  But decreasing gun deaths overall won’t (probably) change the likelihood of events like these:

“But here’s another thing to note: these very sad incidents “represent only a sliver of America’s overall gun violence.” Those who are appropriately interested in reducing gun homicides generally and who are (also appropriately) making this tragedy the occasion to discuss how we as a society can and must do more to make our citizens safe, and who are, in the course of making their arguments invoking(appropraitely!) the overall gun homicide rate should be focusing on what we can be done most directly and feasibly to save the most lives.

Repealing drug laws would do more —  much, much, much more — than banning assault rifles (a measure I would agree is quite appropriate); barring carrying of concealed handguns in public  (I’d vote for that in my state, if after hearing from people who felt differently from me, I could give an account of my position that fairly meets their points and doesn’t trade on tacit hostility toward or mere incomprehension of  whatever contribution owning a gun makes to their experience of a meaningful free life); closing the “gun show” loophole; extending waiting periods etc.  Or at least there is evidence for believing that, and we are entitled to make policy on the best understanding we can form of how the world works so long as we are open to new evidence and aren’t otherwise interfering with liberties that we ought, in a liberal society, to respect.”

Dan’s post is trying to productively redirect our public debate, and I wanted to use this platform to bring more attention to his point.  But, I think he’s missing something, and if you follow me after the jump, I’ll tell you what.

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SCOTUS Sustains Assault on Contractual Freedom

The Supreme Court continues to reject freedom of contract and the power of contracting and state contract law in favor of its national policy favoring arbitration.  Most recently, in a per curium opinion in Nitro-Lift v. Howard, it said Oklahoma is not allowed to apply its own contract law to evaluate the validity of classic contract terms (here covenants not to compete). Instead, due to SCOTUS takes on a federal law and the presence of an arbitration clause in the contract, arbitrators make that decision.

The Court’s opinion stresses its conception of a national policy favoring arbitration, which it has found in recent decades in a century-old statute, the Federal Arbitration Act.  That emphasis on this “national policy” marks a retreat from the false pretenses that infect the Court’s precedents on the subject, which pretend to be engaged in the application of contract law.

Despite that improvement in the Court’s honesty, it remains the case that the Court’s approach to this subject diminishes traditional principles of contract laws and the value of contracts.  People are held to bargains they did not make or that are recognized by contract law as illegal.  But the Court insists that no court is allowed to consider these questions, thanks to its statement of national policy.

In numerous past SCOTUS cases, dissenting opinions were routinely filed exposing the flaws in the Court’s jurisprudence. The recent per curium opinion may signal capitulation, indicating that there are no longer any Justices prepared to object to these mistakes. That defeat means it is clearly time for Congress to rein the Court in. It should make it clear that state courts are responsible for developing and applying state contract law, not SCOTUS, federal courts or private arbitrators.

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Calling Liberal Pro-Business Judges

Andrew Cuomo, New York’s Democratic Governor, will have the responsibility of making two appointments to the state’s highest court, after the recent death of Judge Theodore T. Jones Jr. and the planned year-end retirement of Judge Carmen B. Ciparick (reaching the court’s mandatory retirement age of 70).  A screening commission will submit a list of names to the Governor from which to choose.

Since selection of judicial nominees is the prerogative of the chief executive, few could rebuke Cuomo for seeking judges in his own likeness. The Governor may prefer to appoint judges with liberal political, religious or social views without regard to other factors, such as a judge’s attitudes toward business.

Yet selections should be guided by the public interest, which may mean using broader criteria. As an extreme example, Mario Cuomo, when he was New York’s governor, deliberately appointed both Democratic and Republican judges to the court on the grounds that quality and balance were more important than quantity and ideology. Given New York’s role as a leading center of international commerce, however, there is a good case that the public interest calls for judges who understand the needs, values and realities of business.

When business people make contracts in New York, they want to know that the courts will uphold them as written and not rewrite them based on a judge’s notions of what is good for the parties. When corporations are formed in the state, entrepreneurs need flexibility and deference without the fear that courts will second-guess how they organized their companies or their business judgments. Judges who understand such business realities reinforce New York’s appeal as a commercial center and may be classified as “pro-business.”

Critics of the Supreme Court have politicized the concept by associating it with conservative thought: Republican justices are portrayed as pro-business, Democrats anti-business. Such an environment begs the question whether there is such a thing as a liberal judge who is also pro-business.

There is not necessarily anything conservative or liberal about being pro-business. True, two justices on the far left, William Brennan and Thurgood Marshall, showed a strong anti-business ideology. But other Democrats, including John Paul Stevens and Byron White, are not so readily classified, and Stephen Breyer’s opinions are quite business-friendly. Furthermore, many Republican justices, such as Sandra Day O’Connor and Potter Stewart, were not invariably pro-business.

The same has been true among judges on the New York Court of Appeals. Leading examples are former Chief Judges Stanley Fuld and Judith Kaye. Fuld was a progressive with Dewey-Republican leanings; Kaye is a Democrat with practicality and common sense. Fuld wrote an influential opinion (Walkovsky) upholding limited liability for corporate shareholders even when a business was structured for that sole purpose. Kaye wrote the important opinion (Levandusky)  that applied the deferential business judgment rule to decisions made by the boards of co-operative homeowners’ associations.

The screening commission and the Governor would do well to look at a class of jurists: experienced business lawyers. Alas, other than Robert S. Smith, the judges on New York’s Court of Appeals lack such experience.  Governor Cuomo has a chance to correct that deficiency, even while appointing judges who share his Democratic values.

Co-Op readers can help by leaving suggested nominees on the Comments section below!

Hat Tips: Stephen Bainbridge, Lester Brickman, Stephanie Cuba, Jeffrey Manns, John McGinnis and Stewart Sterk.

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Stanford Law Review Online: Pulling the Plug on the Virtual Jury

Stanford Law Review

The Stanford Law Review Online has just published a Note by Nicolas L. Martinez entitled Pulling the Plug on the Virtual Jury. Martinez takes issue with Judge William Young’s proposal that Khalid Sheikh Mohammed be tried via videoconference from Guantanamo Bay by a jury sitting in New York:

Most people probably figured that the debate over where to try alleged 9/11 mastermind Khalid Sheikh Mohammed (“KSM”) had ended. Indeed, it has been well over a year since Congress forced Attorney General Eric Holder to reluctantly announce that KSM’s prosecution would be referred to the Department of Defense for trial before a Guantanamo military commission. But a provocative proposal put forth recently by Judge William G. Young of the District of Massachusetts has revitalized one of the most contentious legal debates of the post-9/11 era. In a nutshell, Judge Young proposes that an Article III court try KSM at Guantanamo, but with one major twist: the jury would remain in New York City.

He concludes:

Perhaps unwilling to refight the battles of two years ago, Congress has shown no inclination to retreat from its apparent view that KSM may only be tried by a military commission at Guantanamo. As a result, following through on Judge Young’s plan, which could be viewed as an attempt to circumvent the will of Congress, might lead some legislators to harden their stance on civilian trials for alleged terrorists and propose even more disagreeable legislation to that end. This is not to say that creative solutions aimed at fortifying the rule of law in a post-9/11 world should be held hostage to the proclivities of intransigent voting blocs in Congress. Quite the opposite, in fact. But the likely political ramifications of Judge Young’s proposal cannot be ignored, especially in an election year when few members of Congress may be willing to spend their political capital defending the need to hold KSM’s trial in federal court.

Even though Judge Young’s provocative suggestion should not be adopted in its current form, he has moved the conversation in the right direction. Continuing to think imaginatively about ways to preserve our rule of law tradition from external threats is immensely important, particularly in the context of national security crises. For it is when the rule of law can be so easily discarded that it must be most doggedly defended.

Read the full article, Pulling the Plug on the Virtual Jury at the Stanford Law Review Online.