New W&L Faculty Papers at SSRN
Several new papers by W&L faculty are available for download from SSRN, including articles by professors Benjamin Spencer, Christopher Seaman, Christopher Bruner and Joshua Fairfield. Titles and abstracts are below:
Avatar Experimentation: Human Subjects Research in Virtual Worlds
Tue, 07 Aug 2012 | Joshua A.T. Fairfield
Researchers love virtual worlds. They are drawn to virtual worlds because of the opportunity to study real populations and real behavior in shared simulated environments. The growing number of virtual worlds and population growth within virtual worlds has led to a sizeable increase in the number of human subjects experiments taking place in such worlds. Virtual world users care deeply about their avatars, their virtual property, their privacy, their relationships, their community, and their accounts. People within virtual worlds act much as they would in the physical world because the experience of the virtual world is “real” to them. The very characteristics that make virtual worlds attractive to researchers complicate ethical and lawful research design. The same principles govern research in virtual worlds and the physical world. However, the change in context can cause researchers to lose sight of the fact that virtual world research subjects may suffer very real harm to property, reputation, or community as the result of flawed experimental design. Virtual world research methodologies that fail to consider the validity of users’ experiences risk harm to research subjects. This Article argues that researchers who put subjects’ interests in danger run the risk of violating basic human subjects research principles. Although hundreds of articles and studies examine virtual worlds, none have addressed the interplay between the law and best practices of human subjects research in those worlds. This Article fills that gap. Virtual worlds are valuable research environments precisely because the relationships and responses of users are measurably real. This Article concludes that human subjects researchers must protect the very real interests of virtual worlds inhabitants in their property, community, privacy, and reputations.
Conceptions of Corporate Purpose in Post-Crisis Financial Firms
Wed, 01 Aug 2012 | Christopher M. Bruner
American “populism” has had a major impact on the development of U.S. corporate governance throughout its history. Specifically, appeals to the perceived interests of average working people have exerted enormous social and political influence over prevailing conceptions of corporate purpose – the aims toward which society expects corporate decision-making to be directed. This essay assesses the impact of American populism upon prevailing conceptions of corporate purpose – contrasting its unique expression in the context of financial firms with that arising in other contexts – and then examines its impact upon corporate governance reforms enacted in the wake of the financial and economic crisis that emerged in 2007. I first explore how populism has historically shaped conceptions of corporate purpose in the United States. While the “employee” conceptual category best encapsulates the perceived interests of average working people in the non-financial context, the “depositor” conceptual category best encapsulates their perceived interests in the financial context. Accordingly, American populism has long fostered strong emphasis on the interests of bank depositors, resulting in striking corporate architectural strategies aimed at reducing risk-taking to ensure firm sustainability – notably, imposing heightened fiduciary duties on directors and personal liability on shareholders. I then turn to the crisis, arguing that growing shareholder-centrism over recent decades goes a long way toward explaining excessive risk-taking in financial firms – a conclusion rendering post-crisis reforms aimed at further strengthening shareholders a surprising and alarming development. While populism has remained a powerful political force, it has expressed itself differently in this new environment, fueling a crisis narrative and corresponding corporate governance reforms that not only fail to acknowledge the role of equity market pressures toward excessive risk-taking in financial firms, but that effectively reinforce such pressures moving forward. I conclude that potential corporate governance reforms most worthy of consideration include those aimed at accomplishing precisely the opposite, which may require resurrecting corporate architectural strategies embraced in the past to reduce risk-taking in financial firms. As a threshold matter, however, we must first grapple effectively with a more fundamental and pressing social and political problem – the popular misconception that financial firms exist merely to maximize stock price for the short-term benefit of their shareholders.
Best Mode Trade Secrets
Fri, 27 Jul 2012 | Christopher B. Seaman
Trade secrecy and patent rights traditionally have been considered mutually exclusive. Trade secret rights are premised on secrecy. Patent rights, on the other hand, require public disclosure. Absent a sufficiently detailed description of the invention, patents are invalid. However, with the passage of the Leahy-Smith America Invents Act (“AIA”) last fall, this once black-and-white distinction may melt into something a little more gray. Now, an inventor’s failure to disclose in her patent the preferred method for carrying out the invention — the so-called “best mode” — will no longer invalidate her patent rights or otherwise render them unenforceable. In this Essay, we explain why it may become routine post-patent reform for patentees to attempt to assert both patent rights and trade secret rights for preferred embodiments of their invention in certain types of cases. We also consider potentially undesirable ramifications of this change and suggest one approach courts may use to limit claims of concurrent trade secret and patent protection when equity demands.
Class Actions, Heightened Commonality, and Declining Access to Justice
Fri, 20 Jul 2012 | A. Benjamin Spencer
A prerequisite to being certified as a class under Rule 23 of the Federal Rules of Civil Procedure is that there are “questions of law or fact common to the class.” Although this “commonality” requirement had heretofore been regarded as something that was easily satisfied, in Wal-Mart Stores, Inc. v. Dukes the Supreme Court gave it new vitality by reading into it an obligation to identify among the class a common injury and common questions that are “central” to the dispute. Not only is such a reading of Rule 23’s commonality requirement unsupported by the text of the rule, but it also is at odds with the historical understanding of commonality in both the class action and joinder contexts. The Court’s articulation of a heightened commonality standard can be explained by a combination of its negative view of the merits of the discrimination claims at issue in Dukes, the conflation of the predominance requirement with commonality, and the Court’s apparent penchant for favoring restrictive interpretations of procedural rules that otherwise promote access. Although an unfortunate consequence of the Dukes Court’s heightening of the commonality standard will be the enlivening of challenges to class certifications that otherwise would never have been imagined, this Article urges the Court to reject heightened commonality and read Rule 23 in a manner that remains true to the language and history of the common question requirement.