On Friday, September 18, 2015 Washington and Lee law professor Christopher Seaman spoke to the Virginia State Bar’s Intellectual Property Section on proposed legislation to create a federal civil cause of action for trade secret misappropriation. The presentation built on Professor Seaman’s article, The Case Against Federalizing Trade Secrecy, which was recently published in the April 2015 issue of the Virginia Law Review.
From the abstract:
Trade secrecy is unique among the major intellectual property (IP) doctrines because it is governed primarily by state law. Recently, however, a number of influential actors — including legislators, academics, and organizations representing IP attorneys and owners — have proposed creating a private civil cause of action for trade secret misappropriation under federal law. Proponents assert that federalizing trade secrecy would provide numerous benefits, including substantive uniformity, the availability of a federal forum for misappropriation litigation, and the creation of a unified national regime governing IP rights.
This Article engages in the first systematic critique of the claim that federalizing trade secrecy is normatively desirable. Ultimately, it concludes that there are multiple reasons for trade secrecy to remain primarily the province of state law, including preservation of states’ ability to engage in limited experimentation regarding the scope of trade secret protection and federalization’s potential negative impact on the disclosure of patent-eligible inventions. Finally, it proposes an alternative approach — a modest expansion of federal courts’ jurisdiction over state law trade secret claims — that can help address the issue of trade secret theft without requiring outright federalization.
On September 3, 2015, Washington and Lee law professor Victoria Sahani presented her latest work-in-progress, Reshaping Risk in Third-Party Funding, at the Iowa Innovation, Business & Law Center at the University of Iowa College of Law. Professor Sahani’s talk launched the Innovation, Business, & Law Colloquium (IBL Colloquium) hosted by the Center. The Fall 2015 IBLC Colloquium features six nationally renowned scholars in antitrust, business, and intellectual property law, including Professor Sahani, who will present their work around the theme “Intangible Assets and the Firm.”
From the abstract:
Third-party funding is an arrangement whereby an outside entity finances the legal representation of a party involved in litigation or arbitration. The outside entity – called a “third-party funder” – could be a bank, hedge fund, insurance company, or some other entity or individual that finances the party’s legal representation in return for a profit. Third-party funding is a controversial, dynamic, and evolving phenomenon. The structure of the third-party funding transaction often is depicted as a triangle shape connecting the funder, attorney, and client. The lines between each of the points on the triangle represent signed contracts between those participants in the funding transaction. Academic literature and state legislators have attempted to solve the potential problems of third-party funding while working within the confines of this seemingly immutable triangle structure. As this Article explains, however, the reality is that there is no triangle in third-party funding. Current law allows contracts between only two of the three participants (funder, client, and attorney) in any given third-party funding transaction. Thus, in reality, the existing third-party funding transaction looks more like a V shape, not a triangle.
This Article challenges the paradigmatic triangular or V-shaped representation of the third-party funding transaction between the funder, client, and attorney. It proposes other transaction structures that would be better suited to addressing potential problems, such as conflicts of interest, evidentiary privileges, and the funder’s exercise of control over the process. The Article argues that the uncertainty surrounding the effect of those and other potential problems creates risks for the funder, client, and attorney. Those risks in turn inflate the price of third-party funding capital. Reshaping the structure of the third-party funding transaction to mitigate those risks will reduce the price of third-party funding capital, which will in turn create more competition among funders in the third-party funding market and encourage individual funders to fund a larger number of cases to meet their revenue goals. Increased competition among more funders funding a larger number of cases will give potential clients wider access to third-party funding and more bargaining power to keep a larger share of their winnings while still benefiting from third-party funding capital.
In addition to bringing down prices and expanding access, reshaping the third-party funding transaction will help guide legislative choices by better defining the funder’s role and the legal relationships that the laws aim to regulate and encourage. Furthermore, reshaping the transaction will give guidance to funders regarding appropriate transactional structures and will give attorneys a clearer sense of their obligations under their professional ethics rules. Moreover, clients will be better informed regarding the baseline structural choices that they should make when deciding whether to hire a particular funder. Finally, exploring multiple transaction structures for third-party funding will allow for flexibility in creating bespoke third-party funding arrangements and will better protect less sophisticated clients and parties.
From the abstract:
Property is the law of lists and ledgers. County land records, stock certificate entries, mortgage registries, Uniform Commercial Code filings on personal property, copyright and patent registries of interests in intellectual property, bank accounts, domain name systems, and consumers’ Kindle e-book collections in the cloud are all merely entries in a list, determining who owns what.
Each such list has suffered a traditional limitation. To prevent falsification or duplication, a single entity must maintain the list, and users must trust (and pay) that entity. As a result, transactions must proceed at significant expense and delay. Yet zero or near-zero transaction costs are the fuel of Internet scalability. Property transactions have not yet truly undergone an Internet revolution at least partly because they are constrained by the cost of creating centralized trusted authorities.
This Article reimagines the contours of digital property if that central constraint were removed. There is every reason to believe it can be. Increased interest in cryptocurrencies has driven the development of a series of technologies for creating public, cryptographically secure ledgers of property interests that do not rely on trust in a specific entity to curate the list. Previously, the digital objects that users could buy and sell online were not rivalrous in the same way as offline physical objects, unless some centralized entity such as a social network, digital currency issuer, or game company served the function of trusted list curator. Trustless public ledgers change this dynamic. Counterparties can hand one another digital, rivalrous objects in the same way that they used to hand each other gold bars or dollar bills. No intermediary or curator is needed.
In addition, the advent of this technology provides an opportunity to discuss property interests in information environments. Property online is currently anemic. Consumers control few online resources and own even fewer. This is in no small part due to antiquated notions of property as the law of physical, tangible resources. Given new technology that can create digital, scarce, and rival intangible assets, these basic assumptions should be reexamined and replaced with a theory of property as an information communication and storage system. That is the project of this piece.
Washington and Lee law professor Christopher Seaman’s new paper Permanent Injunctions in Patent Litigation After eBay: An Empirical Study, was recently posted on SSRN and is listed in numerous Top Ten lists of most downloaded new articles, including Intellectual Property Law, Innovation Law and Policy, Experimental and Empirical Studies, and Judgments and Remedies.
The article was also recently featured in posts on Patently-O, an influential patent law blog, Written Description, Legal Theory Blog, Empirical Legal Studies Blog, and Comparative Patent Remedies Blog.
From the abstract:
The Supreme Court’s 2006 decision in eBay v. MercExchange is widely regarded as one of the most important patent law rulings of the past decade. Historically, patent holders who won on the merits in litigation nearly always obtained a permanent injunction against infringers. In eBay, the Court unanimously rejected this “general rule” that a prevailing patentee is entitled to an injunction, instead holding that lower courts must apply a four-factor test before granting such relief. Almost ten years later, however, significant questions remain regarding how this four-factor test is being applied, as there has there has been little rigorous empirical examination of eBay’s actual impact in patent litigation.
This Article helps fill this gap in the literature by reporting the results of an original empirical study of contested permanent injunction decisions in district courts for a 7½ year period following eBay. It finds that eBay has effectively created a bifurcated regime for patent remedies, where operating companies who compete against an infringer still obtain permanent injunctions in the vast majority of cases that are successfully litigated to judgment. In contrast, non-practicing entities almost always are denied injunctive relief. These findings are robust even after controlling for the field of patented technology and the particular court that decided the injunction request. It also finds that permanent injunction rates vary significantly based on patented technology and forum. Finally, this Article considers some implications of these findings for both participants in the patent system and policy makers.
In late April, Washington and Lee law professor Mark Drumbl gave a lecture at the University of Cologne entitled “Thinking Twice About Child Soldiers,” which addressed a number of arguments made in a CNN op/ed and also a blog post. In May, he taught a course on public international law held at Herstmonceaux Castle, in southern England near Hastings and traveled to the Czech Republic to give a public lecture on “Atrocity Then, Trials Now: The Value of Delayed Justice.” This talk, delivered at Masaryk University School of Law, examined the justifications for prosecuting 93 year-old Oskar Groening, who is currently on trial in Germany and who had served as the accountant and bookkeeper at Auschwitz in the 1940’s.
Finally, in June Drumbl gave a lecture to lawyers at the Department of Justice on evidentiary challenges in securing convictions under the US Child Soldiers Accountability Act, which gives US courts the ability to prosecute individuals who unlawfully recruit children under the age of fifteen into armed forces or armed groups anywhere in the world.
On Tuesday, June 9, Washington and Lee Law Professor Christopher Bruner spoke at the University of Hong Kong on his current book project examining the role of small jurisdictions in cross-border corporate and financial services, titled Market-Dominant Small Jurisdictions in a Globalizing Financial World (forthcoming, Oxford University Press). The seminar was sponsored by the Asian Institute of International Financial Law, a research center of UHK’s Faculty of Law, where Professor Bruner has pursued his research on Hong Kong’s financial center as a Visiting Fellow.
Assistant Dean for Legal Information Services and Professor Legal Research Caroline Osborne recently spoke at the University of North Texas Annual Open Access Symposium. The event was held on May 18 and 19, 2015 at the UNT Dallas College of Law and titled “Open Access, the Law, and Public Information.”
The 2015 symposium examined aspects of how the law relates to the open access movement, including copyright law, privacy law, access to government information, and access to and use of legal literature online. Dean Osborne presented a program, “The Open Access Advantage for American Law Reviews” with Carol Watson of the University of Georgia and James Donovan of the University of Kentucky.