Notes

Sarbanes-Oxley and the accompanying era of heightened corporate governance dramatically changed the composition, role, and responsibilities of corporate boards. As a result of these changes, many of the justifications for traditional director compensation plans no longer apply. As directors struggle with their new responsibilities as independent corporate monitors, the manner in which they are compensated must reflect these changes. A director compensation plan in which directors receive compensation primarily in the form of cash, coupled with finely tailored equityholding requirements, strikes the right balance of director independence and director accountability. It also facilitates the creation of corporate boards drawn from a more diverse pool of talent.

New technologies such as the VCR and Google Book Search can change the way copyrighted works are used, thereby making their innovators rich. Copyright owners are aware of these riches and often strategically sue the technology companies with the aim of gaining a share of the money. This dynamic—an innovator investing to create a new technology and a creator of a copyrighted work then suing for her share of the profits—creates an investment incentive problem. The dual goal of promoting the efficient creation of both new copyrighted works and new technologies that augment those works requires us to choose a legal rule that divides the gains from these new technologies between authors and innovators. The fair use doctrine—the statutory rule that allows some types of copyright infringement—is the legal rule that is used to do this dividing. However, economic theories of copyright law do not contain an analysis of investment incentives. This Note analyzes the effects fair use has on the incentives to create copyrighted works and to invest in technologies that affect those works.

Since its emergence in the 1990s, Internet gambling has grown into a $12-billion-per-year industry. In October 2006 Congress passed the Security and Accountability for Every Port Act, which includes a provision that prohibits domestic financial institutions from moving funds to and from online casinos, all of which are located overseas. While the new law has certainly caused a major stir in the Internet gambling community, users and overseas companies are continuing to find new ways to circumvent it. In this Note, the author first gives an overview of the gambling industry and the problems it poses to gamblers and communities. The author then reviews the tactics Congress attempted to use over the last decade in fighting Internet gambling—criminalizing the operation of a gambling website, criminalizing individual gambling, and criminalizing funds transfers to and from casinos—and explains why each method fails to address, and often exacerbates, the very problems the legislation seeks to resolve. The author then proposes a new method of regulation and explores how that system could significantly reduce the problems of Internet gambling.

This Note analyzes the National Football League’s (NFL) 2002 decision to implement an innovative—and controversial—policy aimed at increasing the League’s number of minority head coaches. Designated the “Rooney Rule,” the policy mandates that every NFL team interview at least one minority candidate upon the vacancy of a head coaching position or be subjected to a significant monetary fine. Despite ongoing allegations that it promotes tokenism and is a form of reverse discrimination, the Rule has reached uncharted success. While other professional sports with large minority populations (e.g., the National Basketball Association) have succeeded in integrating their head coaching positions over the past twenty years without analogous action, this Note argues that the pre–Rooney Rule NFL hiring process remained relatively static because decisionmakers unwittingly held (and often still hold) archaic biases regarding the intellectual ability of minority candidates to handle the high degree of organizational complexity in football. By deftly traversing the line between “soft” and “hard” variants of affirmative action, the Rule has proven effective because it forces decisionmakers harboring this unconscious bias to expand previously restricted coaching networks and come face-to-face with a candidate they would never have considered otherwise.

In this Note, the author argues that sunset provisions associated with tax legislation are, in their current form, the product of political maneuvering designed to bypass budgetary constraints and are exploited as a means of enacting what is, in reality, permanent legislation. The use of sunsets in this manner has lead to considerable uncertainty regarding the future of their associated tax provisions. This uncertainty, in turn, has created opportunities for legislators to extract rents from lobbyists, generated inefficiencies for both taxpayers and the government, and increased overall tax code complexity. These problems can be minimized, however, if sunsets are used in a more principled manner. This Note argues that sunset clauses in tax legislation can be made more efficient by limiting both the occasions in which sunsets are employed as well as the procedures used to implement them. First, sunsets should only be used in conjunction with certain kinds of tax incentives: The incentives should be simple, of limited duration, and provide diffuse rather than concentrated benefits. Second, sunsets should only be implemented through a limited set of congressional budgetary procedures: They should only be included as part of the reconciliation process for enacting fiscal legislation if the underlying bill increases rather than decreases revenue, and if Congress enacts and adheres to a revenue-neutral, pay-as-you-go set of budgetary rules. These changes, both substantive and procedural, will increase overall efficiency in the use of sunset provisions in tax legislation.

Although the United States’ so-called “War on Terror” has entailed significant military action, it has also involved the augmentation of the executive’s law enforcement powers. The result has been the emergence of a distinct “counterterrorism” model of coercive government action, falling between the traditional models of war and criminal law enforcement. This Note seeks to place the U.S. counterterrorism model within a larger international context by comparing it with that of another Western democracy, Spain. The author contends that the U.S. model evinces less respect for customary checks and balances than does the Spanish. Nonetheless, the author questions whether the Spanish model’s greater relative commitment to checks and balances has in practice prevented government overreaching. The author concludes that both the Spanish executive and Parliament have overstepped the bounds of their constitutionally prescribed counterterrorism competences, despite the existence of checks and balances. In addition to suggesting that these excesses may be partially attributed to the institutional heritage of Francoist Spain, the author surmises that government overreaching may be endemic in any regime, such as the Spanish, that transparently vests special counterterrorism competences in the executive and legislative branches.

Federal judges are expected to conduct themselves differently than their counterparts in the political branches. This Note considers the policy and historical reasons used to justify this different standard of conduct and concludes that these justifications are largely unsupported or overstated. These erroneous justifications obfuscate the debate over extrajudicial conduct and may result in a suboptimal level of extrajudicial activity.

Intersexed children are born with genitalia and/or reproductive organs that do not look like those of most biological males or females. Doctors and parents usually assign an intersexed child a gender at birth or during early childhood. Occasionally, an individual will reject his or her gender of assignment and will want to take on a different gender role. Some clinicians and intersex advocates instruct parents to accept an intersexed child’s expressions of gender identity and to support the child’s gender role change. There is a risk, however, that parents may resist or prevent a child’s gender transition due to their own discomfort with the idea or based on a physician’s recommendation. A statutory framework that allowed intersexed minors to complete a “social gender transition,” coupled with a provision equating parental interference with this transition with actionable neglect, would protect intersexed children’s autonomy and prevent the trauma that can result from a forced existence in a gender role with which a child does not identify. The proposed framework would likely survive a constitutional challenge by the parents of an intersexed child because the harm caused by the parental decision to interfere with a child’s gender expression removes such interference from the realm of constitutionally protected parental decisionmaking.

Generally, in order to infringe a U.S. patent, the entire patented invention must be practiced within the United States. However, as technology evolves it is becoming harder to contain inventions within national borders. Specifically, the advancement of networking and communications technologies allows for the rapid, cost-efficient dissemination of information across countries’ borders. As a result, the number of inventions that are being practiced in multiple jurisdictions, or the practicing of divided infringement, is on the rise. Potential infringers that commit divided infringement are practicing patented inventions, escaping liability in all jurisdictions, but still reaping the rewards of the American market. Consequently, potential infringers who commit divided infringement are undercutting the incentive to innovate, the primary purpose of the patent system. To solve the problem of divided infringement, this Note proposes expanding the extraterritorial scope of U.S. patent law by adopting a substantial effects test, limited by comity concerns.

DNA databases enable extremely accurate criminal identification, and a database with appropriate privacy safeguards could be a boon not only for law enforcement but for civil libertarians as well. Unfortunately, current DNA databases lack important precautions and expose DNA donors to serious risks of abuse. The courts that have heard Fourth Amendment challenges to these databases have uniformly upheld them using one of two different rationales. Some courts have held that DNA databases serve a special need, and others have held that the convicted offenders targeted by current statutes have diminished privacy interests in their DNA. However, neither rationale provides a convincing justification for compelling individuals to provide DNA for a database, with or without safeguards. The problem is not with the substantive reasonableness of DNA collection for an ideal database, but with crafting a judicial decision procedure that allows only reasonable databases and not unreasonable ones. The solution proposed by this Note, accordingly, is an alternative decisionmaking procedure that enlists the assistance of the political process. Under the “universality exception” to the warrant requirement proposed by this Note, a search is reasonable if it is authorized by a statute that truly applies equally to every member of the population. The political process leading to the enactment of a universal DNA database, which this exception would require, would ensure that any such database had appropriate safeguards.