On April 15, 2013, the U.S. Supreme Court heard oral arguments in Association for Molecular Pathology v. Myriad Genetics, Inc. on the question, “Are human genes patentable?” This article argues that human genes are not patentable and that isolating a gene from its surroundings in a human body—or creating synthetically what exists in nature as DNA—does not cause the DNA to become patentable subject matter. The isolated DNA segments of claim 1 have the identical nucleotide sequence and the same function as native DNA, and the isolated DNA of claim 1 do not reflect the marked changes required under Chakrabarty, or the inventive step required under Prometheus, to change an unpatentable product of nature into patentable subject matter. Claim 2 describes those nucleotides in the DNA sequence that code for the polypeptide identified in the Myriad Genetics patent specification and simply reflects the genetic code, an unpatentable law of nature. Since no inventive step has been added to the law of nature, claim 2 constitutes unpatentable subject matter under Prometheus. The Federal Circuit’s contrary decision in Myriad Genetics disregards 150 years of Supreme Court cases that physical phenomena found in nature and laws of nature are not patentable subject matter and threatens to enclose building blocks of nature under federal patent law. The Supreme Court should reverse the Federal Circuit’s decision in Myriad Genetics on claims 1 and 2.

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Cite: 11 Duke L. & Tech. Rev. 434

By: Michael P. McEvilly

After a lengthy premarket approval process, the Food and Drug Administration (FDA) is soon likely to deem AquAdvantage Salmon, a fast-growing, genetically engineered salmon, safe for human consumption. If approved, AquAdvantage Salmon will be the first genetically engineered animal designed for human consumption to go to market in the United States. Because there have been no significant changes to the statutory or regulatory framework governing agricultural biotechnology since it was established in the 1980s, the FDA reviews applications of genetically engineered animals under the New Animal Drug Application (NADA) provisions of the Federal Food, Drug, and Cosmetic Act (FDCA). The FDA’s treatment of genetically engineered food as a new animal drug has been criticized due to potential environmental and human health risks, and because of a lack of transparency throughout the regulatory process. After providing an overview of the premarket approval process, this Issue Brief argues that even under the NADA provisions, the FDA’s premarket approval risk assessment should be more transparent. In particular, the justification for trade secret status of relevant biotechnology is undermined, if not extinguished, by the need for public consideration of the biotechnology’s safety and effectiveness after a certain time in the approval process. Furthermore, the comment period prior to advisory committee meetings should be lengthened to allow for greater scientific input on safety and effectiveness, and an independent body should be created to communicate with the public about food safety.

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Cite: 11 Duke L. & Tech. Rev. 413

By: Lesley Hamming

Despite the intellectual property system’s success in promoting the economic well-being of the United States, this system has not achieved all socially valuable ends. Insufficient treatments are applied both to diseases endemic in developing countries, such as malaria, and rare diseases, such as rare childhood cancers. This Issue Brief reviews the existing legislative tools for promoting socially valuable drugs and biologics through market incentives. The priority review voucher (PRV) program is the latest and most unique of these legislative tools aimed at encouraging the development of drugs for neglected diseases without burdening taxpayers. The Creating Hope Act—recently signed into law as part of the Food & Drug Administration Safety & Innovation Act—extends the PRV program to rare pediatric diseases. This Issue Brief argues that some provisions in this new legislation may result in undesirable collateral effects that could prevent the legislation from fulfilling its objective of encouraging investment in treatments for rare pediatric diseases.

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Cite: 11 Duke L. & Tech. Rev. 390

By: Sara Jeruss, Robin Feldman, & Joshua Walker

Any discussion of flaws in the United States patent system inevitably turns to the system’s modern villain: non-practicing entities, known more colorfully as patent trolls. For many years, however, discussions about non-practicing entities have been long on speculation and short on data.

In 2011 Congress directed the nonpartisan Government Accountability Office to study the effects of non-practicing entities on patent litigation. At the request of the GAO, we collected and coded a set of patent lawsuits filed over the past five years. This article presents our analysis of the data and its implications.

The data confirm in a dramatic fashion what many scholars and commentators have suspected: patent monetization entities play a role in a substantial portion of the lawsuits filed today. Based on our sample, lawsuits filed by patent monetizers have increased from 22% of the cases filed five years ago to almost 40% of the cases filed in the most recent year. In addition, of the five parties in the sample who filed the greatest number of lawsuits during the period studied, four were monetizers and only one was an operating company.

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Cite: 11 Duke L. & Tech. Rev. 357

By: Brad Turner

The Active Denial System (ADS) is unlike any other nonviolent weapon: instead of incapacitating its targets, it forces them to flee, and it does so without being seen or heard. Though it is a promising new crowd-control tool for law-enforcement, excessive-force claims involving the ADS will create a Fourth Amendment jurisprudential paradox. Moreover, the resolution of that paradox could undermine other constitutional principles—like equality, fairness, and free speech. Ultimately, the ADS serves as a warning that without legislation, American jurisprudence may not be ready for the next generation of law-enforcement technology and the novel excessive-force claims sure to follow.

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Cite: 11 Duke L. & Tech. Rev. 332

By: Lauren Ann Ross

This Issue Brief explores an oft-neglected irony in international e-discovery: the rationales used by courts to compel discovery against foreign parties embroiled in litigation in U.S. courts may contradict courts’ reasoning when compelling discovery against U.S. parties engaged in litigation overseas. U.S. courts often grant petitions for discovery, increasingly electronic in form, both against a foreign party in the U.S. and against a domestic party abroad. Although allowing discovery in both scenarios appears consistent, it actually ignores important counterconsiderations like fairness and reciprocity in different legal systems. Because the rise of technology has exacerbated the existing problem, making discovery more expensive and time-consuming, this Brief proposes that, when examining 28 U.S.C. § 1782 claims, courts adopt a more conservative approach to foreign-discoverability and a comparative approach to the balancing test set forth in Intel Corp. v. Advanced Micro Devices, Inc.

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Cite: 11 Duke L. & Tech. Rev. 313

By: Sandra L. Rierson

Statutory dilution claims are traditionally justified on the theory that even non-confusing uses of a famous trademark (or similar mark) can nonetheless minutely dilute the source-identifying capacity of the targeted trademark. This Article challenges that theory. The evidence that this phenomenon occurs is weak and has been subject to substantial empirical challenge. The true foundation for dilution claims lies not in alleged economic harms, but rather the misplaced fiction of corporate personality. We do not require trademark holders to prove actual economic injury in the context of a dilution claim because, at least in the vast majority of cases, there is none. Instead, we have granted the holders of famous trademarks the equivalent of a “moral” right to these marks, analogous to the rights granted to a creator of an expressive work in the copyright context. The parameters of that right have recently expanded in numerous ways that have increasingly burdened both competition and free speech. Recasting dilution law in a moral rights framework allows us to more accurately assess its costs and benefits, with normative implications for its continued existence and scope. In particular, the federal dilution statute should be repealed, amended, or, at the very least, narrowly construed.

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Cite: 11 Duke L. & Tech. Rev. 212

By: Libby Greismann

Copyright law aims to promote the dual goals of incentivizing production of literary and artistic works, and promoting public access and free speech. To achieve these goals, Congress has implemented a policy that acknowledges the rights of both the copyright holder and the public, which vest with the fixation of the work. However, as Congressional action has strengthened copyright protection, the rights of the public have been narrowed. Orphan works – works to which the copyright owner cannot be located or identified – present a unique problem, in that achieving free access and use of the works is often impossible. This note argues that the public has a recognizable right in both gaining access to and using orphan works – a right which emanates from, but is tangential to, the First Amendment right to free speech.

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Cite: 11 Duke L. & Tech. Rev. 193

By: Richard M. Lee

This Issue Brief examines recent cases addressing the patent eligibility of computer-implemented method claims and their implications for the development of cloud computing technologies. Despite the Supreme Court’s refusal to endorse the machine-or-transformation test as the exclusive patent eligibility inquiry, lower courts have continued to invalidate method claims using a stringent “particular machine” requirement alongside the requisite abstract ideas analysis. This Issue Brief argues that 1) post-Bilski v. Kappos cases have failed to elucidate what constitutes a particular machine for computer-implemented methods; 2) in light of substantial variance among Federal Circuit judges’ Section 101 jurisprudence, the application of the particular machine requirement has become subject to a high degree of panel-dependency, such that its relevance for analyzing software method claims has come under question; 3) notwithstanding the unease expressed by practitioners and scholars for the future of cloud computing patents, the courts’ hardening stance toward computer-implemented method claims will do little to deter patenting in the cloud computing context. Instead, clouds delivering platform and software services will remain capable of satisfying the particular machine requirement and supporting patent eligibility, especially given the possible dilution of the particular machine requirement itself.

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Cite: 11 Duke L. & Tech. Rev. 175

By: Timothy J. Calloway

“To the cloud!” trumpets a commercial by Microsoft, whose aim is to herd customers, and their checkbooks, into the cloud computing fold. But Microsoft, and other cloud providers like Amazon and Google, might inadvertently be doing just the opposite. It is not for lack of security or even early adopter apprehension that potential customers might turn away. Nor is it a lack of fantastic, cost-saving applications of cloud technology.

Rather, the problem is buried deep within these tech giants’ clickwrap agreements—the ones that customers rarely read and to which they invariably click “I Agree.” Hidden in these agreements are limitation on liability clauses, veritable safe harbors for cloud providers and submerged icebergs for the unwary cloud customer. Often, these clauses wholly abrogate a customer’s right to recover damages for his provider’s wrongful acts. In other words, a provider could purposefully delete its customers’ data or shut down its users’ websites, leaving the aggrieved customers with no cause of action and no right to recover.

While limitation on liability clauses are not new to the contract law vernacular, their inclusion in cloud computing agreements is particularly troublesome. The amount of potential liability that customers may waive through a half-cocked click is as enormous as it is troubling. While courts have recently held that these clauses are enforceable in other Internet-related areas, courts should be wary of blindly applying precedent and enforcing these clauses in the cloud computing context.

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Cite: 11 Duke L. & Tech. Rev. 163

By: Jing Xu

SoundCloud is an online service provider that allows users to upload, share, and download music that they have created. It is an innovative platform for both amateur and established producers and disc jockeys (DJs) to showcase their original tracks and remixes. Unfortunately, it is also a platform that lends itself to widespread copyright infringement. Looking toward potential litigation, several factors ought to be considered by SoundCloud and other similar providers. The Viacom v. YouTube case, decided in the Southern District of New York and now currently on appeal in the Second Circuit, sheds light on the potential liability service providers like SoundCloud face. It draws out the Digital Millennium Copyright Act’s (DMCA) safe harbor provisions under which SoundCloud could potentially find protection. However, SoundCloud is unique among similar service providers because it provides users with a variety of viewing, sharing and downloading options that are built into the platform. These options could lead to infringement that would not fall under a DMCA safe harbor. This Issue Brief will discuss the various arguments to be made for and against SoundCloud’s liability, and examine whether the unique utility provided by the service to users could be sustained in the face of potential litigation. Ultimately, the safeguards used by SoundCloud to filter blatant infringement, combined with the DMCA § 512(c) safe harbor, should allow this innovative platform to maintain its current model without neutering its core functionality.

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Cite: 11 Duke L. & Tech. Rev. 145

By: Aarthi S. Anand

Before striking down laws increasing copyright’s domain, judges and legislators are asking for evidence that information products will be created even if copyright protection is not provided. The future of Internet technology depends on locating this evidence in time to limit expansive copyright. United States law, however, already protects information products under copyright. Hence, this counterfactual evidence that judges request cannot be generated in the United States. In response to the demand for data, American legal scholars have attempted to mine evidence from open software and other non-commercial endeavors on the Internet. However, these endeavors have been dismissed as exceptions or “cults,” unrelated to mainstream industry needs. This Article, for the first time, provides evidence of growth in the commercial software industry without intellectual property protection. Between 1993 and 2010, the software industry in India emerged as the fastest growing in the world, accounting for $76 billion in revenues by 2010. In the same time period, the software industry in India remained unaffected by changes in intellectual property protection for software. By demonstrating industry growth without strong intellectual property protections, the Indian data fills the critical gap in American literature.

Moreover, the comparative data from India enables scholars to separate causality from outcomes in specific empirical and analytical studies emerging out of the United States. In the case study of California’s Silicon Valley, for instance, there is a risk that causality may be extrapolated to alternative California statutes, giving rise to errors of second order. The comparative analysis checks this potential inaccuracy. The industry in India also provides illuminating data from contracting practices—decisive evidence of the legal infrastructure firms need and will create by contract, if not found in a priori law. This study equips policy-makers to go beyond the “historic accident” explanation to understand why the software industry flourishes where it does.

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Cite: 11 Duke L. & Tech. Rev. 65

By: James Boyle

This Article explores the difficulties that high technology markets pose for patent law and, in particular, for patent injunctions. It then outlines the ways in which “open source innovation” is unusually vulnerable to patent injunctions. It argues that courts can recognize this vulnerability, and respond to the particular competitive and innovative benefits of open source innovation, by flexibly applying the Supreme Court’s ruling in eBay v. MercExchange. Having dealt with the lamentable failure of the International Trade Commission to exercise a similar flexibility in its own patent jurisprudence, despite statutory and constitutional provisions that counsel otherwise, the Article concludes with some recommendations for reform.

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Cite: 11 Duke L. & Tech. Rev. 30

By: Amy J. St. Eve & Michael A. Zuckerman

The explosive growth of social networking has placed enormous pressure on one of the most fundamental of American institutions—the impartial jury. Through social networking services like Facebook and Twitter, jurors have committed significant and often high-profile acts of misconduct. Just recently, the Arkansas Supreme Court reversed a death sentence because a juror Tweeted about the case during deliberations. In light of the significant risks to a fair trial that arise when jurors communicate through social media during trial, judges must be vigilant in monitoring for potential outside influences and in deterring misconduct.

In this Article, we present informal survey data from actual jurors on their use of social networking during trial. We discuss the rise of web-based social networks like Facebook and Twitter, and the concerns that arise when jurors communicate about a case through social media before returning a verdict. After surveying how courts have responded to jurors’ social media use, we describe the results of the informal survey. The results support a growing consensus in the legal profession that courts should frequently, as a matter of course, instruct jurors not to use social media to communicate about trial. Although others have stressed the importance of jury instructions in this area, we hope that the informal survey data will further the dialogue by providing an important perspective—that of actual jurors.

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Cite: 11 Duke L. & Tech. Rev. 1

By: Roy J. Epstein

The 2011 decision by the Federal Circuit in Uniloc v. Microsoft properly condemned the “25% Rule,” which bases a reasonable royalty on 25% of an infringer’s profits. Nonetheless, at least one proponent of the Rule continues to argue that the Rule is fundamentally valid and should remain in use. This article analyzes the historical development of the Rule, its conceptual basis, its application in actual cases, and relevant insights from other recent Federal Circuit cases. Each analysis shows fundamental problems and contradictions that demonstrate the Rule can never be a reliable patent damages methodology. There is no reason to change the conclusion in Uniloc.

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Cite: 2012 Duke L. & Tech. Rev. 001

By: Michael L. Rustad & Diane D’Angelo

The evolution of the Internet has forever changed the legal landscape. The Internet is the world’s largest marketplace, copy machine, and instrumentality for committing crimes, torts, and infringing intellectual property. Justice Holmes’s classic essay on the path of the law drew upon six centuries of case reports and statutes. In less than twenty-five years, Internet law has created new legal dilemmas and challenges in accommodating new information technologies. Part I is a brief timeline of Internet case law and statutory developments for Internet-related intellectual property (IP) law. Part II describes some of the ways in which the Internet is redirecting the path of IP in a globalized information-based economy. Our broader point is that every branch of substantive and procedural law is adapting to the digital world. Part III is the functional equivalent of a GPS for locating the latest U.S. and foreign law resources to help lawyers, policymakers, academics and law students lost in cyberspace.

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Cite: 2011 Duke L. & Tech. Rev. 012

By: Loni Schutte

Fashion design in America has never been covered by the extensive intellectual property (IP) protections afforded to other categories of creative works or to the art in other countries. As a result, America has become a safe haven for design pirates. Piracy disproportionately harms young designers who do not have established trademarks for their brands and must rely purely on creativity to propel their designs into the market. H.R. 2511 is a bill that aims to extend copyright protection to fashion designs, albeit narrowly. Compared with previous proposals to extend effective IP protection to fashion design, H.R. 2511 is more of a sui generis protection aimed at the particularities of the fashion industry. It was the result of intensive negotiations between parties of conflicting interests, and has been tailored to address specific yet ubiquitous problems in the fashion industry.

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Cite: 2011 Duke L. & Tech. Rev. 011

By: Karen Neville

Recent Supreme Court cases involving the Confrontation Clause have strengthened defendants’ right to face their accusers. Bullcoming v. New Mexico explored the question of whether the testimony of the technician who performs a forensic analysis may be substituted by that of another analyst, and the Court held that producing a surrogate witness who was not sufficiently involved in the analysis violates the confrontation right.

The presumption of infallible technology is fading, and courts may soon realize programmers have greater influence over the ultimate outcome of forensic tests than do the technicians who rely on such analytical tools. The confrontation right, so bolstered by recent cases, may encompass defendants’ right to demand testimony from the programmers of machines performing forensic analyses. The Bullcoming decision is certain to affect whether the right to confront the programmer will be recognized.

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Cite: 2011 Duke L. & Tech. Rev. 010

By: David M. Longo Ph.D. & Ryan P. O’Quinn Ph.D.

A classic property rights question looms large in the field of patent law: where do the rights of inventors end and the rights of the public begin? The right of inventors to modify the scope of their claimed inventions, even after the patent issues, is in direct tension with the concepts of public notice and the public domain. The Patent Act currently permits broadening of claims so long as a reissue application demonstrating intent to broaden is filed within two years of the original patent issue. Over the years, however, this relatively straightforward statutory provision has sparked numerous disputes over its meaning and application.

On September 8, 2011, the Court of Appeals for the Federal Circuit heard oral arguments or In re Staats. In this case, Apple Computer, Inc. appeals the rejection of a continuation reissue patent application. The U.S. Patent & Trademark Office and the Board of Patent Appeals and Interferences rejected the application on the grounds that Apple attempted to broaden the scope of its patent claims in a manner not “foreseeable” more than eight years after the patent first issued. Apple contends that the language of the statute and prior case law permit its interpretation, and the application should be allowed in the interest of innovation. This issue is hardly a new one—this submission highlights nearly 140 years of case law, legislative history, and statutory shaping pertaining to broadening reissues. We analyze the issues raised in the briefs from Staats, as well as the oral arguments. Finally, we discuss from a practitioner’s perspective what the Federal Circuit could do—and should do—in the field of broadening reissues.

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Cite: 2011 Duke L. & Tech. Rev. 009

By: Alberto G. Araiza

Cloud Computing is poised to offer tremendous benefits to clients, including inexpensive access to seemingly limitless resources that are available instantly, anywhere. To prepare for the shift from computing environments dependent on dedicated hardware to Cloud Computing, the Federal Rules of Discovery should be amended to provide relevant guidelines and exceptions for particular types of shared data. Meanwhile, clients should ensure that service contracts with Cloud providers include safeguards against inadvertent discoveries and mechanisms for complying with the Rules. Without these adaptations, clients will be either reluctant or unprepared to adopt Cloud Computing services, and forgo their benefits.

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Cite: 2011 Duke L. & Tech. Rev. 008

By: Justin Van Etten

The rise of software and software licensing has led to another phenomenon: the attempted enforcement of software licenses through copyright law. Over the last fifteen years, content creators have begun to bring copyright suits against licensees, arguing that violation of license terms withdraws the permission needed to run the software, turning the use of the software into copyright infringement. Not surprisingly, courts have rejected this argument, and both the Ninth Circuit, in MDY v. Blizzard, and the Second Circuit, in Krause v. Titleserv, have developed new legal rules to prevent copyright enforcement of contract terms. This iBrief explores software licensing in detail, analyzes the courts’ responses, and concludes that the Ninth Circuit’s approach to copyright enforcement of license terms is preferable to the Second Circuit’s approach because it is supported by legislative history, more straightforward, and more likely to prevent future content creators from enforcing their licenses through contract.

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Cite: 2011 Duke L. & Tech. Rev. 007

By: Robert Goldscheider

Fifty years ago, Robert Goldscheider helped pioneer the use of a methodology known as “the 25% Rule,” a tool for determining reasonable royalties in intellectual property licensing negotiations. The Rule holds that licensees of intellectual property normally deserve the lion’s share of the profit because they usually bear the bulk of the business risk associated with bringing the intellectual property to market. Experts familiar with the art of intellectual property licensing frequently rely on the 25% Rule to rationally determine reasonable royalties in litigation and transactional settings.

The Rule’s prominence has been accompanied by unfortunate misunderstandings about its form and substance. It is not, as some suggest, intended to be a simple shortcut to determine patent royalties. Rather, it was developed as, and remains, a meticulous methodology inspired by significant private transactions and ultimately refined by brilliant judicial interpretation. As such, it is inappropriate to condescendingly diminish it to a mere “rule of thumb.” When properly understood and applied, the Classic 25% Rule is an effective discipline that achieves the high standards of reliability demanded by the U.S. Supreme Court in the Daubert.

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Cite: 2011 Duke L. & Tech. Rev. 006

By: Jeremy J. Beck & Libby Van Cleve

Oral history provides society with voices and memories of people and communities experiencing events of the past first-hand. Such history is created through interviews; an interview, however, like any other type of intellectual property—once in a fixed form—is subject to copyright law. In order to make oral history available to the public, it is critically important that individuals generating and acquiring oral history materials clearly understand relevant aspects of copyright law. The varied nature of how one may create, use, and acquire oral history materials can present new, surprising, and sometimes baffling legal scenarios that challenge the experience of even the most skilled curators.

This iBrief presents and discusses two real-world scenarios that raise various issues related to oral history and copyright law. These scenarios were encountered by curators at Yale University’s Oral History of American Music archive (OHAM), the preeminent organization dedicated to the collection and preservation of recorded memoirs of the creative musicians of our time. The legal concerns raised and discussed throughout this iBrief may be familiar to other stewards of oral history materials and will be worthwhile for all archivists and their counsel to consider when reviewing their practices and policies.

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Cite: 2011 Duke L. & Tech. Rev. 005

By: Hillary Greene

The ability of intellectual property owners to earn monopoly rents and the inability of horizontal competitors to price fix legally are two propositions that are often taken as givens.  This iBrief challenges the wholesale adoption of either proposition within the context of buyer price-fixing in intellectual property markets.  More specifically, it examines antitrust law’s role in protecting patent holders’ rents through its condemnation of otherwise ostensibly efficient buyer price fixing. Using basic economic analysis, this iBrief refines the legal standards applicable at this point of intersection between antitrust and patent law.  In particular, the author recommends the limited abandonment of per se condemnation of buyer price-fixing within pure intellectual property contexts.  As an alternative, a coarse screen which accounts for both price and innovation effects is proposed. This recommendation represents one example of how antitrust law can better account for the complicated and imperfectly understood effects of the patent system on social welfare.

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Cite: 2011 Duke L. & Tech. Rev. 004

By: Austin J. Sandler

Technological innovation continues to make trading and markets more efficient, generally benefitting market participants and the investing public. But flash trading, a practice that evolved from high-frequency trading, benefits only a select few sophisticated traders and institutions with the resources necessary to view and respond to flashed orders. This practice undermines the basic principles of fairness and transparency in securities regulation, exacerbates information asymmetries and harms investor confidence. This iBrief revisits the Securities and Exchange Commission’s proposed ban on the controversial practice of “flash trading” and urges the Securities and Exchange Commission and the Commodity Futures Trading Commission to implement the ban across the securities and futures markets. Banning flash trading will not impact high-frequency trading or other advantageous innovative trading practices, and will benefit all market participants by making prices and liquidity more transparent. In the wake of the May 6, 2010 “flash crash” and the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, now is an opportune time for the Securities and Exchange Commission and Commodity Futures Trading Commission to implement the ban.

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Cite: 2011 Duke L. & Tech. Rev. 003