120 Yale L.J. 1590 (2011).In Graham v. John Deere Co., the Supreme Court explained that patent law’s nonobviousness doctrine is meant to restrict the award of patents to only “those inventions which would not be disclosed or devised but for the inducement of a patent.” This Article argues that this inducement standard, largely ignored in practice, should serve as the doctrinal polestar. Such an approach would provide a solid economic foundation for the patentability standard and would align patent law with the many other fields of regulatory law that currently apply economic analysis in determining the scope and content of regulation. The Article also offers several refinements to the inducement standard and explains how the Patent and Trademark Office and courts could implement the inducement standard in an administrable way.
120 Yale L.J. 1682 (2011).One of the principal determinants of an asset’s return is its liquidity—the ease with which the asset can be bought and sold. Liquid assets yield a lower return than do otherwise comparable illiquid assets. This Article demonstrates that an income tax alters the tradeoff between asset liquidity and yield because: (1) high yields from illiquid assets are taxed; (2) imputed transaction services income from liquidity is untaxed; and (3) illiquidity costs are only sometimes deductible. As a result, assets have more liquidity and the price of liquidity in terms of yield is higher than it would be in the absence of an income tax. These distortions foster an excessively large financial sector, which exists in large part to create (tax-favored) liquidity. The tax wedge between liquidity and yield also creates clientele effects, in which low-rate taxpayers, such as nonprofit institutions, hold illiquid assets regardless of their liquidity needs. The liquidity/yield tax distortion also offers a new perspective on fundamental questions in federal income tax, such as the desirability of the realization requirement, preferential capital gains tax rates, and corporate taxation. These elements of the income tax mitigate or even negate the pro-liquidity tax bias identified in this Article.
120 Yale L.J. 1734 (2011).
This Feature is an adaptation of chapter 3 of a forthcoming book, America’s Unwritten Constitution, which in turn is a sequel to a 2005 book, America’s Constitution: A Biography. The 2005 book explores America’s written Constitution in considerable detail, taking readers on a journey that begins with the Preamble and proceeds through the document, Article by Article and Amendment by Amendment. The sequel invites readers to venture beyond the written Constitution by exploring aspects of America’s constitutional order that are not expressly enumerated within the four corners of the document. The unifying theme of America’s Unwritten Constitution is that there exist various approaches to American constitutionalism that supplement the terse text without supplanting it—nontextual interpretive methods and techniques that harmonize with the text itself.
Chapter 3 of this forthcoming book—the foundation of this Feature—explores the domain of unenumerated rights. Although such rights are by definition not expressly listed in the terse text, the written Constitution signals their existence and provides broad guidance about where and how to find these rights. One of the most obvious places where these rights are to be discovered is in the lived practices and beliefs of the American people themselves. Another source of these “lived” rights is where Americans live: their homes. While privacy rights embody some of America’s most notable examples of “lived” constitutional entitlements, this Feature places privacy examples alongside case studies drawn from criminal procedure and property law to illustrate the range, power, and limits of one general way of thinking about unenumerated rights. Whether the underlying (and underspecified) constitutional text is the Fourth, Fifth, Sixth, Eighth, Ninth, or Fourteenth Amendment, or some combination thereof, faithful constitutional interpreters properly attend to the expectations and practices of ordinary Americans who claim certain basic rights even though the terse text does not explicitly list these rights.
120 Yale L.J. 1784 (2011).Despite their seeming impotency, non-self-executing treaties play an important role in domestic jurisprudence. When a statute permits more than one construction, judges have a number of interpretive tools at their disposal. One of these is the Charming Betsy canon, which encourages judges to select an interpretation of an ambiguous statute that accords with U.S. international obligations—including those expressed in non-self-executing treaties. This Note concludes that the judicial practice of giving indirect force to all treaties through the Charming Betsy canon is both justified and beneficial.
120 Yale L.J. 1820 (2011).
Since the ratification of the Fourteenth Amendment in 1868, judges and scholars have struggled to coherently identify the rights, privileges, and immunities that no state should abridge. Debates over the ambit of the Fourteenth Amendment, however, have consistently overlooked a crucial source that defines the fundamental civil liberties of American citizens. The Northwest Ordinance of 1787 contains in its Articles of Compact a set of rights that constituted the organic law—the fundamental law—of the United States. Rather than limiting federal power like the Bill of Rights, the Northwest Ordinance enumerates those rights that no state shall abridge. Not only should these rights qualify for protection under the Due Process Clause of the Fourteenth Amendment, but they also give substance to the terms “privileges” and “immunities” as used and understood by Americans throughout the nineteenth century.This Note chronicles how the rights in the Northwest Ordinance spread, through various acts of Congress, from the Northwest Territory to all corners of the United States. These rights were integral to the organic law of twenty-eight of the thirty states (a supermajority) that ratified the Fourteenth Amendment by 1868. In addition, the admission of new states into the Union was often predicated on two conditions that state constitutions had to satisfy: they had to be republican and not repugnant to the principles of liberty in the Northwest Ordinance. Once they acquired statehood, however, new states were free to change their constitutions and violate the fundamental civil rights enumerated in the Ordinance. It is this defect in the organic laws of the United States that the Fourteenth Amendment was designed to repair, and it is to the Northwest Ordinance that we must look to understand the rights protected by the Fourteenth Amendment.
120 Yale L.J. 1885 (2011).