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Recent Working Papers:

Comment of the Global Antitrust Institute, George Mason University School of Law, on the National Development and Reform Commission’s Anti-Monopoly Guide on Abuse of Intellectual Property Rights

By Koren Wong-Ervin, Joshua Wright, Douglas Ginsburg, Bruce Kobayashi


This comment is submitted to China's National Development and Reform Commission (NDRC) by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the NDRC's Draft Abuse of Intellectual Property Rights Guideline. The GAI Competition Advocacy Program provides a wide-range of recommendations to facilitate adoption of economically sound competition policy, including how to analyze conduct involving standard-essential patents, as well as refusals to license, the essential facilities doctrine, discriminatory licensing, “unfairly high” pricing, bundling, cross-licensing, grantbacks, charging for expired patents, and the use of no-challenge clauses.

Who’s Really Sentenced to Life Without Parole?: Searching for “Ugly Disproportionalities” in the American Criminal Justice System

By Craig Lerner


Critics argue that the American criminal justice system is rife with “ugly disproportionalities” and “brutal penalties on the undeserving.” One particularly brutal punishment is the sentence of life without the possibility of parole (LWOP). The punishment, conceived decades ago as a substitute for the death penalty, scarcely exists in the rest of the world. Today, while capital punishment wanes in the United States, steadily increasing numbers of defendants are sentenced to LWOP. Furthermore, according to a recent ACLU Report, over 3,000 of the 50,000 inmates serving LWOP were convicted of nonviolent offenses. There is no uglier disproportionality than a defendant, guilty of a minor crime, banished to prison for the remainder of his life.

This Article questions this narrative and therewith the contemporary wisdom as to the brutality of American criminal justice, at least in its imposition of LWOP sentences. The author conducted a detailed study of every inmate sentenced to LWOP in eight states. In a few states, it is impossible to find a single inmate sentenced to LWOP for any crime other than murder or the most serious violent crimes. Even in jurisdictions that impose LWOP for crimes labeled “nonviolent,” the inmates are few in number and often present aggravating factors, such as extensive criminal histories or previous violent crimes. Inevitably, criminals sentenced to LWOP will vary in culpability, and some will appear not to merit this punishment. Drawing attention to their plight can spur executive clemency in individual cases. But accusations that the American legal system is rife with “ugly disproportionalities,” at least insofar as this claim is applied to LWOP sentences in the states, appear to have little merit.

Religious Liberty for Employers as Corporations, Natural Persons or Mythical Beings? A Reply to Gans

By Harry Hutchison


David Gans and Ilya Shapiro’s recent book probes the question of corporate constitutional and statutory rights. Advanced by a series of public debates, the book is entitled: Religious Liberties for Corporations?: Hobby Lobby, The Affordable Care Act and the Constitution. This manuscript delineates the facts, and legal arguments as well as the majority and dissenting opinions in Burwell v. Hobby Lobby. Gans emphasizes the Founders’ conception of corporations and offers predictions regarding the future trajectory of corporate rights beyond the narrow, yet clamorous, domain of religious liberty. Consistent with the weight of scholarly opinion and in sharp contrast to his co-author’s approach, Gans denies that for-profit corporations have free exercise rights. Whatever its merits, the Hobby Lobby opinion has provoked a wave of scholarship and a flurry of rancor. Gans’s contribution is part of this outpouring and confirms that corporate ontology is once against the focal point of academic and judicial commentary.

Equally true, the Hobby Lobby Court’s decision has generated a number of overlapping questions. First, since the Hobby Lobby plaintiff-firms are institutions characterized by the pursuit of profit, limited liability, and a legal separation from their shareholders, do those attributes either together or separately, bar them from asserting free exercise rights? Second, must the pragmatic or normative implications connected to the legal structure of for-profit corporations require them to maximize profits, in principle, or can such entities maximize other values as well, coherent with the deduction that religious exercise may take a corporate form for a wide spectrum of actions and purposes that include full involvement in the marketplace? Third, although Justice Douglas has cautioned us that “[g]eneralizations about standing to sue are largely worthless as such,” can the plaintiff-firms  satisfy the “case and controversy” requirement  because they suffered a concrete injury to their own interest within the domain of Article III or based on a derivative or third-party theory of prudential standing consonant with the view that they are more like partnerships, membership organizations or associations of individuals, rather than large publicly-held corporations? Finally, are the opponents of corporate free exercise correct in their presumption that free exercise claims are purely personal and individual as opposed to being the representative outworking of a voluntary collective group, so that profit pursuing corporations must be seen as non-religious entities lacking the anthropomorphic capacity necessary to practice religion?

These questions and their correlative answers are visualized through a nexus-of-contracts-entrepreneurial-choice investigation that originates in the law and economics of organizations, a scaffold, which encompasses closely-held firms, LLCs and other for-profit vehicles. Pertinent answers are then refracted through the prism of Professor Buccola’s organizational neutrality framework. The resulting analysis provides a basis to contest the weight of scholarly opinion. When viewed on a pragmatic or normative level, it is doubtful that the choice of the corporate form, a move that gives rise to both for-profit firms and nonprofit entities, should be relevant, in establishing a defendable boundary that cabins an institution’s ability to pursue free exercise exemptions.

Conditional Discounts and the Law of Exclusive Dealing

By Derek Moore, Joshua Wright


The appropriate antitrust analysis of conditional discounts remains a subject of considerable debate. The debate surrounding how the law ought to treat conditional “discounts” stems largely from the fact that certain discounting practices resemble both conduct that the antitrust laws have analyzed under the “predation” rubric and conduct that the antitrust laws have analyzed under the “exclusion” rubric. The critical question, then, is whether the law should analyze conditional discounts as price predation, exclusive dealing, or some hybrid combination of the two. This Article argues that exclusive dealing provides a superior framework for analyzing conditional discounts. The basis for this claim is relatively simple. There are two economic paradigms to analyze anticompetitive conduct that is not the product of collusion among competitors: predation and exclusion. Most, if not all, modern cases involving conditional discounts are based upon theories of economic harm grounded in the RRC-exclusion framework. Because the relevant economics for understanding these claims involves the economics of exclusion, the legal framework best suited to analyze conditional discounts is the one most closely aligned to the economics of exclusion. As this Article will demonstrate, price-cost tests applied to predatory pricing are not a good match for the economics of exclusion. A price below cost is neither necessary nor sufficient for exclusion. Further, importing a price-cost test to analyze claims sounding in exclusion rather than predation inserts intellectual distance between antitrust economics and the correct legal standard—rather than more closely aligning industrial-organization economics and antitrust law, as has been the overwhelming and beneficial trend over the past fifty years. The false allure of the increased administrability of price-cost tests has led many scholars to argue that loyalty discounting is the exceptional case in which the antitrust laws are improved by imposing a legal framework that does not comport closely with the economic forces describing most conditional-discount-based antitrust claims. They are wrong, both because price-cost tests in the conditional-discount context require subjective, costly, and uncertain determinations of contestability and because prices below cost are not a necessary condition of the relevant anticompetitive mechanism allegedly at work in exclusion cases. Accordingly, courts should reject price-cost tests in conditional-discount cases alleging exclusion in favor of the rule of reason framework applied in exclusive-dealing cases.

The Legend of the Privateer Airship and the Currents that Lifted It

By Jeremy Rabkin


The United States last issued a letter of marque in 1942. It authorized the Goodyear Company to deploy a helium filled blimp to hunt Japanese submarines off the Pacific coast. At least, that is the story reported in newspapers in the 1940s and embellished in books and articles over the following decades. But the story is not true–there were no letters of marque issued in World War II. The legend seems to have emerged from journalistic confusions, spawned by larger wartime controversies over legal limits on private involvement in military operations. The debates of that era have reemerged in our time–along with the notion of using letters of marque to unleash high tech combatants.

Promise and Perils in the Nascent Jurisprudence of the Second Amendment

By Nelson Lund


In Heller v. District of Columbia, the Supreme Court held that the Second Amendment protects the right of individuals to keep and bear arms for self-defense. In McDonald v. City of Chicago, the Court held that this right is also protected from infringement by the states under the Fourteenth Amendment. Thus, many important decisions about the reach of government’s regulatory authority will henceforth come from the federal courts. The scope of the Second Amendment right, however, has not yet been clarified, either by the Supreme Court or by a consensus of the lower courts. 

This short symposium contribution sketches out several possible approaches to defining the scope of the right, and argues that one of them is better than the others, at least for purposes of adjudication under the Second Amendment. The essay argues that Judges Diarmuid O’Scannlain and Diane Sykes have shown—more clearly than the Supreme Court has yet done—the right way to decide cases in this nascent area of constitutional law.

Trolls and Orphans

By Tun-Jen Chiang


Patent trolls and orphan works are major topics of discussion in patent and copyright law respectively, yet they are rarely discussed together. Commentators seem to regard these two problems in modern IP law as discrete issues with little to do with each other.

In reality, patent trolls and orphan works are two sides of the same coin. The patent troll problem occurs when users of a technology are surprised by the emergence of a previously undiscovered patent holder, who holds up the user for the value of fixed investments made in the patented technology. The orphan works problem occurs when potential users of a work fear the later emergence of an undiscovered copyright holder, and therefore refrain from using the work. In both cases the problem is one of an undiscovered IP owner emerging to hold up a user who has made irreversible fixed investments.

Understanding the common roots of orphan works and patent trolls has a theoretical payoff in showing how economic theory applies in similar ways across distinct branches of IP law, and explains why proposed solutions for patent trolls and orphan works have often unwittingly converged despite the lack of interaction between the two literatures. More practically, understanding patent trolls and orphan works as manifestations of a holdup problem suggests that the literature would benefit from devoting more attention to solving the holdup problem in IP law, while devoting less attention to other issues that have thus far dominated the troll and orphan debates.

Administrative Collusion: How Delegation Diminishes the Collective Congress

By Neomi Rao


This Article identifies a previously unexplored problem with the delegation of legislative power by focusing not on the discretion given to executive agencies, but instead on how delegations allow individual congressmen to control administration. Delegations create administrative discretion, discretion that members of Congress can influence through a variety of formal and informal mechanisms. Members have persistent incentives for delegation to agencies, because it is often easier to serve their interests through shaping administration than by passing legislation. To understand the particular problem of delegation, I introduce the concept of the “collective Congress.” Collective decisionmaking is a fundamental characteristic of the legislative power. The collective Congress serves an important separation of powers principle by aligning the ambitions of legislators with the power of Congress as an institution. Although members represent distinct interests, the Constitution allows members of Congress to exercise power only collectively and specifically precludes them from exercising any type of individual or executive power. Delegation, however, provides opportunities for individual legislators to influence administration and poses a serious separation of powers concern by fracturing the collective Congress. This insight undermines the conventional view that delegations will be self-correcting because Congress will jealously guard its lawmaking power from the executive. Instead, members of Congress will often prefer to collude and to share administrative power with the executive. As a result, delegation destroys the Madisonian checks and balances against excessive delegation. This structural failure suggests a need to reconsider judicial enforcement of the nondelegation doctrine and to implement political reforms to realign Congress with its collective power.

The Troubling Use of Antitrust to Regulate FRAND Licensing

By Douglas Ginsburg, Koren Wong-Ervin, Joshua Wright


In the last year, we have seen a growing—and troubling—trend as courts and competition agencies around the globe propose and impose antitrust sanctions on holders of standard-essential patents (“SEPs”) for seeking injunctive relief against alleged infringers and for reneging on their commitment to license their patents on fair, reasonable, and non-discriminatory (“FRAND”) terms. These new rules, recently adopted in the European Union and in Korea, proposed in Canada and Japan, and favored by some government officials in the United States, are premised upon the erroneous beliefs that (1) patent “holdup” is a widespread problem that results in significantly adverse consequences for competition and innovation and (2) whatever the magnitude of the problem, it requires an antitrust remedy.  In this article, we discuss the lack of empirical evidence to substantiate the claim that patent holdup is a systemic problem for competition and consumers, and the likely harm to both competition and consumers from imposing antitrust liability for patent holdup.

Book Review: Philip Hamburger, Is Administrative Law Unlawful?

By David Bernstein


This is a review of Philip Hamburger’s book, Is Administrative Law Unlawful? Most scholars believe that administrative law began with the rise of administrative agencies in the late nineteenth century. Hamburger, by contrast, suggests that administrative law—by which he means legally binding rules that are developed through unilateral actions by  the executive branch—has existed since colonial times and beyond, and that claims of administrative autonomy are direct descendants of the claims of the English monarchy to executive omnipotence. The Framers of the Constitution were well aware of such claims, and utterly rejected them. Yet, Hamburger argues, modern administrative law embodies precisely the evils that the Constitution and its separation of powers sought to prevent.

I predict that most readers will find Hamburger’s historical analysis compelling. Somewhat fewer will share his “originalist-ish” claim that the Constitution, properly understood, is at odds with modern administrative law. Many fewer, given pre-existing ideological commitments, will agree that the administrative state is despotic and must be dismantled, with power flowing instead back to the judiciary and Congress. Nevertheless, anyone interested in the rise of the American administrative state will benefit from this original, erudite, and thought-provoking book.

Comment on the Korea Fair Trade Commission’s Revised Review Guidelines on Unfair Exercise of Intellectual Property Rights

By Bruce Kobayashi, Douglas Ginsburg, Koren Wong-Ervin, Joshua Wright


This comment is submitted to Korea's Fair Trade Commission ("KFTC") by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the KFTC's December 17, 2014 revisions to its Review Guidelines on Unfair Exercise of Intellectual Property Rights. The GAI Competition Advocacy Program provides a wide-range of recommendations to facilitate adoption of economically sound competition policy, including how to analyze conduct involving standard-essential patents.

Restoring Freedom of Contract between Doctor and Patient in Medicare Part B

By David Bernstein


Despite promises that Medicare would not interfere with patients’ ability to choose their physician and to purchase additional health coverage on the open market, over the decades Medicare rules and regulations have gradually eroded senior citizens’ ability to control their healthcare choices. With Medicare facing financial and regulatory pressures that threaten to drive more and more physicians out of the system, it’s time for Congress to allow private contracting to play a significantly greater role in Medicare Part B. Congress should eliminate the limit on patients’ ability to negotiate fees with nonparticipating physicians, expand the scope of Medigap coverage to include services not covered by Medicare, and liberalize the rules for opt-out physicians.

Sparks Cases in Contemporary Law and Economic Scholarship

By Eric Claeys


“Sparks cases” arose in the late 19th century, when sparks from newly laid railroads caused fire damage to adjacent landowners. Sparks cases have become a staple example in law and economic scholarship over the last generation. This entry uses those cases to contrast the differences between leading approaches to law and economics and Austrian economics.  Sparks cases illustrate concretely important differences between welfare-maximizing and order-securing legal theories of regulation.  Many leading law and economic works assume that legal actors can maximize the welfare created from incompatible resource disputes; in sparks cases, such theories assume that legal actors may and should choose the regime of tort liability most likely to maximize the joint product from a railroad right of way and adjacent land.  Austrian economics focus on basic ordering, for it presumes that information shortfalls, subjective value, and changing resource uses all make it prohibitively difficult for legal actors to identify the highest and best uses of resources in conflict. In such constraints, the tort principles that regulate sparks disputes should be designed around simple and clear property boundaries, so that railroad operators are strictly liable for fires caused on land owners’ lots by sparks from their trains. 

This basic Austrian critique may be applied in other, more recent, and more complex fields of regulation.  If scholars hope to expose a wider audience of legal scholars to this critique, however, they must integrate Austrian themes better into the normative frameworks and scholarly categories applied by legal scholars.

Comment of the Global Antitrust Institute, George Mason University School of Law, on the National Development and Reform Commission’s Questionnaire on Intellectual Property Misuse Antitrust Guidelines

By Douglas Ginsburg, Bruce Kobayashi, Koren Wong-Ervin, Joshua Wright


This comment is submitted to China's National Development and Reform Commission (NDRC) by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the NDRC's Questionnaire on Intellectual Property Misuse Antitrust Guidelines. The GAI Competition Advocacy Program provides a wide-range of recommendations to facilitate adoption of economically sound competition policy, including how to analyze conduct involving standard-essential patents and non-practicing entities.

Antitrust Decisions of the U.S. Supreme Court, 1967 to 2007

By Leah Brannon, Douglas Ginsburg


In this article we suggest that the U.S. Supreme Court, far from indulging a pro-defendant or anti-antitrust bias, is methodically re-working antitrust doctrine to bring it into alignment with modern economic understanding. Over the last four decades, the Court has increasingly: (1) decided antitrust cases in favor of defendants; (2) issued antitrust opinions subscribed to by two-thirds or more of the Justices; (3) decided antitrust cases in the manner recommended by the Solicitor General; and (4) expressly featured economic analysis in its reasoning. There is now broad and non-partisan agreement¿in academia, the bar, and the courts¿regarding the importance of sound economic analysis in antitrust decision making. We believe this broad consensus has contributed to both the prevalence of supermajority and even unanimous antitrust decisions and to the improved success rate of the United States when it appears either as a party or as an amicus in Supreme Court antitrust cases. In addition, because the near-consensus among academic commentators reflects a substantial rethinking of the plaintiff-friendly antitrust decisions of earlier decades, it has led to the present high success rate for defendants.

Monopsony Power, Collective Bargaining and College Football

By Harry Hutchison


The collision of sports and labor law has prompted a rise in scholarly activity best exemplified by the recent Workshop on Sports Law at the Southeastern Association of Law Schools (SEALS). Featuring a number of scholars, the workshop moderated by Professor William Berry surveyed an array of issues. One issue concerns the implications that correspond with the question whether or not the football players at Northwestern University, who receive grant-in-aid scholarships, ought to treated as employees within the meaning of Section (2)(3) of the National Labor Relations Act of 1935 (NLRA).

Although Richard Posner’s understanding of economic theory suggests that the NLRA can be viewed as a kind of reverse Sherman Act designed to encourage cartelization of labor markets, it is equally possible to adduce evidence showing that universities, as putative employers, richly defended by the NCAA, possess unjustified market power. If universities are properly seen as employers, they can be viewed as monopsonies that extract unjustified benefits from their employees who possess inferior bargaining power in spite of the NCAA’s self-proclaimed mission to prevent exploitation of student-athletes under the umbrella of “amateurism.” This brief essay suggests that an economic case can be established favoring the unionization of Division I football players grounded in the likelihood that college players face employers with monopsony power. This remains true despite the fact that complications arise with regard to the possible adverse effects of unionization on both the status of Division II and Division III programs and university athletic programs outside of the domain of football.

Defending Daubert: It’s Time to Amend Federal Rule of Evidence 702

By David Bernstein, Eric Lasker


The 2000 amendments to Rule 702 sought to resolve the debate that had emerged in the courts in the 1990s over the proper meaning of Daubert by codifying the rigorous and structured approach to expert admissibility announced in the Daubert trilogy. Fifteen years later, however, the amendments have only partially accomplished this objective. Many courts continue to resist the judiciary’s proper gatekeeping role, either by ignoring Rule 702's mandate altogether or by aggressively reinterpreting the Rule’s provisions.

Informed by this additional history of recalcitrance, the time has come for the Judicial Conference to return to the drafting table and finish the job it began in 2000. Rule 702 should be amended to secure the promise of Daubert and effectively protect future litigants and juries from the powerful and quite misleading impact of unreliable expert testimony.

Religious Freedom versus Sexual Expression: A Guide

By Helen Alvaré


Claimed rights to sexual expression unlinked to the creation of children, are among the strongest challenges facing the free exercise of religion in the United States today. Such rights gained importance by means of a series of Supreme Court opinions associating consensual sexual expression unlinked to children with human dignity and even personal identity. These were accompanied by legal and cultural movements, led by more privileged Americans, diminishing children’s rights in favor of adults’, in the context of sex, marriage and parenting. Laws and regulations protecting and promoting sexual expression detached from children are powerfully affecting religious institutions that operate health care, educational, and social services available to all Americans; the Catholic Church is a particularly prominent supplier of all of these services. Respecting the Catholic Church, it is possible but quite difficult to maintain respect for its free exercise of religion in the current environment, potentially by highlighting its measurable contributions to the common good. It might also be useful to show the close link between Catholic teachings on sex and marriage and the entire Catholic cosmology, such that coercing Catholics to behave otherwise is tantamount to coercing them to practice a different faith.

Marriage and Family as the New Property: Obergefell, Marriage and the Hand of the State

By Helen Alvaré


Prior to the Supreme Court’s 5-4 decision in Obergefell v. Hodges creating a constitutional right to same-sex marriage, it was nearly universally acknowledged that the state did not have constitutive authority over human marriage, which was “up from nature” rather than “down from the state.” In other words, the nature of marriage was determined by pre-given qualities of human, opposite-sexed pairs and the organic qualities and consequences of their union. Post-Obergefell, however, even marriage has become a form of “new property”: a state-determined status, entitling recipients to various rights and benefits. Relying upon classic texts by Professors Robert Reich and Mary Ann Glendon regarding the rise of government and the decline of families as guarantors of security for American citizens, this article investigates the implications of marriage as “the new property” for the quality and stability of marriage and the future of children.

The Opposite of Anarchy and the Transmission of Faith: The Freedom to Teach after Smith, Hosanna Tabor, Obergefell and the Ascendancy of Sexual Expressionism

By Helen Alvaré


Lawmakers are attaching an increasing variety of constitutional and statutory rights to various forms of sexual expression, marriage and parenting (hereafter “SMP”), which readily provoke contests about the scope of the First Amendment’s Free Exercise and Establishment clauses. Religious beliefs and practices about SMP are foundational to Judeo-Christian cosmology and anthropology. Yet legislators and judges are requiring religious actors to conform to new legal and social preferences on SMP using laws framed as nondiscrimination guarantees. The recent Supreme Court decision declaring a constitutional right to same-sex marriage–Obergefell v. Hodges–increases the likelihood that such laws will be deployed in the context of elementary and secondary religious schools’ employment decisions. While it seems intuitively true that the First Amendment would preserve a scope of freedom for religious schools that would include their authority to require their instructors to support their religious mission in word and deed, leading First Amendment cases and various statutes do not make this readily apparent. A closer look at the leading cases indicates, however that Smith v. Employment Division, Hosanna Tabor v. EEOC and Obergefell are amenable to protecting religious schools’ interests in determining their instructors. Such a way forward is necessary in order to provide de facto religious freedom, especially respecting parents’ opportunities to transmit religion to the next generation.