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Issue 1
The Corporate Settlement Mill
From cases involving “robo-signed” mortgages to catastrophic oil spills, the United States legal system increasingly encourages corporate wrongdoers to design and implement their own high-volume settlement programs to compensate thousands of unrepresented victims. These private settlement systems rely on corporate economies of scale to resolve massive disputes as comprehensively as a class action, but entirely outside of the court system. We call these systems “corporate settlement mills.”
Like class action settlements and “no fault” insurance options, corporate settlement mills may ameliorate many of the most commonly criticized features of individualized litigation. They offer redress to people who often cannot afford counsel, handle large volumes of claims quickly and predictably, and reduce court congestion. For those reasons such programs are increasingly required by federal laws, regulatory bodies and as a matter of complex litigation practice.
But corporate settlement mills also have costs of their own. When sophisticated corporate actors quietly settle large numbers of cases in assembly-line fashion, they threaten transparency, fair dealing, and the rule of law. We argue that this new category of dispute resolution is more dangerous than others because a single, self-interested party — the prospective defendant itself — designs and oversees the entire determination process. Corporate settlement mills thus raise fundamental questions about how far policymakers may go to privatize our public, and historically neutral, system of adjudication.
Drawing lessons from other movements to privatize government, we argue that corporate settlement mills can provide an appropriate alternative to public adjudication as long as they remain answerable to the regulators, courts, and claimants that rely on them. We therefore offer specific suggestions to make them more accountable — including targeted prospective regulation, judicial review, stakeholder participation, and ethical reform. In so doing, we broaden the debate over what constitutes mass litigation, in the hope that lawmakers realize the benefits of large private settlements, without frustrating administrative regulation or the judiciary’s authority to “say what the law is.”
Eliminating the Single-Entity Rule in Joint Infringement Cases: Liability for the Last Step
The Patent Act of 1952 provides that “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States…infringes the patent.” It is often clear who directly infringes a patent: We can recognize who uses a machine, or sells a manufactured product, or makes a composition of matter. Identifying the user of a multistep patented method, however, can be a murkier inquiry. Who “uses” a patent when multiple parties combine to complete the protected steps?
This question has stumped courts for decades. The Federal Circuit’s most recent attempt to address the issue drew a swift rebuke from the Supreme Court in Limelight v. Akamai. The Federal Circuit’s previous attempts to lay forth a workable standard in “joint infringement” cases, however, are also inadequate. So too are previous suggestions from the academy.
This Note attacks the premise of joint infringement cases by exploring the foundation of the Federal Circuit’s “single-entity rule.” This Note contends that the rule, which says that a party does not directly infringe a patented method unless the party completes all steps of the method, is based on a misreading of precedent. Having set aside the single-entity rule, this Note turns its focus to a potential solution. It proposes that a party who completes the last step of a patented method and accomplishes the desired result only because each prior step was already completed “uses” the patent and therefore infringes it. The Note concludes by exploring the implications of this new, suggested approach.