MARCEL KAHAN, New York University - School of Law
Email: kahanm@juris.law.nyu.edu
EDWARD B. ROCK, University of Pennsylvania Law School
Email: erock@law.upenn.edu

In this paper, we argue that chief executive officers of publicly-held corporations in the United States are losing power to their boards of directors and to their shareholders. This loss of power is recent (say, since 2000) and gradual, but nevertheless represents a significant move away from the imperial CEO who was surrounded by a hand-picked board and lethargic shareholders. After discussing the concept of power and its dimensions, we document the causes and symptoms of the decline in CEO power in several areas: share ownership composition and shareholder activism; governance rules and the board response to shareholder activism; regulatory changes related to shareholder voting; changes in the board of directors; and executive compensation. We argue that this decline in CEO power represent a long-term trend, rather than a temporary response to economic and political conditions. The decline in CEO power has several important implications, including implications with respect to the possibility of a regulatory backlash against certain newly empowered shareholder groups, the type of persons who will serve on corporate boards in the future, the type of shareholder initiatives that will be introduced and the corporate response to them, the convergence of corporate laws across countries, and the source of resistance to acquisitions and the legal regulation of target defenses.

RICHARD WINCHESTER, Thomas Jefferson School of Law
Email: rwinchester@tjsl.edu

The United States has always taxed income at progressive rates, so that an individual's tax burden would increase with his ability to pay. Whenever the United States has had an income tax, it has also imposed an entity level tax on the profits of certain businesses, but not others. Both the structure of the progressive tax rates and the design of the entity level tax on business profits have evolved over time, resulting in a wide range of incentives and outcomes. This article recounts the early history of the income tax in the United States, focusing on how an entity level tax on business profits operated within the context of a system that taxed individuals at progressive rates. It highlights how the combination of rules created disparities in the taxation of business profits, setting the stage for individuals to exploit those disparities in an effort to minimize their tax bills. Although Congress adopted measures to reduce the disparities and curb tax avoidance, such measures proved increasingly less effective as the income tax took on a more progressive design, resulting in distorted outcomes that seemed to get worse over time. In light of this experience, the article questions whether the system ever achieved any form of parity in the taxation of business profits, potentially undermining its very ability to operate in a progressive way.

WENDY A. BACH, CUNY School of Law
Email: bach@mail.law.cuny.edu

Since welfare reform in 1996, privatization has led to a radical reconfiguration in the dominant mode of governance in public benefits programs. The United States has largely moved from systems controlled through law and regulation to systems controlled through contracts. With this shift has come a significant diminishment in public accountability in general and, more specifically, a diminishment in the ability of poor communities and their advocates to intervene in the making of welfare policy. At the same time, privatization has proven to be an extraordinarily effective mechanism for imposing highly punitive welfare programs on poor communities. Building upon the findings of grassroots, community-controlled research on the effectiveness of privatized welfare-to-work programs, this article argues that "collaborative" or "new governance" structures provide potentially meaningful opportunities for increasing public accountability in privatized welfare settings. However, given the long history and current practice of using welfare programs as a means of subordination, these structures must be configured in a way that makes primary and renders substantive the role of low income communities in the new collaborative governance enterprise.

LAWRENCE M. FRANKEL, U.S. Department of Justice - Antitrust Division
Email: lawfrank@aol.com

For more than thirty years, the Tunney Act - which governs the judicial review of antitrust consent decrees proposed by the U.S. Department of Justice Antitrust Division - has been a source of controversy, due largely to the open-ended nature of the statute and the ambiguities inherent in it. Judicial and congressional attempts to clarify the Act, while helpful, have failed to provide clear guidance to district courts. However, by examining the Act's text and legislative history, the policy objectives the Act can usefully serve, and the costs of various review options, and by bearing in mind both practical and constitutional limitations as well as analogous administrative law principles, it is possible to design a procedural and substantive model for judicial review of antitrust consent decrees that advances, rather than hinders, effective antitrust enforcement.

CHRISTOPHER R. LESLIE, Chicago-Kent College of Law
Email: cleslie@kentlaw.edu

Patentees sometimes use fraudulently procured patents to secure illegal monopolies, excluding efficient competitors and raising prices to consumers. While antitrust doctrine condemns the acquisition of monopoly power through fraudulently procured patents, antitrust liability hinges on whether the monopolist actually "enforced" the patent. Despite the critical importance of the definition of patent enforcement for antitrust law, no scholarship or commentary exists that addresses what conduct constitutes patent enforcement. Without explanation, lower courts have narrowly defined patent enforcement to mean either filing an infringement lawsuit or explicitly threatening to do so. This Article explains how monopolists with fraudulently procured patents have exploited this narrow conception of patent enforcement in order to effectively exclude competitors without triggering antitrust scrutiny.

This Article argues that whenever a monopolist exercises the exclusionary power of a patent, it is in fact effectively enforcing the patent for antitrust purposes. The Article concludes that courts must broaden their conception of "patent enforcement" to include, depending on context, publicly flaunting one's patent, publicly stating a general intent to sue infringers, accusing competitors of infringement, threatening competitors' business partners, and licensing activities. Courts currently do not consider these actions to ever constitute patent enforcement. As a result, the current interpretation of the enforcement requirement for antitrust purposes renders patent fraud cost-beneficial. Absent antitrust liability, it is rational for a monopolist to commit fraud on the PTO, maintain the patent as an ever-present threat, and simply not actively enforce it. These are not incentives that either patent law or antitrust law should create. Expanding the definition of patent enforcement will close the loophole that currently allows firms to acquire and exercise illegal monopoly power through the acquisition of fraudulently procured patents.