Volume 8 / Number 1 / Spring 2004

This page contains the abstracts, as well as links to the complete document on Westlaw.com, for the articles in our Spring 2004 Issue.

 

Article

 

Does Size Matter? An Economic Analysis of Small Business Exemptions From Regulation
C. Steven Bradford
Westlaw
In the ant’s house the dew is a flood.”
-Persian Proverb
The author examines whether exemptions for small businesses and small transactions that appear in many regulations are economically efficient. The cost of regulation has both variable and fixed components. As demonstrated by many empirical studies of regulatory compliance costs, the fixed costs of regulation, and some of the variable costs, are subject to economies of scale that benefit larger firms and larger transactions. Though it is harder to measure the benefits of regulation, the benefits of regulation generally vary in proportion to the size of the regulated firm or transaction. The author develops a mathematical model of how the costs and benefits of regulation vary with size and concludes that, no matter what assumptions one makes in constructing that model, it supports small business exemptions. However, when transactions costs, the cumulative effect of regulation, and other real-world issues are considered, the case for small business exemptions is more ambiguous.

 

Comments

 

Does Sound Travel in Cyberspace?
Joseph P. Kenrick
Westlaw
The 1998 Digital Millennium Copyright Act’s (DMCA) statutory licensing fee for webcast transmissions of musical performances artificially creates a barrier to entry that is not inherent to the nature of the Internet radio industry, and will result in the elimination of most small independent Internet radio broadcasters. Applying the theories of industrial organization to the traditional and Internet radio markets demonstrate why musicians and the public are better served by an Internet radio industry consisting of many smaller firms, rather than a few larger firms. Borrowing concepts from open source software, open music licenses promote creativity and quality in music and provide a richer musical market for consumers than the statutory licensing scheme imposed on Internet radio by the DMCA.

Electronic Signature Laws and the Need for Uniformity in the Global Market
Anda Lincoln
Westlaw
There are an abundance of electronic signature laws. The profusion of approaches to electronic signature authentication fosters confusion for businesses as well as consumers. It also creates higher transaction costs and impedes the growth of e-commerce. This paper analyzes and compares the two foremost electronic signature laws: The Federal United States law and the European Union law. This paper details the need for global uniformity of e-commerce laws and concludes with a proposal for change.

Reasonable Royalties for 18-Month Patent Publication Infrindgement: An Unreasonable Remedy For Small Businesses
Bryan J. Massey
Westlaw
On November 29, 1999, Congress enacted the American Inventors Protection Act (AIPA), which, among other things, requires patent applicants to publish their patent applications eighteen months after filing unless specific exceptions are met. While advantageous for large corporations, the pre-grant publication requirement is seemingly disadvantageous for small businesses. The exceptions to the requirement and a new provisional right grant were thought by Congress to alleviate the apparent negative impact that publicly disclosing a patent application prior to issuance would bring small business applicants. This Comment explores the ineffectiveness of the exceptions to the 18-month publication requirement and the inadequacy of the remedy associated with provisional rights and patent publication infringement. It concludes by providing justification for a change in the AIPA and proposing a proper remedy for small businesses based on foreign patent policy and trade secret misappropriation analogies.

 

Recent Developments

 

Maintaining Innocence: All Appropriate Inquiry Under the Small Business Liability Relief and Brownsfields Revitalization Act
William H. Dolan
Westlaw
The Small Business Liability Relief and Brownfields Revitalization Act of 2002 seeks to encourage redevelopment of Brownfields by clarifying the “all appropriate inquiry” standard that is a requirement to affirmative defenses for the Comprehensive Environmental Response, Compensation and Liability Act. The Environmental Protection Agency is drafting a new all appropriate inquiry standard to replace the industry-adopted standard currently used. While the clarification will create more certainty so that small businesses purchasing commercial property will know how to protect themselves, the changes will drive up the transactional costs for every commercial property transaction.