There is no such law, and it's never been a fiduciary duty.

There is one common law school case where a court smacked down Henry Ford for saying he didn't care about shareholders, just his workers, but that's because it was the Dodge brothers bringing suit and Henry Ford was being a huge dick. That case wasn't really a correct statement of the law even at the time.

>Sure, you can sue for breach of fiduciary duty, but that duty does not include no-holds-barred maximization.

That depends on what you mean by "no-holds-barred". If the company is giving up potential income they had better be able to explain the reason, otherwise it is a breach of fiduciary duty. Of course they're not allowed to do anything illegal, and you can probably get away with saying "this would give us bad PR". But "we don't enforce our patents because we think patents are stupid" is definitely a breach of fiduciary duty.

See here:

http://www.litigationandtrial.com/2010/09/articles/series/sp...

Managers have extremely wide latitude under the law to run the business as they see fit. As long as they have some hazy explanation as to how their actions could plausibly be for the benefit of shareholders, then they can do as they please. If shareholders don't like that, they can fire the managers. For example, Bezos could certainly say, "We think patents are stupid, as do many of our key customers, potential acquisition targets, and employees we'd like to hire." That could all be hogwash, but as long as he says it with a straight face on the witness stand, I don't believe he can successfully be sued personally.

The only reason eBay v Newmark exists as a case is that the managers are also the majority shareholders, which introduces a conflict of interest. (Well, that and the fact that eBay are dicks who were trying to fuck with a key competitor.) It's a weird case, and that decision has no practical implication for Bezos.

That bit from the decision comes up in regards to complicated stock shenanigans designed to keep eBay from getting more CL stock. The principle isn't being applied to ordinary management decisions, just decisions about stock ownership and board seats. So even if this decision did mean something for Bezos, it wouldn't mean anything about him deciding not to enforce patents.

Somebody else already cited this, and I don't think it proves what you think it proves. In this case, Craig and Jim were sued because they were actively attempting to diminish eBay's share value. In my inexpert opinion, it is not analogous to failing to enforce dubious patents. At any rate, the odds that Amazon would actually have been sued for failing to enforce one-click strike me as incredibly low.

IANAL, but I believe that you are correct, the corporation must pursue its shareholder interests for the purposes outlined in its articles of incorporation. That can be (afaik) any legal purpose. AMZN has repeatedly communicated their purpose of maximizing long-term shareholder value.

> AMZN has repeatedly communicated their purpose of maximizing long-term shareholder value

Even that doesn't pin them down. Amazon can easily say they believe it is in their own long term interests to campaign against patent laws and therefore sacrificing a small short term profit from the one-click patent is a logically correct way to maximize long term shareholder value. The argument that a company "has to do evil thing X" to maximize shareholder value is pretty much always just an excuse for avoiding argument about whether "thing X" is evil or not.

I am not a lawyer but it would seem that the ebay v. craigslist ruling would have the same effect.

http://www.litigationandtrial.com/2010/09/articles/series/sp...

If you read the decision, it seems that it is not really about shareholder maximization as we are discussing here. Instead, Jim and Craig actively worked to minimize the value of eBay's shares. Also, the very article you cite discusses a few ways in which companies can fail to perfectly maximize profits yet still stay on the correct side of the law. One example is philanthropy.

Except corporate philanthropy has limits. If the CEO of Exxon decided to donate 50% of all profits to philanthropy you can bet there would be a host of successful lawsuits.

If on the other hand a company's charter stats that 50% of all profits are donated to charity before it goes public then you your unlikely to successively sue them for continuing to do so.

On the third hand, extreme examples might not be relevant to a more minor tweak of profits like suing or not suing over one-click. If it's a matter of degrees, degrees matter.

True, enough. There are plenty of company's like IBM where giving up patent revenue without changes to the patent system would heavily impact there profits. However, IBM has donated a fair number of patents in the past.

http://www.nytimes.com/2005/01/11/technology/11soft.html

Along massive quantities of data. http://depth-first.com/articles/2011/12/15/ibm-donates-large...