Facebook comments:

Classifying Patent and Copyright Law as “Property”: So What?
≡ Menu

Classifying Patent and Copyright Law as “Property”: So What?

In recent papers, two pro-intellectual property libertarians, Richard Epstein and Objectivist Adam Mossoff, try to defend IP by arguing that it “can” be treated like property by a legal system.

In Epstein’s case, see his The Structural Unity of Real and Intellectual Property (video) (discussed here) and his The Disintegration of Intellectual Property? A Classical Liberal Response to a Premature Obituary. From the abstract of the latter piece:

The title of this paper plays off the title of Thomas Grey’s well known article, The Disintegration of Property, which argued in part that the ceaseless consensual fragmentation and recombination of property rights revealed some inner incoherence of private property institutions. I take the opposite position and treat this supposed disintegration as evidence of the robust nature of private property rights, not only for land but for all forms of intellectual property.

From the text of the former article:

My historical path influences the way I think about intellectual property. While others might look first to the statutes or the case law, I take a step back from these particulars. I first try to understand something about the general configuration of property rights as it works for various kinds of material objects. So armed, I then asked how intellectual property fits into the general framework. I did not start with the question of why intellectual property in its various forms is unique and distinct. To me the key question is how much of basic understanding about property rights carries over into intellectual property.

… The next question is how do these four elements [for treatment of physical resources]—exclusion, disposition, fragmentation and concentration—combine when the task is to examine the universe of intellectual property? And the answer is, it translates amazingly well.

Mossoff, in his draft chapter “Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine,”1 argues (from Abstract):

At the start of the Industrial Revolution, patentees created many novel and complex transactions to commercialize their property: they maximized their profits through sophisticated agreements that imposed restrictions on manufacturing, sales, and other uses of their inventions. When these restrictions were challenged as invalid restraints on property, courts consistently upheld them. They did so by employing the same concepts and doctrines used by common law courts to validate the creation of lesser estates or restrictive covenants for real property. In sum, early American courts incorporated into patent law the same legal doctrines governing conveyances of real estate, even going so far as adopting the common law property concepts of “assignments” and “licenses.” Given widespread confusion today concerning patent conveyance doctrines, this chapter explains the structure and content of this now-forgotten doctrinal framework.

This analysis is descriptive (or positive, in economic parlance), but patent theorists today can draw at least two important lessons from it. First, it reveals how traditional property theory is determinative in patent law. Early American courts secured to patentees the same conveyance rights as owners of real estate because patents were “property.” Thus, by definition, patentees enjoyed the same rights as those of landowners – the exclusive rights of use, enjoyment and disposal. Courts applied to patentees the same legal rules for conveying estates, and thereby permitted patent-owners to sue downstream infringers if there was a properly created reversionary interest. Second, patents are now defined as securing only a right to exclude, and this has unhinged patent conveyance doctrines from their firm conceptual grounding in property law. When novel issues are presented to courts concerning complex conveyances of patent rights, the result is indeterminacy and confusion in both the Federal Circuit’s and the Supreme Court’s decisions. Perhaps it is time to rethink how the hoary concept of property was essential to the successful commercialization of property rights in inventions in the nineteenth century.

(And in another draft essay, “Trespass Fallacy in Patent Law,” Mossoff makes similar arguments, which I discuss in Mossoff: Patent Law Really Is as Straightforward as Real Estate Law.)

In other words, both authors are highlighting the fact that a modern property-rights-oriented legal system “can” treat IP rights under some of the same legal rules, as a property right. Well sure, I agree with them. But then so what? This is a fairly trivial observation, in terms of policy (as opposed to legal theory), unless it is supposed to imply that this somehow helps to legitimize–or maybe rehabilitate–IP law. But of course it does not. There is a distinction between positive law (and the legal rights corresponding to these laws), and what we libertarians sometimes call “natural law” or libertarian law (and the natural rights or libertarian rights corresponding thereto).2 The criminal gang called the state, through its law-creating legislature, can create any number of arbitrary positive rights or laws that contravene libertarian rights and justice.3 The right to receive social security payments could be viewed as an annuity. Another human could be viewed as property, and bought and sold as such. So what?

Calling something property, or fitting it into the state’s property law legal framework, does not mean it is legitimate property.4 To the contrary, just as the fed printing money dilutes the purchasing power of money, legislatively granting the status “property” to privileges granted by the state can only dilute the value of property itself. As Professor Tom Bell artices, in his witty Copyright Erodes Property?, “Calling copyright property risks eroding that valuable service mark.” To quote at greater length, Bell argues:

Copyrights and patents differ from tangible property in fundamental ways. Economically speaking, copyrights and patents are not rivalrous in consumption; whereas all the world can sing the same beautiful song, for instance, only one person can swallow a cool gulp of iced tea. Legally speaking, copyrights and patents exist only thanks to the express terms of the U.S. Constitution and various statutory enactments. In contrast, we enjoy tangible property thanks to common law, customary practices, and nature itself. Even birds recognize property rights in nests. They do not, however, copyright their songs.

Those represent but some of the reasons I have argued that we should call copyright an intellectual privilege, reserving property for things that deserve the label. Another, related reason: Calling copyright property risks eroding that valuable service mark.

Property as a service mark, like FedEx or Hooters? Yes. Thanks to long use, property has come to represent a distinct set of legal relations, including hard and fast rules relating to exclusion, use, alienation, and so forth. Copyright embodies those characteristics imperfectly, if at all. To call it intellectual property risks confusing consumers of legal services—citizens, attorneys, academics, judges, and lawmakers—about the nature of copyright. Worse yet, it confuses them about the nature of property. The property service mark suffers not merely dilution from copyright’s infringing use, but tarnishment, too.

Update: See Tom Bell: Copyright Erodes Property?, arguing that it is in fact inappropriate to classify or refer to IP as “property.” And see also Bell’s article “Copyright as Intellectual Property Privilege“:

Abstract: 
We often call copyright a species of intellectual property, abbreviating it, “IP.” This brief paper suggests that we consider copyright as another sort of IP: an intellectual privilege. Though copyright doubtless has some property-like attributes, it more closely resembles a special statutory benefit than it does a right, general in nature and grounded in common law, deserving the title of property. To call copyright a privilege accurately reflects legal and popular usage, past and present. It moreover offers salutary policy results, protecting property’s good name and rebalancing the public choice pressures that drive copyright policy. We face a choice between two ways of thinking about, and talking about, copyright: As an intellectual property that authors and their assigns own, or as an intellectual privilege that they merely hold. Perhaps no label can fully capture the unique and protean nature of copyright. Recognizing it as form of intellectual privilege would, however, help to keep copyright within its proper legal limits.

See also Peter S. Menell’s 2007 article The Property Rights Movement’s Embrace of Intellectual Property: True Love or Doomed Relationship?, concluding that:

the Property Rights Movement is too limited and grounded in absolutist ideology to support the needs of a dynamic, resource-sensitive intellectual property system. Professor Epstein’s *754 simplistic equation of real and intellectual property generates more heat than light. It is not particularly helpful to think of real and intellectual property as structurally unified. The differences matter significantly and resorting to rhetorical metaphors distracts attention from critical issues. As Judge (later Justice) Cardozo cautioned in 1926, “[m]etaphors in law are to be narrowly watched, for starting as devices to liberate thought, they end often by enslaving it.”

And Who are You Calling a Pirate?: Shaping Public Discourse in the Intellectual Property Debates Christina Mulligan Yale Law School, Information Society Project Brian Patrick Quinn affiliation not provided to SSRN October 22, 2010 Brandeis University Department of English Eighth Annual Graduate Conference, 2010 Abstract: To describe an activity as “piracy” is to code it as violent, avaricious, and unjustified. The word’s etymology in the Hellenistic Greek peirân, “to assault,” emphasizes the physical force involved. Later usage added the connotation of theft. Today, the term is applied to two groups that could hardly be more dissimilar. One group takes hostages at sea and sometimes harms them; the other, on a home computer, downloads songs and software without paying for them. This paper argues that the use of the word “piracy” by members of the content industry, such as recording companies, betrays an effort to naturalize a notion of intellectual property that has historically been rejected by courts in the English-speaking world. This notion holds that intellectual property is analogous to any material good and that, as a consequence, acquiring it without the permission of its creator is theft. We contend, in contrast, that this analogy between physical property and intellectual property is troubled for a number of reasons. Moreover, referring to violations of copyright law as “piracy” in public and legal discourse can, by rhetorically invoking the bloody anomie of maritime piracy, promote the unsupported notion that intellectual property protections are as natural as prohibitions of violent theft. This rhetorical legerdemain obscures intellectual property laws’ constructedness and papers over any gaps that exist between the letter of the law and the values of the citizens to whom it applies. Number of Pages in PDF File: 10 papers.ssrn.com/sol3/papers.cfm?abstract_id=1695461

Update: This is discussed by Bell in his recent interview on Surprisingly Free with Jerry Brito (see Tom Bell on copyright reform).

See also my 2008 Mises blog post: Are Copyrights and Patents Property Rights?:

Timothy Lee on the Cato blog notes that

The latest issue of Regulation magazine has a fantastic article by Peter Menell discussing the divisions in libertarian theory on copyright and patent issues. One one side is what Menel dubs the Property Rights Movement, of which Richard Epstein is a leading theoretician. They see intellectual property and more traditional property rights as fundamentally similar, and apply libertarian insights about the importance of strong property rights in tangible goods to debates over patent and copyright law. For theorists like Epstein, the need to reward the fruits of labor lie at the heart of the libertarian case for property rights, and as a consequence the argument for strong intellectual property rights is identical to the argument for tangible property rights.The other camp sees copyright and patent law as fundamentally different from tangible property rights. It includes F.A. Hayek, many “cyberlibertarians,” and Menell himself. For this camp, the fundamental argument for property rights is not about rewarding creativity so much as managing scarcity. We need strong property rights in tangible property so people can make plans about the use of scarce resources. Since inventions and creative works are non-rivalrous once created, the argument goes, property-like restrictions on their use are at best a necessary evil.

The paper cited is Intellectual Property and the Property Rights Movement by Peter S. Menell.

The last paper cited has a conclusion similar to the other Menell paper cited above:

The property rights movement is too limited and grounded in absolutist ideology to support the needs of a dynamic, resource-sensitive intellectual property system. It is not particularly helpful to think of real and intellectual property as “structurally unified.” To the contrary, the landscape of intellectual property itself is quite variegated. Functionally-oriented property rights analysis can be useful to legal and policy debates, but property rights rhetoric is misleading philosophically, historically, and functionally. Suggesting that “intellectual property” must be treated as part of a monolithic “property” edifice masks fundamental differences and distracts attention from critical issues.

Update: See also Jacob Huebert’s article The Fight Against Intellectual Property:

Intellectual property has origins that are far different and far more recent. As law professor Lawrence Lessig has put it, some people’s desire to treat IP rights just like we treat other property rights has “no reasonable connection to our actual legal tradition.”5 Rather, intellectual property rights are the product of government fiat — of statutes that grant inventors, writers, and artists a monopoly privilege to use certain ideas for certain lengths of time.

The people who enacted IP laws in the first place knew this well — that they were not recognizing some preexisting natural property right, but just granting a temporary privilege. This is clear in the wording of Article I, section 8, clause 8 of the US Constitution, which gives Congress “the power to promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” The language shows that Congress would be granting a positive right to serve a specific purpose, not recognizing some preexisting natural right.

And see Wendy J. Gordon, “Intellectual Property“, sec. 1.1.3:

The ‘property’ portion of the ‘intellectual property’ label has caused practical as well as conceptual difficulties. Too many courts have assumed that all things called ‘property’ should be treated similarly, ignoring the important physical, institutional, and statutory differences that distinguish intellectual ‘property’ from the tangible kind.

For example, it has become standard in the study of IP to note that patent and copyright reflect a balance between two effects on society: (1) providing incentives to authors and inventors, and (2) providing access to the members of the public, both as consumers and as potential new authors and inventors who need to copy in order to implement their own creativity and skill. The first goal (incentives) is served by giving rights to IP proprietors. The second goal (access) is served by giving liberties to the public,which involves limiting IP owners’ rights in ways quite foreign to ordinary property.Yet those limits are as crucial to IP as are the rights that IP grants. (Or at least the limits should be as important. The dynamics of public choice sometimes result in special interests having a greater impact on IP legislation than does the interest of the general public ….)

Another difficulty with the ‘property’ label is that, even more obviously than with ordinary property, the essence of IP law is person-to-person, not person-to-thing.This relational focus might have been better captured by the label that the US bar employed for the field during the first half of the last century,‘unfair competition’. In my view, that was a better phrase (albeit still imperfect) to unite the various doctrines. The core and most justifiable part of the essence of the IP cause of action is to restrain some act of duplication or free riding that, if widespread,would be wrongful (‘unfair’) because it is immoral and/or economically costly. Economic cost in IP usually stems from the danger that free riding will cause a loss of incentives, leading to under-production,or from the danger that fraud and confusion will result from too many entities using the same symbol. However,‘unfair competition’, too, is inadequate as a label.

Most obviously, it is misleading as a descriptive matter. IP owners today have rights against persons who are neither competitors nor cause effects like those caused by competitors. It is even a bit misleading to use ‘unfair competition’ as a normative model. That is because competitors are not the only persons who can use strangers’ patterns in ways that have deleterious social effects.

…  Dispensing with the need for a plaintiff to show a particularized personal or social harm reduced the cost of adjudication, increased certainty, and made it easier to buy and sell rights—and, so long as the IP was sufficiently narrow,may have done so without significantly chilling the socially desirable use of created works by third parties.

However, over the years, the definitions of both subject-matters and protectable rights have expanded.(For example,under early copyright statutes,the proprietor typically had rights only against slavish duplication and sale of the copyrighted manuscript. She had no right to veto, for example, a creative adaptation of her work that served a different market. By contrast, today a copyright proprietor’s rights extend over creative uses that others may wish to make of her work.) With this expansion,a lack of fit between private and public interest has become increasingly likely to occur in given IP cases.

At least, so is the view of this writer, and of the growing academic consensus. Various devices exist to ameliorate this situation. …

[Mises]
Update: See also Yet more disanalogies between copyright and real property.

  1. George Mason Law & Economics Research Paper No. 11-27; forthcoming in Competition Policy and Patent Law Under Uncertainty: Regulating Innovation, Geoffrey A. Manne, Joshua D. Wright, eds., Cambridge University Press, 2011. []
  2. See my post Logical and Legal Positivism. []
  3. See my “Legislation and Law in a Free Society.” []
  4. See my post Intellectual Properganda. []
  5. Lawrence Lessig, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control CreativityDownload PDF (New York: Penguin, 2004). []
Share

{ 2 comments… add one }

  • T. Kingston October 4, 2011, 7:31 pm

    “Even birds recognize property rights in nests. They do not, however, copyright their songs.”

    This is a great quote. As always, thanks for sharing this article and your thoughts on IP. You are a breath of fresh air.

  • Lawrence D’Oliveiro October 5, 2011, 3:55 am

    It is worse than mere “dilution” of the concept of property, the concept of “intellectual property” is downright incompatible with property rights. The question I like to ask is: if I buy something, do I own it? With normal property, I do, but as soon as “intellectual property” gets involved, the answer becomes “not really”.

CC0
To the extent possible under law, Stephan Kinsella has waived all copyright and related or neighboring rights to C4SIF. This work is published from: United States. In the event the CC0 license is unenforceable a  Creative Commons License Creative Commons Attribution 3.0 License is hereby granted.