LeFevre on Intellectual Property and the “Ownership of Intangibles”

Chapter X

Ownership of Intangibles

The difficulty experienced in establishing the abstract concept of ownership when the owner is absent, is merely the forerunner of additional difficulties which are glimpsed as consideration is given to the ownership of intangibles.

Intangible properties are characterized by boundaries that are invisible to sight or not subject to discovery by touch. In this category we find contracts of all kinds, both real and implied; odors, sounds, and ideas.

Odors and sounds can be dealt with first. At the moment, our technology is such that to deal with them as property, we deal with tangible containers rather than with the items themselves. An odor is a distinctive olfactory stimulation emanating from a source. The source can be identified by its physical boundaries, and the owner controls and is sovereign over that source. Sounds have much the same characteristic. They arise from a source and the source is tangible and subject to ownership. We have phonograph records and sheet music. We attend concerts or operas and exchange money for the privilege of listening to sounds for a period of time. We never really own the sounds we hear. A musical performance offered to the public falls into the category of a contract which has a boundary other than a physical source. As listeners, we never presume that we own the performers or their instruments, although we have paid to hear them.

Contracts of all kinds are usually bounded by time. Many written contracts have a phrase included to the effect that “time is of the essence of this contract.” When we purchase a ticket to a musical performance, the purchase entitles us to remain and enjoy, for its duration, whatever sounds are offered.

A man owns a field and hires a worker to harvest his grain. He agrees to pay the worker on a time or a quantity basis. He either contracts for so much an hour, a week, or a month, or he contracts for so many bushels of grain at such and such a rate per bushel. The owner of the field has not purchased the worker. But he has obtained a property right in the projected labor of the worker.

Similarly, and in harmony with all contracts, the other party to the contract has bound the owner. He does not own the field, nor does he own the owner. But he has obtained a property right to so many dollars and cents in the projected reimbursement he is to receive as a result of services rendered.

Since every contract is essentially a matter of trust, an act of extending credit, it invariably includes time as a boundary. The worker extends credit to the owner of the field while he labors. The owner of the field extends a trust to the worker by permitting him access to his property. It is understood that the produce garnered by the worker does not belong to the worker; it belongs to the owner, even though it is the labor of the worker that brings in the grain.

Any extension of credit by anyone to anyone is nothing more than a property right extended through time. When the time has elapsed, the contract has expired. It can only be renewed by the agreement of both contracting parties.

All contracts, of necessity, involve two or more parties. No contract exists in the singular. And each contracting party becomes an owner of the agreed-upon terms or conditions made by the other side which will be delivered in time. All contracts, whether they relate to anticipated services fulfilled, or anticipated delivery of goods or tangible property, are properties in themselves. They are jointly owned by the contracting parties, each party obtaining a property right in the promise of the other to specific performance when the contract is fulfilled.

The marriage contract is essentially an intangible property involving mutual exchange of goods and services. It is important to realize that all valid contracts assume a property to exist, either in performance or relationship, and do not make of either contracting party a property per se. Thus, a contracting man or woman is not property. The contracting party is an owner, and acquires a right in the goods or services of another, not in the will or identity of the other.

Unfortunately, this distinction is not always fully grasped. It is quite common for one or both spouses in a marriage contract to presume that their opposite number is actually a possession of theirs. Our language gives credence to this supposition for it is usual to hear a man refer to his partner as “my wife.” She is not his in a property sense. But he does have a claim to her services by virtue of the contract into which they have voluntarily entered. Similarly, though the wife may refer to her mate as “my husband,” she does not own him. She merely has a property right in his services or goods.

A similar problem frequently arises among employers who may, since they rarely take the time to think about it, presume that employees working for them are actually “owned.” They are not. They retain their ownership of themselves. The employer merely has a property right contracted for, during a specific period of time, and involving the labor, skills, or energies of the employee. Similarly, an employee may look upon his employer as “my boss” and view him almost as a possession he has managed to acquire. Or, the employee may suppose that once he has been hired, the job is his property, regardless of the length of the contract. Unless an employment contract is specifically set forth to cover an extended period, it is usual and reasonable to assume that the point wherein wages are paid is the terminal point of the contract. Thus, if an employee wishes to terminate his working relationship with a given employer, it is usual and reasonable for him to notify his employer, at the beginning of a pay period, that this will be final pay period he will remain under contract with the employer. Similarly, if an employer wishes to dispense with the services of an employee, it is reasonable and usual for him to notify the employee of this fact at the beginning of a pay period. While today most employment occurs on an “until notification” basis, in actual fact no real contract exists beyond the agreed-upon pay period unless otherwise specified. It is merely tacitly understood that unless notification occurs from one party to another, the contract is automatically renewed after each pay period.

The ownership of an idea is probably the most difficult and abstract area of property to consider. All ideas are the product of the mind. In this respect, the mind itself is the perfect receptacle. As long as the idea remains in the mind that conceived it, it is unlikely that any question can be raised concerning its ownership. But when a person expresses an idea either verbally, in writing, or in an art form, the idea is no longer exclusively bounded by the mind that conceived it. Nor is there any automatic time factor that can be invoked. Expressing an idea is somewhat analogous to emptying the water from a bucket. The interior of the bucket may still contain traces of moisture just as the original mind may retain the original idea. But the boundary by means of which the original idea was positively contained has now been extended without limit. This is particularly true of any verbal expression.

An idea in writing is bounded to some degree by the paper to which it is confided. Ownership of the paper is easily established. The paper has boundaries, and control of it is a simple matter. Similarly, an idea reduced to an art form, regardless of the kind of form utilized, has a kind of boundary in the sense that the form has boundaries and the form itself is subject to the control of an owner. Even so, the person who reads what is written on the paper, or studies the art form and from it deduces an idea, is in a position to extract the idea while the form remains in the ownership of the person expressing the idea. But a verbal expression of an idea releases the idea into the minds of any persons within hearing distance. The words employed in a verbal expression are not subject to ownership. The mere fact that a word can be used to convey an idea reveals that no word can be the exclusive property of anyone. Words are abstractions in the form of symobls. Their usefulness relates to the fact that they are not property, but rather they are symbols which can be generally recognized and understood.

One can attempt to set forth a contractual understanding in advance of one’s expression of an idea. A person can enjoin his hearer or audience that the idea he intends to express is private property and although he wishes them to know of it, he does not wish them to use it. Assuming they agree in advance to this restraint, then, depending on their respect for intangible property, he can, to some degree at least, retain control. But to demand of a man that he listen to your idea but not use it, is a little like demanding of a sponge on which you are about to pour water, that it not absorb the water.

The human mind is a kind of sponge which absorbs ideas from many sources. Although a man may be completely honest and have the best intentions imaginable, an idea transferred to him is bound to enter into his consciousness if he grasps it at all, and while he may live up to this promise not to use the idea, it is entirely possible that the idea he has heard will stimulate his mind in such a way that the new thought will germinate a growth other than the one originally presented. Thus, while he scrupulously avoids use of the idea as he heard it, he may very well use a tangential outgrowth from that idea. Nor could this be prevented.

The mind is stimulated to some degree by everything heard, seen, or comprehended. Further, even when an idea is scrupulously copied, it takes on a new quality from each new mind that accepts and ultimately expresses it. We are all different and, to some degree, unique. To forbid a man to think, but at the same time to ask him to listen, is somewhat incongruous. It is like suggesting to a man that as he looks about him viewing various objects, products, and processes, he refrain from understanding them and applying the ideas in them.

While there is certainly nothing wrong with keeping an idea to oneself, or even placing others with whom the idea is shared on some kind of contractual basis, to attempt to do this totally is in essence to ask for some kind of tyrannical power over the minds of men. If an idea is so precious that you do not want others to use it, perfect security is possible by refusing to discuss it. The curious thing here is that many men, believing their ideas to be unique and of enormous value, wish to share them with others, impress others with their importance, and at the same time retain total control and ownership of what they express. This desire reaches somewhat absurd proportions when men who have possibly come up with something new presume that they are the total originators of what they offer as their own. The very words they use to express a thought are words for which they are indebted to their forebears of ancient times. Dare they use a word to express a thought without acknowledging the originator of the word, and possibly setting some money aside for the estate of that individual, together with all his descendants? Since ideas are always composites of other ideas, no one is truly original.

Further, if one man can come up with a new development relating to ideas he has absorbed from many others, so can other men. It is common occurrence for two men, in widely spaced geographic areas, to come up at the same time with ideas which are virtually identical. Since each man accomplished his own cerebration, it is reasonable to state that each man has actually conceived of the idea and hence that neither man has total ownership of the idea, since all that has happened is the production of duplicate copies of the same idea. It is no more wrong for two men or many men to come up with the same idea than it is for two men or many men to manufacture chairs. Obviously, each chair will be much the same in concept, while no two will be precisely alike.

It is entirely possible that the lack of original thinking at the present time is tied directly into our patent and copyright legal system. Many men entirely capable of reasoning in pioneer areas and methods spend so much of their time and energy worrying about the possibility that someone may get hold of their ideas that they curtail their ideation, and we are all the poorer as a result.

This situation is most visible when some men offer courses of instruction wherein they present ideas, to which they have added their own unique touch, and after having accepted a fee for the course of instruction they offer, forbid a purchaser to make use of any of the ideas offered without paying an additional fee. They demand of their students that they comprehend the ideas offered, and at the same time seek to place each paying student under a contractual obligation never to make use of what was learned without acknowledgment, both verbal and financial.

The same practice can be found in the realm of recorded music, filmed and taped entertainment, and the like. Artists are hired and paid fabulous sums to make a permanent record of their skills and talents. Then, every time these recordings, tapes, or films are exposed publicly, an additional fee is demanded. By this process, the investor who pays for the original work never really owns what he has purchased. Still, he presumes that he is an owner. And the resulting legal entanglements, lawsuits, bickering, and bad faith are almost incalculable. Is this not something akin to selling a man a chair and then requiring that every time the chair is used, an additional fee be paid to the man who built the chair? Or possibly an additional fee to the man who first conceived of the idea of a chair, if he or his heirs can be located (and etc.)?

The problem relates to ownership. If a recording, a piece of sheet music, or taped or filmed entertainment were rented and a fee paid for its use, there would be no problem. The difficulty arises in the conflict between ownership and rental. If ownership exists, then use should be unrestricted since total control accompanies ownership. If a rental or leasing arrangement exists, then the ownership of the item remains with the lessor and there is no problem.

I would contend that ownership is enhanced and greater human satisfaction will ensue when the purchaser of any product or service obtains total rights over what he has purchased and thus may employ his product or service as he sees fit without some retroactive obligation. While I would uphold the right of any man to contract in any way he wishes at the time he does anything or proposes to do anything, I would oppose any effort to limit or control total ownership. Ownership of anything is a total condition, when rightfully seen. To sell something to another yet at the same time to retain rights in the use of that item is to make a conditional sale. This process leads to endless bookkeeping and much wasted energy. It is not immoral, per se, but it is far from being fully productive.

See also this related comment:

‎”One of the principal characteristics of the toolmaker is his ability not only to devise the original tools but to improve upon that tool which he has devised. It could be argued that a failure to improve a given tool, while other tools were being improved, might seriously handicap man’s progress.”⁸