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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,” ((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.)) 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.

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). ((See my post Logical and Legal Positivism.)) 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. ((See my “Legislation and Law in a Free Society.”)) 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. ((See my post Intellectual Properganda.)) 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.


Stephan Kinsella

Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom, and editor of Libertarian Papers.

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