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Intellectual Property and the Property Rights Movement

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Intellectual Property and the Property Rights Movement RESEARCH & DEVELOPMENT= Should intellectualproperty be accorded the same protections as tangibleforms ofproperty? Intellectual Property and the Property Rights Movement By PETER S. MENELL University of California,Berkeley School ofLaw he property rights movement (PRM) has sought to enjoin eBay, the popular online auctioneer, from fur- taken active interest in several Supreme ther use of the patented method in the hope of forcing a favor- Court cases over the past few years. It was able licensing deal. The patentability of such methods was itself hardly surprising to see PRM activists quite controversial because of the abstract nature of business mobilize in support ofSusette Kelo, whose method claims. Furthermore, the governmental "interference" home was condemned by the city of New with the patent owner's property was limited. The district court London. She argued that condemning her denied MercExchange's request for a permanent injunction property to convey it to a private developer did not constitute based on the patent owner's willingness to license to other par- "public use" and hence violated her constitutional rights. Ms. ties, the adequacy of monetary damages, the fact that the pat- Kelo's plight fell squarely within PRM's core agenda of safe- entee did not itself practice the invention, and "growing con- guarding the liberty interests of property owners against gov- cern" over the effects of business method patents on ernmental interference. Nor was it surprising to see PRM organ- competition and innovation. The U.S. Court of Appeals over- izations mobilize in Rapanos v. UnitedStates, involving the scope turned the denial of the permanent injunction, holding that, of federal authority to regulate wetlands; San Remo Hotel v. City as a "general rule," injunctions must follow all patent infringe- & County ofSan Francisco, challenging the constitutionality of ment findings absent "exceptional circumstances" such as a a hotel conversion ordinance under the Takings Clause; Lingle grave risk to public health. As a result, eBay appealed to the v. Chevron US.A., seeking to overturn a state statute limiting the Supreme Court, which granted certiorari in late 2005. rent that oil companies could charge dealers leasing company- In an amicus brief filed in the Supreme Court on behalf owned service stations; or Tahoe-SierraPreservation Council, Inc. of "various law and economics scholars," Prof. Richard v. Tahoe Regional PlanningAgency, asserting that a temporary Epstein, one of the PRM's leading theorists, contended that moratorium on development effected an unconstitutional the Merc-Exchange patent deserved much the same pro- taking of private property. tection as real estate. By analogizing patent infringement to By contrast, eBay v. MercExchange did not seem to fit the PRM trespass, the brief argued that injunctive relief should be pre- mold. The "property" at issue - a patent on a method of sell- sumed in cases of patent infringement. It pushed the bound- ing goods through an "electronic network of consignment aries of patent law advocacy by citing land encroachment stores" - could hardly have been more different in character and precedent. economic underpinning than Susette Kelo's home. MercEx- The property rights rhetoric in the eBay case marked an change had prevailed in a patent infringement action and important new front in the campaign to establish a strict and broad interpretation of property rights and their enforce- Peter S. Menell is professor of law at the University of California, Berkeley School ment. Professor Epstein's expansion of his property rights of Law and director of the schools Berkeley Center for Law and Technology. advocacy into the intellectual property domain over the past 36 REGULATION FALL 2007 HeinOnline -- 30 Regulation 36 2007-2008 'A several years coincides with the growing importance ofintan- term "intellectual property" in a reported legal decision can gible assets in the modern economy. The digital revolution has be traced to an 1845 patent case in which the court observed displaced General Motors and other manufacturing enter- that "a liberal construction ... given to a patent" will encour- prises from the top of the economic food chain. Knowledge- age "ingenuity and perseverance" and "only in this way can we based companies such as Google, Microsoft, and Apple reflect protect intellectualproperty, the labors of the mind, productions the new economic order. and interests as much a man's own, and as much the fruit of Other property rights advocates have joined the effort to his honest industry, as the wheat he cultivates, or the flocks "port" the absolutist libertarian vision to the realm of intel- he rears." Prof.Justin Hughes, in a recent Southern California lectual property. In a May 21, 2007 op-ed page advertisement Law Review article, notes that "the courts and legislatures had in the New York Times, the Washington Legal Foundation led: regularly discussed copyrighted works as 'property' through- out the seventeenth, eighteenth, and early nineteenth cen- Stolen Property, Stolen Future turies, with the adjectival concepts of 'artistic,' 'literary,' and What if strangers showed up in your backyard and 'intellectual' orbiting around the property notion." held a block party? America's fiercely defended tradi- There can be little question today that intellectual property tion of private property rights wouldn't tolerate this. assets are forms of "property." The Patent Act expressly declares But that is in essence what's happening to the intel- that "patents shall have the attributes ofpersonal property" and lectual property ... of American businesses overseas. the Supreme Court acknowledges them as such. The Copyright Should "intellectual property" be so blithely equated with Act states that "ownership of a copyright may be transferred in tangible forms of "property"? While there are certainly his- whole or in part by any means of conveyance or by operation torical connections and functional parallels between "intel- of law, and may be bequeathed by will or pass as personalprop- lectual property" and "property," philosophical, legal, eco- erty by the applicable laws of intestate succession." nomic, and political bases for protecting intellectual property But the classification of patents, copyrights, trademarks, and tangible property differ in significant ways. Those under- and trade secrets as forms of "property" does not resolve the pinnings suggest that the effort to bring intellectual proper- contours of those assets and the rights and protections that ty into the "property" tent may well backfire. their owners enjoy. Property is not a monolithic concept and its treatment varies significantly across classes of resources. SEMANTICS AND SUBSTANCE The critical question is not whether the rubric "property" Private property in land and other tangible resources is per- applies to intellectual property, but whether the traditional haps the oldest human institution and has long occupied a rights associated with real and other tangible forms of prop- prominent position in law and philosophy. But to what extent erty apply to intellectual property. does intellectual property - rights in intangible resources - Professor Epstein and some other PRM advocates assert fall within the relatively uniform right structure applied to that the rules associated with real property (such as a strict land and other tangible resources? right to exclude and restrictions on governmental interference) The law has long treated land and intellectual property should govern intellectual property. Those scholars would within the general rubric of "property." The first use of the shoehorn intellectual property into an idealized Blackstonian HeinOnline -- 30 Regulation 37 2007-2008 REGULATION FALL 2007 37 RESEARCH & DEVELOPMENT conception of property rights as exclusive and inviolate. Yet (although in the case of copyrights, the term is quite long). such a classification is more semantic than actual. The two Furthermore, exclusivity in the field of "intellectual proper- fields derive from different philosophical foundations, ty" is far less inviolate than it is in the traditional property embody different rules and institutions, and reflect different domains. Intellectual property law comprises a system of pol- political constituencies. icy levers that legislatures tailor and courts interpret in order to promote innovation and protect the integrity of markets PHILOSOPHICAL DIFFERENCES in light of the ever-changing state of technology as well as John Locke believed that every man has an inherent property social institutions. interest in his own person and, by extension, in the labor of his Patent law's experimental use defense and various excep- body, subject to there being "enough, and as good left in com- tions (e.g., severe restrictions on enforcement of medical pro- mon for others." Upon this foundation, Locke asserted "life, cedure patents, prior user rights for business methods) limit liberty, and property" to be inalienable rights of a just society. the exclusivity of patent rights. Copyright law's fair use doc- Drawing upon Locke's natural rights conception of prop- trine, numerous compulsory licenses, and various exemp- erty, the Property Rights Movement advocates an absolutist tions significantly qualify the exclusivity of copyright interests. approach to the protection of property rights and strict lim- Trademark law's distinctiveness doctrine, infringement stan- itations on government interference with private
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