Introduction: What Is Property?

Lara Covington

INTRODUCTION: WHAT IS PROPERTY?

Property: a legally protected expectation of being able to draw some advantage from the thing in question according to the nature of the case.

Property Basics

Real Property = relates to land and those things more or less permanently attached to it

▪ Ex: buildings, houses, etc.

▪ Property right is usually given by the state or transferred by the owner

Personal Property/chattel = all other things subject to individual rights; tangible or intangible

▪ Tangible property: things that are movable and touchable. Ex: watch, pen, etc.

▪ Intangible property: financial instruments (stocks, bonds) and intellectual property (copyrights, patents, trademarks, etc.).

▪ Property right is usually created specifically for sale or use by the creator and clearly belongs to its producer.

Property Rights (“bundle of rights”)

= Protection of property rights creates incentives to use resources efficiently (economic function)

▪ Right to exclude:

· “To the world: keep off unless you have my permission, which I may grant or withhold. Signed, Private Citizen. Endorsed by the State.” Cohen.

· Endorsement of the State: property and the state are born together and will die together, without the state there is no property and without property there is no state.

· limited in cases of emergency or necessity

· for commercial property: limited by state civil rights laws

▪ Right to use and enjoy

· limitations when the using or enjoying affects others (noise ordinances, covenants)

▪ Right to transfer (during life or upon death)

· limitations/restrictions on rental of property (FHA)

▪ Right to maintain ownership of property

· limitations imposed by state by foreclosure or eminent domain power

Justifications for the institution of “private” property

1. Occupation theory: simple fact of occupation or possession of a thing justifies legal protection of the occupier or possessor’s claim to the thing.

Ex: Faverstrom’s – they occupied the land

1. Labor theory: a person has a moral right to the ownership and control of things he produces or acquires through his labor.

Ex: If a person clears wilderness (labor of clearing unowned land leads to entitlement)

1. Contract theory: private property is the result of a contract between individuals and the community
2. Natural rights theory: natural law dictates the recognition of private property
3. Social utility theory: the law should promote the maximum fulfillment of human needs and aspirations, and that legal protection of private property does, in fact promote such fulfillment.
4. Granting property rights in a thing helps to encourage productive use.

Three criteria of an efficient system of property rights:

1. Universality: i.e., all resources should be owned or ownable by someone unless it is so abundant as to make ownership unnecessary.
2. Exclusivity: to give owners an incentive to incur the costs required to make efficient use of resources owned by them.
3. Transferability: because “if a property right cannot be transferred, there is no way of shifting a resource from a less productive to a more productive use through voluntary exchange.”

ACQUIRING LEGAL RIGHTS TO TRANSFER

(OTHER THAN VOLUNTARILY)

Adverse Possession

= a non-owner can acquire full ownership rights in real property is the non-owner “possesses” property without permission by the “true” owner for a certain amount of time.

▪ It must be actual possession that is open and notorious, exclusive, continuous, and adverse or hostile for the statutory period.

▪ this applies to the property, not the owner. The time frame can encompass many owners.

▪ the statute of limitations begins to run when the claimant goes adversely into possession of the true owner’s land

Actual possession

▪ Must be sufficient to assert general ownership of the strip of land or parcel in question.

▪ Can amount to the ordinary use to which the land is capable and such as an owner would make of it (taking care of it, maintaining it, etc.).

▪ A prescriptive easement may be granted for limited use of the land

Open and notorious

▪ Notorious = notice-giving

▪ Must be sufficiently visible and obvious to put a reasonable owner on notice that her property is being occupied by a non-owner with the intent of claiming possessory rights.

▪ The “true” owner is charged with seeing what reasonable inspection would disclose.

- no actual notice required, constructive notice is sufficient

Exclusive

▪ Use of a type that would be expected of a true owner of the land in question

▪ Possession cannot be shared with the true owner

▪ Two adverse possessors may acquire joint ownership rights as co-owners.

Continuous

▪ Must exercise control over the property in the ways customarily pursued by owners

· look at characteristics of land and the customs of the community it’s in.

· for rural land, a lesser exercise of dominion or control may be sufficient

▪ Tacking doctrine: Succeeding periods of possession by different persons may be added together

· most states require that the successors are in privity with each other.

· If the successor dispossessed the prior adverse possessor, there is generally no benefit from the tracking doctrine; it must be from the true owner.

Adverse or Hostile

▪ Use must be without permission of true owner.

▪ Adverse possessors state of mind (three tests)

· Lack of permission/bad faith (objective)

-adverse possessor acted without permission of true owner.

-Permission is a complete defense, but must be proven.

-The intent of the trespasser is irrelevant. Most commonly used test.

· Intentional dispossession (subjective)

- adverse possessor is aware that the land belongs to someone else and intends to dispossess true owner (bad faith trespasser).

· Good faith (subjective)

- adverse possessor mistakenly occupies property owned by someone else.

▪ True owner’s state of mind

· Presumptive permission

· true owner considers use of land as permissible unless otherwise explicitly stated.

· Presumptive non-permission

· used by most courts; use of land is considered non-permissive unless permission is explicitly given.

For the statutory period

▪ Usually 10, 15, or 20 years.

▪ Many states will toll the statute of limitations if the true owner is under a disability.

· infancy, insanity, incompetence.

· some states say that being out of the state or imprisonment can be a disability.

▪ If the true owner files suit before the statutory period runs out and judgment is rendered after the period ends, the judgment will relate back to the time when the complaint was filed

▪ Under Color of Title: some states require that adverse possessors show that they purchased the property pursuant to a deed that mistakenly failed to describe accurately the boundaries of the property and that possessed the land in the belief that they owned it.

▪ Claims against the Government: generally not upheld.

· certain instances where there are exceptions

Prescriptive Easement

= limited right to use the property of another

Requirements: exclusivity not required for a prescriptive easement and “actual possession” is replaced by “actual use”

▪ affirmative easement = right to affirmatively do something with respect to someone else’s property

· right to walk through backyard

▪ negative easement = right to prevent someone from doing something on their property

· neighbor prevents you from building an additional story on your house.

▪ analogous to the doctrine of adverse possession: except with easements you can only use them for limited purposes and there are relaxed requirements

Theoretical justification of adverse possession

▪ more efficient use of the land (shown in actual possession requirement)

- why not require that the adverse possessor to purchase it?

· reliance, unfair bargaining

▪ reliance on the land after a certain period/settled expectations (show in continuity requirement)

- adverse possessor has already grown roots and become attached to the property

▪ response to European feudalism

- prevent land from concentrating in the hands of few

▪ punishment of the true owner for not monitoring her property and making an objectively efficient use of it/ encouraging productive use

- don’t want the land to be left idle

-involves value judgments about what the proper use of property is.

The Body and Genetic Material (and Patent Law)

Patent law

= creates a limited monopoly to encourage the production of inventions – processes, machines, and compositions of matter.

▪ basis for Patent law stems from Art.1, § 8, cl.8 of Constitution: empowers Congress “to promote the progress of science and the useful arts by securing for limited times the authors and inventors the exclusive right to their writings and discoveries.”

History: came from Royal “Letters Patent” that granted exclusive privileges to conduct certain trades or manufacture certain goods

Policy: public benefits directly from the invention and the spur to innovation

Requirements: must obtain a patent from Patent and Trademark Office (PTO) when meets requirements:

▪ patentable subject matter

· process, machine, manufacture, or composition of matter

▪ novelty, non-obviousness and usefulness

Rights: inventor obtains exclusive rights to make, use, and sell the innovation and exclude others

▪ protects even against independent creation

▪ (trade secrets have unlimited terms: recipe for Coke)

▪ the patent owner need not use the patent, but must prove its use elsewhere

Exceptions: laws of nature, natural phenomena, and abstract ides.

▪ BUT, an application of any of above can be patented

Duration: a period of 20 years from the date of the patent application

Pros:gives incentive to pursue inventions and public disclose them and it rewards the labor of inventor

Cons: creates “artificial scarcity” (prevents others from non-rivalrous use), incentive for costly patent races, may increase industry concentration and set a barrier to entry

Moore v. Regents of the University of California

Facts: Moore under went treatment for leukemia at  hospital. The doctors took cells from the , knowing that the cells were valuable in the area of scientific research.

Holding: The final patented product is legally and factually distinct from the Moore’s cells. The patented product is not the natural phenomenon that was taken from Moore, his cells could not have been patented alone. His contribution is unpatentable; and the researcher’s efforts contributed all the value to the invention

Trademark Law

Grants property-type rights in words, names, logos, color schemes, etc. for those who use such marks in connection with their goods and services in commerce.

Trademark

= a word, phrase, symbol, etc used to identify and distinguish one’s goods or services from those of others

▪ protected by federal statute: The Lanham Act (under Commerce Clause)

▪ sounds, colors, scents and shapes may also be protected.

Protection requirements: using the mark in commerce with one’s goods or services will give the exclusive right to continue to do so.

▪ PTO registers trademarks, but it is not necessary to be registered to obtain protection.

▪ infringement turns on whether consumers are likely to be confused as to the origin of the goods or services (not on similarity or whether or not the Δ copied).

▪ the mark must be distinctive, not generic

· distinctive: suggestive and fanciful marks will be offered broader protection (Polaroid).

· generic: offered less or no protection (All News Channel)

▪ trademarks do not expire: continue until abandoned by owner (renewable 10 year terms)

Original purpose: protect consumers in a world of mass merchandising from unscrupulous sellers attempting to fly under the banner of someone else’s well-known logo or identifying symbol.

▪ Now, it creates a system whereby consumers can rely on a mark that they are familiar with to identify goods and services (prevent product confusion)

Benefit: gives incentive to the company to invest in the marks

Duration: lasts as long as the owner continues to use the mark to identify her goods and services (renewable ten year terms)

Trademark Dilution

1125(c) of the Lanham Act

Requirements for injunction:

▪ use of the mark must begin after it becomes distinctive or famous

▪ use must cause dilution of the distinctive quality of the mark (blurring)

= the lessening of the capacity of the famous mark to identify and distinguish good/services, regardless of likelihood of confusion, or of competition.

· need not show likelihood of confusion

▪ must be commercial use in commerce

· the use need not be competitive

Requirements for damages:

▪ same as above, plus willful intent to trade on the owner’s reputation and cause dilution of the famous mark

Trademark Infringment

1125(a) of the Lanham Act

Requirements:

▪ use in commerce

▪ use of any word, term, symbol, combination, or false or misleading representation that is likely to cause confusion as to the association of such person with another person as to the origin or approval or his or her goods by another person

▪ use of any word, term, etc. in commercial advertising or promotion that misrepresents that nature, qualities, or geographic origins of his or another persons goods, services or commercial activities

Liability: liable in civil action for any damages

Use in commerce: prerequisite for Congress to use its power under the Commerce Clause

▪ putting the good out there, putting it into the stream of inter-state commerce.

Commercial use: use for a profit

Domain names

▪ unique addresses for web sites that map to Internet protocol (IP) addresses

▪ historically, there are 5 generic top level domains (TLDs): .com, .org, .edu, .net, and .gov.

▪ NSI and other domain name registrars register domain names (DNs) on a first come, first served basis with no pre-clearance procedure.

▪ cyber squatters (hijackers) or pioneers whose foresight should be rewarded?

Why are there disputes between trademarks and domain names?

▪ Domain names are registered on first-come first serve basis and required no check for conflict with existing trademarks

▪ Domain names are global whereas trademark protection is at best national

▪ Trademarks are registered for certain classes of goods and services, not domain names.

· ex: Ritz camera, Ritz Carlton, Ritz crackers.

Anti-cybersquatting Consumer Protection Act

▪ amendment to the Lanham Act

Requirements: no commercial use requirement or famous mark requirement

▪ must establish that the domain name registrant had a bad faith intent to profit from the mark (including a personal name) and registers or uses a domain name that is identical or confusingly similar or dilutes of the mark.

▪ Bad faith intent factors (Supp, 62):

· does squatter have any trademark or other IP rights in the domain name?

· does domain name consist of legal name of the squatter?

· does the squatter use the name in connection with bona fide offering of goods/services

· is the squatter’s bona fide use noncommercial or fair

· intent to sell domain name

· intent to divert customers

· providing misleading false contact information

· acquisition of multiple domain names that the squatter knows are similar to famous marks

Nissan Motor Co. v. Nissan Computer Co.

Facts: Nissan Computer used a symbol similar to Nissan’s and put car related information on their website

Rule: To obtain a preliminary injunction the moving party must show either: (1) a combination of probable success on the merits (trademark infringement claim) and the probability of irreparable injury without the injunction; OR (2) that serious questions are raised and the balance of hardships tips sharply in favor of the moving party.

(1) To prevail on a trademark violation claim, the ’s must show they have a valid, protectable interest in their mark and that the defendant is using a confusingly similar mark (strength of ’s mark, relatedness of goods, similarity of marks, evidence of actual confusion, marketing channels used, degree of care likely to be used by purchaser, Δ’s intent, likelihood of expansion of the product lines).

Holding: The Court held that Nissan had a valid, protectable interest in their mark and the injunction was issued ordering Nissan Computer to identify the website’s affiliation, disclaim affiliation with Nissan Motor, and not to display any automobile-related information on their website.

Intermatic Inc. v. Toeppen

Facts: Toeppen was using the name “intermatic” for a webpage and put a map of Illinois on it.

Holding: The court held that there was not a high enough likelihood of confusion for a summary judgment on the trademark infringement claim because there was no similarity of products/services, there is no area of manner of concurrent use, there was no evidence of consumer confusion or actual confusion and Toeppen’s intent is a question of fact that must be decided at trial. The court held that Intermatic could succeed in summary judgment for trademark dilution because he used the name for a commercial use (registered for profit) in commerce (on net) after the name was famous and the use was causing dilution of the distinctive quality of the mark (Intermatic’s name on webpage and lessens Intermatics ability to distinguish itself on the Internet).

Requirements / How to acquire exclusive rights / Registration

Patents

/ · Invention is new, useful, and non-obvious. / · Notify others by patent designation on item
· Get the right to exclude everyone else from making using or selling the invention during a 20 year patent term / · Must register with PTO

Trademarks

/ · Must be a distinctive mark to identify or distinguish goods/services in commerce / · Trademark infringement law: get the right to prevent others from using the same or similar mark in commerce in a manner that is likely to cause confusion.
· Trademark dilution law: get the right to prevent others from making commercial use in commerce of the same or similar famous mark such as to dilute the distinctive power of the mark.
· Trademarks rights are renewable every 10 years as long as the mark is used and not abandoned.
· Trademark owner has the duty to prevent slippage of the mark into generic usage (Band-aid, Q-tip) / · Registration is optional
· Confers rights to nation-wide use of the mark.
· Can put a trademark symbol on the mark to notify others.
Domain Names / · Register with a domain name registrar / · be the first one to register / · Must register with a domain name registrar
Copyrights / · Must create an original work of authorship. / · Get the right to prevent anyone else from reproducing, modifying, or distributing your work from the moment the work is created until 70 years after the author’s death. / · No need to register
· There are incentives to register
· Can put a copyright notice on work to assert property rights.

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