What Rights Are We Talking About?

Property

Acquisition of Property rights

What rights are we talking about?

I.Property is a bundle of rights. Generally, we talk about the rights to:

A.use

B.exclude

C.dispose of (called alienate - to transfer property)

D.possess

II.But sometimes we can narrow it down to just one: exclude. If you can exclude everyone else, you can do whatever you want.

Acquisition by Capture

I.How does one obtain legally recognizable property rights over Natural Resources / Wild Animals?

A.RULE: Possession / Occupancy

1.(a) Mortally wounding the animal or otherwise depriving the animal of its natural liberty (b) while in the course of pursuit is enough to acquire rights to the animal. Both elements are necessary.

This is the lowest limit. Obviously, capturing or killing the animal is sufficient. A chase, no matter how likely or probable the animal will be caught, is not sufficient to acquire rights to the animal.

a.Policy:

(1)Simple litigation – It’s hard to determine facts that make something ‘reasonably likely’; also it’s easier to apply to future cases.

(2)Reduces disputes – it makes capture certain, less room for questions of ownership and litigation.

(3)Good for business/promotes transactions – if the acquisition of wild animals was less certain, it would decrease the value of these animals because the purchaser would be scared that he will lose his rights (i.e. he doesn’t have the true rights) in the animal.

(4)Protect ex-ante investments – if I know I will certainly be able to keep any animal I capture, I will invest more money into the business.

B.Constructive Possession - we consider it as if you have actual possession

1.A land owner has constructive possession of the animals on his land

a.Policy:

(1)We want people to be secure on their land. Lack of constructive possession breeds trespass

(2)Trespass breeds conflict. Constructive possession discourages trespass

(3)One is much more likely to invest in his land when the law gives redress to constructive possession, i.e. trespass.

C.Property is RELATIVE: we talk about Superior Rights

1.If an animal is naturally wild and it escapes ... you must again acquire rights to the animal by capture - you have lost whatever superior rights you once had.

2.T steals from O. T1 steal from T. T does have a legal claim against T1 because T has superior rights to T1. (O has superior rights to both T and T1

3.Animus Revretende (sp?) - owners of domesticated animals do not lose their superior rights when their animals wander off their property.

a.Policy:

(1)society places significant value on the domestication of animals. It's hard to have enough grazing land, so if the animals wander to graze we want to protect that right.

4.Why does the importer get the hide of the silver fox back?
5.Situation: Oil reservoir under both A and B's land.

a.Old common law rule: Each person can tap as much oil as they want.

(1)Outcome - it's a race. the oil will get drained extremely quickly.

b.New common law rule: A could limit how much B takes.

(1)Why? Society doesn't want to drain our natural resources. These resources will be more valuable in the future and we want them around.

c.Current Statutory laws limit our use of natural resources: hunting license, etc.

Theories of Property Law

I.Why do we recognize individual rights to property ?

A.Blackstone Occupancy - In the beginning everything was up for grabs. Based on the first in time principle (illustrated in Pierson v. Post) whoever gets it, got it. But it was transient. You put it down, you lost it. Once everything was grabbed up, society was forced to recognize more permanent rights. Once there were permanent rights, people were free to pursue other things instead of guarding all their stuff.

B.Locke's Labor Theory - In beginning, all a person owns is his own body; the work of his hands is his. Therefore when he invested his efforts in something, he has annexed something that is properly his to it. No other man can claim a right to the labor that he invested.

C.Demsetz Theory - Basically, Demsetz suggests that the cost of internalizing externalities is less with private ownership rights when compared to communal ownership. (economic terms why there is personal property rights.)

1.Externalities – an effect on another person that the first person is not forced to take into account. A harm or benefit that flows from someone’s use of property that the property owner doesn’t have to consider. (A benefit can be created by either building or removing something on/from your property)

2.Internalize – to take the effects on the other into account.

3.If community owns the land, and you want a specific action done to one part of the land for your benefit (say building a dam), you have to negotiate with every single other owner. The transaction costs involved can be prohibitively expensive, plus someone could always holdout. And some people will try to free-ride, let everyone else carry the burden and expense of enacting their ideas which will benefit the aggregate. In addition, since the costs of maintaining the land fall on everyone, if one person overworks the land, he gains unfair value because he reaps the profit without the burden of all the costs. BUT, with private ownership, negotiations for mutual benefits considerations are much more feasible and less costly because they would involve less people. Also, each person would be able to consider the economic cost-benefits of how they work or don’t work their land.

4.Transaction Costs:

a.Holdout - computer motherboard with 5,000 parts. The owner of the last part holds out to get much more money than his part is worth.

b.Freeride - everyone decides to pay the guy to get him to stop cutting down trees, but some people decide that everyone else wants it bad enough, they'll pay a little more so I don't have to pay anything.

5.Tragedy of the Commons – one view states that communal property will always be abused (without coercive intervention from the government) simply because they can. Litter and pollution, for instance, since it is everybody’s burden and not the burden of the factory producing the smoke, the factory is not forced to consider this effect on society. Another view feels owners of common property resources can cooperate to manage them efficiently.

a.i.e. too little property rights

b.The tragedy is overuse of public (common) property.

(1)Property rights alleviate the 'tragedy of the commons' by reducing transaction costs.

6.Tragedy of the Anticommons – just as commons include few rights to exclude others, anticommon entails multiple rights to exclude others. Usually, for example, no one person is given ownership of a storefront. Instead, the incidents of ownership are broken up and distributed among a number of competing owners: one person has the right to sign a lease, another to receive some o the lease revenue, another to sell the property altogether, another to occupy the premises, and so on. No one can set up shop without consent from all the owners.

a.i.e. too much property rights per each item.

D.Coase Theorem - In a world w/o transaction costs it won't matter to whom you assign property rights.

1.Without the transaction costs (Holdouts, Freerides), any sensible person will allow the proper allocation of assets

a.X gains $100 but causes $150 damages in pollution to city Y. Y offers to pay somewhere between $100 and $150 to stop. Problem solved.

b.Or city Y just never gives X the rights to run the kind of business it has. Either way, the pollution won't be a problem.

Acqusition by Creation / Intellectual Property

I.Intellectual property is a form of personal property (as opposed to land).

A.What’s a problem that flows from common property? Overconsumption – the tragedy of the commons.

B.Unlike physical property, which we both can’t use the pen at the same time, intellectual can be used, a story told, at the same time without causing any detriment to others simultaneous users. So, assigning property rights on intellectual property isn’t justified simply by claiming to solve the tragedy of the commons. That ‘tragedy’ doesn’t really occur with intellectual property. Your use doesn’t preclude my use of it like it would with tangible property.

C.Policy goal in INS v. AP: If court found for INS, AP would be much less interested in researching the news b/c it would be much less profitable. Court wanted to preserve news in this country. So they created quasi property rights for AP. This seemed like a very broad rule at the time, but future cases really narrowed it.

D.Try to compare Cheney to INS:

1.Making these designs is hard work and is expensive, and we don’t think we can get copyright protection and even if we could, it might not be worth it (it’s not practical to get property rights by any of these other mechanisms).

2.The actions of Cheney are also unfair. D is appropriating the value of the design.

3.If court doesn’t protect this under some sort of property rights, allowing my competitor to have an unfair advantage over me b/c he has so much less costs, then that will put me out of business. I will no longer be able to afford to provide this service to the public. Protection of this type of property is a social good.

E.So it’s a different justification for giving Intellectual Property rights than Real Property rights.

1.Real Property. – to prevent over-consumption;

2.Intellectual Property – to encourage and further the sciences and arts.

F.Judge Hand distinguishes INS from Cheney by saying that INS was the justification and the limit of that rule.

1.The default rule is that you can copy stuff, unless there is a statute or a special common law.

a."In the absence of some recognized right at common law, or under the statutes...a man's property is limited to the chattels which embody his invention. Others may imitate these at their pleasure..."

2.Hand says competition makes things cheaper. Promotes efficiency, reforms, improvements, and the advancement of art and science.

a."Since appellee’s perfume was unpatented, appellants has a right to copy it…There is strong public interest in doing so, ‘for imitation is the lifeblood of competition. It is the unimpeded availability of substantially equivalent units that permits the normal operation of supply and demand to yield the fair price society must pay for a given commodity."

Copyright

I.COPYRIGHT - protects original works of authorship (our focus) fixed in a tangible medium of expression (not our focus).

A.Subject matter of Copyright: In general

1.(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

a.(1) literary works;

b.(2) musical works, including any accompanying words;

c.(3) dramatic works, including any accompanying music;

d.(4) pantomimes and choreographic works;

e.(5) pictorial, graphic, and sculptural works;

f.(6) motion pictures and other audiovisual works;

g.(7) sound recordings; and

h.(8) architectural works.

2.(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

B.Copyright protects the expression of ideas (not the ideas themselves) in books and articles, artistic works, and so on. Lasts for a long time, typically 70 years after the death of the author or creator. Must be original (not novel) material.

C.To qualify for copyright protection, a work must be original to the author.

1.Original, as the term is used in copyright means only that the work was

a.(1) independently created by the author (as opposed to copied from other works), AND

b.(2) that it possesses at least some minimum degree of creativty.

2.Unlike a patent, if two people were to independently write the exact some story, they could both obtain copyrights for their work. (Even thought their work is identical.)

D.Facts are not copyrightable - they contain no originality.

1.As a statutory matter, U.S.C. does not afford protection from copying to a collection of facts that are selected, coordinated, and arranged in a way that utterly lacks originality.

2.A factual compilation may become copyrightable: (Fiest v. Rural)

a.The choices as to selection and arrangement, so long as they are made independently by the compiler and entail a minimal degree of creativity, are sufficiently original that Congress may protect such compilations through copyright laws.

b.BUT protection is only conferred on those elements of a work that are original to the author. The work as a whole, i.e. the facts contained therein, are not protected.

3.'Sweat of the Brow' approach assumes that since you took the time, initiative, money, and time to collect those facts you should be afforded protection under the law. But this is incorrect. Facts themselves, no matter how much effort was involved in the collection of those facts, are not copyrightable b/c there is no originality in them.

E.Copyright protects the expressions of ideas, not the ideas themselves. Baker v. Seldon.

1."(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."

F.Merger Doctrine - if an idea and expression merge unavoidably, then the expression is not copyrightable, just like the idea.

1.When the uncopyrightable subject matter is very narrow, so the ‘the topic necessarily requires,’ if not the only one form of expression, at best only a limited number, to permit copyrighting would mean that a party or parties, by copyrighting a mere handful of forms, could exhaust all possibilities of future use of the substance. We cannot recognize copyright as a game of chess in which the public can be checkmated. Morrissey v. P & G.

Patent

I.PATENT - protects new, useful, and non-obvious processes, etc. Our focus is patentable subject matter.

A.Subject matter of Patent:

1.35 U.S.C. §100 - Definitions

a.When used in this title unless the context otherwise indicates:

(1)(a) The term "invention" means invention or discovery.

(2)(b) The term "process" means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

2.35 U.S.C. §101 - Inventions Patentable

a.Whoever invents or discovers any new and useful process, machine, manufacture, or compostion of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(1)Laws of nature, physical phenomena, and abstract ideas are not patentable.

(a)If we gave a patent claim on a pure algorithm, what's the problem?

I.It's too broad, too big a scope. It would cover all uses of that equation, uses that are perhaps unforeseeable and very valuable. Funk Bros.

(2)Living things are patentable (if made through human intervention). Anything ‘under the sun’ that is made by man. Anything that falls into the 4 categories (process, machine, manufacture or composition of matter) that is made by man is patentable. Diamond v. Chakabarty

(3)Products themselves are patentable - as long as man's indelible imprint has been left on the product. Adrenaline was patentable because there was substantial human intervention in the refining of the final product. Parke v. Davis.

(4)The process of applying an abstract law of nature to a specific end, that process is patentable.

(a)While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be. Diamond v. Dier.

3.35 U.S.C. §271 - Infringement of a Patent

a.(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

B.Patents grant a limited monopoly (20 years from the time of application) over protected material: novel, useful, or non-obvious processes. This promotes creative activity but is limited in order to advance competition.

C.Claims. On a Patent document one line reads, "What is claimed is." What follows--the claims--are the fence, the scope of the property rights which the law recognizes as exclusively yours with respect to everyone else.

D.Policy for patents:

1.I may not reveal my invention/discovery to the public if I wasn't protected. I would be afraid that someone would steal my idea. We recognize the public value in the furtherance of science/arts.

2.We want to offset the commercial risk of developing new technologies by allowing the developer the exclusive rights to profit off his invention.

E.Societal Costs for patents:

1.Permits premium pricing. New drugs, for example, would be a lot cheaper and much more of the world would benefit if generic drugs, which would lower the overall consumer cost of the drugs, were allowed.

2.Administrative costs - we need special courts, there's a huge patent office to examine all the applications, procedural costs of filing all those applications, etc.

3.People would always invent stuff anyway. It's argued that patents overprotect unnecessarily.

II.TRADEMARKS - words and symbols indicating the source of a product or service; owners of marks are protected against use of similar marks by others when such use would result in confusion.

Conversion in body parts

I.Conversion - wrongful exercise of ownership rights over the personal property of another. Conversion is similar to trespass. But trespass is for damages suffered because of interference with your property. Conversion is a situation where you can’t get your property back. The damage is for the current market value of the property.

II.Important argument for majority: Conversion should not lie because it would discourage medical research of cells and patients are adequately protected from abuse because of informed consent laws.

III.This stuff is from the Moore case. I don't know what we're supposed to learn from it exactly.