Property and property rights
Abstract and Keywords
This chapter clarifies a concept of right that is not biased by moral, political, or normative judgments. It uses an objective technique to identify rights in the positive law. To this specific end, the Hohfeldian model of jural relations provides the analytical framework. After introducing the methodology for identifying and analyzing rights, the discussion proceeds to various conceptualizations of private property, which should help to extrapolate property's paradigmatic characteristics as a legal-social institution. Later, the presentation of property theories and their application in the area of copyright law will underlie the discussion on problems such as the property metaphor and the contribution of classic property concepts to the intellectual property debate, as well as selected information cost-theory perspectives.
Within the broad question addressed in this study concerning the interrelations between copyright and access, property is a central element. The previous chapter explored the nature of copyright subject matter as information. The focus now shifts to examining the set of legal entitlements surrounding the atypical subject matter called information (or, in terms of Chapter 1, medial message). The discussion of access rights requires an introductory explanation of the study’s approach to legal property rights in general. The question whether A has a right to do (or abstain from doing) conduct X, or whether A has a right to compel B to do (or abstain from doing) X can be approached at various levels of abstraction. The term right is used in different ways and in a variety of contexts: a person may have a right to life, a right to self-defense, a right to earn a living, a right to vote, a right to obtain public records, a right to enjoy public parks, a right to breathe unpolluted air, or a right to keep his personal affairs and related information private. In a given legal system, all the above-mentioned entitlements may be called rights in the loose, generic sense of the term. At the same time, the legal situations these (and other) rights represent, as well as the entitlements they entail, may diverge substantially.
As a practical matter, lawyers and courts routinely search for the applicable rights in a given legal dispute in order to ascertain their scope and consequences for litigants. Where do they hope to find those applicable rights? This chapter will mention, but not focus on, related philosophical questions concerning the source, content, authority, and operation of legal rights in general. Yet the discussion on rights will primarily adhere to a positivistic methodology and will separate between positive legal rights and ethical questions. This methodology will provide a useful tool for determining the existence of legal rights by drawing on man-made institutions and establishments (such as statutes, courts, etc.) as the origin and source of legal rights.1 In this chapter, natural law, ethics, morality, “soft” social norms and the like—as distinguished from the positive law—will largely remain outside the pool of resources that give rise to legal entitlements.2
(p.60) The question whether A, the copyright rights-holder, has a right to control access to works will be addressed more closely in Chapters 4–6, which focus on legal analysis of the positive law. However, to set the stage for the descriptive analysis, it is necessary to clarify a concept of right that is not biased by moral, political, or normative judgments. It is further necessary to use an objective technique to identify rights in the positive law. To this specific end, the Hohfeldian model of jural relations will provide the analytical framework. After introducing the methodology for identifying and analyzing rights, the discussion will proceed to various conceptualizations of private property, which should help to extrapolate property’s paradigmatic characteristics as a legal-social institution. Later, the presentation of property theories and their application in the area of copyright law will underlie the discussion on problems such as the property metaphor and the contribution of classic property concepts to the intellectual property debate, as well as selected information cost-theory perspectives.
II. The hohfeldian model of jural relations
A. The Model as an Analytical Apparatus
The choice to apply the Hohfeldian model of jural relations has one central thrust. The analytical framework of access rights needs an objective and precise vocabulary for evaluating legal positions under a given legal regime. Throughout this study, the Hohfeldian methodology will guide the search for (and analysis of) rights and other entitlements as they exist, or may exist in the law. Wesley Newcomb Hohfeld3 introduced his model of fundamental jural relations in the early twentieth century. He engineered a logical scheme for analyzing complex legal situations whose key to resolution is reducing legal positions to their lowest common denominators. In striving to articulate these denominators, Hohfeld set forth a strikingly elegant model that reflects a near algebraic, universal rigor.4 The stated mission of the model is to provide coherent definitions of legal positions and entitlements, thus helping to identify them without reaching normative questions.
The model offers a short and straight answer to the question whether A has a right or not (assuming of course that one knows the relevant facts and applicable (p.61) legal rules.)5 The model hence does not stipulate the law or any legal rights; instead, it provides a set of tools for evaluating legal positions in a given legal environment. Further, it does not attempt to answer whether A indeed should have a right, nor does it offer direct clues concerning the scope of rights.
Before reaching the details, it should be noted that despite its modest, nearly matter-of-fact packaging, the Hohfeldian model had a profound impact on modern legal thought6 and on property law in particular.7 Legal theorists saw in the model much more than merely an attractive proposal for fixing the legal jargon.8 Despite its descriptive-formalistic façade,9 Hohfeld’s model and its perspectives on legal relations and conceptions inspired scores of theoreticians. Among them were the founders of legal realism, a movement that, inter alia, has had a major influence on U.S. legal scholarship during the twentieth century.10 Also intellectual property scholars occasionally apply the Hohfeldian model when analyzing theoretical issues and articulating arguments concerning available and unavailable rights under copyright.11 (p.62)
Table 2.1 The hohfeldian opposite positions
B. The Scheme
As noted, Hohfeld endeavored to clarify the legal vocabulary and render the basic jural terminology more rigorous. He was troubled by finding certain words of critical importance in legal discourse had no agreed meaning, warning that muddled language might lead to muddled thought.12 He stressed “whether legal or non-legal, chameleon-hued words are a peril both to clear thought and to lucid expression.”13 He then insightfully arranged all legal positions in four pairs, which he denoted “the lowest common denominators of the law.”14 His taxonomy of opposite positions is reprinted in Table 2.1.
Each pair contains two mutually exclusive opposite positions: A can have vis-à-vis B either a “right-claim” or a “no-right” to do a given act (or to compel B to forebear from doing an act.) Both the existence and content of the position are determined by the applicable law. For instance, A may have either a right to exclude B from his land or a no-right to exclude B from his land. Similarly, B may have either a privilege to enter A’s land or a duty to stay off it.15 Jural relations are always analyzed as between two persons in the bilateral sense, so with respect to each legal position, there is a correlative legal position held by another. For example, if A holds a right-claim, his opponent B by definition holds a duty concerning the act covered by that right-claim. The correlative relationships are represented in the table reprinted in Table 2.2.
1. The Right/Duty and Privilege/No-Right Rubrics
The first two correlative relations denoted as right/duty and the privilege/no-right are of crucial importance. In the Hohfeldian sense, A has a right when she has an enforceable claim against B, who is, by definition, a duty holder. (p.63)
TABLE 2.2 The hohfeldian correlative positions
There is an additional important point concerning the second scenario of privilege/no-right. In Hohfeldian terms, A (the “no-right” holder) does not necessarily owe B (the privilege holder) a duty not to interfere with the exercise of B’s privilege. In other words, the no-right position held by A does not imply a legal obligation to respect B’s privilege. To secure the exercise of B’s privilege against A, B then must hold an additional right-claim of noninterference. That means that B, by virtue of his privilege per se, does not have a claim against A if A stands in his way to exercise the privilege. Further, A cannot legally enforce her interference (as she is in a no-right position) unless the law grants her a specific right-claim supporting her interference.18
Applied to property legal interests, a myriad of complex and intertwined clusters of positions and relations are commonplace. For instance, A, the owner of Blackacre, can have a right-claim against B to prevent B’s unauthorized entry, and B has a correlative duty not to trespass on Blackacre. In property jargon, A holds a right-to-exclude B from A’s property. In addition, A typically holds a (p.64) privilege to enter Blackacre herself, correlated to B’s no-right to restrict A’s privilege to enter. Further, A may have a right-claim against B that would impose a duty on B not to interfere with A’s access and use privileges. Such right may cover activities such as entry, exploitation, and enjoyment. Accordingly, A (the “owner”) holds a bundle of rights and privileges that constitute her legally protected interests in Blackacre.19
Often, privileges are not exclusive, which renders the situation of conflicting privileges not unlikely. For instance, A can have a privilege to cross over a narrow bridge, whereas B is in a position of no-right to prevent it. B may have an identical privilege to cross the same bridge, whereas A is in a no-right position to prevent it. If the bridge is narrow so only one person can pass at a time, and A and B wish to exercise their respective privileges simultaneously, the two privileges would collide. To clarify the legal situation, it may be necessary to designate a duty of noninterference as to one of the parties, which would effectively corroborate one of the privileges with a right-claim. As a result, one of the parties will hold both a privilege to cross over and a negative right-claim obligating the other party to stay clear. The Hohfeldian model does not pretend to solve issues such as when and how to attach duties of noninterference in case of conflicting privileges (or liberties).20 To Hohfeld, those were matters of “justice and policy” the model is not designed to resolve.
2. The Power/Liability Rubric
A brief comment on the power/liability constellation is in order. As reflected in the Hohfeldian tables above, a power is the jural opposite of disability and the jural correlative of liability. The position of power describes the situation where A can volitionally change the legal position of himself and others. Thus, A, “whose volitional control is paramount may be said to have the (legal) power to effect the particular change of legal relations that is involved in the problem.”21 Accordingly, owner A may have the power to transfer his interests in Blackacre to B (e.g., through sale), and by exercising this power he extinguishes his own interests while creating new and corresponding interests in B. Hohfeld characterized power as “one’s affirmative “control” over a given legal relation as against (p.65) another.”22 In the case of A’s power to transfer a property interest to B, it is likely that before transfer, A holds this interest himself, as in order to transfer a good title in Blackacre to B, A must first hold ownership title. To avoid complications in applying the model, one may assume no agency situation (in which A is merely an authorized agent of C, who is the actual legal owner of Blackacre). Further, the possibility is set aside that A is the government, exercising its power of eminent domain.23
In the ordinary situation, A cannot transfer a right to exclude others from the res unless A himself is entitled to this right in the first place.24 In general, A does not have the power to transfer ownership interests to B that A does not have himself before transfer. The flip side of the same principle is that A usually cannot destroy entitlements vested in B unless he is given the power to do so. If B has Hohfeldian immunity, A (by definition) is in a position of disability to influence B’s affairs, a conclusion derived from the fourth pair of correlative positions. A’s power to destroy B’s interest is not equivalent to rights/duties relations, as the two situations are represented in two distinguishable rubrics of correlative relations (as Table 2.2 indicates). However, if the law grants A the power to destroy B’s privilege at will and replace it with duty owed by B to A himself, the situation is akin to granting a potential right-claim. The parties shift from the power/liability rubric to the right/duty rubric if and when A resolves to exercise his power. For example, if B presently holds a privilege to walk through A’s Blackacre, and if A has the power to impose a duty on B to stay off, one can say that prior to exercising the power, A holds a potential right-claim to exclude B. To bring an example closer to the central topic of this study, if B presently holds a privilege to access a creative work, and if the law grants A Hohfeldian power to prohibit B’s access at will, A was actually granted a potential right-claim to control access to the work. If A exercises that power, B will be under a duty to respect it.
(p.66) III. Private property
The colloquial meaning of the word property (in the sense of “this is my property!”) diverges significantly from its “sophisticated” one. Most property owners are probably unaware of the quandaries with which property theorists have been wrestling for centuries on end concerning this basic term.25 With regard to property in the legal-specialist context, matters are far from clear.26 One thorny question has been to articulate the necessary components, or the essential content of private property ownership.27 Theoretical-definitional inquiries focus, inter alia, on the special characteristics of private property, seeking to ascertain its unique attributes as distinguished from other legal fields. Rumination on the nature of private property is not without practical ramifications, as there is a logical thread connecting the ontological question (“what is private property?”) and philosophical questions (“why private property?”)—and further, with normative-political questions (“how much private property?”) Proposing an answer to one of these questions appears to have an immediate effect on the answer to the others.
It is common to draw a distinction between conceptualist and nonconceptualist approaches.28 More specifically, some commentators underscore the differences between conceptualism and instrumentalist/economic approaches.29 In general, conceptualist theories seek to achieve an understanding of the intrinsic concept of property by identifying its unique nature and attributes. By comparison, non-conceptualist approaches to legal analysis tend to undermine the importance of the “what is property” question. Those following these approaches are suspicious regarding abstract legal concepts in general30 and are prone to (p.67) move directly to more practical aspects of property law and its functions.31 The differences between theoretical methodologies emerge as one ponders framework questions, such as:
• What types of entitlements qualify as “property” entitlements and with regard to which assets?
• Against whom do property entitlements operate?
• What is the distinctive content of property rights?
• What are the consequences of property violations (what remedies)?
Consider the owner’s legal protection against trespass to land. Is this a property right, and if so, why? What is its scope, and who is thereby affected? What are the remedies available to the owner in the case of violation? In which way does the classification of an entitlement as property right influence the answers to those questions?
To the conceptualist, protection against trespass to land is a property entitlement first because property law generally defines access and use entitlements of persons with respect to resources (here, between the owner and a plot of land).32 The conceptualist would further stress that a right to prevent unauthorized entry availing “against the world” is distinctively a feature of property law.33 The conceptualist could proceed by stating that, in fact, exclusion entitlements are at the very core of private property.34 The fact the law helps owners to oust uninvited intruders, irrespective of harm or demonstrable damages, can be considered a conceptual dimension of property rights distinguishing them from legal fields such as torts and contracts.
(p.68) The nonconceptualist addresses the problem differently—for example, by evaluating property rights according to their economic function and operation.35 Consequentialist theories are less concerned with the question of what property rights are as with the question what property rights can or should do (e.g., serve as a vehicle for enhancing general utility). Property theories are important for this study because one of the main topics it deals with is clarifying the interrelations between copyright law and access rights with respect to works. Entitlements conferring access control with respect to information subject matter are called “property-like entitlements” due to their suggestive similarities to classic trespass rules; in both cases, controlling access to the resource constitutes the core of private property dominion. The crucial common denominator connecting property theory and access rights to information is the rights-holder’s private right to exclude others from the resource, which is an essential element of private property in general. The following passages recount the importance of clarifying the concept of property—or at least, its central conceptual dimensions—as an intermediate step toward explaining how property-like rights in information materialize and operate.
B. Conceptual Dimensions of Property
1. Property, Its Res, and Thing-Ownership
Property law traditionally defines relations of persons with regard to physical “things,” or relations between persons concerning “things.” The intuition of physical relations has a long lineage. Roman law developed its property doctrines around problems of possession and use of physical resources, in which legal and actual-physical relations often merged.36 Legal scholars and courts have formulated occupancy and possession theories that enshrine physical relations within property doctrines.37 For instance, possession-oriented theories consider (p.69) original possession in unwonted resources the key for allocating initial ownership rights.38 Possession and occupancy property doctrines essentially presuppose the existence of an object, or, put in the legal vernacular, a res. The res is not simply an element in the property formula; it is its centerpiece. There must always be a thing, a resource, with respect of which the property regime creates rules of access and use.
The central importance of res as the signifier of property law is evident in civil code jurisdictions, which occasionally classify property regimes as the “law of things.”39 Mere manifested relations between persons and resources usually do not suffice to confer legal property rights absent social recognition in that person-thing relation. Property is not only a legal, but also a social institution in which members of society make assumptions and claims.40 Property law regulates behavior of individuals in social settings, where legal rules mirror social conceptions and conventions about the legitimacy of private possession and the duty to respect it. The complex interrelation between the law of private property and social recognition is starkly reflected in theories of social contract or social consent, tracing back to early thinkers such as Grotius, who spread this idea at the dawn of Western liberal thought.41 Some contemporary scholars similarly emphasize the crucial role of social consent within the foundation of theoretical justification of property.42
Grotius and other liberal thinkers derived the social consent requirement from the general proposition that prior to private property, resources are owned (p.70) by mankind in common.43 Though theorists may disagree about the social contract tenet and its role in explaining and justifying private property in things, as a practical matter, it seems pointless to speak of private property in the abstract without considering both its social functions and social ramifications—and the manifestation of property entitlements as a part of social life, conventions, and institutions. In that social structure, property is associated most often with physical spaces and/or objects capturing physical space in a world. Scarcity of space and valuable resources generates conflicts for which the law seeks to provide the institutional framework for resolutions. In this light, one central mission of property law is to clarify ownership entitlements and secure the ability of owners to reasonably enjoy, improve, protect, and transfer resources.
At the same time, the thing subject to property arrangements need not always be tangible, and the reason for the emergence of property rights in intangible things is not always (and not directly) rooted in scarcity.44 But either way, it is always about things.45 In this light it is safe to propose that property entitlements have at least two necessary elements. One is the subject, which is the person having a claim. The second is the object, the property res. Various property systems expressly establish the status of ownership or owner, denoting the person holding entitlements in the thing over which ownership reigns.46 Other systems are more ambivalent in their stipulations concerning the content of ownership. Generally speaking, ownership vests in the person(s) holding all or some of the entitlements to the thing.47 As a rule of thumb, a person is often considered the (p.71) owner if she holds three core interests in the thing: the right to exclude, the privilege to possess/use, and the power of transfer.48
2. The Right to Exclude
The right to exclude (jus prohibendi) is a keystone element, perhaps the most important among all private property entitlements. Some commentators consider the right to exclude the very essence of private property.49 In an unruly world, a person having a claim in a resource could still exclude others from it by using physical force or physical barriers. But legal thinkers and common sense predict exclusion that depends solely on self-help measures would furnish a rather “miserable” possession.50 State-supported exclusory entitlements provide the essential guarantee to owners, with the law ensuring their individual claims shall be respected by their fellow citizens. With legal exclusion rights, owners may expect to have the resource available for use, enjoyment, and transfer without the need to ceaselessly watch for challengers.
The right to exclude is a negative entitlement: it commands third parties to forbear, rather than support duties to perform acts.51 Holders of exclusory entitlements52 may prevent unauthorized entering, touching, use, and other physical interference with the res. In the absence of the ability to exclude, control over the resource is impaired and its value to the owner is expected to diminish. The right to exclude is often celebrated as the hallmark of ownership, as it provides the necessary underpinning for virtually all (or most) other ownership-related property entitlements.53 Private exclusion is the most direct measure to combat (p.72) the problem giving rise to the need for private property in the first place, namely, competition over valuable resources under conditions of scarcity. Further, as the right to exclude is transferable, it can increase the exchangeable value of the resource.
Negative-exclusory entitlements and positive-use entitlements are often intertwined.54 The negative right-claim to exclude indirectly secures the rights-holder’s opportunity to exercise positive enjoyment privileges herself. Exclusion capacity can be said to encapsulate within itself positive use entitlements, as making positive use often become feasible indirectly by virtue of the ability to exclude strangers.55 Accordingly, positive use entitlements are implied and inferable from a broad exclusion entitlement.56 (We do not attend here to situations in which “standing-alone” positive use rights conflict, and where the law’s recognition in such positive rights might influence the legal analysis.) In any event, property rights (both negative and positive) are rarely unqualified. Public and private interests of others may trump private ownership rights to use the object where the law considers it more beneficial or just.57
3. The In Rem Principle
The in rem principle goes hand in hand with the right to exclude. It addresses the second question mentioned in the introduction to this section: who is affected by the right to exclude? Exclusion in rem usually means the right avails “against the world.” The law does not identify or specify duty holders, but every person is generally under a duty to respect the private dominion.58
(p.73) The in rem operation of property exclusion entitlements draws an important distinction between the domains of property and contract law. In the property scenario, duty holders are indefinite and numerous. One of the most important distinctive characteristics of property right connects precisely to that impersonal aspect. Rights-holders do not need to know the duty holders or have a personal connection to them. No less important, duty holders do not need to know the rights-holders or have any connection to them either. This feature is particularly significant in the constellation of exchange. As property rights are usually impersonal, according to the in rem principle, the fact a property interest has changed hands does not affect the obligation of nonowners in general;59 the only thing nonowners need to know is that the resource is owned by someone. Among other things, this aspect of property rights reduces the information cost of nonowners, who need not inquire about the precise identity of rights-holders in order to assess the scope of their duty.60 Though property rhetoric speaks of rights against the world, the circle of persons actually affected by property rights held by owner A with regard resource X clearly does not extend so broadly. Rights in rem actually affect only those nonowners whose activities might conflict with the exclusive rights held by A. For analytical purposes, one may classify affected nonowners according to certain distinctions. For example, nonowners who only wish to avoid violation of exclusion rights can be distinguished from those advancing conflicting claims over the resource. Other groups of nonowners are those interested in transactions with rights-holders or those who are adversely affected by the use performed by rights-holders.61 Most importantly, the in rem principle generally situates all nonowners on an equal footing, and the scope of their duties is initially independent of classifications and subjective inclinations.
4. The Numerus Clausus Principle
Numerus clausus means literally “closed number.” As a legal principle, it reflects the observation that the design of property rights is subject to structural limitations.62 In the United States, some property scholars have contended that (p.74) property rights are limited in number and form, and that this feature is unique to property entitlements. They argue (descriptively) that property rights are fixed and limited in a menu of basic choices.63 The principle implies structural and quantitative constraints on the possible emergence of property rights in any given scenario. Specifically, private parties cannot create property rights that are not already recognized as such.
The numerus clausus principle indicates the property system, with some exceptions, is generally intolerant to the novel, idiosyncratic formulation of interests.64 That means the law would generally refuse to enforce nonrecognized entitlements against persons who are not in contractual privity with each other. In other words, nonrecognized entitlements usually will not “run with the asset” to bind third parties other than the original parties to an agreement.65 Commentators generally agree the numerus clausus principle is reflected in property systems, though they might disagree about its description and main function. For instance, whereas Merrill and Smith argue the numerus clausus principle operates to reduce information costs,66 Hansmann and Kraakman challenge that view, proposing instead that the principle, in fact, regulates the types and degrees of notice required to establish different property rights, and that its purpose is to (p.75) facilitate verification of ownership of rights offered for conveyance.67 In any event, both views offer an economic-functional explanation to the numerus clausus principle, which focuses on information-related dimensions and consequences of property rights on such costs.68
5. Property Rule
Calabresi and Melamed articulated in thier well-known account the distinction between property and liability rules and its implications in the following manner:
In our framework, much of what is generally called private property can be viewed as an entitlement which is protected by a property rule. No one can take the entitlement to private property from the holder unless the holder sells it willingly and at the price at which he subjectively values the property. Yet a nuisance with sufficient public utility to avoid injunction has, in effect, the right to take property with compensation. In such a circumstance the entitlement to the property is protected only by what we call a liability rule: an external, objective standard of value is used to facilitate the transfer of the entitlement from the holder to the nuisance.69
(p.76) Calabresi and Melamed identified a typological distinction between legal rules endowing holders a priori veto powers to suppress unapproved use on the one hand, and on the other legal rules that excuse unapproved action, but mandate ex-post compensation. Significantly, Calabresi and Melamed constructed an economic framework for their analysis. For example, they explain the existence of liability rules as buttressed by a straightforward economic efficiency rationale.70 At the same time, they did not neglect to mention noneconomic rationales to liability rules (e.g., distributional reasons).71
The distinction between property and liability rules receives concrete outlines when one closely examines the legal-positive formulation of a given legal entitlement. Does the law grant to the rights-holder an in rem veto power to prevent actions, or rather, does it create a compensatory cause of action valid against wrongdoers? An important aspect (or rather, a consequence) of having a property entitlement is the availability of injunctions to the rights-holder, which is a typical characteristic of a property regime. Property rules, as identified by Calabresi and Melamed, signify property entitlements, whereas liability rules exhibit a deviation from the common property formulation of rights and duties. As noted, their perspective gives much weight to legal remedies and their impact on stakeholders (i.e., the legal consequences of violations).72 Injunctions and super-compensatory (punitive) damages are typical consequences of property rules’ violations, whereas judicial awards of compensation to remedy violations by stipulating monetary damages based on approximate market value or actual harm are more typical of liability rules.
Calabresi and Melamed suggested that a liability rule is generally preferable when transaction costs are high, whereas a property rule is preferable when transaction costs are low.73 The economic rationale behind this proposition is elementary: when a property rule controls a situation in which high transaction costs prevented a more efficient allocation through contracting, it is more (p.77) efficient to shift to a liability rule, under which nonowners are allowed to extract utility without consent, but must pay compensation that would approximate a hypothetical efficient transaction. Thus, when transaction costs are prohibitively high, or in holdouts and strategic behavior situations, it would be generally more efficient to follow a liability rule.74 The contribution of the property/liability rule distinction to the conceptualization of property is important, as it helps to identify private property entitlements according to their general adherence to the property rules scheme. According to this scheme, the legitimacy of using a privately owned resource depends on its owner’s consent most of the times and for most purposes, and consent is the key to extracting enjoyment and utility from the res. Infringement of private property rights is likely to entail severe legal consequences in the form of injunctions and overcompensatory damages awards.
C. The Concept of Property and the Information Cost Theory
1. Property’s Conceptual Erosion
The five characteristic aspects enumerated above roughly outline the picture of what property rights are about and how they find expression in the law. In this context, the countermovement led by nonconceptualists should be mentioned. Hohfeld’s project was a jurisprudential milestone within a larger movement that antagonized conceptualism and high-level categorizations.75 For his part, Hohfeld launched a direct attack on the in rem and in personam concepts, which were traditionally used to distinguish between property law and the law of obligations. Specifically, he rejected the notion of in rem rights due to its conceptual fuzziness and proposed instead the term multitial rights, which are the practical equivalent of bunching together a multiplicity of in presonam rights.76 Hohfeld also implicitly challenged the prominence of the right-to-exclude in the property scenario. He began with drawing a sharp distinction between physical relations and jural relations,77 then insisted property rights, like any other rights (whether (p.78) in rem or in persoman) define the relationships between individuals, not between persons and things.78 Hohfeld identified no particular hierarchy among the various possible entitlements consisting of the legal position of a person,79 while deemphasizing the thing-ownership concept by focusing on the legal persons who have legal positions against each other and not against things.80 To Hohfeld, there was no real qualitative distinction between a multitial right against trespass and a multitial right not to be a victim of battery.81 In his twin articles, Hohfeld sewed the seeds for what Grey more than sixty years later proclaimed as the “disintegration” of property:
We have gone, then, in less than two centuries, from a world in which property was a central idea mirroring a clearly understood institution, to one in which it is no longer a coherent or crucial category in our conceptual scheme. The Concept of property and the institution of property have disintegrated.82
As a result, the property “orthodoxy” reigning supreme in the Anglo-American legal scholarship views property as nothing more (and nothing less) than a bundle of rights or “sticks.”83 According to this view, property is a composite of legal interests such as rights, privileges, and powers. Metaphorically, the entitlement beneficiary holds her stick(s) at one end, while another person (the Hohfeldian correlative partner), holds the stick(s) at the other end. Property is an amalgam of Hohfeldian entitlements in which the content, number, size, or length of the sticks in a given bundle is contingent. No conceptual framework can outline the notion and boundaries of property “ownership,” as the property bundle may theoretically assume any shape and form.
2. The Information Cost Theory
(a) Information Cost: In General
The broad acceptance of the “bundle” theory in the Anglo-American property jurisprudence did not mark the end of the property debate. In recent years, some scholars have developed a theoretical rejoinder to the bundle theory and (p.79) its problems, which, based on economic analysis, reinforces (rather than liquidates) the conceptual dimensions of property law. At first blush, one might suspect a tension between information cost’s functional orientation and property conceptualism. However, property scholars (most significantly Merrill and Smith) showed that to the extent made, this assumption is rebuttable.
The emerging literature has begun to identify and explain the core traditional features of private property within the framework of an information cost paradigm. Information cost theory is premised on the universal proposition that regulation always imposes certain economic costs. One sort is information costs. In the context of property entitlements, the legal rule generally carries with it two types of information costs: The first type concerns information about the res itself, its conceptual and physical boundaries, its attributes, qualities, and so on. These costs relate to ascertaining what the “thing” is and what distinguishes it from other objects.84 The second type of information costs relates more directly to the legal entitlements surrounding the res.85 It includes first information about the fact the object is a private property res, and second, information concerning the content and scope of the property entitlements surrounding the object. As a practical matter, nonowners need to know (at least) what they can and cannot do without talking to rights-holders first.
As noted earlier, nonowners facing in rem rights scenarios can be classified according to their idiosyncratic agendas, intentions, and information cost they need to obtain to make rational decisions. The three main groups of nonowners affected by property regulation can be called avoiders, challengers, and transactors.86 Avoiders are likely to make up the largest group. Avoiders simply wish to keep away from infringing on others’ private property rights and minimize the risk of incurring liability. Accordingly, they must be able to identify the object and comprehend their set of negative abstention duties concerning that object. It is possible to view avoiders’ information cost as externalities resulting from the allocation of property rights to rights-holders.87
(p.80) Challengers vindicate antagonistic claims with respect to the res. As a logical preliminary step, they should be able to resolve information uncertainties so as to realize they are challengers in the first place. In other words, they need to know what the object is and what rights are attached to it in order to ascertain conflict with their own expectations regarding the same res. Next, they need information about the scope of their opponents’ rights to formulate their own claims.
Transactors endeavor to acquire property rights via consensual exchange. They obviously need to valuate the object. To make an accurate assessment, transactors need detailed information about the attributes of the res (e.g., its quality, age, origin, functionality, or marketability). They further need to know who their potential contractual partners are and what rights they hold in order to assess what rights the potential partners can legally transfer.88 In the course of ascertaining rights and identifying rights-holders, information about challengers’ actual and potential claims and the prospects of successfully undermining the legal position of the rights-holders are relevant factors in the decision-making process. In this respect, information costs are a central component in the overall transaction costs involved in dealing with economic goods.89
In order to act rationally, parties affected by the allocation of property rights must acquire information relevant to their profile—but acquiring this information is costly. The basic idea of the information cost theory is that the legal rule, which imposes lower net information costs, is better than a rule imposing higher net information costs. The net information costs entailed by each alternative regulation depend on multiple variables (e.g., the number of persons affected by the rule, the attributes of the res, and the complexity of the property arrangement surrounding it).
(p.81) Smith described the regulation dilemma as the choice between two strategies, an exclusion strategy and a governance strategy.90 According to Smith, in exclusion, “decisions about resource use are delegated to an owner who, as gatekeeper, is responsible for deciding on and monitoring specific activities with respect to the resource. To set up such rights, rough proxies like boundaries and the ad coelum rule are used. These exclusion rights are used when the audience (of duty holders) is large, and their simplicity reduces the processing costs that would be high for such a large and anonymous audience.”91 By contrast, Smith describes governance rules as picking out specific uses and users. As governance rules contain more details, they impose a greater informational burden on a definite group of duty holders.92 Any given legal rule generally falls somewhere on the spectrum between the exclusion and governance poles.93
(b) Information Cost and Property Concepts
Information cost theory has been applied to provide an economic rationale to the existence and justification of long-standing property concepts—a kind of antithesis challenging the “disintegration” thesis. The paradigmatic example of exclusion strategy is the prevalence of the right to exclude in positive property law. According to Smith, “property proper includes a basic exclusionary regime with refinements of the governance type.”94 Instead of positively specifying in detail the uses exclusively reserved to the owner—thereby imposing correlative duties on nonowners to respect them—the law employs a rough proxy, bunching all those uses under the simple norm stipulating negative exclusion from making any unauthorized use of the resource. Nominally, the information costs of knowing a simple negative rule are expected to be lower than those of knowing a complex positive regulation. The information cost theory would justify the right to exclude if rough exclusion proxies (sending on/off signals telling uninvited nonowners always to stay clear) are more efficient than refined proxies contemplated under a governance rules (e.g., nonowner X is prevented from doing A, B, and C under Y and Z circumstances.) Exclusion rules are less precise on the one hand, but are cheaper to process and enforce on the other. By comparison, (p.82) governance rules are more precise but entail more processing and enforcement cost.95 It follows there is an inevitable trade-off between the preciseness of the rule and the information costs it imposes. It is equally obvious exclusion strategy is not always “better” than governance simply because it lowers net information costs. More accurate proxies may be necessary both as a matter of economic efficiency and broader policy considerations. The information costs argument only underlines its unique focal points as such that might help to shape the legal rule among other factors that should guide lawmakers.
Information cost analysis indeed offers an attractive explanation of the in rem principle. It helps to show why in rem patterns are necessary for private property and identifies situations in which it would make sense to grant in rem rights. When developing their information cost analysis, Merrill and Smith built on (and modified) Hohfeld’s taxonomy of paucital versus multital rights while adding four clarifications/qualifications to Hohfeld’s explication of the nature of in rem rights: (1) in rem rights are characterized by an indefinite and large number of duty holders; (2) in rem rights are qualitatively different from a simple aggregation of in personam rights by virtue of their relationship to a particular thing; (3) from the perspective of a duty holder, rights-holders of in rem entitlements are also numerous and indefinite; and finally, (4) in rem always require duty holders to abstain (negative entitlements) rather than imposing a positive duty to perform an act.96
The first clarification led Merrill and Smith to articulate a typology counting four species of rights, among which the attributes of indefiniteness and numerousity are diverse. The two polar cases are the Hohfeldian paucital (or pure in personam) rights and pure in rem rights.97 In the middle range, the phrase compound paucital rights has been coined, the duty holders of which are definite but numerous (as in the case of standard-form contracts), and quasi-multital rights, the duty holder of which is indefinite but singular (as in the case of assignment of a right under a lease).98 The important insight behind this taxonomy is that the in rem concept can be refined in a manner that would invite an information costs analysis of such rights. According to this framework, information costs considerations influence the type of rights designated to their holders. Pure in rem rights are defined as negative duties (which according to the fourth clarification, demand abstention) that are imposed on numerous and indefinite duty holders. Under an information cost analysis, in rem exclusion rules make sense when the number of persons who must know about the entitlement is great and the rules can be phrased in simple, unsophisticated terms. This reflects the classic Blackstonian in rem scenario, in which (i) negatively defined exclusion duties are directed (ii) against “the world.”
(p.83) Smith also explored the application of the information cost framework to the Calabresi/Melamed distinction between property and liability rules.99 Smith notes Calabresi and Melamed initially did not mean the term property rule to necessarily accompany or be associated with the classic concept of property;100 to them, the term was a derivative of economic conditions. At the same time, Smith brings forth an argument linking property rule and property law based on information costs analysis. Smith argued the information cost theory, as applied to the distinction between property and liability rules, helps to “capture the deep connection between ‘property rule’ treatment and the traditional notion of property as an in rem right to a thing.”101 Smith’s central contention is that what Calabresi and Melamed defined as property rules is prevalent in property law as a response to information cost problems.102 Smith further argues property rules are naturally paired with the right to exclude, which he conceives as the predominant property entitlement. It is worthwhile to recite Smith’s argument in its original formulation:
[E]xclusion, property, and property rules fit together. Resources in the world are multidimensional and not homogeneous from one token to the next. But producing information about the things in the world is costly and thus things tend to be grouped by type, even though the tokens in those types are not equally suited to various uses … If delineation and evaluation—the production of information—were costless, then the response to the problem of heterogeneous tokens would be to measure the valued attributes of the tokens—at zero cost—and set up new, more fine-grained types. This process would continue until marginal benefit declined to zero. At this point, the homogeneity of assets and services would be reestablished, with smaller groupings of assets and services under one price …
Human minds, however, cannot know or process every detail of the environment; the mind segments the environment into things and things into classes based on similarities. Thus, in many cases, significant differences exist among the seemingly interchangeable assets and services, from the oranges in a grocer’s bin to toasters to haircuts, that are grouped under the same type. These differences are economically significant because the attributes are valued; the different levels of these attributes in the tokens cause the various tokens to differ in value…different actors will have differing abilities to (p.84) develop and act on this information. Property responds to uncertainty over uses by bundling uses together and delegating to the owner the choice of how to use the asset, thus avoiding the need to specify uses at any stage.103
Smith posits that liability rules, which impose a “price” on unapproved use, are more typical to governance regulative strategy, whereas property rules, which impose “sanctions” as a response to violations, are more typical of exclusion strategy.104 Exclusion is an inextricable feature of property, and one should expect property rules to dominate the structure and allocation of property rights. Information costs analysis provides an explanation of the advantage of property rules within the exclusion strategy by relying on rough and low-cost signals.105 To complete the picture, Smith argued information cost theory also corroborated property law’s essential attribute as thing-related regulation:
Protection of a large and indefinite class of uses by delineating a thing and giving the owner a right to exclude others from the thing is a strategy well suited to situations in which it is not economical to decide first-order questions of use on a use-by-use basis. Instead, the right to exclude from a thing—property in the classic sense—is the result of a second-order delegation to the owner to choose among any uses, known or unknown, of the thing.106
To summarize the main points, information cost theory underscores and reinforces the economic-functional rationales of traditional property concepts. Property law is about the regulation of access and use of (i) resources (“things”), making an intensive use of an apparatus called (ii) the right to exclude, which avails against (iii) the rest of the world, of which violation entails (iv) injunctions and other legal sanctions. All these basic features of property law reemerge as the discussion proceeds to the area of intellectual property, at times yet with greater vigor. It shall be shown the persuasive force of information costs perspectives is also reinforced when the property res is stripped from any physical attributes—namely, when the res is intangible.
IV. Intellectual property
A. Proprietary Entitlements in Information
Chapter 1 showed that information subject matter can be thought of as a medial message, which is the perceptible manifestation of communicative activities within the information process. In the intellectual property context, the message (p.85) is the “thing” around which property-like entitlements are tailored,107 forming the conceptual convergence point between information and property. In its prevalent contemporary meaning, intellectual property is an umbrella notion covering patent, copyright, and trademark laws, as well as other legal branches securing exclusivity in immaterial objects.108 The bulk of intellectual property theoretical and practical problems concern the application of property-like exclusion regimes to domains of intangible artifacts.109 Two assumptions strongly underlie intellectual property law, with one being pragmatic and the other normative: it is assumed that at least in principle, protection of property-like entitlements in messages is both feasible and warranted, with neither assumption being self-evident.110 A number of theoretical and normative justifications for intellectual property are discussed in the next section,111 and matters concerning the design of property-like rights in information are explored in Chapter 3 infra. First addressed are several issues concerning the uneasy transition from the corporeal property res to the incorporeal.
1. Information as “Public Good”
Due to its informational nature, a message is an unusual candidate for being considered property res. This peculiarity is frequently expressed in conjunction with the economic notion of public good.112 The description of immaterial subject (p.86) matter as public goods has become so prevalent in the literature that its fundamental assumptions are seldom questioned,113 though the fuzziness of this labeling already manifests itself at the level of definitions. Economic literature describes a “pure” public good as having two characteristic features: it is nonexcludable, and its consumption is nonrival.114 First, non-excludability means it is impossible to provide the good to one person and prevent the provision of the good to others. Classic examples are the benefits of a lighthouse and national defense. Second, enjoyment from (or consumption of) tangible goods is considered rivalrous, meaning that enjoyment derived by one person diminishes the ability of other persons to do the same. Classifying goods as non-rivalrous means consumption of the good by one person does not diminish the supply available for consumption by others.115 In economics vernacular, the marginal cost involved in extracting marginal utility from such goods is zero.116
Many intellectual property scholars view in these features the most critical distinction between physical and incorporeal resources.117 Yet some aspects of the treatment of information goods as public goods are controvertioal, for instance the question of whether one or rather both pure public good features accurately describe the intangible subject matter of property. Some legal scholars believe intellectual property subject matter is both non-excludable and non-rivalrous.118 Others insist such subject matter is non-rivalrous but excludable (p.87) upon investment of some effort and expense for fencing.119 Yoo has recently proposed a perspective for the debate by returning to Samuelson’s original analysis, which was particularly interested in the optimal production of public good by the government.120 Yoo notes Samuelson saw the peculiarity of public goods not in their non-excludability and non-rivalrous consumption, but in the way consumers signal their preferences and valuation. Whereas in the case of private goods (which are provided and consumed individually, with consumers revealing their preferences by purchasing a given quantity at a given price), in the case of public good, consumers reveal idiosyncratic preferences by their willingness to pay a given price for one quantity unit, which is in fact the whole product.121
These and other divergent views on the public good problem yield divergent approaches to legislative solutions and the legal protection of intellectual property in general. Those who believe intangible subject matter is inherently non-excludable are often hostile to legal fencing in the form of strong intellectual property protection.122 Others believe fencing is necessary to alleviate the systematic malfunction of markets in which the marginal cost of producing the next unit is zero (or near zero) and consumption is non-rivalrous.123 Yoo’s analysis shifts the focus to the “Samuelson condition,” requiring expansion of the production of public goods so long as the aggregate marginal benefits derived by all consumers exceed the marginal cost of that production.124 Though it is arguably impossible to determine the aggregate marginal value to consumers of a public good, Yoo argues that analyzing ideal objects (in that case, copyrighted works) (p.88) as impure public goods, which nonetheless must satisfy the Samuelson condition, has a major doctrinal payoff.125
Much of the trouble is rooted in the seemingly inherent contradiction between the essence of messages and property-like exclusion strategies and the proper response to that contradiction. How can a message (as defined in Chapter 1) fit in the traditional property framework? As to the first pure public good feature (concerning excludability), if one were given complete freedom to shape factual circumstances, it would seem possible to also selectively provide products such as air or information.126 To some extent, a similar conclusion may follow if one could freely shape the legal landscape in connection with the view considering intellectual property laws as a form of legal fencing, thus effectively enhancing the excludability of ideal objects. The main instruments of the law to achieve a degree of excludability are enforcement of exclusory entitlements, and no less significantly, deterrence.
Theoretically, there are several ways to achieve selective provision of the message ex post initial communication by the originator. One obvious way is to impose legal sanctions on recipients who recommunicate the message without permission. The legal basis for such rule could be intellectual property law, but also others such as contract, privacy, libel, or national security. A second strategy piggybacks on real property rights. Ownership of physical spaces (e.g., keeping the sole exemplar of a work in a domestic safe), or ownership of tangible objects (possessing the sole copy of a manuscript) can serve to impede unwanted reception by unauthorized individuals. A third strategy, which shall be explored in length in the next chapters, is exercising control over the functionality of logical and logistic media.
As to the second pure public good feature (concerning nonrival consumtion), it is broadly accepted that often the costs involved in marginal reception by the marginal recipient of a message are zero (or near zero) while the marginal utility effect is positive.127 Consumption itself may be non-rivalrous; however, the consumption of input resource invested to create the message may very well be rivalrous,128 which appears to be the main rationale behind providing legal fencing under the incentive theory. It should be noted the term consumption in this (p.89) context might be misleading as messages obviously are not “consumed” as are food, water, or physical commodities.129 (Still, a message might “expire” if nobody knows its content, and if all feasible routes to recover it have been exhausted.)130 Nor are messages subject to natural-biophysical processes or the transformation of energy into matter and vice versa.131 Indeed, information can be “used” (as distinguished from being “consumed”).132 One can think of three paradigmatic ways to use messages. First and most basically, reception itself is a type of use, such as reading a book or listening to music. The second is recommunication (i.e., incorporating the message or elements thereof in one’s own expression). Finally, the third is action upon (or according to) information, such as purchasing stocks of a publicly traded company after receiving insider information. This observation is illustrated in Figure 2.1 below:
2. Information and Possession
Commentators and courts attending to issues of intellectual property as public good often quote Thomas Jefferson’s famous words objecting to natural rights in ideas. Jefferson observed:
It would be singular to admit a natural and even an hereditary right to inventors…It would be curious…if an idea, the fugitive fermentation of an individual brain, could, of natural right, be claimed in exclusive and stable property. If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it.
Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move and have our physical being, incapable of confinement or exclusive appropriation.133
(p.91) The relevant part of this quote denotes the problem of consolidating between the conventional notion of possession and the immaterial subject matter of property. As noted, the classic concepts of property law evolved out of life situations and conflicts related to physical possession.134 In the quoted excerpt, Jefferson’s objection focuses precisely on the fundamental difference between the nature of possessing ideas as compared to material resources. Actual possession of physical resources has provided the necessary background for the emergence and formation of traditional property conceptions and arrangements in which the act of taking possession is both declarative and prohibitive: it is a declaration of an individual claim, which occasionally imposes actual barriers on possession and use by other claimants. Taking possession is an open act in the physical world that can be observed and evaluated by members of the community. It puts others on notice with regard to subjective claims and invites them to submit their objections (if they have any).135
The central importance of actual possession in the classic property narrative is frequently mirrored also in modern positive property law (for instance, in adverse possession law or finders law).136 Possession is noticeable, affirmative, and declarative. It demarcates the physical space or thing of which the claimant seeks to deprive others. It is fairly undisputed today, as Jefferson lucidly articulated two centuries ago, that the rationales for recruiting public resources (adjudication, enforcement etc.) for the sake of securing private claims over valuable resources cannot be transplanted as-is into intellectual property doctrines. Often, the problems intellectual property law must confront differ radically. For example, possession by its nature simply cannot fulfill the same functions in the information good scenario. To “have” information (or knowledge, or an idea) is at its core a subjective condition, a cognitive circumstance. So long as this condition remains purely subjective, it cannot single out any intention or claim. (p.92) As Jefferson pointed out, others become aware someone “possesses” a message upon communication, which in fact, has precisely the opposite effect of physical possession, namely, of occupying the thing for one’s self in order to exclude others from its benefits. Instead of declaring an exclusivity claim, the immediate effect of communication is that other persons become new “possessors” of the message.137
The relationship between information (as a public good) and the role of possession are commonly invoked to emphasize the discrepancies between information subject matter and common conceptions of real property. Those skeptical about intellectual property protection attack the property metaphor, which draws analogies from real property conceptions in analyzing exclusivity in ideal objects.138 With this debate in mind, it might not be necessary to flatly reject “conventional” property principles when one comes to explore the issue of rights in messages—perhaps as representing “nonconventional” subject matter. The analogy to real property (or, the “property metaphor”) could be valuable for theoretical analysis, but in any case, it shoud be handled with caution, as the issue of possession illustrates. More refined sub-analogies must take into consideration the conceptual differences between real and information reasources for the purpose of applying property principles to messages.
B. Theoretical Approaches to Intellectual Property
Thomas Jefferson did not object to intellectual property per se—his critique targeted the natural law justifications to property-like entitlements in ideas.139 (p.93) In the above excerpt, he used a metaphor of fire to describe the information process.140 Jefferson’s fire metaphor is powerful: It encapsulates the nature of information as a dynamic process mobilized by thinking and communication energy. It also implies information is not a “natural” object of exclusion rights, and that when such rights are nonetheless granted, there must be compelling underlying arguments justifying legal protection.
The main projects of intellectual property theory have been to explain the positive law and justify property-like entitlements in information goods. On the prescriptive level, a further objective has been to propose an optimal (or at least a better) design of the positve law. Pondering the very basic justifications to intellectual property protection has remained a vibrant topic in legal scholarship, which continuesly produce new theories.141 Some of the most influential approaches—those that now form the conventional basis to argue about intellectual property—originally did not focus on ideal objects at all. Also today, most leading arguments draw heavily on philosophical traditions primarily designed to underpin private property in general, occasionally with a mix of influences from other legal fields such as torts, restitution, and unfair competition.142 Often, intellectual property rhetoric blends arguments having their roots in various theoretical traditions, and justifying legal protection is flanked with snippets put together, but that do not necessarily “belong” together.143
(p.94) Fisher, among others, is skeptical concerning the capacity of any single theoretical approach to explain, justify, and model positive intellectual property regimes.144 At the same time, he noted theoretical approaches are important for helping to identify “nonobvious attractive resolutions” to particular problems, as well as to foster “valuable conversations” among stakeholders involved in the legislative process.145 Hughes referred to a “mirroring” effect between theoretical principles and the positive law, noting the “two things are becoming more acceptable by mirroring one another.”146 With this optimistic-yet-cautious view on the role of theory in shaping positive rules, the following passages focus on three of the most significant theoretical narratives and their application to copyright law.
1. The Lockean Argument
(a) Locke’s Labor Justification of Property
The works of John Locke profoundly influenced modern property theories.147 Locke is famous, inter alia, for his labor-based justification of private property rights. The theory proclaims a natural right to property born out of exercising labor upon not-yet-appropriated resources found in the state of nature.148 Locke’s initial premise is that to extract utility, persons must exercise labor upon natural raw resources. The raw resources in the state of nature are held in common by all mankind until appropriation via labor occurs, as labor morally justifies a reward. The laborer’s claim for reward furnishes the core normative justification for the grant of an exclusive property right in the resources he has extracted from the state of nature.
Locke’s argument is complex and intriguing,149 inspiring vast literature debating its meaning, correctness, and robustness. The discussion here focuses (p.95) mainly on one critical point, namely, the baseline problem (asking “where property in information begins?” or “what is the information commons from which information is appropriated?”) and its relation to copyright.
Locke begins with proposing that a person has a property right over his own body.150 He describes the state of nature as containing resources given to mankind from God in “common.” However, these resources cannot be utilized or enjoyed in their natural state—instead, individuals must exercise labor upon them.151 When a person mingles his efforts (the “labour of his body, and the work of his hands”) with the raw, uncultivated materials of nature, thereby removing them from the state of nature, the resulting product should to be his.152 Mixing labor with a natural resource endows property rights in the resource and distinguishes it from the common.153 The status of resources in the state of nature as “common” suggests the appropriation applies to resources not yet appropriated through labor by someone else.154 Locke suggested that appropriation through labor of common resources is justified under two main conditions (provisos). The enough-and-as-good proviso requires that in ex post appropriation, there are enough and as good resources left in common for others to exercise labor upon.155 In other words, appropriation should leave the world with similar appropriation opportunities as it has been ex ante. Locke also introduced the no-waste proviso condemning excessive accumulation of property leading to destruction of goods before they can be utilized.156
(p.96) Theorists often classify Locke’s argument as a natural law justification of private property.157 The argument emphasizes the “pains” suffered by the laborer, which renders his claim superior to the expectations of residual claimants, who anyway are left with enough-and-as-good appropriation opportunities.158 At the same time, Locke makes several assertions having instrumental-utilitarian flavor.159 Importantly, Locke seems to have strayed away from the path marked by early natural law thinkers such as Grotius and Puffendorf by questioning the theory of social agreement/tacit consent. Grotius, for instance, insisted natural property rights must be based on the community’s acknowledgement.160 By contrast, Locke did not seem to condition appropriation out from the common with the consent of all commoners or society in general.161 Locke warned that if private use of natural resources depended on the consent of all mankind, “man had starved, notwithstanding the plenty God had given him.”162
The numerous important objections to the Lockean justification cannot be reviewed here.163 One significant point is Locke appears to have downplayed the (p.97) obvious problem of scarcity, that is, taking from the common under scarcity conditions almost inevitably diminishes the opportunity of other commoners to do the same. A possible solution to this problem resides in Locke’s enough-and-as-good proviso, yet to serve this purpose, the proviso must be sustainable under real-life conditions. In Locke’s reality, exploring the vast, uncultivated plains of the New World164 or drinking from an ever-rushing pond that is permanently generating water to quench the thirst of men,165 served as examples of appropriation that left enough-and-as-goods resources in common. It is clear, however, that natural resources are more often scarce and exhaustible than otherwise. Simple logic warrants that under scarcity conditions, any taking from the commons would reduce the quantity of remaining resources left for others. It also follows that a taking from the commons necessarily affects others’ ability to appropriate for themselves.166 If the taking is done unilaterally without requiring even the tacit consent of the injured commoners, how can one ethically justify this result?167
Nozick proposed a modification to Locke’s argument based on a lenient interpretation of the enough-and-as-good proviso. Accordingly, appropriating from the commons does not necessarily worsen the position of other commoners under scarcity conditions, and persons whose overall situation is improved by the existence of property rights protection in general cannot complain about being impoverished via individual acts vesting private property rights in certain assets labored upon.168
(p.98) A second well-documented critique of Locke’s property rationale relates to the problem of proportion. Locke seems to hold the laborer is entitled to private ownership in the entire product or resource he has labored upon.169 However, there is no clear indication the intensity or scope of property rights earned are commensurate with the intensity or amount of labor invested, or that their scope should be proportional to the value added to the resource through labor. In an imaginary reality of inexhaustible resources, this might not amount to a serious distributional problem. However, under scarcity conditions, there is a strong sense of unfairness if the investment of minimal input, say, pouring a Nozickian can of tomato juice into the ocean, could buy one the ocean, and this to the detriment of all other would-be appropriators.170 Correction of this problematic outcome possibly should include a mechanism for determining the scope of property rights according to the amount of self-resources invested (i.e., labor) and the amount taken away from the commons (i.e., the value of expropriated common resources, possibly offset by the benefit to the public resulting from the appropriation). Or at the very least, it seems this is what a moral labor-based system of property rights would need.
(b) Labor Justification of Copyright
It is debatable whether Locke himself intended his argument to underpin property rights in intangible resources.171 The Lockean argument itself does not contain elements that would a priori foreclose application to ideal objects, perhaps to the contrary: some property theorists find the argument particularly attractive in the context of intellectual property.172 Echoing these sentiments, Epstein writes:
Indeed, the labor theory of acquisition seems, if anything, stronger here precisely because intellectual property does not require any form of mixing with tangible forms. Rather, these types of property appear to be the result of pure (p.99) labor, which the creator, therefore, cannot keep because first possession of a tangible object allows him only to protect the paper on which the draft is written, rather than the draft itself. Yet by the same token, the author has not taken anything else out of the commons and so does not run into the joint contribution objections that undermine the power of the first possession rule for tangible objects. The only function of legal intervention here is to protect that investment in labor without any expropriation.173
This passage encapsulates the essential points. Authors do not expropriate commoners by acquiring exclusive rights in works they have created, and the enough-and-as-good proviso can be more easily satisfied, depending on the scope and nature of exclusive rights granted.174 For example, if copyright protection extends only to the original elements of the work, arguably the position of other would-be authors ex post appropriations is not worse as a result of copyright exclusivity relating to nothing more than that. According to this view, later-day authors enjoy at least the same number and quality of informational resources as compared to their position before copyrights have been acquired. To the extent a system of property rights in expression improves the position of later-day authors (e.g., by enriching their intellectual heritage and sources of inspiration), the objection based on questioning the viability of the enough-and-as-good proviso might lose much of its vigor.175
Additionally, it might be possible to view copyright’s exceptions and limitations on exclusive rights as a response to the proportionality problem highlighted by Nozick and others. At least in theory, according to the idea/expression distinction, authors receive protection proportional to the amount of creativity they have injected into existing informational resources. Preservation of the commons is achieved by protection not attaching to “negative categories” such as ideas, facts, or methods. Its limited duration renders copyright a weaker form of property and provides the lawmakers with fine-tuning tools, with fine-tuning-by-duration rules allowing monitoring of the amount (or value) taken from society as a result of exclusive copyrights by setting an “expiration date” to copyright protection. As far as the no-waste proviso is concerned, it has been argued that (p.100) unlike apples, information does not “spoil” over time,176 nor does it become barren if neglected the way a pasture might.177
(c) The Baseline Problem: What is the Information Commons?
Application of the information model’s terminology and methodology to the Lockean argument reveals some doubts concerning Locke’s basic assumptions. Locke’s argument follows a clear temporal and logical order: In the beginning, God gave the earth and all natural resources on it to mankind in common,178 and persons had property rights only to their own bodies.179 As human subsistence and prosperity depend on labor, labor will emerge, and as the laborer has a natural claim to the resources he has labored upon, he may exclude others from them. According to this depiction, it is easy to imagine the world in its primal phase, where unowned resources simply exist “out there,” with their existence depending neither on labor nor on mankind in general. Because mankind does exist, labor directed against those untouched resources will be exercised. Labor then is a constituting event: it creates a division between privately owned resources and whatever resources are left in the common pool. However, if informational messages are the resource at issue, this order cannot be sustained.
To illustrate the point, it is useful to consider two different types of informational input. The first type is unrelated to human communication—it is the bird in the sky, the view of the ocean, the sound of the waves, the tree in the forest, and so on. These impressions are dubbed here “natural input,” or N-input. The second type is communication-related impressions, referring to all the messages to which the author is exposed, called M-input. The information environment surrounding the author consists of both N-input and M-input elements. Both types may be used by the author for creating his own expression, constituting together the “raw material” labored upon. Consider now the conceptual convergence between labor in the Lockean sense and origination in the meaning of the information model, with origination as a constituting event. In that context, origination creates a message, which is essentially the subject matter of copyright. Before origination, the message has been purely a subjective thought, (p.101) whereas now (ex post origination) the message becomes an artifact that is both legally and economically relevant.
To the extent the author used N-input incorporated in the message, these impressions—which are not subject to any property right in themselves—become a component of property subject matter as expressed in the message (provided the originality threshold is met). N-input may be used for creating works, but M-input must be used for any work. All authors must use existing coding systems, formulations, and communication building blocks that cannot qualify as N-input as they are the fruits of others’ “labor”. Though (input) information broadly conceived is not always man-made (e.g., a tree in the field, a bird in the sky, the whistle of the wind, or the waves of the ocean), authors routinely use ideas, constructions, and formulations that are the result of others’ intellectual achievements. Now, the proportion between the intensity of using M-input and N-input for creating a given message does not change the facts that (1) there is no reasonable way to subject N-imput to property rules, and (2) the message will always include M-input that (also under a Lockean worldview) could and sometimes should be subject to property rules.
The most important point is that this M-input does not fit within the Lockean depiction of the common as untouched resources, as a raw gift from God.180 (p.102) The information environment consists of messages that owe their existence to the actions of other persons. In this sense, the baseline problem denotes the inability of one to determine when (based on the labor justification) property begins and the information commons ends. Put differently, there is no articulable baseline from which one can be allocating property rights out of the commons to individuals based on the principle of labor on not-yet-labored-upon resources in their “state of nature.”
Two recognitions emerge from this baseline problem. First, it is evident the critical challenge is defining the information commons ex ante appropriation. Second, this commons cannot mean untouched resources. Therefore, our conception of ex ante appropriation resources cannot rely on Locke’s depiction of the “plenty of natural provisions there was a long time in the world.”181 Yet the Lockean argument appears to heavily rely on the assumption that not-yet-labored-upon resources do exist in the world ex ante appropriation.
It could be useful at this point to return to some possible interpretations of the commons in the context of intellectual property theory. Fisher proposed seven information commons candidate categories: the universe of facts, languages (vocabularies, grammar), cultural heritage, non-appropriated ideas already comprehended by at least one person, the set of ideas already apprehended by at least one person, the set of all “reachable” ideas, and the set of all “possible” ideas.182 Each version of the commons stipulates a different criterion for defining zones of freedom to create new messages under an information property regime. Fisher’s portrayal takes into account the possibility information resources could indeed exist independently of human communication. For example, reachable ideas are defined as “all ideas that lie within the grasp of people today,” and possible ideas are defined as “all ideas that someone might think of.”183 According to this interpretation of the commons, amorphous, wholly abstract ideas reside in a metaphysical universe, waiting to be plucked by a genius mind who will endow them with a communicable form.184 This potential may or may not materialize into an expression.
(p.103) The Platonic universe of ideas seems attractive at first hearing for conceptually coming quite close to the Lockean untouched state of nature. However, because each message, regardless of the status of the ideas it represents, contains M-input elements, the baseline problem remains unsolved. To reiterate, unlike in the Lockean world (or, in the Platonic universe of ideas, by comparison), the existence of information raw material is never completely independent of previous human labor.185 Therefore, the problem of defining the ex ante appropriation commons transforms into that of deciding how much M-input (if any) remains in the commons ex post appropriation, despite the fact that it is M-input—namely, the product of someone else’s labor.
As shown, approximations and modifications to the original labor argument must be made, as in its original formulation it cannot justify initial allocation of property rights in creative messages. The crux of the labor argument is that strangers have a weaker moral claim to a product that costs the laborer with toil and sweat. A modified argument will have to explain why the claim of the author is superior despite his usage of M-input.
To remain faithful to the basic assumptions of the labor argument as applied to information resources, one may assume externalizing thoughts and ideas—and converting them into medial messages—always requires some degree of “labor.” The originator is hence a Lockean laborer. The key justification underpinning a moral claim to exclusive rights in the message is not so much the toil of communication as it is the social value added by the author-originator.186 The next question is how much property would be morally justified under the value-added justification. Insoluble questions of measuring and apportionment are involved. First, it would seem unfair to reward the author for elements she has taken from other authors. Second, it is practically impossible to measure the precise individual contribution of value added to information resources as a (p.104) result of producing the message.187 Messages cannot be dissected precisely according to their original and borrowed elements,188 and allocation of exclusive rights can never scrupulously correspond to the actual contribution of each and every individual origination in past and present communication sequences.189 At the same time, the law cannot flatly prohibit any such unauthorized “taking” as the result would be both ridiculous and unjust. Some accommodations and compromises must be made, but either way, a calculus based on moral issues should also factor in authors’ moral “debt” to their predecessors.190
One practical strategy is to allow some M-input taking and grant exclusive rights in the output, but simultaneously diminish the intensity of the “harm” to others by reducing the intensity of exclusive rights.191 A modified approach would necessarily apply rough approximations, yet any compromise of this sort seems to diminish the direct relations between labor and reward. Epstein offered a pragmatic solution: he proposed an approximation rationale he named “confession and avoidance.” He argued in favor of a practical, rough-justice rule that mixes influences from the added-value approach. Accordingly, he who contributed the lion’s share to the finished product, making it worthy of our attention, shall be morally entitled to the entire property claim.192 Further, Epstein suggested (p.105) the author’s property claim could be morally justified if the author contributed an “equal measure” to the common pool of knowledge.193
(d) Communication as Labor?
Let us summarize the critique: Proponents of the Lockean labor argument as a justification to copyright protection must come to terms with serious compromises in the initial formulation of the labor justification and the way justifying property rights in expressions operate. So far it has been assumed, without proof, that human communication generally falls within the notion of Lockean “labor” for which originators desrve a reward in the form of property rights. However, this might turn at times a very weak assumption. Often, the originator’s primary reward for the “toil” involved in creating a message is purely communicative: the joy and benefit of being socially involved, noticed, and understood by others. To the extent authors-originators contribute to the information process additional (valuable) messages that otherwise would not have existed, assessing their contribution to society seems to better fit within the value-added variation.194 Indeed, the value-added approach would undermine the “pains” element as the crux of the moral justification for reward195 and shift the focus to adding value (=adding messages) to the information environment.
At this point we should pause: saying that communication (=adding messages to the information environment) adds value is one thing. Saying that such contributions morally justify individual reward in the form of exclusive rights in expressions is yet another. After all, the urge to communicate is a basic human need, and as such, it is not inherently something that automatically creates a societal debt from the collective to the individual communicator.
Even assuming arguendo that authors in general deserve a reward for creating messages, and assuming their net contribution to society can be measured, what then should be the ratio between that net contribution and the net social costs of copyright (assuming the net social cost can also be measured)? Should society “pay back” exactly the same value it has received from authors? How does this payback translate into exclusive rights, the commercial value of which is to a (p.106) large extent initially undeterminable? How can this undeterminable value of a work be distributed among all atomistic authors who have contributed to its creation at various stages of its formation? How strong should the private entitlements be to the whole message? Lockean labor theories do not seem to offer satifying answers to these concerns.
2. The Hegelian Personality Theory
(a) Hegel’s Idea of Property
Personality theories of property inspired by the philosophy of Hegel and Kant focus on the relationship among property, autonomy, and personal development of the individual. It is possible to distinguish between development-based and identification-based personality theories. The former category of arguments focuses on the process of personal development and the need to secure the freedom to become a person, whereas the latter focuses on the psychological relationships and dependencies persons develop with respect to things.196 As one example of identification-based theory, Radin offered a distinction between “personal property” and “fungible property,”197 with the former type relating to personal autonomy manifested in the object, a recognition having a potential influence on the scope and nature of positive property rights in objects.198 According to many personality approaches, property is an essential condition for freedom, autonomy, and self-actualization.
Hegel’s account of the relations between persons, freedom, and property, as laid out in the Philosophy of Right (Grundlinien der Philosopie des Rechts), proves remarkably viable in the contemporary theoretical discourse on property law.199 (p.107) Property plays a critical role in Hegel’s broader political-philosophical discussion200 while assuming its great importance both as being the initial right of persons and as providing the logical basis for the rights to life and liberty.201 The logical beginning is the free will—a universal, infinite potential.202 The will is free in the sense that in its abstract, initial mode as “self” it has no physical characteristics;203 as it has no physical dimensions, free will is not subordinated to natural conditions or needs, even those of time and space.204 The will is free and true as a “thinking intelligence.”205
Free will resides in persons who are likewise free in the initial stage of their individual development: “The abstract will, the will which exists for itself, is a person.”206 The will can actualize its abstract freedom only through acts against external objects/things, which, by definition, are not subjects as they do not exist in and for themselves. External objects are distinguished from subjects on the basis that they lack free will of their own.207 The physical attributes of persons, and the external reality in which they must operate, imposes restrictions on the will. In that reality, through will-driven conducts directed against external things, the personality—initially a shapeless, contentless and abstract entity—progressively develops its actual freedom and individuality. Hegel suggested will-driven (p.108) conducts executed against external things is a necessary condition for actualization of freedom and personal development: “A person must give to his freedom an external sphere, in order that he may reach the completeness implied in the idea.”208
In the Hegelian sense “right” is an extension of freedom,209 and free persons have a “right” to actualize their freedom and develop their individuality via external objects. As noted, in Hegel’s philosophy, the subject is an end-in-itself. As such, the person has a right to direct his free will upon every thing and thereby make it his property.210 Hegel’s argument is logical and systematic: as persons have a right to actualize their freedom, and as the only way to do that is to act against external objects, a person must have a right to external objects. Hegel initially speaks of appropriation of unowned things (herrenlos).211 Through taking possession of external objects, the subject seeks to achieve self-recognition; he distinguishes himself thereby from unfree objects and from other subjects with respect to which he seeks to relate himself.
The function of property in Hegel’s ethical composition is multifaceted. Property is first and foremost a result of a mental act of willing, a claim that creates rights. Hegel draws at the outset an important dialectic distinction between right in the legal sense and right in the philosophical sense.212 Further, Hegel defined abstract right as having to do with personality,213 as the proper safeguarding of freedom within the special juridical sense.214 Abstract right is derived from the personal entitlement to develop and actualize freedom. It is formulated as the general duty to “[b]e a person and respect others as persons.”215 In line with this distinction, the positive (formal) right granted by the state in particular cases may or may not mirror the full spectrum of acts covered by the abstract right. (p.109) Further, having a formal-positive right is not proof the rights-holder has an abstract right to begin with.216
In The Philosophy of Right, Hegel pointed out three external aspects of appropriation. The embodiment of the will occurs in the process of progression thought levels of development—from a purely abstract existence towards objective and external freedom—which is manifested in possession, use/consumption, and alienation. It is possible to think about the three forms as delineating the stages in the evolution of the relations between the person and the object. Possession begins the relation, use or consumption maintains it, and alienation often marks the end of it.
Possession appears to occupy a central role in Hegel’s framework: “The reasonableness of property consists not in its satisfying our needs, but in its superseding and replacing the subjective phase of personality. It is in possession first of all that the person becomes rational.”217 For possession to take effect, two necessary conditions need to be fulfilled: first, the subject must have will to appropriate the object, and second, some physical interaction between the will-contained body and the external object must take place.218 As to the physical-objective phase, possession is manifested partly as occupancy, partly as forming, and partly as mere marking.219 Interestingly, Hegel refers to marking as a form of possession, and perhaps as its purest, most genuine indication. The rationale is that marking can ideally fulfill the double function of possession: (i) a direct manifestation of physical relation to an object (ii) through which the claim of the will becomes recognizable.220 This confirms an important operation of possession is to put others on notice about the existence of a subjective claim: “A person’s putting his (p.110) will into an object is the conception of property, and the next step is the realizing of it. The inner act of my will, which says that something is mine, must be made recognizable for others. When I make an object mine, I give it a predicate, which must be manifested in its outer form, and not remain merely in my inner will.”221
The thread of external manifestation continues to the next stage of property relations. Use or consumption of the object is recognized through the alteration of the object in some way, where the change in form is attributed to the claim of the will. In Hegel’s framework, the nexus between property rights and use/consumption is crucial.222 This modus of property externalization signifies a direct and immediate relationship between the will and the thing. The thing is openly and unambiguously subject to the individual will; the relational hierarchy between the willing subject and the thing is salient.223 The subject-object interaction, signified by use (or deformation) of objects, launches a process of recognition-by-negation through which subjects and objects are recognized as such.224
In the Philosophy of Right, Hegel does not attempt to sketch a model for an ideal legal system.225 Perhaps this reservation has something to do with Hegel not endeavoring to precisely draw limits on the legitimate power of state intervention regarding conduct of individuals.226 In this vein, Hegel further did not provide specific guidelines for the proper allocation of property entitlements.227 At the same time, several commentators read in Hegel the proposition that all persons are entitled to some private property rights.228 This proposition is supported, inter alia, by Hegel’s objection to slavery.229 Accordingly, everyone is entitled to at least a modicum of private property, but we do not know exactly how much. A positive legal system should support private property via organizations (p.111) and political institutions while conducting rational decision-making processes that determine the actual scope and limits of private legal rights.230
The possibility of disposing of property rights follows the same rationale for acquiring them in the first place, namely, the relation to the will. When the element of will-driven actions embodied in external objects fades away, so does property.231 Hegel recognized that some things are inalienable: those elements of the inner self such as personal freedom, morality (Sittlichkeit), religious convictions, and life itself.232 However, Hegel clearly regarded property as alienable in principle, inasmuch as such alienation does not compromise an ongoing, present exchange between the free will and the object.233 The issue of alienation proved particularly challenging: if the object is indispensable to the self, is it at all transferable, and if so, under which condition? At first blush, if personality (or the autonomy of the person) is imbued in the object, alienation of the object might violate the principle that freedom cannot be relinquished.234 This appears to be a serious problem if personality interests are said to justify property rights in external objects. In this context, Waldron proposed an interpretation “of a dual line of effect from my will to the object and back to my will.”235 Only so long as this dual line exists is the object the property of the person. Hughes pointed out that recognizing a power of alienation might lead to a paradox, as the free will (which no longer relates to the relinquished object) cannot have the power to transfer property rights to others—property rights that it no longer has.236 (p.112) In response, the nexus between property and Hegel’s idea of the contract is crucial, an idea complex and intriguing in itself:
But property is also a manifestation of will, and the other, for which it exists, is the will of another person. This reference of will to will is the true and peculiar ground on which freedom is realized. The means by which I hold property, not by virtue of the relation of an object to my subjective will, but by virtue of another will, and hence share in a common will, is contract.237
Wood noted the dependence of the abstract right on the dialectic of recognition is stated quite clearly here.238 He explains “[a] self actualizes itself when it makes itself into what it needs to be in order to satisfy its desire for self-certainty … a self must become a free person, through participating in a community of recognition or universal self-consciousness, and becoming aware of itself as a free person.”239 Accordingly, neither abstract right nor contract can be understood outside the social context and the idea of free wills that need to interact through mutual recognition in one another’s freedom and in one self’s.240 Thus, the (p.113) answer to the alienation “paradox” is that at the intersection of a contract, the will of the transferee already implicitly exists in the object, and unlike in the traditional property sense of passing “good title,” the property rights of the transferee do not depend on simultaneous existence of precisely the same property rights in the transferor.241
(b) Personality Theory and Copyright
Intellectual property scholars have identified in Hegel’s discussion on property qualities that significantly enrich the theoretical foundation for property rights in intangible objects. The most direct and obvious attractiveness of Hegel lies in the property res having no intrinsic relation to physical attributes—and that physical attributes do not belong in the definition of property rights’ objects.242 In the case of copyright, personality theories inspired by Hegel’s treatment view human creative expressions as the embodiment of the creator’s self.243 Accordingly, an essay or a musical piece can be viewed as a direct and genuine objectivization of the self in the thing. Moreover, in Hegel’s framework, incorporeal things are the most natural candidates for becoming objects of private property. Things are defined by negation to subjects; they are external to the self and dominated by it. Things cannot have free will, and they do not need to acquire any physical (as distinguished from external) form whatsoever:
The will is a special way of thinking; it is thought translating itself into reality; it is the impulse of thought to give itself reality. The distinction between thought and will may be expressed in this way. When I think an object, I make of it a thought, and take from it the sensible. Thus I make of it something which is essentially and directly mine.244
It would seem a thought is the purest object to be considered as belonging to the thinking subject. Thinking is an action of the free will in the external world that shapes the external world into objects of property. Thinking out the thought, in the course of the self’s endeavors to reach a higher stage of development and recognition, gives it an objective existence and underpins the claim to control it. In paragraphs 68–69 of the Philosophy of Right, Hegel reaches the issue of legal (p.114) rights in intellectual productions (geistige Produktion). He begins by identifying the particular nature of such objects:
What is peculiar to a mental product can be externalized and directly converted into an object, which it is possible for others to produce. When another person has acquired the object, he may make the thought or, it may be, the mechanical genius in it, his own; a possibility which in the case of literary works constitutes the reason and special value of acquisition. But, over and above this, the new owner comes at the same time into possession of the general power to express himself in the same way, and so of making any number of objects of the same kind.245
Hegel grappled with the question whether claims in immaterial objects are capable of being conceptually separated from the property rights in physical objects embodying them.246 He reaches this question is his discussion on relinquishment of property. In that context, Hegel felt obligated to explain whether and how the property holder should be able to alienate copies on the one hand, but on the other reserve for himself (or separately alienate) the exclusive power to make reproductions. Hegel’s answer to the “whether” question is positive—and that should be the case due to the special character of intellectual property rights, which are said to be less like possession (Besitz) and more like wealth (Vermögen).247 The direct and intended use of an intellectual product is to think it,248 whereas the indirect, particular power to control use bestowed by intellectual property is indirect, separate, and alienable.
In a lengthy Note to paragraph 69, Hegel continues to struggle with the special nature of intellectual property rights. He notes that through multiple reproductions and modifications, “the profit which the work promised the author or inventor in the first place may be wiped out, or the purpose of both author and imitator may be defeated, or one may be ruined.” This notwithstanding, for (p.115) Hegel using existing expression in one’s own expression (an act he named “plagiarism”) was, above all, a violation of the code of honor (Ehre).249 He does not appear to articulate a stronger justification to the prohibition against unauthorized literary reproduction beyond the protection of economic interest. He is further highly skeptical about the feasibility of identifying “plagiarized” elements in new works, which leads him to conclude plagiarism cannot be said to strictly violate property rights.250 As a logical consequence, Hegel commented that intellectual property rights as expressed in the positive law serve their purpose in granting specific protections to authors and publishers, yet these protections are justifiably very limited in scope.251
3. Utilitarian Theories
(a) Utilitarian Approaches to Property
Classic utilitarian thinkers considered utility, welfare, and happiness as bedrock concepts in legal theory and legislation. Jeremy Bentham, for instance, opened the Theory of Legislation with the following statement: “THE PUBLIC GOOD ought to be the object of the legislator; GENERAL UTILITY ought to be the foundation of his reasoning. To know the true good of the community is what constitutes the science of legislation.”252 Bentham applied this principle when speaking about civil law and the allocation of legal rights/obligations in general: “In the (p.116) distribution of rights and obligations, the legislator … should have for his end the happiness of society.”253 As concrete legislative ends, Benthan named Subsistence, Abundance, Equality, and Security.254 Famously, Bentham ferociously rejected natural rights as the basis of law.255 Moving to discuss property law in his Theory of Legislation, Bentham perceived property entitlements merely as a basis of expectation guaranteed by the law.256 State protection of property expectations enhances the sense of security among members of the public, thereby contributing to greater happiness.257 Property protects the basis of expectations that is founded on existing rules—and by securing these expectations through the institution of property, society can expect some level of productivity.258
Bentham was deeply influenced by David Hume, who described property as “a relation betwixt a person and an. object as permits him, but forbids any other, the free use and possession of it, without violating the laws of justice and moral equity.”259 Justice and morality are indeed central to Hume’s social and political philosophy in general. Hume categorically rejected the notion that morality is universal and derivable from reason.260 Instead, he posited that moral virtues and vices are contingent, and that morality is essentially a matter of the relations between mental (internal) actions such as passion or volition and external objects.261 Hume suggested both vice and virtue are in this sense equally artificial and “out of nature.” He stated “[f]or however it may be disputed, whether the notion of a merit or demerit in certain actions be natural or artificial,’tis evident, that the actions themselves are artificial, and are perform’d with a certain design and intention.”262
(p.117) Understanding Hume’s formulation requires some background. He divided what he called “virtues” into those that are “natural”—in that our approval of them does not depend upon any cultural inventions or social intervention—and those that are “artificial” (i.e., dependent both for their existence as character traits and for their ethical merit on the presence of conventional rules for the common good).263 Hume’s “natural” virtues are more refined and completed forms of human traits, which one could expect to find even in people who belonged to no society but cooperated only within small familial groups.264 The traits he calls “artificial” virtues are the ones we need for successful impersonal cooperation, but our natural sentiments are too partial to give rise to these virtues without intervention.265 To Hume, then, morality does not emanate from any higher or natural source other than human nature itself.266 A moral and just law is neither divine nor universal; morality is an “artifice” and the laws based upon it are artificial rather than natural.267 Humans must operate in social settings to survive and satisfy their needs; moral distinctions are derived from social conventions necessary for the success of the collaborative effort. Social conventions, on their part, preserve social structures, maintain social life, and enable prosperity under conditions of scarcity and selfish human actors having claims to those resources.268 Upon the premise of justice as a social artifice, Hume established the justification for property law:
Our property is nothing but those goods, whose constant possession is established by the laws of society; that is, by the laws of justice. Those, therefore, who make use of the words property, or right, or obligation, before they have explain’d the origin of justice, or even make use of them in that explication, are guilty of a very gross fallacy.269
Property is an artificial and necessary circumstance of social life; property law reinforces the prevalent convention concerning property according to the moral (p.118) parameters set by society.270 Hume considered property law and prosperous social life as interlocked in the sense that morality and property mirrored one another. Property law mirrored the contingent standards of morality and justice in human societies, and without conventions about stable ownership supported by property law, societies cannot function and thrive.
Drawing on the insights of Hume, Bentham, Mill, and others, legal utilitarianism scholars generally view the law as an instrument for achieving higher goals. Utilitarian property scholarship generally maintains that private property is justified inasmuch as it positively contributes to social utility. Accordingly, utilitarianism supports a regime of private property that functions as a catalyst of greater welfare. The premise underlying utilitarian approaches is that without private property, society stands to lose as no rational actor would have sufficient incentives to invest in preserving, nurturing, and improving common resources.271 Utilitarian concepts of property evolved out of the understanding that association is advantageous, yet impossible in the absence of rules governing individual rights to control and enjoy resources. Hume identified the locus of the problem of socially collaborating efficiently in the tendency of people to trespass against one other.272 To combat this tendency, property rights are instated to secure stable possession. Therefore, recognized rules regarding acquisitions and transactions are essential for the very existence of associations and the formation of large-scale social structure and institutions.273
Influenced by the tendency to apply economic analysis to law, the utilitarian idea of maximizing social welfare in the law-and-economics literature coincides with a striving toward higher economic efficiency. Economic analysis of the law (p.119) has both descriptive and prescriptive claims.274 In the latter context, economic analysis may attempt to ascertain the legal rule that would bring society to the desired result more efficiently. The central operation of property law under utilitarian-economic approaches is functional: the law facilitates allocative efficiency of valuable resources under scarcity conditions, striving toward wealth maximization, with property ownership being in principle an economically efficient arrangement.275 Demsetz argued that property rights will emerge when internalization of externalities is cost-effective and that, in fact, “[a] primary function of property is that of guiding incentives to achieve a greater internalization of externalities.”276 Viewed through the prism of economic analysis, a key role of the law is to provide the proper incentives to wealth-maximizing individuals who compete over scarce resources. The strategy for achieving greater societal welfare is to provide incentives to individuals who pursue their selfish agenda, namely, striving toward greater personal happiness.
Incentivizing selfish individuals to obtain, preserve, and improve resources by granting them legal rights to control and benefit from these resources is said to offer the answer to the “tragedy of the commons.”277 According to conventional economic wisdom, a regime of property rights is likely to enhance the value of resources in many situations. If markets operate efficiently, resources through free exchange should end up in the hands of the owner who values them the most and who can extract the highest utility. In the aggregate, the market would theoretically stabilize on a Pareto-optimal allocation in which no one is able to further improve his position through voluntary exchange.
However, the issue of externalities makes murky the idealized picture of a perfect resource allocation through voluntary and efficient exchange. Some economists indeed consider externalities as a central impediment to efficiency.278 Externalities create efficiency problems because the market price of an asset does not reflect its true value. More generally, in an externality situation, not all the costs and benefits involved in a transaction are reflected in the price. Some economic approaches to property law view its central mission as providing the optimal conditions for internalization of externalities; more pointedly, one of Coase’s greatest contributions to the economic analysis of the law was to shift (p.120) the focus from externalities in general to transaction costs. Coase famously showed that in a world of zero transaction costs and enforceable contracts, parties would reach an efficient internalization of externalities regardless of what the legal norm says.279 As conditions of zero transaction costs exist only in classroom hypotheticals, the actual mission of the law is to create the conditions for efficient transactions by helping to minimize transaction costs.280
(b) Utilitarianism and Copyright
A well-known exposition of the utilitarian stance in the positive law is the Intellectual Property Clause of the U.S. Constitution, vesting in Congress the power to legislate patent and copyright laws “[t]o promote the Progress of Science and useful Arts.”281 This clause exhibits a consequentialist, means-ends relationship between the exclusive rights and the grand project those rights are destined to serve. By contrast to backward-looking reward theories that seek to compensate authors for past achievements such as Lockean labor, utilitarian approaches to copyright aim to encourage the production of creative works in the future. The key assumption is that authors and other rights-holders can be incentivized via exclusive copyrights to create and produce more than what they would otherwise do. With this assumption in mind, an extensive body of theoretical literature deals with applying law-and-economics analysis to intellectual property issues.282
Economic analysis of copyright law emerged more-or-less simultaneously with the inception of modern law-and-economics literature.283 Standard economic analysis of copyright law considers the main task of the law as ameliorating the free-rider problem.284 Actors who invest economic resources in creating and producing information products should be able to recoup their production (p.121) costs. Creators usually cannot compete with a copyist, who only needs to cover the marginal costs of producing an additional copy (which are comparatively very low).285 Exclusive rights to reproduce, distribute, communicate, etc. provide supercompetitive advantages to rights-holders and are designed to secure a level of protection that will offset the social costs of monopoly with the value generated by providing economic incentives to produce and create new works.
Under the assumption that utility, efficiency,286 and incentives should serve both as the compass and the conscience of copyright legislation,287 a number of initial questions call for attention. First, creating effective exclusory rights in intangible resources should be achievable through state legislation. It is questionable whether one can build walls around messages in the same way, for the same purpose, and with the same effect as a farmer erecting fences around a pasture in which only her (or only “authorized”) cows may graze.288 As noted in the context of the public good discussion, legislation attempts to provide some fencing designed to mitigate the inefficient results involved in non-excludability that is meant to secure the ability to generate revenues from producing information goods.289 Second, to be efficient, the net benefits of the copyright system must outweigh its net costs. This general law-and-economics consideration is not unique to copyright, of course, yet in this particular context it warrants special attention. Economists often assess the cost of the copyright system in terms of deadweight loss caused by monopolistic market conditions, which is technically described as reduction in consumer surplus. In this vein, the copyright system is economically justified if the additional aggregate gain of value extracted from creative works outweighs the aggregate loss causes by exclusivity. Property rights (p.122) in information goods tend to be more costly due to their monopolistic nature and their non-rivalrous “consumption.”290 The implied assumption is that an accurate cost/benefits analysis is feasible through which contradicting welfare effects of copyright legislation are juxtaposed to yield the net social impact. At a minimum, one should be able to determine whether a given copyright rule is Pareto-superior to the alternatives.291
However, both sides of the copyright cost/benefit analysis are difficult to determine. Apparently Paul Samuelson himself—the thought leader of the public good problem—was skeptical about the ability to measure the net utility generated from providing non-excludable goods due to the valuation problem,292 and it should be equally challenging to quantify the utility of which the public is deprived (i.e., the reduction in positive externalities) that is the expected result of a given copyright restriction. Indeed, dynamic analysis of alternative copyright regulations poses grave empirical challenges. It would seem insurmountable to assess today the future welfare impact of a legal rule, under the assumption that every stage of the information process depends on the previous one, and assuming also that circulation of messages is a significantly random and unpredictable progression. As Chapter 1 demonstrated, this recognition is derived from the very nature of information, rendering assessments about the ramifications of regulative interventions risky in general. For example, how can one calculate the costs of regulation in terms of the value that has not been created yet due to copyright restrictions (e.g., the derivative work that never came to be)? Further, it is likely impossible to achieve sufficient certainty concerning the impact of regulation (or the abstention from regulation) on the creation of a given work.293 Assessing the cause-and-effect relationship between copyright regulation and the level of creative production always involves a certain degree of guessing, especially where the involvement of derivative rights-holders in the creative process is relatively minor, and more generally, in cases (p.123) where commercial considerations do not play a siginificant role in the creative process.
This chapter opened by introducing Hohfeld’s model of jural relations. The lawyer should find the model helpful for answering his client’s questions, which can be roughly framed as follows: “Do I (client) have a right to do this and that?” “Can I refrain from doing this and that?” “Can I force person X to do (or refrain from doing) this and that?” Under a Hohfeldian analysis, the charged concept of “right” appears to be reduced to earthy, practical questions of the sort that are determined by the positive law. The Hohfeldian model will play an important role in the descriptive project of this study concerning the positive law’s position on access rights questions (Chapters 4–6 infra).
Property conceptualists attack Hohfeld for his contribution to the dissolving of long-standing understandings about property in the theoretical discourse. This said, the discussion in this chapter suggests that making a principal choice between property conceptualism and property nominalism is not necessarily dispositive for evaluating the “property metaphor” and its implications. Contemporary conversations about property in general—and intellectual property more specifically—can draw important insights from both perspectives on private property as a social and legal institution. It was further argued that instrumental-economic approaches to property law might even reinforce the conceptualist’s view on property (for instance, under the assumptions and methodology of information cost theory). In the same vein, both traditional property concepts and legal nominalism are constructive for addressing various aspects and complex philosophical, normative, and pragmatic questions of intellectual property law. Especially in the context of copyright protection in the digital environment, high protection proponents tend to uphold the physical property metaphor to support their views,294 including arguments for a broad right to exclude in rem being applicable to copyrighted works as well. Yet as their critics often maintain, a sweeping analogy between intangible goods and conventional property already bears significant risks at the level of the basic assumptions of that analogy.
As shown in the discussion above, justifying strong copyright protection solely on moral/personality grounds is especially problematic,295 a recognition (p.124) that has been arising also in jurisdictions such as Germany and France.296 Among the many discrepancies between classic moral justifications of private property and copyright law, this chapter elaborated on problems in Locke’s original labor-based argument as the basis for exclusive rights in works.297 By comparison, Hegel’s position viewing positive intellectual property protection merely as a department of commercial regulation is far less an “ethical” underpinning to copyright as it is often thought to be the case.
At the framework level, no single theoretical approach to copyright is capable of providing conclusive answers to the regulative challenges, and at the same time, neither should be dismissed on its face as plainly “false.” In addition, some longstanding conceptual tenets of property, within which the right-to-exclude in rem plays a central role, can provide a useful orientation point for analyzing the nature and function of various property structures, including the one controlling creative works.298 In the context of digital copyright protection, a clear view of the way in which private property law principally operates is important for understanding the transition of the legal system from regulating works in analog formats to covering digital information. The next chapter will develop a theoretical framework that draws on these insights in more detail.
(1.) See TOM D. CAMPBELL, Introduction to LEGAL POSITIVISM xiii (1999) (enumerating the three spearheads of legal positivism, namely (1) the logical separation between law and morality, (2) the emphasis on historical and institutional origin of the law, and (3) the centrality of rules in the legal system).
(2.) The term positive law here corresponds to its dictionary definition as constituting the black letter, applicable legal rules promulgated by official, competent authorities: “Positive law typically consists of enacted law—the codes, statutes, and regulations that are applied and enforced in the courts. The term derives from the medieval use of positum (Latin “established”), so that the phrase positive law literally means law established by human authority.” See BLACK’S LAW DICTIONARY (4th. ed. 2004).
(3.) Wesley Newcomb Hohfeld: 1879–1918.
(4.) Cf. STEPHEN R. MUNZER, A THEORY OF PROPERTY 25 (1990) (commenting the Hohfeldian methodology “has the salient advantage of cross-cultural application”).
(5.) Munzer considered the inability of the model to answer normative questions or divulge the applicable legal rules as a limitation of the Hohfeldian theory. See id. at 20–21. Whether this limitation is severe or not depends on one’s expectation from the model. For the present purpose, this limitation may actually be considered an advantage.
(6.) See, e.g., Nigel E. Simmonds, Introduction to WESLEY NEWCOMB HOHFELD, FUNDAMENTAL LEGAL CONCEPTIONS AS APPLIED IN JUDICIAL REASONING at x (2001) (noting “[f]ew works have made such a lasting contribution to analytical jurisprudence;” Curtis Nyquist, Teaching Wesley Hohfeld’s Theory of Legal Relations, 52 J. LEGAL EDUC. 238 (2002).
(7.) One manifestation of this impact in U.S. property law is the adoption of some of the model’s basic concepts by the American Law Institute’s Restatement of Property. See RESTATEMENT (FIRST) OF PROPERTY (1936) § 1 (defining property a property “right” in line with Hohfeld’s definition).
(8.) See Joseph William Singer, The Legal Rights Debate in Analytical Jurisprudence from Bentham to Hohfeld, 1982 WIS. L. REV. 975, 989–93 (1982) (reviewing the major theoretical debate invoked by Hohfeld’s model and commenting: “The Hohfeldian debate consumed a great deal of paper and energy. Yet I believe that those engaged in it went about it the wrong way. The eight terms presented by Hohfeld were a human invention. Their validity and importance must relate to their utility in solving some problem”).
(9.) See Simmonds, supra note 6, at x–xi.
(10.) See WILLIAM FISHER III ET AL., AMERICAN LEGAL REALISM 8 (1993) (noting Hohfeld’s taxonomy of entitlements was of practical use to the Realists in their efforts to discredit long-standing distinctions and sharpen their critique of classic legal reasoning). For a similar discussion in German legal theory (the so-called “reine Rechtslehre”) and critique, see ALEXANDER PEUKERT, GÜTERZUORDNUNG ALS RECHTSPRINZIP 857–62 (2008).
(11.) See, e.g., Wendy J. Gordon, An Inquiry into the Merits of Copyright: Challenges of Consistency, Consent, and Encouragement Theory, 41 STAN. L. REV. 1345 (1989); Thomas P. Heide, Copyright in the EU and United States: What “Access Right”? 48 J. COPYRIGHT SOC’Y. U.S.A. 363, 364–66 (2001); David R. Johnstone, Debunking Fair Use and Copyduty under U.S. Copyright Law, 52 J. COPYRIGHT SOC’Y 345, 359 ff (2005).
(12.) While referring to the legalese commonplace in courts, Hohfeld lamented about the “inveterate and unfortunate tendency to confuse and blend the legal and the non-legal quantities in a given problem” as well as about “the ambiguity and looseness of our legal terminology.” Wesley Newcomb Hohfeld, Some Fundamental Legal Conceptions as Applied in Judicial Reasoning, 23 YALE L.J. 16, 20–21 (1913).
(13.) Id. at 29 (footnote omitted).
(14.) Id. at 58.
(15.) Id. at 32–33.
(16.) Id. at 31–32. See also RESTATEMENT (FIRST) OF PROPERTY, supra note 7, § 1 com. a. (“The relation indicated by the word ‘right’ may also be stated from the point of view of the person against whom that right exists. This person has a duty, that is, is under a legally enforceable obligation to do or not to do an act.”). Hohfeldian rights are commonly denoted as right-claims or claim-rights, as the existence and scope of the duty determines the existence and scope of the right.
(17.) Hohfeld, supra note 12, at 32.
(18.) Hohfeld illustrated the situation with his famous shrimp salad hypothetical: “[T]he privilege could, in a given case exist even though the rights mentioned did not. A. B. C. and D, being the owners of [a shrimp] salad, might say to X: ‘Eat the salad, if you can; you have our license to do so, but we don’t agree not to interfere with you.’ In such a case, the privilege exists, so that if X succeeds in eating the salad, he has violated no rights of any of the parties. But it is equally clear that if A had succeeded in holding so fast to the dish that X couldn’t eat the contents, no right of X would have been violated.” Id. at 35.
(19.) Ownership usually also includes the exclusive entitlement to transfer interests in the res. Such entitlements are Hohfeldian powers, discussed below.
(20.) Hohfeld argued that privilege and liberty are two names for the same thing, both equally distinguishable from rights-claims under the terminology he defined. See Hohfeld, supra note 12, at 36 (“liberty” or “privilege” per se do not imply a right against third parties to prevent interference).
(21.) Id. at 44. Hohfeld provided various examples of legal powers such as the power of the owner of personal property to extinguish his own legal interests through abandonment, transfer, or contract. Powers are also manifested in agency situations, where the agent is granted a power that can change the position of the principal. Id. at 45–46.
(22.) Id. at 55.
(23.) Exercising governmental eminent domain powers can alter private property positions. Often, the government is neither the owner of the assets nor a directly authorized agent of the actual owner (Of course, democratically elected/constructed government actors could be said to draw the power to alter private property positions as the legitimate representatives of their constituencies, a topic that goes beyond our focus here on private law, however). For the present purpose, it suffices to assume both actors A and B are private parties having their private property interests at stake.
(24.) In some special situations, a person has the power to transfer good title without being the legal owner (e.g., abandonment or transfer to a good faith purchaser in commercial situations). However, the general rule remains that the power to transfer a good title is usually placed in the hands of the legal owner: “A non-owner’s power of sale is an exception to the nemo dat rule… which is the basic property principle that, in general, and for obvious reasons, I cannot transfer to you a property interest I do not have… As a non-owner I therefore have no power to transfer, unless I acquire the power from some other source.”) See ALISON CLARKE & PAUL KOHLER, PROPERTY LAW: CASES AND MATERIALS 24 (2005) (italics in original).
(25.) See, e.g., JEREMY WALDRON, THE RIGHT TO PRIVATE PROPERTY (1988) at 30 (“The objects of property—the things which in lay usage are capable of being owned—differ so radically in legal theory, that it seems unlikely that the same concept of ownership could be applied to them all, even within a single legal system.”).
(26.) Id. at 26–61 (noting various approaches and setting forth a theoretical-analytical framework for the discussion on private property.) See also JAMES E. PENNER, THE IDEA OF PROPERTY IN LAW 1–2 (1997) (providing an introduction to property’s “identity crisis.”).
(27.) Cf. WALDRON, supra note 25, at 28 (arguing the content of private property (or the bundle of rights) is not constant but rather changing, which creates the difficulty in ascertaining the content of ownership).
(28.) The latter category includes nominalist, realist, instrumentalist, consequentialist, economic, and neighboring theoretical frameworks.
(29.) See, e.g., Abraham Bell & Gideon Parchomovsky, A Theory of Property. 90 CORNELL L. REV. 531, 534–36 (2005) (underscoring the divide between conceptualist and instrumentalist/economic approaches).
(30.) For a classic Realist critique on conceptualism, see Felix S. Cohen, Transcendental Nonsense and the Functional Approach, 35 COLUM. L. REV. 809 (1935).
(31.) One may contrast conceptual approaches with functional-nominal approaches to property. Singer explained: “Conceptualism is the belief that concepts at a high level of generality and abstractness are operative, in the sense that they correspond to elements of the real world and are the basis of numerous and concrete subrules that can be deduced from them… Nominalism is the belief that concepts at only a very low level of generality and abstractness are operative. Thus general concepts, such as ‘law’ or ‘property’ or ‘rights,’ are seen merely as convenient categorizations of experience.” See Singer, supra note 5, at 1016.
(32.) Cf. WALDRON, supra note 25, at 31 (“The concept of property is the concept of a system of rules governing access to and control of material resources.”) For his discussion on intellectual property rights, see Jeremy Waldron, From Authors to Copiers: Individual Rights and Social Values in Intellectual Property, 68 CHI-KENT L. REV. 841 (1993).
(33.) Section III.B.2 infra.
(34.) Cf. PENNER, supra note 26, at 68 (arguing “property rights can be fully explained using the concepts of exclusion and use” and that “use almost always involves some exclusion of others”).
(35.) See, e.g., YORAM BARZEL, ECONOMIC ANALYSIS OF PROPERTY RIGHTS 62 (1989) (arguing “[t]he ability to consume commodities… implies the possession of rights over them. One cannot expect, then, to discover any evidence of a pre-property rights state, and it is, in fact, not possible to endow a pre-property rights state of affair with meaning”); Daniel H. Cole & Peter Z. Grossman, The Meaning of Property Rights: Law versus Economics? 78 LAND ECON. 317 ff. (2002) (contrasting legal and economic approaches to property rights).
(36.) Stein notes classical Roman law drew a sharp distinction between possession and ownership, whereas in the post-classical law, where everyone could vindicate his possessory claims in the thing, the distinction between physical possession and ownership became unimportant. See PETER STEIN, ROMAN LAW IN EUROPEAN HISTORY 25 (1999). Further, mere obligation to convey possessory rights did not affect ownership so long as conveyance had not yet taken place. Id. These principles, inter alia, demonstrate the firm nexus between physical and legal relations.
(37.) See, e.g., Carol Rose, Possession as the Origin of Property, 52 U. CHI. L. REV. 73 (1985) (discussing the common law rule of first possession).
(38.) See, e.g., Richard A. Epstein, Possession as the Root of Title, 13 GA. L. REV. 1221 (1979) (arguing the case for original possession in unowned resources as the baseline to property rights.) Cf. Morris R. Cohen, Property and Sovereignty, 13 CORNELL L.Q. 8, 15 (1927) (criticizing the normative power of the “occupation” theory, yet admitting “there is a kernel of positive value” in the principle of protecting the first occupant’s claim).
(39.) German law considers property as the broad right to actual and legal control over movable and non-movable “things.” See OTTO PALANDT, BÜRGERLICHES GESETZBUCH, introduction to § 903 BGB nr. 1 (2007). Property law is organized as the legal field called Sachenrecht, in which Sachen means (physical) “things.” For an analysis of things (including intangible things) as a paradigmatic principle for the allocation of exclusive rights in German law, see PEUKERT, supra note 10, at 212 ff.
(40.) See JIM W. HARRIS, PROPERTY AND JUSTICE 3–5 (1996).
(41.) See HUGO GROTIUS, THE RIGHTS OF WAR AND PEACE, Book II, Ch. II, 2 at 89 (Cosimo 2007) (1625) (“It was not by the act of the mind alone that this change [from common to private property] took place. For men in that case could never know, what others intended to appropriate to their own use, so as to exclude the claim of every other pretender to the same; and many too might desire to possess the same thing. Property therefore must have been established either by express agreement, as by division, or by tacit consent, as by occupancy.”).
(42.) See, e.g., Adam Mossoff, What is Property? Putting the Pieces Back Together, 35 ARIZ. L. REV. 371, 379–80 (2003) (recounting Grotius’ assertion that required social recognition in manifested relations as a crucial step for the establishment of property (“dominion”)).
(43.) GROTIUS, supra note 41, Book II, Ch. II, 2 at 86 (“God gave to mankind in general dominion over all the creatures of the earth.”).
(44.) Section IV. infra.
(45.) For a discussion on things and thingness in law, with some emphasis on intellectual property, see Michael J. Madison, Law as Design: Objects, Concepts, and Digital Things, 56 CASE W. RES. L. REV. 381, 382 & n. 4 (2005) (noting “[p]roperty theorists have recently raised the problem of things in the law, recognizing the paradox that in an era of increasing dephysicalization of the artifacts of our lives, thingness may matter more than ever.”) (footnote omitted).
(46.) The German civil code, for instance, defines ownership entitlements as the general power to do with the thing as one wishes, and to exclude others from the thing. See § 903 BGB.
(47.) The discussion does not address the theoretical problem of defining ownership or its content. The U.S. RESTATEMENT (FIRST) ON PROPERTY, supra note 7, reflects some of the confusion surrounding this issue. The “owner” is generally defined as “the person who has one or more interests.” See id. § 10 (emphasis added). Later, the same Restatement provides “[a] person who has the totality of rights, powers, privileges and immunities which constitute complete property in a thing… is the ‘owner’ of the ‘thing,’ or ‘owns’ the ‘thing.’” Id. at comment (b) (emphasis added). At the same time, it acknowledges ownership also in cases of diminished interests. Id. at comment (c) (“The owner may part with many of the rights, powers, privileges and immunities that constitute complete property and his relation to the thing is still termed ownership both in this Restatement and as a matter of popular usage.”).
(48.) In his influential account, Honoré identified multiple incidents of ownership, while noting the right to exclusive possession is central: “The right to possess, namely to have exclusive physical control of a thing, or to have such control as the nature of the thing admits, is the foundation on which the whole superstructure of ownership rests.” A. M. HONORÉ, OWNERSHIP 113 (1961). Honorè seems to present the right of (positive) possession and the (negative) right to exclude as two “aspects” of the same legal position.
(49.) See, e.g., Cohen, supra note 38, at 12 (“the essence of private property is always the right to exclude others”). See also Thomas W. Merrill, Property and the Right to Exclude, 77 NEB. L. REV. 730 (1998) (arguing for the primacy of the right to exclude and its status as both a necessary and sufficient condition of property). Cf. PENNER, supra note 26, at 68–74 (discussing the nexus between exclusion and use in the social setting).
(50.) See Richard Epstein, Liberty Versus Property? Cracks in the Foundations of Copyright Law, 42 SAN DIEGO L. REV. 1, 18 (2005) (quoting Bentham).
(51.) For a statement of this universal principle in German property doctrine, see PALANDT, supra note 39, § 903 nr. 6.
(52.) In this study, the term exclusory entitlements denotes only negative exclusion entitlements, not positive duties imposed on other persons.
(53.) Few dispute that exclusion is a necessary aspect of property. Cf. HARRIS, supra note 40, at 24–25 (arguing that trespassory rules are a necessary but not sufficient condition for property).
(54.) PENNER (1997), supra note 26, at 68–69. Penner argued that “at a theoretical level we understand the right to property equally as a right of exclusion or a right of use, since they are opposite sides of the same coin.” Id. at 71.
(55.) Merrill, supra note 49, at 740 (“if one starts with the right to exclude, it is possible to derive most of the other attributes commonly associated with property through the addition of relatively minor clarifications about the domain of the exclusion right”). Of course, the ability to exclude others does not always guarantee that ability, and not even the legal entitlement to perform all imaginable uses of the resource. For instance, the owner of a parcel may have a broad right to exclude, but still be limited by zoning regulations concerning the structures she is allowed to erect on her land.
(56.) It is true the right to exclude does not always entail a right to positive use by the same person holding the negative entitlement. However, it is safe to assume that empirically, when the right to exclude in rem vests in a person, it ushers in an entitlement to exclusive use by that person more frequently than not.
(57.) A Hohfeldian solution to problems of conflicting or harmful uses of the resource by the owner to the detriment of another person does not necessitate explicit positive stipulations to the benefit of either party; for instance, the law can simply grant opponents the negative entitlement not to be harmed without needing to directly delineate the positive use rights of owners.
(58.) In Blackstone’s classic formulation: “There is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property; or that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.” See 2 WILLIAM BLACKSTONE, COMMENTARIES Ch. 1 at 56 (1838) (1765–69) (emphasis added).
(59.) Of course, the status of the specific parties to the transfer is affected, but only theirs, despite the possibly broader legal consequences of the transaction.
(60.) Thomas W. Merrill & Henry E. Smith, The Property/Contract Interface, 101 COLUM. L. REV. 773, 802 (2001) (“In rem rights entail lower information costs, at least on a unit-cost basis. To create an in rem right it is necessary only to specify particular resources and to identify one person as the manager (owner) of the resources. The ‘deal’ here is much simpler. It confers general exclusionary rights on the owner and then leaves it to the owner’s discretion to establish use rights.”).
(61.) This classification is discussed in more detail later on. See Section II.C.2(a) infra.
(62.) In German law, this principle is known as Typenzwang or Typenfixierung, which generally means that parties to a contract cannot “invent” new property rights that are effective in rem. Cf. BGH, V ZB 43/93 (1994) (Erwerberhaftung für Wohngeldrückstände) (stating the principle, but qualifying its application in cases when the law itself provides the possibility of the creation of new in rem entitlements).
(63.) See Thomas W. Merrill & Henry E. Smith, Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 YALE L.J. 1, 9–24 (2000). Cf. Henry Hansmann & Reinier Kraakman, Property, Contract, and Verification: The Numerus Clausus Problem and the Divisibility of Rights, 31 J. LEGAL STUDIES 373, 376–77 (2002) (interpreting the numerus clausus principle as a limitation on rights) This principle has no explicit stipulation in US law, not even a unique “American” name, a fact that contributed to the heated debate on its existence, scope and function.
(64.) Merrill & Smith, supra note 63, at 10–11 (arguing that common law systems follow the principle while treating the recognized forms of property as a closed list that can be modified only by the legislature).
(65.) See Hansmann & Kraakman, supra note 63 (arguing the distinction between a property and a contractual entitlement is that the former “runs with the asset”).
(66.) See Merrill & Smith, supra note 63, at 69 (“the numerus clausus makes sense from an economic perspective. By permitting a significant number of different forms of property but forbidding courts to recognize new ones, the numerus clausus strikes a balance between the proliferation of property forms, on the one hand, and excessive rigidity on the other. Proliferation is a problem because third parties must ascertain the legal dimensions of property rights in order to avoid violating the rights of others and to assess whether to acquire the rights of others. Permitting free customization of new forms of property would impose significant external costs on third parties in the form of higher measurement costs”).
(67.) Hansmann & Kraakman, supra note 63, at 347. These authors’ disagreement with Merrill and Smith is both descriptive and normative:
At bottom, [the] difference between property rights and contract rights reflects the relative ease of aligning the interests of multiple claim holders who deal with each other directly as compared with the substantial costs, both private and social, of aligning the expectations of rights holders who are strangers, and of providing evidence of those expectations to a court. This difference between contract and property is quantitative rather than qualitative. Just using the ordinary tools of contract, it is possible with sufficient effort to fashion nonpossessory rights in an asset that will bind third-party purchasers. The rules of law that offer explicit recognition of particular types of property rights simply reduce the costs of establishing those rights. Consequently, it is not quite right to say that the law limits the kinds of property rights that can be created. Rather, it is more accurate to say that there are only limited kinds of property rights whose creation the law affirmatively facilitates.
Id. at 419 (emphasis added).
(68.) For a rather different Continental-European perspective on the numerus clausus principle (with special focus on intellectual property), see Ansgar Ohly, Gibt es Numerus clausus der Immaterialgüterrechte?, in PERSPEKTIVEN DES GEISTIGEN EIGENTUMS UND WETTBEWERBSRECHTS (2005). The application of that principle in various intellectual property contexts depends on the classification of those rights as thing-related (dinglich.) For a discussion on this classification in the context of intellectual property licensing agreements, see RETO M. HILTY, LIZENZVERTRAGSRECHT 108–16 (2001).
(69.) See Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089, 1105–06 (1972) (footnote omitted).
(70.) Id. at 1106 (“Often the cost of establishing the value of an initial entitlement by negotiation is so great that even though a transfer of the entitlement would benefit all concerned, such a transfer will not occur. If a collective determination of the value were available instead, the beneficial transfer would quickly come about.”).
(71.) Id. at 1110.
(72.) Other scholars also underscored the substantive role of remedies in the definition of the legal rights they corroborate. See, e.g., Epstein, supra note 38 (noting the question about the nature of rights and the question of remedies are very much intertwined); Henry E. Smith, Property and Property Rules, 79 N.Y.U. L. REV. 1719, 1749 & n. 116 (“Property rules and liability rules are properly thought of as different ways of defining the scope of entitlements in the domain of transfer, rather than simply as ‘remedies’ protecting entitlements”) (citing to respective literature) (emphasis added). Of course, the recognition that defining legal rights mirrors the legal consequences of their violations (or, that the duty is the mirror image of the right) is a tenent of the Hohfeldian model.
(73.) See Calabresi & Melamed, supra note 69, at 1106–08.
(74.) See Smith, supra note 72, at 1733–34.
(75.) For a detailed account on the “decline” of property in Anglo-American scholarship during the twentieth century, see Thomas W. Merrill & Henry E. Smith, What Happened to Property in Law and Economics? 111 YALE L.J. 357 (2001). See also Bell & Parchomovsky, supra note 29, at 543–47.
(76.) Hohfeld suggested in rem rights are nothing other than the aggregation of numerous in personam rights (which he called “paucital” rights). Hohfeldian multitial rights are held by one person (or a group of persons) and are good against “persons constituting a very large and indefinite class of people.” See Wesley Newcomb Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning, 26 YALE L. J. 710, 718 (1917) (footnote omitted).
(77.) “A man may indeed sustain close and beneficial physical relations to a given physical thing; he may physically control and use such thing, and he may physically exclude others from any similar control or enjoyment. But, obviously, such purely physical relations could as well exist quite apart from, or occasionally in spite of, the law of organized society: physical relations are wholly distinct from jural relations.” Id. at 721 (emphasis in original) (footnote omitted).
(78.) Id. at 720–21.
(79.) Id. at 723 (arguing the obligation to keep a contractual promise and an obligation not to commit trespass are not intrinsically distinguishable).
(80.) See Merrill & Smith, supra note 75, at 364 (arguing “Hohfeld failed to perceive that in rem property rights are qualitatively different in that they attach to persons insofar as they have a certain relationship to some thing”).
(81.) See Hohfeld, supra note 76, at 719.
(82.) See Thomas C. Grey, The Disintegration of Property, in PROPERTY: NOMOS XII. 69, 74 (J. Roland Pennock & John.W. Chapman eds., 1980).
(83.) Id. at 69–71. See also MUNZER, supra note 4, at 22–24.
(84.) See Clarisa Long, Information Costs in Patent and Copyright, 90 VA. L. REV. 465, 474 ff (2004) (noting the distinction between information costs related to the thing (the object) and those concerned with legal relations).
(85.) Id. at 474–76. See also Henry E. Smith, Exclusion Versus Governance: Two Strategies for Delineating Property Rights, 31 J. LEGAL STUDIES S453, S454–55 (2002).
(86.) Long proposed a taxonomy classifying nonowners (in the intellectual property context) into avoiders, transactors, and builders. See Long, supra note 84, at 489–92. Note classifications here are analytical and not mutually exclusive, as in reality, a single nonowner may exhibit attributes of one or more groups. Long makes a similar point (id. at 492).
(87.) Externalities can be described as “side effects” of economic activity. Standard economic analysis distinguishes between consumption and production externality. See HAL R. VARIAN, INTERMEDIATE MICROECONOMICS 602–03 (2003). If property rights are the “good” in the focus, then “consumption” by rights-holders (i.e., the exercise of rights) imposes negative (information) externalities on duty holders. This application might seem rather plastic, though it suffices for explaining the general point of information costs that attach to legal rights. Note the notion of externalities in economic theory intimately relates to the notion of transaction costs. See, e.g., Carl J. Dahlman, The Problem of Externalities, 22 J.L. & Econ. 141–42 (1979) (explaining the reason externalities are not fully internalized by wealth-maximizing economic agents must be rooted in high transaction costs).
(88.) As already mentioned in a different context, rights-holders generally have the power to transfer only entitlements they already have. See Section II.B.2 supra.
(89.) As Coase explained: “In order to carry out a market transaction it is necessary to discover who it is that one wishes to deal with, to inform people that one wishes to deal and on what terms, to conduct negotiations leading up to a bargain, to draw up the contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on. These operations are often extremely costly, sufficiently costly at any rate to prevent many transactions that would be carried out in a world in which the pricing system worked without cost.” Ronald H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 15 (1960).
(90.) See Smith, supra note 85.
(91.) Id. at 454–55 (footnote omitted).
(92.) Id. at 455.
(93.) Smith writes: “The theoretical limit, achievable only under conditions of zero transaction costs, would be one in which every potential Hohfeldian legal relation (right/duty, privilege/no right, and so on) is specified between every pair of members of the society. At the opposite extreme would be a total absence of specification of rights (anarchy or complete open access). In between are situations in which rights are specified, but they bunch together what would be separate rights in the fully specified zero-transaction-cost world, and so fall further toward the exclusion end of our spectrum.” Id. at 473 (footnote omitted).
(94.) Id. at 456.
(95.) Id. at 473–75.
(96.) See Merrill & Smith, supra note 60, at 783 ff.
(97.) Id. at 785.
(99.) See Smith, supra note 72.
(100.) Id. at 1791 (“In their article, Calabresi and Melamed coined the term ‘property rule’ but without relating property rules to the traditional notion of property. Instead, following in the Realists’—and Coase’s—footsteps, they ignored property as an in rem right to a thing in favor of ‘entitlements,’ which have no antecedent character until filled in by judges resolving use conflicts between plaintiffs and defendants.”) (footnote omitted).
(102.) Id. at 1753 ff.
(103.) Id. at 1727–28 (footnotes omitted).
(104.) Id. at 1750–53.
(105.) Id. at 1753 ff.
(106.) Id. at 1754.
(107.) The denotation property-like is used to indicate the distinction between property ownership in the conventional sense, and the set of entitlements protected under intellectual property law.
(108.) See Peter K. Yu, Intellectual Property and the Information Ecosystem, 2005 MICH. ST. L. REV. 1, 2–6 (2005) (reviewing common usage of the term intellectual property in legal scholarship.) See also WIPO Web site, What Is Intellectual Property? (“Intellectual property refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce”) (available at http://www.wipo.int/about-ip/en/). One textbook generally described intellectual property as covering “the creation, use and exploitation of mental or creative labour.” See LIONEL BENTLEY & BRAD SHERMAN, INTELLECTUAL PROPERTY LAW 1 (2004) (citation omitted). Cf. ROBERT P. MERGES ET AL, INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 1, 24 (2006) (avoiding a general definition).
(109.) See, e.g., Mark Lemley, Property, Intellectual Property, and Free Riding 83 TEX. L. REV. 1031 (2005) (criticizing the application of real property legal norms, rationales, and terminology to areas of intellectual property).
(110.) Cf. Wendy J. Gordon, Intellectual Property, in THE OXFORD HANDBOOK OF LEGAL STUDIES 618–19 (P. Peter Cane & Mark Tushent eds., 2003) (the accuracy of both the intellectual and the property labels contained in the term intellectual property can be questioned).
(111.) Section IV.B infra.
(112.) See WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC STRUCTURE OF INTELLECTUAL PROPERTY LAW 14 (2003) (“[intellectual property] is a ‘public good’ in the economist’s sense that consumption of it by one person does not reduce the consumption by another.”).
(113.) For one notable exception, see Christopher S. Yoo, Copyright and Public Good Economics: A Misunderstood Relation, 155 U. PENN. L. REV. 635 (2007). Yoo critically observed that much of the scholarship on the economics of copyright has been considering works as pure public goods. Id. at 644 ff.
(114.) This terminology is widespread but not universal. For instance, Demsetz objected to the notion that public goods are nonexcludable per definition. Instead, he proposed that such goods can be nonrival but excludable, and called goods that meet both conditions “collective goods.” See Harold Demsetz, The Private Production of Public Goods, 13 J.L. & ECON. 13 292, 295 (Oct. 1970).
(115.) See, e.g., ANDREW GOWERS, GOWERS REVIEW OF INTELLECTUAL PROPERTY ¶ 1.2 (“Unlike physical property, knowledge, ideas and creations are partial ‘public goods.’ Knowledge is inherently non-rivalrous. That means one person’s possession, use and enjoyment of the good is not diminished by another’s possession, use and enjoyment of the good.”).
(116.) Cf. LANDES & POSNER, supra note 113, at 19–20.
(117.) See, e.g., MERGES ET AL., supra note 109, at 2 (“The fact that the possession and use of ideas is largely ‘nonrivalrous’ is critical to intellectual property theory because it means that the traditional economic justifications for tangible property does not fit intellectual property.”).
(118.) See, e.g., Tom G. Palmer, Intellectual Property: A Non-Posnerian Law and Economics Approach, 12 HAMLINE L. REV. 262, 275–76 (1989) (arguing “ideal objects” satisfy both pure public good conditions, as namely, they are both nonexcludable and nonrivalrous: “My consumption of an idea or of a process, for example, does not in the least diminish the consumption of another, while, since the cost of reproduction of an idea is virtually zero (as it need only by thought), it can be very difficult, if not impossible, to exclude nonpurchasers from enjoying the benefits of their production. Thus, ideal objects may qualify as truly archetypical cases of pure public goods.”).
(119.) See, e.g., Patrick T. Croskery, Institutional Utilitarianism and Intellectual Property, 68 CHI.-KENT L. REV. 631, 635 ff. (1993) (preferring the term information goods that are excludable and non-rival to describe IP subject matter).
(120.) See Paul A. Samuelson, The Pure Theory of Public Expenditure, 36 REV. ECON. & STAT. 387 (1954) (defining collective consumption goods as being that “each individual’s consumption of such a good leads to no subtraction from any other individual’s consumptions of that good”).
(121.) See Yoo, supra note 113, at 638–39 (“Indeed, each person who purchases the public good simultaneously consumes the entire output of the public good. This characteristic gives rise to an interesting inversion of the conditions for the efficient allocation of private goods. For private goods, consumers pay the same price and signal the different valuations that they place on the good by purchasing different quantities. For pure public goods, consumers consume the same quantity of production and signal the intensity of their preferences by their willingness to pay different prices.”) (footnote omitted).
(122.) See Palmer, supra note 119, at 303.
(123.) Economic perspectives on copyright law will be briefly discussed in Section IV.B.3(b) infra.
(124.) Yoo, supra note 113, at 639.
(125.) Id. at 683 ff.
(126.) Cf. Bell & Parchomovsky, supra note 29, at 580–82 (providing a hypothetical fact pattern in which a resource such as air is provided selectively).
(127.) Note that although production costs may be zero, the overall costs (production, consumption, and opportunity costs) are greater than zero. Reception consumes resources such as time and attention span. Economists may call them positive opportunity costs. In addition, the crowding of the channel (congestion) caused by marginal reception might have a negative impact on net utility.
(128.) See Henry Smith, Intellectual Property as Property: Delineating Entitlements in Information, 116 YALE L.J. 1742, 1744 (2007).
(129.) See Niva Elkin-Koren, Making Room for Consumers under the DMCA, 22 BERKELEY TECH. L.J. 1119, 1137 (2007) (“We do not ‘consume’ a book in the same way we ‘consume’ chocolate. Both reading a book and eating a piece of chocolate may involve pleasure, but the novel—the copyrighted informational work that is embodied in a book—is never consumed. It can never be used up like all other tangible goods. Consumption of informational works does not exhaust the resource.”) (footnote omitted).
(131.) See Klaus Krippendorff, Information Theory, in COMMUNICATION AND BEHAVIOR 351 (Gerhard J. Hanneman & William A. McEwen eds., 1975).
(132.) Cf. Yochai Benkler, From Consumers to Users: Shifting the Deeper Structures of Regulation Towards Sustainable Commons and User Access, 52 FED. COMM. L.J. 561, 565–70 (2000) (objecting to the term information consumers and favoring the term users to underscore perspectives of democracy, personal autonomy, and communication).
(133.) See Thomas Jefferson, Letter to Isaac McPherson, Aug. 13, 1813, in 13 THE WRITINGS OF THOMAS JEFFERSON (Andrew A. Lipscomb ed., 1903). The cited letter was quoted in length and clearly influenced the U.S. Supreme Court in Graham v. John Deere Co., 383 U.S. 1, 7 ff (1966).
(134.) In making a similar point, Palmer argued that unlike traditional property, patents and copyrights are “not the product of an evolutionary process of interaction among interested parties that is later ratified through legal sanctions.” See Palmer, supra note 118, at 280.
(135.) See Carol M. Rose, Possession as the Origin of Property, 52 U. CHI. L. REV. 73, 81 (1985) (“Possession as the basis of property ownership, then, seems to amount to something like yelling loudly enough to all who may be interested. The first to say, ‘This is mine,’ in a way that the public understands, gets the prize, and the law will help him keep it against someone else who says, ‘No, it is mine.’ But if the original communicator dallies too long and allows the public to believe the interloper, he will find that the interloper has stepped into his shoes and has become the owner.”).
(136.) See, e.g., Thomas W. Merrill, Property Rules, Liability Rules, and Adverse Possession, 79 NW. U. L. REV. 1122, 1226 ff (1984) (explaining adverse possession law in the United States).
(137.) This does not mean to argue that communication of the message is the only way to let the world know an individual possesses information, as it is perhaps possible to communicate information on the message rather that the message itself. Further, acting upon information may signal the actor has information. In the example above, the inside trader does not need to tell the authorities he has been acting according to insider information in order to be identified—and possibly convicted. Illuminating a different aspect of the same point (but in a different context), Gordon wrote: “Once put into the cultural stream by an initial creative person, intellectual products may be impossible for others not to use. Consider someone trying independently to invent a paper clip after having seen one. Some inventions ‘infect’ one immediately with knowledge of their workings.” See Wendy J. Gordon, A Property Right in Self Expression: Equality and Individualism in the Natural Law of Intellectual Property, 102 YALE L.J. 1533, 1582 (1993).
(138.) Cf. Julie E. Cohen, Cyberspace And/As Space, 107 COLUM. L. REV. 210, 230–32 (2007) (critiquing the property metaphor within a broader critique concerning cyberspace as a “place”).
(139.) Thomas Jefferson wrote: “Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody… The exclusive right to invention [is] given not of natural right, but for the benefit of society.” Jefferson, supra note 133. For a recent critique of Jefferson’s approach to patents, see Adam Mossoff, Who Cares What Thomas Jefferson Thought About Patents? Reevaluating the Patent “Privilege” in Historical Context, 92 CORNELL L. REV. 953 (2007).
(140.) Id. (“[Information] seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point.”).
(141.) See, e.g., LIOR ZEMMER, THE IDEA OF AUTHORSHIP 8–21 (2007) (listing six to seven leading categories of theoretical justifications to copyright law).
(142.) See Gordon, supra note 110, at 624 (noting the influence of tort, restitution, and unjust enrichment theories).
(143.) See, e.g., Eldred v. Ashcroft, 537 U.S. 186, 212, n. 18 (2003) (U.S. Supreme Court suggesting a complementary relationship between natural law and utilitarian justifications, noting that both types of underlining principles—protection of authors and achieving utilitarian maximization of welfare—are not “mutually exclusive.”). In Europe, a strong utilitarian influence is felt in the field of copyright law after the adoption of the European Copyright Directive (EUCD) (2001). See Recital 4 EUCD (using rhetoric of incentives and consequentialist theories to justify harmonization at a high level of protection); see also Kamiel J. Koelman, Copyright Law and Economics in the EU Copyright Directive: Is the Droit d’Auteur. Passé?, 35 IIC 603 (2004) (criticizing the Directive’s economic-utilitarian stance). In connection with the competition between instrumentalist and normative arguments, Hughes observed “the instrumental argument often seems to be treated as a ‘proof’ of the normative argument.” See Justin Hughes, The Philosophy of Intellectual Property. 77 GEO. L.J. 287, 303 (1988).
(144.) See William Fisher, Theories of Intellectual Property, in NEW ESSAYS IN THE LEGAL AND POLITICAL THEORY OF PROPERTY 177 (Stephen Munzer ed., 2001): “Ambiguities, internal inconsistencies, and the lack of crucial empirical information severely limit the prescriptive power [of IP theories]”.
(145.) Id. at 194.
(146.) Hughes, supra note 143, at 289 (arguing “[t]he existing law supports, to varying degrees, the credibility of different theories of property and  these theories support, to varying degrees, the validity of existing laws.”).
(147.) See Ian Shapiro, Introduction: Reading Locke Today, to JOHN LOCKE, TWO TREATISES OF GOVERNMENT AND A LETTER CONCERNING TOLERATION (Yale Univ. Press 2003) (1690).
(148.) For a detailed discussion and critique on the Lockean justification to private property, see WALDRON, supra note 25, at 137 ff. Waldron classified the Lockean argument as a natural, special rights-based justification to property in that property rights are “acquired rights  as a result of actions and transactions that men undertake on their own initiative.” Id. at 137–38.
(149.) See Shapiro, supra note 147, at ix (indicating Locke’s central arguments are sufficiently complex to invite disputes about their true meaning).
(150.) See JOHN LOCKE, TWO TREATISES OF GOVERNMENT, Second Treatise [ST], Ch. V § 26 (Yale Univ. Press 2003) (1689), (“every man has a ‘property’ in his own ‘person.’”) Munzer questioned this axiom, concluding a person has a limited package of property rights in his body that does not amount to full “ownership.” See Munzer, supra note 4, at 37 ff.
(151.) LOCKE, supra note 150, §§ 26–27.
(153.) Id. § 26 (“Whatsoever, then, he removes out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property.”).
(154.) Locke’s use of the term common seems to denote the opposite of (private) property. Id. § 24.
(155.) Id. § 26 (“For this ‘labour’ being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others.”) Locke elaborates on this proviso also in §§ 32–33 as a justification for the appropriation of land and other resources for the purposes of improving them.
(156.) Id. § 30 (“As much as any one can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in. Whatever is beyond this is more than his share, and belongs to others. Nothing was made by God for man to spoil or destroy.”).
(157.) According to Locke, property is a “natural” right not in the sense that persons are born with that right, but that their individual endeavors give rise to the right, as opposed to dependency on positive stipulation by the state. See WALDRON, supra note 25, at 138.
(158.) LOCKE, supra note 150, § 33 (“He that had as good left for his improvement as was already taken up, needed not complain… if he did, it is plain he desired the benefit of another’s pains, which he had no right to.”) (emphasis added).
(159.) See, e.g., id. §§ 38–39. Michelman argued that, on the one hand, desert theory such as Locke’s “makes no assertion that property is desirable because it leads to consequences which can be regarded as good for society ‘as a whole.’” See Frank Michelman, Property, Utility, and Fairness, 80 HARV. L. REV. 1165, 1203–04 (1967). On the other hand, Michelman admitted Locke’s theory can be perceived simultaneously as a social utility theory. Id. at 1204, n.80 (“Locke’s theory may, with at least equal plausibility, be understood as a social utility theory.”).
(160.) See GROTIUS, supra note 41, Ch. II, Sec. 2(5).
(161.) LOCKE, supra note 151, § 27: “And will any one say he had no right to those acorns or apples he thus appropriated because he had not the consent of all mankind to make them his? Was it a robbery thus to assume to himself what belonged to all in common? If such a consent as that was necessary, man had starved, notwithstanding the plenty God had given him.” This part of Locke’s argument gave rise to the social utility interpretation of the labor justification. It seems Locke sought to fill the void left after dropping Grotius’ social consent principle by inserting the general utility factor.
(162.) Id. More than a century after Locke, Blackstone made note of this philosophical debate, and although refusing to unequivocally take sides, he seems to position himself closer to Locke while upholding the occupancy theory. See 2 BLACKSTONE, supra note 58, at 5–6 & n. 1. For a modern critique of this aspect of Locke’s argument, see Epstein, supra note 38, at 1127–28.
(163.) For a critical analysis of occupation, labor-based as well as other natural law principles and theories as the foundation of property law—as distinguished from theories that uphold the social contract idea and the emanating legislative power of the state as reflected in the positive law, see PEUKERT, supra note 10, at 772–84.
(164.) LOCKE, supra note 150, § 36.
(165.) Id. at § 32.
(166.) It is open to debate whether the proviso strictly requires that commoners shall have enough and as good appropriations opportunities, or whether they shall merely have enough and as good opportunities to use/enjoy/benefit from resources. Locke’s own formulation, requiring “there is enough, and as good left in common for others,” seems to better correspond to the first alternative because it does not include enjoyment from resources not in common ownership any longer. The first alternative is obviously more difficult to satisfy in practice.
(167.) It appears that solving the allocative dilemma and the moral problem rooted in unilateral allocation of scarce resources via enacted positive rules—while considering the government the authorized agent of the injured commoners—would still be in tension with the enough-and-as-good proviso.
(168.) See ROBERT NOZICK, ANARCHY, STATE AND UTOPIA 174 ff (1974). Nozick suggested the increase in social products resulting from the private property right can alleviate the problem of applying the proviso under scarcity conditions. Nozick is careful to distinguish between his proposed modification to the proviso and utilitarian interpretations, as his does not seem to consider the labor rationale (including its provisos) as part of the normative justification of private property.
(169.) In chapter V of the SECOND TREATISE, Locke frequently uses the term enclosure to describe the distinction between private property and common resources, which indicates that via labor, the laborer acquires the right to exclude others from the entire resource. Cf. LOCKE, supra note 150, §§ 25, 32, 34, & 38.
(170.) NOZICK, supra note 168, at 175.
(171.) Epstein seems to propose a negative answer: “To be sure, Locke did not offer any explicit treatment one way or the other of intellectual property rights, which adds to his charm.” See Epstein, supra note 50, at 21. Cf. ZEMMER, supra note 141, at 147–77 (reaching the opposite conclusion in the context of copyright law after consulting other writings by Locke).
(172.) For two leading treatments, see Hughes, supra note 143, at 297–330; Gordon, supra note 137. For an articulate objection to the Lockean argument in the intellectual property context, see Seana Valentine Shiffrin, Lockean Arguments for Private Intellectual Property, in NEW ESSAYS IN THE LEGAL AND POLITICAL THEORY OF PROPERTY (Stephen Munzer ed., 2001).
(173.) Epstein, supra note 50, at 21.
(174.) See Hughes, supra note 143, at 329 (“Intellectual property systems, however, do seem to accord with Locke’s labor condition and the ‘enough an [sic] as good’ requirement. In fact, the ‘enough and as good’ condition seems to hold true only in intellectual property systems. That may mean that Locke’s unique theoretical edifice finds its firmest bedrock in the common of ideas.”) (footnote omitted).
(175.) Cf. Hughes, supra note 143, at 316–19 (arguing that appropriating ideas could in fact increase the “ideas commons” left for others ex post).
(176.) Id. at 327–29 (discussing the no-waste proviso in the context of intellectual property, and observing “the value lost by hoarding an idea until it becomes obsolete is a very different kind of loss than food spoilage. There is no internal deterioration in the idea and the loss in value is seen only against a social backdrop. The loss is speculative and may be reversible.”).
(177.) Cf. PETER DRAHOS, A PHILOSOPHY OF INTELLECTUAL PROPERTY 51 (1996) (pointing out “[a]s abstract objects ideas cannot spoil, but the opportunities that they confer may”).
(178.) LOCKE, supra note, §§ 24–25.
(179.) Id. at § 26 (“Though the earth and all inferior creatures be common to all men, yet every man has a ‘property’ in his own ‘person.’ This nobody has any right to but himself.”) (emphasis added).
(180.) This argument is corroborated by Locke’s epistemology as laid out in his essay on human knowledge. See JOHN LOCKE, AN ESSAY CONCERNING HUMAN UNDERSTANDING (1849). Locke believed that no knowledge is innate (“No Innate Principles in the Mind”) and that all knowledge is acquired throughout life’s experience. Id. Bk. 1, Ch. II. Locke wrote: “No proposition can be said to be in the mind which it never yet knew, which it was never yet conscious of.” Id. Bk. 1, Ch. II.5. Persons are borne only with the capacity of knowing and senses that allow them to receive impressions from their external environment:
Ideas, especially those belonging to principles, not born with children. —If we will attentively consider new-born children, we shall have little reason to think that they bring many ideas into the world with them. For, bating perhaps some faint ideas of hunger, and thirst, and warmth, and some pains, which they may have felt in the womb, there is not the least appearance of any settled ideas at all in them; especially of ideas answering the terms which make up those universal propositions that are esteemed innate principles. One may perceive how, by degrees, afterwards, ideas come into their minds; and that they get no more, nor other, than what experience, and the observation of things that come in their way, furnish them with; which might be enough to satisfy us that they are not original characters stamped on the mind.
Id. Bk. 1, Ch. IV.2 (italicization in original) Locke continued:
All ideas come from sensation or reflection. Let us then suppose the mind to be, as we say, white paper, void of all characters, without any ideas; How comes it to be furnished? Whence comes it by that vast store which the busy and boundless fancy of man has painted on it with an almost endless variety? Whence has it all the materials of reason and knowledge? To this I answer, in one word, From experience: in that all our knowledge is founded; and from that it ultimately derives itself. Our observation employed either, about external sensible objects, or about the internal operations of our minds perceived and reflected on by ourselves, is that which supplies our understandings with all the materials of thinking. These two are the fountains of knowledge, from whence all the ideas we have, or can naturally have, do spring.
Id. Bk. 2 Ch. I.2. (italicization in original).
(181.) LOCKE, supra note, at § 30.
(182.) See Fisher, supra note 144, at 186 (listing seven possible ways to define the raw material constituting the common).
(184.) Hughes added a skeptical comment concerning the presumption of a platonic universe of ideas constituting the commons: “The Lockean conception of idea-making provides another ground for treating idea and execution as a single event. Viewing new ideas as plucked from some platonic common may be reification in the extreme. Yet in that view, the ideas already exist and the chief labor is transporting them from the ethereal reaches of the idea world to the real world where humanity can use them. If ideas are thought of as such preexistent platonic forms, the only activity possible is execution, which consists of transporting, translating, and communicating the idea into a form and a location in which humans have access to it.” See Hughes, supra note, at 311–12 (footnote omitted).
(185.) Cf. Gordon, supra note 137, at 1558–59 (“[A]lthough the common explicitly discussed in the two Treatises was the physical realm—both that which existed already (land, seas, mountains) or that which was continually in the process of coming into existence without the assistance of humankind (deer, fish, acorns)—applying Locke’s analysis to the intangible realm would not do violence to his thought. Admittedly, for the intangible reality of intellectual property, the common must be defined differently.”).
(186.) As Hughes noted, desert theories tend to depart from Locke’s naïve depiction of a laborer removing material from the state of nature and move towards instrumentalist and consequentialist arguments. Hughes, supra note, at 305–06.
(187.) Cf. Stephen Breyer, The Uneasy Case for Copyright, 84 HARV. L. REV. 281, 285–87 (1970) (criticizing value-added justifications to copyright); Hughes, supra note, at 309 (questioning the validity of the value-added reasoning for copyright, which grants protection irrespective of the value or non-value of a given work to society).
(188.) One may argue that a given author labored on her expression as a whole; therefore, she deserves exclusive rights in the entire message, negative categories elements excluded. In this case, the conceptual indivisibility of the message plays to the hands of present authors, who claim exclusive rights in the entire work as one whole.
(189.) Cf. Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45, 49–51 (2d Cir. 1939) (the court discussed in detail the evidentiary problem of discerning the economic value added to the original work by the creator of a derivative work).
(190.) See Jonathan Lethem, The Ecstasy of Influence: A Plagiarism, HARPER’S, Feb. 2007 (“Most artists are brought to their vocation when their own nascent gifts are awakened by the work of a master. That is to say, most artists are converted to art by art itself. Finding one’s voice isn’t just an emptying and purifying oneself of the words of others but an adopting and embracing of filiations, communities, and discourses. Inspiration could be called inhaling the memory of an act never experienced. Invention, it must be humbly admitted, does not consist in creating out of void but out of chaos. Any artist knows these truths, no matter how deeply he or she submerges that knowing.”).
(191.) For a detailed interpretation of the labor argument through the lens of the obligation not to harm others (in particular with respect to free speech rights), see Gordon, supra note, at 1560 ff.
(192.) See Epstein, supra note 50, at 22 (suggesting “[t]here is little question that all these [external] influences come to bear on the individual author. But by the same token, it is possible to locate in one person, or a small group of joint authors, the creative spark or hard effort that took these disparate influences and melded them into a coherent work, worthy of our attention.”) This argument demonstrates the clear nexus between the justification to copyright and the perception of the author as originator in the meaning of the information model. See Chapter 1, Section V.A.2 supra.
(193.) Epstein, supra note 50, at 22–23. Alas, this formulation threatens to re-evoke the measurement problem Epstein seeks to avoid.
(195.) Cf. Hughes, supra note, at 300–05 (offering a thoughtful discussion on the question whether mental creation can be considered a Lockean labor, and concluding “[t]he issue is not whether idea-making is an absolutely unpleasant activity, but whether it is comparatively less pleasant and less desirable than other activities”) (footnote omitted). It appears, however, that communication often cannot be caged within the constraints of such formulation.
(196.) See CHRISTIAN GERO STALLBERG, URHEBERRECHT UND MORALISCHE RECHTFERTIGUNG 111 ff (2006) (explaining this distinction and analyzing various arguments in the context of justification for copyright protection).
(197.) See Margaret Jane Radin, Property and Personhood, 34 STAN. L. REV. 957, 960 (1982) (describing personal property “as simply a category of property for personal autonomy or liberty. Property for personal autonomy or liberty might be a class of objects or resources necessary to be a person or whose absence would hinder the autonomy or liberty attributed to a person”).
(198.) Id. at 978 ff.
(199.) See Peter Gordon Stillman, Property, Freedom, and Individuality in Hegel’s and Marx’s Political Thought, in PROPERTY (J. Roland Pennock ed., 1980). For a study on Hegel’s ethics in general, see ALLEN W. WOOD, HEGEL’S ETHICAL THOUGHT (1990). For a leading analysis in the context of private property, see WALDRON, supra note 25, at 343 ff. The cursory discussion that follows does not aim at providing a comprehensive account of Hegel’s contribution to legal thought. The focus is on Hegel’s treatment concerning property as stated in the Philosophy of Right, under the caveat often voiced by Hegel scholars, warning the Philosophy of Right cannot be fully and properly understood without reference to Hegel’s previous works, and importantly, as a reply to Kant. See, e.g., David Gray Carlson, How to Do Things with Hegel, 78 TEX. L. REV. 1377, 1381 (2000) (arguing “[w]ithout knowledge of [Hegel’s] Science of Logic, we cannot fathom the Philosophy of Right in the way Hegel meant for it to be read”).
(200.) See WOOD, supra note 199, at 96 (observing “Hegel treats all abstract right as a right of property, even the right to our own life and body, the right over our inner life and conscience, and the right to a social status as free persons”).
(201.) Stillman (1980), supra note 199, at 130–31.
(202.) GEORG WILHELM FRIEDRICH HEGEL, PHILOSOPHY OF RIGHT § 34[A] (S.W. Dyde trans., Batoche Books 2001 (1896) (“The completed idea of the will is found when the conception has realized itself fully, and in such a manner that the embodiment of the conception is nothing but the development of the conception itself. But at the outset the conception is abstract. All its future characters are implied in it, it is true, but as yet no more than implied. They are, in other words, potential, and are not yet developed into an articulate whole.”) Note that the Additions (marked as [A]) were written by Hegel’s students, and were not supervised by the philosopher himself. At the same time, they provide an important source for understanding the original paragraphs, which are concisely and often cryptically formulated. Id. Translator’s Preface at 10.
(203.) See Carlson, supra note 199, at 1380 (“Such a self is freed of all attributes. It has no property, and it has no ‘properties.’ In such a state it cannot be perceived at all. It is nothing.”) (footnote omitted).
(204.) GEORG WILHELM FRIEDRICH HEGEL, GRUNDLINIEN DER PHILOSOPHIE DES RECHTS §§ 21–22 (1821) (referring to the absolute existence of the will as infinite (unendlich)).
(205.) Id. at § 21[N] (“Hier ist der Punkt, auf welchem es erhellt, daß der Wille nur als denkende Intelligenz wahrhafter, freier Wille ist.”) (emphasis in original).
(206.) HEGEL, supra note 202, § 35[A].
(207.) Id. §§ 42–44.
(208.) Id. § 41. In Hegel’s original formulation: “Die Person muß sich eine äußere Sphäre ihrer Freiheit geben, um als Idee zu sein.” See HEGEL, supra note 204, § 41 (emphasis in original).
(209.) On the multiple meanings of the term right (Recht) in Hegelian philosophy, see WOOD, supra note 199, at 94.
(210.) HEGEL, supra note 202, at § 44 (“A person has the right to direct his will upon any object, as his real and positive end. The object thus becomes his.”).
(211.) Id. §§ 50–51.
(212.) Id. §§ 2–3.
(213.) Abstract right is defined in connection with personality: “Personality implies, in general, a capacity to possess rights, and constitutes the conception and abstract basis of abstract right.” Id. § 36.
(214.) See WOOD, supra note 199, at 94 (explaining that “abstract right” has to do with the property safeguarding of a sphere of arbitrary choices, as distinguished from morality, which is concerned with what ought to be performed).
(215.) HEGEL, supra note 202, § 36.
(216.) Id. § 37[A] (“When anyone bases a claim upon his mere formal right, he may be wholly selfish, and often such a claim comes from a contracted heart and mind. Uncivilized man, in general, holds fast to his rights, while a more generous disposition is alert to see all sides of the question. Abstract right is, moreover, the first mere possibility, and in contrast with the whole context of a given relation is still formal. The possession of a right gives a certain authority, it is true, but it is not, therefore, absolutely necessary that I insist upon a right, which is only one aspect of the whole matter. In a word, possibility is something, which means that it either may or may not exist.”).
(217.) Id. § 41[A] (emphasis added).
(218.) Id. §§ 51–51[A].
(219.) Id. § 54 (“Taking possession is partly the simple bodily grasp, partly the forming and partly the marking or designating of the object.”) It seems that a continuous physical interaction is not necessary. It is more important the person continues to grasp the object as dominated by his will with some external manifestation that can be attributed to that relation. Id. § 55[A].
(220.) Id. §§ 58–58[A]. The Addition provides: “Of all kinds of possession this by marking is the most complete, since the others have more or less the effect of a mark. When I seize or form an object, in each case the result is in the end a mark, indicating to others that I exclude them, and have set my will in the object. The conception of the mark is that the object stands not for what it is, but for what it signifies.” Id.
(221.) Id. § 51A (emphasis added).
(222.) See WALDRON, supra note 25, at 365–70.
(223.) HEGEL, supra note 202, §§ 59–59[A].
(225.) See Stillman, supra note 199, at 133–34.
(226.) Cf. Allen W. Wood, Editor’s Introduction, to GEORGE WILHELM FRIEDRICH HEGEL, ELEMENTS OF THE PHILOSOPHY OF RIGHT xvi. (Allen W. Wood ed., 1991).
(227.) It has been argued that personality-based property theories are too vague to have much practical significance in addressing issues concerning the size and shape of property rights. See Fisher, supra note 144, at 191 (“the conceptions of the self… that underlie most avatars of personality theory are too abstract and thin to provide answers to many specific questions”).
(228.) See, e.g., WALDRON, supra note 25, at 129 ff.; see also Jeanne L. Schroeder, Unnatural Rights: Hegel and Intellectual Property, 60 U. MIAMI L. REV. 453, 456 (2006) (“It follows from the fact that the subjectivity created by abstract right is purely formal, that it is only the form of property, and not its content, that is relevant to Hegel’s analysis. All that matters is that some minimal private property rights exist.”).
(229.) HEGEL, supra note 202, §§ 57[N], 66[N], 66[A].
(230.) See WOOD, supra note 199, at 239–41 (discussing Hegel’s concept of civil society).
(231.) HEGEL, supra note 202, § 65 (“I may relinquish property, since it is mine only by virtue of my having put my will into it.”).
(232.) Id. §§ 66, 70.
(233.) Id. § 65 (“I may let a thing go unowned by me or pass it over to the will and possession of another; but this is possible only so far as the object is in its nature something external.”).
(234.) For an argument favoring autonomy-based inalienability rules under copyrights, see Neil Netanel, Copyright Alienability Restrictions and Enhancement of Author Autonomy: A Normative Evaluation, 24 RUTGERS L.J. 347, 398 ff (1993).
(235.) WALDRON, supra note 25, at 370. (“To say, then, that my will is embodied in the chair is to regard the chair as the nexus of this dual relation between will and object, object and will. Now to alienate an object is to terminate one relation of this pair, and thus to withdraw from the object this status as a nexus of relations… My will is reflected in the object inasmuch as there is this dual line of effect from my will to the object and back to my will.”).
(236.) “This is the paradox of alienation under the personality model of property. The present owner maintains ownership because he identifies the property as an expression of his self. Alienation is the denial of this personal link to an object. But if the personal link does not exist—if the object does not express or manifest part of the individual’s personality—there is no foundation for property rights over the object by which the ‘owner’ may determine the object’s future. An owner’s present desire to alienate a piece of property is connected to the recognition that the property either is not or soon will not be an expression of himself. Thus, the justification for property is missing. This subtle control of the object’s future does not jibe with foreseen future denial of the personality stake.” See Hughes, supra note 143, at 345. Schroeder replied that the problem is answered through the Hegelian concept of contract. See Schroeder, supra note 228, at 476 ff.
(237.) HEGEL, supra note 202, § 71. See also id. §§ 40(b), 40[N].
(238.) See WOOD, supra note 200, at 91.
(239.) Id. at 92.
(240.) Carlson argued “[i]n Hegel’s account personality is not pre-legal. Contract law is not merely useful to persons. It is the foundation of personality itself. Consent binds because personality is consent to human interrelation.” See Carlson, supra note 199, at 1378 (footnote omitted). Carlson further explains: “If the warriors exchange objects, each confirms whatever the other rightly possesses. A freely bestows property on B—property that B claimed to own previously. B freely bestows property on A—property that A purported to own already. This is true in a very radical sense. When A gives property to B, A gives B all the property B has. Until the contract, Warrior B has nothing. Likewise, B gives A all the property Warrior A has. Until the contract, Warrior A had nothing. Hence, it is wrong to think that A and B ‘exchange property.’ Property comes into existence for the first time with the contract. What is really exchanged is recognition as such.” Id. at 1391 (footnote omitted). In this respect, Hegel is perhaps not so distant from Hohfeld, who emphasized the constitutive relational aspect of legal positions, though Hohfeld, unlike Hegel, did not insist that “things” are indispensable to the interaction between subjects. See HEGEL, supra note 204, § 40[N] (“Es ist allerdings nur eine Person, die aus einem Vertrage zu leisten hat, sowie auch nur eine Person, die das Recht an eine solche Leistung erwirbt, aber ein solches Recht kann man darum nicht ein persönliches nennen; jede Art von Rechten kommt nur einer Person zu, und objektiv ist ein Recht aus dem Vertrage nicht Recht an eine Person, sondern nur an ein ihr Äußerliches oder etwas von ihr zu Veräußerndes, immer an eine Sache.”) (italicization in original). This fundamental subject-object dialectics is absent in the Hohfeldian model.
(241.) Cf. Schroeder, supra note 228, at 480–81 (“legal relationships relate only to the creation of legal subjects—persons capable of bearing rights and duties. The legal subjectivity mutually constituted with abstract right is, therefore, equally abstract and formal.”).
(242.) HEGEL, supra note 202, § 43[N] (“Mental endowments, science, art, such matters of religion as sermons, masses, prayers, blessings of consecrated utensils, inventions also, are objects of exchange, recognized things to be bought and sold. It is possible to ask, also, if an artist or scholar is in legal possession of his art, science, or capacity to preach or read mass; and the question is put on the presumption that these objects are things.”).
(243.) For a recent account and critique, see STALLBERG, supra note 196, at 122 ff.
(244.) HEGEL, supra note 202, § 4[A].
(245.) Id. at § 58.
(246.) Id. at § 69[N] (“The first question is whether the separation of the object from the power to reproduce, which goes with the object, is allowable in thought, and does not destroy full and free possession.”).
(247.) Id. (“Now there is this peculiarity about this power [to reserve the right to allow reproductions] that through it the object becomes not merely a possession, but a means of wealth… This new feature is a special kind of external use, and is different and separate from the use to which the object was directly appointed. It is not, as it is called, an accessio naturalis as are foetura. Hence as the distinction occurs in the sphere of external use, which is naturally capable of being divided, the reservation of one part, while another is being disposed of, is not the retention of an ownership without utile.”).
(248.) Id. (“But in the case of a mental product the intention is that others should comprehend it, and make its imagination, memory, and thought their own. Learning is not merely the treasuring up of words in the memory; it is through thinking that the thoughts of others are seized.”).
(249.) HEGEL, supra note 204, § 69[N] (“Inwiefern nun die in der wiederholenden Äußerung sich ergebende Form den vorhandenen wissenschaftlichen Schatz und insbesondere die Gedanken solcher anderer, die noch im äußerlichen Eigentum ihrer Geistesprodukte sind, in ein spezielles geistiges Eigentum des reproduzierenden Individuums verwandle und ihm hiermit das Recht, sie auch zu seinem äußerlichen Eigentum zu machen, gebe oder inwiefern nicht,—inwiefern solche Wiederholung in einem schriftstellerischen Werke ein Plagiat werde, läßt sich nicht durch eine genaue Bestimmung angeben und hiermit nicht rechtlich und gesetzlich festsetzen. Das Plagiat müßte daher eine Sache der Ehre sein und von dieser zurückgehalten werden.”) (emphasis added).
(250.) Anglo-American copyright commentators who discuss the application of Hegel’s idea of property tend to overlook this important aspect of Hegel’s treatment (Schroeder—supra note 228— is exceptional in this respect).
(251.) HEGEL, supra note 204, § 69[N] (“Gesetze gegen den Nachdruck erfüllen daher ihren Zweck, das Eigentum der Schriftsteller und der Verleger rechtlich zu sichern, zwar in dem bestimmten, aber sehr beschränkten Umfange”) (emphasis in original). Schroeder went so far to argue Hegel’s discussion of property does not mandate positive copyright protection at all. See Schroeder, supra note, at 502. In copyright terminology, Hegel was probably a “dualist” rather that a “monist” for considering the economic rights so contingent and merely a matter of “commercial law.” See Leslie Kim Treiger-Bar-Am, Kant on Copyright: Rights of Transformative Authorship, 25 CARDOZO ARTS & ENT. L.J. 1059 (2008) (noting the distinction between Kant-inspired monistic systems and Hegel-inspired dualistic systems).
(252.) See 1 JEREMY BENTHAM, THEORY OF LEGISLATION Ch. 1 at 13 (1840).
(253.) Id. at Pt. 1, Ch. 2 at 119.
(255.) JEREMY BENTHAM, ANARCHICAL FALLACIES 501 (1843) (“Natural rights is simple nonsense: natural and imprescriptible rights, rhetorical nonsense—nonsense upon stilts.”) (emphasis in original). In a similar vein, Bentham proclaimed: “All men born free? Absurd and miserable nonsense!” Id. at 498.
(256.) See BENTHAM, supra note 252, Ch. 8 at 137–38.
(257.) Id. at 139 (“As regards property, security consists in receiving no check, no shock, no derangement, to the expectation founded on the law, of enjoying such and such portion of good… When [the legislature] does not contradict [that expectation], he does what is essential to the happiness of society.”).
(258.) See Michelman, supra note 159, at 1212.
(259.) See DAVID HUME, TREATISE OF HUMAN NATURE Bk.II., Ch.I., sect.x (e-books@adelaide 2006) (1739).
(260.) Id. Bk.III., Ch.I., sect.i.
(261.) Id. Hume further believed “[v]ice and virtue… may be compar’d to sounds, colours, heat and cold, which, according to modern philosophy, are not qualities in objects, but perceptions in the mind.” Id.
(262.) Id. sect. ii.
(263.) See Rachel Cohon, Hume’s Moral Philosophy, in THE STANFORD ENCYCLOPEDIA OF PHILOSOPHY (Edward N. Zalta ed., 2004).
(266.) HUME, supra note 259, Bk.III., Ch.II., sect.I (“no action can be virtuous, or morally good, unless there be in human nature some motive to produce it, distinct from the sense of its morality”) (emphasis in original).
(267.) See Frederick G. Whelan, Property as Artifice: Hume and Blackstone, in NOMOS XXII: PROPERTY 101–02 (J. Roland Pennock & John Chapman eds., 1980) (explaining “artifice” is a distinctively Humean term, used to designate something as based on social conventions, rather than being “natural” and independent of nature).
(268.) HUME, supra note 259, Bk. III., Ch.II., sect. i–ii.
(269.) Id. See also Whelan, supra note 267, at 108–14 (discussing Hume’s justification for property law).
(270.) HUME, supra note, Bk.III., Ch.II., sect.iii.
(271.) For the famous modern articulation of this argument, see Garrett Herdin, The Tragedy of the Commons, 162 SCIENCE 1243, 1244 (1968).
(272.) Michelman explained:
The key is Hume’s historical starting point, which posits men initially in an atomistic, nonsocial situation. By his account, sexual attraction and natural affections among family members lead men into a first perception of the advantages of association—the efficiency of combined and divided labor, and the usefulness of sharing. The wish to associate gradually transcends the family group. But as each person approaches association with strangers, cognizant of potential advantages, he carries with him a certain accumulation of possessions. Since it is men’s selfishness, not their gregariousness or their sympathy, which turns them towards association, nothing in the process of associating necessarily implies any security of possessions, or any curbs on violations of such security. Yet people realize that no lasting association will be possible as long as they trespass against one another. As a result, there evolves a kind of tentative practice of mutual forbearance, which gradually solidifies into an established set of rules.
See Michelman, supra note 159, at 1209–10.
(274.) RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 24–25 (2007).
(275.) See Harold Demsetz, Toward a Theory of Property Rights, 62 AM. ECON. REV. 347 (1967).
(276.) Id. at 348.
(277.) See Herdin, supra note 271.
(278.) Externalities could be thought of for this purpose as the unintended positive or negative utility effects on others, resulting from certain activity, that are not reflected in the market price. A common example of a negative externality is environmental pollution, and a common example of a positive externality is the improved capacity telecommunication systems have with every additional user (network effects).
(279.) See Coase, supra note 89.
(280.) Landes and Posner argue “[r]educing transaction costs is the very raison d’etre of property rights.” See LANDES & POSNER, supra note 112, at 12–13. For an influential analysis of the U.S. fair use doctrine as a response to transition costs problems, see Wendy J. Gordon, Fair Use as Market Failure, A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82 COLUM. L. REV. 1600 (1982).
(281.) See U.S. Constitution, art. 1, § 8.
(282.) See Peter S. Menell, Intellectual Property: General Theories, in ENCYCLOPEDIA OF LAW AND ECONOMICS (Boudewijn Bouckaert & Gerrit De Geest eds., 2001) (providing a law-and-economics introduction to intellectual property and an extensive collection of sources).
(283.) For a classic treatment, see Robert M. Hurt & Robert M. Schuchman, The Economic Rationale of Copyright, 56 AM. ECON. REV. PAPERS & PROC. 42 (1966) (formulating the framework that is still widely followed today concerning weighing effects of regulation on incentives against restrictions on access). See also Wendy J. Gordon & Robert G. Bone, Copyright, in 2 ENCYCLOPEDIA OF LAW & ECONOMICS 189 (Boudewijn Bouckaert & Gerrit De Geest eds., 2001) (providing an introduction and a collection of sources).
(284.) See Gordon, Intellectual Property, supra note 110, at 619.
(285.) See William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18(2) J.L. & ECON. 325, 326–27(1989).
(286.) The literature underscores the distinction between consideration of static and dynamic efficiency. Posner explains that static analysis suppresses the time dimension of economic activity, whereas dynamic analysis relaxes the assumption of instantaneous adjustment to change. See POSNER, supra note 274, § 3.1.
(287.) For a recent critical analysis of applying Demsetzian principles to copyright law, see Brett M. Frischmann, Evaluating the Demsetzian Trend in Copyright Law, 3 REV. L. & ECON. 649 (2007). For a more general analysis on the advantages and disadvantages of positive and normative economic analysis for the allocation and shape of exclusive rights, see PEUKERT, supra note 10, § 3.
(288.) After Herding’s Tragedy of the Commons, the example of the pasture and the grazing cows became a popular illustration of efficiency problems concerning use of scarce resources in the absence of private property rights. See, e.g., POSNER, supra note 274, § 3.1.
(289.) Cf. LANDES & POSNER, supra note 113, at 40–41 (cautioning that copyright restriction will not always be necessary for recovering the costs of creating works.) For the classic argument in this vein, see Breyer, supra note 188. Cf. Barry W. Tyerman, The Economic Rationale for Copyright Protection for Published Books: A Reply to Professor Breyer, 18 UCLA L. REV. 1100 (1971).
(290.) Cf. LANDES & POSNER, supra note 112, at 16–21.
(291.) See VARIAN, supra note 87, § 1.9 (if allocation of resources allows some people to be made better off without making anybody else worse off, the allocation is Pareto inefficient). For an alternative approach to cost analysis of copyright law from the perspective of the new institutional economy, see F. Scott Kieff, The Case Against Copyright: A Comparative Institutional Analysis of Intellectual Property Regimes, Stanford Law and Economics Olin Working Paper No. 297; Washington U. School of Law Working Paper No. 04-10-01 (available at SSRN: http://ssrn.com/abstract=600802 or http://doi:10.2139/ssrn.600802) (2004).
(292.) See Yoo, supra note 113, at 639–40.
(293.) Particularly in nonprofessional creative circles (hobbyists, for instance), it seems difficult to determine whether a given work has been created as a response to the legal incentives encapsulated in copyright protection or whether the same work would have been created irrespective of copyright incentives.
(294.) Cf. MELVILLE B. NIMMER & DAVID NIMMER, 3 NIMMER ON COPYRIGHT § 12A.03[D] (2006) (demonstrating and critiquing the “breaking and entering” metaphor in the context of U.S. anticircumvention legislation).
(295.) See, e.g., STALLBERG, supra note 196; Tom G. Palmer, Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects, 13 HARV. J. L. & PUB. POL’Y. 817 (2002).
(296.) See, e.g., Matthias Leistner & Gerd Hansen, Die Begründung des Urheberrechts im digitalen Zeitalter, GRUR (2008) (arguing the classic author-centered justifications for copyright protections are facing a crisis).
(297.) Section IV.B.1.(c)–(d) supra.
(298.) This principle is not unique to Anglo-American conceptions of property. A recent study established the centrality of subjective exclusory (and relational) entitlements within the constitutional concept of property under German law as reflected by the jurisprudence of the German Constitutional Court. See PEUKERT, supra note 10, at 718; see also id. at 860 (objecting to a pure negative approach to property rights and upholding the view that subjective-exclusive rights must have some positive content—the entitlement to do, not only to exclude others).