Law Commons^™

Intellectual Property, Independent Creation, And The Lockean Commons, Mala Chatterjee

Faculty Scholarship

Copyrights and patents are differently structured intellectual property rights in different kinds of entities. Nonetheless, they are widely regarded by U.S. scholars as having the same theoretical underpinnings. Though scholars have sought to connect philosophical theories of property to intellectual property, with a particular interest in the labor theory of John Locke, these explorations have not sufficiently probed copyrights’ and patents’ doctrinal differences or their philosophical implications for the theories explored. This Article argues that a defining difference between copyrights and patents has normative significance for the framework of Lockean property theory: namely, that copyright law treats independent creation as …

Legal Institutionalism: Capitalism And The Constitutive Role Of Law, Simon Deakin, David Gindis, Geoffrey M. Hodgson, Kainan Huang, Katharina Pistor

Faculty Scholarship

Social scientists have paid insufficient attention to the role of law in constituting the economic institutions of capitalism. Part of this neglect emanates from inadequate conceptions of the nature of law itself. Spontaneous conceptions of law and property rights that downplay the role of the state are criticized here, because they typically assume relatively small numbers of agents and underplay the complexity and uncertainty in developed capitalist systems. In developed capitalist economies, law is sustained through interaction between private agents, courts and the legislative apparatus. Law is also a key institution for overcoming contracting uncertainties. It is furthermore a part …

Possession As A Natural Right, Thomas W. Merrill

Faculty Scholarship

What follows is, I hope, a tribute both to Friedrich Hayek, for whom this lecture series is named, and Richard Epstein, who was kind enough to invite me to give the lecture. Hayek has long been an inspiration for his insights about the advantages of decentralized decision making and the importance of information in understanding design of institutions. Both are recurring themes in my own work. Richard was my teacher at the University of Chicago Law School and has been a guiding light ever since. His works on nuisance law, takings, and the public trust doctrine, among others, have had …

Introduction: Toward Voice And Reflexivity, Olivier De Schutter, Katharina Pistor

Faculty Scholarship

In their introductory chapter, De Schutter and Pistor argue that in light of increasing absolute and relative scarcity of land and fresh water there is urgent need to improve the governance of these and other essential resources. Emphasizing “essentiality” shifts the debate from allocative efficiency to normative concerns of equity and dignity. Essential resources are indispensable for survival and/or for meaningful participation in a given community. Their allocation therefore cannot be left to the pricing mechanism alone. It requires new parameters for governance. The authors propose Voice and Reflexivity as the key parameters of such a regime. Voice is …

Coasean Bargaining In Consumer Bankruptcy, Edward R. Morrison

Faculty Scholarship

During my first weeks as a graduate student in economics, a professor described the Coase Theorem as “nearly a tautology:” Assume a world in which bargaining is costless. If there are gains from trade, the Theorem tells us, the parties will trade. The initial assignment of property rights will not affect the final allocation because the parties will bargain (costlessly) to an efficient outcome. “How can that be a theorem?,” I remember thinking at the time.

Property And The Right To Exclude Ii, Thomas W. Merrill

Faculty Scholarship

In 1998 I published a short essay entitled Property and the Right to Exclude. It appeared in an issue of the Nebraska Law Review honoring Lawrence Berger, a long-time property professor at Nebraska. The essay has been rather widely cited, but I have my doubts as to whether it has been widely read. A review of citations in Westlaw suggests that the essay is commonly identified as arguing that the right to exclude is the "sine qua non" of property, a statement that appears in the opening paragraph. The typical citing author takes this to mean that …

Contested Shore: Property Rights In Reclaimed Land And The Battle For Streeterville, Joseph D. Kearney, Thomas W. Merrill

Faculty Scholarship

Land reclaimed from navigable waters is a resource uniquely susceptible to conflict. The multiple reasons for this include traditional hostility to interference with navigable waterways and the weakness of rights in submerged land. In Illinois, title to land reclaimed from Lake Michigan was further clouded by a shift in judicial understanding in the late nineteenth century about who owned the submerged land, starting with an assumption of private ownership but eventually embracing state ownership. The potential for such legal uncertainty to produce conflict is vividly illustrated by the history of the area of Chicago known as Streeterville, the area of …

Quasi-Property: Like, But Not Quite Property, Shyamkrishna Balganesh

Faculty Scholarship

Quasi-property interests refer to situations in which the law seeks to simulate the idea of exclusion, normally associated with property rights, through a relational liability regime, by focusing on the nature and circumstances of the interaction in question, which is thought to merit a highly circumscribed form of exclusion. In this Article, I unpack the analytical and normative bases of quasi-property interests, examine the primary triggering events that cause courts to invoke the category, and respond to potential objections to the recognition of quasi-property as an independent category of interests in the law.

Property As Modularity, Thomas W. Merrill

Faculty Scholarship

Professor Henry Smith’s Property as the Law of Things urges a return to an older conception of property as rights with respect to things – and justifies this in terms of a very new conception of property based on modularity. Throughout, he highlights the importance of information costs in determining the structure of property law, starting with a baseline of in rem rights of exclusion supplemented by governance rules to deal with exceptional situations. I fully agree with his emphasis on the centrality of things in the law of property, the in rem nature of property, the primacy of exclusion …

The Uncertain Future Of "Hot News" Misappropriation After Barclays Capital V. Theflyonthewall.Com, Shyamkrishna Balganesh

Faculty Scholarship

In this Essay, I attempt to disaggregate the Second Circuit’s decision in Barclays Capital to show that while the court may have reached the right conclusion in the end (a position I have argued for previously), its reasoning to reach that conclusion is rather confusing, while at the same time a rich source of information about the future of hot news doctrine. At every stage of its analysis, the Second Circuit went to significant lengths to cabin the reach of the doctrine quite considerably, despite reiterating that it was not abrogating it altogether. In analyzing the opinion, I thus consider …

Contesting Property Rights: Towards An Integrated Theory Of Institutional And System Change, Katharina Pistor

Faculty Scholarship

It is widely recognized that institutions are embedded in social systems and that institutions as well as social systems change over time. Several implications follow: First, institutions cannot be described and analyzed without referring to the system in which they operate; conversely, a system cannot be described without reference to its core institutions. Second, systems foster institutional change and can breed new institutions. Third, institutional change can have systemic implications and may even engender the formation of new systems. In short, the relation between institutions and systems is characterized by complex interactions. A better understanding of the dynamics of institutional …

Private Rights In Public Lands: The Chicago Lakefront, Montgomery Ward, And The Public Dedication Doctrine, Joseph D. Kearney, Thomas W. Merrill

Faculty Scholarship

When one thinks of how the law protects public rights in open spaces, the public trust doctrine comes to mind. This is especially true in Chicago. The modem public trust doctrine was born in the landmark decision in Illinois Central Railroad Co. v. Illinois, growing out of struggles over the use of land along the margin of Lake Michigan in that city. Yet Chicago's premier park – Grant Park, sitting on that land in the center of downtown Chicago – owes its existence to a different legal doctrine. This other doctrine, developed by American courts in the nineteenth century, …

Rethinking The Laws Of Good Faith Purchase, Alan Schwartz, Robert E. Scott

Faculty Scholarship

This Essay is a comparative economic analysis of the disparate doctrines governing the good faith purchase of stolen or misappropriated goods. We argue that prior treatments have misconceived the problem. An owner will take optimal precautions to prevent theft if she is faced with the loss of her goods; and a purchaser will make an optimal investigation into his seller's title if faced with the loss of the goods. An owner and a buyer cannot both be faced with the full loss, however. This presents a problem of "double moral hazard" and it cannot be solved in a first-best efficient …

Rca V. Whiteman: Contested Authorship, Copyright, And The Racial Politics Of The Fight For Property Rights In Musical Recordings In The 1930s, Kurt Newman

Studio for Law and Culture

Between the Progressive Era and World War II, African American jazz music became the source of big profits for some white entrepreneurs in the United States. The encounter between whites and jazz was both a propertization and a privatization of African American group resources. While new technologies of recording and radio broadcasting were critical factors facilitating these cultural enclosures, the sine qua non was the embeddedness of American intellectual property law in the logic of white supremacy. In this paper, I focus on the popular jazz bandleader Paul Whiteman, best known to most contemporary legal scholars as the defendant in …

A Few Questions About The Social-Obligation Norm, Jedediah S. Purdy

Faculty Scholarship

I applaud Gregory Alexander for proposing an innovative view of property, one focused on the obligations of ownership. His project locates what I think of as the liberal aim of personal freedom (meaning both formal autonomy and real opportunity) within a social context of distributive choices and conceptions of mutual obligation. That is, he is asking what counts as a free society, and he is putting property regimes at the center of the answer. I want to set out some questions about where his project goes from here.

Tolerated Use, Tim Wu

Faculty Scholarship

"Tolerated use" is a term that refers to the contemporary spread of technically infringing, but nonetheless tolerated, use of copyrighted works. Such patterns of mass infringement have occurred before in copyright history, though perhaps not on the same scale, and have usually been settled with the use of special laws, called compulsory licensing regimes, more familiar to non-copyright scholars as liability rules. This paper suggests that, in present times, a different and slightly unusual solution to the issue of widespread illegal use is emerging-an "opt-in" system for copyright holders, that is in property terms a rare species of ex post …

The Morality Of Property, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

The relationship between property and morality has been obscured by three elements in our intellectual tradition. First is the assumption, which can be traced to Bentham, that property is a pure creature of law. An institution assumed to be wholly dependent on law for its existence is unlikely to be infused with strong moral content. Second is the related tradition, also Benthamite, of examining questions about property law from a utilitarian perspective. Utilitarianism is, of course, a moral theory. But in its modern applications, based on price theory and cost-benefit analysis, it adopts a framework largely indifferent to questions of …

Six Myths About Kelo: Kelo V. City Of New London, Thomas W. Merrill

Faculty Scholarship

Kelo v. City of New London, 125 S. Ct. 2655 (2005), is unique in the modem annals of law in terms of the negative response it has evoked. The initial reaction by lawyers familiar with the case was one of lack of surprise. Within days, however, Internet bloggers, television commentators, and neighbors talking over backyard fences decided that Keio was an outrage. Even Justice Stevens sought to distance himself from his own majority opinion, declaring in a speech to a bar association that he thought the outcome was "unwise," and that he would not have supported it if he were …

Connecticut: Ace Equip. Sales, Inc. V. Buccino, Michael J. Graetz

Faculty Scholarship

Ace Equip. Sales, Inc. v. Buccino, 869 A.2d 626 (Conn. 2005) (reversing adoption of the civil law rule that afforded an inherent riparian right by virtue of abutting property ownership).

A Freedom-Promoting Approach To Property: A Renewed Tradition For New Debates, Jedediah S. Purdy

Faculty Scholarship

This should be a heady time for theorists and practitioners of property law. Some of the most important recent proposals to improve human wellbeing rest on the expansion or reform of property rights. From Peru, the political economist Hernando de Soto recently captured the world's attention by contending that a lack of property rights stands between the slum dwellers of the world's poor countries and new horizons of prosperity. Nearer home, Yale economist Robert Shiller has proposed a new market in risk, essentially propertizing present expectations of good fortune, which would represent one of the most dramatic expansions in the …

The Origins Of The American Public Trust Doctrine: What Really Happened In Illinois Central, Joseph D. Kearney, Thomas W. Merrill

Faculty Scholarship

The public trust doctrine has always been controversial. The general rule in American law favors ownership of natural resources as private property. The public trust doctrine, a jarring exception of uncertain dimensions, posits that some resources are subject to a perpetual trust that forecloses private exclusion rights. For environmentalists and preservationists who view private ownership as a source of the degradation of our natural and historical resources, the public trust doctrine holds out the hope of salvation through what amounts to a judicially enforced inalienability rule that locks resources into public ownership. For those who view private property as the …

The New Technology Transfer Block Exemption: Will The New Block Exemption Balance The Goals Of Innovation And Competition?, Maurits Dolmans, Anu Bradford

Faculty Scholarship

Licensors and licensees have long enjoyed the benefit of block exemption regulations for technology licensing. Block exemption regulations were adopted in the mid-80s for patent licensing and know-how licenses. These were combined and replaced in 1996 by a unified Technology Transfer Block Exemption Regulation (TTBE). This block exemption is currently under review.

DG Competition is writing a draft for a new T'BE. It is expected to be ready for review by the member states in September, and to be published for comments in October. The Commission hopes to have the new block exemption adopted and published in the first quarter …

The Demsetz Thesis And The Evolution Of Property Rights, Thomas W. Merrill

Faculty Scholarship

Both conventional price theory and standard economic accounts of tort and contract law assume fixed property rights. In fact, however, property regimes are not static but change over time. Given the assumption of fixed property that otherwise prevails in economic literature, explaining the evolution of property rights is one of the great challenges for the economic analysis of law.

The point of departure for virtually all efforts to explain changes in property rights is Harold Demsetz’s path‐breaking article, “Toward a Theory of Property Rights.” The article is still widely cited and reproduced, especially in first‐year property courses in law schools. …

What Happened To Property In Law And Economics?, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

Property has fallen out of fashion. Although people are as concerned as ever with acquiring and defending their material possessions, in the academic world there is little interest in understanding property. To some extent, this indifference reflects a more general skepticism about the value of conceptual analysis, as opposed to functional assessment of institutions. There is, however, a deeper reason for the indifference to property. It is a commonplace of academic discourse that property is simply a "bundle of rights," and that any distribution of rights and privileges among persons with respect to things can be dignified with the (almost …

Patents And Cumulative Innovation, Clarisa Long

Faculty Scholarship

Proprietary rights to the products of biomedical research have repeatedly been a source of controversy for over twenty years. Patents on biomedical innovations have allowed scientists, academics, and research institutions to raise research funds and have contributed to the growth of the biotechnology industry. But “one firm’s research tool may be another firm’s end product.” Patents have been a source of great concern for academic and basic researchers, who fear that proprietary rights to basic research results will hamper the progress of science, stifle the free flow of new knowledge and the dissemination of research results, and chill the research …

Controlling Strategic Voting: Property Rule Or Liability Rule, Zohar Goshen

Faculty Scholarship

Strategic voting – situations where voters place their votes according to their assessment of how other voters will behave rather than according to their actual preference – results in distorted decisionmaking. Strategic voting can cause the company to lose desired transactions and can also be used to coerce voters into accepting alternatives they would have otherwise rejected. An analysis of the various types of strategic voting situations which arise in corporate law demonstrates the author's argument that strategic voting is inherent in the voting mechanism, regardless of the type of group involved or of the decision being made. Maintaining a …

The Roles Of The State And The Market In Establishing Property Rights, Andrzej Rapaczynski

Faculty Scholarship

Using the experiences of Eastern Europe as an example, this article argues that, contrary to the economists' assumption that property rights are a precondition of a market economy, market institutions are often a prerequisite for a viable private property regime. Progress in the development of complex property rights in Eastern Europe, thus, cannot be expected to come primarily from a perfection of the legal system. Instead, it is more likely to arise as a market response to the demand for property rights. Indeed, legal entitlements can only be expected to become effective against a background of self-enforcing market mechanisms.

Property Rights: A View From The Trenches, Michael A. Heller

Faculty Scholarship

How do governments create – or in some countries recreate - basic property rights that citizens demand in the transition to a market economy? My first comment, quite briefly, is on the debate within this Symposium on the relationship between constitutional reforms and the emergence of new property regimes. Second, I will comment on the counterintuitive property rights regime that is emerging from the "big bang" – the post-1989 collapse of the old socialist legal order in Central and Eastern Europe and the former Soviet Union and its replacement with a new, market-oriented system of property rights.

Zero-Sum Madison, Thomas W. Merrill

Faculty Scholarship

Has the fabric of American constitutional law been permanently "distorted" by the Framers' preoccupation with protecting private property against redistribution? Jennifer Nedelsky thinks so. In this provocative study of how the idea of property shaped the political thought of the Framers and the institutions they designed, she argues that James Madison's constitutional philosophy was driven by fear that a future propertyless majority would seek to expropriate the holdings of a minority. To combat this danger, Madison sought to create a structure of government that would ensure the dominance of the propertied elite. Madison's obsessive fear of redistribution spread to the …

The Role Of Institutional Factors In Protecting Individual Liberties, Thomas W. Merrill

Faculty Scholarship

Questions about the efficacy of the Bill of Rights cry out for serious comparative legal scholarship. Robert Ellickson and Frank Easterbrook suggest that one might approach these questions by looking at different state constitutions. One might also look more seriously at the different constitutional regimes around the world, and try to draw some judgments about what impact, if any, different types of constitutional arrangements have on individual rights. We have heard expressions of skepticism about this approach, but there has been very little serious comparative scholarship by constitutional law scholars in this country. The scholarly tradition in America has been …