Intellectual Property and the Property Rights Movement: Should Intellectual Property Be Accorded the Same Protections as Tangible Forms of Property?
Menell, Peter S., Regulation
The property rights movement (PRM) has taken active interest in several Supreme Court cases over the past few years. It was hardly surprising to see PRM activists mobilize in support of Susette Kelo, whose home was condemned by the city of New London. She argued that condemning her property to convey it to a private developer did not constitute "public use" and hence violated her constitutional rights. Ms. Kelo's plight fell squarely within PRM's core agenda of safeguarding the liberty interests of property owners against governmental interference. Nor was it surprising to see PRM organizations mobilize in Rapanos v. United States, involving the scope of federal authority to regulate wetlands; San Remo Hotel v. City & County of San Francisco, challenging the constitutionality of a hotel conversion ordinance under the Takings Clause; Lingle v. Chevron U.S.A., seeking to overturn a state statute limiting the rent that oil companies could charge dealers leasing company-owned service stations; or Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, asserting that a temporary moratorium on development effected an unconstitutional taking of private property.
By contrast, eBay v. MercExchange did not seem to fit the PRM mold. The "property" at issue--a patent on a method of selling goods through an "electronic network of consignment stores"--could hardly have been more different in character and economic underpinning than Susette Kelo's home. MercExchange had prevailed in a patent infringement action and sought to enjoin eBay, the popular online auctioneer, from further use of the patented method in the hope of forcing a favorable licensing deal. The patentability of such methods was itself quite controversial because of the abstract nature of business method claims. Furthermore, the governmental "interference" with the patent owner's property was limited. The district court denied MercExchange's request for a permanent injunction based on the patent owner's willingness to license to other parties, the adequacy of monetary damages, the fact that the patentee did not itself practice the invention, and "growing concern" over the effects of business method patents on competition and innovation. The U.S. Court of Appeals overturned the denial of the permanent injunction, holding that, as a "general rule," injunctions must follow all patent infringement findings absent "exceptional circumstances" such as a grave risk to public health. As a result, eBay appealed to the Supreme Court, which granted certiorari in late 2005.
In an amicus brief filed in the Supreme Court on behalf of "various law and economics scholars," Prof. Richard Epstein, one of the PRM's leading theorists, contended that the Merc-Exchange patent deserved much the same protection as real estate. By analogizing patent infringement to trespass, the brief argued that injunctive relief should be presumed in cases of patent infringement. It pushed the boundaries of patent law advocacy by citing land encroachment precedent.
The property rights rhetoric in the eBay case marked an important new front in the campaign to establish a strict and broad interpretation of property rights and their enforcement. Professor Epstein's expansion of his property rights advocacy into the intellectual property domain over the past several years coincides with the growing importance of intangible assets in the modern economy. The digital revolution has displaced General Motors and other manufacturing enterprises from the top of the economic food chain. Knowledge-based companies such as Google, Microsoft, and Apple reflect the new economic order.
Other property rights advocates have joined the effort to "port" the absolutist libertarian vision to the realm of intellectual property. In a May 21, 2007 op-ed page advertisement in the New York Times, the Washington Legal Foundation led:
Stolen Property, Stolen Future What if strangers showed up in your backyard and held a block party? …