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Seton Hall Unversity School of Law
Landes, William

I.                   The INS Case & Misappropriation
A.                The Rule
1.                  Misappropriation where
a)                 Public Good
(1)               Two people can use at same time
(2)               MC of additional person = 0
(3)               Ability to enjoy or benefit not affected by others use
(4)               No benefit to exclude others
(5)               Economies of scale ex post
(6)               Ignores incentive problems ex ante
b)                 High cost to excluding free riders
c)                 Competitive injury in primary market – Parties direct competitors
(1)               Causing significant market injury
(2)               Landes says NOT limited to hot news
d)                 Consider: Transformative v. Reproductive Use (NBA)
e)                 Cost – Benefit Analysis (case by case)
(1)               Free Riding really significant – ruins incentives for party creating information (product threatened)
f)                   Limitations On INS
(1)               Means were unlawful (Brandeis)
(a)               BUT this would gut the doctrine. This is conversion
(2)               Essentially similar facts to INS (Hand)
(3)               Cost Benefit. Case by case analysis (incentives v. transaction / access costs
(4)               Restricted to competitive injury
B.                 Benefits of the Misappropriation doctrine
1.                  Saving on private enforcement costs
2.                  Protect specific incentives of the firm stolen from
3.                  Protect general incentives so that others want to do it. 
4.                  Fairness Argument (he who creates it, should get it)
C.                Costs of the Misappropriation doctrine
1.                  Duplication costs
a)                 BUT there will be

n constitutes free riding on P’s costly efforts to generate or collect it (no free riding in this case)
(4)               D’s use of the information is in direct competition with a product or service offered by P
(5)               The ability of other parties to free ride on the efforts of the P would reduce incentive to produce & its existence would be threatened.
c)                 Potential Problem: Multiple sources (many potential Ps)
3.                  Standards
a)                 No monopoly over the use of standards. Hubbbell v. GE. (incentives small, costs high)
(1)               INS limited to fraud & bribery
4.                  Fads
If you are first in mkt, you reap advantage from being first. (incentives enough)