1) Establishing Property Rights
a) Property, general concepts: (good to keep in mind, all comes down to some form of this)
i) Property is:
(1) Deeply constitutive of the structure of society, orders relations among people, not just things
(2) Policy tool for economic productivity, to promote certain types of productive behavior
(a) Court awards productivity
(3) Promote stability while accommodating change
(4) Bundle of rights (right to use, possession, own, lease, mortgage, title, convey, etc.)
b) First Possession: How to create property rights in the first instance
i) What is possession? What we consider is property is socially contingent, property rights for certain objectives
ii) Discovery: Johnson v. M’Intosh (CA for ejectment: NA’s had possession, no title, couldn’t convey)
(1) Holding: NA’s no right to convey title, this case: what constitute occupancy, etc. is socially contingent- NA’s where there first but they didn’t get the rights
(2) Shows relationship bw property and power
(3) Property promotes stability, need property rules
(4) Concept of first possession:
(a) I.e. occupancy theory, first in time
(b) Possession not always lead to title
(c) Discovery (said NA’s land was terranilious- belonged to no one)
(d) Discovered v. possessed: contingent on society, power
(e) Difference bw possession and ownership
(f) Chain of title is a useful way of validating ownership
iii) First Possession Theories
(1) First in time:
(a) First in time is first in right, so provide some order
(i) BUT difficult to determine who was first, define first in time, what’s first, for what, how much, etc.
(2) Lockean Labor Theory
(a) Put labor in, make it yours, promotes productive behaviors
(i) BUT also hard to limit like first in time, to how much land, how much work needs to be put in
iv) Capture
(1) Capture = Intent (achieved with some intent to possess) + occupancy
(a) What is Occupancy? (occupancy = first in time, but when does it occur?)
(i) Pierson v. Post: fox case, bc ferae naturae, property rights = possession, occupancy; property rights are tools to meet certain objectives; i.e. whether to get rid of foxes or to increase economic productivity
1. When does first in time occur?
2. Majority: occupancy = intention plus certain control (award 2nd guy)
a. PP: Bright-line rule so easier to decide conflicts for sake of certainty, peace, and order of society, incentive for more people to engage in fox-killing because could have certainty in their possession
3. Dissent: occupancy = intention with reasonable prospect (award the 1st guy)
a. PP: thinks that to motivate them to pursue and invest in fox-hunting should give them control when began hunting
4. PP: don’t want to overhunt foxes
(b) Taking into account norms and customs:
(i) Ghen v. Rich: whale case, rule based on industry practice
1. Social norms for property rights
a. PP: efficiency- already have a whole industry, maintain stability, somewhat consistent with CL- killer gets the rights, person who speared it with their spear
b. Drawbacks: what if don’t know of the norms, i.e. foreigner? What if conflicting norms? Are people put on notice?
(c) Productivity as a basis
(i) Keeble v. Hickeringhill: duck pond, rationale soli- if on land, its yours
1. Legitimate and illegitimate harms
2. Capturing ducks is productive, but shooting to scare away is not
3. Legitimate competition v. malicious interference (can’t interfere with capture for no purpose)
(d) Animals and Fugitive Resources
(i) Establishing Property Rights in Animals
1. Rule of Capture
a. Applies to ferae naturae
i. Rationale soli trumps – implies constructive possession by owner
b. NOT apply to animus revertendi (domesticated animals, “animals that return”)
i. PP: want to encourage domestication, it’s a productive use
2. Rule of Increase
a. Mother takes care of young, so owner of mother gets property rights
(ii) Rule of Capture and Fugitive Resources
1. I.e. Oil and gas are like ferae naturae- if rationale soli, owner gets, but if escapes, can be captured (i.e. if pump common oil well from your side, with no trespass on land, its yours)
2. PP: encourage people to extract, invest in extracting, BUT may lead to overexploitation
v) Theoretical Justifications for Property Rights
(1) Demsetz Theory:
(a) Property rights serve to:
(i) Internalize externalities
1. Gives incentives to be productive, preserve (i.e. fur trade led to building fences)
(ii) Respond to social and economic challenges
1. When becomes favorable for those affected by externalities, when becomes beneficial to internalize the externalities (i.e. when fur had value)
(iii) Curb exploitation
1. Tragedy of the commons means fix by giving property rights so future not discounted
a. Tragedy of the anti-commons: too many individual property rights will lead to inefficient utilization
2. Voluntary coordination is difficult, i.e. transaction/policing costs, this is supposed to be better
vi) Creation and Intellectual Property
(1) Purpose of law protecting creation: incentive to develop, produce
(2) Distinct area: No concern about over-exploitation or communal ownership
(3) Tension bw:
(a) Property as providing incentives to create (INS) v. Allow dissemination of creations, copying and imitation (Doris Silk)
(b) Don’t want to draw lines so broadly that it impedes creativity, but want to promote creation
(4) Invention: right to exclude via legal fence rather than physical one, enforced by:
(a) Federal
(i) Patents (inventions- process, machines, manufactures, compositions of matter/20 yrs )
(ii) Copyrights (expressive works- literary, artistic & dramatic works, computer software /authors life)
(iii) Trademarks (“marks”- brand names, logos, etc./may be indefinitely)
(b) State and common law (contract, tort, property/ trade secret, unfair competition, right of publicity)
(5) Cases for Creation:
(a) INS v. AP (news in particular form is protected, substance of news is not)
(i) Content: i.e. Obama’s inauguration, not protected, but expression of the news is
(
Contributory infringement v. Direct Infringement
a. Contributory requires INTENT
3. Social norms for file-sharing, i.e. Ghen v. Rich/ whaling norms, but different here bc not clear that the norm of file-sharing is productive so can’t decide based on norms
(7) Property in One’s Own Body
(a) Moore v. Regents: (took his cells to make stuff, no rights bc of PP reason for research) Cells taken, brings COA of conversion on premise cells are property- But Ct thinks will inhibit scientific research, Arabian says body will just be commodity, Mosk says one way to respect patient autonomy
(i) PP: like Pierson v. Post, want to encourage policy objective, this case biomed research
1. Conversion not apply, not really own his cell lines, not want to lead to people selling organs
a. Policy concerns: Ethics v. Dignity, property as a bundle of rights? Sell some parts?
2. Alienability:
a. Fully alienable, cars
b. Inalienable, right to vote
c. Market-alienable, only gifts, not sale, i.e. babies and organs
d. Only market-alienable, sales allowed, no gifts, i.e. bankruptcies and trustees, can’t give away only sell
e. Policy objectives dictate how things can be transferred, if at all
vii) First possession- Recap
(1) Mechanisms:
(a) Discovery, Capture, Creation, Ones own body
(2) Occupancy is socially constructed:
(a) Johnson v. M’intosh, title of lnd by Na’s superseded by Europeans
(3) Policy objective and incentives:
(a) Pierson v Post: how to construct a property regime to max eradication of foxes?
(b) IP: provide incentives to create and ability to create
(4) Property and productivity:
(a) Keeble: Productive activity is promoted
(b) Social norms: Ghen v. Rich- productive, file-sharing- not so much
(5) Theories:
(a) Externalities: Property rights help internalize them
(b) Tragedy of the commons
(c) Info as a public good: Motivate creation by exclusive rights
(d) Limits of property: Can inhibit productivity; i.e. in copyright? Want free creative expression but copyrights too
(e) Property and noneconomic value: i.e. distributional outcomes and fairness and personal dignity
(f) Property as a flexible, malleable instrument:
(i) Idea of property as monolithic, but more like a bundle of rights
1. i.e. IP, patents, not last indefinitely
(g) Property as defining relationships between people and things, not just about things
(i) i.e. INS v. AP: between them, not okay, between AP and me, okay
