Justifying Intellectual Property: Chapter 1

Why should a property interest exist in an intangible item? In recent years, arguments over intellectual property have often divided proponents – who emphasize the importance of providing incentives for producers of creative works – from skeptics who emphasize the need for free and open access to knowledge.In a wide-ranging and ambitious analysis, Robert P. Merges of UC Berkeley (Boalt Hall) Law School establishes a sophisticated rationale for the most vital form of modern property: IP rights. His insightful new book answers the many critics who contend that these rights are inefficient, unfair, and theoretically incoherent. But Merges’ vigorous defense of IP is also a call for appropriate legal constraints and boundaries: IP rights are real, but they come with real limits.Drawing on the property theory of Kant, Locke, and Rawls as well as contemporary scholars such as Jeremy Waldron and Wendy Gordon, Merges crafts an original explanation of why IP rights make sense as a reward for effort and as a way to encourage “creative professionals” to carve out autonomous careers built on their talent for making high-quality original works. He also addresses an overlooked topic: the distributional fairness of the IP system. Merges provides a novel explanation of why awarding IP rights to creative people is fair, in Rawlsian terms, for everyone else in society. Merges argues convincingly that IP rights are based on a solid ethical foundation, and – when subject to fair limits – these rights are an indispensable part of a well-functioning society.Chapter 1: IntroductionChapter 1 describes the author’s search for strong, durable intellectual foundations for the IP field. It explains why Merges came to see deficiencies in the standard utilitarian account of the field, why that led him to explore classic writings on the institution of property (Locke, Kant, etc.), and how he came to understand the deep significance and relevance of those writings for the IP field.Though describing his own recourse to the philosophical roots of property, Merges leaves room for other foundational accounts as well. There is, he says, “room at the bottom,” at the deepest conceptual level of the IP field, for numerous different understandings of why IP makes sense. To permit high-level policy debate despite this foundational pluralism, he borrows from Rawls the idea of an “overlapping consensus,” a shared public space that permits high-level discourse while dispensing with the need for agreement on ultimate foundational principles. He then populates this public space with four essential “mid-level” principles of IP law, a concept he derived from legal philosopher Jules Coleman. These mid-level principles, which he draws from his long experience with the field, are: (1) efficiency; (2) nonremoval, or preservation of the public domain; (3) proportionality, i.e., grant or reward proportional to effort or contribution; and (4) dignity. Scholars of all stripes, whatever their belief in the ultimate basis of the IP field, can and in many cases already do engage in high level analysis and debate using this principles. The idea here is to make this mid-level policy debate more explicit, and to separate it when appropriate from the debate over ultimate foundations.As an example of the type of analysis he has in mind, Merges then moves to a detailed discussion of the proportionality principle. Like all the mid-level principles, this is a deep conceptual construct that spans, transcends, and ties together a wide range of specific doctrinal issues. From patent scope, to fair use, from the utility doctrine in patent law, to remedies for IP infringement, again and again specific doctrines and issues manifest the same underlying conceptual challenge: how do we calibrate the magnitude of the property grant to the effort or contribution of the claimant? To explore the deep structure of proportionality, Merges uses a simple story about property rights and the building of a bridge. This “parable of the bridge” seeks to describe the basic impulse to reward property claims in proportion to the significance of the claimant’s contribution. Most pertinent for IP law, the parable is employed to show how courts can adjust the reach of property rights when post-grant conditions change. This ex-post adjustment of rights makes sense, Merges argues, when adhering to the scope of an initial right would provide a disproportionate reward to the rightholder through no effort, contribution, or foresight on the rightholder’s part. In the final part of the book, the author strives to demonstrate the “cash value” or payoff of the theory he lays out in the early parts of the book. First Merges describes how property rights theory, traditionally keyed to the ownership of individual assets by individual claimants, can be mapped onto a world where large institutions employ many creative professionals and thus wind up as the beneficial owners of many IP rights. He explores the actual workings of the corporate and institutional “ecosystems” in which creative professionals operate, and concludes that individual IP rights, though diluted in impact by this modern institutional setting, still largely serve their purpose of fostering autonomous careers for creative professionals. Next he turns to some detailed issues of concern to contemporary IP scholars: ownership of creative works in the digital age, and the problem of patents on life-saving drugs in the face of destitute populations who need them. With respect to digital content, Merges recounts the advantages of continued adherence to a property regime, notwithstanding a large chorus of voices contending that property is obsolete and counterproductive in this new setting. He defends the privileging of significant, high-quality creative work as against nonprofessional and group-created works; yet he also calls for a simplified system of waiver of rights (which he roots in Kant’s writings on property) to facilitate voluntary sharing of works when that is what creative authors want. Next he deploys John Locke’s often-overlooked “charity proviso” to defend the right of the destitute to have access to life-saving drugs, despite the presence of patents. While pointing out the need to balance intergenerational equity concerns, he nonetheless finds that Locke’s strong defense of property came with an equally strong concern for its distributional impact in extremis, and so dictates a limited right of access when lives are at stake.