Indeterminism and the Property-Patent Equation

Abstract:     
Fierce debate has raged over the relative primacy of liability and property rules in informing patent jurisprudence. Those who favor the latter path often see prescriptive parallels in the rules properly brought to bear on owners of physical and intellectual property. Others view the intellectual domain as sufficiently distinct as to render the law of tangible property incongruous and inapplicable.

This Article seeks to promote a novel perspective on this dialectic, by focusing on the import of a heretofore unappreciated tenet of the analogy between intellectual and real property. Those who seek to inform the optimal construction of patent rules through long-established norms of property law face a challenge in the form of the asymmetric legal certainty that characterizes these respective property rights. More specifically, the validity of ownership rights in patented technology is heavily stochastic, whereas rights in physical property are largely definite. The issue of certainty implicates both the epistemological and consequential qualities of ownership, and should inform the optimal construction of property rights accordingly. This holds especially true with intellectual property, where exclusivity comes at the cost of the Lockean 'enough and as good' condition, given the public good benefits foregone by private ownership.

This insight begs two major conclusions. First, there may be good normative ground for tempering the exclusive rights properly associated with highly probabilistic property rights. Second, in an environment of free contract, one should be concerned that a patentee may be able to transform the aoristic right granted it by Congress into a certain one, thus deriving a greater pecuniary return than was inherent in the 'patent bargain.' The legitimacy and scope of the power to exclude lies at the heart of this transformative process, creating a spectrum that charts a direct association between patent certainty and freedom of contract.

Indeterminism thus bears significant repercussions for the property-patent equation. This Article charts the positive source of the divergence in determinism between intellectual and tangible property, and explores the normative repercussions of that departure for the formulation of both substantive patent law and ideal restraints on freedom of contract. Interestingly, the capricious nature of intellectual property need not strip the property-patent equation of all legitimacy. Nevertheless, the temptation to borrow wholesale from the law governing real property must be met with sensitivity for the distinctions between the property characteristics at issue. The Article concludes by suggesting that improvements in the prosecution and re-examination processes would greatly strengthen the property-patent equation. Until that time, though, qualified limitations on the right to exclude, and rights derived therefrom, may be normatively justified.

Number of Pages in PDF File: 46

Accepted Paper Series