Oasis or Mirage?: Efficient Breach as a Relief to the Burden of Contractual Recapture of Patent and Copyright Limitations

Abstract

Statutory and common law limitations on intellectual property rights are important aspects of the overall scheme that balances creation and innovation incentives and the rights of the public. Contractual waivers of these rights - particularly in the form of so-called shrink-wrap, click-wrap or browse-wrap licenses - may pose a problem to the extent that they allow an inappropriate extension of intellectual property rights. An issue that has been substantially buried in the many publications discussing this issue from the perspective of contract enforceability and liability is whether the application of efficient contract remedies may alleviate the tension in the regimes apparently in conflict. This paper gives in-depth consideration to that question by providing a comprehensive detailing of the relevant intellectual property rights limitations, addressing the application of contracts to constrain intellectual property limitations and considering potential contract remedies for a breach of the aforementioned contracts for their likely effect on property owners and society. It identifies the practical barriers to efficient and equitable solutions to contractual restraint and presents a striking, graphical demonstration of their impact. The paper concludes with recommendations to help promote efficient merging of federal intellectual property and state contract law.

JEL Classification: 034, 038