Property Rules, Liability Rules, and Immunity: An Application to Cyberspace

Abstract

This paper sets out a theory of torts and cyberspace wrongs. Its goal is to set out a sparse theoretical account of tort law and apply it to cyberspace torts, both negligent and intentional. I approach this goal by applying the framework of property rules and liability rules to cyberspace torts. That framework suggests that trespass doctrine is appropriate in instances of cyber-invasions of private information resources, such as the breaking of codes to access private information on the web. However, trespass doctrine should play no role in cyber-invasions of public information resources, such as the sending of spam email. I also examine indirect liability claims against operating system sellers or internet service providers for the harms caused by cyberspace actors (e.g., virus writers, copyright violators). The theory presented here suggests that the basis for strict indirect liability is weak. Finally, the theory suggests that immunity rules should play a role in this area, though in a smaller set of instances than those protected by the Communications Decency Act.

Keywords: property rules, liability rules, immunity, cyberspace, tort law, cyberspace torts, cyber-invasions of private information sources, cyber-invasions of public information sources, virus writers, copyright violators

JEL Classification: K00, K13, K42