Friday, October 19, 2012

Penalver & Liivak on the Right to Not Use Property

Eduardo Penalver (Cornell) and Oskar Liivak (Cornell) have posted The Right Not to Use in Patent and Property Law on SSRN.  Here's the abstract:

In Continental Paper Bag Co. v. Eastern Paper Bag Co., the Supreme Court, held (among other things) (1) that patent owners have an absolute right not to practice their patent and (2) that even these non practicing patent owners are entitled to the liberal use of injunctive relief against infringers. In eBay Inc. v. MercExchange, LLC, the Supreme Court softened the second part of that holding. In this essay, we argue that Congress or the Court should also reconsider the first, not because patents are not rightfully property but because the institution of property does not support such an absolute right not to use for reasons that are relevant to the question of nonuse in patent law. The Court's recognition of a robust right not to use patents was based on a flawed analogy to tangible property, which the Court understood as recognizing "the privilege of any owner of property to use or not use it, without question of motive." The Court's reasoning was flawed in two respects. First, the law of tangible property makes a sharp distinction between what we call derelict nonuse and attentive nonuse. With respect to the former, the law significantly hems in the rights of owners not to use their property, employing numerous doctrines, such as nuisance, abandonment, adverse possession, and permissive waste, to ensure that owners' decision not to use their property does not inflict harm on others. Even with respect to attentive nonuse, owners' rights are qualified, both by common law doctrines like necessity and by the state's power to override (or at least influence) owners' decisions about nonuse through eminent domain, regulation and taxation. Second, beyond its poor understanding of the law of nonuse as it relates to tangible property, the Court in Continental Paper Bag failed to consider the ways in which the reasons for recognizing a right not to use might differ in the contexts of patent and tangible property. Although the same basic considerations are at play in both contexts -- efficiency, autonomy, and personhood -- the implications of nonuse for these considerations differ in the patent context because of, among other things, information's nonrivalrous nature and because of the particularly powerful way that patent law constrains the freedom of nonowners. Taking these factors into account suggests not only that the normative case for recognizing a robust right not to use a patent (even attentively) is weaker than in the domain of tangible property but also that we ought to recognize an obligation for patent owners to disseminate their inventions. Recognition of such an obligation would significantly reduce the threats posed by so-called patent trolls and the high tech patent wars.

Steve Clowney

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