Property Rules Research Articles

In the shadow of industry: a study of culturization in Papua New Guinea

The activities of extractive industry have recently been framed by a language of corporate social responsibility that relies on a system of legibility and objectification. This process reifies ‘cultural units’, abstracting them from the rules of kinship, migration, and exchange that ensure social and economic security. I refer to this process and the ideology of ‘development’ that accompanies it as culturization and examine it in the context of oil extraction in Papua New Guinea's Kutubu region. Drawing on debates on the indigenization and politicization of ‘culture’, I present culturization as a process that relies on rules of inheritance and property to impose a structure of difference in contexts of extractive industry that ignores the intricacies of sociality that ultimately give life meaning. The aim of the paper is to both illustrate the consequences of this process and consider cognate ideas of ‘culture’ vis‐à‐vis ‘sociality’ to emphasize their mutual theoretical importance to contemporary anthropological inquiry.

Stone-Age Property in Domestic Animals

Only yesterday, all animals were wild. Zoological archaeologists assert that about 15,000 years ago, our hunter-gatherer forebears achieved the first domestication — the dog. Over the course of ensuing millennia, they proceeded to domesticate sheep, cattle, and other livestock. By the advent of the Bronze Age, domestic animals had come to constitute a major component of human wealth. Domestications required Stone Age people to create various informal property rules to resolve conflicting claims to the ownership of a domestic beast. A brand on an animal, for example, might have been considered adequate notice to a hunter that another person’s tamed animal was no longer up for grabs. This article marshals indirect sources of evidence, such as the practices of modern-day hunter-gatherers and the historical materials left by the earliest civilizations, to ground hypotheses about the substance of primeval property rights in domestic animals. These sources suggest, for example, that during the Neolithic Period (the late Stone Age) both dogs and livestock conventionally would have been owned privately by either an individual or a family, and not, as Friedrich Engels speculated, communally by a band or a tribe.

Insiders, outsiders, and the adaptability of informal rules to ecological shocks

The history of the world is strewn with the remains of societies whose institutions failed to adapt to ecological change, but the determinants of institutional fragility are difficult to identify in the historical record. We report a laboratory experiment exploring the impact of an exogenous ecological shock on the informal rules of property and exchange. We find that geographically-induced tribal sentiments, which are unobservable in the historical record, impede adaptation post shock and that inequality declines as wealth and sociableness increase. Quantitative measures of individual and group sociality account for some of the differences in successful or failed adaptation.

The impact of EU on sport broadcasting: what does the line of recent ECJ cases signal about?

The Murphy case decision in 2011 in favour of a pub landlady from the UK showed that the broadcasters cannot prevent customers from buying cheaper foreign satellite TV services to watch Premier League football. While legal experts said that pubs still might be prevented from such business activity because of the intellectual property rules, the case underlined the growing complexity of policing and selling sports rights in a digital world. The case has ‘voided’ territorial exclusivity of broadcasting rights, one of the cornerstones of the sector. The FIFA and Sky Osterreich cases reinforce the protection of minor broadcasters and the viewers by limiting the aggressive marketing behaviour of the rightholders and major broadcasters. Assertion of the need for a case-by-case examination of the compatibility of sporting practices with the Treaty did not change. The Commission and the ECJ will continue to be the main EU actors affecting the broadcasting market of sporting events.

Climate Change, the International Intellectual Property Régime, and Disputes Under the TRIPS

This study considers intellectual property rules contained in the WTO TRIPS Agreement as they might affect climate change regulatory efforts. The TRIPS Agreement rules that are most directly applicable in this context are patents; confidential information, and enforcement of IP rights before national courts. With respect to patents, the Agreement provides rules on subject matter eligibility and compulsory licensing that may affect which climate-related technologies get patented and how they are applied. The rules concerning confidential information are less precise. The Study then considers how a WTO dispute-settlement panel might apply WTO rules (especially TRIPS) to climate change initiatives that a WTO Member might take.

FRAND's Forever: Standards, Patent Transfers, and Licensing Commitments

The Internet, computing, and telecommunications industries are ripe for a collision between the worlds of intellectual property and standardization. Many technologies in these industries are covered by patents, and some of these patented technologies are essential to standards necessary for interoperability. Many standard-setting organizations (SSOs) adopt IP rules that require participants in the standard-setting process to disclose essential patents or promise to license essential patents on fair, reasonable, and nondiscriminatory (FRAND) terms to implementers of the standard. However, many SSOs also state that the SSO will not get involved in licensing disputes. Thus, it is left to the patent owner and the implementer of the standard to work through their differences, which sometimes results in generalist judges resolving cutting edge technology issues with potentially far-reaching impacts on consumers.We examine the theoretical foundations of FRAND commitments and analyze recent case law to expose the limited ways that theories grounded in patent, antitrust, and contract can apply to problems concerning the FRAND commitment. We note that a contract-based theory offers a good approach in many situations, but there are significant limitations to contract theory as applied to FRAND commitments. In particular, contract theory fails to effectively address the problem of enforcing FRAND commitments after an essential patent has been transferred.In this Article, we propose a novel theory for applying property law to FRAND commitments. As recent work by Merrill and Smith on the property and contract interface demonstrates, there are a number of areas of law that cannot be characterized as purely “in rem” or “in personam,” and in our view, this includes patents in the context of standards. Our property approach thus emphasizes the FRAND commitment as creating something analogous to a servitude under real property law, but our approach also acknowledges the importance of contract law principles to address many other issues.To preserve the viability of FRAND commitments, we have two main recommendations: (1) courts should view FRAND commitments as having traits of both property and contract and apply our proposed theory that FRAND commitments create a servitude that runs with the patent; and (2) courts and adjudicative agencies should reject efforts to impose injunctions on the use of essential patents when the infringer must use the patent to comply with the standard. Injunctions against the use of SEPs could have more harmful effects on consumers and competition than injunctions against the use of non-SEPs, and by making a FRAND commitment, the patent owner is stating that damages would be adequate to compensate for a loss of exclusivity. We thus urge courts to view a FRAND commitment as converting a property rule into a liability rule. If these two recommendations are adopted, companies that manufacture products that conform to technical standards will stand on firmer legal ground, confident in the availability of a license to all patents that are essential to a standard. This increased legal certainty through carefully circumscribed property and contractual rights will, in turn, foster further investments and support the adoption of standardized technologies, assuring the continuance of a robust market for innovation.

Compelling to Disclose Software Interoperable Information: A Risk for Innovation or a Balanced Solution?

AbstractSoftware interoperability has been declared matter of public interest by the European Commission in its European Digital Agenda because of its obvious intrinsic value and, therefore, it is in the interest of society to support it. The most significant ex ante intellectual property rules on interoperability in IT markets are presently located in the area of copyright law. Ideally, copyright law should provide market participants with clear indications as to the ability to access and use interoperability information. However, none of the Actions of the European Digital Agenda address copyright in general nor the Software Directive in particular in the matter of interoperability. This essay will discuss whether the regulation established by the Software Directive can jeopardize the public interest. Subsequently, due to the impact of the Microsoft CFI decision, it will be analyzed whether a compulsory licensing approach is the best solution in order to guarantee access to interoperable information. Closing, some recommendations over both the interoperable information regulation of the Software Directive and the licensing approach that might help in keeping a fair balance between the copyright holder of the computer program and competitors in the ICT sector for the sake of interoperability and innovation.

TPP and Intellectual Property: Growing Concerns

Promoted as a high-quality twenty-first century trade agreement for the Asia-Pacific, the Trans-Pacific Partnership (TPP) has generated concerns over several WTO plus issues it is negotiating. This article examines the concerns on intellectual property rules with respect to patents and copyrights. While large emerging markets like China and India are not part of the TPP, growth of a rigid intellectual property regime as proposed by the TPP in the Asia-Pacific, will have several implications for them, particularly in innovations and production of generic pharmaceuticals, as discussed by the article.

A Conflict-of-Laws Approach to Competing Rationalities in International Law: The Case of Plain Packaging between IP, Trade, Investment and Health

The idea of employing conflict-of-laws principles to address competing rationalities in international law is unorthodox, but not new. Research focuses on inter-systemic conflicts between different areas of international law – but has stopped short of proposing conflict rules. This article goes a step further and reviews the wealth of private international law approaches and how they can contribute to applying rules of another, ‘foreign’ system. Against the background global intellectual property rules and their interfaces with trade, investment, health and human rights, the dispute over plain packaging of tobacco products serves as test case for conflict-of-laws principles. It shows how these principles allow a forum to apply external rules – beyond interpretative concepts such as systemic integration.

Contract Law, Liability Rules, and Property Rules

Calabresi and Melamed’s concepts of property rules and liability rules apply to contractual entitlements. The structure of consumer’s contractual entitlements resulting from the consumer sales directive fits with the model of property rules. In keeping with such a model, whenever performance-oriented remedies are not available, consumers should be allowed to choose between expectation damages and disgorgement damages.

Contract Law, Liability Rules, and Property Rules

Calabresi and Melamed’s concepts of property rules and liability rules apply to contractual entitlements. The structure of consumer’s contractual entitlements resulting from the consumer sales directive fits with the model of property rules. In keeping with such a model, whenever performance-oriented remedies are not available, consumers should be allowed to choose between expectation damages and disgorgement damages. Résumé La distinction entre les règles de proprieté et les règles de responsabilité doit s’appliquer aux droits contractuels. La directive 1999/44/CE, du 25 mai 1999, s’inspirant du second de ces deux modèles-ci, les droits contractuels de l’acheteur/consommateur y sont protégés par des règles de proprieté. La décision de la directive devant être poursuivie cohéremment, le consommateur doit être accordé le droit de choisir entre des dommages-intérêts compensatoires et des dommages-intérêts restitutifs. Zusammenfassung Calabresis und Melameds Konzepte von den Eigentumsrechten und der Haftungsregeln beziehen sich durchaus auch auf vertragliche Rechtspositionen. Insbesondere fügen sich auch die Rechtsbehelfe, die die EG-Kaufrechts-Richtlinie vorsieht, in diese Konzepte ein. Nimmt man dies ernst, so müssten Verbraucher, wenn immer ihnen die Primärleistung vorenthalten bleibt, ein (Wahl-)Recht gleichermaßen auf Schadensersatz in Form des Erfüllungsinteresses wie auch auf Gewinnherausgabe haben.

The Capacity of Property Rights to Accommodate Social-Ecological Resilience

In this paper, I consider how social-ecological resilience can be facilitated by the use of property rights. Taking a legal perspective on the use of different forms of property, I consider how property rules can manifest the attributes of flexibility, responsiveness, optionality, and scalability associated with resilient systems. I note how different regulatory regimes such as domestic law and international law have differing capacities to accommodate property rights, and this in turn affects the capability of property to sustain resilience. The fluid nature of resilience and property systems defies simple conclusions about the influence of property rights on resilience. However, it is possible to make some general observations on how well-suited archetype forms of property such as private property and community-based holdings might be for regulating certain resources.

The Rise of Rule Four Institutions: Voluntary Standards, Certification and Labeling Systems

Voluntary standards, certification and labeling mechanisms are one of many forms of private governance institutions that have been developed in recent years to permit communities to govern without government. These institutions enhance efficiency by internalizing externalized social costs and meeting consumer preferences associated with risk. This article advances the existing literature in three ways. First, the article observes that, as a descriptive matter, voluntary standards, certification and labeling systems are “Rule 4” institutions, systems; they permit parties to pursue a Coasian solution to externalities by facilitating the exchange of entitlements. Drawing from Calabresi and Melamed’s seminal article, “Property Rules, Liability Rules and Inalienability Rules: One View of the Cathedral,” the article explains how voluntary standards, certification and labeling systems, by lowering their steep transaction and information costs, permit consumers to trade entitlements. Second, the article observes that these systems are developed primarily in response to government void and government failure, and that this belies the central premise of the Coase theorem - that the main obstacle to internalizing externalities through private sector solutions is the lack of properly defined property rights. These systems permit the exchange of entitlements, not by allocating or defining property rights, but by addressing knowledge problems and collective action problems, suggesting that these are the true impediments to reaching Pareto efficient allocations of resources through Coasian exchanges. Third, the article argues that where governments have adopted voluntary standards certification and labeling systems to counteract their own allocation of entitlements, an overhaul of existing law to change the original allocation may be in order.

Institutional Development and Stock Price Synchronicity: Evidence from China

Better developed legal and political institutions result in greater availability of reliable firm-specific information. When stock prices reflect more firm-specific information there will be less stock price synchronicity. This paper traces the experience of China, an economy undergoing dramatic institutional change in the last 20 years with rich variation in experiences across provinces. We show that stock price synchronicity is lower when there is institutional development in terms of property rights protection and rule of law. Furthermore, we investigate the influence of political pluralism on synchronicity. A more pluralistic regime reduces uncertainty and opaqueness regarding government interventions and therefore increases the value of firm-specific information that reduces synchronicity.

Property, Information And Institutional Design

First Nations' emerging choices over their property institutions, however, are considerably more complex than perennial debates about private-individual versus communal rights would tend to suggest. [...]the information-based perspective suggests: (i) that First Nations should prioritize simple, bright line property rules that eschew the uncertainties of community-based interpretation and context; and (ii) that First Nations should work to harmonize their local property systems with a uniform set of norms familiar to Anglo-Canadian common law.2 My purpose in this Essay is to question these two basic prescriptions and offer some alternative ways of thinking about property, information, and institutional design. In Part II, I describe a second implication of the information-based approach - namely, the idea that communities should seek to reduce local variation in their property regimes. Because local divergence from widely used common law property norms is thought raise the costs of transactions across community boundaries, recent research suggests that there may be substantial incentives for communities to move toward harmonization or convergence, at least over the long run. For several reasons, investors will demand secure property - i.e., well defined and broadly agree upon norms with predictable and enforceable consequences.4 Using uncertain legal standards to delineate property rights appears to cut against this accepted logic by undermining real and perceived security and discouraging economic investment. [...]because uncer - tainty around property can effectively delegate important legal and political decisions to nonmajoritarian institutions and third-party decisionmakers from outside local communities, it seems that this strategy might also be unattractive from the perspective of strong, autonomous First Nations governance.

A Complete View of the Cathedral: Claims of Tortious Interference and the Specific Performance Remedy in Mergers and Acquisitions Litigation

A bank promises to lend several billion dollars to fund a buyer’s purchase of a target company. The buyer enters into a merger agreement with the target. Thereafter, the economy plummets, and the bank decides that breaching its contract with the buyer will cost less than performing. The buyer seeks specific performance. The target also sues the bank, alleging tortious interference with the merger agreement. Billions of dollars are on the line. This is the reality lived by many investment banks that committed to fund leveraged buyouts during the recent economic downturn. Most of these matters were resolved in private settlements to avoid the possibility of crippling tort liability and publicly airing the messy details of the targets’ poor financial circumstances. The judicial decisions that do exist reveal a myopic view of the relationship between the buyer’s specific performance claim against the bank, on the one hand, and the target’s tort claim against the bank, on the other. By treating these claims as substantively distinct, courts threaten to impose an inefficient liability rule for the bank’s allegedly tortious conduct (including the possibility of punitive damages) and an equally inefficient property rule for the bank’s alleged breach of contract (specific performance). Courts must take a singular view of the combined costs and efficiencies created by the buyer’s and target’s individual claims to properly determine the appropriate remedy for the bank’s conduct.

The United States’ Demands for Intellectual Property Enforcement in the Trans-Pacific Partnership Agreement and Impacts for Developing Countries

The United States proposal for the Trans-Pacific Partnership Agreement (TPP) includes many demands that will increase intellectual property rights for rightholders. The leaked text reveals that the United States seeks to introduce numerous measures that go well beyond the requirements of the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property (TRIPS), known as TRIPS-plus provisions. Some of the areas of concern include the provisions on intellectual property enforcement. The TPP currently includes eleven negotiating parties of vastly different economic backgrounds: the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Other countries, like Thailand and Japan have been rumored to be the next to join, and the agreement is intended to eventually cover the entire Asia-Pacific region, including least developed countries like Laos or Myanmar.Intellectual property systems must provide appropriate balance and important development concerns are affected by intellectual property rules. The high levels of intellectual property protection and enforcement proposed by the United States can create unnecessary barriers to progress and development. Leaks of the United States proposal reveal not only efforts to increase the rights of rightholders without sufficient safeguards to protect the public interest through substantive copyright or patent provisions, but also through increases in the minimum levels of enforcement. The enforcement provisions work in tandem with substantive copyright and patent provisions to tilt the balance of the intellectual property system in favor of rightholders, at the expense of users and consumers. Among other issues, the proposed enforcement provisions would impact access to medicines and access to medical technologies. The provisions could require countries to use scarce resources to investigate and prosecute intellectual property infringement despite the fact that intellectual property rights are private rights. Such use of government resources is costly not only for developing countries, but also for developed countries.This examines the five articles comprising the United States proposals for enforcement of intellectual property rights in the TPP and potential implications for developing countries. Many of the proposals by the United States in the TPP intrude on the policy space reserved for states to pursue balanced intellectual property systems and determine the most efficient methods for enforcement in light of their domestic situation. As a WTO panel recognized, “differences among Members’ respective legal systems and practices tend to be more important in the area of enforcement” and the TRIPS-plus measures proposed by the United States with respect to enforcement could create particular problems for developing countries. The areas of enforcement that are discussed include: 1) civil and administrative procedures and remedies, 2) provisional measures, 3) special requirements related to border enforcement, 4) criminal enforcement, and 5) special measures relating to enforcement in the digital environment.

The effect of time on default remedies for breach of contract

Among default remedies for breach of contract, expectation damages are believed superior to property rules such as specific performance since they allow the promisor to breach inefficient contracts when renegotiation is economically infeasible. We examine whether the promisor's ability to accurately determine when to breach is maintained when taking into account the value of time that distinguishes between immediate performance and paying damages in court. We show that if prejudgment interest does not equal the promisor's subjective value from time (e.g. if the court uses the promisee's interest rate to fully compensate him), the promisor's breach decision will be distorted. When renegotiation is feasible this problem of excessive breach is mitigated, however asymmetric information about discount factors can lead to a renegotiation process that is doomed to fail. Punitive damages behave similarly. Specific performance without ancillary monetary awards always creates a pie for division between the parties. Ancillary awards for delay are unlikely to change this, but ancillary awards for partial breach make specific performance behave more like expectation damages, although to a lesser degree.

Private Proprietary Standards and Public Law: Invoking WTO's Competition Dimension to Avoid Global Market Distortion

In today’s global economy driven by trade in knowledge intensive products, technical standards are set across borders and are meant for global consumption. However, private proprietary interests that currently dominate the national, regional and international standard-setting environment can cause considerable global market distortion. Private exclusivity preserved by patents is essential for the development of new technologies, while standardization ensures homogeneity and introduces product compatibility. However, the interaction between them viz., patents - ‘private’ and ‘exclusive’ v. standards - ‘public’ and ‘non-exclusive,’ is far from achieving coherence. This paper has examined problems arising from proprietary technical standards (termed as “standards-essential patents” –SEPs) at two different levels of normative inquiry, viz., a) national/regional or comparative law and policy that regulates issues concerning SEPs; b) international trade law and policy landscape governing technical standardization. The problem as broadly perceived arising from SEPs suggests that patent holders engage in ‘hold-ups’ or are able to extract ‘unfair,’ ‘unreasonable’ licensing terms from different market players practicing standards across the globe. The essential conflict lies in the fact that the remedy system structured around patent-property rights (injunctive relief and damages) in different jurisdictions largely incentivizes hold-up behavior. This leads to global market distortion and causes significant consumer harm. The regulations that deal with these situations and the remedies that follow anticompetitive conduct involving SEPs are weak or even absent in some jurisdiction. The most important remedy involving SEPs may be based on liability rules, where the patent holder is denied any injunctive relief and the value of patent holder’s entitlement is determined by some form of third party intervention- usually by the courts or through regulation. Standard-setting Organizations (SSOs) require FRAND (Fair, Reasonable and Non-Discriminatory) licensing commitments from the patent holders in cases involving SEPs. However, interpretation of ‘FRAND’ has caused considerable concerns and there is significant inter-jurisdictional legal and policy conflict. Currently, litigation involving SEPs is pending in different jurisdictions, which may lead to potentially different outcomes. Antitrust authorities in the US and EU have opened investigations for violation of FRAND commitments leading to another possibility of significant divergence of antitrust remedies involving SEPs. Antitrust remedies may also take some form of liability rules. This underscores the need for global mandatory liability rules to resolve problems arising from SEPs. The paper articulates a premise for the application of liability rule and not property rule for SEPs from a global regulatory perspective to overcome the differential treatment in various jurisdictions. The paper examines the TRIPS Agreement framework of liability norms in their application to SEPs. While patent rights and remedies that follow them are largely harmonized in TRIPS, liability rules that can help resolve problems arising out of SEPs are not harmonized, or at best, permissive. To these ends, the paper investigates the missing ‘mandatory’ nature of liability norms in the TRIPS Agreement and suggests the need for articulating one. Similarly, the TBT Agreement framework in their application to SEPs is examined. The conspicuous absence of liability norms in the TBT Agreement for SEPs is investigated from a WTO competition policy perspective. As an outcome, a need for a ‘principle-based approach’ that promotes competition in SEPs is suggested. Since liability norms represent significant ‘regulation,’ the paper investigates how a regulatory model similar to GATS telecommunication interconnection regime may be used to establish a global mandatory liability rule for SEPs. It is suggested that a solution based on global mandatory liability rule perspective can significantly reduce global market distortion arising from inter-jurisdictional normative conflict.

Exchange Efficiency with Weak Property Rights

We show that the first welfare theorem obtains independently of the strength of property rights protection. In an exchange setting, a large class of legal rules (what we call generalized liability rules) are exchange-efficient. Included in this class are property rules (generalized liability rules with very large damages Ds), standard liability rules (generalized liability rules with Ds that track the owner's valuation), and even rules which afford possessory interests only very weak protection (generalized liability rules with very small Ds). This result corrects a previous misconception in the literature, and yields the provocative conclusion that strong property rights are not required for exchange efficiency.