Date Posted: July 2011
Contemporary American intellectual property (“IP”) scholarship assumes trade secrets and hot news are not property rights because neither field entitles claimants to rights to exclude. This Chapter challenges that conventional wisdom on two grounds. The first is conceptual. Doctrinally, “property” encompasses not only trespassory and exclusionary rights—like rights in land—but also usufructs—like riparian rights. Conceptually, rights in land and river flow both count as property because property consists not of a right to exclude but rather a right to determine exclusively the use of an external asset. Trade secrets and hot-news rights also fit that definition—as usufructs in IP corresponding to riparian rights in real property.
The other ground is historical. Seminal American authorities relied on the concept of the IP usufruct as described in this Chapter to describe and justify trade secrecy and hot-news doctrine as both emerged in nineteenth-century American common law. The Chapter illustrates by interpreting Chancellor James Kent’s treatment of trade secrecy in his Commentaries on American Law, the Massachusetts Supreme Court trade secrecy decision Peabody v. Kidd (1868); an early hot-news decision, Kiernan v. Manhattan Quotation Tel. Co. (N.Y. Supr. 1876); and the U.S. Supreme Court’s decision recognizing hot-news interests in International News Service v. Associated Press (1918).