The Conceptual Relation Between IP Rights and Infringement Remedies
- Author(s): Eric Claeys
- Date Posted: 2015
- Law & Economics #: 15-23
- Legal Studies #: LS 15-05
- Availability: Full text (most recent) on SSRN
This Essay contributes to a symposium held at George Mason University, and sponsored by GMU's Center for the Protection of Intellectual Property, on the common ground between creators and inventors in intellectual property. The Essay focuses on the legal concepts involved in remedy determinations in copyright and patent infringement suits. In its 2006 decision eBay v. MercExchange, the U.S. Supreme Court handed down a decision widely viewed as weakening the relationship between a judgment of infringement and the entry of an injunction prohibiting the infringement. The opinions in the Supreme Court and lower courts joust about how the property in a patent relates to the remedies for infringement. Much scholarly commentary on the eBay decision follows Calabresi and Melamed's 1972 'Cathedral' article and studies infringement remedies using the vocabulary of property rules and liability rules.
Both the judicial opinions and the Cathedral-inspired scholarly commentary make problematic conceptual assumptions about the meanings of: property, infringement, injunctive relief, and awards limiting prevailing infringements to money damages. This Essay recounts relevant conceptual-philosophy scholarship critiquing the conceptual assumptions about remedies made in the Cathedral framework. The Essay adapts those prior critiques to account for the special features of small-component/large-assembly undue hardship arguments in property disputes, and applies those critiques so adapted to eBay-related issues.
When soundly conceived, a 'property right' consists of a right of exclusive use over an asset. Such a right gives a proprietor presumptive freedom to dispose of the asset as she likes, but that freedom may be limited in cases in which the asset gets justifiably entangled with the labor or property of others. Orders of injunctive relief and damages-only awards specify the circumstances in which the owner retains her disposition rights and the ones in which she claims more control over disposition than her exclusive use entitles her to. Several of the judicial opinions in eBay misstated these concepts by portraying the property in patents as a 'right to exclude'; this portrait makes property rights seem broader and more likely to generate injunctive relief than they are in social concepts or practice. The Cathedral-inspired commentary portrays damages-only awards as 'liability rules'; this portrait misstates the conceptual character of damages-only awards, and does so in ways that obscure the normative influence that 'property' can have in remedy determinations.