Last updated: September 24, 1999
Limits on the Exercise of Property Interests in Information
First Amendment Limits
Harper & Row, Publishers,
Inc. v. Nation Enterprises, 471 U.S. 539 (1985)
Read the first paragraph and parts III and IV of the majority opinion
and part II of Justice Brennan's dissenting opinion.
Intellectual Property and Antitrust Limits
Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990)
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996)
Image
Technical Services, Inc. v. Eastman Kodak Co., 125 F.3d 1195 (9th Cir.
1997)
Read part I, the introductory paragraph of part III, and part III.B.
Agreement
Containing Consent Order, In re Intel Corp., Docket No. 9288 (F.T.C. Mar.
17, 1999)
Read parts I and II of the Order.
Intellectual Property Remedies and First Amendment Limits
Mark Lemley
& Eugene Volokh, Freedom of Speech and Injunctions in Intellectual Property
Cases, 48 Duke L.J. 147 (1998)
Read parts II.A, II.B.1, and II.B.2; whichever portions of parts II.D.
and III you find most interesting; and part IV.
Governmental Subsidies—The Bayh-Dole Act
Comments
The purpose of intellectual property rights is to provide an incentive for the production of new information. It is difficult to know, though, whether our system of intellectual property rights provides the right incentive, or if we provide either too little or too great incentive. If we provide too little incentive, less information than is desirable will be produced, and society will suffer from the absence of that information. If we provide too great incentive, we will grant monopoly property rights over information that would be produced even without those rights, and society will suffer from the lack of competition in offering those rights.
This problem was addressed in last week's materials, which addressed what sorts of information would be protected. This week, the materials address a somewhat different question (though the line between the two is not very clear): given that certain information is protected, how far do its protections extend? This question has constitutional implications, as illustrated by Harper & Row v. The Nation—you might want to consider whether similar constitutional issues exist in the patent context, especially in light of the Ninth Circuit's opinion in Bernstein v. Department of Justice—but it is usually addressed through antitrust or antitrust-like claims. The issue usually arises when an intellectual property owner seeks to exercise its rights in such a way as to give it a competitive advantage in a market that is distinct from, but linked to, the one in which the rights primarily apply. The courts have not developed a consistent approach to these situations, as the cases illustrate.
As suggested in the first week, another form of incentive for the production of information is a direct government subsidy. The federal government does in fact fund a great deal of scientific research, and the Bayh Dole Act, 35 U.S.C. §§ 202-212, combines this direct subsidy with a grant of the intellectual property rights to any resulting inventions to the funded parties, on the theory that the grant of those rights will encourage the owners of the rights to commercialize the inventions. The CellPro case raised the question of what should happen if a rights owner does not commercialize its invention rapidly, yet prevents others from doing so.
Finally, the Supreme Court recently decided that, under principles of sovereign immunity, the states cannot be sued for patent infringement. Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, ___U.S. ___(1999). This decision can be viewed as giving state actors a competitive advantage over private ones; that is, it is a form of state subsidy. Whether such a subsidy is good public policy, whether Congress will seek to eliminate it, and whether it constitutionally can do so, remain to be seen.