Adam Mossoff, ‘Intellectual Property and Property Rights’

Abstract:
This essay is the introductory chapter to Intellectual Property and Property Rights (Edward Elgar, 2013), which contains some of the leading articles published in recent years on the nature of patents, copyrights, trademarks and trade secrets as property rights. But this essay does not merely review the articles. For the first time in a single essay, it presents the three basic analytical frameworks in which intellectual property rights are defined or justified as property rights – historical, conceptual, and normative.

Drawing upon the substantive content of the articles in the volume and beyond, the essay first reviews the two descriptive framings of intellectual property rights, explaining that intellectual property rights historically have been defined and justified as property rights since the eighteenth century and that there are serious analytical reasons why intellectual property is defined conceptually in this way. The essay then explains how these two descriptive bases – the historical account and conceptual definition – provide a foundation for the two normative justifications for intellectual property as property – the utilitarian and labor-desert theories. Ultimately, the essay summarizes the substantive theoretical case for intellectual property as property, and it also briefly summarizes the critique of intellectual property from the perspective of property rights advocates.

Mossoff, Adam, Intellectual Property and Property Rights (July 15, 2014). Intellectual Property Rights and Property Rights (Edward Elgar, 2013).

John Oberdiek, ‘Putting (and Keeping) Proximate Cause in Its Place’

Abstract:
This is a draft contribution to a forthcoming festschrift in Michael S Moore’s honor, to be published by Oxford University Press. The chapter takes on an aspect of Moore’s important work on causation in law.

Before one can recover for an injury sounding in negligence, one must establish that the defendant more likely than not proximately caused the injury. That the positive law of negligence imposes this requirement is beyond controversy. What is more controversial is whether the requirement is conceptually and morally defensible. Michael Moore, singly as well as in tandem with Heidi Hurd, powerfully argues that it is neither. Specifically, Moore contends that the harm-within-the-risk test of proximate causation, despite its venerable history in tort law and reaffirmation in the latest Restatement, is “incoherent” and “morally undesirable”. It is bad enough, on Moore’s view, that negligence law bifurcates its causal inquiry, distinguishing as it does the question of actual causation from that of proximate causation, rather than pursuing a unified naturalistic inquiry into the substantiality of causal contribution. What is worse is that tort law can’t even get its own misguided causal inquiry half-right.

I do not share Moore’s jaundiced view of the harm-within-the-risk test of proximate cause – what I will call the “risk rule” for short. I begin by questioning his understanding of the risk rule as it figures in tort law, and go on to argue that neither his conceptual nor his moral criticism of the risk rule is decisive. In the course of rebutting Moore’s criticisms, I outline what I take to be the most compelling account of the risk rule in the law of torts. What emerges is a conception of proximate cause that is thoroughly moralized. Of course moral premises must be invoked to defend the risk rule’s moral merit, but, I argue, they must also be invoked to defend its conceptual coherence. In my view, the risk rule is both morally and conceptually sound.

Oberdiek, John, Putting (and Keeping) Proximate Cause in Its Place (July 17, 2014). Forthcoming in Kimberly Kessler Ferzan and Stephen Morse (eds), Legal, Moral, and Metaphysical Truths: The Philosophy of Michael S Moore (Oxford).

Gracz and De Filippi, ‘Regulatory Failure of Copyright Law Through the Lenses of Autopoietic Systems Theory’

Abstract:
The paper explores the mechanisms that led to the current crisis of copyright law in the digital environment (understood as its inability to regulate social dynamics as regards the production, dissemination and access to creative works) by applying the concept of law as an autopoietic system. It analyses how the copyright regime (a subsystem of the legal system) evolved over time, by scrutinizing the interdependencies between copyright law and the other constitutive systems of its environment: the creative system (concerned with the creation, reproduction, distribution, and access to creative works) the political system (comprising both the State and the Church), the economic system (ruled by right holders and intermediaries on the market for creative works), and the technological system.

It will be shown that every new development in the technological system irritated the remaining systems, thereby stimulating the evolution of the overall ecosystem. For a long time, copyright law managed to properly adjust to the environmental changes brought by technological developments, so as to successfully regulate the production, dissemination and access to creative works. It is only with the advent of Internet and digital technologies that copyright law’s selective response to environmental stimuli resulted in its failure to adapt to the new reality and, consequently, in the loss of its regulative power. Reacting mostly to the pressures of the economic and political systems (i.e. the lobbying of right holders and intermediaries), while neglecting the needs of the creative system, and even failing to adjust to the specificities of the changing technological system, copyright law eventually disrupted the balance of the surrounding environment. Furthering the economic interests of intermediaries (often at the expense of the public and in certain cases of the authors) created a series of divergences between legal norms – increasingly restricting the access, use and reuse of creative works – and social norms (produced within the creative system, and supported by the new opportunities of digital technologies), which advocate for the free use and reuse of digital works. Over the years, copyright law distanciated itself so much from the social reality in which it operates that it has lost most of its credibility and applicability in the digital world.

Hence, the paper contends that, for copyright law to successfully regulate the production, dissemination and access to cultural works, it must be radically reformed in light of the intrinsic logic and needs of all constitutive systems of modern society, without favoring those of the economic and political systems over those of the creative system. It concludes that society (as a whole) might only benefit from the new opportunities offered by digital technologies if copyright law properly adapts to the digital era by embracing – rather than opposing – the specificities of the digital world.

Gracz, Katarzyna and De Filippi, Primavera, Regulatory Failure of Copyright Law Through the Lenses of Autopoietic Systems Theory (July 20, 2014). International Journal of Law and Information Technology, 2014, 1-33. Oxford University Press.

Eleonora Rosati, ‘Closed Subject-Matter Systems are No Longer Compatible with EU Copyright’

Abstract:
So far legislative harmonisation of the copyright laws of EU Member States has left general subject-matter categorisation untouched. Yet recent case law of the Court of Justice of the European Union (CJEU) suggests that under EU law copyright protection should arise any time a work is its author’s own intellectual creation. This questions the compatibility of enumerated systems like the UK one with EU law.

After recalling that EU legislation does not provide a general definition of ‘work’, this contribution reviews a number of CJEU decisions and concludes that: first, the Court has de facto harmonised the notion of ‘work’ under Directive 2001/29/EC (the ‘InfoSoc Directive’); secondly, in relevant instances this piece of EU legislation is bound to displace ad hoc directives, like Directive 98/71/EC (the ‘Design Directive’) and Directive 2009/24/EC (the ‘Software Directive’); thirdly, automatic protection under the InfoSoc Directive means – among other things – that this might have stronger harmonisation effects than what has been understood so far. The latter appears confirmed by the Court’s increasing reliance on the internal market objective, and diminished tolerance for diverging approaches at the national level in areas affected by the InfoSoc Directive. The article then reviews UK position in relation to subject-matter categorisation and the different legal treatment of the various categories of works. It discusses recent judicial dicta that may pave the way to a new approach to subject-matter categorisation in this Member State, possibly following a specific reference for a preliminary ruling that would ask the CJEU to clarify – once and for all – whether closed systems of copyright-protected works are (still) compatible with EU law.

Rosati, Eleonora, Closed Subject-Matter Systems are No Longer Compatible with EU Copyright (July 18, 2014). (Forthcoming) GRUR Int.

Tanya Pierce, ‘It’s Not Over ‘Til It’s Over: Mandating Federal Pretrial Jurisdiction and Oversight in Mass Torts’

Abstract:
Nearly twenty years ago, speaking of the difficulties inherent in managing mass tort cases, Chief Justice William Rehnquist predicted that without coordinated state and federal mechanisms, lawyers would “seek to pursue duplicative and exhaustive litigation”. And some courts, “operating under a parochial view of the situation,” would allow them to do so. He warned that the result would be “expense, delay, resulting crowding of dockets, divergent decisions on identical factual questions, and sometimes the insolvency of the defendants who are being sued”. Despite this and similar warnings, expensive and exhaustive litigation is exactly what has happened in many cases.

Because of concurrent jurisdiction in mass tort litigation, lawyers often file tens of thousands of separate but related lawsuits in federal and state courts all over the country. No existing procedural mechanism requires co-ordination of all of these related cases. Therefore, this type of litigation threatens inconsistent awards or even the bankruptcy of defendants such that no resources would be available to pay injured plaintiffs who file suit later but who may be just as entitled to compensation. In addition, even when courts and parties engage in massive, voluntary coordination efforts and are able to negotiate settlements, holdover parallel litigation may threaten those efforts. If those threats are not effectively controlled, courts may become unable to manage future litigation and facilitate other settlements.

Recognizing that effective docket management by multidistrict litigation courts is crucial to the ability to resolve complex mass torts where class action treatment is not available, this Article argues that it is more important than ever to facilitate pretrial consolidation of interstate litigation. The recent litigation surrounding the drug Vioxx highlights the ways in which duplicative, parallel state court litigation can threaten the ability of federal courts to effectively manage mass tort litigation, even when massive voluntary coordination efforts are involved. This Article proposes the adoption of amendments to the federal Multidistrict Litigation Statute to allow pretrial consolidation of related cases that are filed in state courts as well as in federal courts. This change could be accomplished by incorporating a minimal diversity jurisdiction requirement into the statute. Additionally, this Article recommends that the Multidistrict Litigation Statute be changed to require courts to provide oversight during the settlement process and over the settlements themselves, similar to the judicial oversight of settlements in federal class actions.

Part II of this Article explores recent developments in mass tort litigation and the resulting enactment of the Multidistrict Litigation Statute. Part III explains how the Supreme Court’s decisions limiting the availability of federal class certifications has restrained recent attempts to combat duplicative litigation in mass tort cases and resulted in increased reliance on the Multidistrict Litigation Statute as the preferred aggregation device. In light of these developments, Part IV reconsiders prior calls for changes to allow courts to more effectively manage duplicative litigation. Parts V and VI use the historical underpinnings of the Anti-Injunction Act and criticisms of interpretations of the Act to analyze the trend of recognizing certain multidistrict litigation contexts as permitting injunctions against parallel state action. Part VII examines Supreme Court precedent that consistently favors strict statutory interpretation and federalism over innovative statutory interpretations aimed at increasing judicial efficiency. It concludes that the Supreme Court would not uphold the current trend of allowing injunctions against parallel state actions in multidistrict litigation cases. Finally, Part VIII proposes solutions aimed at increasing efficiency, predictability, and fairness in the management and resolution of mass tort litigation.

Pierce, Tanya J, It’s Not Over ‘Til It’s Over: Mandating Federal Pretrial Jurisdiction and Oversight in Mass Torts (June 6, 2014). 79 Missouri Law Review 27 (2014).

Jeff Schwartz, ‘The Corporatization of Personhood’

Abstract:
This Article explores the burgeoning practice of investing in people as if they were corporations. Sometimes pitched as a way to pay-off student loans or fund a business idea, people now have the opportunity to sell shares of their future income to investors in exchange for cash today. Such transactions create a financial relationship closely analogous to that of a corporation and its shareholders. This Article considers how existing law applies to this new practice and whether today’s rules are responsive to the unique challenges these arrangements present. I argue that, despite raising both constitutional and public-policy concerns, these transactions should be permitted. Rather than outlaw such dealings, the nature of the financial relationships at issue means that they should be subject to securities regulation. Securities law alone, though, is insufficient. It is solely focused on protecting investors, leaving the broader social concerns raised by investing in people unaddressed and the more vulnerable parties to these transactions — those selling shares of themselves — without protection. To respond to these issues, I set forth a complementary regulatory template that would, among other things, require certain disclosures and set certain boundaries on these novel financial relationships.

Schwartz, Jeff, The Corporatization of Personhood (July 14, 2014). University of Illinois Law Review, 2015, forthcoming.

‘A new theory of insider trading law’

Sung Hui Kim, The Last Temptation of Congress: Legislator Insider Trading and the Fiduciary Norm Against Corruption, 98 Cornell Law Review 845 (2013); Sung Hui Kim, Insider Trading as Private Corruption, 61 UCLA Law Review 928 (2014). Sung Hui Kim of the UCLA School of Law has developed a bold new theory of insider trading that is well worth reading. In The Last Temptation of Congress: Legislator Insider Trading and the Fiduciary Norm Against Corruption, Kim lays the foundation of her new theory, which she expands in Insider Trading as Private Corruption. In arguing that members of Congress are fiduciaries for purposes of insider trading law, Kim joins a number of others scholars who have argued for the imposition of fiduciary duties on government officials … (more)

[D Gordon Smith, JOTWELL, 16 July]

Round Table: 200 Years Savigny and Thibaut: The Codification Debate Revisited: Maastricht University, 10 October 2014

2014 marks the 200th anniversary of the famous debate between Von Savigny and Thibaut about the need for and feasibility of private law codification. This debate has made a lasting contribution to our thinking about the sources of private law and still shapes present-day discussions about European private law. Thibault gave three main reasons in favour of codification: to facilitate the market by way of unification of law, to promote the transparency of the legal material, and to adjust the law to the ‘modern times’. All three motives seem to have a universal value … (more, programme)

[Catalina Goanta, MEPLI Blog, 21 July]

Alexander Wulf, ‘Institutional competition of optional codes in European contract law’

Abstract:
The Common European Sales Law (CESL) is the European Commission’s most recent policy initiative for European contract law. It aims to address the problem that differences between the national contract laws of the Member States may constitute an obstacle for the European Internal Market. This paper develops a model of the institutional competition in European contract law and uses it to addresses the question as to whether an optional European contract code and the CESL are economically desirable for European contract law. To do so I examine the transaction costs involved in the process of choosing an applicable law that European businesses face when they conduct cross-border transactions in the European Internal Market. I then describe how these transaction costs shape the competitive environment, i.e. what I refer to as the “European market for contract laws” in which the contracting parties choose a law to govern their cross-border contracts. Having identified this environment and the competitive forces operating within it, I propose a model, the “Cycle of European Contract Law”. I use this model to analyze the competitive processes that take place in the European market for contract laws. Based on my results I make recommendations for the optimal implementation of an optional European contract code and the CESL in European contract law.

Alexander J Wulf, Institutional competition of optional codes in European contract law. European Journal of Law and Economics, Volume 38, Issue 1 , pp 139-162.

Tanya Aplin, ‘A Critical Evaluation of the Proposed EU Trade Secrets Directive’

Abstract:
The European Commission issued a proposed Trade Secrets Directive on 28 November 2013, with the aim of tackling the legal fragmentation in the protection of trade secrets that currently exists in the European Union. Key divergences between Member States include: the legal mechanism used to regulate trade secrets (criminal or civil law and within civil law, whether unfair competition, tort, contract or labour law); the definition of trade secrets; whether trade secrets are classified as intellectual property (thus affecting the application of the Enforcement Directive); criminal penalties and the procedural mechanisms for protecting the confidentiality of trade secrets during litigation. Such legal fragmentation was seen as problematic, because it made enforcement opaque and expensive and also led to sub-optimal investment in cross-border innovation activities within the EU. This paper undertakes an evaluation of the proposed Directive, along with the ‘General Approach’ put forward by the General Secretariat of the European Council to the Council on 26 May 2014. It argues that we should be skeptical of claims that harmonization will bring substantial economic gains and that only a modest amount of harmonization is likely to ensue from implementation of this Directive, should it be adopted. This is because several of the obligations contain uncertainties and Member States will have the freedom to implement these obligations according to whichever mechanisms they prefer. As a result, we are likely to see a patchwork of laws continuing to regulate the protection of trade secrets in the EU and a series of references to the European Court of Justice for many years to come.

Aplin, Tanya, A Critical Evaluation of the Proposed EU Trade Secrets Directive (July 18, 2014).