Week Eight

Chapter 49: Personal Property

"Property" refers to things that can be owned

What does it mean to "own" something. How can you own something 10,000 km away that you've never seen? How can you own something that cannot be perceived by the senses?

"Property": a bundle/group of private rights to control objects and abstractions, enforceable in law.

Rights to use, to decide who else may use, to exclude others from use, to misuse, and to transfer such rights to others

Implies that some have such rights while others are excluded, so ...

PROPERTY IS ROBBERY!

The bundle of rights can be broken apart or fragmented in various ways. Property rights can be structured in time, in extent, can overlap or be contingent.

Classifications of property

Real estate: land and things attached

Fixtures depend on degree of attachment Eg: computers once were fixtures

Personalty: movables

"Tangible": things that can be touched.

Intangibles are abstract, such as stock or copyrights

Acquiring ownership of personalty

Capture of things in the wild state

Purchase

Possession may suffice. Who has, owns, unless someone else can prove otherwise

For some items, documents of title control (pink slip for autos, stock certificate

Gift: a transfer without consideration

Requires: donative intent, actual or symbolic delivery, and acceptance

Uniform transfers to minors procedure

Inheritance: transfer of property at death. Often requires a court order to change documents of title, since deceased is no longer able to

Accession: improvement of value of personalty

Con-fusion: acquiring a part interest in a bulk lot by mixing

Lost, mislaid and abandoned personalty

Distinction: "lost" is due to carelessness.

"Mislaid" is due to forgetfulness after voluntary placing in particular location

Abandonment: intentionally discarded

Significance of distinction: rights of the finder vs those of owner of place where found

Lost: Finder obtains "title" (all rights of ownership) against all but true owner

Mislaid: Owner of place where found obtains right to possess (not all rights, just right to hold) vis-a-vis all but trueowner

Abandoned: (eg. old furniture dumped on sidewalk. Whoever takes, owns)

Estray statutes: a finders-keepers law with reporting, holding, and public notice

Abandoned financial assets: Escheats

Bailments

One of oldest legal concepts: Ca 1100 A.D. or so. Way before contracts: society of farmers: land, grain and cattle

A "Bailee" is a temporary holder of property owned by another

Bailment separates ownership from present possession

Bailment may be for safekeeping, storage or delivery, for hire or as a favor

Bailee's standard of care

"Please hold this for me" vs "May I please borrow it" vs "Storage $5 per day." What about "Park and lock. Not responsible"?

Chapter 17: Intellectual Property

How can a thought or an idea be "property"?

"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation."

Thomas Jefferson, letter to Isaac McPherson, August 13, 1813.

In addition to writing the Declaration of Independence and being the third US President, (having earlier served as Vice-President, as Secretary of State and as Ambassador to France), Jefferson was also an inventor (moldboard plow, cipher wheel and spherical sundial) and the first head of the US "Board of Arts" -- the predecessor of the Patent Office

Business Identity, Reputation and Know-How

Counterfeit Goods

Common law tort of representing false origin for goods. Fake Rolexes and fake designer clothing.

Issue is whether the real goods have acquired a secondary identification with their source. Fake Rolex vs. real watch that happens to look like a Rolex. (The "Romex")

Trade Libel

Publication of false statement about competitor's goods, etc. with malicious intent to injure.

Lanham Act (US Trademark law) allows injunction and damages against false comparative advertising

Misappropriation of Trade Secrets

A process, formula, know-how, customer list etc. that is *treated* as a secret by a business

Legal protection only against *illegal* acquisition -- reverse engineering and independent invention are OK

Note role of corporate confidentiality agreements

1996 Federal "Economic Espionage Act"

Made misappropriation of such secrets a Federal crime. Concern that local prosecutors lacked resources

Question the real, as opposed to symbolic, effectiveness of criminalization

Patents

Defined

A grant of a limited period (now 20 yrs) of legal monopoly to the inventor of a novel, non-obvious, useful machine, process or composition of matter

The exclusive right to make and use the invention, and to license or deny to others (even if independent invention) such rights

Grant is in exchange for public disclosure

Administered by the US Patent & Trademark Office

A quasi-adversary process, with patent examiners as "devil's advocates". Once issued, patent is enforced by an "infringement" suit. Validity can be challenged again here.
Hi! I'm your friendly patent examiner.

Trivia Question:

Who was the most famous patent examiner of all time?

Recent Changes:

US adoption of WTO rules: extended period from 17 to 20 years, and it starts to run with filing, not at time of grant

Was response to the "Submarine patent" abuse

File application and keep delaying grant by the patent office. (P) stays confidential while being processed. Then, years later, get (P) granted and sue all who have possible infringed in the meantime

Significant Current Issues

extension of "process" to software and business techniques, and extension of "machine" to genes.

Copyrights

Federal statutory right of authors, musicians, etc. to control publication of their work, with the ability to "license" rights and sub-rights. Administered by the US Copyright Office in the Library of Congress

Note copyright problem: the technological ease of duplication

Distinguished from Patents

Duration: is life of author + 70, or 95 years from publication if "work for hire"

Copyright protects only the expression of an idea, not the idea itself.

Protects against copying, but original duplicate composition is OK (e.g. PC ROM-BIOS reverse engineering)

Note difference from patents, where independent invention is *not* a defense (tho it may be evidence as to "non-obviousness").

Second Trivia Question:

Who invented the telephone?

Copyright "inheres in the work". Not an adversarial process. No registration necessary, except as prelude to suit. (c) year and author is permissive to clarify author and give notice of the claim

Concept of "derivative work"

Fair Use: Section 107

An important but fuzzy public protection against the privatization of language. Note the economic/political imbalance that tends to over-protect intellectual property and turn (c) into economic rent.

University of Texas Crash Course in Copyrights

Trademarks

A statutory extension of the tort of "unfair competition", deceiving the public as to origin of goods or services. Federal law applies if goods were sold in interstate commerce,

Indefinite (10 yr renewal) protection for trade/service marks which are associated with a particular maker of the goods

Need a unique "distinctive" name/mark, or at least an ordinary word which has acquired a 2ndary meaning indicating particular source of the goods

Problem: if used too commonly/broadly, becomes generic, like "aspirin" (originally, the Bayer brand of acetylsalicylic acid)

TM filing: if used in interstate commerce. Purpose of filing: notify world that the mark belongs to someone

Chapter 50: Real Property

"From now to eternity" (and answerable only to the King) - most common type by far

Fee simple defeasable

all rights, but can be lost if future condition occurs or fails to occur

Life estate

Right to income for life (or term of years) but no longer. Duty not to commit waste -- not impair the value for the next owner

Reversions and remainders

These are "future interests" after estate for life or term of years

Overlapping rights: Concurrent ownership

Joint tenancy w/ right of survivorship

How created and purpose for creating. Note potential problems w/ survivorship: tontine

Method of terminating

Tenants in common

Tenancy by the entirety

only married couples/not in California

Community property: California system

Condominiums and cooperatives

Transfer of ownership

Sale and real estate sales contracts

Note distinction between contract and close ("settlement")

RESPA/ HUD statement at close for residences

Calif a "disclosure of all defects" state

Gift, inheritance

Tax sale, with period of redemption

Adverse possession may become title

  • Statutory time
  • Open visible notorious
  • Actual exclusive
  • Continuous and peaceful
  • Hostile and adverse

Transfer by gift or sale involves document called a deed

Public recording of deeds by county recorder

Title can be tracked by grantor-grantee index

Rights to use: Non possessory interests

see concept summary in text. If on land without any of these rights, tort of trespass

Easement:

right to use property of another for limited purpose or control another's use of property

  • Easement "appurtenant" runs with the land
  • Easement in "gross" runs with the person

License: right to enter for short time

"Profit a prendre": right to remove something, such as minerals

Chapter 53: Wills and Inheritances

Control over who gets what after owner dies

Basic Issues:

The role of the "will"

Very long history: source in Rome @ 300 BC, which had evolved a truly awful intestate default system

Estate administration generally required in US/English systems (not just -- to family unless anyone complains, as in France)

"Intestacy" (no will -- state determined pattern)

What's a "Will"? It's like a letter to a judge

"Probate": the testing of the will and the supervision of administration

Alternatives: documents of title contain the transfer provisions

Trusts: the legal fiction for separating ownership and control. Again, the old English law/equity distinction

Footnote: The Invention of the Telephone

Elisha Gray filed a "caveat" -- a warning of an impending patent claim -- two hours after Alexander Graham Bell filed his patent application for an (unworkable) prototype telephone. Bell's application concluded:

"Having described my invention, what I claim, and desire to secure by Letters Patent, is as follows:

"1. A system of telegraphy in which the receiver is set in vibration by the employment of undulatory currents of electricity, substantially as set forth.

"2. The combination, substantially as set forth, of a permanent magnet or other body capable of inductive action, with a closed circuit, so that the vibration of the one shall occasion electrical undulations in the other, or in itself, and this I claim whether the permanent magnet be set in vibration in the neighborhood of the conducting-wire forming the circuit, or whether the conducting-wire be set in vibration in the neighborhood of the permanent magnet, or whether the conducting-wire and the permanent magnet both simultaneously be set in vibration in each other's neighborhood.

"3. The method of producing undulations in a continuous voltaic current by the vibration or motion of bodies capable of inductive action, or by the vibration or motion of the conducting-wire itself, in the neighborhood of such bodies, as set forth.

"4. The method of producing in a continuous voltaic circuit by gradually increasing and diminishing the resistance of the circuit, or by gradually increasing and diminishing the power of the battery, as set forth.

"5. The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth.

"In testimony whereof I have hereunto signed my name this 20th day of January, A.D. 1876.

"ALEX. GRAHAM BELL."

Extensive litigation followed. Bell and his financial backers finally won in the US Supreme Court -- in a 5 to 3 decision. See The Telephone Cases, 126 US 1, 531 (1888) <BACK>

notes and format (c) 2001 Robert H. Daniels