HLS Private Law Workshop; Lisa Bernstein, Revisiting the Maghribi Traders (Again)

by

Post by Patrick Goold

Avner Greif’s study of Maghribi Jewish traders in the eleventh century is a seminal work in the literature on private ordering. In a couple of highly influential articles (here and here), Greif documented how this group of merchants created elaborate trading networks across the Islamic Mediterranean. Greif argued that the Maghribi formed a close-knit “coalition” that could eschew enforcement of agreements by lawsuits and the threat of liability and instead rely on reputation-based community enforcement. However, in recent years, historians of the period, including  Jessica Goldberg, as well as Jeremy Edwards and Sheilagh Ogilvie, have questioned Greif’s thesis, suggesting that there is little evidence of Maghribi traders boycotting members for misconduct, and some evidence that they relied on courts.

At this week’s HLS Private Law Workshop, Lisa Bernstein presented a draft essay that revisits this topic (Revisiting the Maghribi Traders (Again): A Social Network and Relational Contracting Perspective). Bernstein proposes to revise Greif’s analysis by swapping out the notion of “coalition” on which he relied for social network analysis and relational contract theory. While this is an alternative account of the Maghribi activities, it nonetheless supports Greif’s central thesis.

Although Maghribi merchants sometimes formed partnerships with one another, they more commonly used each other as reciprocal agents under a legally unenforceable agreement known as a Suhba. Under a Suhba, a merchant who asked his agent to perform a task (for example, travel to a foreign city to sell the merchant’s flax) would become obligated to perform a task of equal value (for example, introduce the agent to other important merchants). This system enabled the traders to diversify their trading portfolios and reach many markets across the Mediterranean without needing to travel with their goods. The center of this trading activity was Fustat, today part of Old Cairo, and it is a cache of documents in the Cairo Geniza that serve as the main historical record of the merchants’ activities.

Bernstein argues that the Maghribi traders were organized as a “semi-closed bridge and cluster network with small-world properties.” Within trading centers (cities like Fustat), most trade was conducted in the open with witnesses. Meanwhile, business and social interactions resulted in a dense network of ties that enabled reputation information to spread easily. These “network clusters” were then “bridged” by a number of social institutions and organizations. Postal routes between trading centers enabled information about reputation to flow between clusters. A handful of dominant traders also had personal and family ties spreading across a number of cities. In addition, an institutional functionary known as the “merchant’s representative” had an incentive to insure accurate information about dealings was transmitted between merchants. The merchant’s representative was a trader from a foreign city who established himself in a trade outpost. The representative’s stature in his new city depended on his ability to entice foreign merchants to do business there, which in turn depended on his ability to ensure that traders in the city kept their obligations. This structure of these bridges and clusters enabled reputational information to flow across the Islamic Mediterranean in such a way that network governance could potentially play a major role in supporting Maghribi trade.   

Read more

HLS Private Law Workshop: Eric Claeys, Harms, Benefits, and Rights in Property and Private Law

by

Post by Patrick Goold

In the most recent HLS Private Law Workshop, Professor Eric Claeys presented a chapter of his forthcoming monograph, Natural Law, Natural Rights, and the Foundations of American Property Law. This monograph presents a natural law theory of American property law. The monograph argues that individuals have pre-political rights to use tangible resources in ways that promote human flourishing. Contemporary property doctrine embodies this logic and, in form and substance, upholds those rights.

The chapter Claeys presented discussed and responded to criticisms of common law property doctrine frequently made by law and economics scholars. Economists, starting with Ronald Coase, tend to view property law as an instrument for settling disputes about incompatible uses of resources (what Claeys labels the “incompatible use framework” of property).  When a rancher’s cattle strays onto a farmer’s wheat fields, or a railroad emits sparks onto a farmer’s hay bales, a Coasian treats the respective parties’ “rights” as the conclusion of, rather than a component of, its analysis.

As Coase acknowledged, this is not how courts have historically resolved such disputes. Rather than resolving the case before them based on transaction-cost analysis, courts tend to ask a series of conceptual questions, including: did the plaintiff have a right to prevent the defendant’s behavior? did the defendant’s actions cause the plaintiffs loss? and, did the plaintiff suffer cognizable harm? Coase and his progeny have viewed such reasoning with skepticism. At the root of this skepticism is the belief that the core concepts, such as “right”, “harm” and “causation,” lack substance and therefore, on their own, cannot tell a judge how to resolve disputes. To use a well-worn example, Coase argued that “causation” is reciprocal; that is, when a railroad’s sparks burn down a nearby farmer’s hay bales, both the railroad and the farmer are “causes” of the loss because both could have taken measures to prevent it.  Accordingly asking whether the defendant’s actions “caused” the plaintiff’s harm is not a cogent way to decide who ought to win in property litigation.

Read more

Algorithmic Identification of Property Law Families

by

Post by Erik Hovenkamp      In the most recent Private Law Workshop, Yun-Chien Chang discussed his ongoing and very interesting effort (with Nuno Garoupa and Martin Wells) to use machine learning techniques to classify legal systems into families—groupings whose members are similar to each other, but relatively distinct from those in other groups.  The … Read more

Toward a Comprehensive Theory of Antitrust and IP Settlements

by

Post by Erik Hovenkamp.

When will private settlements advance the normative objectives espoused by the relevant area of law, as opposed to straying away from them?  One sensible metric is to assess the similarity between (1) the positions the parties maintain post-settlement; and (2) the positions the parties would have maintained had they litigated (accounting for possible post-trial contracting).   Given that the outcome of litigation can rarely be predicted with certainty, we can interpret the second prong as the expected result of litigation—as weighted by the relative likelihoods the parties assign to the different possible outcomes.  To illustrate, suppose my doctor’s treatment of me causes me to suffer $1000 in harm, and there is a 50% chance that he will be held liable for negligence.  Then we will settle for about $500, for we cannot mutually agree on anything else.  This is precisely the expected result of litigation, and hence the settlement is representative of how the courts would apply the law to our dispute.

If we ignore things that might skew negotiations in one party’s favor (e.g. asymmetric ability to cover litigation costs), the above result is essentially a corollary of the Coase theorem.  If the court’s judgment won’t affect the final allocation of rights, then the parties just bargain over the distribution of welfare. Neither party will accept less than it expects to get through litigation, which is a function of the legal standards that would be applied by a court.  Thus, under these circumstances, private settlements will “emulate the law.”

But as I have emphasized previously, one important feature of the IP-antitrust interface is that the parties to a dispute are often prohibited from contracting out of a judgment that fails to maximize their (joint) profits.  Competitors in a patent dispute cannot “undo” a holding that the patent is invalid or noninfringed in order to revive the patent’s exclusionary power; they are obligated to stick with open competition.  The result is that rival firms often have a shared interest in settling an IP dispute on terms that deviate substantially from their expectations about litigation.  Specifically, if they expect litigation to produce a relatively competitive result (e.g. because the patent is likely invalid), they prefer to evade that outcome by settling on terms that restrain competition substantially, resulting in higher prices and larger profits.   The result is that these settlements do a very bad job of promoting IP and antitrust policy objectives; they do not emulate the law.  

In my recent paper with Jorge Lemus, Proportional Restraints and the Patent System, we propose a comprehensive standard for evaluating patent settlements under the antitrust laws, along with a set of economic tools for administering it practicably.  In what follows, I provide an overview of the underlying problem and our proposed solution. 

Read more

HLS Private Law Workshop: Rebecca Williams, The ECJ’s ‘Remedies Jurisprudence’ and the Role of Domestic Courts

by

Samuel Beswick, Frank Knox Memorial Fellow, SJD candidate, Harvard Law School One of the major catalysts behind the resurgence in England and Wales of the law of unjust enrichment has been the influence of fundamental rights jurisprudence of the European Union. Where a member state levies charges on persons contrary to EU law (such as … Read more

Yale Law School, Private Funds Conference — Sadie Blanchard

by

Post by Sadie Blanchard The Yale Law School Center for Private Law will host the Private Funds Conference: Private Equity, Hedge Funds, and Venture Capital on November 17, 2017. The conference will bring leading theorists from law, economics, finance, and sociology into dialogue with people with experience at the highest levels of experience with private funds, … Read more

HLS Private Law Workshop: Shyamkrishna Balganesh, Copyright as Legal Process

by

Post by Patrick Goold

2017 marks the bicentennial of Harvard Law School. It is fitting, therefore, that the first Private Law Workshop of the semester focused on intellectual legal history and, in part, the influence of some of Harvard’s most prominent law professors. Shyamkrishna Balganesh presented his work-in-progress Copyright as Legal Process. In it, Balganesh argues that copyright underwent a “quiet metamorphosis” in the twentieth century. Under the influence of the Legal Process School of jurisprudence, copyright evolved from private law to public law. What’s more, this evolution has entailed a fundamental transformation in the conception of law at the heart of modern copyright.

From 1870 to 1950, copyright law was, according to Balganesh, normatively and structurally part of American private law. The “private law conception” of copyright crystalized during the age of Legal Formalism (or Classical Legal Thought), and was characterized by a focus on the horizontal legal relationship between the copyright owner and the copyist. The owner’s copyright was, axiomatically, an individual right; users of the protected work were duty-bound not to copy; he who copied the work wronged the owner. This right-duty relationship was largely self-justifying. Courts rarely discussed the “purpose” of copyright law; on the occasions they did, they claimed copyright’s purpose was to uphold a right-duty relationship, and that any broader social goals were merely a welcome by-product. Furthermore, the private law conception involved a particular understanding of judicial reasoning. When adjudicating copyright disputes, courts rarely appealed to policy, nor paid particular deference to the wording or history of the Copyright Act 1909. Instead, courts tended to search for established “copyright principles” (such as the idea-expression dichotomy, or the nature of authorship) and reasoned therefrom.

Perhaps surprisingly, the private law conception of copyright – according to Balganesh –  was largely maintained through the Legal Realist period. While the Realists claimed legal doctrine was indeterminate and thus were skeptical that judicial reasoning could be objective, they nevertheless valorized the judiciary (and notably a number of high-profile Realists served on the bench). Realism emphasized judicial creativity in solving cases, while simultaneously placing little faith in statutory interpretation. As a result, when adjudicating copyright disputes, courts continued to show Congress little deference, but instead trusted judicial craftsmanship to resolve the particularized problems that arose.

Read more

The Restatement of Consumer Contracts and Quantitative Caselaw Studies — Greg Klass

by

Post by Greg Klass

I hope those interested in contract law are aware of the ALI’s project for a Restatement of the Law of Consumer Contracts. It is a major undertaking, both in its attempt to synthesize existing law in this area and as a statement about how common law courts can best address business-consumer transactions.

There is a lot to say on the substance of current draft (which the ALI doesn’t seem to have on its website). The Reporters’ core move is give up on robust ex ante consumer assent—shrinkwrap and browsewrap are both ok, as are notice-only business-side modifications—and to protect consumers through stronger ex post judicial review for substantive unconscionability. I’m not sure this is the all-things-considered best way to go. Mandatory terms crafted by regulators might provide businesses more certainty and consumers more protection. The Reporters’ approach might be the best common law courts can do. But I worry that enshrining it in a Restatement could deter regulatory innovation. That said, I am a big fan of draft sections 6, 7 and 8, which together would limit businesses’ ability to integrate standard terms. The logic of the parol evidence rule falls apart when we know one side hasn’t read the writing in question.

Read more

Private Equity Conference Announcement – Yale Law School

by

Save the Date The Yale Law School Center for Private Law will host a Private Equity Conference on November 17, 2017. The conference will bring leading theorists from law, economics, finance, and sociology into dialogue with people with experience at the highest levels of private equity, including from law practice, financial firms, and institutional investors.  Oliver … Read more

Intellectual Property and Practical Reason — Eric Claeys

by

Post by Eric Claeys, George Mason University, Antonin Scalia Law School

In a recent post, Henry Smith made some perceptive observations about the state of contemporary intellectual property scholarship.  Henry was commenting on a panel at a recent conference, in which panelists stressed that “treating intellectual property as a kind of property does not mean assuming it is absolute.”  And he noted that what he called “external” accounts of IP are much better-represented than what he called “internal” or “interpretivist” approaches to IP. 

I have offered a few thoughts on Henry’s post already, and I hope to offer a few other thoughts in due time.  I am extremely interested in Henry’s question because I have been working on an article focusing on those same questions.  As luck would have it, I just received news that the article was accepted for publication in the journal Jurisprudence.  I’d like to take a minute to flag the article (still in draft form) and summarize its arguments.

The article is titled “Intellectual Property and Practical Reason.”  The article’s main intention is to show how general principles of a certain family of normative theories supply basic guidance for the field of IP. The theory-family covers theories loosely associated with natural law and rights-based forms of eudaemonist or perfectionist political theory.  (In what follows, I’ll describe these approaches as “rights-based perfectionist” approaches.)  In IP, Wendy Gordon, Ken Himma, Adam Moore, Rob Merges, Adam Mossoff’s, and my own work on Lockean labor theory all fall in this family.  But so do Nussbaum-Sen “capabilities” theories, and (at least on some interpretations) Rawlsian fairness theories.

Read more

New Private Law and the Future of Law & Economics — Patrick Goold

by

Post by Patrick Goold

I recently had the pleasure of attending the “Future of Law & Economics and the Legacy of Guido Calabresi” conference held at Boston University School of Law. It examined the methodological, institutional, and conceptual issues raised by Judge Calabresi’s new book, The Future of Law and Economics. After two fun days, packed with delightful anecdotes about Calabresi and the early days of the Law and Economics movement, the question I found myself asking was: How do the ideas in this new book relate to the New Private Law project? My sense, which I will explain in this short post, is that there is a strong synergy between that project and Calabresi’s vision for Law and Economics.

At the core of Calabresi’s book is a distinction between “Economic Analysis of Law” (EAL) and “Law and Economics” (L&E). EAL uses economic theory to “analyze the legal world.”  EAL scholars explain and justify legal reality through the prism of efficiency. Where that reality does not fit economic theory, the EAL scholar proclaims the law to be “irrational” and in need of reform. The classical precursor to this approach is that of Jeremy Bentham, who tested moral beliefs against a theory of utilitarianism, and dismissed what did not fit the theory as vague generalities and “nonsense upon stilts.” The prominence of EAL scholarship today is due, in part, to the influential writings of Richard Posner.

Read more

The Supreme Court Takes on Patents and the Private-Versus-Public-Rights Distinction — John Golden

by

Post by John Golden

On June 12, the United States Supreme Court granted certiorari with respect to the first question presented in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 (S. Ct. 2017):

Whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

This grant gives new prominence to a question flagged in my post of May 30, the question of whether patents involve public or private rights for purposes of U.S. administrative law.  In this context, the question is refracted through a definition of “public rights” that the Supreme Court has developed to delimit the scope of Article III courts’ exclusive powers.  A determination that patent rights are more properly viewed as “private” than “public” could lead to a conclusion that inter partes review, as well as other new mechanisms for the administrative review of patent validity, are unconstitutional. 

Read more

The Supreme Court on Laches, Patent Exhaustion, and Lord Coke — John Golden

by

Post by John Golden

Intersections between statutory law and traditional private law principles loom large in two recent patent law decisions of the United States Supreme Court.  For this, we can partly thank the United States Court of Appeals for the Federal Circuit.  As discussed in my first NPL blog post, the Federal Circuit preceded the Supreme Court in taking the cases for en banc review.  The en banc circuit obligingly produced holdings that the Court could not resist overruling.

In the first case, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017), the Supreme Court held that laches cannot block a claim for damages from patent infringement when that infringement has occurred within the statutorily allowed period of six years before the filing of the claim.  Seven of the eight Justices involved in deciding SCA Hygiene agreed that this outcome followed straightforwardly from the Court’s 2014 decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), which addressed similar questions regarding laches, damages, and the Copyright Act’s three-year statute of limitations.  Writing for the Court with what appeared to be restrained exasperation, Justice Alito began his opinion by stating, “We return to a subject that we addressed in Petrella ….”  Alito’s opinion proceeded to emphasize that laches arose from equity and that the case before the Court involved “application of the defense to a claim for damages, a quintessential legal remedy.”  In the Court’s view, a statute of limitations such as the Patent Act’s six-year limitation on backward-looking damages “necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted.”  Application of a laches defense in the face of this congressional judgment “is beyond the Judiciary’s power.”

Read more

Internal and External Accounts of IP Law — Eric Claeys

by

Post by Eric Claeys, George Mason University, Antonin Scalia Law School

In a recent post on this blog, Henry Smith asked some important questions about methodological commitments in American scholarship about intellectual property.  Henry distinguished between (on one hand) “external” and (on the other hand) “internal or interpretivist” frameworks for studying law.  He then noted that, in American IP scholarship, “scholars overwhelmingly adopt consequentialist and even utilitarian frameworks” in relation to patent law and repeat those same tendencies in copyright (though not to the same degree as in patent).  Henry’s post invited readers to consider why IP scholarship is so much more externally-oriented than other fields of scholarship on private law.

I completely agree with Henry’s general impressions about normative frameworks  in IP.  I also agree with his suggestion that IP scholars should reflect more upon why and how external accounts came to predominate in IP scholarship.  In this and a few subsequent posts, I’d like to offer a few thoughts.  In later posts, I want to suggest a different demarcation than Henry’s demarcation between external and internal-interpretivist approaches.  But my concern on that point is fairly specialized, removed from the big questions Henry is raising.  Before running off with the proverbial ball to one corner of the field, I hope in this post to offer some thoughts about the state of play in the middle of the field.

Read more

Patents and the Private-Versus-Public-Rights Distinction

by

Post by John Golden

Are patent rights public or private rights?  Generally speaking, patents are privately held, and their enforcement is limited to civil suits brought by their private holders.  Hence, in some sense, the answer might seem obvious.  But for purposes of addressing issues of separation of powers and the right to a jury trial, the answer is not so straightforward.  For these purposes, the United States Supreme Court has made central a public-versus-private-rights distinction under which the key question is whether the rights at issue are “integrally related to particular government action” because “the claim at issue derives from a federal regulatory scheme, or … the resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority.”  Stern v. Marshall, 564 U.S. 462, 491–92 (2011).  If the answer to this question is “yes,” the right in question is a “public right” whose application Congress may entrust to adjudication by an administrative body.  If, on the other hand, the claim is one of “private right,” a category typically understood to include suits traditionally brought at common law, the Court’s understanding of constitutional requirements of separation of powers means that authoritative trial-level adjudication may occur only in an Article III court, one in which the presiding judge or judges enjoy the protections of life tenure and salary protection mandated for the judicial branch by Article III of the United States Constitution.

Controversy rages over the extent to which patent rights—or, at least, challenges to patent rights’ validity—fall within the “public rights” exception to Article III adjudication.  The motive force for this controversy is the popularity of new procedures for post-issuance review of patent claims by administrative patent judges of the U.S. Patent and Trademark Office (PTO).  Starting in the early 1980s, Congress authorized the PTO to conduct post-issuance proceedings that could reconsider the validity of issued patent claims on either the PTO’s own initiative or that of a third party.  Through the America Invents Act of 2011, Congress revised and elaborated on PTO post-issuance proceedings.  One form of the revised set of proceedings, so-called “inter partes review,” has flourished since 2011: the PTO currently receives over 1,000 petitions for inter partes review each year.  In such a proceeding, the patent holder and a patent challenger contest the validity of issued patent claims before administrative patent judges of the PTO’s Patent Trial and Appeal Board (PTAB).

Read more

Reflections on Obligations in Canada

by

Post by Samuel Beswick

On May 5–6, the Peter A. Allard School of Law (University of British Columbia) hosted the inaugural Canadian Law of Obligations conference with the theme of Innovations, Innovators, and the Next 20 Years. The conference was held in honor of Professor Joost Blom QC to mark his retirement from a 45-year career at UBC’s Law School.

Justice Russell Brown of the Supreme Court of Canada, a UBC alumnus and unabashed “tortaholic,” opened the conference with praise of Canada’s legal heritage and the methodological constraints of stare decisis, analogical reasoning, and reasons-based persuasion that are both empowering and humbling features of common law adjudication.

The conference drew scholars from across North America as well as from England and Wales, Hong Kong, Israel, and South Africa. Across the nine panels and four keynote addresses, presentation topics traversed problems concerning public authority liability, the evolving torts of privacy and defamation, remedies for historic wrongs and abolition of historic rights, private law theory, empirical research and causation theory, trusts, and the implications of the good faith principle in contract law (the “tortification of contract,” as Professor Blom put it).

Read more

Internal and External Accounts of IP Law: Notes from IP, Private Law, and the Supreme Court Conference Continued

by

Post by Henry Smith

As a follow up to Patrick Goold’s post on the IP, Private Law, and the Supreme Court Conference, let me raise a couple of questions inspired by the first panel. Much of the discussion focused on how treating intellectual property as a kind of property does not mean assuming it is absolute or that all of IP is equally “property-like.” And yet what does it mean to think about a topic in terms of property?

In private law, a distinction is often drawn between two broad families of approaches. On the one hand are external, often functional, theories that explain and justify private law in terms of something else, whether economics, psychology, or philosophy. On the other side and less common in American law schools are internal or interpretivist theories that adopt the perspective of one inside the legal system and seek to make sense of that system from within – to render it coherent.

Read more

Contract Law & the Moral Limits of Markets Summer School – Call for Applications

by

From Wednesday June 28- Saturday July 1 the Summer School “Contract Law and the Moral Limits of Markets” will take place at the Amsterdam Law School. Junior scholars and advanced students will have the opportunity to explore questions on moral limits of markets from a legal, contractual, standpoint together with Aditi Bagchi, Hanoch Dagan, Lyn … Read more

Notes from the IP, Private Law, and Supreme Court Conference

by

Post by Patrick Goold

On March 10, the Project on the Foundations of Private Law at Harvard Law School and the Intellectual Property Program at the George Washington University Law School hosted the Intellectual Property, Private Law, and the Supreme Court conference. This day-long conference brought scholars, practitioners, and policy makers together to discuss the Supreme Court’s use of private law concepts in IP cases. The conference was a time to reflect on how the court has used principles from property, torts, contracts, equity and remedies, in IP law, and to think about how the court should use these principles in the future. This short blog post reports some of the day’s major themes.

Opening remarks were delivered by Commissioner F. Scott Kieff (International Trade Commission, on leave from his faculty position at George Washington Law).  Drawing from the examples of three prior cases (MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2015); Limelight Networks, Inc. v. Akamai Technologies, 134 S.Ct. 2111 (2015); and ClearCorrect Operating, LLC, v International Trade Commission, 819 F.3d 1334 (2016)), he explored some benefits and risks presented when individual litigants focus their arguments on private law concepts, and how this differs from the “too much versus too little protection” debate that commonly dominates IP law discussions.

Read more

Journal of Tort Law Invites Submissions

by

The Journal of Tort Law is the only peer-reviewed journal devoted to tort law in the United States. It offers several advantages to those submitting scholarship. First, your work will be reviewed by peers. This is particularly important for more technical pieces. Second, there is no submission cycle. Articles can be submitted at any time. … Read more

Markets, Ethics, and the Law Postdoctoral Fellowships

by

The Edmond J. Safra Center for Ethics at Tel Aviv University is accepting applications for its 2017-18 postdoctoral fellowship program. The Center offers grants to outstanding researchers who study the ethical, moral and political aspects of markets, both local and global from all disciplines and fields, including economics, social sciences, business, the humanities and the … Read more

Apply for the Qualcomm Fellowship in Private Law and Intellectual Property

by

The Project on the Foundations of Private Law at Harvard Law School is seeking applicants for the Qualcomm Fellowship in Private Law and Intellectual Property. The Qualcomm Fellowship is a two-year, residential postdoctoral program specifically designed to identify, cultivate, and promote promising scholars early in their careers with a primary interest in intellectual property and … Read more

Apply to be a Private Law Fellow at the Project

by

The Project on the Foundations of Private Law at Harvard Law School is seeking applicants for the Postdoctoral Fellowship in Private Law. The Fellowship is a two-year, residential postdoctoral program specifically designed to identify, cultivate, and promote promising scholars early in their careers with a primary interest in private law. Private law embraces traditional common … Read more

Intellectual Property, Private Law, and the Supreme Court — Conference Announcement

by

Post by Patrick Goold The Project on the Foundations of Private Law at Harvard Law School and the Intellectual Property Law Program at The George Washington University Law School invite you to attend Intellectual Property, Private Law, and the Supreme Court, a day-long conference in Washington, DC, on March 10. In the last decade, the … Read more

Patent Exhaustion and Private Law Goes to the Supreme Court — Patrick Goold

by

Post by Patrick Goold

Sir Edward Coke’s Institutes of the Lawes of England, first published in 1628, rarely influences the direction of modern U.S. patent law. But that might be about to change. This December, the Supreme Court of the United States granted certiorari in the case of Impression Products, Inc. v. Lexmark International, Inc., Supreme Court Docket No. 15-1189, concerning the scope of the patent exhaustion doctrine. The case will interest readers of this blog because it highlights the conceptual and doctrinal relationship between IP exhaustion and common law rules regarding restraints on alienation.

The case involves the ongoing battle over refurbished printer toner cartridges. Lexmark International makes printer toner cartridges, over which it owns a number of patents. These cartridges fall into two types: “Regular Cartridges” are sold at full price; while “Return Program Cartridges” are sold at a discount but come with a “single-use/no-resale” restriction, meaning the buyer may neither reuse nor resell the cartridge after the toner has run out. Lexmark sells these cartridges both domestically in the U.S. and abroad. In 2014, Lexmark sued Impression Products for patent infringement. Impression Products had previously: (1) bought domestically-sold Return Program Cartridges, modified by third parties to allow refilling, and resold them in the U.S.; and (2) imported and resold both Regular and Return Program Cartridges from foreign markets. Lexmark maintained both of these actions infringed their U.S. patent rights under § 271 of the Patent Act. Impression argued that both of these acts were non-infringing due to the Patent Exhaustion doctrine, which holds that “the initial authorized sale of a patented item terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). John Golden has discussed the case in a prior New Private Law Blog post.

Read more