Posted by: sambeswick | 20th May, 2020

Knowledge & Normative Convergence in Property Law

Post by Malcolm Lavoie.

One of the most intriguing features of New Private Law scholarship is its recognition that diverse normative accounts often converge in explaining core private law doctrine. For instance, the right to exclude as an incident of ownership can be understood in consequentialist terms as a means of accounting for information costs, or alternatively in deontological terms as a way to protect a sphere of individual autonomy. Similarly, aspects of tort law that have traditionally been conceptualized in non-consequentialist terms, such as the bilateral nature of tort obligations as a relationship between the doer and sufferer of a wrong, can also be explained on economic grounds when an account of information costs is introduced. In these examples, consequentialist accounts of the law (in both cases, work by Henry Smith) converge with deontological approaches in explaining the basic structure of private law.

A recent article of mine exploring the implications of an under-appreciated justification for property rights provides an interesting (and unanticipated) example of this kind of convergence. In outlining a consequentialist argument, I came to a new understanding of an approach to property doctrine that had previously primarily been understood in deontological terms.

My article is about the ways in which property systems decentralize decision-making about physical resources. Property rights devolve decision-making authority to a dispersed pool of owners, who in many cases have local knowledge relevant to their resources. This local knowledge can take many forms. For instance, it may include knowledge about the physical characteristics of the resource, local conditions relevant to the use of the resource, the needs and preferences of those who are likely to use the resource, or local norms relevant to its use. Importantly, this kind of knowledge is often held by those who are in close physical proximity to the thing, or involved in an activity with it. The owner of a house, for instance, is often better positioned than anyone else to know how its rooms are best allocated, what repairs are most urgent, and what renovations would be most useful, along with many other questions dependent on physical context.

Since it is often difficult and costly for others to acquire and act upon this kind of knowledge, for instance through a centralized bureaucracy, effective resource management requires a means of recognizing decision-making authority exercised by parties with local knowledge. Property rights have traditionally served this function, channeling valuable local knowledge into decision-making about resources. Owners often have local knowledge or are well-positioned to acquire it. This argument can supply a complementary justification for the institution of private property. By channeling local knowledge into decision-making, property rights can yield better decisions and better outcomes according to a range of consequentialist criteria.

The argument that property rights help owners to take advantage of local knowledge is not novel, having been made most prominently by F.A. Hayek (though elements of it are also present in work by Harold Demsetz and Robert Ellickson). While Hayek was focused on the role of property in facilitating coordination in a market economy, I argue that the knowledge-channeling function of property is actually much more basic and generalizable than that, applying even in cases, such as with respect to inalienable resources, where owners do not interact with markets. For instance, an Indigenous community with title to land may not engage in commercial transactions with the land, but can nevertheless draw on local knowledge in making decisions about the use and management of the land.

In addition to outlining the knowledge-channeling function of property, my article also discusses the ways in which this approach can help us understand property doctrine, including notably the agenda-setting authority of owners. Larissa Katz has previously argued that the exclusive right of an owner to set the agenda for a resource is the essential feature of ownership. Katz makes the argument primarily in descriptive terms, claiming that agenda-setting authority for a resource is more central to the idea of ownership than other incidents, such as the right to exclude. To the extent that Katz grounds her theory in a normative justification, it is in non-consequentialist, autonomy-oriented terms: An owner’s agenda-setting authority upholds important personal autonomy interests of the owner.

Katz does not seek to justify her theory on consequentialist grounds (as far as I am aware). And indeed, the most prominent consequentialist accounts of property rights may seem unpromising for this purpose, given that they tend to emphasize the right to exclude as the most significant feature of property rights. Besides arguments based on the information costs created by the property system itself, alluded to above, other consequentialist arguments for property also emphasize the right to exclude. For instance, one argument holds that property rights create incentives to work and produce by ensuring that the products of one’s labour are not appropriated by others. Why sow today when someone else can come along and reap tomorrow? Having a property interest in the crops helps solve this problem by removing the threat of the interloper. Another argument is that property rights avoid the overuse of resources that would occur under an open-access regime. Why limit one’s own use of a resource when there is no assurance that others will do the same? Again, property can provide an answer, by allowing an owner to control access. According to both of these arguments, it is the right to exclude that provides the decisive shift in incentives, helping to align them with what is socially optimal. Other incidents of ownership serve a subsidiary function. They are allocated to the owner because it usually makes the most sense for these rights and powers to be in the same hands as the party with the right to exclude.

This is where the normative convergence I alluded to earlier comes in. The local knowledge argument for property puts agenda-setting, rather than exclusion, at its core. A property interest can serve to channel local knowledge into resource-based decision-making only if the owner has the authority to make agenda-setting decisions about that resource. To the extent that property is justified by its ability to devolve decision-making to parties who are or who are likely to become knowledgeable about their resources, it is the owner’s agenda-setting authority that is central to the argument. Other incidents of ownership, such as the right to exclude, are often useful in upholding the owner’s agenda-setting authority, but they are not as central to the argument as agenda-setting authority. An owner can channel her local knowledge into decisions about the resource without exercising the right to exclude, but not without exercising agenda-setting authority.

I don’t pretend to have thought through all of the implications of this consequentialist justification for Katz’s theory of ownership. For now, I will simply observe that this seems to provide another example of converging normative accounts of private law doctrine. Like the right to exclude, the agenda-setting authority of owners can be understood as central to the concept of ownership based on both consequentialist and non-consequentialist normative arguments. An understanding of the law previously conceptualized primarily in autonomy-oriented terms can also be given a consequentialist framing. Interestingly, like the other examples of convergence identified above in the work of Henry Smith, this one too depends on taking knowledge and information seriously.

Posted by: sambeswick | 24th Jan, 2020

Obligations X ~ July 14–17, 2020 ~ Harvard Law School

We are pleased to announce the website launch for the Tenth Biennial Conference on the Law of Obligations: http://obligationsx.wpengine.com/

The conference is co-hosted by Harvard Law School and Melbourne Law School, and is being co-convened by John Goldberg, Andrew Robertson and Henry Smith. 

The conference theme, Private Law Inside and Out, is intended to provoke discussion about the inside and outside of private law. The conference will focus on the contrast between ‘internalist’ and ‘externalist’ perspectives on the law in this field. It will also consider the boundaries and relationships between private law and morality, private law and economic efficiency, and private law and other policy goals. A central aspiration of this iteration of Obligations is to give private law scholars working in different intellectual traditions an opportunity to identify previously underappreciated overlaps and synergies, and thereby help to break down methodological barriers to an improved understanding of the field.

We look forward to hosting speakers and attendees in July.

UPDATE (5/11/2020): Due to a hiring freeze at Harvard University, there is no further information regarding the postdoctoral positions for The Project on the Foundations of Private Law. All inquiries should wait until further notice.

The Project on the Foundations of Private Law at Harvard Law School is seeking applicants for full-time, one- to two-year residential appointments, starting in the fall of 2020 — in particular, it is seeking applicants for both the Postdoctoral Fellowship in Private Law and the Qualcomm Postdoctoral Fellowship in Private Law and Intellectual Property. Application materials are due to Bradford Conner ( conner at law.harvard.edu) by 9:00 a.m. on February 21, 2020

Postdoctoral Fellowship in Private Law

The Fellowship is a one- or 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 law subjects (property, contracts, and torts), as well as adjacent statutory areas such as intellectual property and commercial law.  It also includes resurgent areas, such as unjust enrichment, restitution, equity, and remedies.  Fellows will be selected from among recent graduates, early-stage academics, and mid-career practitioners who are committed to pursuing publishable research likely to make a significant contribution to private law scholarship.  

Fellows devote their full time to scholarly activities in furtherance of their individual research agendas. In addition, fellows contribute to the intellectual life of the Project and the Harvard Law School community through mentoring students, presenting their research in and attending faculty workshops and seminars, helping to organize and participating in Center events and projects, and blogging.

A description of the Private Law Fellowship is here and the call for applications is here. A link to the Project’s website is here

Qualcomm Postdoctoral Fellowship in Private Law and Intellectual Property

The Qualcomm Fellowship is a one- or 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 its connection to one or more of property, contracts, torts, commercial law, unjust enrichment, restitution, equity, and remedies. Fellows will be selected from among recent graduates, early-stage academics, and mid-career practitioners who are committed to pursuing publishable research likely to make a significant contribution to intellectual property and private law scholarship.

Fellows devote their full time to scholarly activities in furtherance of their individual research agendas. In addition, fellows contribute to the intellectual life of the Project and the Harvard Law School community through mentoring students, presenting their research in and attending faculty workshops and seminars, helping to organize and participating in Center events, and blogging.

A description of the Qualcomm Fellowship is here and the call for applications is here. A link to the Project’s website is here

The Edmond J. Safra Center for Ethics at Tel Aviv University is accepting applications for its 2020-21 post-doctorate fellowship program. The Center offers grants to outstanding researchers who study the ethical, moral and political aspects of markets, local or global, real or virtual. The Center encourages applications from all disciplines and fields, including economics, social sciences, business, the humanities, and the law.

Grant Amount: $30,000

The Research Fellows will be part of the Center’s research group and will take part in the Center’s activities. While in residence, the fellows are expected to dedicate their full time to research.

View the call for applications here.

Deadline for submission of all application materials: Feb 18, 2020.

Posted by: sambeswick | 10th Dec, 2019

Scaling Up in Private Law

Post by Henry Smith

Andrew Gold and I have a new paper out about how complexity in private law presents a problem of connecting the micro and the macro and how this problem plays out in external and internal approaches to private law theory. The paper, “Sizing Up Private Law,” just out online at the University of Toronto Law Journal (print to follow), can be found here.  And here is the abstract:

The conflict between external and internal perspectives in private law is both exaggerated and underplayed. Both external and internal perspectives pay too little attention to how the ‘micro’ level of individual, even bilateral, interaction relates to the ‘macro’ level of society and the law as a whole. We will show that both perspectives overlook the resources they could employ to explain how the micro and macro are connected; in their different ways, external and internal perspectives do not draw out the connection between local simplicity and generalization. By treating law as a complex system, both perspectives could converge on a picture of private law in which locally simple structures of bilateral rights and duties scale up to produce emergent properties at the level of society.

We suggest that functionalists should take seriously the moral norms immanent in private law – these norms are central to the functioning of private law as a system. Without these modular components, private law can be intractably complex. Accordingly, we propose an inclusive functionalism, one that takes these moral norms at face value. These moral norms perform a crucial function of managing the otherwise intractable complexity of the interactions between parties governed by private law. We also propose an inclusive internalism, which is more open to functional considerations involving simplicity. Private law must avoid intractable complexity if it is to function properly, and this calls for a simplicity criterion: internalists should look for moral norms that are both simple and generalizable.

Resolving private law’s conceptual structure at the middle level focuses debate where it is needed. Important questions about the role of public values and the ultimate grounding of private law remain open and are sharpened by recognizing the role that complexity plays in the way that private law operates as a system.

Posted by: sambeswick | 30th Sep, 2019

Patent Accidents: Questioning Strict Liability in Patent Law

Post by Patrick Goold.

In 1999, Canadian company, Research in Motion (RIM), launched the Blackberry email pager. The pager was an instant commercial success amongst businesspeople and politicians alike. Behind the Blackberry’s success was its wireless email technology. No longer were emails confined to the desktop but were now easily accessible on-the-go. The technology for which had been invented by RIM founder Mike Lazaridis in the mid-1990s; or so Lazaridis thought. The following year, RIM received a letter from a small Virginia-based company called NTP. The letter alleged that the Blackberry infringed patents NTP held covering wireless technology that an engineer, Thomas Campana, had invented in the mid-1980s. This infringement letter came as a shock to RIM. Only a few months earlier RIM had received its own US patent on the Blackberry’s email technology. As far as RIM was concerned they had created the technology and had the patent to prove it! Yet NTP won their infringement case in Virginia, securing an injunction that threatened to bring the production of Blackberries to a halt. To avoid a complete shutdown, RIM ultimately paid NTP an exorbitant license fee of $612.5 million in 2006.

The RIM case is illustrative of the growing problem of accidental infringement of patent rights. Property rights in tangible property can only be infringed by a limited number of individuals who are in close physical proximity to the tangible good. By contrast, due to the nature of intangibles, patents can be infringed by multiple people regardless of their location. Furthermore, unlike physical goods, with readily ascertainable boundaries, the scope of patent boundaries is unpredictable. The result is inadvertently infringing patent rights is becoming easier and easier in the twenty-first century. Buy a wireless router to use in your small business, and you may unknowingly be using technology that was not licensed by the proprietor; incorporate Bluetooth technology into a new cell phone after searching the patent register, and you may be inadvertently manufacturing a technology whose patent information was buried under a mountain of similar patents; grow crops on your farm and you may later find such crops germinated from patented seeds which were blown by the wind from nearby farm land.

To address this problem, I argue that the liability rule in patent law needs to be reformed. Currently, patent law is a strict liability offense: one is liable for all accidental infringements one commits. In a forthcoming Article, I argue that a negligence liability rule would be better for society. Defendants should not be liable for accidental infringement when they have made reasonable efforts to prevent such infringement. Building on work by Blair & Cotter, and Chiang, the Article applies economic models developed in tort law literature to the problem of patent accidents. Doing so demonstrates how switching to a negligence rule would help reduce the amount of accidents which occur, while simultaneously protecting the inventive incentives at the heart of patent law. Thus, by adopting a negligence rule, we can make a pretty large step towards limiting the growth of the patent accidents problem.

Posted by: steveschaus | 11th Jul, 2019

Open Positions at The City Law School in London

The City Law School is hiring lecturers (the UK equivalent of Assistant Professor) in the next months, and appears to have special interest in hiring in several private law subjects. More information is available here. Interested candidates are also welcome to contact Patrick Goold with questions. 

Posted by: steveschaus | 15th May, 2019

Canada’s Second Biennial Obligations Conference

By Samuel Beswick, Frank Knox Memorial Fellow, SJD candidate, Harvard Law School

On May 10 and 11, the University of New Brunswick Faculty of Law hosted the second biennial Canadian Law of Obligations (CLO) conference. Legal scholars from across Canada, as well as the United States and England, presented their works-in-progress on the theme of Obligations and Access to Justice.

Whereas 2017’s conference at UBC in Vancouver grappled with modern developments in tort law, this year contracts took the spotlight. The problems of imputing meaningful consent in online click-wrap agreements that nobody reads; of challenging arbitration and anti-class action clauses that are routinely buried in standard terms and conditions; and of understanding why and when terms may be unenforceable for unconscionability—these all implicate access to justice and were the subject of lively discussion.

This year’s conference had two keynote speakers: the distinguished contracts practitioner and professor Angela Swan, and Shannon Salter, the Chair of British Columbia’s new Civil Resolution Tribunal. Professor Swan, delivering an address titled “It Matters How You Start to Think about a Contracts Problem,” spoke to the theory and doctrine of contracts. Following the influence of the Relational Contract Theory developed by the Scottish-American Professor Ian Macneil, Professor Swan challenged the audience to recognize the gulf between contracts as experienced by people and practitioners and the contract law found in scholarship—setting out illustrations that traversed the doctrines of consideration, to good faith, to implied terms.

Cameron Fitch Photo UNB

Ms Salter, in the following day’s keynote, built upon this law-in-practice theme with a presentation on British Columbia’s new technology-assisted small claims tribunal. The BC Civil Resolution Tribunal (CRT) is the first online disputes tribunal in the Canadian justice system and has quickly become a model for civil justice reform. Ms Salter attributed the Tribunal’s success to their commitment to ensuring it works from the ground up for everyday people. So intuitive and minimalist online questionnaires have replaced tricky court forms. Discovery and evidence production has been stripped back. And everything—from filing a claim, to engaging in negotiation and mediation, to pursuing an enforceable judgment—can be done through a cellphone via web-browser or Skype. Not everybody agrees that the CRT improves access to justice, mind. The Trial Lawyers Association of British Columbia is currently challenging the CRT’s jurisdiction over most motor vehicle accidents, claiming that removing such cases from the Provincial Court violates the Canadian Charter of Rights and Freedoms. A hearing and decision on that issue is hotly anticipated.

Particular highlights of the CLO conference for me include:

  • Marina Pavlović’s analysis of a consumer arbitration clause she discovered taped to the inside of her newly-purchased refrigerator.
  • Jason MacLean’s reflections on his own pedagogical approach to teaching first-year contracts, and his efforts to balance imparting doctrine and principle with critical reflection on contract-in-practice to a student audience who have grown up experiencing contract as an impenetrable click-box.
  • Jane Thomson’s analysis of the Ontario Court of Appeal’s judgment in Spence v BMO Trust, which has curbed a unique public policy doctrine that Canadian courts have long invoked to re-write discriminatory scholarship conditions and to set aside overtly racist wills and residual bequests to foreign neo-Nazi organizations.
  • And a paper by recent JD graduate Colleen Thrasher, who gave a compelling presentation on how, in suits for negligently inflicted psychiatric injury, the judicial inquiry into whether “it was foreseeable that a person of ordinary fortitude would suffer serious injury” is often unnecessary, confuses the remoteness test, and—most troublingly—stigmatizes vulnerable plaintiffs.

The second CLO conference was a memorable event and credit is due to its convener, Professor Hilary Young. A selection of papers that were presented are to be published in a forthcoming edition of the Supreme Court Law Review. With Obligations X coming to Harvard in July 2020, and CLO 2021 to be hosted by the uOttawa Faculty of Law, this is an engaging time to be doing private law in North America.

Posted by: steveschaus | 27th Feb, 2019

Smith on Property Law as a System

Post by Henry Smith

I have two new papers up on SSRN (one out and the other forthcoming), which both deal with the question of property law as a system.  In “Complexity and the Cathedral: Making Law and Economics More Calabresian,” a piece for a symposium in the European Journal of Law and Economics, on Guido’s recent book, I argue that law and economics could learn more from law (in a Calabresian fashion) if we abandon the strongly reductionist versions of the bundle of rights picture that stands behind Guido’s famous “Cathedral” article – about property rules, liability rules, and inalienability rules – with Doug Melamed. (When I presented the paper, Guido was in the audience and Doug the commentator – a once in a lifetime experience for me!).

In a related vein, I have a paper “Restating the Architecture of Property,” forthcoming in Modern Studies in Property Law, which argues that “system” has been a systematic (!) problem for restating property law. From the beginnings of the American Law Institute and continuing on through Realism and its aftermath, a numerosity-based approach to complexity and a reductionist view that law is a heap of rules have contributed to the difficulty of capturing the architecture of property law. Complexity is a matter of interconnectedness and emergent properties – as important as it is difficult to capture in the conventional process of restating the law.  I give some examples from the property torts of how with the Fourth Restatement we are trying to remedy this lack of attention to complexity and system.

Bonus teaser question: Which figure best represents the bundle of rights?:

[Figure adapted from Lee Alston & Bernardo Mueller, Towards a More Evolutionary Theory of Property Rights, 100 Iowa L. Rev. 2255, 2263, Fig. 1]

Posted by: steveschaus | 11th Feb, 2019

Freilich on Prophetic Examples

Post by Janet Freilich

Patent law – like many areas of private law – is riddled with unusual, obscure, and sometimes incomprehensible rules. In a forthcoming paper, I draw attention to a particularly puzzling doctrine of patent law: patents can include fictional experiments and made-up data. Take, for instance, the following experiment published in a recently granted patent:

“A 67-year old male has pancreatic cancer…He is provided with A. paucinervis pomel extract [the patented invention] for three years. The patient is examined later and…[h]is tumor is reduced in mass…”

What appears at first glance to be a groundbreaking finding is, unfortunately, merely a fictional experiment with a made-up result.

Though normally the phrase ‘made-up data’ would trigger accusations of fraud, in the context of patents, making up data is not fraud. Both the PTO and the Federal Circuit have found such made-up data to be permissible in patents and, for purposes of proving patent validity, fictional data in treated as largely equivalent to factual data.

These fictional experiments are called “prophetic examples” in the sense that the patentee is prophesizing what might have happened had the experiment actually been conducted. Somewhat surprisingly, they have flown entirely under the radar – there is no in-depth scholarship on the phenomenon.

I found the concept intriguingly strange and wanted to know more. In an empirical study of prophetic examples in 2 million chemistry and biology patents and applications, I found that 17% of experiments in patents are prophetic, and almost one quarter of patents contain at least one prophetic experiment. I further characterize who uses prophetic examples and provide some evidence as to when and why such examples are used. Perhaps most shocking is how prophetic examples are interpreted by scientists. Though some scholars have suggested that scientists ignore patents, a recent survey has found that scientists do read patents – but they clearly do not understand prophetic examples. I find that 99% of citations in the scientific literature to prophetic examples cite the example as if it were real. 

Prophetic examples are clearly causing confusion and should no longer fly under the radar. I hope my study is a first step towards learning more.

 

 

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