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.

 

 

Post by Henry Smith

Yun-chien Chang and I have a paper out on SSRN about comparative property law. We differentiate between aspects of property law that are structural versus those that are stylistic and between those that are more integrated into the law and those that are more detachable.  We derive some predictions for cross-linguistic variation, which we illustrate with a snapshot from a data set of property laws in 119 jurisdictions across the world.  The paper (which can be found here) is part of an NYU symposium on Convergence and Divergence in Private Law that will appear in the Southern California Law Review.  The abstract follows:

This article utilizes a unique data set of property laws in 119 jurisdictions in the world to test convergence/divergence theories in comparative property law. Our theory predicts that first, the structure of property law among all jurisdictions in the world will converge, or is similar since some time in the distant past, as they all face the same, positive transaction costs in delineating property rights. Second, our theory posits that the style of property law will tend to converge when the doctrines in question are isolated, but diverge when they are interconnected. Our data and descriptive analysis support the theory. Doctrines regarding possession, sales, condominium, tenancy in common, and limited property rights serve as prominent examples.

Figure 1 Jurisdictions Used in Analysis

Posted by: steveschaus | 17th Jan, 2019

Harold Demsetz (1930 – 2019)

Post by Henry Smith

It is with great sadness that I just learned that the great economist Harold Demsetz passed away on January 4, 2019 at age 88.  Harold was as famous in the law and economics of property as he was in several fields of economics.  Recent remembrances can be found here, here, and here.

As President of the Society for Institutional and Organizational Economics, I had the privilege and honor of conferring on Harold the first Elinor Ostrom Lifetime Achievement Award on behalf of the organization in 2015:

From the citation for the award:

Harold Demsetz is Arthur Andersen UCLA Alumni Emeritus Professor of Business Economics. He previously taught at the University of Chicago and the University of Michigan. He chaired UCLA’s Department of Economics from 1978 through 1980. From 1984 to 1995, he held the Arthur Andersen UCLA Alumni Chair in Business Economics and Directed UCLA’s Business Economics program.

A towering figure in the economics of institutions and organizations, he is listed in Mark Blaugh’s Great Economists Since Keynes. His works are focused on property rights, the business firm, problems in monopoly, competition, and antitrust, and even bioeconomics. Harold Demsetz is the author of numerous articles, two published monographs, and five books. His most recent book is From Economic Man to Economic System: Essays on Human Behavior and the Institutions of Capitalism, published in 2009 by Cambridge University Press. The 1972 article he co-authored (with Armen A. Alchian) “Production, Information Costs, and Economic Organization,’ in the American Economic Review, was selected by the American Economic Association as one of the 25 most important papers published in the 100 year history of the AER. His 1967 paper, “Toward a Theory of Property Rights” also in the AER, has inspired an entire literature. Professor Demsetz is an elected Fellow of the American Academy of Arts and Sciences, past director of the Mont Pelerin Society, and past (1996) President of the Western Economics Association International. Northwestern University, in 1994, awarded him an Honorary Doctorate in Humane Letters, and, in 1996, he received an Honorary Doctorate in Social Science from Francisco Marroquín University. Drexel University, in 2012, honored his work on corporate governance, and, in the same year, the University of California Los Angeles honored his work across all disciplines.

On a more personal note, Harold’s work has been hugely influential for me. The first conference I co-organized was on the Evolution of Property Rights, an exploration of the Demsetz Thesis.  In a very short 1967 paper, Harold started the modern field of property rights economics. He presented a simple model of property rights according to which property rights emerge when their benefits in terms of problems solved exceed the cost of furnishing them.  His use of Eleanor Leacock’s study of beaver-hunting territories among the Montagnais and Naskapi tribes of the Labrador Peninsula is one of the most well-traveled case studies in law and economics.  The literature springing out of this one paper is vast and still growing rapidly. 

Harold was never a “blackboard economist.” His work was always tethered to reality.  Coining the term “nirvana fallacy,” he stressed the importance of comparing real-world institutions to potential real-world alternatives.  The failure of an institution to live up to the ideal is not yet an argument for replacing it.  Although warnings about the nirvana fallacy are now a staple of comparative institutional analysis, expecting the total eradication of the nirvana fallacy would probably be an instance of it!

As those who met Harold in person or saw him speak, there are few people – much less academics and economists! – who combine such sharpness with twinkling humor.  One of his favorite sayings was that Ronald Coase got the Nobel Prize for an article that he Harold had written many more times!  As a great thinker and a warm human being, Harold is an irreplaceable original, who will be greatly missed.

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 2019 — 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 February 15, 2019

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.

You can find more information about the Private Law Fellowship 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.

You can find more information about the Qualcomm Fellowship here. A link to the Project’s website is here

The Edmond J. Safra Center for Ethics at Tel Aviv University is happy to announce its call for Post-Doc Fellowship applications for the academic year 2019-20. We encourage applicants from all disciplines and fields, including economics, social sciences, business, the humanities, and the law.

The Edmond J. Center Safra stands at the forefront of academic research in the critical and multidisciplinary interface between market, ethics and law. We promote a variety of activities, designed to stimulate dialogue, to exchange and advance knowledge, and to explore new ideas. Above all, we aim at gaining new insights that will strengthen our understanding of the various markets in which we operate and contribute to making them fair and just. The Edmond J. Safra Center for Ethics cohort of fellows represents a diverse group of young scholars from top institutions. Alongside their research, the fellows participate in a set of advanced research seminars and in a weekly colloquium to discuss foundational texts and present their personal projects. The Center collaborates with the fellow Center at  Harvard University and is proud of the all-star international advisory board composed of distinguished experts in law, political science and philosophy.

Application materials are due by February 15, 2019, and should be sent to  safracen at tauex.tau.ac.il. A PDF version of the announcement is available here. Please check our website for more information.

Oxford University Press is pleased to announce the launch of Oxford Studies in Private Law Theory, edited by Paul Miller (Notre Dame) and John Oberdiek (Rutgers), and to issue a call for papers for the first volume. 

Oxford Studies in Private Law Theory is a series of biennial volumes showcasing the best article-length work across private law theory.  The series will publish exceptional work exploring the full range of private law’s domains and doctrines—including contract, property, tort, and fiduciary law as well as equity, unjust enrichment, and remedies—and employing diverse methodological approaches to individual areas of private law as well as to private law in general.  Submissions should be approximately 12,000 words, inclusive of footnotes.  The deadline for submission is May 6th, 2019.

All accepted papers will be presented at a workshop at Notre Dame’s Global Gateway campus in London in late summer/early fall 2019.  The Notre Dame Program in Private Law will cover the expense of contributors’ travel and accommodation.  

To submit a paper for consideration, please email Paul Miller ( paul.miller at nd.edu) and John Oberdiek ( oberdiek at law.rutgers.edu).

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