"Cornwall School House Nº 3 (1830)" by Flickr user Don Shall. CC BY-NC-ND 2.0.

In the twentieth century, the general move in regards to Fourth Amendment jurisprudence — one prong of privacy — has been away from a focus on property, and towards a view that focuses on people instead. (See, e.g., The Fourth Amendment: from property to people.) This move gave us warrant requirements for wiretaps even when a physical trespass had not occurred, for example, because it protected people’s “reasonable expectations of privacy.” But as I noted in a previous article, an alternative approach to creating an entirely new right would be to extend property rights to cover information or personal data, rather as copyright, patents, trademarks, and other forms of intellectual property extended physical rules into the realm of the intangible.

While there are undoubtedly benefits to this, there are limitations as well. Pamela Samuelson, in “Privacy As Intellectual Property,” discusses several of them:

First, the infrastructure necessary for enabling a privacy market to flourish is not insubstantial, and would likely require government oversight anyway, especially given the disparity between individuals and data companies (1136-37).

Second is the problem Samuelson characterizes as “free alienability”: normally, once sold, the buyer can resell a product to a third party. But this is likely to be a problem with privacy, since individuals may well be comfortable selling to one company but not to another. Limiting alienability undermines a core part of a property system. (1137-38, 1145)

Third, it is unclear if a property market is really the most efficient way to allocate resources: “What is scarce is information privacy, not personal data,” but Samuelson argues that it is personal data that is being bought and sold. The goal of the market, then, unlike most others, is to limit availability, not increase it. (1138-39) One might counter by re-conceive of the market as one where privacy is what is bought and sold, but I’m not sure this fixes the market issue.

Fourth, but relatedly, the market for intellectual property exists because of a bargain: the law grants temporary monopoly rights (patents, copyrights) to encourage creation and to benefit the public as a result. Everyone benefits from the system. Without it, creators may not have sufficient incentive to invest in, for example, research and development in the face of potential free riders who might undercut them without investing themselves. In the case of privacy rights, though, there is no similar incentive: “Property rights are not needed to bring them [personal data] into being, nor to achieve widespread distribution of them.” In short, what incentives does creating property rights in personal data create? (1140-41)

Additionally, if a core reason that copyright has always been compatible with the First Amendment is that it is a property right, then perhaps a way out of the conflict between privacy and freedom of speech and the press is to conceive of privacy in the same way — as a property right. Certainly it is already on its way there, as the “right of publicity” in many jurisdictions already implicitly does so, since it provides control over unauthorized commercial use by others.

What follows are three approaches the outline some of the benefits of doing exactly this.

Dissolving the Inkblot: Privacy as Property Right

Unsurprisingly, this is an approach libertarian thinkers have already explored. In a 1993 report for the Cato Institute, Sheldon Richman argues for a vision of privacy “that derives privacy rights from a Lockean framework based on each person’s property in his own life, liberty, and estate.” Richman grounds his vision of the right to privacy as a property right embedded in the Constitution:

That the propertarian model of privacy has the full force of the Constitution behind it is evident in the purposes listed in the preamble to the Constitution, in the recurring express references to property, and in the protection of unenumerated rights in the Ninth Amendment.

He additionally argues that viewing privacy as property is supported by older case law as well:

[I]n Boyd v. United States (1886), a search and seizure case involving a businessman, Justice Joseph Bradley wrote that the constitutional guarantees securing people in their persons, houses, papers, and effects transcend the concrete case and “apply to all invasions on the part of government and its employes of the sanctity of a man’s home and the privacies of life. It is not the breaking of his doors, and the rummaging in his drawers, that constitutes the essence of the offense; but it is the invasion of his indefeasible right of personal security, personal liberty and private property.”

Richman argues that “propertarian privacy” provides a consistent philosophical and moral grounding for property rights that protects privacy without giving judges too much leeway:  ”To determine whether one has a right of privacy with respect to some act, a judge need only ask what the property rights are.” As a result, contraceptive use is protected through his right to privacy because “each party owns himself or herself. … The same is true … for persons who engage in consensual homosexual sodomy.” Child abuse — even in one’s own home — is not protected “because the child is a self-owner.” Abortion is generally protected because “the fetus comes into existence inside the body of a self-owner.” On the other hand, employers may ban smoking — even in an employee’s home — without violating their right to privacy because the “prospective employee can turn down the job.”

In regards to data privacy legislation, Richmond’s approach would generally not protect privacy unless contractual obligations were violated (this might be seen as protecting confidentiality):

A private firm compiles a computer data base on consumers in order to rent it to direct marketers. Privacy violation? Not if the information was originally provided freely by the consumers (or otherwise lawfully obtained) and all contractual restrictions are observed. But if information was given confidentially, divulgence should be actionable. To be sure, data can be misappropriated, stolen by computer hackers, or used in ways that violate contractual obligations. That is why there are criminal and civil courts.

The Property Rights Origins of Privacy Rights

In The Property Rights Origins of Privacy Rights, Mary Cholpecki explores the historical connections between property and privacy. She points to two English cases as examples of this. First, in Yovatt v. Winyard (1820), what I might call an early trade-secrets case, the court “extended property rights protections to cover personal secrets,” namely, secret formulas for medicines used by a competitor. Cholpecki writes:

Yovatt brings to light the interesting and important fact that “what we now call ‘unfair competition’ and ‘plagiarism’ and ‘privacy’ were all wrapped together, in Yovatt’s time, under the principle of ‘property.’” It was only later that these concepts were separated.

She then discusses Prince Albert v. Strange, a case from 1849 in which Strange is prohibited from selling copies of etchings he had catalogued for Prince Albert:

According to one commentator, the most significant aspect of this case and its underlying philosophy is that it rested on a right of privacy, which the court considered a type of property right. In fact, it appears that until 1890, no English court recognized the right to privacy independent of property rights.

Cholpecki blames Samuel Warren and Louis Brandeis’ 1890 law review article for “divorcing privacy from its historical and intellectual partner, property rights.” Because of this, she argues, in subsequent cases the courts have “muddled the parameters of the right and allowed critics to argue that the right to privacy does not exist in the Constitution.”

She sees hope in the 1977 case of Moore v. City of East Cleveland, where a plurality of justices united in the ruling, some of the basis of a right to privacy and some on the basis of property rights:

The Moore case illustrates the interconnectedness between privacy and property rights. Given the same set of facts, four members of the Court believed privacy rights were jeopardized, while another believed property rights were threatened. Ultimately, the two segments came together to protect the rights at stake. … The most enduring protection for both rights is to view each as indispensable to the other.

Privacy As Intellectual Property?

In “Privacy As Intellectual Property?,” Pamela Samuelson explores the potential benefits and pitfalls of adopting a property-based approach to privacy protections.

First, she writes, viewing data about oneself as private property matches an intuition many of us already have. Since people already have the legal right to exclude people from access (journals locked in a desk drawer, papers stored at home in a file cabinet, etc.), “they may have a sense that they have a property right in the data as well as a legal right to restrict access to it” (1130). Data protection laws reinforce this intuitive sense.

This intuitive sense of property persists even though ownership of data is not the core legal framework in American law for dealing with privacy: “Indeed, the traditional view in American law is that information as such cannot be owned by any person” (1131). Although property rights are involved with Fourth Amendment protections, it is not a property right in the information per se, but rather a property right against trespass. The Fifth Amendment (against self-incrimination) protects a liberty interest in a kind of privacy right, but it is not a property right. If a doctor reveals confidential medical information to a newspaper, a patient’s rights “would arise under contract or privacy law, not from the existence of any property rights in this information” (1131).

Samuelson suggests that granting individuals property rights in their own data might force companies to internalize the costs of privacy — if individuals retain property rights over their own information, even if gathered without their intervention, the companies would need to compensate them (and get permission) for the use by buying the rights, or forgo using the personal data. It would also have the side benefit of potentially increasing the quality of data collected, since individuals and companies would each have an incentive to make sure data is accurate (1133).

Perhaps most importantly, taking a property rights approach would allow market forces and market efficiencies handle privacy concerns, without neglecting the particular desires of individual people, and without extensive (and potentially expensive) government regulations (1135-36).

Conclusions

Both Cholpecki and Richmond write from a libertarian perspective, and both believe that connecting the right to privacy with property rights will helps unify conservative and liberal positions into one that can have positive outcomes for everyone. Samuelson approaches the issue from a critical perspective, but outlines many of the important benefits that a “privacy as property” approach might give — and notes that, especially as many American today dislike government-run anything, a system of privacy rights that leverages and extends existing property rules and regulations would likely achieve significant support.

Specifically, the Supreme Court ruled 5-2 against the old Charles River Bridge Company, saying that Massachusetts had not violated the federal constitution’s Contracts Clause — a victory, it was held at the time, for state’s rights (as was Dred Scott). Justice Taney, generally very conservative and pro-property rights (and incidentally in favor of preserving slavery, as abolition would deprive owners of property), ruled against the contracts claim of the private corporation in favor of the public good:

While the rights of private property are sacredly guarded, we must not forget that the community also have rights, and that the happiness and well-being of every citizen depends on their faithful preservation. Charles River Bridge, 36 U.S. at 548.

Taney aligned the “public good” with progress and technological improvements. Ruling in favor of the entrenched Charles River Bridge Corporation would mean that the country would “be thrown back to the improvements of the last century, and obliged to stand still.” Id. If an exclusive monopoly were upheld, then incumbent highway corporations would hold back development of new railroads and canals, which were booming as the new technologies of the nineteenth centuries.

New developments and new approaches had permitted a new corporation to build a new bridge at a lower cost — and to make it free within a few years of its opening, while still turning a profit for its investors. But in doing so, the profit-making potential of the old bridge was destroyed (although investors had already made back their initial investment multiple times over).

But hadn’t the old company taken a risk initially? Didn’t its investors deserve to reap their new profits because they had taken the risk initially? Wouldn’t setting a precedent that their state-granted monopoly could be limited later actually inhibit future investment?

If these questions all seem rather familiar in the 21st century, it’s because these are the same kinds of arguments advanced by patent and copyright holders today. Pharmaceutical companies want their patent monopolies to extend further, and argue that failing to grant a sufficient monopoly would inhibit development and investment. Music and movie companies argue that their copyright monopolies should extend even further than it does now — because otherwise creation and investment would suffer.

Taney said “no” to this argument in 1837. I’ll ask the obvious question, then: did this decision to limit a monopoly contract reduce investment and technological development in the nineteenth century? The (equally obvious) answer is, “no”: the nineteenth century gave us railroads, the telegraph, the telephone, and much, much more. If there’s anything we can learn from Taney’s 1837 decision, it’s that minimizing monopoly rights does not inhibit development — and, I think, the reverse is even more likely.

It’s a lesson we would do well to keep in mind when considering the length and extent of patent and copyright monopolies.

Jack M. Balkin, from the Knight Foundation. CC BY-SA 2.0.

In “Digital Speech and Democratic Culture: A Theory of Freedom of Expression for the Information Society,” Jack Balkin (of the blog Balkinization) writes about what he sees as the appropriation of free speech ideals by media corporations in an effort to maximize their capital investments:

Thus, in the digital age, media corporations have interpreted the free speech principle broadly to combat regulation of digital networks and narrowly in order to protect and expand their intellectual property rights. … Invoking a property-based theory of free expression, they have rejected arguments that public regulation is necessary to keep conduits open and freely available to a wide variety of speakers. (22)

Balkin sees this as reminiscent of a similar appropriation during the first Gilded Age of the 1870s and 1880s especially, when the “robber barons” grew wealthy and strong. Corporations of the time lobbied (and won) for new property rights and new constitutional protections against employment regulations (24). The abolitionists and others had celebrated the freedom to labor for whom one chose as a rejection of slavery; the corporations reinterpreted this as the “freedom of contract,” and used it to prevent government labor regulations (24). So, for example, when Congress passed a child labor law in 1916, the courts — drawing on the freedom of contract now enshrined as a principle in the Constitutional theory of the day — struck it down two years later (in Hammer v. Dagenhart).

Bilkin writes:

In what Clinton Rossiter called the “Great Train Robbery of Intellectual History,” laissez-faire conservatives appropriated the words and symbols of early nineteenth-century liberalism — liberty, opportunity, progress, and individualism — and gave them an economic reinterpretation that served corporate interests. … By the turn of the twentieth century, the best legal minds that money could buy had reshaped the liberal rights rhetoric of the 1830s into a powerful conservative defense of property that they claimed was the rightful heir to the best American traditions of individualism and personal freedom. (24-25)

Today, Bilkin said, we’re seeing a similar move: “The right to speak has been recast as a right to be free from business regulation” (25). Corporations have moved to extend copyright, making it both broader (covering more) and longer (lasting for 70+ years instead of the original fourteen years of 1790. ) They have also argued that networks should be freer than ever of government regulation, because such regulations — passed in the name of protecting the public’s speech — infringes on their freedom of speech.

(Interesting note: this move — discussed in Balkin’s 2004 article — is very similar to what happened with corporate money and speech in the 2010 Citizen’s United decision.)

Copyright law is often approached in terms of debates over competing interpretations of the law: should copyright be used to protect the author’s freedom, or to encourage the public distribution of culture and information, or to turn intellectual products into marketplace commodities, or to serve the interests of corporate publishers and distributors?

He then explains that, at least in the Western–and perhaps especially in the American–tradition, “copyright is the enactment of the dream that the disparate goals and values of individual creative freedom, commerce, and informational dissemination can be reconciled in law.”

In the United States, copyright has always served a functional purpose:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries  (Article I, Section 8, Clause 8 of the United States Constitution).

Drawing on this, Streeter writes that:

From the beginning, therefore, copyright was understood more in functional than in formal or moral terms; the emphasis was more on copyright’s role in encouraging the distribution of culture and information than on its inherent justice.

American law depends on conceptual distinctions, particularly originality and the distinction between an idea and its expression, that are derived from the romantic image of authorship as an act of original creation whose uniqueness springs from and is defined in terms of the irreducible individuality of the writer.

But, Streeter points out, modern broadcast mediums–especially television, but also music, movies, and more–do not have individual “authors,” and yet our legal approaches to copyright still assume some notion of an individual author or creator.

One way the law has handled this is through the fictional “corporate person” who now owns copyrights and substitutes for individual creative humans. These large bureaucratic institutions now “create” most modern works, but still argue that consumers have a moral right to compensate them for their creation in a way that tends to invoke romantic authorship–and breaks down when the “creator” is a large multinational corporation.

Corporations have responded to create bureaucratic enforcement mechanisms, so-called “copyright collectives,” such as ASCAP and BMI. These groups create licensing arrangements that only roughly correspond to “actual” use or “actual” creators (and often strike me as rather reminiscent of a protection racket…).

New technologies that have emerged after Streeter’s book hold the potential for revolutionizing this relationship, although Amazon, Netflix, Hulu, Spotify, et. al. fundamentally do nothing about the problem of corporate content creation. They do, however, re-enable the possibility of individual creators (if such a thing really exists…) to escape the old bureaucratic confines and to more directly connect with consumers via mediators that can reduce the communications and collections overhead.

So is this really a revolution? Perhaps–but as I said, it does nothing about the major point of Streeter that much of today’s media has no individual creator at all. In such a case, these new technologies merely permit more efficient collection, cutting back on the number of “middlemen,” but don’t otherwise revolutionize anything at all.

At least at the University of California, San Diego, the process involves tech transfer officers — 6 for the life sciences, 3 for other kinds of technology, and 1 who does both — reviewing the research done at UCSD. They look for innovations that may be potentially turned into marketable intellectual property. According to Dr. Montisano, a life sciences tech transfer officer at UCSD, they do not “police faculty.” As a result, they sometimes do not learn of new technology until after publication, which immediately causes the loss of international patent rights, and puts U.S. patent rights on a 1-year timeline.

If they do manage to intercept the technology in time — either through researchers submitting it to them directly, or by discovering it after publication — they review the innovation, and may file a provisional patent application to preserve their rights (this allows publication). They then have a year to convert that to a full patent.

Once they have provisional protection in place, the office looks for a good licensee for the technology. They first put a description of the innovation on the UCSD web site, making it available to interested parties who may be seeking such technology. They also identify and actively target potential companies for licensing, focusing on those they know do work in the field and who may be interested in the technology.

The point, according to Dr. Montisano, is to get the technology out into the world through commercialization, not to make a fortune, and UCSD looks for licensees on this basis. Such a focus emphasizes the public nature of the university, and emphasizes the role of the tech transfer office as the buffer zone between private and public enterprise — they license innovations for money, but do so with a goal of benefitting the public.

Additionally, the distribution process also protects researchers from undue market influences. The university owns the invention, not the professor, or grad student, or research tech. 50% of the incoming money goes to the university as a whole, while the remaining 50% is split by the department between those who developed the invention and the department. Thus, even the incoming money is diluted and sifted, buffering the researchers themselves from direct contact with the commercial players.

More rules are in place when it comes to researchers profiting or being overly involved in the commercial enterprise while retaining their role at the university. A university researcher cannot be the executive of a licensee company nor a board member, but can sit on a scientific advisory board. Such a researcher can own shares in the company, though, suggesting at least one way for the market to more directly intrude on an individual academic. Nonetheless, to be full involved in directing a licensee, a researcher must leave the university and their post as an academic and fully enter the commercial world.

Finally, the office itself is insulated from the money involved. Although they bring in millions to the University of California, UCSD’s technology transfer office is funded entirely by the state. No funding comes through a percentage of license fees and no officer receives specific bonuses for signing deals. This emphasizes their focus on the public service of commercializing technology, rather than on their use as market-enablers.

Madey v. Duke

Even after Madey, many researchers continue to ignore patent protections, and continue their work as if they didn’t need to license technology. The result has been increasing claims by license-holders, and a growing sense by researchers that this is complicating their scientific pursuits and introducing extra costs and restrictions.

Universities, now large licensors themselves of new technology thanks to Bayh-Dole and technology transfer offices, have turned to, in the language of Professor Robin Feldman, “open transfer” agreements to lossen up these restrictions. Such agreements are added to agreements when universities license their technologies for industry to develop, and permit both the licensing university and any other nonprofit they allow to use the technology for education and research. This approach co-opts the mechanisms of the market, rather like open-source licensing does, to permit the continued free sharing and publishing in the academic community.

What do these clauses look like? In the case of the University of California, San Diego, Article 2.2 of the sample agreement for licensing captures this “open transfer” provision:

2.2 Reservation of Rights. UNIVERSITY reserves the right to:
(a) use the Invention, and Patent Rights for educational and research purposes;
(b) publish or otherwise disseminate any information about the Invention at any time; and
(c) allow other nonprofit institutions to use and publish or otherwise disseminate any information about Invention and Patent Rights for educational and research purposes.

Part (a) and (b) are relatively standard in all licensing agreements, commercial or not. Most industry licenses also permit the licensor to use their own technology. Part (c) is the interesting part, as it permits other nonprofit institutions to also use and even publish on the technology, provided it is for educational and research purposes. In other words, what the Federal Circuit has taken out of common law, university tech transfer offices have recreated through their own market-focused and neoliberal license agreements.

This approach suggests that, despite efforts to commercialize the “ivory tower,” there remain creative resistance that seeks to maintain the traditional values and benefits of an academic research environment.

There are, of course, numerous challenges for tech transfer offices. Within the university, most scientists are “in it for the science” and not for the money, according to Dr. Montisano. University researchers have the tendency to publish first, forcing his office to chase after them to try to prevent the loss of patent rights (publishing first loses most international rights immediately, though U.S. law allows for a year’s grace). Outside the university, industry values focus on profit first — even if many researchers have been taught to value the science by universities first.

Diagram from James A. Severson, Ph.D., of Veratect Corporation, Kirkland, WA

Industry prefers to restrict use of its technologies to those explicitly licensed—and such licensees generally must pay for the privilege of their use. Methods and materials are kept close, as trade secrets, unless licensed out for approved use. Competitors must be kept from access to preserve corporate profits. Universities, on the other hand, have generally taken a much broader approach to technology use and sharing. Researchers in universities must “publish or perish,” and getting describing methods and approaches garners a researcher the most benefit when readership is broad. One-upping academic competitors is still a key goal, but the method is through demonstration and publishing successes, not through profit-making and market dominance.

The Bayh-Dole Act attempted to bridge the divide, and technology transfer offices are the means of its implementation. Prior to Bayh-Dole, ”legislators were concerned that for a variety of reasons, the government” — formerly the federal government owned the research it funded — ”had proved ineffective as a shepherd of the inventions created with federal research dollars” (see Open Source, Open Access, and Open Transfer: Market Approaches to Research Bottlenecks). By many measures, the results have been phenomenal: at the end of fiscal year 2009, UCSD alone had more than 400 licenses active around the world, with a steady increase since 2000. Also in 2009, UCSD’s technology transfer office distributed more than fifteen million dollars to inventors ($9 million), joint titleholders ($432 thousand) research labs and departments ($2.5 million), and the UC general fund ($2.5 million).

All the money suggests some obvious problems created by the “intrusion” of a neoliberal, market-focused approach into the “ivory tower” university environment (assuming such pure extremes ever existed). For a cash-strapped state government like California’s, why not emphasize this market-connected activity and turn universities into self-supporting institutions? Such an approach risks compromising the university focus of basic research and — perhaps even more importantly — ignores the less commodifiable teaching and research done at such institutions, especially in the humanities. Even within the sciences, forcing research to fit into license agreements and patent arrangements may impede the flow of data, slow down innovation by restricting information sharing, and, ultimately, force university researchers away from basic sciences that form the core of future applications.

Related articles

• Technology Transfer and the Third Way (kfwhite.wordpress.com)
• Columbia University’s Tech Transfer Guru, Orin Herskowitz, on Turning IT, Biotech, and Cleantech Ideas Into Businesses (xconomy.com)

But with intellectual property, even more than with traditional goods, one encounters dissimilar products that are not substitutable. Shubha Ghosh, in The Fable of the Commons: Exclusivity and the Construction of Intellectual Property Markets, uses songs to illustrate this: one song is both the same as and different from another song, but they are not perfectly interchangeable. The same may be said for some chemical and industrial processes. As a result, the intellectual property market cannot allocate goods based on price alone, but also on other characteristics (like quality or type of product). This does not lead to efficient trades or distributional balance.

In addition, intellectual property markets are deeply concerned with the licensing of rights, such as royalties and similar pricing arrangements. The complexity — with dimensions going beyond simple price — means often there is an asymmetry in information and strategic behavior by creators and users. The result is inefficient and undesirable distribution.

As a final example, most analyses of ideal markets suggest that buyers and sellers will reach agreement, but such analyses typically ignore situations in which a customer’s life is at stake — leading to a tendency to pay any price to get a product. There is, notes Ghosh, “something troubling” about this situation. But it is not necessarily easy to select a better alternative to these market-oriented models — somehow justice needs to factor into the model, but how?

I’ve just finished Adrian Johns’ 2009 book, Piracy: The Intellectual Property Wars from Gutenberg to Gates, a 500+ page magnum opus stretching from the 1600s to the present. Johns is a noted University of Chicago historian, and his book is a fascinating and essential read for anyone interested in the history of the term “intellectual property” and development of the modern copyright and patent systems.

via Required Reading: Adrian Johns, Piracy: The Intellectual Property Wars from Gutenberg to Gates | Electronic Frontier Foundation.

Of particular interest:

• The story of the rise of the term “intellectual property” in the 1870s and its connection to patents.
• How the United States once  refusing to recognize the copyrights of foreign (mainly British) authors, and gained a reputation as a “pirate nation.”
• Early anti-piracy efforts in 1903, aimed at sheet music reprinters.

Sounds like a good read!

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• Historian warns against copyright-fight heavy hitting (go.theregister.com)
• History of piracy, reviewed by EFF’s senior copyright lawyer (boingboing.net)