October 28, 2008
Road to IP 3.0
Posted by Shubha Ghosh
Intellectual property as a legal academic field has evolved through three stages. The first is as a set of service courses, offered by some law schools in recognition that some attention had to be paid to patent, copyright, and trademark law in the curriculum because some students would be interested in practicing in these areas. Except for the field of trademark, which sometimes would arise in the context of competition law or consumer protection courses, intellectual property was not viewed as a serious discipline, certainly not one suitable for serious academic inquiry or for policy.

Then, something changed in the 1990’s. The field received a lot more attention at the domestic and international levels, perhaps out of greater concern with the need to promote innovation and economic growth, perhaps out of industry pressures as certain high technology industries expanded economically and then politically, or perhaps out of the move to privatize and liberalize legal systems, whether the shift from the New Deal paradigm in the United States or the shift towards more liberal political and economic regimes in certain developing countries. Intellectual property became hot, all schools starting expanding in this area (albeit at different rates) and much academic inquiry focused on intellectual property law and policy. The field obtained constitutional valence both through an increased focus on constitutional law and norms in intellectual property and through a recognition that intellectual property law may perhaps be constitutive of (i.e. the foundation for) the law and the economy more broadly. This expansion seemed to reach a plateau with some big Supreme Court defeats for the academy (Eldred v Ashcroft, Universal Studios v Grokster) and increased legislative efforts which took intellectual property out of the realm of academic theory and back into the dealings of the Beltway world. Intellectual property has become normalized with many voices formulating arguments within an established academic frame of ownership, on the one hand, and access, on the other.

Now, we are talking about IP 3.0, and my sense is that this recent stage of intellectual property is about recognizing and developing the transactional practice of intellectual property, as opposed to defining the rights structure of intellectual property within a set of constitutional norms. At one level, IP 3.0 is about ordinary practice: IP is a business asset, a source of value, and we need to understand how this set of rights called intellectual property is transferred and restructured through transactions within and between firms. What is relevant in IP study is how these rights are licensed, acquired, and transformed into value. In some ways, this progression is the logical one from constitutional IP: once foundational rights are established, the next step is to see how they are practically administered and used. At another level, IP 3.0 reflects some dissatisfaction with IP 2.0. The constitutionalization of IP failed. Eldred was a disappointing decision with the Court’s seeming to conclude that Congress can pretty much do what it wants as far as copyright (and patent) legislation. If Congress pulls the strings, then IP constituencies would have to learn how to play Beltway politics to move the game in their favor. Grokster, perhaps, solidified this sense of failure (at least symbolically; the case really may not be much of a watershed practically) by revealing that Sony, the keystone of copyright fair use, may not be that protective or limiting on copyright after all. If the cathedral fails to stand, then we are left to play with the individual stones.

The latter scenario is overly pessimistic. The shift to considering IP as a business asset, the core of IP 3.0, may be an acknowledgement that true IP reform can best occur through better IP practice. If we want to promote greater use and dissemination of protected works, then creating legal rules of protection may be wholly inadequate, especially if rights protective of users and employees can readily be transacted away. Focus instead on the transactions themselves: develop a richer set of licensing terms, understand how these terms can be disseminated and then enforced by the courts, consider doctrines that shape transactional practice (such as the first sale doctrine in the recent Supreme Court decision in Quanta v LG Electronics), think about the life of intellectual property in the world of commerce, and see how the wheels of commerce can shape the scope of intellectual property rights.

Hence the transactional turn in intellectual property which I am seeing in current intellectual property study. This vision is not myopia on my part since I am the co-author of a casebook on Intellectual Property in Business Organizations. I see this turn in the scholarship of many IP colleagues, in the conferences on entrepreneurship, in the curriculum of some law schools, and in the development of case law, particularly the big Supreme Court IP decisions since 2005 (eBay, Independent Ink, KSR, Quanta). I will discuss the implications of this transactional turn for IP policy towards the end of this series of posts. But I would first like to explore what this transactional turn entails, looking at the important overlap between intellectual property and transactional practice tomorrow and then at the details of a transactional intellectual property course the next day.

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