Laws3111 Lecture4 2011

Week 4 – Justifications for Property

  • More relevant than justifications for other areas of law, due to the nebulous and expanding definition of what is ‘property’ (eg. Moore, Loreal)

L’Oreal v Belure (2009)

  • Defendant sold lawful ‘smell-alike’ perfumes (no IP protection for scents)
  • Held he infringed trademark by distributing ‘comparison lists’ identifying what smells like the L’Oreal version.
  • Effectively held that trademarks could be held to prevent economic ‘free-riding’
  • Judgement rooted in economic, moral, and ethical justifications rather than law.

Utilitarian and Law & Economics Justifications

  • Utilitarian reasoning uses wealth, happiness, or general welfare to prove society is better off with property rights than without (Waldron)
  • Legal property systems with clearly defined rights serve to minimise the cost of protecting possessions (policing, litigation, etc.)
  • Creates/increases incentives to create property (eg. Patents, Copyright) if you know that you can actually benefit from it.
  • Policing costs theory justifies communal property – but the tragedy of the commons results in communal property being less effectively utilised. (Hardin)
  • Demsetzia proposed that property rights and designed to correct for externalities – benefits or costs outside of exchanges, not otherwise reflected by market prices. Allows the internalisation of those externalities by granting clearly defined rights for the purposes of negotiation (Coase Theorm)
  • Pigouvian proposed government subsidies to compensate for positive externalities
  • Economists generally favour property rights over liability rules or inalienable rights, because they allow for more efficient transactions.
    • Liability Rule: Right to be compensated, but no control or exclusion – generally not an accurate indicator of market prices in an efficient market
    • Inalienable Right: Non-transferrable, absolute right
  • Actual party with the right is less relevant than having it clearly defined, so parties know they can negotiate. However rights should ultimately be allocated to the party that minimises transaction costs if possible.

Natural Rights Theorem

  • Lockean property rights theory based around natural law/rights
  • Proposed liberty rights
    • Disposition of your own efforts
    • Right to use the commons (things not ‘owned’)
  • Proposed duty – Duty not to interfere with things produced/taken from the commons
  • Argued we have the ownership/rights in our own body, and by extension we own our labour and the products of our labour.
  • Reflects morality to a degree – should not appropriate the labour of others.
  • Argued limits to property rights – must not take so much it spoils (more than you can use) unless you can sell or gift it, and must leave enough and as good for people who come along later (morality based – greed is bad. Efficiency based – don’t take more than you can realistically use)
  • Didn’t believe that private property was inconsistent with the commons – which falls apart in modern society, when any useful property is ultimately owned by someone (albeit frequently in a ‘more than you can use’ fashion)

Personality/Personhood Theory (as per Radin)

  • Originated in Hegel’s ‘Philosophy of Right’
  • Posited that self determination/becoming a person involves interaction with other people and the world around us with a view to leaving our mark on the world – which meant we need to affect control over the resources in our environment, and see those efforts reflected.
  • Hegel’s restatement by Radin is more relevant
  • Radin felt we need a minimum material comfort in order to flourish and thrive, and that certain ‘key’ items are truly personal property (eg. Wedding Ring, family photos, etc.) that are tied to our sense of personhood.
  • Most relevant to copyright law (personal ideas) and inalienable rights tied to the person (moral rights)