Semicommons in Fluid Resources

Marquette Intellectual Property Law Review Volume 20 | Issue 2 Article 6 Semicommons in Fluid Resources Henry E. Smith Follow this and additional works at: http://scholarship.law.marquette.edu/iplr Part of the Intellectual Property Law Commons Repository Citation Henry E. Smith, Semicommons in Fluid Resources, 20 Marq. Intellectual Property L. Rev. 195 (2016). Available at: http://scholarship.law.marquette.edu/iplr/vol20/iss2/6 This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion in Marquette Intellectual Property Law Review by an authorized editor of Marquette Law Scholarly Commons. For more information, please contact . NIES LECTURE 2016 (DO NOT DELETE) 4/12/2017 9:38 PM 2015 ANNUAL HELEN WILSON NIES LECTURE IN INTELLECTUAL PROPERTY SEMICOMMONS IN FLUID RESOURCES HENRY E. SMITH* INTRODUCTION ..................................................................................... 195 I. FLUID PROPERTY ............................................................................... 199 II. MANAGING WATER ......................................................................... 205 III. THE INTELLECTUAL PROPERTY SEMICOMMONS............................. 209 CONCLUSION ......................................................................................... 212 INTRODUCTION Intellectual property has an exclusion problem. Much of the current controversy over intellectual property appears to stem from the excessive exclusion that intellectual property law affords the holders of rights—rights that derogate from the public domain and prevent what would otherwise be use that does not directly harm anyone. To the economist, it is the nature of information as a resource that causes us our ambivalence about exclusion rights to information: if information can be consumed at zero marginal cost, exclusion is an unalloyed bad. The only rationale for intellectual property would be as an incentive to produce the information in the first place, but once it is produced, we implement exclusion only with regret and should not do so if there is a cheaper way to provide an incentive for the production of information. Given that exclusion looks like a colossal waste, many would hold that one or more of these alternatives—from prizes to social recognition—simply has to be better.1 And intellectual property is not the only area in which exclusion proves * Fessenden Professor of Law and Director of the Project on the Foundations of Private Law, Harvard Law School. I thank Andrew Lewis for excellent research assistance. All errors are mine. 1. See, e.g., MICHELE BOLDRIN & DAVID K. LEVINE, AGAINST INTELLECTUAL MONOPOLY (2008); see also JAMES BESSEN & MICHAEL J. MEURER, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK (2008). NIES LECTURE 2016 (DO NOT DELETE) 196 MARQ. INTELL. PROP. L. REV. 4/12/2017 9:38 PM [Vol. 20:2 controversial. As with information, many would claim that property rights of any sort in water, and especially those involving prior appropriation as in the American West, are inherently wrong and violate human rights.2 Similar ire is directed against proposals for property rights in the radio spectrum and on the Internet.3 From these perspectives, property itself would appear to be the problem. It is property that erects the metaphorical fences around information, spectrum, water, and other resources with public goods characteristics; it is, therefore, property that so many would like to do away with. In this lecture, I would like to propose a somewhat different diagnosis. Property is indeed at the heart of these questions over rights in fluid resources. However, I will argue that the picture of property is incomplete. Once we understand how property meets its own challenges, we will be in a position to see how problems involving intellectual property, water, spectrum, and so on— what I will call “fluid resources”—can be, and sometimes are, solved rather than created by means of property institutions. In particular, I will show that fluid resources are very likely to call for hybrid property systems combining private and common elements—a semicommons—and require much more fine-tuning through rules governing property use than do more-familiar kinds of resources. To begin with, the notion of exclusion is not uncontroversial in property. People disagree about how central exclusion is to the notion of property (if there is such a notion!), and how far it should be pushed.4 Further, if we do 2. See, e.g., Karen Bakker, The “Commons” Versus the “Commodity”: Alter-globalization, Anti-privatization and the Human Right to Water in the Global South, 39 ANTIPODE 430 (2007); Joseph W. Dellapenna, The Importance of Getting Names Right: The Myth of Markets for Water, 25 WM. & MARY ENVTL. L. & POL’Y REV. 317 (2000). 3. See, e.g., YOCHAI BENKLER, THE WEALTH OF NETWORKS: HOW SOCIAL PRODUCTION TRANSFORMS MARKETS AND FREEDOM (2006); LAWRENCE LESSIG, THE FUTURE OF IDEAS: THE FATE OF THE COMMONS IN A CONNECTED WORLD (2001); see also Jon M. Peha, Approaches to Spectrum Sharing, IEEE COMM. MAG. (Feb. 2005). 4. See, e.g., J.W. HARRIS, PROPERTY AND JUSTICE 30–32 (1996); J.E. PENNER, THE IDEA OF PROPERTY IN LAW 68–74 (1997); Larissa Katz, Exclusion and Exclusivity in Property Law, 58 U. TORONTO L.J. 275 (2008); Thomas W. Merrill, Property and the Right to Exclude, 77 NEB. L. REV. 730, 731 (1998); see also Henry E. Smith, The Thing About Exclusion, 3 BRIGHAM-KANNER PROP. RTS. J. 95 (2014). Trespass is a sovereignty-based tort. See Arthur Ripstein, Beyond the Harm Principle, 34 PHIL. & PUB. AFF. 215 (2006). For use-based critiques of emphasizing exclusion, see, e.g., Eric R. Claeys, Exclusion and Exclusivity in Gridlock, 53 ARIZ. L. REV. 9, 17–28 (2011) (reviewing MICHAEL HELLER, THE GRIDLOCK ECONOMY: HOW TOO MUCH OWNERSHIP WRECKS MARKETS, STOPS INNOVATION, AND COSTS LIVES (2008)); Adam Mossoff, What Is Property? Putting the Pieces Back Together, 45 ARIZ. L. REV. 371, 395–97 (2003). For critiques of the importance of exclusion, see, e.g., HANOCH DAGAN, PROPERTY: VALUES AND INSTITUTIONS 37–55 (2011); Gregory S. Alexander, The Social-Obligation Norm in American Property Law, 94 CORNELL L. REV. 745 (2009). NIES LECTURE 2016 (DO NOT DELETE) 2016] SEMICOMMONS IN FLUID RESOURCES 4/12/2017 9:38 PM 197 implement exclusion strategies in “regular” property, they lead to many of the same problems identified in the controversies over intellectual property, water, and the other mentioned resources, but often to a lesser extent. Whether for fluid or regular resources, exclusion always comes at a cost in terms of delineation and enforcement effort—and in terms of forgone harmless use. Intellectual property and water law problems are indeed problems, but they are property problems. And yet, the difficulties in intellectual property, water law, spectrum, and the like are in a sense special, an (...truncated)