Intellectual Liability

"Intellectual property" is increasingly becoming a misnomer, since incentives to create are today often granted in the form of liability rights rather than a property-type right to exclude. In this Article, Professor Crane revisits the assumptions implicit in the term "intellectual property," finding that the debate over whether liability or property rules provide better incentives focuses too narrowly on the pros and cons of the right to exclude.

Crane suggests reframing the debate; if the right to exclude is one in a bundle of sticks (rights), then the question of whether property or liability is the better model for intellectual rights should be answered "with reference to the totality of sticks in the bundle of rights." The Article begins with an exploration of the varying pressures causing the partial "depropertization" of intellectual property rights. Many of these pressures stem from a concern that rightsholders with power to exclude enjoy a monopoly-holdout position that enables them to extract excessive royalties.

Crane then argues his central normative claim: "that the effect of depropertization on the incentives of inventors and creators to undertake 'useful arts' cannot be assessed in isolation. Instead, everything depends on the valence of intellectual rights—the interaction between the various sticks in the bundle." Finally, the Article considers how to operationalize a decisional rule regarding intellectual property rights that accounts for the interactions among various sticks in the possible bundle.