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doi:10.1093/ojls/gqt029
Published Advance Access October 21, 2013
1. Introduction
Over its 600-year history, intellectual property (IP) has been dogged by
persistent disagreement over its normative foundations, and whether they
justify the various IP regimes then extant.1 Particularly heated have been the
debates over the proprietary nature of IP rights, due to the perceived
implications of a rights formal characterization as property for its duration,
A review of RP Merges, Justifying Intellectual Property (Harvard University Press 2011) (JIP).
* St Catherines College, Faculty of Law, and the Institute of European and Comparative Law at the
University of Oxford. Email: justine.pila@law.ox.ac.uk. I am grateful to Julie Dickson for her valuable editorial
comments on this article.
1
For example, 400 years after the first patent legislation was introduced in Venice, Switzerland remained
steadfast in its refusal to establish a patent system on the basis of the pernicious and indefensible principle of
patent protection. F Machlup, An Economic Review of the Patent System: Study of the Subcommittee on Patents,
Trademarks, and Copyrights of the Committee on the Judiciary (US Govt Printing Office 1958) 4.
The Author 2013. Published by Oxford University Press. All rights reserved. For permissions,
please e-mail: journals.permissions@oup.com
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Revolutionary France and America (1990) 64 Tulane L Rev 991 with JC Ginsburg, European Copyright Code
Back to First Principles (with some additional detail) (2011) Auteurs et Medias <http://ssrn.com/
abstract=1747148> accessed 13 August 2013.
10
G Davies, Copyright and The Public Interest (Max Planck Institute for Foreign and International Patent,
Copyright and Competition Law 1994) 79 (quoting from Archives Parlementaires de 1787 a` 1860, Receuil complet
des debats legislatifs et politiques des Chambres francaises (vol xxii, Paris 1887) 210.
11
On IP rights as promoting human flourishing see JIP 38, 105. A further argument from harm and unjust
enrichment is that not recognizing such rights would cause harm to authors or enable third parties to enrich
themselves unjustifiably at an authors expense. Merges also supports this argument as linked to Kant; see JIP 89.
12
The United States Constitution, art 1, s 8.
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13
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Most choose to channel all their discussion of the proper balance between individual
and society into the arena of IP law itself, as though each doctrine and each
controversy must be engineered so as to get the balance right. The more systemic
view supplied by Rawlss way of thinking can get us out of the unproductive and often
divisive trap of thinking that each individual rule of IP must balance out perfectly.
Rawlss approach frees us from this excessively internalist perspective and ought to be
embraced for that reason alone.29
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32
While attributed to the systemic perspective which his argument for IP entails,
this view also reinforces his account of its day-to-day operation by relieving
specific IP rules and practices of the burden of protecting third party rights and
interests in individual cases.32
JIP is not the first work to offer a pluralistic account of IP built around
midlevel principles. For example, in his 2003 essay entitled A Pluralistic
Account of Intellectual Property,33 David Resnik analyzed six approaches to
IP based on Lockean property theory, US-style utilitarianism, Hegels theories
of freedom, self-expression and property, privacy and egalitarianism, including
Rawlss pluralistic conception of justice. The conclusion he reached was that
none of these approaches accounts adequately for the existence of IP, with each
instead emphasizing a different value or goal which IP supports, including
autonomy (or freedom), privacy, utility and justice. He argued that an
alternative understanding of IP is therefore required, and expressed his
preference in that regard for a pluralistic one, explained with reference to the
inadequacy of the other approaches in isolation, the diversity among the
different IP regimes, and the pluralistic nature of modern democratic societies,
all of which he described as militating against a one size fits all approach to IP
(or any other form of property).
Resniks description of the practical implications of his pluralistic model
elucidates Mergess model by highlighting some important similarities and
differences between the two. According to Resnik, when resolving IP disputes a
court ought to decide which of the values having primacy in IP are at stake, and
then weigh and balance those values to decide which ought to have priority in
the particular case. While all IP values are a priori equal in Resniks account, the
extent of their engagement in a case depends in part on the IP right involved and
its social and legal function. For example, because (US) patent law exists to
promote the progress of science and the useful arts,34 utility ought to have a
higher priority in patent disputes than privacy and autonomy. The reason is
social pluralism, which Resnik views as requiring a commitment to a certain legal
pluralism as well, not only in the sense of tolerating different individual beliefs as
to the nature of or reason for law, but also in the sense of allowing that the
different aspects of a legal institution such as IP be governed by different basic
values according to its different legal and social function[s].35 Hence Resniks
choice of primary IP values, which reflect in combination his view of the
different legal and social functions of the main IP regimes.
It is clear from Resniks essay that his values share the midlevelness of
Mergess principles, and exist as principles in the Dworkinian sense:36
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JR Pennock and JW Chapman (eds), Justifications: Nomos XXVIII (New York University Press 1986) 49;
K Henley, Abstract Principles, Mid-Level Principles, and the Rule of Law (1993) 12 L & Phil 121; L Alexander
and K Kress, Against Legal Principles (199697) 82 Iowa L Rev 739.
37
Resnik (n 33) 331.
38
RP Merges, The Relationship Between Foundations and Principles in IP Law UC Berkeley Public Law
Research Paper No 2130199 (July 2012) 14 <http://ssrn.com/abstract=2130199> accessed 13 August 2013. See
also JIP 19 (It would take some real work to sort out, in a detailed way, how to reconcile these competing
demands to arrive at a coherent set of principles for a property regime.)
39
See Merges (n 38) 14 ([T]here are not that many ties to break. There is no need to resort to lower levels of
analysis in many cases.)
40
Association for Molecular Pathology v Myriad Genetics Inc 569 US 12398, 132 SCt 1794 (2013). For a
discussion see J Pila, Isolated Human Genes: The patent equivalent of a non-copyrightable sound recording
(2013) LQR forthcoming; preprint available at http://users.ox.ac.uk/~lawf0169/pdfs/lqr_isolatedhumangenes.pdf.
41
[2011] UKSC 39, [2012] 1 AC 208.
occupying an intermediary space between moral values and legal rules; deriving
their force from both their moral content and their fit with existing institutional
facts; and existing to be optimized in individual cases by a process of weighing
and balancing.37 While not expressed identically, Mergess approach seems
very close to this, the main differences being: his choice of midlevel principles
(dignity, efficiency, non-removal and proportionality instead of autonomy,
privacy, utility and justice); his one size fits all theory of IP; and his eschewal
of a method of decision-making which involves identifying the function of the
IP regime involved and/or weighing and balancing the principles at stake
according to the facts of the case. Indeed, weighing and balancing principles in
individual cases is all but obviated by Mergess systemic account of IP, and
resort to the function of IP is supported only as part of an enquiry into the
purpose of IP in those exceptional cases in which a tiebreaker between
principles subsisting in equipoise is required.38
An initial question raised by this discussion is whether these arguments
regarding the theory and principles of IP are borne out by current legal
practice. For example, when interpreting and applying IP legislation, do the
courts routinely consider the purpose of IP, including the moral rights of
authors and inventors and/or the value to the public of having access to works
and inventions? Contrary to Mergess suggestion the answer seems clearly to be
yes, including in the USA.39 For example, in June 2013 the US Supreme
Court held that the patentability of isolated genes could not be determined
without regard to the purpose of the US patent system.40 In its opinion, as that
purpose is to promote creation, and the act of isolating a gene from its natural
environment does not involve the creation of anything, isolated genes are not
patentable under US law, contrary to the position in Europe and elsewhere.
Such policy-based reasoning in IP is common, including in the UK, as two
further recent examples serve to demonstrate.
The first is Lucasfilm Ltd v Ainsworth,41 involving a claim of artistic copyright
in the storm trooper helmet from Star Wars as a sculpture within the meaning
of the Copyright, Designs and Patents Act 1988. In considering the claim, the
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42
43
44
45
46
ibid [14].
ibid [48].
ibid.
[2011] UKSC 51, [2012] 1 All ER 1154.
ibid [99].
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47
cf Myriad (n 40) 2116 (excerpted at n 84). The theory of patents supported in HGS is effectively that
argued for in EW Kitch, The Nature and Function of the Patent System (1977) 20 J L Econ 26590, namely,
that patents are prospects for developing technological opportunities. L Hoffmann, unpublished FHS patent law
seminars delivered at the University of Oxford (Hilary Term 2012).
48
Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the
harmonization of certain aspects of copyright and related rights in the information society [2001] OJ L 167/10
(Information Society Directive) art 5(1).
49
[2013] UKSC 18, [2013] 2 All ER 852.
50
ibid [8].
51
ibid.
52
See ibid 83 (suggesting that a Kantian perspective of this issue would result in IP rights trumping the
interests of would-be licensees so as to require online permissions).
and copyright, IP is far from a monolithic legal entity. And a fourth (related to
this third inference) is that the purpose of IP regimes is understood differently
by different courts in different jurisdictions, with concrete implications for their
scope and application. Thus, and as reflected in the reasoning in AMP and
HGS above, whereas the US Supreme Court regards the purpose of the US
patent system as being to promote creation, the UK Supreme Court regards it
as being to promote innovation, including by ensuring that researchers have the
monopoly rights they need to attract the external funding required to pursue
their research.47 The result is very different implications for the scope of IP
rights, as the outcomes in AMP and HGS themselves demonstrate.
In sum, courts commonly invoke the historical and theoretical roots of IP
to assist in the interpretation and application of modern copyright and patent
legislation. In addition, it seems reasonable to expect that the day-to-day
importance of those roots will increase in the UK and other jurisdictions as a
result of the impact of European and international harmonization in promoting
teleological methods of interpretation and challenging UK understandings of
IP law and policy. On the other hand, other recent UK decisions point to a
further result of that impact in the form of an increased judicial reliance on
principles rather than foundational theory when interpreting and applying IP
legislation. An example may again be offered from recent UK Supreme Court
opinions, this time involving the scope of the EU exemption from copyright
infringement covering temporary acts of reproduction in the digital environment.48 According to the Court in Public Relations Consultants Association Ltd
(PRC) v The Newspaper Licensing Agency Ltd (NLA),49 the lower courts view
of copyright as prohibiting any consumption of [a] work, including any
unauthorized copying of a webpage made on a computer screen in the course
of internet browsing, was not justified by the policy of the EU to maintain a
high level of protection of intellectual property as had been argued.50 The
reason, it held, was the need to read that policy in light of the EUs further
commitment to allow[ing] the ordinary use of the internet.51 Thus, it was the
principles of ensuring a high level of IP protection and not impeding the
ordinary use of the internet that determined Lord Sumptions opinion in PRC
v NLA, rather than the reasons (past or present) for such protection per se.
While this outcome seems contrary to that advocated in JIP,52 the reasoning
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53
See JIP xi, 10, 13941. In Mergess account this results in a conception of midlevel principles as
philosophically neutral, in the sense of being simultaneously explicable with reference to utilitarian and nonutilitarian arguments for IP. See n 83.
54
See eg N MacCormick, Beyond the Sovereign State (1993) 56 MLR 1. See further G Itzcovich, Legal
Order, Legal Pluralism, Fundamental Principles. Europe and Its Law in Three Concepts (2012) 18 ELJ 358.
55
cf JIP 159 (describing proportionality as the most undertheorized of the four midlevel principles, and as
rarely identified as a stand-alone principle).
56
See ibid 7, 159.
57
See The Treaty on European Union [2010] OJ C83/13, art 5(4); T Harbo, The Function of the
Proportionality Principle in EU Law (2010) 16 ELJ 158; A Ohly and J Pila (eds), The Europeanization of
Intellectual Property Law: Towards A European Legal Methodology (OUP 2013, forthcoming) chs 1, 8, 9, 13.
58
See eg Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457; Re S [2004] UKHL 47, [2005] 1 AC
593 [17] (Lord Steyn) (The interplay between articles 8 and 10 [ECHR] has been illuminated by the opinions in
the House of Lords in Campbell v MGN Ltd . . . . For present purposes the decision of the House on the facts of
Campbell and the differences between the majority and the minority are not material. What does, however,
emerge clearly from the opinions are four propositions. First, neither article has as such precedence over the
other. Secondly, where the values under the two articles are in conflict, an intense focus on the comparative
importance of the specific rights being claimed in the individual case is necessary. Thirdly, the justifications for
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interfering with or restricting each right must be taken into account. Finally, the proportionality test must be
applied to each. For convenience I will call this the ultimate balancing test.)
59
JIP 162.
60
See ibid 181.
61
See generally J Pila, Intellectual Property as a Case Study in Europeanization: Methodological Themes and
Context in Ohly and Pila (n 57) 1.
62
Directive 98/44/EC on the legal protection of biotechnological inventions [1998] OJ L213/1321 (Biotech
Directive).
63
Information Society Directive (n 48).
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71
rules and practices of copyright. Thus, in the European context, the operative
principles of copyright restate the established basic values of the European
community, thereby ensuring that the specific rules and practices of the regime
are tethered to those values. Hence the primacy among them of the free
movement of goods, services, people and capital throughout EU Member
States (guaranteed by the TFEU71 and expressed, inter alia, in Recitals (1) to
(4) of the Information Society Directive), the protection of property and
dignity (guaranteed by Articles 17(2), 1 and 13 of the EU Charter and
expressed, inter alia, in Recitals (3), (4), (9) and (11) of the Information
Society Directive), and the protection of freedom of expression and educational
values (guaranteed by Articles 11 and 14 of the EU Charter and expressed,
inter alia, in Recital (3), (14) and (34) of the Information Society Directive).72
The position is different with respect to the EU patent system. Still confined
to the field of biotechnology, that system is premised less on a personal but
unselfish rights model of IP73 than the utilitarian model reflected in the
decisions of the UK and US Supreme Courts above. According to that model
in its EU form (and consistent with the reasoning of HGS particularly), the
aim of the patent system is to promote European industry and the internal
market by ensuring sufficient harmonized legal protection to encourage
investment in biotech research and development74 while also respecting
national regulatory provisions regarding such research and development; the
public domain of (non-patentable) discoveries; and fundamental principles
safeguarding the dignity and integrity of the person,75 as well as values of
individual autonomy and the right to have an opportunity to consent to the use
of ones own biological materials.76 Thus, and as in European copyright, one
sees an emphasis on ensuring a high level of protection for inventors, albeit for
utilitarian rather than deontological reasons, and still subject to certain
Charter-derived third party rights and societal interests. Principal among those
rights are human dignity and the integrity of the person, which the Directive
recognizes as supporting the exclusion from patentability of a range of
biotechnological subject matter, in addition to informing basic principles of
patentability themselves.77
Among other things, this discussion draws attention to the way in which the
principles in Mergess account are derived. Rather than stemming from the
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78
See JIP 140 (Midlevel principles engage foundational values in a number of ways, but they do not depend
on any particular set of values for their validity. They spring from doctrine and detail, from the grain of actual
practice.)
79
See ibid 14243.
80
See ibid 155.
81
See ibid 15658.
82
See ibid 15051, ch 6. On the connection between proportionality and the requirement that patent claims
be commensurate with the specifications teaching see further J Pila, Chemical Products and Proportionate
Patents Before and After Generics v. Lundbeck (2009) 20 KLJ 489. On proportionality and patent scope more
generally see J Pila, Patent Eligibility and Scope Revisited in the Light of Schutz v Werit, European Law, and
Copyright Jurisprudence in RC Dreyfuss and JC Ginsburg (eds), Intellectual Property at the Edge (CUP 2013)
ch 18.
83
See JIP 1445 (principles are theoretical or policy-oriented; yet because they are not rooted in any specific
normative framework, they avoid what might well be a fruitless debate if conducted at that level.) See also ibid
68, 13031 (connecting efficiency and non-removal to utilitarian theories of IP, proportionality to Lockean,
utilitarian and Rawlsian theories, and dignity to non-utilitarian and continental European IP systems). Compare
the view of Resnik (n 33).
84
The point is alluded to by Merges himself; see JIP 39. See also Mayo Collaborative Services v Prometheus
Laboratories Inc 566 US 101150, 132 SCt 1289, 1293 (2012) (justifying the exclusion from US patent
protection of natural phenomena, mental processes and abstract intellectual concepts with reference to the
purpose of patent law in promoting innovation. According to the Court, monopolization of those [basic] tools
[of scientific and technological work] through the grant of patent might tend to impede innovation more than it
would tend to promote it.); Myriad (n 40) 2116 (As we have recognised before, patent protection strikes a
delicate balance between creating incentives that lead to creation, invention, and discovery and imped[ing]
the flow of information that might permit, indeed spur, invention.. . . We must apply this well-established
standard to determine whether Myriads patents [in respect of isolated human genes] claim any new and
useful . . . composition of matter ); but cf Myriad (n 40) 211617 (justifying the exclusion from US patent
protection of isolated human genes (as products of nature) with reference to the purpose of patent law in
promoting creation, and the consequential need for an act of creation to support a patent).
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85
See eg JIP 155, 251 (describing Mergess enthusiasm for individual IP rights as putting him on the side
of those who would be cautious in finding a particular practice to be fair use, lest a rush to apply the fair use
label will stifle the formation of a market.)
86
This is consistent with Mergess further claim that [a]uthors gain nothing without a market: JIP 155; but
cf JIP 295 (the essence of property is the right to exclude (emphasis added)).
87
JIP 81; see also ibid xi, 40.
88
IP rights do not confer a right to use a particular subject matter, much less exploit it commercially. See eg
Biotech Directive (n 62) (14) (Whereas a patent for invention does not authorise the holder to implement that
invention, but merely entitles him to prohibit third parties from exploiting it for industrial and commercial
purposes). And so too normatively, the conception of property rights as rights to turn a profit has no clear basis
in accepted understandings of property.
89
On the utilitarian premise of market failure views of fair use see M Spence, Intellectual Property and the
Problem of Parody (1998) 114 LQR 594.
90
JIP 278.
91
This connection has been particularly influential in Indian patent law; for a discussion see J Pila, Some
Reflections on Method and Policy in the Crowded House of European Patent Law and their Implications for
India (2012) 24 NLSIR 54.
license the use of their works (as Merges does85), rather than, for example, to
autonomy, and a desire to protect its instantiation in such third party rights
and interests as freedom of expression and educationunless one again
supports an exclusively utilitarian understanding of the purpose of copyright.
This is particularly given the widespread connection of the fair use defence to
such rights and interests, the centrality of autonomy to Mergess foundational
theory, the difficulty of squaring that theory with the view of fair use which
Merges advocates, and the law-and-economics premise of that view in a
conception of copyright as conferring a right to a certain market power with
respect to a work (rather than a right to exclude others from its use).86
Regarding the latter particularly, even if we accept Mergess claim that
autonomy requires a conception of IP rights as including a right to try to make
some money87a claim which seems doctrinally and normatively problematic88it does not follow that IP rights confer only such a right. To suggest
otherwise seems difficult to defend other than on an explicitly utilitarian
understanding of IP as existing to facilitate a market in IP rights and their
related subject matter for economic or other societal reasons.89
The same utilitarian bias underpins Mergess discussion of patent rights and
essential medicines. There he writes that as [t]he dignity interest of researchers
who develop the drug is not directly at issue, [and] nor is the nonremoval
principle, the issue of access to essential medicines is appropriately conceived
as one of efficiency and, to a lesser extent, proportionality.90 The result is a
discussion in which considerations of utility again eclipse the individual rights
and interests of third parties, notwithstanding the well-established link between
dignity and health care,91 and the centrality of dignity to both Mergess
foundational theory and operational model of IP. Thus, he writes, that the real
question is not whether human rights trump property rights to require access
to essential medicines, but what is the best way to maximize the number of
effective pharmaceutical products that are brought to bear on [human]
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96
ibid.
See Case C34/10 Brustle v Greenpeace eV [2012] CMLR 41.
See ibid.
99
See eg Football Association Premier League Ltd (n 65); Case C302/10 Infopaq International A/S v Danske
Dagblades Forening (CJEU, 17 January 2012).
97
98
importance is whether the use of the work was for a commercial purpose or
competed with the copyright owners market. If it was or did it will be regarded
as presumptively unfair, and thus not capable of supporting a fair dealing
defence.96
This is broadly consistent with Mergess account of the USAs fair use
defence, as well as with the CJEUs emphasis on ensuring that exceptions to
copyright are interpreted narrowly. On the other hand, it is very different from
the manner in which the fundamental rights of third parties are protected in
European patent law. In that context the CJEU has held that dignity-based
exclusions from patentability must be interpreted expansively in recognition of
the importance of the value underpinning them.97 In addition, it has held that
when determining whether an invention is excluded from patentability on
morality or public policy grounds, the history of its derivation is relevant,
including whether any biological materials thereby required were consensually
obtained.98 When considered alongside the treatment of the freedom of
expression and education-based defences of copyright, the inescapable implication is that dignity and autonomy interests weigh more heavily in the balance
with patent rights than freedom of expression and educational interests weigh
in the balance with copyright.
There are various possible explanations for this differential treatment of third
party rights and interests in copyright and patent law, the most obvious
being the different nature and justificatory basis of the IP and other rights in
question and/or the extent of their perceived conflict. Before accepting such
explanations, however, it is important to note that whereas in patent law the
position described is a product of the Biotech Directive, in copyright it is a
product of the UK courts adoption of the factors-based approach to fairness.
To the extent that approach receives positive support from European
legislation, it is via the three-step test of Article 5(5) of the Information
Society Directive, which has recently been read down by the CJEU as adding
nothing of substance to the individual defences of Article 5(1)(4).99 Given
this, it seems important to enquire further into the consistency of the UK
courts test of fairness with European law, including EU fundamental rights
and the principle of proportionality. And doing so reveals its problematic basis.
Specifically, and assuming that the rationale for the fair dealing defences is to
protect third party Charter rights to freedom of expression and education
(which it seems clearly to be), and that the statutory definitions of the
permitted dealings do represent the legislative expression of that rationale
(which they seem clearly to do), the implication is unavoidable thataccording
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101
102
103
See
See
See
See
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properly to instantiate such rights and interests in the rules and practices of
their IP regimes.
5. Conclusion
104