Analyzing the Circuit Split Over CDA Section 230(E)(2): Whether State Protections for the Right of Publicity Should be Barred


In 2018, coworkers notified Karen Hepp, a newscaster and co-anchor for the local Fox affiliate’s morning news program Good Day Philadelphia, that a screenshot of her smiling at a hidden security camera taken about fifteen years ago was being used in various online advertisements for erectile dysfunction and dating apps. Hepp was not previously aware that her photo had been taken or that her photo was posted and shared online on platforms such as Facebook, Reddit and Imgur. Hepp’s photo was used to solicit Facebook users to “meet and chat with single women.” The photo was also featured on Imgur under the heading “milf,” a derogatory and degrading term that refers to a sexually attractive woman with young children, and a Reddit user under the handle “pepsi_next” posted Hepp’s photo to a Reddit subgroup “r/obsf,” which is a repository for risqué photos of older women. Though Hepp did not allege that Facebook, Imgur, or Reddit had any role in creating or directly publishing this content, she argued that the platforms’ actions have caused “serious, permanent and irreparable harm” to her reputation brand, and image. Hepp filed claims against Facebook, Imgur, and Reddit for violations of a Pennsylvania state statute that codifies a right of publicity through causes of action for an unauthorized use of one’s name or likeness and the Pennsylvania common law right of publicity.

Because there is no federal law protecting a right of publicity, states that have adopted the right of publicity have done so by statute, judicial decision, or both. The right of publicity is the right to control the commercial use and value of one’s persona, but the right significantly varies from state to state. Generally, a claim “requires three elements to be actionable: (1) the use of an individual’s persona; (2) for commercial purposes; and (3) without plaintiff’s consent.” The Pennsylvania statute creates a cause of action for “any natural person whose name or likeness has commercial value and is used for any commercial or advertising purpose without the written consent of such natural person.” In Hepp v. Facebook, Facebook, Reddit, and Imgur filed a motion to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6), and the District Court for the Eastern District of Pennsylvania granted the motion, holding that Hepp’s statutory and common law right of publicity claims were barred by the section 230(c) of the Communications Decency Act (“CDA”).

Section 230 of the CDA states, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and it expressly preempts any state law to the contrary. Essentially, this means interactive service providers are generally immune from liability related to content posted or shared by third parties. Therefore, section 230 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.” However, there are some exceptions to this immunity, including causes of action under “any law pertaining to intellectual property.”

In granting the motion to dismiss, the district court in Hepp followed the Ninth Circuit’s interpretation of section 230(e)(2) in holding that only federal intellectual property claims are excluded from the scope of CDA section 230 immunity, so state rights of publicity claims are barred by section 230(c). Hepp argued that the District Court for the Eastern District of Pennsylvania should instead follow other district courts in New Hampshire and New York in holding that section 230(e)(2) includes state intellectual property claims, such as a state right of publicity claim. Hepp subsequently appealed her case to the Third Circuit, which held that it would “adhere to the most natural reading of section 230(e)(2)’s text” so that “a state law can be a ‘law pertaining to intellectual property,’ too.” This created a circuit split between the Ninth and Third Circuits with regard to subsection (e)(2).

The argument to limit interpretation of the intellectual property exemption in section 230(e)(2) to federal law is most strongly supported by the broader congressional intent to create a broad liability shield for interactive computer service users and providers in enacting section 230. Federal laws are well-established with clear scopes of application, but state laws protecting intellectual property are far from uniform, so state laws are much less predictable and could lead to significantly different outcomes between jurisdictions. State laws may cover different causes of action rooted in different legal theories, have varying purposes and policy goals, and provide for different remedies, all assuming that a state legislature has decided to enact a law at all. Consequently, if varying state laws are exempt from section 230 immunity, the integrity of section 230 would be severely compromised. Policy-wise, the Ninth Circuit’s interpretation to exclude state intellectual property laws could very likely prevent individuals harmed by infringing content from having any redress as third-party users who typically post such content are generally very difficult to identify. On the other hand, we must also defer to Congress’s express statutory language and assume that the literal language of the statute accurately reflects Congress’s intent. Therefore, because subsection (e)(2) states that “any law pertaining to intellectual property” is not included within section 230 immunity, and Congress explicitly named federal and state law multiple times within subsection (e), we must conclude that Congress did not actually intend to limit the intellectual property exemption, which should apply its most literal meaning.

There is also a potential argument that the right of publicity is not even an intellectual property right at all, in which case the exception to immunity for claims related to intellectual property laws would not even apply. Furthermore, there has been intense controversy over section 230 coming from both sides of the political aisle, so the statute may be amended or even repealed entirely in the relatively near future. Also, the entire landscape of the internet and the public’s relationship with the internet have been shaped by section 230, so changes to the law or differing applications of the law could compromise our understanding of the right and the internet. However, the current proposed changes to section 230 do not directly address the issue over how subsection (e)(2) should be interpreted with regard to state intellectual property laws, so the circuit split described in this Note will likely still be relevant.

In the absence of federal protection, whether claims regarding the right of publicity are actionable is increasingly important with the growth and expansion of the internet, particularly social media. The rise of “influencers,” individuals who essentially monetize and make a career out of their personas and relationships with branded or commercial content, and the rise of “deep fakes,” which utilize technology to synthesize fake pictures or videos that convincingly appear to depict specific individuals or celebrities, are deeply linked to the interest in one’s self, which is protected by the right of publicity. Though lawsuits over right of publicity have historically been brought almost exclusively by celebrities, the age of social media has created many more opportunities for members of the general public to have a commercial interest in their name, image, likeness, or persona. Social media has proven to be extremely lucrative, and content can generate significant value from a business standpoint. Companies and internet platforms will presumably adapt their own policies regarding allegedly infringing content depending on the prevailing interpretation of section 230(e)(2) in order to avoid as much liability as possible, which would create consequences for the millions of users that access those sites and platforms every day.

Part I of this Note will provide background and context to the right of publicity and how it developed in common law to provide a remedy
for individuals, typically celebrities, whose likenesses have been misappropriated without their consent. I will analyze the right of publicity as codified in individual state statutes with an emphasis on how these often significantly different statutes create unpredictability in enforcement and litigation. I will also distinguish the right of publicity from causes of action regarding copyright and compare the Digital Millennium Copyright Act (“DMCA”) to section 230 of the CDA. Part II will provide an overview of section 230 and discuss legislative history and intent. Within Part II, I will also examine both sides of the circuit split from the Ninth and Third Circuits’ contrary interpretations of CDA section 230(e)(2) and each side’s underlying tradeoffs involving the lack of uniformity in state intellectual property laws and the potential effects of precluding claims from such laws as compared to potentially refraining from expanding beyond the congressional purpose of CDA section 230. Finally, I will address the arguments over whether section 230 should still exist in its current form and proposed reforms.


Hepp sued Facebook, Reddit, and Imgur for allegedly violating her right of publicity as granted by Pennsylvania state statute and common law. The right of publicity is defined as “the inherent right of every human being to control the commercial use of his or her identity.” The right of publicity is generally regarded as an intellectual property right, though interactive service providers such as the defendants in Hepp have argued to the contrary. The right of publicity allows all individuals, celebrity or not, to recover for unpermitted uses of their likeness or persona for commercial gain. The right is valuable in that it provides individuals the opportunity to protect the commercial use of their identities as many people, especially celebrities, generate significant income by authorizing others to use their identities in exchange for payment.

 A. Origins and Development

The right of publicity originally developed as the other side of the coin of the laws and theories surrounding the right of privacy. Samuel D. Warren and Louis Brandeis first recognized the right of privacy as a right potentially rooted in common law in a law review article in 1890. The right of privacy was designed to protect people from uninvited public attention and create a cause of action for people who suffered emotional harm from unwanted publicity. However, because the right to privacy is generally a right “to be let alone,” there was difficulty in enforcing and applying this right to cases involving individuals who were already in the public spotlight. Some courts held that individuals who sought out publicity through their career choices must waive any right of privacy, while others concluded that while celebrities may be the subject of news stories, they maintain a right of privacy that allows them a shield from unwanted, non-newsworthy publicity. Therefore, the term “right of publicity” was first coined by Judge Jerome Frank in Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc. in order to address “the economic potential of a celebrity’s identity.”

In Haelan, a chewing-gum manufacturer made a contract with a baseball player for the exclusive right to use the player’s photograph in connection with sales of its gum. However, a rival chewing gum manufacturer knew of the contract and deliberately induced the player to authorize the rival manufacturer to use the player’s photograph in connection with the sales of the rival’s gum. The Second Circuit held that an individual has a right in the publicity value of their photograph—that is, the right to grant the exclusive privilege of publishing their picture—and that this right, which is particularly relevant for prominent figures in the public eye, “might be called a ‘right of publicity.’ ” Haelan distinguished itself from prior case law due to the opinion’s emphasis on the economic interest at stake as the plaintiffs, rather than not wanting their photographs to be withheld from public viewing entirely, simply did not want their photographs to be sold for profit by third parties. The right of publicity is significantly distinct from the right of privacy because the right of privacy is not assignable, and as such, the two rights are independent from each other.

Though the right of publicity has clear roots in privacy rights, Professor Melville Nimmer associated the right of publicity with unfair competition and property law. Nimmer stated an individual is entitled to “the fruit of his labors unless there are important countervailing public policy considerations . . . [and] persons who have long and laboriously nurtured the fruit of publicity values may be deprived of them, unless judicial recognition is given to what is here referred to as the right of publicity.” Thus, Nimmer linked the right of publicity to the commercial aspects of a public figure’s “personality.” In contrast, in 1960, William Prosser advocated for the recognition of the tort of privacy appropriation and suggested that an individual could have the right to control the use of their identity from the appropriation of others. Unlike Nimmer’s analysis of the right of publicity, the tort of misappropriation is not a property right. This analysis lends support to the minority view that the right of publicity should not be considered an intellectual property right.

B. Federal Influences

In 1977, the U.S. Supreme Court recognized the right of publicity in Zacchini v. Scripps-Howard Broadcasting Co., the first and only Supreme Court case to address the right of publicity. In Zacchini, an entertainer performed a fifteen-second human cannonball act and sued a local television station after the station taped and broadcast the entire act on the news without the entertainer’s permission. The Court considered whether the station was immunized from damages by the First and Fourteenth Amendments of the Constitution and ultimately held that Ohio could grant a state law remedy against the station or give immunity to the press but was not required to do so either by the First and Fourteenth Amendments. The rationale behind protecting the right of publicity, according to the Court, was simple: to prevent unjust enrichment by the theft of good will as broadcasting an entertainer’s entire act “poses a substantial threat to the economic value of that performance.” The Court clearly emphasized the proprietary interest of the individual and compared the purpose of the right of publicity to the economic philosophy behind granting patent and copyright ownership, which is to encourage individuals to produce inventions and creative works in order to foster innovation and benefit the public.

Zacchini, as the only Supreme Court case on the subject, provided some federal influence on the right of publicity, and another source of federal influence is section 43(a)(1) of the Lanham Act, the federal unfair competition act. Rights of publicity cases also regularly implicate the Lanham Act because unauthorized appropriations of celebrities’ identities often involve issues of confusion over sponsorship. Congress amended the Lanham Act in 1988 to codify judicial decisions that had interpreted the Act to allow for false endorsement claims, and the amendment provides celebrities with a clearer statutory foundation for alleging the applicability of the Lanham Act in right of publicity actions. The Lanham Act is also important as a federal law because the CDA has a preemption clause that preserves federal claims of false endorsement, so hypothetical plaintiffs could potentially still have an avenue for redress under this federal law even if causes of action under the state right of publicity are barred. Thus, in order to attempt to avoid being barred, some types of cases are now more likely to also be rooted in the Lanham Act for the nationwide coverage, clear remedy, and wide scope of damages.

C. Incongruence Among States

Currently, twenty-five states have passed statutory protections for the right of publicity, and many other states have held that their respective common law would protect the right. Of the courts that have directly addressed the issue, some states have recognized a distinct right of publicity and distinguished it from a right from misappropriation while others treat the right of publicity as synonymous with the tort of appropriation as expressed in the Restatement (Second) of Torts. As previously stated, Prosser wrote about the right to privacy in 1960 and argued it is composed of four subparts, one of which being the right to protection against misappropriation of one’s likeness. Later, the American Law Institute adopted these four subcategories in the Restatement (Second) of Torts. The tort of misappropriation protects the “interest of the individual in the exclusive use of his own identity, in so far as it is represented by his name or likeness, and in so far as the use may be of benefit to him or to others.” Though this right is in the nature of a property right, misappropriation is rooted in the common form of invasion of privacy.

The scope of the right of publicity varies from state to state, so the extent that a right of publicity might be protected greatly depends on the state in which a person is attempting to assert that right, as well as the state in which that person is domiciled. For example, individuals in most states, such as California, can assert their right of publicity during their lifetimes, while individuals in Texas cannot, as their statutory right is protected only post-mortem. Further, there is a wide range of duration periods within state statutes that provide for the right of publicity to survive after an individual’s death. Moreover, some state statutes only protect the right of publicity for certain types of people, such as soldiers or “public figures.” Perhaps most notably, what exactly is protected under the right of publicity varies greatly among states. For example, in Virginia, the statutory right of publicity is limited to a person’s name, portrait, or picture, whereas in New York, the right protects a person’s “name, portrait, picture or voice” but does not extend to that person’s likeness. In contrast, the California statute is much broader and protects against unauthorized use of an individual’s “name, voice, signature, photograph, or likeness, in any manner.” Even further, Indiana’s statute grants a property interest in an individual’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms.

Significantly, there is currently no federal statute to protect the right of publicity or otherwise provide a uniform approach to the right. Due to the reach of social media and other technological advancements, and the fact that those most likely to assert their right of publicity are celebrities and public figures whose identities could be recognized across the entire country, litigation is unpredictable. Generally speaking, a right of publicity claim involves (1) the use of an individual’s “persona,” (2) for commercial purposes, and (3) without the individual’s consent. For the purposes of this Note and to determine whether a state’s right of publicity statute might fit into the carve-out of CDA section 230 immunity, I will largely limit the discussion to statutory protections and judicial applications of such protections.

D. Application

Each state’s statutory differences in turn lead to very different judicial outcomes in application that do not necessarily strictly adhere to the statutory language. In Midler v. Ford Motor Co., for example, actress and singer Bette Midler sued for an alleged violation of her right of publicity when Ford and its advertising agency used a sound-alike of Midler, but neither her name nor her picture, in a television commercial. Though the advertising agency had properly licensed Midler’s song from the copyright holder, the sound-alike was directed to “sound as much as possible like the Bette Midler record” after Midler herself refused the gig. Thus, the only issue in the case was whether Midler’s voice was protected. The lower court granted summary judgment in favor of the agency due to the fact that although California’s statute would have protected Midler’s voice if it were used without her consent, the audio in the commercial was not actually Midler’s voice. Ultimately, the Ninth Circuit reversed and held that “to impersonate her voice is to pirate her identity,” so the defendants committed a tort of misappropriation by intentionally seeking an attribute of Midler’s identity, valued at what the market would have paid for Midler to have actually sung the commercial. However, there was no statutory violation of Midler’s right of publicity as the term “likeness” refers to a visual image rather than a vocal imitation.

Similarly, in White v. Samsung Electronics, plaintiff Vanna White, the co-host of Wheel of Fortune—“one of the most popular game shows in television history” to which an estimated forty million people tune in daily— sued after Samsung ran an advertisement without consent from or payment to White. Samsung referred to the advertisement as the “Vanna White” advertisement, which depicted a robot outfitted to specifically resemble White in her famed stance next to the “instantly recognizable” Wheel of Fortune game show set. White argued that the advertisement used her “likeness” in violation of section 3344 of the California Civil Code, but because the advertisement featured a robot with mechanical features and not White’s “precise features,” the Ninth Circuit held that the robot did not constitute White’s “likeness” within the statutory meaning and affirmed the dismissal of White’s claim. However, the common law right of publicity has a broader umbrella of protection as it “does not require that appropriations of identity be accomplished through particular means to be actionable,” and in this case, the aspects of the advertisement leave “little doubt about the celebrity the ad is meant to depict,” so the district court erred in rejecting White’s common law right of publicity claim on summary judgment.

Furthermore, White also brought a claim under the Lanham Act, for which she was required to show that the defendants created a likelihood of confusion as to whether White was endorsing the products in the advertisement. The Ninth Circuit applied an eight-factor test from the trademark case AMF Inc. v. Sleekcraft Boats. The eight factors are as follows: “(1) strength of the plaintiff’s mark; (2) relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) defendant’s intent in selecting the mark; [and] (8) likelihood of expansion of the product lines.” Based on the evidence White provided, the first, second, fifth, sixth, and seventh factors supported finding that there was a likelihood of confusion. The Ninth Circuit found that a jury could reasonably conclude that there was an underlying intent to persuade consumers that White was endorsing the products, so White properly raised a genuine issue of material fact and the lower court erred in rejecting her claim at the summary judgment stage. Thus, even if state right of publicity claims are barred by section 230, a potential plaintiff may be able to assert a similar but distinct claim.

E. Distinguishing the Right of Publicity from Causes of Action for Copyright Infringement

Copyright law and the right of publicity, though seemingly similar, are very different rights that are rooted in different textual and theoretical foundations, especially regarding copyright law’s constitutional basis. The federal Copyright Act grants authors of original works the exclusive rights to reproduce, distribute, display, and perform their work. Copyright law also gives rights to the public, such as the right to use ideas and the right to resell lawfully purchased works. In contrast, as previously stated in this section, the right of publicity is protected by state statutes and common law and allows an individual to recover for unauthorized use of a person’s name or likeness for a commercial purpose. The right of publicity is most often asserted by celebrities, but most state statutes grant all individuals this right. There is also “a critical distinction between a commercial transaction for a photograph, itself, and a commercial transaction where a photograph is used to promote or sell another product or service.”

Jennifer Rothman, a leading scholar on the right of publicity, has argued that though copyright and the right of publicity both strive to protect creative artists and to incentivize them to create works, the two rights seriously conflict. Rothman argued that the right of publicity “conflicts not only with explicit provisions of the Copyright Act, but also with the implicit grant of affirmative rights to copyright holders and the public,” particularly because the right of publicity has grown to cover “persona,” so the scope of the right has expanded beyond just an individual’s name or likeness. One’s “persona” could be implicated in a use where a viewing audience is simply reminded of the person even when neither the person’s name nor likeness is used.

Section 301 of the Copyright Act sets out a test to determine whether copyright law preempts a state law claim, such as a right of publicity claim: the content of the protected right must fall within the subject matter of copyright as specified by sections 102 and 103 of the Copyright Act, and the right asserted under state law must be “equivalent to any of the exclusive rights within the general scope of copyright” as specified by section 106 of the Copyright Act. Therefore, while causes of action under a state’s right of publicity can be brought concurrently with a cause of action for copyright infringement, copyright law does not necessarily preempt right of publicity claims. Though an argument that the state-based right of publicity is preempted by federal copyright law exists, most judicial decisions have rejected it. The Sixth and Ninth Circuits, as well as some district courts, have concluded that section 301, the Copyright Act’s explicit preemption clause, never preempts the right of publicity because the right of publicity is generally not equivalent to the rights protected by the Copyright Act. While there is no categorical preemption of right of publicity claims, there have been individual cases in which the right was preempted; for example, in Fleet v. CBS, Inc., an actor in a movie attempted to use his right of publicity to thwart a copyright owner from exploiting its property. In Fleet, because the individuals only sought to block CBS from reproducing and distributing their performances in a film, their claims were preempted by federal copyright law since the film came within the subject matter of copyright protection and their claim was equivalent to an exclusive right within the general scope of copyright.

Many rights of publicity cases also involve causes of action for copyright infringement under the DMCA, which is analogous to the CDA in that the DMCA immunizes providers from some lawsuits involving third-party content. In passing the DMCA, Congress “sought to provide a safe harbor against copyright liability for the normal operations of online service providers.” The DMCA established certain safe harbors to “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools.” The DMCA provides “safe harbors” to covered providers who remove content after being notified that the content may violate federal copyright law. To be protected from lawsuits premised on hosting potentially infringing content, the DMCA requires the person notifying a service provider of copyright infringement to submit a statement “under penalty of perjury identifying the allegedly infringing material and providing a good-faith assertion that the use of the material is unlawful.” Then, the provider hosting the allegedly infringing content must decide whether to accept the notice and remove the material or ignore the notice and risk liability. The DMCA both incentivizes the provider to take down the material by granting immunity to providers that do so, which creates a risk that providers will take down lawful material in order to avoid liability, as well as provides a process for the user who posted the allegedly infringing content to challenge the initial notice, in which case the provider may be able to replace the initial post and retain immunity if there is sufficient “counter notification.”

The most significant difference between the CDA and the DMCA is the DMCA’s requirement that the provider lack knowledge of the infringing material to be protected. Section 230 of the CDA immunizes providers for hosting both lawful and unlawful third-party content regardless of whether the provider has notice of allegedly unlawful user-generated content. For example, Perfect 10, Inc. v. CCBill LLC, in which the owner of a subscription website for adult entertainment alleged interactive service providers violated copyright and right of publicity laws among others by providing services to websites that posted stolen images, involved both the safe harbors from DMCA and the question of whether a claim under the right of publicity was barred by section 230 of the CDA. Because the DMCA sets a significantly higher threshold for providers to qualify for immunity, the Ninth Circuit first analyzed whether the providers met the threshold conditions set out in section 512(i) and then determined whether the providers could qualify for any of the safe harbors established in subsections (a) through (d). Ultimately, the provider was not eligible for immunity because it was not enforcing its DMCA policy. The district court stated that “the DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe.”

In contrast to the complex and thorough examination of the requirements set forth by the DMCA to be shielded from liability, the question of whether the right of publicity claim was barred by section 230 of the CDA was quickly and succinctly handled on its face as the Ninth Circuit held the claim did not fit within the intellectual property carve-out. Perfect 10 clearly illustrates some of the significant differences in the liability shields granted through the DMCA and the CDA. Though the statutes are entirely distinct from one another, scholars have advocated for CDA reform, in part because as it is, section 230 allows interactive service providers to avoid liability even if they are aware of and profit from illegal content, so long as the provider itself is not the author of the material.


A. Legislative History and Intent

Before Congress enacted section 230 of the Communications Decency Act, it enacted a subsection of the Telecommunications Act of 1996 in order to protect internet platforms from liability for third-party content. Common law had created a much different legal standard. In Stratton Oakmont v. Prodigy Services, a defamation case involving the “Wolf of Wall Street,” Jordan Belfort, in which an anonymous user wrote on Prodigy’s online message board that Belfort’s brokerage had engaged in criminal and fraudulent acts, the New York Supreme Court held that the message board was a “publisher” and moderating some posts and establishing guidelines for impermissible content meant that the message board was liable. Thus, an internet platform would bear no liability for illegal context created by its users, but this protection did not extend to a platform that moderated user-created content. This created a policy-poor incentive in that platforms could adopt an “anything goes” model for user-created content to avoid open-ended liability. In response, then-Representatives Ron Wyden, a Democrat from Oregon, and Christopher Cox, a Republican from California, were concerned that this precedent would disincentivize websites to block obscene content.

Representatives Wyden and Cox were also concerned about another extreme: then-Senator James Exon (Democrat from Nebraska) proposed a bill in the summer of 1996 to ban “anything unsuitable for minors from the internet.” Senator Exon’s bill, which passed in the Senate with eighty-four votes in favor and sixteen votes opposed, cast an extremely wide net as “anyone who posted any ‘indecent’ communication, including any ‘comment, request, suggestion, proposal [or] image’ that was viewable by ‘any person under 18 years of age,’ would become criminally liable, facing both jail and fines.” Moreover, the bill went so far as to criminalize the mere transmission of such content. Representatives Wyden and Cox responded and proposed their own bill that was intended to protect speech and privacy on the internet from government regulation and “incentivize blocking and filtering technologies that individuals could use to become their own censors in their own households.” Representative Wyden emphasized that “parents and families are better suited to guard the portals of cyberspace and protect our children than our Government bureaucrats,” and argued against federal censorship of the internet. This way, content creators would be liable for compliance with all civil and criminal laws relating to their content, but this responsibility would not shift to internet platforms, “for whom the burden of screening billions of digital messages, documents, images, and sounds would be unreasonable—not to mention a potential invasion of privacy.” Instead, platforms are permitted to review and moderate some content in the course of enforcing rules against obscene content while still maintaining a broad liability shield. This measure received 420 yeas and four nays in the House of Representatives, and Congress ultimately passed its version of the Telecommunications Act—with both the contradicting Cox-Wyden amendment and Exon amendment. However, within a year of the statute’s enactment, the Exon amendment was struck down by the Supreme Court, which unanimously held that the Exon amendment created an unacceptable burden on adult speech because “[i]n order to deny minors access to potentially harmful speech, the CDA effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another.” Ironically, because Exon’s legislation and Cox-Wyden’s legislation were merged into the same legislative title, after Exon was declared unconstitutional, the Cox-Wyden amendment became section 230 of the Communications Decency Act, the exact name of the legislation that it was designed to rebuke. When section 230 was enacted in 1996, less than half of Senators and only a quarter of House Representatives even had email addresses. Though people likely generally understood the burgeoning significance of the internet, it was probably hard to foresee exactly how important user-generated content would become to everyday lives and activities or even the sheer volume of internet traffic.

Overall, section 230 serves three core purposes. First, it “maintain[s] the robust nature of internet communication and, accordingly . . . keep[s] government interference in the medium to a minimum.” Second, the immunity provided by section 230 “protects against the ‘heckler’s veto’ that would chill free speech,” as without section 230, individuals could threaten litigation against interactive computer service providers, which would be forced to choose to either remove the content or face litigation costs and potential liability. Third, section 230 encourages interactive computer service providers to self-regulate “offensive” material as a response to the holding in Stratton Oakmont, in which the provider of an electronic message-board service was “potentially liable for its user’s defamatory message because it had engaged in voluntary self-policing of the third-party content.” However, the broad immunity shield granted to providers has arguably led to disincentivize providers from self-regulating.

Judicial interpretation of section 230 is crucial to determine whether platforms such as Facebook, Reddit, Imgur, and others could be liable for the infringing actions of third-party users. Section 230 unambiguously provides immunity to providers and users of interactive computer services from liability for subject matter generated by third parties as (c)(1) states, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Though “immunity” or a synonym is not explicitly included in section 230(c)(1), reviewing courts have recognized the provision to protect interactive service providers for the display of content created by someone else. The main purpose of section 230 is to bar “lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone, or alter content.” In Zeran v. AOL, which was decided shortly after the CDA was enacted, the Fourth Circuit heard a defamation claim against America Online (“AOL”) alleging “that AOL unreasonably delayed in removing defamatory messages posted by an unidentified third party, refused to post retractions of those messages, and failed to screen for similar postings thereafter,” but held that the CDA squarely barred the claim.

 Section 230 defines an “interactive computer service” as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet.” This broad definition covers many entities operating online, including broadband internet access providers (such as Verizon FIOS and Comcast Xfinity), internet hosting companies (such as DreamHost and GoDaddy), search engines (such as Google and Yahoo!), online messaging boards, and many varieties of online platforms. An “information content provider” is “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” Thus, section 230 distinguishes those who create content from those who provide access to that content, providing a broad liability shield to the latter group.

It is undisputed that section 230(c)(1) of the CDA is limited by section 230(e)(2), which requires courts to “construe Section 230(c)(1) in a manner that would neither ‘limit or expand any law pertaining to intellectual property.’ ” However, there are conflicting interpretations of section 230(e)(2) of the CDA. This discrepancy is the focus in many rights of publicity cases and other cases rooted in state causes of action, such as Hepp v. Facebook. In determining whether section 230(e)(2) applies, courts have sometimes looked not only to whether the plaintiff is suing under a law that generally involves intellectual property issues, but more specifically, whether the plaintiff’s claim actually involves an intellectual property right. It is significant to note that protection of intellectual property rights on internet platforms is limited by federal protections, such as the safe harbor provisions of section 512 of the DMCA. These safe harbors give providers a broad liability shield from indirect liability for copyright infringement by third-party users, which is relevant here as these safe harbors could potentially be interpreted to indicate congressional intent to protect platforms against liability for intellectual property infringement by third-parties. Because both statutes were enacted in the late 1990s, there has been debate over whether they should still exist in their current form, as the internet is nearly unrecognizable as compared to the late 1990s.

B. Arguments that Subsection (E)(2) Should Be Interpreted to Be Limited to Federal Intellectual Property Laws

In three relatively short paragraphs, the Ninth Circuit directly addressed in 2009 whether the intellectual property carve-out in section 230(e)(2) should open up interactive computer service providers to liability for claims under state right of publicity statutes in Perfect 10, Inc. v. CCBill LLC and ultimately held that it should not. The Ninth Circuit revisited the issue in 2019 in Enigma Software Group USA, LLC v. Malwarebytes, Inc., and affirmed its prior conclusion.

Section 230 states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and expressly preempts any state law to the contrary, so the majority of federal circuits have interpreted section 230 to establish “broad ‘federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.’ ” There is no express definition of “intellectual property” in the CDA, and there are many types of laws that could arguably be characterized as intellectual property claims. The Ninth Circuit reasoned that while the scope of federal intellectual property laws is “relatively well-established,” state laws governing intellectual property claims significantly differ and do not provide analogous uniformity. Therefore, construing “any law pertaining to intellectual property” in subsection (e)(2) to literally mean any intellectual property law, including state laws, would open up interactive computer service providers to a massive amount of liability with extremely unpredictable litigation. To avoid this, the Ninth Circuit held that the term “intellectual property” should instead mean “federal intellectual property” in order to protect Congress’s “expressed goal of insulating the development of the Internet from the various state-law regimes.” Furthermore, regarding the right of publicity specifically, there is an argument that the publicity rights do not constitute intellectual property rights for the purposes of the liability carve-out, in which case subsection (e)(2) would be irrelevant and right of publicity suits would be barred by section 230(c)(1).

This concern is certainly valid with respect to right of publicity claims; as noted above, of the twenty-five states that have actually granted statutory protection to an individual’s right of publicity, there are vast discrepancies between state statutes, including the scope of the right, who may assert a claim, and the duration of the right. However, websites and their respective contents are accessible in all fifty states at any given time. Thus, if section 230 does not immunize interactive computer service providers from causes of action stemming from right of publicity statutes, each state with relevant legislation could potentially have a different outcome. For example, if potentially infringing content used only an individual’s voice for a commercial purpose without the individual’s consent, it would be actionable only in Alabama, California, Hawaii, Indiana, Illinois, Nevada, New York, Ohio, Oklahoma, South Dakota, Texas, and Washington, but likely not in Florida, Kentucky, Massachusetts, Nebraska, Pennsylvania, Rhode Island, Tennessee, Utah, Virginia, or Wisconsin. Even states that would allow this claim to proceed have different required elements regarding who may bring the claim and the duration of the right, among others, and even if an individual were able to successfully assert their right and win their case, these statutes grant different remedies. Overall, allowing section 230(e)(2) to include the state right of publicity laws within the intellectual property exception could open up interactive computer service providers to a massive amount of unpredictable liability. Again, because the internet is accessible throughout the country, these providers would be required to comply with the most restrictive state’s standards to avoid liability.

Additionally, states also have different choices of law and jurisdictional reaches that could lead to forum-shopping. For instance, the broad choice of law and jurisdictional reach of the Indiana statute, collectively with the statute’s “expansive scope of protection and purported applicability to non-domiciliaries and deceased individuals, opens up Indiana courts for suits brought by many individuals who might not have a cause of action in their home states.” Though forum-shopping would likely not pose a significant risk if the relevant statute requires that an individual seeking to assert a claim be domiciled in that state as an individual can only be domiciled in one state, it is still a possibility, particularly if the statute does not limit who may assert a claim in the state or if the allegedly infringing content in question involves multiple individuals. For example, because the Indiana right of publicity statute specifies that it “applies to an act or event that occurs within Indiana, regardless of a personality’s domicile, residence, or citizenship,” an individual who may not meet the required elements of another state’s statute could be incentivized to assert their right in Indiana instead. This possibility could force entities that utilize others’ personality rights to comply with Indiana’s statute over others.

Alternatively, individuals who split their time between different states may raise a question of domicile. For example, in a series of cases involving who could control the commercial use of the iconic photograph of Marilyn Monroe standing over a subway grate with her white skirt blowing up around her from the film The Seven Year Itch, because Monroe split her time, work, and property ownership between New York and California, the significant differences in the state law made the question of domicile critical. Eventually, the Monroe estate lost its rights in Monroe’s identity because the court determined that Monroe’s domicile resulted in the application of New York law.

In Perfect 10, the Ninth Circuit most likely implicitly categorized the right of publicity as intellectual property because it considered whether the California statute protecting the right of publicity should be included in the Section(e)(2) exception and concluded it should not. The Ninth Circuit stated that “[s]tates have any number of laws that could be characterized as intellectual property laws: trademark, unfair competition, dilution, right of publicity and trade defamation.” Due to the nature of the inconsistency of state laws, “no litigant will know if he is entitled to immunity for a state claim until a court decides the legal issue.”

The California right of publicity statute is distinct from the right of privacy and stresses the economic value of an individual’s persona as property, which aligns with the general consensus that the right of publicity is a property right rather than a personal one. However, this is not true for all states. Because the right of publicity originally stemmed from a privacy theory, some states have retained this classification. In New York, for instance, the current statute is titled the “Right of Privacy,” and as such, is concerned with protecting an individual’s identity rather than unfair competition. Despite the fact that Haelan was the first to recognize that a right of publicity existed separately from the right of privacy under New York law in 1953, the current New York statute is relatively limited compared to other states. If the right of publicity is not rooted in a theory of property, “then the right clearly may be made the subject of license or waiver, but cannot have independent, exclusive, alienable, or divisible characteristics.” However, if the right of publicity is defined as a property right, then the right may be “assignable, survivable, descendible, and even taxable.” This difference was another significant issue in the series of Marilyn Monroe cases described above; because New York law applied, issues of assignability resulted in the Monroe estate losing its rights in Monroe’s identity. Somewhat similarly, a New Hampshire trial court held that three right-of-privacy torts, including “intrusion upon seclusion, publication of private facts, and casting in a false light,” involved rights that could not be considered property rights. Thus, the claims did not fit within the intellectual property carve-out and section 230 barred the claims.

Theoretically, if the right of publicity is not actually classified as intellectual property, section 230(e)(2) would not apply and right of publicity claims brought in those states would unquestionably be barred. Despite considering the intellectual property carve-out of section 230, the Ninth Circuit declined to explicitly define what constitutes “intellectual property” or reference a definition of the term in Perfect 10 and instead construed the term narrowly to advance the CDA’s express policy of providing broad immunity. Conversely, the Third Circuit applied multiple definitions of intellectual property, including one from Black’s Law Dictionary that defines the term as a “category of intangible rights protecting commercially valuable products of the human intellect. The category comprises primarily trademark, copyright, and patent rights, but also includes . . . publicity rights.” The intellectual property system aims to strike a good balance between the interests of innovators and the wider public in order to “foster an environment in which creativity and innovation can flourish.”

Interestingly, this is very similar to Congress’s stated purpose behind section 230 of the CDA. Even in 1996, the internet was already a valuable tool for society that offered significant opportunities for people to both create and express content, as well as learn from the massive amount of information available, so Representatives Cox and Wyden wanted to strike an analogous balance to the intellectual property system. By shielding interactive computer service users and providers from liability and allowing them to moderate user-generated content so long as they do not participate in the generation of allegedly infringing content in any way, section 230 was designed to balance innovation and public interest of free speech online. The precarious balance of these significant competing interests could be greatly threatened if section 230(e)(2) were interpreted to include state right of publicity laws because internet platforms would be subject to liability in an ever-evolving and incredibly inconsistent doctrine of law.

Right of publicity actions involve both confusion-based and association-based relationships. Confusion-based relationships include situations “where a person’s name or likeness is used in commercial advertising, creating a likelihood that consumers will believe the person endorses or approves of the advertised product.” Association-based relationships, on the other hand, are “mere references that conjure associations with a person [but] do not automatically create a likelihood that consumers will be confused as to whether the person endorses or approves of the product.” Because confusion-based relationships are already protected by the broad scope of trademark and unfair competition law, these types of claims do not necessarily need to be brought under state right of publicity law in order to fit within the subsection (e)(2) intellectual property exemption. For example, celebrities and public figures can register their names as a trademark or service mark under federal trademark law. As described above in White, Vanna White brought a likelihood of confusion claim under the Lanham Act and the Ninth Circuit found that the provided evidence was sufficient to present a genuine issue of material fact. Similarly, unfair competition acts can be brought under federal trademark law even without a registered trademark. Thus, analogous cases involving confusion-based relationships can be brought under the Lanham Act as it provides nationwide coverage, a clear remedy, and a wide scope of damages. Such claims would not be barred by section 230 because under either interpretation of subsection (e)(2), the Lanham Act would clearly fit within the statutory exemption for intellectual property. Therefore, plaintiffs such as White may have some recourse available to them even if the circuit split on the interpretation of subsection (e)(2) is resolved to bar state right of publicity laws. However, this case was decided in 1992, so the CDA had not yet been enacted. The next relevant question would be to determine whether interactive service providers might still be entitled to immunity for violations of specific provisions of the Lanham Act. In a more recent case, the Ninth Circuit held that despite the fact that the Lanham Act generally deals with intellectual property—for example, trademarks—the intellectual property carve-out in section 230(e)(2) “does not apply to false advertising claims brought under [section] 1125(a) of the Lanham Act, unless the claim itself involves intellectual property.”

Overall, the Ninth Circuit declined to include rights of publicity protected by state law within the “intellectual property” exemption because doing so would “fatally undermine the broad grant of immunity provided by the CDA.” Despite the isolated language in section 230(e)(2), reading section 230 holistically leads to the conclusion that courts should defer to the legislative intent and purpose of creating a “vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by . . . State regulation.” Thus, to interpret section 230(e)(2) to include diverse state intellectual property laws, particularly those regarding the right of publicity, would mean that entities otherwise entitled to CDA immunity would be forced to endure litigation costs for extremely unpredictable state laws, defeating the purpose and policy goals of section 230.

C. Arguments that Subsection (E)(2) Should Be Interpreted to Include State Intellectual Property Laws

In contrast, the Third Circuit recently addressed whether state right of publicity laws should be included in the intellectual property exemption in Karen Hepp’s appeal and concluded that “a state law can be a law pertaining to intellectual property, too.” Despite the Ninth Circuit’s holding in Perfect 10, the Third Circuit reasoned that the plain language of section 230(e)(2) is clear. If Congress had actually intended for the intellectual property exemption to be limited to federal law, “it knew how to make that clear, but chose not to.”

The Third Circuit’s holding builds off Universal Communication Systems, Inc. v. Lycos, Inc., the first case to address whether section 230 precludes intellectual property laws. First Circuit case was decided shortly before Perfect 10 in which there were alleged violations of federal law as well as trade name dilution in violation of Florida law. In Universal Communication, the First Circuit held “[c]laims based on intellectual property laws are not subject to section 230 immunity,” so it addressed the dilution claim separately.

The Third Circuit also considered district court cases that interpreted section 230(e)(2), including Atlantic Recording Corp. v. Project Playlist, Inc. In Atlantic Recording, record companies asserted copyright claims under both state and federal law, and the court reasoned that because Congress specified whether local, state, or federal law applied four times in subsection (e), Congress did not intend to limit the intellectual property exemption to only federal law. Therefore, in Hepp, the Third Circuit found that because Congress knew how to cabin the interpretation about state law and did so explicitly, “the structure does not change the natural meaning.” Atlantic Recording did not involve any DMCA safe harbors, but other such cases that involve allegedly infringing third-party user content could consider the interaction between the CDA intellectual property exception and the DMCA safe harbors to determine whether interactive service providers might still be immune from liability.

While it is true that section 230 generally created a pro-free-market policy, the statute’s policy goals do not necessarily swallow state intellectual property rights because state property rights can also facilitate market exchange. The Third Circuit noted that because the natural reading of section 230(e)(2) would include state law, “policy considerations cannot displace the text.” Even so, the Third Circuit stated that policy could cut the other way even outside section 230’s text: “if likeness interests are disregarded on the internet, the incentives to build an excellent commercial reputation for endorsements may diminish.”

The Third Circuit also considered whether Hepp’s claims actually arose from a law pertaining to intellectual property, and concluded that they do. Black’s Law Dictionary defines “intellectual property” to include publicity rights, and both legal and lay dictionaries treat “intellectual property” as a compound term. The court also applied a test from another legal dictionary, Bouvier’s, which the Pennsylvania right of publicity statute satisfies. Overall, there is substantial evidence to support the conclusion that at least Pennsylvania’s statutory right of publicity falls within the definition of intellectual property. Moreover, the Third Circuit considered the only Supreme Court case to address the right of publicity, Zacchini v. Scripps-Howard Broadcasting Co., which analogized the right of publicity to patent and copyright law because the right of publicity focuses “on the right of the individual to reap the reward of his endeavors and [has] little to do with protecting feelings or reputation.” As analyzed above, the right of publicity and trademarks are relatively analogous for confusion-based relationships. The Florida Supreme Court articulated the harm caused by a right of publicity violation by “associat[ing] the individual’s name or . . . personality with something else.” Thus, the legal definition including trademark also supports the conclusion that the right of publicity is intellectual property.

However, Judge Cowen dissented in Hepp and stated that he “believe[s] that the ‘intellectual property’ exception or exclusion to immunity under § 230(e)(2) . . . is limited to federal intellectual property laws (i.e., federal patent, copyright, and trademark laws) and—at most—state laws only where they are co-extensive with such federal laws.” Judge Cowen argued that despite the fact that the majority implied there was an existing circuit split between the First and Ninth Circuits due to Universal Communication and Perfect 10, Hepp actually created the circuit split because in Universal Communication neither party actually raised the issue of whether state law counts as intellectual property under section 230 and the First Circuit seemingly assumed it did. Ultimately, Judge Cowen supported the Ninth Circuit’s approach for the reasons analyzed in Section II.B and stated that “the more expansive interpretation would gut the immunity system established by Congress and undermine the policies and findings that Congress chose to codify in the statute itself.” Furthermore, on October 21, 2021, Facebook requested that the Third Circuit re-hear the Hepp appeal en banc, arguing that the “ ‘majority’s decision misread the intellectual property exception to the immunity established by section 230 of the Communications Decency Act (CDA) creating a conflict with’ the Ninth Circuit, and ‘ignores a key textual feature and downplays the contextual and structural features of the statute.’ ”

D. Arguments for Section 230 Reform and Proposed Changes

The above arguments and analyses of section 230 of the CDA are applicable in its current state, but section 230 as a whole has recently come under fire from both sides of the political aisle. There have been calls to amend or even repeal the statute. Many on the left have criticized section 230 because they believe it has “enabled tech platforms to host harmful content with impunity,” while many on the right argue that it has allowed tech platforms to disproportionately suppress conservative speech and perspectives. The law arguably allows bad actors to hide behind the law’s liability shield and prevents harmed users, such as Karen Hepp, from holding internet platforms accountable. In the 116th congressional session, twenty-six bills were introduced that would have amended the scope of section 230 immunity, and the bills had an extremely wide range of proposed changes, such as reducing the scope of immunity in certain types of cases, placing conditions on immunity, or repealing the statute entirely. Currently, there are fourteen bills that have been introduced for the 117th congressional session related to section 230, but none of the proposals are related to the judicial interpretation or scope of the intellectual property exception to immunity within subsection (e)(2).

There is also a question of executive authority in whether the Federal Communications Commission (“FCC”) has regulatory authority to implement section 230. Congress passed the CDA as part of the Telecommunications Act of 1996, which in turn amended the Communications Act of 1934, a statute administered by the FCC. The National Telecommunications and Information Administration (“NTIA”) filed a petition in 2020 that provides the FCC with an opportunity to consider its rulemaking authority. To clarify the FCC’s role in administering section 230, Congress could grant an express delegation or disavowal of authority. A delegation would give the FCC a statutory basis for promulgating regulations while a disavowal would prohibit the FCC from attempting to regulate under section 230.

Legislative action on section 230 in any shape or form could have significant and unintended consequences. Since section 230 was passed in 1996, it has been considered to be the “cornerstone of online expression” and has been referred to as the “[twenty-six] words that created the internet” and the internet’s “Magna Carta.” The internet has grown exponentially and has influenced daily public life considerably since the statute was enacted in 1996, so a fundamental change to section 230 could change the internet as we know it, and even a small change to section 230 could have a substantial ripple effect. For example, social media operators could potentially adjust their content moderation practices to comply with reforms, ranging from aggressively screening content to not moderating any content, including content that may be considered objectionable or obscene to most users. On the other hand, if section 230 were to remove immunity for certain types of content, it does not necessarily mean that providers or users will actually be liable for such content; it simply means that section 230 would not bar liability. Thus, providers could continue to host potentially obscene or objectionable content if they believe the benefits of hosting such content would outweigh potential litigation costs, particularly if lawsuits are unlikely or providers believe they have a strong likelihood of prevailing in a suit. This could be a move to bring the reality of section 230 closer to its original congressional intention of creating a free-market system.

Overall, despite the heated debate over section 230, there have not been any proposed changes that have been close to being implemented. The extremely wide range of proposed changes also means that their implications on section 230 generally, as well as the right of publicity specifically, are ironically very unpredictable. Therefore, the circuit split on the interpretation of subsection (e)(2) and whether state right of publicity claims should be barred will continue to be a noteworthy issue until Congress acts, whether through amendments, repealing the statute entirely, or more directly providing guidance on the relatively narrow subject of the right of publicity.


The explicit statutory language of section 230 of the CDA supports the Third Circuit’s interpretation of subsection (e)(2), the intellectual property exception to immunity. Within subsection (e), Congress specified whether federal, state, or local law applied in four instances, so we must defer to the express language and assume that Congress chose not to limit subsection (e)(2) to only federal intellectual property laws. The general consensus among the legal community is that the right of publicity falls under the umbrella of intellectual property, so the literal interpretation of section 230 should not bar right of publicity claims brought under state statutes. Unless or until Congress clarifies what should be included within this exception to the broad liability shield protecting interactive service providers or takes some other action, the Third Circuit’s interpretation will likely be upheld.

Overall, however, it would make the most sense to interpret section 230(e)(2) in the way that aligns most closely with the legislative intent and history of the statute as a whole to avoid fundamentally crippling the statute by exposing interactive service providers to liability from extremely varied state statutes relating to the right of publicity. The Third Circuit’s interpretation could very likely create an exception that swallows the whole statute. Assuming the right of publicity constitutes intellectual property, under the Ninth Circuit’s interpretation to protect the integrity of section 230, right of publicity claims should be barred so long as providers do not participate in the creation of the allegedly infringing content. This would maintain uniformity and predictability throughout the court system. The Ninth Circuit’s interpretation is thus most beneficial to interactive service providers such as Facebook and most frustrating to individuals who feel they have been harmed by allegedly infringing content on internet platforms, such as Karen Hepp. Such individuals could potentially attempt to redress this harm through other types of claims, such as copyright or trademark. These two examples would undoubtedly constitute intellectual property laws, and claims under federal law would be doubly effective against section 230’s broad shield, but alleged infringements of the right of publicity do not always meet the required elements for such claims. Furthermore, providers could be immune from liability through other statutes, such as the safe harbors from the DMCA, so individuals may be left without a remedy. There is no clear balance or solution to these concerns in the current form of section 230 of the CDA.

The severe implications of the Third Circuit’s seemingly “correct” interpretation could strongly incentivize Congress to clarify either the scope of subsection (e)(2) or separately protect the right of publicity in order to avoid the purpose and intent behind section 230 of the CDA. Many scholars have advocated for a federal statute or a uniform act to protect the right of publicity. Federal codification of the right of publicity would create uniform and equal protections to individuals across the entire country, as opposed to the current state statutes that have created extremely varied interests in the right. A federal statute or uniform act would also drastically reduce the economic costs created by uncertainty in litigation. Finally, unauthorized uses of individuals’ “personas,” including name and likeness, are becoming increasingly more common due to improvements in technology and the expansion of social media. This type of action would balance the interests of wanting to protect both the public’s right of publicity and interactive service providers from liability for user-generated content. Ultimately, due to the complex and time-intensive nature of Congressional processes, any proposed change, if any, to section 230 may not be established for some time, so there is likely going to be substantial consequences and potentially a wave of lawsuits for alleged violations of the right of publicity in the wake of the Third Circuit’s holding in Hepp.


96 S. Cal. L. Rev. 449


J.D., University of Southern California Gould School of Law, 2023. B.A., University of California, Los Angeles, 2020.

Who’s on the Hook for Digital Piracy? Analysis of Proposed Changes to the Digital Millennium Copyright Act and Secondary Copyright Infringement Claims

FBI Anti-Piracy Warning: The unauthorized reproduction or distribution of a copyrighted work is illegal. Criminal copyright infringement, including infringement without monetary gain, is investigated by the FBI and is punishable by up to five years in federal prison and a fine of $250,000.[1]

Chances are that many Americans have seen the warning above at some point in their lives, whether they saw the words stamped on the back of a music album sleeve or displayed on a screen before viewing a film.[2] Still, despite the threat of severe liability, chances are that many of these individuals will nevertheless engage in illegal pirating activity.[3]

Prior to the rise of the internet, individuals who made illegal copies of copyright-protected works like movies and music recordings were necessarily limited by the technology available to make such copies.[4] Magnetic audio and videotape cassettes allowed individuals to record songs played on the radio or movies and television shows to create “bootleg” versions by crude processes which, by nature, hindered one’s ability to reproduce multiple copies of similar quality to the original work.[5] However, as technology progressed, the opportunities to create illegal copies of copyrighted works, specifically within the newly emerging digital landscape, expanded with ease, and digital piracy grew more and more rampant.[6] The development of compact discs (“CDs”) and MP3 compression software provided easier avenues to create impermissible copies of digital media, and access to high-speed internet coupled with the rise of peer-to-peer sharing systems streamlined opportunities for fast and simple illegal downloading.[7] Today, in the current landscape of internet ubiquity, digital piracy has become an all but inevitable obstacle that every copyright owner, be it a large established entity such as a record label or a small independent content creator, has come to anticipate.[8]

The issue of digital piracy has not gone unaddressed by Congress, as evidenced by the promulgation of the Digital Millennium Copyright Act (“DMCA”) in 1998.[9] One goal of the DMCA was to address the growing rates of digital piracy in the 1990s by providing copyright owners additional causes of action against copyright infringers, particularly infringers that impermissibly circumvented technological tools used by rights-owners to protect their works.[10] However, the drafters of the DMCA were also careful to remain consistent with the main underpinnings of copyright law, which are to maintain a balance between protecting copyright owners’ works and facilitate the constitutional charge to “promote the Progress of Science and useful Arts.”[11] Within the context of the emerging digital age, Congress applied this balance by seeking to (1) instill confidence in rightsholders that copyright protections would remain effective in a digital landscape and (2) provide assurances to new, growing online service providers (“OSPs”) that their unprecedented business models would not be decimated by imputing liability to the providers for the infringing conduct of their users.[12] Thus, Title I of the DMCA laid out “anti-circumvention provisions” that prohibit circumvention of technological measures, such as password keys and encryption codes, used to protect copyrighted works.[13] Title II of the DMCA mitigated liability for internet service providers (“ISPs”)[14] by granting “safe harbor” protections to ISPs that comply with statutory requirements—these safe harbors largely aimed to incentivize ISPs to promptly respond to reports of infringing content.[15]

Since its enactment, the DMCA has received criticism that its measures are outdated and ill-equipped to address the ongoing digital piracy problems that continue today.[16] The internet is undoubtedly a different landscape from what it was at the time the DMCA was promulgated more than two decades ago.[17] With current considerations to amend the DMCA in light of the areas of growth that were unimagined at the time the DMCA was written,[18] coupled with recent litigation seeking to hold ISPs secondarily liable for infringing conduct of their subscribers,[19] the path to reducing digital piracy is still paved with uncertainty.

Following a discussion of ongoing proposed changes to the DMCA and developing litigation concerning the potential for vicarious liability claims against ISPs, this Note will ultimately argue that the current DMCA safe harbor provisions require updated eligibility requirements for ISPs, but the availability of vicarious liability claims against “mere conduit” ISPs overreaches the scope of protection afforded to copyright owners. Part I will provide a brief history of the DMCA, including a discussion of the safe harbor provisions and the requirements therein. Part II will incorporate current discussions regarding the need for DMCA reform, address the competing policies at play, and note potential areas of reform. Part III will discuss the origins of secondary copyright infringement liability caselaw, including recent cases that have considered extending vicarious liability claims to ISPs that act as “mere conduits” to provide internet to their users. Part IV will propose clarifications in the DMCA safe harbor protection most needed in the current digital landscape while arguing that ISPs must still be properly insulated from open floodgates of liability. This Note will conclude that the DMCA should be revised to alleviate rightsholders’ burden of monitoring incidents of copyright infringement, but the DMCA should still insulate “mere conduit” ISPs from vicarious liability claims.

          [1].      FBI Anti-Piracy Warning Seal, Fed. Bureau of Investigation, https://www.fbi.
gov/investigate/white-collar-crime/piracy-ip-theft/fbi-anti-piracy-warning-seal [].

          [2].      See id. All U.S. copyright holders are authorized by 41 C.F.R. § 128-1.5009 to use the FBI’s Anti-Piracy Warning (“APW”) Seal, the purpose of which is to deter infringement of U.S. intellectual property laws by educating the public of these laws’ existence and notifying citizens of the FBI’s authority to enforce these laws. Id.

          [3].      Maria Petrescu, John T. Gironda & Pradeep K. Korgaonkar, Online Piracy in the Context of Routine Activities and Subjective Norms, 34 J. Mktg. Mgmt. 314, 324–25 (2018). Studies have shown that although some consumers may view digital piracy as an infringement of another’s intellectual property rights, this did not impact their moral perceptions of the act of infringement. Id. Digital piracy may be regarded as a “soft crime,” as one study noted that consumers who state they would not steal a CD from a store would still consider illegally downloading the contents of the CD online, due to a lowered risk of getting caught. Id. at 325.

          [4].      Thomas J. Holt & Steven Caldwell Brown, Contextualising Digital Privacy, in Digital Piracy: A Global, Multidisciplinary Account 3, 4 (Steven Caldwell Brown & Thomas J. Holt eds., 2018).

          [5].      See id.

          [6].      See id.

          [7].      See id.

          [8].      See id. The authors note that “it is thought that millions of people engage in digital piracy every day. The true scope of piracy is, however, difficult to document as clear statistics are difficult to obtain.” Id. at 5. One report by Music Watch estimated 57 million Americans pirated digital copies of music in 2016; another report by Nera estimated the revenue loss for the global movie industry to be between $40 billion and $97.1 billion per year. Damjan Jugović Spajić, Piracy Statistics for 2021, DataProt (March 19, 2021), [

          [9].      Digital Millennium Copyright Act of 1998, 17 U.S.C. §§ 512, 1201–02.

        [10].      See Holt & Caldwell Brown, supra note 4, at 189; Cyberlaw: Intellectual Property in the Digital Millennium § 1.02, Lexis [hereinafter Cyberlaw § 1.02] (database updated Oct. 2020).

        [11].      U.S. Const. art. I, § 8, cl. 8.

        [12].      See Bill D. Herman, The Fight Over Digital Rights: The Politics of Copyright and Technology 45, 48–49 (2013).

        [13].      Cyberlaw § 1.02, supra note 10.

        [14].      For the purposes of this Note, the term “ISP” will refer to service providers that merely provide internet access to their subscribers (for example, Charter Spectrum, AT&T, and Frontier). The term “OSP” will refer to all other online service providers that provide services such as user material hosting or system caching (for example, YouTube, Facebook, and Google).

        [15].      Cyberlaw § 1.02, supra note 10.

        [16].      See U.S. Copyright Off., Section 512 of Title 17: A Report of the Register of Copyrights 27–28 (2020) [hereinafter Report of the Register of Copyrights], https:// [].

        [17].      See id.

        [18].      See id. at 10.

        [19].      Compare UMG Recordings, Inc. v. Bright House Networks, LLC, No. 8:19-CV-710, 2020 U.S. Dist. LEXIS 122774, at *5 (M.D. Fla. July 8, 2020) (declining to hold defendant ISP vicariously liable for user infringement because ISPs do not receive a direct financial benefit from ongoing infringement), with Warner Recs. Inc. v. Charter Commc’ns, Inc., 454 F. Supp. 3d 1069, 1079 (D. Colo. Oct. 21, 2019) (holding that defendant ISP may be vicariously liable for infringement because the ISP plausibly receives a financial benefit from infringing users “motivated” to use the ISP’s service due to the ISP’s lax approach to curbing infringement).


An Empirical Study of Gender and Race in Trademark Prosecution

This Article is the first to empirically examine the extent to which women and minorities succeed in prosecuting trademark applications before the United States Patent and Trademark Office (“USPTO”). Trademark registration is an important measure of entrepreneurial activity and progress in business, education, and the arts. To explore how women and minorities are succeeding in this domain, we compared 1.2 million trademark applications over thirty years with demographic information on race and gender.             We analyze whether trademark prosecution reflects systematic underrepresentation of women and minorities similar to those reported in patent and copyright prosecution. We found that trademark data showed significant differences from the other two federal intellectual property (“IP”) regimes. Our analysis reveals that women regularly secure trademark registration at a higher rate than men. Women are underrepresented in the pool of trademark applicants compared to their presence in the population, but not all minority groups are underrepresented. For women and underrepresented minorities, the disparity is decreasing at a rate not seen in other IP registration systems.

       While recent work has significantly advanced our understanding of trademark prosecution, no published studies consider the race and gender of trademark applicants. By filling that void, this Article substantially contributes to our understanding of minority intellectual property ownership and provides a new foundation for policy shifts and further research to assure that intellectual property ownership paths, theory, law, and reform are grounded in equality.

Trademark’s “Ship of Theseus” Problem by Mathew T. Bodie*

Postscript | Intellectual Property Law
Trademark’s “Ship of Theseus” Problem
by Matthew T. Bodie*

Vol. 95, Postscript (Nov 2021)
95 S. Cal. L. Rev. Postscript 27 (2021)

Keywords: Intellectual Property Law, Trademark

The “Ship of Theseus” is a classic philosophical problem posed about the continuity of identity. In Plutarch’s telling, the ancient Athenians preserved for posterity the famous ship piloted by Theseus after the slaying of the Minotaur.1 Once a year, a delegation would travel on the ship to the island of Delos with a tribute to the god Apollo.2 Over time, the wood began to rot, and the decaying planks were replaced with new ones. The ship became “a standing example among the philosophers, for the logical question of things that grow: one side holding that the ship remained the same, and the other contending that it was not the same.”3 The conundrum was recently referenced in the Marvel Comics Universe, as two versions of the organic android Vision puzzled over their identities in the climax of WandaVision.4 A wrinkle was added: what if the boards from the original ship were saved and used to recreate a version of the ship? Would that also be the ship of Theseus?

Trademark has long had a problem with identity. The purpose of trademark is to identify the source of goods or services and thereby make life easier for consumers. But trademark does not make an effort to ensure that the company that holds the mark still reflects the entity that developed the mark’s identity. Rather, trademark has turned largely into an alienable property right, unmoored from its created context.5 The law has severed the connection between the mark and the entity beyond the formalities of organization law, with the result that whoever controls the mark’s owner controls the mark. As a result, new owners can take advantage of reputation capital they never earned, and those with a true connection to the success of the original business can be shut out.6

This Essay argues against the law’s presumption that the corporate entity should have exclusive control over the mark, no matter the continuing connection (or lack thereof) that the entity has with the original business and goodwill. Trademark should instead reflect the potential that the identity will change over time, changing the meaning of the trademark along with it. Rather than blindly empowering individual corporations, trademark law should either pay closer attention to identity issues or allow a wider variety of participants to use the mark in various ways. Either of these approaches to trademark would be messier but would reflect more accurately our complicated reality.

* Callis Family Professor, Saint Louis University School of Law. This Essay is based in part on an ongoing research project presented at the Intellectual Property Scholars Conference and the biannual meeting of the Labour Law Research Network; I very much appreciate comments from Erika Cohn, Mark Lemley, Laura Heymann, Yvette Liebesman, Jake Linford, and Mark McKenna. Thanks to Danielle Dur- ban for excellent research assistance.

Not a Vara Big Deal: How Moral Rights, Property Rights, and Street Art Can Coexist

Note | Intellectual Property Law
Not a Vara Big Deal: How Moral Rights, Property Rights, and Street Art Can Coexist
by Mary Daniel*

94 S. Cal. L. Rev. 927 (2021)

Keywords: Street Art, Copyright Law, VARA, 5Pointz

“Art Murder”—the accusation was sprayed in red paint onto the side of real estate developer Jerry Wolkoff’s Long Island City building.1 Underneath the denunciation was a patchy layer of white paint, and underneath that layer, decades of graffiti art that once made up 5Pointz, “the world’s premier graffiti mecca.”2 Aerosol artists from around the world travelled to the Queens neighborhood for a chance to contribute to the de

facto street art museum.3 However, the buildings that served as the artists’ canvas belonged to Wolkoff, and in 2013, hoping to benefit from the growing housing market in Long Island City, Wolkoff announced plans to raze the former factory buildings to make room for luxury high-rise condominiums.4 The potential destruction of 5Pointz caused a frenzy in the art community as artists scrambled to prevent the popular site’s demolition.5 Then, all hopes of preserving the artwork ended on the morning of November 19, 2013, when 5Pointz’s curator, Jonathan Cohen,6 awoke to discover that, at the direction of Wolkoff, more than 10,000 artworks covering 200,000 square feet were unceremoniously covered over with white paint in the middle of the night.7

Artists responded to the whitewashing by bringing suit under the Visual Artists Rights Act of 1990 (“VARA”), codified at 17 U.S.C. §106A, claiming that the destruction of the artwork was a violation of the artists’ moral rights.8 Moral rights are a relatively new feature of United States law and a feature that seemed improbable through much of the development of copyright law.9 However, in a surprising decision, the district court found in favor of the artists. Holding that painting over 5Pointz was unlawful, Judge Block ordered Wolkoff to pay the artists $6.7 million in damages.10 The decision marked the first time graffiti art was extended VARA protection.11 Wolkoff immediately appealed the district court’s decision, but in February 2020, the Second Circuit upheld Judge Block’s decision in its entirety.12

The ruling has been heralded by many as a big win for artists’ rights

that signifies courts’ growing recognition and respect for artists working in atypical mediums.13 However, many others have expressed concern that such an expansion of VARA is at odds with property law and signifies a dangerous trend of artists’ rights superseding property owners’ rights.14 Moral rights run counter to the United States’ traditionally utilitarian approach to copyright law, and the 5Pointz ruling exemplified the inevitable conflict between moral rights and property rights. Additionally, the street art movement has a reputation as a fringe community, with the term “street art” often used to describe both lawfully and unlawfully created artwork. By extending VARA protection to the unconventional medium, opponents worry that the court lowered VARA’s standard and opened the door for other mediums to push the limits of the statute.15 Fueling this anxiety, there have been other artists seeking the shelter of VARA following the 5Pointz ruling. For example, the Blued Trees movement, started by artist and activist Aviva Rahmani, is an art installation affixed to trees along planned natural gas pipeline pathways.16 Rahmani has successfully filed the project for copyright registration and hopes to use the moral rights granted by VARA to prevent the removal of the trees.17 These concerns have led to demands for the 5Pointz ruling to be overturned or for VARA to be amended, or even repealed, so as to limit its interference with property rights.18

This Note argues that VARA’s application to street art is appropriate and not something for property owners to fear. While moral rights undoubtedly conflict with property rights, it is important for the United States to recognize moral rights in order to keep up with international standards and encourage creation. Additionally, street art is no longer the fringe movement it once was; artists such as Jean-Michel Basquiat, Keith Haring, and Banksy have helped sway the public opinion of street art away from viewing it as vandalism and towards viewing it as a legitimate artistic

medium worthy of additional copyright protection.19 Finally, the language of VARA is intentionally limiting and leaves a lot of interpretation to the courts.20 Generally, courts have been hesitant to apply VARA unless clearly warranted, suggesting that cases such as Blued Trees should not be a cause for panic given the court’s careful application of VARA.21

Part II of this Note explores the development of United States copyright law. Particular emphasis is put on the resistance to the concept of moral rights. Part III discusses the 5Pointz ruling and analyzes critics’ arguments against the holding and against moral rights in general. This Part also explores the potential ramifications of the 5Pointz ruling. Part IV argues that this recent application is appropriate and not a cause for concern about overreaching. The arguments against V ARA are also addressed and concluded to be unpersuasive. The appropriateness of the application of VARA to street art is supported by public opinion and judicial interpretation, while future overreaching is prevented by the statute’s limiting language and a careful court. Blued Trees is used as an illustration of the ease with which a court can deny VARA protection. Finally, Part V suggests that VARA offers appropriate coverage presently, but future expansion of VARA may be necessary.


*. Executive Senior Editor, Southern California Law Review, Volume 94, J.D. Candidate 2021, University of Southern California Gould School of Law; B.A. Communications and Fine Art 2015, Loyola University Maryland. Thank you to Professor Sam Erman for his guidance during the drafting of this Note. Additionally, thank you to my friends and family for their support and feedback. Finally, thank you to all the Southern California Law Review editors for their hard work.


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Does Fair Use Matter? An Empirical Study of Music Cases by Edward Lee and Andrew Moshirnia

Article | Intellectual Property Law
Does Fair Use Matter? An Empirical Study of Music Cases
by Edward Lee* and Andrew Moshirnia†

From Vol. 94, No. 3
94 S. Cal. L. Rev. 471 (2021)

Keywords: Intellectual Property Law, Music Law, Entertainment Law

Copyright law recognizes fair use as a general limitation. It is assumed that fair use provides breathing room above and beyond the determination of infringement to facilitate the creation of new works of expression. This conventional account presupposes that fair use matters—that is, fair use provides greater leeway to a defendant than the test of infringement. Despite its commonsense appeal, this assumption has not been empirically tested. Except for fair uses involving exact copies (for which infringement would otherwise exist), it has not been proven that fair use makes much, if any, difference in results. Indeed, in one sector, the music industry, defendants have avoided pursuing fair use as a defense in most infringement cases (except parodies) decided under the 1976 Copyright Act. This fair use avoidance is surprising given that musicians now face a spate of lawsuits due to a predicament we call copyright clutter, which occurs when copyrights protect numerous subelements of many works in a field of creation, thereby making it difficult for people to create a new work in that field without facing exposure to copyright liability simply based on a similar subelement. If fair use provides breathing room, why do musicians avoid it?
This Article provides the first empirical testing of the significance of fair use as a defense. In an experimental study involving approximately 500 subjects, we found that fair use does make a difference: subjects found no liability more frequently under fair use than the test of infringement when examining the same case. And greater knowledge of music or law resulted in higher findings of no liability under fair use. These findings provide a better conceptual understanding of how fair use operates and practical information for litigants that call into question the predominant strategy of musicians avoiding fair use as a defense. Such a strategy may result in greater findings of liability where fair use would have otherwise been found.

*. Professor of Law and Co-Director, Program in Intellectual Property Law, Illinois Tech Chicago-Kent College of Law. In the interest of full disclosure, I joined an amicus brief submitted to the Ninth Circuit in support of the jury verdict against Pharrell Williams in Williams v. Gaye, 895 F.3d 1106 (9th Cir. 2018). See Brief Amicus Curiae of the Institute for Intellectual Property and Social Justice Musician and Composers and Law, Music, and Business Professors in Support of Appellees, Williams, 895 F.3d 1106 (No. 15-56880) 2016 U.S. 9th Cir. Briefs LEXIS 2423. I also joined an amicus brief submitted to the Second Circuit in support of the lower court’s finding of fair use by Drake in Estate of Smith v. Cash Money Records, Inc., 253 F. Supp. 3d 737 (S.D.N.Y. 2017), aff’d sub nom. Estate of Smith v. Graham, 799 F. App’x 36 (2d Cir. 2020). Brief for Amicus Curiae Intellectual Property Professors Supporting Defendants-Appellees, Estate of Smith, 799 F. App’x 36 (No. 19-0028). In both appeals, the courts sided with the result supported by the amicus briefs. See Williams, 895 F.3d at 1120–27; Estate of Smith, 253 F. Supp. 3d at 742–43. We are grateful for the comments we received from colleagues during a presentation of a draft of this Article at the 2019 Intellectual Property Law Scholars Conference. Many thanks to our research assistants Sarah Anderson, Elizabeth Campbell, Elizabeth Jedrasek, Brittany Kaplan, and Annika Morin. This research was funded by a grant from the Chicago-Kent Center for Empirical Studies of IP and was approved for human subjects testing by the Institutional Review Board of Illinois Institute of Technology.

†. Associate Professor, and Director of Education, Business Law & Taxation, Monash University.

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Rearranging Fair Use: A Critical Analysis of Kienitz v. Sconnie Nation by Eric Wolff

Note | Intellectual Property Law
Rearranging Fair Use: A Critical Analysis of Kienitz v. Sconnie Nation
by Eric Wolff*

From Vol. 94, No. 1
94 S. Cal. L. Rev. 83 (2020)

Keywords: Intellectual Property Law, Fair Use, Kienitz v. Sconnie Nation

The Seventh Circuit’s 2014 opinion in Kienitz v. Sconnie Nation has played an outsized role in the discourse on fair use, an affirmative defense to copyright infringement.The opinion is quite short, spanning just over three pages, and it emerged from a circuit that produces relatively few fair use opinions.Yet Kienitz is often cited for its rejection of “transformative use,” a relatively new but influential concept that has reshaped fair use doctrine.3  The court in Kienitz warned that transformative use threatens to replace the four-factor test for fair use found in § 107 of the Copyright Actand could erode authors’ exclusive rights to produce derivative works” based on their original works.In place of transformative use, Kienitz proposed that courts should simply stick with the statutory list” of four factors when analyzing fair use.The opinion applied this approach by focusing its analysis on factors three and four: the amount of the copyrighted work used and the effect of that use on the market for the copyrighted work.7

Is Kienitz’s approach a viable model for analyzing a fair use defense without relying on transformative use? The answer is no. This Note concludes that Kienitz’s reasoning is fundamentally flawed and suffers from many of the same infirmities it identified in transformative use.8

There are three problems with Kienitz’s reasoning. First, its approach to factor four defines the scope of derivative works in a way that would severely limit authors’ rights.Second, it employs a test, known as the  substitute/complement test,” which tends to underestimate market harm.10 Finally, its analysis of factor three implies there was no copyright infringement, which if true, would have made the fair use defense unnecessary.11 If Kienitzs amputation of transformative use was an attempt to remedy its harmful symptoms, its cure was worse than the disease.12

Although its analysis was flawed, Kienitz’s diagnosis of the problems with transformative use was accurate.13 Transformative use has been applied in a way that has come to dominate the statutory fair use factors and blurs the line between protected derivative works and fair use.14 This Note proposes two ways to restructure fair use analysis to limit the negative effects of transformative use: (1) rearrange the order in which the factors are analyzed and (2) make a finding of transformative purpose a threshold requirement of transformative use.

Part I explains how the scope of fair use has contracted and expanded throughout United States history and how transformative use has driven the current period of expansion. Part II examines the analysis in Kienitz and concludes, for the reasons described above, that it does not provide a viable alternative to transformative use. Part III demonstrates an alternative fair use analysis of the facts in Kienitz to show how the opinion could have benefited from incorporating transformative use into its analysis and by applying this Notes two proposals for restructuring fair use. In the process, Part III also reveals, and argues against, common issues in other courts’ analyses of each fair use factor, including the widespread underappreciation of factor two15 and Campbell v. Acuff-Rose Music, Inc.s unprecedented instruction to emphasize findings from factor one in the analysis of factor three.16

* Executive Senior Editor, Southern California Law Review, Volume 94; Juris Doctor Candidate 2021, University of Southern California Gould School of Law. This Note has benefited greatly from the attentive guidance and insightful comments of Professors Jonathan Barnett and Sam Erman. It would not exist without the unwavering support of my spouse Georgina and my parents Lori and Greg. I am also grateful to my colleagues at the Southern California Law Review who edify and inspire me with their excellent work.

Institutional Design in Patent Law: Private Property Rights or Regulatory Entitlements – Article by Adam Mossoff

From Volume 92, Number 4 (May 2019)


Institutional Design in Patent Law: Private Property Rights or Regulatory Entitlements

Adam Mossoff[*]


Judges often observe that the U.S. patent system arose from the English practice of the Crown conferring commercial monopoly privileges under its prerogative power.[1] This is undeniably true—just as it is undeniably true that the American republic arose from the English constitutional monarchy and parliamentary system of government. After the American Revolution, the U.S. retained aspects of the English political and legal systems, such as the common law,[2] but it also implemented innovative structural and substantive changes in its new political and legal institutions. Its patent system represented the same fundamental break from the English patent system as other U.S. political and legal institutions.[3]

The early U.S. patent system was a legal system in transition, but with the first Patent Act of 1790, there were fundamental differences between the U.S. and English patent systems. This divergence reflected a fundamental choice in institutional design. It is the core difference between defining a patent, on the one hand, as a private property right or, on the other hand, as a regulatory entitlement—between securing rights through private law doctrines and legal institutions constrained by the rule of law versus granting rights as matters of public policy and through discretionary decision-making processes in the political organs of the government.[4]

This key distinction is often obscured by the oft-repeated judicial gloss about the provenance of the U.S. patent system. A single article cannot address all historical and institutional details, but, as historians and economists have recognized, the U.S. patent system generally diverged from the English patent system as a matter of institutional design by defining patent rights largely within the domain of private law.[5] By the late nineteenth century, there was some convergence among jurisdictions, as other countries adopted aspects of the U.S. private law model for their patent systems, such as providing enforceable property rights that are alienable in the marketplace for commercial development. The U.S. patent system has been the legal “gold standard” in applying to patents basic precepts of the rule of law, securing them in stable legal institutions such as a Patent Office that followed definitive procedures in first examining and then publishing the patents it issued to inventors, and using an independent judiciary to resolve infringement and validity disputes over issued patents.[6]

These comparative choices in institutional design are significant because, in the early twenty-first century, patent systems are diverging again. This time, however, the United States is shifting to a conception of patents as regulatory entitlements—defining patents as public rights within the administrative state, denying judicial remedies for private property rights to patent owners, and denying patent protections to new technologies, among other changes. Meanwhile, other jurisdictions are creating or reforming their patent systems as private law systems in order to promote their own innovation economies. This includes (surprisingly) China, which has moved aggressively in recent years to create a patent system and a supporting legal infrastructure as a key foundational pillar in its efforts to create its own growing innovation economy.

This Article will address the legal and economic implications of the institutional design choice in defining patents as private property rights versus public regulatory entitlements. First, it will identify the historical divergence of the U.S. patent system from the English patent system in two key respects: (1) in securing patents as private property rights by providing effective judicial remedies against infringers, both private citizens and public officials, and (2) in securing the alienation of patents in the marketplace on legal and commercial par with other property rights. It will detail these two fundamental pillars of a private property right in historical court decisions and in other primary sources in the historical record. Second, it summarizes the economic and historical evidence that has consistently found a causal relationship between a private law model for patent systems and growing innovation economies and flourishing societies. Third, it identifies the convergence in the nineteenth century around elements of the U.S. patent system, how this convergence was driven in part by the economic success of the U.S. patent system, and that the United States is now diverging from its historical private law model while other jurisdictions are retaining theirs or are adopting the private law model in their own reforms of their respective patent systems.

I.  The U.S. Patent System: A Private
Property Rights Model

From the beginning of the U.S. patent system, there has been a vibrant debate about the nature of patent rights. Some courts and commentators classified patents as monopoly privileges.[7] Others classified patents as private property rights.[8] As with all legal doctrines, one can identify judges or commentators who support one side or the other of the debate. Sometimes, the private property or monopoly privilege perspectives are expressed by the same person in a single legal document, such as in Chief Justice William Taft’s 1923 decision in Crown Die & Tool Co. v. Nye Tool & Machine Works.[9] There, Chief Justice Taft first explained that the “title” in a patent secures the classic “common-law right . . . of exclusive enjoyment,” but then he later shifted in framing a patent as a statutory “monopoly” and concluded that “[i]t is not safe . . . to follow implicitly the rules governing a transfer of rights in a chose in action at common law.”[10]

Yet Chief Justice Taft was wrong in his second claim that U.S. patent law did not incorporate the legal rules from the common law of property or contract. In creating the foundational doctrines that comprised U.S. patent law in the nineteenth century, courts explicitly applied to patent owners the same common law rules governing transfers of other property rights, as well as imported into patent law other private law doctrines in property, contract, and tort more generally. This is not an ex post observation by historians tantamount to the accounts by law and economists of how the common law implicitly achieved efficiency via private law doctrines.[11] Nineteenth-century courts and commentators explicitly recognized that the private law character of the U.S. patent system was one of its distinctive characteristics, especially in comparison to the English patent system whence the U.S. patent system arose.[12] By the nineteenth century, the English patent law system had progressed toward a private law model,[13] but it still bore significant vestiges of its provenance in a royal grant of privilege issued by either political favoritism or for purely economic policy goals.

Notably, the early U.S. patent statutes did not refer to patents as “property,” but they defined patents as securing the exclusive rights to make, use, and dispose of an invention.[14] Congress thus used in the patent statutes the longstanding definition of property reaching back to the Roman law, which legal elites in the United States recognized as a classification of patents as property rights.[15] This is confirmed by federal courts consistently recognizing patents as a “species of property.”[16] In 1813, for example, Chief Justice John Marshall, riding circuit, explained that the “constitution and law, taken together, give to the inventor, from the moment of invention, an inchoate property therein, . . .  [and] that this inchoate and indefeasible property in the thing discovered commences with the discovery itself, and is only perfected by the patent.”[17] Later, in 1824, a unanimous Supreme Court held that a patent secures to an “inventor . . . a property in his inventions; a property which is often of very great value, and of which the law intended to give him the absolute enjoyment and possession.”[18]

This dominant line of nineteenth-century patent cases represents a fundamental institutional design choice by Congress and courts. In its concepts, doctrines, and even in judicial rhetoric, U.S. patent rights were secured to their owners, not through political institutions defined by discretionary policy-making and modes of regulatory analysis, but largely through the private law doctrines of property, contract, and tort.[19] The evidence for this is widespread throughout early U.S. patent law, but in the constraints of a single article, I will illustrate this in two primary areas of private law theory: (1) the enforcement of the property right against infringers via lawsuits in courts, including against the government, and (2) the free alienation of the property right in the marketplace.

In terms of the remedies available to patent owners for violations of their property rights, there was a period of transitional development in the first few decades of the U.S. patent system. Given general concerns arising from federalism and related constitutional constraints on the federal government in the Federalist Period, Congress did not expressly provide in the patent statutes for an injunction as a remedy for patent infringement until 1819.[20] Yet, there is evidence that courts awarded injunctions to patent owners (and copyright owners) who met the requirements for this equitable remedy before the 1819 amendment to the patent statutes.[21]

This made sense. Since early courts recognized that infringement of a patent is a violation of a property right,[22] they conceptualized patent infringement as a species of trespass.[23] This of course provides a remedy for damages, which patent owners could obtain, just as all other property owners. Some courts recognized that the ongoing or willful trespasses inherent in a defendant’s commercial infringement of a patent are properly the subject of an equitable remedy, as evidenced in Antebellum case law.[24] The 1819 amendment was in effect a declaratory act.

This is further confirmed by other private law doctrines and rhetoric that courts invoked as legal reference points for patent infringement. For example, Chief Justice Marshall, riding circuit, characterized as “fraud” a defendant’s efforts at avoiding liability by making minor changes in copying a patented invention.[25] Moreover, judges and commentators alike repeatedly embraced the rhetoric of “piracy” in characterizing the act of patent infringement.[26]

The unique U.S. approach in securing patents as private property rights, especially in comparison to the more general public law model in the English patent system, is exemplified in securing patents under the Takings Clause of the U.S. Constitution.[27] Again, the cases are not all uniform, as no legal doctrine is entirely “pure” in this way, but the dominant jurisprudence weighed in favor of constitutional security for the private property rights in patents.[28] For example, in 1878 in McKeever v. United States, which arose from a lawsuit against the federal government for compensation for an unauthorized use of a patented cartridge box by the federal government, the Court of Claims engaged in a wide-ranging, historical analysis of how U.S. patents are “private property,” as opposed to the English definition of a patent as a “grant” that issues by “royal favor” and thus do “not exclude a user by the Crown.”[29]

The McKeever court first analyzed the text of the Patent and Copyright Clause as evidence of this fundamental difference between the English Crown’s personal privilege and the U.S. private property right. The court explained that the language in the U.S. Constitution—the use of the terms “right” and “exclusive,” the absence of the well-established English legal term “patent,” and the absence of any express reservation in favor of the government—established that the private property rights in a U.S. patent were not on the same legal footing as the personal privileges in a patent granted by the English Crown.[30] The McKeever court further observed that this conclusion was buttressed by the fact that the Framers empowered the Legislature, not the Executive, to secure an inventor’s rights—placing this constitutional provision in Article I, not in Article II. This indicated that they viewed patents as private property rights secured by the people’s representatives, not as a special grant rooted in the discretionary prerogative powers of the Executive (the U.S. analog to the English Crown).[31] The McKeever court concluded that the Framers “had a clear apprehension of the English law, on the one hand, and a just conception, on the other, of what one of the commentators on the Constitution has termed ‘a natural right to the fruits of mental labor.’”[32]

As a segue to the second key private law feature of U.S. patent law—alienability of patents in the marketplace—the McKeever court further explained that the U.S. approach in securing patents as private property rights was confirmed by the federal government’s well-established practice since the Founding Era in using patented inventions by “express contracts” with patent owners.[33] This was in contrast to the power claimed by the English government to the free use of any patent issued by the Crown.[34]

U.S. courts secured to patent owners their rights to dispose of their property by importing into patent law longstanding common law doctrines securing the free alienation of real property. This was not achieved through a public lawmaking mode of top-down regulatory directive; rather, early U.S. patent owners alienated their property interests in the marketplace by drafting conveyances to successors and assigns (using property concepts and terms),[35] using patents as collateral in obtaining financing from investors,[36] selling security interests in their patents to obtain third-party financing for lawsuits against infringers,[37] and otherwise slicing and dicing their property into myriad sets of exclusive rights in follow-on owners, successors, and assigns in making, using, and selling the patented property throughout the United States.[38]

In adjudicating disputes over licenses and assignments of patent rights, Justice Joseph Story explicitly relied on real property case law as binding precedent in his many patent opinions that he issued while riding circuit.[39] In fact, the willingness of early federal courts to import into patent law the common law property concepts of assignment and license for defining the quantum of estate conveyed to a successor in interest in a patent is one more data point indicating that the United States implemented a private law model in creating its patent system.[40] Notably, President George Washington chose to acquire a license in 1791 from Oliver Evans, the recipient of the third U.S. patent issued under the 1790 Patent Act, for use of Evans’ invention in Washington’s mill at Mount Vernon.[41] Of course, Congress already made this fundamental institutional design choice itself in 1790 by providing in the first patent statute that a patent may issue to an inventor or to “his, her or their heirs, administrators or assigns” (and retaining the codification of this right to transfer to “assigns” in subsequent patent statutes).[42]

Similar to the earlier contrast of a U.S. patent as a private property right against an English patent as a personal privilege, courts and commentators further contrasted U.S. and English patents in terms of their permissive alienation to third parties. This is reflected in an anonymous note in the Federal Cases Reporter, which explains that an English patent is a “privilege” conferred by a “grant by the crown,” and thus the patent owner’s “right has been regarded [as] a personal privilege, inalienable unless power to that effect is given by the crown.”[43] Although the legal rule was that an English patent was “a mere naked right, inseparable from the person of the grantee,” legal and commercial practice evolved such that this power was typically conferred in patent grants.[44] In the U.S., however, the patent statutes and courts provided as a matter of law and right that patents could be conveyed by their owners, which meant that the patent is “defined as an incorporeal chattel, which the patent impresses with all the characteristics of personal estate . . . .”[45] As one federal court later put the point: “the rights conferred by the patent law, being property, have the incidents of property, and are capable of being transmitted by descent or devise, or assigned by grant.”[46]

In conclusion, the U.S. patent system was initially crafted by Congress and courts along a private law model, which diverged in key respects from the mostly public law model that prevailed in England in the eighteenth and nineteenth centuries. There are many aspects of the U.S. patent system that reflect this basic institutional design choice, including the creation of a Patent Office that operated along set rules of procedure in issuing patents (and then after 1836, examining patent applications).[47] Here, I identify two key private law features of U.S. patents: (1) providing remedies in court against both private citizens and public officials for violations of patent rights, and (2) securing the free alienation of patent rights in the marketplace. These are exemplars of the unique U.S. approach in securing patent rights as private property rights—as an intellectual property right similar to the nonpossessory “incorporeal rights” like easements and other property rights long secured at common law.[48] Justice Levi Woodbury, riding circuit, captured the essence of this institutional design choice in the U.S. patent system in an 1845 case, writing that “we protect intellectual property, the labors of the mind, . . . as much a man’s own, and as much the fruit of his honest industry, as the wheat he cultivates, or the flocks he rears.”[49]

II.  The Significance of the U.S. Patent System
as a Private Law System

As economists and historians have recognized, the U.S. approach to defining its patent system as a system of property rights within a private law framework has contributed to the United States’ thriving innovation economy. This is unsurprising. When defined by clear legal requirements and secured within stable political and legal institutions governed by the rule of law, private property rights are a key ingredient for growing economies and flourishing societies.[50]

This general insight by economists and political scientists applies as much to property rights in inventions as it does to property rights in land and in other assets, whether tangible or intangible. For example, Hernando de Soto’s research shows the importance of title recordation and clear rules for transferring property to economic growth.[51] He recognized that this fundamental insight applies to patents just as much as it does to real estate, although many miss this point in de Soto’s analysis.[52] The prior Part described some of these key legal characteristics of the early U.S. patent system, including the security of patents as private property rights that are recorded in a legal institution functioning under the rule of law (the Patent Office), and the alienability of patents in the marketplace under the same rules as other long-standing property rights.

Economists, such as Professor Zorina Khan, have identified that this choice in institutional design by Congress and courts was a key factor in promoting thriving innovation markets in the United States in the nineteenth century.[53] Other economists have also identified features of these robust nineteenth-century innovation markets—such as an increase in “venture capital” investment in patent owners, the rise of a secondary market in the sale of patents as assets, and the embrace of specialization via licensing business models—as indicators of value-maximizing economic activity made possible by securing patents as private property rights.[54] This remains true today: a twenty-first-century startup with a patent more than doubles its chances of securing venture capital financing when compared to a startup without a patent.[55]

Historically, U.S. patent owners also innovated the franchise business model via licensing of their patent rights to businesspersons. This included Samuel Morse, the inventor of the electro-magnetic telegraph,[56] and Alexander Graham Bell, the inventor of the telephone,[57] among others. Other innovations in new corporate forms and cross-licensing agreements, such as the invention of the patent pool in 1856, made it possible for patent owners to use their property rights to overcome transaction-cost barriers in the commercialization of their property; in the case of patent pools, this was the private-ordering solution to widespread litigation by multiple owners of patents on multiple components of a single product or service sold in the marketplace.[58] All of these developments and activities confirm de Soto’s insight that a “good legal property system is a medium that allows us to understand each other, make connections, and synthesize knowledge about our assets to enhance our productivity.”[59]

Even when patent owners engaged in strategic, rent-seeking behavior in the nineteenth century, this problem arose in the context of legal disputes over patents and thus it was addressed by courts who responded appropriately within the procedural and substantive legal rules governing the scope of property rights in patents. For instance, starting in the early nineteenth century, the Patent Office began permitting patent owners to surrender patents that had inadvertent formal defects in their patents that had unintended substantive, negative effects on the scope of the property rights secured to them.[60] The Patent Office would “reissue” a corrected patent. Consistent with the private law model in the U.S. patent system, this practice was not left solely to administrative discretion. First, the Supreme Court upheld the validity of reissue patents in 1832 in Grant v. Raymond,[61] and then Congress codified the reissue practice in the 1836 Patent Act.[62]

Some patent owners began to exploit their right to obtain reissue patents to expand ex post the scope of their property rights solely to capture newly invented technologies, which was not the initial function of the reissue right (and it was explicitly prohibited).[63] Courts reined in this strategic behavior by patent owners in extending a property right beyond the metes and bounds in one’s title deed.[64] This was done for the same reasons that all property owners are delimited in the use of their property by other property owners’ equal rights.[65] In the case of property rights in inventions, courts sought to secure as clear title as possible in the context of new innovation to facilitate licensing and to provide proper notice to other innovators and commercial actors of the legal boundaries in which they could operate without incurring liability.[66]

Ultimately, the private law model embraced by the U.S. for its patent system, which differentiated it from its predecessor in the English patent system, has been identified by Professor Khan as serving a key role in the “democratization of invention.”[67] As she explains:

The tendency to democratization was manifested in unique features of the U.S. patent system such as the examination of patent applications by technically qualified Patent Office employees, the award of property rights only to the first and true inventor, low fees, and few restrictions on the ability of patentees to exploit their inventions in the marketplace.[68]

Professor Stephen Haber also surveys the economic and historical evidence and finds the weight of evidence supporting a finding of a “causal relationship between strong patents and innovation.”[69] Here, a “strong patent” means a property right enforceable in courts and freely alienable to third parties such that it facilitates specialization and the division of labor in innovation markets. Professor Haber concludes that “there are no wealthy countries with weak patent rights, and there are no poor countries with strong patent rights.”[70] This establishes the same presumptive burden on behalf of patents that is established by the same overwhelmingly positive correlations between other private property rights and economic growth—those who claim otherwise bear the burden of proof.[71]

III.  Historical Convergence and Modern Divergence
in Patent Law Systems

Key elements of modern patent systems around the world today were copied from the U.S. patent system, including the most widely adopted institutional feature: examining patent applications at a Patent Office according to predetermined legal standards in both process and substance.[72] This convergence is notable, especially among the world’s leading economies. The United States became a leading world economy only in the latter half of the nineteenth century after having a per capita gross domestic product on par with Brazil at the start of the eighteenth century.[73]

Yet jurisdictions throughout the world did not adopt all aspects of the U.S. private law model for their patent systems. While adopting examination processes and rules regarding title recordation, among others, they balked when it came to securing patents as private property rights that were freely alienable in the marketplace and enforceable against all infringers in court. For example, in addition to the “Crown right” that permitted free use of patents by the English government, England adopted a compulsory licensing scheme in the late nineteenth century.[74] As noted, this was in stark contrast to the property and contract doctrines generally relied on in the United States to define the freedom of patent owners to convey their rights in the marketplace.[75] In fact, the United States repeatedly has considered and rejected compulsory licensing requirements in its patent system.[76]

The U.S. patent system thus has been identified as the “gold standard” for world patent systems given its comparative advantages in securing private property rights in technological innovations,[77] but this has begun to change in the twenty-first century. In recent years, the United States has slowly shifted through court decisions, legislation, and the creation of a new administrative tribunal for reviewing and canceling patents. It has moved from a predominantly private law model to one that has significant institutional features of a public law model.

In terms of reliable and enforceable patent rights, courts have muddied the doctrinal waters in awarding either equitable or legal remedies for violations of these private property rights. In 2006 in eBay v. MercExchange, the U.S. Supreme Court reframed the test for awarding injunctions to patent owners on a finding of infringement by a defendant in terms of an allegedly historical four-factor test (which was not in fact a historical test).[78] Justice Anthony Kennedy concurred in the decision, arguing that there now exists a new business model of “obtaining licensing fees” and that patent licensing companies should not be permitted to “charge exorbitant fees” by threatening manufacturers with an injunction if they do not take a license.[79] Within a few years, many district courts conflated Justice Kennedy’s concurrence with the holding in eBay itself, citing not the majority opinion, but Justice Kennedy’s concurrence.[80] As a result, patent owners, including both manufacturers and licensors, are now less likely to obtain an injunction against infringers.[81] In effect, patent owners are forced into compulsory licensing schemes via judicial decisions that deny them injunctions, requiring them to accept court-ordered “reasonable royalties” for ongoing infringement. In terms of determining these “reasonable royalties,” courts have further lowered the baseline for assessing damages to the “smallest saleable patent practicing unit,”[82] and are using this standard for damages even when it does not match the market-based rate for licensing patented innovation.[83]

The result of the weakening of the ability to obtain an injunction—the backstop for all market-based negotiations of conveyances of property rights—and the further limiting of damages awarded to patent owners below market-set rates has led to an increasingly common commercial practice referred to as “efficient infringement.”[84] This occurs when a company decides that it “economically gains from deliberately infringing [on a] patent[]” because it knows the patent owner will not receive an injunction and thus it will pay less in legal fees and in court-ordered damages than it would have paid in a license obtained from the patent owner.[85]

For instance, in its patent infringement lawsuits against Apple—a multi-year, worldwide legal dispute that spanned numerous court cases—Qualcomm claimed in late 2018 that Apple was in arrears for as much as $7 billion (and counting) for refusing to make royalty payments under its previous licensing agreements for use of the 4G digital transmission technologies invented at Qualcomm.[86] In April 2019, the two companies settled all worldwide litigation with Apple paying an undisclosed sum and entering into a new license to use Qualcomm’s next-generation 5G technologies in future iPhones.[87] By itself, the refusal to pay royalties might not fall within the scope of strategic behavior labeled as “efficient infringement,” but internal documents disclosed in one of the legal cases shortly before the settlement revealed that Apple engaged in a deliberate legal campaign to devalue Qualcomm’s patents for the sole purpose of reducing its royalty payments in previously agreed-upon licenses.[88] This is consistent with economic and theoretical analyses of what happens when injunctions are not an available remedy for infringement of property rights, which incentivizes “hold out” by licensees or infringers.[89] The only jurisdiction in which Apple was not enjoined in the patent infringement lawsuits brought by Qualcomm was the United States, although injunctions were issued against Apple in Germany and in China.[90]

Given the increasingly high costs of patent litigation as a result of both efficient infringement practices and diminished chances of success for many patent owners in seeking protection of their rights in court, patent litigation is now referred to as the “sport of kings.”[91] This directly undermines the “democratization” effects that accessible, reliable, and effective property rights have historically achieved via the private law model of the U.S. patent system. This is important given that the “great inventors” in the nineteenth century were individuals who mostly relied on patent licensing and other features of market specialization facilitated by enforceable and tradeable property rights.[92]

In addition to the shift in U.S. courts in treating patents less like private property rights, Congress has similarly adopted changes to the patent system that comprise a public law model, such as discretionary, administrative adjudication of patent rights by regulatory officials. In 2011, Congress enacted the largest revision to the U.S. patent system since 1836, called the America Invents Act (AIA).[93] Among many transformations in the U.S. patent system, including shifting to a first-to-file system from a first-to-invent system, Congress created a new administrative tribunal to review and cancel previously issued patents.[94] This tribunal, called the Patent Trial and Appeal Board (PTAB), began its administrative hearings in 2012. Unfortunately, Congress imposed very few substantive or procedural limits on this tribunal in the AIA, and thus the PTAB quickly became an example of an administrative agency run amok.

There are innumerable due process and related concerns at the PTAB. One prominent issue has been the practice of “panel stacking” administrative judges at the PTAB to obtain preordained results.[95] Moreover, anyone in the world can file a petition at any time during a patent’s twenty-year term to challenge it regardless of the personal financial gain that may motivate the petition, leading to strategic behavior by hedge-fund managers who would short stocks of companies in which they then file PTAB petitions seeking to invalidate the respective companies’ patents.[96] In fact, anyone can file as many petitions as they wish; numerous patents have been subject to “serial filings” of multiple petitions,[97] and serial petitions are sometimes filed concurrently in order to keep the patent under an administrative, legal, and commercial cloud. The PTAB also initially adopted a lower legal standard for construing patent claims in its administrative hearings than what is used in a lawsuit in an Article III court; this has resulted in inordinately high “kill rates” that range almost as high as 100% for some types of patents.[98] This difference in legal rules in interpreting patents has resulted in cases in which the PTAB cancels a patent after an Article III court construes a patent as valid and enforceable. The Court of Appeals for the Federal Circuit has held that this is an acceptable contradiction in legal decisions concerning the validity of the same property right reached between two state institutions governing the patent system.[99]

These are just a few examples of the new regulatory mode of legal governance in a patent system that was once defined by relatively clear legal requirements, the rule of law, and stable legal institutions. The newly appointed Director of the U.S. Patent & Trademark Office has issued new regulations to reverse course on some of these practices.[100] But these new rules are not legally mandated; thus, there is nothing that can prevent a new Director from reversing course and reinstituting as a matter of regulatory fiat all of these problematic practices at the PTAB, whose administrative panels one former federal judge has characterized as “death squads . . . killing property rights.”[101]

Significantly, many patent owners raised constitutional challenges to the PTAB on the basis of due process and takings concerns, but the Supreme Court agreed to hear a challenge to the PTAB in Oil States Energy v. Greene’s Energy Group[102] on whether the PTAB violated the Seventh Amendment rights of patent owners to receive a jury trial. In its opinion in May 2018, the Oil States Court did not reach the Seventh Amendment question, because it held that the legal determination of the validity of an issued patent was entirely a matter of “public right,” and thus a patent is not a private right secured by the separation of powers and other structural protections afforded to citizens by the Constitution.[103] This is the first time that the Supreme Court held that a patent that had vested in an owner after an examination and grant by the Patent Office is a public right, as opposed to construing patents as private rights.[104] Oil States represents a radical shift from the private law model in which the U.S. patent system has secured patents as private property rights and provided them the relevant constitutional protections as other private rights.

The PTAB is widely recognized as contributing to a legal and policy environment in which patents owned by individuals or other under-capitalized entities, such as startups or universities, are now significantly devalued as commercial assets. This patent owner must first navigate the increasingly difficult process to obtain a patent, especially in the biopharmaceutical and high-tech industries that have been hit the hardest by recent court decisions that have severely restricted the patent eligibility of innovations in these sectors of the innovation economy.[105] If a patent issues, the patent owner is then faced with the prospect of efficient infringement, as companies do not pursue a license and instead infringe a patent given their economic calculation that a denial of an injunction and a below-market-rate “reasonable royalty” awarded by a court will result in a smaller compulsory license fee than if they negotiated a license directly with the patent owner. Companies, or the special companies hired anonymously to file petitions in the PTAB,[106] then file multiple petitions in the PTAB, which is an expensive process and time consuming.[107] Through its administrative processes, which are nothing like the legal processes in court, the PTAB can cancel a patent. The odds favor the petitioner. This regulatory cancelation is valid regardless of panel stacking or other concerns. It is also valid even if the patent owner was lucky enough to survive a validity challenge in court, prove infringement, and then receive an injunction or damages high enough to justify its legal fees. The U.S. patent system is now characterized by inordinately high costs, high legal hurdles, and discretionary and even contradictory legal processes and decisions. In sum, patents are now more like public rights awarded and adjudicated according to the discretionary, regulatory decisionmaking processes of the political branches, as opposed to stable private rights in property secured in courts.

The judicial, legislative, and administrative developments in the U.S. patent system in the last ten years represent a demonstrable shift away from the private law model that was the hallmark of the early U.S. patent system. In the early twenty-first century, the U.S. patent system has the institutional traits of the public regulatory model that first animated the English patent system, and from which the United States diverged. This is not merely a divergence in the U.S. patent system over time, as foreign jurisdictions are adopting elements of the private law model for their own patent systems. One jurisdiction in particular is China, which has begun a substantial reform of its patent system over the past decade, but unlike the United States, it is creating a private law system.

Among other reforms it has implemented in contract law and in other fields of private law,[108] China has begun reforming its patent system within a private law model. First, it is implementing new rules at the State Intellectual Property Office (SIPO) that “provide for the streamlined examination of patent applications” on inventions in the high-tech sector, such as those in cloud computing, AI, the Internet, and Big Data.[109] As one legal news source reported, “China’s opening up [of its patent system to new high-tech innovation] contrasts with the United States’ move to cut back on business method patents and software patents.”[110] In terms of its judicial institutions, China enacted reforms in 2014, creating three specialized IP courts in Beijing, Shanghai, and Guangzhou, and creating another fifteen IP tribunals in other regions of the country.[111] China authorized these courts to award both injunctions and damages on a finding of patent infringement.[112] Patent owners in Chinese courts typically seek injunctions against infringing products, which, unlike their U.S. counterparts, judges are “generous in awarding.”[113] Finally, following the United States’ lead in creating the Court of Appeals for the Federal Circuit, a specialized single appellate court that hears all patent cases, China has announced that it is considering creating a single national IP appeals court.[114] This would create much-valued national uniformity in judicial decisions that resolve disputes and which ultimately govern the private decision-making and private-ordering institutions in its innovation economy.

Although China initially used its patent laws and institutions to promote its own domestic economic interests, it is showing signs that it is embracing the basic tenets of equal protection under the rule of law in its patent system. As reported in early 2018, “[p]atent holders in China are likely to prevail in infringement actions . . . with specialized IP courts said to have found for foreign plaintiffs in nearly every case tried to date.”[115] In December 2018, for example, a Chinese court issued a preliminary injunction against Apple selling older iPhone models in China in a patent infringement lawsuit filed by Qualcomm.[116] Two months earlier and in stark contrast to the Chinese court issuing an injunction on a finding of infringement, the U.S. International Trade Commission refused to issue an exclusion order against imports of older models of the iPhone, despite the administrative law judge finding that Apple was infringing Qualcomm’s patents.[117]

A key feature of a private law model is that owners of property rights receive the same remedies as other owners of property rights, including injunctive relief for ongoing or willful infringement. The importance of these archetypical private law reforms in China’s patent system is confirmed by the response from innovators themselves. As the New York Times has reported, patent-intensive “Big Pharma is shrugging off its long-held fears of China’s rampant counterfeiting and cumbersome bureaucracy. . . . Executives say that the government has made inroads in toughening protections of pharmaceutical patents.”[118]

Of course, all is not entirely well with China, as there are legitimate concerns about its government’s authoritarianism more generally, which has ramped up in recent years in other areas of its society.[119] This effects its private law reforms in its patent system, because, as the historical and economic evidence consistently finds, private property rights only work in stable political and legal institutions defined by the rule of law. Yet, the success of China’s reform of its patent system within a private law model, and any resulting economic success in its fledgling innovation economy, may provide an incentive for political and legal actors elsewhere in the Chinese government to implement further reforms in the rule of law and limited government throughout its political and legal institutions. With the United States embracing the public law model of regulatory entitlements and discretionary decisionmaking processes in its own patent system, the United States arguably no longer has the comparative advantage to China in this key driver of its innovation economy.


Although scholars typically focus on the pendulum swings over time when courts and Congresses are either more favorable or more skeptical of patents, there is a more fundamental institutional distinction between defining patents as private property rights or regulatory entitlements. This institutional divide was a key difference between the early U.S. patent system, that was put into effect in the early republic and developed by Congress and the federal courts throughout the nineteenth century, and the early English patent system whence it arose. The success of the U.S. patent system, as evidenced in part by the explosive economic growth in the U.S. innovation economy in the nineteenth century, led to an international convergence on aspects of the U.S. private law model in its patent system. Today, though, the United States is diverging from this private law model and is returning once more to a public law model of regulatory entitlements, as evidenced in part by the creation of the PTAB, the denial of core remedies for violations of private property rights, heightened legal costs, and devaluing of patent rights in the marketplace. Other jurisdictions, such as China, are diverging from the United States today in implementing the private law model for their patent systems. Given the substantial historical and economic evidence correlating private law models of patent systems with innovation and economic growth, this divergence between the United States and other countries today is concerning.


[*] *. Professor of Law, Antonin Scalia Law School, George Mason University. Thank you to Marcus Cole, Charles Delmotte, Richard Epstein, Henry Smith, Saul Levmore, Arial Porat, Mario Rizzo, Aaron Simiwicz, and Yun-chien Chang for their helpful comments. Thank you also to Yun-chien, Richard, and Mario at the Classic Liberal Institute at NYU for inviting me to present this paper at the Convergence and Divergence in Private Law Symposium held at the New York University School of Law in November 2018. Dylan Campbell provided valuable research assistance.

 [1]. See Graham v. John Deere Co., 383 U.S. 1, 5 (1966) (“[The Copyright and Patent Clause] was written against the backdrop of the practices—eventually curtailed by the Statute of Monopolies—of the Crown in granting monopolies to court favorites in goods or businesses which had long before been enjoyed by the public.”); see also Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC 138 S. Ct. 1365, 1377 (2018) (“The Patent Clause in our Constitution ‘was written against the backdrop’ of the English system.” (quoting Graham v. John Deere Co., 383 U.S. 1, 5 (1966))); Bilski v. Kappos, 561 U.S. 593, 626–27 (2010) (Stevens, J., concurring) (“The Constitution’s Patent Clause was written against the ‘backdrop’ of English patent practices, and early American patent law was ‘largely based on and incorporated’ features of the English patent system.” (citations omitted)).

 [2]. See Ford W. Hall, The Common Law: An Account of Its Reception in the United States, 4 Vand. L. Rev. 791, 798–800 (1951) (identifying the fact that all of the original thirteen states except Connecticut enacted either reception statutes or provided expressly in their new state constitutions for the authoritative force of the common law).

 [3]. See B. Zorina Khan, Trolls and Other Patent Inventions: Economic History and the Patent Controversy in the Twenty-First Century, 21 Geo. Mason L. Rev. 825, 830 (2014) (“The American patent system was deliberately designed to be different [from the British patent system].”); see also Adam Mossoff, Who Cares What Thomas Jefferson Thought About Patents? Reevaluating the Patent “Privilege” in Historical Context, 92 Cornell L. Rev. 953, 967 (2007) (“The provenance of the American patent system, as the American property system generally, is found in the English feudal system. . . . But an American patent in the late eighteenth century was radically different from the royal monopoly privilege dispensed by Queen Elizabeth or King James in the early seventeenth century.”).

 [4]. See B. Zorina Khan, The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790–1920, at 51 (Claudia Goldin ed., 2005). In contrast to British patent law, “U.S. doctrines emphatically repudiated the notion that the rights of patentees were subject to the arbitrary dictates of government.” Id.

 [5]. See generally id. (examining the unique institutional and legal approach in the United States in securing patents as private property rights as compared to England and France, and identifying the positive impact this had on the U.S. innovation economy in the nineteenth century). For further discussion on the shift in defining and securing patents as private property rights in the United States, see Oren Bracha, The Commodification of Patents 1600-1836: How Patents Became Rights and Why We Should Care, 38 Loy. L.A. L. Rev. 177, 181 (2004) (“Patents changed from case-specific discretionary policy or political grants of special privileges designed to achieve individually defined public purposes, to general standardized legal rights conferring a uniform set of entitlements whenever predefined criteria are fulfilled.”).

 [6]. See Kevin Madigan & Adam Mossoff, Turning Gold Into Lead: How Patent Eligibility Doctrine is Undermining U.S. Leadership in Innovation, 24 Geo. Mason L. Rev. 939, 940 (2017) (identifying the “gold standard” label for the U.S. patent system as compared to the rest of the world).

 [7]. See, e.g., United States v. Am. Bell Tel. Co., 167 U.S. 224, 239 (1897).

[T]he purpose of the patent is to protect him in this monopoly, not to give him a use which, save for the patent, he did not have before . . . . The patentee, so far as a personal use is concerned, received nothing which he did not have without the patent, and the monopoly which he did receive was only for a few years.


 [8]. See, e.g., Seymour v. Osborne, 78 U.S. 516, 533 (1870) (“Inventions secured by letters patent are property in the holder of the patent, and as such are as much entitled to protection as any other property, consisting of a franchise, during the term for which the franchise or the exclusive right is granted.”); Rubber Co. v. Goodyear, 76 U.S. 788, 798 (1869) (“[T]here is no distinction between . . . a patent [for land] and one for an invention or discovery.”).

 [9]. Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24, 33–44 (1923).

 [10]. Id. at 36–41.

 [11]. See Richard A. Posner, Economic Analysis of Law 6 (1973).

[M]any areas of the law, especially the great common law fields of property, torts, and contracts, bear the stamp of economic reasoning. Few legal opinions, to be sure, contain explicit references to economic concepts and few judges have a substantial background in economics. But the true grounds of decision are often concealed rather than illuminated by the characteristic rhetoric of judicial opinions.


 [12]. See, e.g., McKeever v. United States, 14 Ct. Cl. 396, 420–21 (1878) (observing that “a patent in England was nothing more than a grant dependent in contemplation of law upon royal favor,” in contrast to the U.S. patent system which “recognizes an invention as property”); Belding v. Turner, 3 F. Cas. 84, 85 (C.C.D. Conn. 1871) (No. 1,243) (discussing the history of patents as a “privilege” granted by the “crown” as distinguished from the “personal estate” now secured in U.S. law); Motte v. Bennett, 17 F. Cas. 909, 913–14 (C.C.D.S.C. 1849) (No. 9,884).

 [13]. See Sean Bottomley, Did the British Patent System Retard the Industrial Revolution?, 1 Criterion J. on Innovation 65, 73–81 (2016) (detailing licensing activities by English patent owners and English courts applying property and contract doctrines to patent owners).

 [14]. See Patent Act of 1870, ch. 230, § 22, 16 Stat. 198, 201 (repealed 1952) (“[E]very patent shall . . . grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use, and vend the said invention or discovery throughout the United States and the Territories thereof . . . .”); Patent Act of 1836, ch. 357, § 11, 5 Stat. 117, 121 (repealed 1870) (“[E]very patent shall be assignable in law . . . [and every] conveyance of the exclusive right under any patent, to make and use, and to grant to others to make and use, the thing patented [must be recorded in the Patent Office] . . . .”); Patent Act of 1793, ch. 11, § 1, 1 Stat. 318, 321 (repealed 1836) (“[A patent secures] the full and exclusive right and liberty of making, constructing, using, and vending to others to be used, the said invention or discovery . . . .”); Patent Act of 1790, ch. 7, § 1, 1 Stat. 109, 110 (repealed 1793) (“[A patent secures] the sole and exclusive right and liberty of making, constructing, using and vending to others to be used, the said invention or discovery . . . .”).

 [15]. See generally Adam Mossoff, What is Property? Putting the Pieces Back Together, 45 Ariz. L. Rev. 371 (2003) (explaining how the exclusive rights of acquisition, possession, use, and disposal are the core rights of property from the Roman Law up through the Anglo-American common law).

 [16]. Ball v. Withington, 2 F. Cas. 556, 557 (C.C.S.D. Ohio 1874) (No. 815); see also Carew v. Boston Elastic Fabric Co., 5 F. Cas. 56, 57 (C.C.D. Mass. 1871) (No. 2,398) (“[T]he rights conferred by the patent law, being property, have the incidents of property . . . .”); Chambers v. Smith, 5 F. Cas. 426, 427 (C.C.E.D. Pa. 1870) (No. 2,582) (analogizing to land sales as the basis for framing scope of patent rights); Ayling v. Hull, 2 F. Cas. 271, 273 (C.C.D. Mass. 1865) (No. 686) (discussing the “right to enjoy the property of the invention”); Hayden v. Suffolk Mfg. Co., 11 F. Cas. 900, 901 (C.C.D. Mass. 1862) (No. 6,261) (instructing the jury that a “patent right, gentlemen, is a right given to a man by law where he has a valid patent, and, as a legal right, is just as sacred as any right of property”); Gay v. Cornell, 10 F. Cas. 110, 112 (C.C.S.D.N.Y. 1849) (No. 5,280) (“[A]n invention is, within the contemplation of the patent laws, a species of property . . . .”); Hovey v. Henry, 12 F. Cas. 603, 604 (C.C.D. Mass. 1846) (No. 6,742) (“An inventor holds a property in his invention by as good a title as the farmer holds his farm and flock.”).

 [17]. Evans v. Jordan, 8 F. Cas. 872, 873 (C.C.D. Va. 1813) (No. 4,564) (Marshall, Circuit Justice), aff’d, 13 U.S. 199 (1815); see also Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 18 (1829) (stating that a patent is a “title” and thus an act of invention before applying for a patent is “like an inchoate right to land, or an inceptive right to land, well known in some of the states, and every where accompanied with the condition, that to be made available, it must be prosecuted with due diligence, to the consummation or completion of the title”).

 [18]. Ex parte Wood, 22 U.S. (9 Wheat.) 603, 608 (1824).

 [19]. See Orin S. Kerr, Rethinking Patent Law in the Administrative State, 42 Wm. & Mary L. Rev. 127, 129 (2000) (“The [U.S.] patent system operates not through regulation, but rather through the private law mechanisms of contract, property, and tort.”).

 [20]. See Patent Act of 1819, ch.19, 3 Stat. 481, 481–82. Federal courts could hear all cases under the patent laws between residents of the same state, and thus this law was declaratory in settling that courts could also hear all cases between citizens of different states. See Binns v. Woodruff, 3 F. Cas. 421, 421 (C.C.D. Pa. 1821) (No. 1,424). The Federal Cases reporter provided the following synopsis for the Binns decision:

This case was before the court at April term, 1819, and then was dismissed; it having been decided, that, although in patent causes the courts of the United States have jurisdiction when both parties reside in the same state, the same did not exist in cases of copyright. On the 15th of February, 1819, [3 Stat. 481, c. 19,] congress passed a declaratory law, giving original any bill in equity; filed by any party aggrieved in any such cases, giving authority to grant injunctions according to the course and principles of courts of equity, . . .

Id.; see also James Ryan, A Short History of Patent Remedies, 6 Cybaris Intell. Prop. L. Rev. 150, 158–61 (2015) (discussing the federalism concerns animating why Congress did not authorize injunctions in early federal statutes).

 [21]. See Motte v. Bennett, 17 F. Cas. 909, 914–17 (C.C.D.S.C. 1849) (No. 9,884) (reviewing “the course pursued in the courts of the United States in granting injunctions in patent cases” reaching back to the early nineteenth century); see also Whitney v. Carter, 29 F. Cas. 1070, 1071 (C.C.D. Ga. 1810) (No. 17,583) (“[T]he plaintiff’s counsel cited . . . the opinion of the court, delivered by Judge Johnson, in December term, 1807, in the case of Whitney and others v. Fort, upon a bill of injunction.” (footnote omitted)); Morse v. Reed, 17 F. Cas. 873, 873 (C.C.D.N.Y. 1796) (No. 9,860) (issuing a permanent injunction for infringement of a patent). The Morse case is apparently mistakenly classified as a patent case when it was actually a copyright case. See Ryan, supra note 20, at 160.

 [22]. See Lightner v. Kimball, 15 F. Cas. 518, 519 (C.C.D. Mass. 1868) (No. 8,345) (“[E]very person who intermeddles with a patentee’s property . . . is liable to an action at law for damages . . . .”); Gray v. James, 10 F. Cas. 1019, 1021 (C.C.D. Pa. 1817) (No. 5,719) (stating that patent infringement is “an unlawful invasion of property”); see also supra note 16 (citing cases referring to patents as property rights).

 [23]. See, e.g., Goodyear Dental Vulcanite Co. v. Van Antwerp, 10 F. Cas. 749, 750 (C.C.D.N.J. 1876) (No. 5,600) (stating that patent infringement is equivalent to a “trespass” of horse stables); Burleigh Rock-Drill Co. v. Lobdell, 4 F. Cas. 750, 751 (C.C.D. Mass. 1875) (No. 2,166) (noting that the defendants “honestly believ[ed] that they were not trespassing upon any rights of the complainant”); Livingston v. Jones, 15 F. Cas. 669, 674 (C.C.W.D. Pa. 1861) (No. 8,414) (accusing defendants of having “made large gains by trespassing on the rights of the complainants”); Eastman v. Bodfish, 8 F. Cas. 269, 270 (C.C.D. Me. 1841) (No. 4,255) (comparing evidentiary rules in a patent infringement case to evidentiary rules in a trespass action); Reutgen v. Kanowrs, 20 F. Cas. 555, 557 n. (C.C.D. Pa. 1804) (No. 11,710) (“In all cases of trespass, the jury may find one defendant guilty, and the other not guilty.”).

 [24]. See Poppenhusen v. N.Y. Gutta Percha Comb Co., 19 F. Cas. 1056, 1057 (C.C.S.D.N.Y. 1858) (No. 11,281) (“[I]n [the] future, there will be an infringement, unless such infringement is restrained by injunction. It is, under such circumstances, almost a matter of course, that the injunction should be allowed.” (citation omitted)); Blanchard v. Reeves, 3 F. Cas. 638, 640 (C.C.E.D. Pa. 1850) (No. 1,515) (“We can not shut our eyes to the fact that the defendants have pirated the invention . . . . The complainant is therefore entitled to his injunction . . . .”); Ogle v. Ege, 18 F. Cas. 619, 620 (C.C.D. Pa. 1826) (No. 10,462) (“I take the rule to be, in cases of injunctions in patent cases, that where the bill states a clear right to the thing patented, which, together with the alleged infringement, is verified by affidavit; if he has been in possession of it by having used or sold it in part, or in the whole, the court will grant an injunction, and continue it till the hearing or further order, without sending the plaintiff to law to try his right.”); Buck v. Cobb, 4 F. Cas. 546, 547 (C.C.N.D.N.Y. 1847) (No. 2,079) (“[T]o secure inventors the rewards of their genius against the incursions of pirates . . . . And so the injunction was granted.”); Sullivan v. Redfield, 23 F. Cas. 357, 360–61 (C.C.D.N.Y. 1825) (No. 13,597) (denying a motion for an injunction for the alleged infringement of a patent that issued in 1819 given plaintiff’s failure to meet the legal and equitable preconditions).

 [25]. See Davis v. Palmer, 7 F. Cas. 154, 159 (C.C.D. Va. 1827) (No. 3,645) (Marshall, Circuit Justice) (instructing the jury that if “the imitator attempted to copy the [patented] model” and made an “almost imperceptible variation, for the purpose of evading the right of the patentee,” then “this may be considered as a fraud on the law”); see also Dixon v. Moyer, 7 F. Cas. 758, 759 (C.C.D. Pa. 1821) (No. 3,931) (Washington, Circuit Justice) (explaining that an attempt to make a “mere formal difference” between a patented device and an infringing copy is “a fraudulent evasion of the plaintiff’s right”).

 [26]. See, e.g., Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 12 (1829) (recognizing that “if the invention should be pirated, [this] use or knowledge, obtained by piracy,” would not prevent the inventor from obtaining a patent); Batten v. Silliman, 2 F. Cas. 1028, 1029 (C.C.E.D. Pa. 1855) (No. 1,106) (decrying defendant’s “pirating an invention”); Motte, 17 F. Cas. at 917 (referring to the defendant’s actions as “piracy of [the patentholder]’s combination” in his patented lathe); Buck, 4 F. Cas. at 547 (recognizing goal of patent laws in “secur[ing] to inventors the rewards of their genius against the incursions of pirates”); Dobson v. Campbell, 7 F. Cas. 783, 785 (C.C.D. Me. 1833) (No. 3,945) (concluding that patent-assignee has been injured by “the piracy of the defendant”); Grant v. Raymond, 10 F. Cas. 985, 985 (C.C.S.D.N.Y. 1829) (No. 5,701) (noting that the patented machine had “been pirated” often); Earle v. Sawyer, 8 F. Cas. 254, 258 (C.C.D. Mass. 1825) (No. 4,247) (instructing the jury that an injunction is justified by defendant’s “piracy by making and using the machine”).

 [27]. See, e.g., Cammeyer v. Newton, 94 U.S. 225, 234 (1876) (holding that a patent owner can seek compensation for the unauthorized use of his patented invention by federal officials because “[p]rivate property, the Constitution provides, shall not be taken for public use without just compensation”); United States v. Burns, 79 U.S. (12 Wall.) 246, 252 (1870) (“[T]he government cannot, after the patent is issued, make use of the improvement any more than a private individual, without license of the inventor or making compensation to him.”); McKeever v. United States, 14 Ct. Cl. 396, 420–24 (1878) (rejecting the argument that a patent is a “grant” of special privilege, because the text and structure of the Constitution, as well as court decisions, clearly establish that patents are private property rights that are secured under the Takings Clause).

 [28]. See Adam Mossoff, Patents as Constitutional Private Property: The Historical Protection of Patents Under the Takings Clause, 87 B.U. L. Rev. 689, 701–11 (2007).

 [29]. McKeever, 14 Ct. Cl. at 417–20.

 [30]. Id. at 421.

 [31]. Id. at 420.

 [32]. Id. The McKeever court did not cite a source for this quote, but it may have been paraphrasing a recently published treatise. See Theodore D. Woolsey et al., The First Century of the American Republic 443 (1876) (discussing how inventors are given “some control over the reproductions of the fruits of mental labor . . . in addition to the natural right to property”).

 [33]. McKeever, 14 Ct. Cl. at 421.

 [34]. See United States v. Palmer, 128 U.S. 262, 271 (1888) (“The United States has no such prerogative as that which is claimed by the sovereigns of England, by which it can reserve to itself, either expressly or by implication, a superior dominion and use in that which it grants by letters-patent to those who entitle themselves to such grants.”).

 [35]. One example from a prominent nineteenth-century telecommunications technology is Samuel Morse’s multiple conveyances of rights in his patent issued for his invention of the electro-magnetic telegraph. See Bill of Complaint at 6, Morse v. O’Reilly, 56 U.S. 62 (1848) (No. 224) (quoting 1844 agreement between Samuel Morse and Alfred Vail in which Morse agreed to “sell, assign, set over, and convey to . . . Vail, his heirs and assigns, one undivided eighth part of his said invention”); Id. at 5 (quoting 1838 agreement between Morse and Francis O.J. Smith in which Morse promised to “execute sufficient deeds of transfer” in his patent); Id. at 6 (quoting an 1848 agreement between Leonard Gale and Morse in which Leonard D. Gale agreed to “sell, assign, set over, and reconvey [back] to . . . Morse, the said one-sixteenth part of the right, title, and interest in the said invention of an electro-magnetic telegraph”).

 [36]. See Adam Mossoff, O’Reilly v. Morse 33 (George Mason Law & Econ. Research Paper No. 14-22, 2014),

Even before Morse’s first patent would issue in 1840, he had entered into several agreements in which he conveyed multiple ownership interests in his imminent patent rights. When Vail began assisting Morse in 1837, for instance, it was not out of altruistic motives by Vail. Morse and Vail executed an agreement that year providing that Vail would construct ‘at his own proper costs and expense’ Morse’s telegraph and would pay the costs of applying for foreign patents in exchange for a 25% interest in the U.S. patent and a 50% interest in any foreign patents.


 [37]. See Adam Mossoff, The Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s, 53 Ariz. L. Rev. 165, 182–83 (2011) (detailing how Elias Howe sold a one-half interest in his patent on the lockstitch to George W. Bliss to fund his first patent infringement lawsuit against Isaac Singer).

 [38]. See generally Adam Mossoff, Patent Licensing and Secondary Markets in the Nineteenth Century, 22 Geo. Mason L. Rev. 959 (2015) (detailing extensive licensing and assigning practices of patent rights by inventors and follow-on patent owners).

 [39]. See, e.g., Brooks v. Byam, 4 F. Cas. 261, 268–70 (C.C.D. Mass. 1843) (No. 1,948) (Story, Circuit Justice) (analogizing a patent license to “a right of way granted to a man for him and his domestic servants to pass over the grantor’s lands,” citing a litany of real property cases and commentators at common law, such as Lord Coke’s Institutes, Coke’s Littleton, Viner’s Abridgment, and Bacon’s Abridgement); Dobson v. Campbell, 7 F. Cas. 783, 785 (C.C.D. Me. 1833) (No. 3,945) (Story, Circuit Justice) (relying on real property equity cases in which “feoffment is stated without any averment of livery of seisin” in assessing validity of patent license).

 [40]. See Potter v. Holland, 19 F. Cas. 1154, 1156–57 (C.C.D. Conn. 1858) (No. 11,329) (surveying in extensive detail how the common law real property doctrines of “assignment” and “license” had been incorporated into U.S. patent law to define the legal interest that a patent owner conveys to a third party); see also Moore v. Marsh, 74 U.S. 515, 520 (1868) (“An assignee is one who holds, by a valid assignment in writing, the whole interest of a patent, or any undivided part of such whole interest, throughout the United States.” (footnote omitted)); Suydam v. Day, 23 F. Cas. 473, 474 (C.C.S.D.N.Y. 1846) (No. 13,654) (distinguishing between “an assignee of a patent [who] must be regarded as acquiring his title to it, with a right of action in his own name,” and “an interest in only a part of each patent, to wit, a license to use”).

 [41]. See Edward G. Lengel, First Entrepreneur: How George Washington Built His—and the Nation’s—Prosperity 159–60 (2016).

 [42]. See Patent Act of 1790, ch. 7, § 1, 1 Stat. 109, 110 (repealed 1793); see also supra note 14 (quoting same language from the Patent Acts of 1793, 1836, and 1870).

 [43]. Belding v. Turner, 3 F. Cas. 84, 85 n. (C.C.D. Conn. 1871) (No. 1,243).

 [44]. Id.; see also H.I. Dutton, The Patent System and Inventive Activity During the Industrial Revolution 1750–1852, at 122–69 (1984) (detailing commercial practices by English patent owners and investments in English patents); Bottomley, supra note 13, at 73–81 (discussing licensing and assignments of English patent rights).

 [45]. Belding, 3 F. Cas. at 85 n.

 [46]. Carew v. Boston Elastic Fabric Co., 5 F. Cas. 56, 57 (C.C.D. Mass. 1871) (No. 2,398).

 [47]. See               Khan, supra note 4, at 182.

 [48]. See Leonard A. Jones, A Treatise on the Law of Easements § 20 (1898) (“Only incorporeal rights pass as appurtenant to land or under the description of ‘appurtenances.’ Land cannot pass as appurtenant, nor can the actual and exclusive possession of land pass as appurtenant, for such possession does not differ in effect from title in fee.”); see also id. § 13 (“An easement is not a right to the soil of the land or to any corporeal interest in it.”); Tinicum Fishing Co. v. Carter, 61 Pa. 21, 29, 3738 (1869) (referring to “an incorporeal easement on the land of the riparian owner” as one type of “incorporeal hereditaments”); Edward Coke, 1 The First Part of the Institutes of the Laws of England § 184, 121b–122a (London, W. Clarke & Sons 19th ed. 1832) (1628) (explaining that “incorporeall” interests are necessarily “appurtenant” to corporeal interests); Emory Washburn, A Treatise on the American Law of Easements and Servitudes 37 (2d ed. 1867) (identifying an easement appurtenant as “an incorporeal hereditament”).

 [49]. Davoll v. Brown, 7 F. Cas. 197, 199 (C.C.D. Mass. 1845) (No. 3,662) (citation omitted); see also Hovey v. Henry, 12 F. Cas. 603, 604 (C.C.D. Mass. 1846) (No. 6,742) (“An inventor holds a property in his invention by as good a title as the farmer holds his farm and flock.”).

 [50]. See Stephen Haber, Patents and the Wealth of Nations, 23 Geo. Mason L. Rev. 811, 811 (2016) (“There is abundant evidence from economics and history that the world’s wealthy countries grew rich because they had well-developed systems of private property. Clearly defined and impartially enforced property rights were crucial to economic development . . . .”).

 [51]. See Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else 83 (2000).

 [52]. See id. at 74.

Perhaps the most significant cost was caused by the absence of institutions that create incentives for people to seize economic and social opportunities to specialize within the marketplace. We found that people who could not operate within the law also could not hold property efficiently or enforce contracts through the courts . . . . Being unable to raise money for investment, they could not achieve economies of scale or protect their innovations through royalties and patents.


 [53]. See Khan, supra note 4, at 9–10 (“[P]atents and . . . intellectual property rights facilitated market exchange, a process that assigned value, helped to mobilize capital, and improved the allocation of resources. . . . Extensive markets in patent rights allowed inventors to extract returns from their activities through licensing and assigning or selling their rights.”).

 [54]. See, e.g., Naomi R. Lamoreaux, et al., Patent Alchemy: The Market for Technology in US History, 87 Bus. Hist. Rev. 3, 4–5 (2013).

 [55]. See Joan Farre-Mensa, et al., What Is a Patent Worth? Evidence from the U.S. Patent “Lottery” 26–27 (USPTO Econ. Working Paper No. 2015-5, 2018),

 [56]. See Kenneth Silverman, Lightning Man: The Accursed Life of Samuel F.B. Morse 261–67 (2003) (discussing Amos Kendall’s franchise business model based on licenses of rights in Morse’s patent).

 [57]. See Christopher Beauchamp, Invented by Law: Alexander Graham Bell and the Patent That Changed America 49–51 (2015) (detailing Bell’s use of licensing and the franchise business model after failing to sell his patents to Western Union or obtain venture capital to support his own full-service company).

 [58]. See Mossoff, supra note 37, at 194–97.

 [59]. See de Soto, supra note 51, at 168; see also Khan, supra note 4, at 96 (“The development of trade is predicated on recognized rights of property . . . . Patent Office assignment records and law reports both reveal that an extensive and deep market in patent assignments and licenses functioned during the antebellum period.”).

 [60]. See Mossoff, supra note 3, at 1001–02.

 [61]. Grant v. Raymond, 31 U.S. (6 Pet.) 218, 242 (1832).

 [62]. See Patent Act of 1836, ch. 357, § 13, 5 Stat. 117, 122 (repealed 1870).

 [63]. See Mfg. Co. v. Ladd, 102 U.S. 408, 411 (1880) (“The real object and design of a reissue of a patent have been abused and subverted.”); see also Christopher Beauchamp, The First Patent Litigation Explosion, 125 Yale L.J. 848, 885–92 (2016) (detailing this abusive practice).

 [64]. See Beauchamp, supra note 63, at 891 (“A string of decisions in the 1870s began to rein in reissue practice and to cast doubt on broadened grants. By 1880, the Supreme Court’s disfavor was clear.” (footnote omitted)).

 [65]. See Campbell v. Seaman, 63 N.Y. 568, 576–77 (1876) (“[E]very person may exercise exclusive dominion over his own property, and subject it to such uses as will best subserve his private interests. . . . But every person is bound to make a reasonable use of his property so as to occasion no unnecessary damage or annoyance to his neighbor.”); Keeble v. Hickeringill (1707) 103 Eng. Rep. 1127, 1128 (Holte, C.J.) (holding that a malicious use of one’s property solely to deprive a neighbor of the productive use of his property is sufficient to justify liability under a writ for trespass on the case); see also Dig. 47.10.44 (Javoleneus, Posthumous Works of Labeo 9) (Alan Watson trans., 1985) (stating that there ought to be a right of legal action against a property owner who interferes with someone else’s property with intention to injure).

 [66]. See McClain v. Ortmayer, 141 U.S. 419, 424 (1891) (“The object of the patent law . . . is not only to secure to [the inventor] all to which [the inventor] is entitled, but to apprise the public of what is still open to them.”).

 [67]. Khan, supra note 4, at 51.

 [68]. Id. at 182.

 [69]. Haber, supra note 50, at 834.

 [70]. Id. at 815.

 [71]. See id. at 834 (“Evidence and reason therefore suggest that the burden of proof falls on those who claim that patents frustrate innovation.”); Letter from Jonathan Barnett, Professor, USC Gould School of Law, et al., to Assistant Attorney Gen. Makan Delrahim (Feb. 13, 2018), https://cpip.gmu.
trust-Enforcement-of-IP.pdf (“It bears emphasizing that no empirical study has demonstrated that a patent-owner’s request for injunctive relief after a finding of a defendant’s infringement of its property rights has ever resulted either in consumer harm or in slowing down the pace of technological innovation.”).

 [72]. See B. Zorina Khan, An Economic History of Patent Institutions, Econ. Hist. Ass’n (2008), (“The German patent system was influenced by developments in the United States, and itself influenced legislation in Argentina, Austria, Brazil, Denmark, Finland, Holland, Norway, Poland, Russia and Sweden. . . . The first national patent statute in Japan was passed in 1888, and copied many features of the U.S. system, including the examination procedures.”).

 [73]. See Haber, supra note 50, at 822.

 [74]. See Khan, supra note 4, at 38 (“Compulsory licenses were introduced [in England] in 1883 (and strengthened in 1919 as ‘licenses of right’) . . . .”).

 [75]. A few special patent doctrines were used to define the outer boundaries of this general reliance on private law doctrines, such as scire facias actions for fraud in obtaining a patent. See Beauchamp, supra note 57, at 86–108 (discussing “a thoroughly ad hoc mobilization of government power” by interest groups who lobbied the federal government to bring a (unsuccessful) case against Alexander Bell in their efforts to invalidate Bell’s patent on the telephone).

 [76]. See, e.g., Bruce W. Bugbee, Genesis of American Patent and Copyright Law 143–44 (1967) (discussing the rejection of a Senate proposal for a compulsory licensing requirement in the bill that eventually became the Patent Act of 1790); Kali Murray, Constitutional Patent Law: Principles and Institutions, 93 Neb. L. Rev. 901, 935–37 (2015) (discussing the introduction of legislation in 1912 requiring compulsory licensing for patent owners not manufacturing a patented invention, which received twenty-seven days of hearings, but was not enacted into law).

 [77]. See Madigan & Mossoff, supra note 6, at 939–40.

 [78]. eBay Inc. v. MercExchange L.L.C., 547 U.S. 388, 390–91f (2006); see, e.g., Doug Rendleman, The Trial Judge’s Equitable Discretion Following eBay v. MercExchange, 27 Rev. Litig. 63, 76 n. 71 (2007) (“Remedies specialists had never heard of the four-point test.”).

 [79]. eBay, 547 U.S. at 396–97 (Kennedy, J., concurring).

 [80]. See Ryan T. Holte, The Misinterpretation of eBay v. MercExchange and Why: An Analysis of the Case History, Precedent, and Parties, 18 Chap. L. Rev. 677, 721–22 (2015).

 [81]. See Kirti Gupta & Jay P. Kesan, Studying the Impact of eBay on Injunctive Relief in Patent Cases 38 (Univ. of Ill. Coll. of Law, Legal Studies Research Paper No. 17-03, 2016),

We find that both for preliminary and permanent injunctions, [patent licensing companies] are less likely to obtain an injunction, after controlling for patent characteristics and the length of the case (from filing to termination) throughout the 2000-2012 time period. We also find that the eBay ruling reduced the likelihood of all firms [including manufacturers] receiving either preliminary or permanent injunctions.


 [82]. Cornell Univ. v. Hewlett-Packard Co., 609 F. Supp. 2d 279, 283–86 (N.D.N.Y. 2009).

 [83]. See Jonathan D. Putnam & Tim A. Williams, The Smallest Salable Patent-Practicing Unit (SSPPU): Theory and Evidence 12 (Sep. 8, 2016) (unpublished manuscript),

 [84]. See Adam Mossoff & Bhamati Viswanathan, Explaining Efficient Infringement, Antonin Scalia L. Sch.: CPIP Blog (May 11, 2017),

 [85]. Id.

 [86]. See Reuters, Apple Reported to Be $7 Billion Behind in Patent Royalty Payments by Qualcomm, Tech2 (Oct. 27, 2018, 10:05 AM), One analyst estimated that Apple paid $5 to $6 billion in its settlement with Qualcomm, which indirectly confirms the amount claimed in arrears. See Kif Leswing, Apple Paid Up to $6 billion to Settle with Qualcomm, UBS Estimates, CNBC (Apr. 18, 2019, 11:49 AM),

 [87]. See Don Clark & Daisuke Wakabayashi, Apple and Qualcomm Settle All Disputes Worldwide, N.Y. Times (Apr. 16, 2019),

 [88]. See Reed Albergotti, Apple Said Qualcomm’s Tech Was No Good. But in Private Communications, It Was ‘the best,’ Wash. Post (Apr. 19, 2019),

 [89]. See Richard A. Epstein & Kayvan B. Noroozi, Why Incentives for “Patent Holdout” Threaten to Dismantle FRAND, and Why It Matters, 32 Berkeley Tech. L. J. 1381, 1414–15 (2017).

 [90]. See Adam Mossoff, Apple Pays for Its Patent Infringement, But Important Legal Cases Continue, IPWatchdog (Mar. 19, 2019),

 [91]. See The Impact of Bad Patents on American Businesses: Hearing Before the Subcomm. on Courts, Intellectual Prop., and the Internet of the H. Comm. on the Judiciary, 115th Cong. (2017) (statement of J. Paul R. Michel, former C.J. of the U.S. Court of Appeals for the Federal Circuit) (“Indeed, most owners of patents can no longer afford to enforce them. . . . Experts opine that to enforce a small portfolio an owner needs $15 million in cash and $3 billion in market cap. So, wages now say that the ‘sport of kings’, horse racing, has been replaced by patent litigation.”).

 [92]. See Khan, supra note 3, at 833–35.

 [93]. See David Kappos, Under Sec’y of Commerce for IP and Dir. of the USPTO, Keynote Address at the Center for American Progress: An Examination of Software Patents (Nov. 20, 2012), (“[T]he AIA is the most significant reform to the U.S. patent system since 1836.”).

 [94]. See 35 U.S.C. § 6 (2018) (patent trial and review board); id. § 101 (patentable subject matter; utility); id. § 102 (novelty); id. § 103 (nonobviousness); id. § 112 (written description and enablement).

 [95]. See Adam Mossoff & David Lund, The Problems with the PTAB, IAM, Nov.Dec. 2017, at 29, 32–33 (discussing Target Corp. v. Destination Maternity Corp., in which the PTAB panel was increased from 3 to 5, and ultimately to 7, judges before the panel finally reached the “right” result of invalidating the patent).

 [96]. See id. at 30.

The most notorious example has been hedge fund manager Kyle Bass, who has repeatedly filed PTAB petitions targeting patents in the biopharmaceutical industry. Neither his hedge fund nor his PTAB-filing organisation makes generic drugs or commercialises any products or services in the pharmaceutical industry. Instead, Bass simply shorts the stock of companies that own the patents he challenges at the PTAB, because the market is aware of the PTAB death squad statistics.


 [97]. See Anne S. Layne-Farrar, The Cost of Doubling Up: An Economic Assessment of Duplication in PTAB Proceedings and Patent Infringement Litigation, Landslide, MayJune 2018, at 52, 55 (“On a per-patent basis, out of 3,460 patents with an IPR challenge filed, 842 (24 percent) were ‘serially petitioned patents.’ Among the patents with three or more IPR challenges, the serial petitions involved an overlap in claims, an overlap in the prior art asserted, or both.” (footnotes omitted)).

 [98]. See Mossoff & Lund, supra note 95 at 29 (reporting that 97.8% of the business method patents reviewed in the Covered Business Method (CBM) hearings at the PTAB were canceled).

 [99]. See Novartis AG v. Noven Pharms., Inc., 853 F.3d 1289, 1293–94 (Fed. Cir. 2017); see also Matthew Bultman, PTAB Nixes Part of Garage Door Opener Patent Upheld By ITC, Law360 (Oct. 25, 2018),

ld-by-itc (reporting a patent canceled by PTAB after it was construed as valid by the ITC, which applies the same legal standard in construing patents as Article III courts).

 [100]. See Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51340, 51340 (Oct. 11, 2018) (to be codified at 37 C.F.R. pt. 42) (changing the legal rule for construing patents at the PTAB to be the same as the rule used in Article III courts).

 [101]. Ryan Davis, PTAB’s “Death Squad” Label Not Totally Off-Base, Chief Says, Law360 (Aug. 14, 2014) (quoting Former Chief Judge of the PTAB, Randall Rader),

 [102]. Oil States Energy v. Greene’s Energy Grp., 138 S. Ct. 1365 (2018).

 [103]. Id. at 1373–74.

 [104]. See Adam Mossoff, Statutes, Common-Law Rights, and the Mistaken Classification of Patents as Public Rights, 104 Iowa L. Rev. (forthcoming 2019) (manuscript at 2) (available at Professor Richard Epstein has meticulously reviewed the cases quoted or cited by the Oil States Court in support of its decision, and he found that the Court quoted or cited the cases out of context, or, in some cases, the quotes elided language that contradicted the propositions for which the Court claimed they supported; See Richard A. Epstein, Inter Partes Review Under the AIA Undermines the Structural Protections Offered by Article III Courts, in The Supreme Court Tackles Patent Reform, 19 Federalist Soc’y Rev. 132, 133–39 (2018).

 [105]. See Madigan & Mossoff, supra note 6. at 946–60 (identifying how four Supreme Court decisions between 2010 and 2014 have destabilized and diminished U.S. innovation, particularly in the biopharmaceutical and advanced technology industries).

 [106]. See Rob Sterne, PTAB Challenges Are a Costly, Uphill Battle for Patent Owners, IPWatchdog (Apr. 22, 2018), (“[C]ompanies like Unified Patents were formed to aggregate the PTAB opportunity . . . . These PTAB aggregators offer several benefits to accused infringers, including reduced PTAB cost, no estoppels, and the ability to circumvent the one-year challenge requirement. They act as a surrogate for the accused infringer, who never files a PTAB challenge.”).

 [107]. Id. (“PTAB challenges are very expensive, often topping [over $1 million] through Federal Circuit appeal. They add 2-4 years to most district court suits.”).

 [108]. See G. Marcus Cole, The Long Convergence: “Smart Contracts” and the “Customization” of Commercial Law, 92 S. Cal. L. Rev 851, 85354 (2019) (“In 1999, the National People’s Congress of the People’s Republic of China adopted the New Contract Law . . . . [I]ts contract law [now] reflects the law of commerce developed over centuries in the common law of the United States, England, and before that, the Law Merchant and the jus commune of continental Europe.”); Aaron D. Simowitz, Convergence and the Circulation of Money Judgments, 92 S. Cal. L. Rev 1031, 1036 (2019) (“On June 30, 2017, a Chinese court recognized a U.S. commercial money judgment—a first in Sino-U.S. history.”). 

 [109]. Steve Brachmann, China Streamlines Patent Examination for Internet, Big Data Patent Applications, IPWatchdog (Aug. 1, 2017),

 [110]. Elizabeth Chien-Hale, A New Era for Software Patents in China, Law360 (May 25, 2017, 11:55 AM),; see also Jack Ellis, China Relaxes Rules on Software Patentability – And the United States Loses More Ground, IAM (Mar. 3, 2017),
ability-and-united-states-loses-more-ground (“China’s apparent embrace of software patents stands in stark contrast to the situation in the United States, which many would see as the traditional home of the software industry.”).

 [111]. Ryan Davis, What You Need to Know About Patent Litigation in China, Law360 (Aug. 9, 2018),

 [112]. See id.

 [113]. Id.

 [114]. See Bing Zhao, China Introduces Legislation to Create a National IP Appeals Court, IAM (Oct. 24, 2018),

 [115]. Grant Clark & Shelly Hagan, What’s Intellectual Property and Does China Steal It? Bloomberg: Quicktake (Mar. 22, 2018, 4:58 AM),

 [116]. See Don Clark & Jack Nicas, Chinese Court Says Apple Infringed on Qualcomm Patents, N.Y. Times (Dec. 10, 2018),

 [117]. See Kristen Jakobsen Osenga, Making Important Patents Worthless, Wash. Times (Oct. 15, 2018),

 [118]. Sui-Lee Wee, Made in China: New and Potentially Lifesaving Drugs, N.Y Times, Jan 3, 2018, at B1.

 [119]. See Simowitz, supra note 108, at 1033 (“China has decisively opened its courts to foreign judgments at the same time the Xi government has dramatically closed other economic doors. For example, the Xi government has imposed Maoist-era currency controls—an act of profound economic self-sabotage, in the view of most observers.”); Jonathan Tepperman, China’s Great Leap Backward, Foreign Pol’y (Oct. 15, 2018, 8:00 AM), (reporting on China’s return to authoritarianism).