By Dennis Crouch
Two people cannot wear the same sock (at least at the same time) but they can think the same thought, sing the same song, or undergo the same medical procedure. As Thomas Jefferson famously put it, part of the ‘peculiar character’ of an idea is that ‘no one possesses the less, because every other possesses the whole of it.’
This quote from Professor James Stern’s new article introduces the conventional view that ideas and information are nonrivalrous, in contrast to the rivalrous nature of tangible goods. As an idea based creation, intellectual property’s nonrivalrous nature has always placed it on airy ground as a statutory creation rather than a natural law. The rivalrous nature of real and personal property has justified property regimes, but for IP we have always needed additional justification and additional limits because propertization creates artificial scarcity. But Stern’s new article bucks the conventional wisdom and instead argues that the nonrivalry of IP is a myth. James Y. Stern, Intellectual Property and the Myth of Nonrivalry, 99 Notre Dame L. Rev. 1163 (2024). Although many economists assume that more information is better, Stern makes clear that is not always true. He writes “it seems a safe bet that there are substantial numbers of people who would prefer the human race had never come up with such novelties as land mines, cigarettes, cargo shorts, Jet Skis, genetically modified foods, anabolic steroids, robocallers, date-rape drugs, subwoofers, Ponzi schemes, and crystal meth, to name just a few.”
Stern’s article challenges the widely held belief that information goods are inherently nonrivalrous, and that this characteristic distinguishes them from tangible property. He argues that the concept of rivalry, properly understood, encompasses not just conflicts between two active uses of a resource, but also conflicts where one person wants to use a resource and another simply wants that person to refrain from doing so. This broader conception of rivalry in terms of wants and desires, Stern contends, is relevant to many situations involving intellectual property. One Stern’s key insights is that preferences to control and restrict access to ideas and information are ubiquitous, extending well beyond the domain of intellectual property law. He points to examples such as privacy laws, testimonial privileges, classified information and state secrets laws, and the Federal Witness Protection Program as evidence that conflicts over controlling access to information are common and demonstrate the potential for rivalrousness when it comes to ideas and information. This insight serves to challenge the notion that the nonrivalrous nature of information goods necessarily means that granting exclusive rights over them is unjustified or socially harmful.
The article also examines how the characterization of intellectual property rights as “monopolies” has shaped legal doctrine, such as the Supreme Court’s reliance on the “public rights doctrine” to uphold adjudication of patent validity in administrative proceedings. Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365 (2018). Stern suggests that this rhetoric traces partly to the view that information goods differ fundamentally from physical property due to their supposed nonrivalry.
Although the article is not patent focused, Stern’s arguments have significant implications for patent law by undermining a key justification for limiting the scope and strength of patent protection. If rivalrousness is possible for patented inventions, then the case for treating patents as a form of property is stronger. An example application here could be eBay and the role of damages and injunctions in patent cases. Similarly, with respect to patent term, Stern’s article raises questions about the appropriate duration of patent rights. If the justification for time-limited patent rights rests partly on the assumption that inventions are nonrivalrous and therefore do not require permanent exclusivity, then recognizing the potential for rivalrousness in the use of inventions may suggest a need to reconsider the optimal term length. At the same time, concerns about dynamic efficiency and the importance of promoting follow-on innovation may still counsel in favor of limiting the duration of patent rights, even if some degree of rivalrousness is present. Consider also double patenting, that is designed to ensure that the public should have access to the invention upon expiration of the patent. See In re Longi, 759 F.2d 887 (Fed. Cir. 1985).
Although I have not fully bought into his ideas, professor Stern has done a great job challenging us to rethink core aspects of intellectual property law. Many courts, especially members of the Supreme Court, have long seen intellectual property as inherently suspect without any inherent value other than the incentive to innovate. Stern’s article grapples with this argument that and highlights the need for a more nuanced understanding of the interests at stake.
