IP AS CONTRACT
The Limits of Contract
The law, then, should protect individual rights to one’s
body, and to legitimately acquired scarce resources (property).
There is not a natural right to ideal objects—to one’s
intellectual innovations or creations—but only to scarce
resources. Many opponents of IP rights typically support
only contractual arrangements to protect ideas and innovations—
private contracts between property owners.80 Suppose,
for example, that A writes a book and sells physical
copies of it to numerous purchasers B1, B2 . . . BN, with a contractual
condition that each buyer B is obligated not to make
or sell a copy of the text. Under all theories of contract, any
46 — Against Intellectual Property
of the buyers B becomes liable to A, at least for damages,
if he violates these provisions.81
But the advocates of the contractual approach to IP are
mistaken if they believe that private contract can be used
to recreate the same type of protection afforded by modern
IP rights. Patent and copyright are good against all
third parties, regardless of their consent to a contract. They
are real rights that bind everyone, in the same way that my
title to a parcel of land binds everyone to respect my property—
even if they do not have a contract with me. A contract,
by contrast, binds only parties to the contract. It is like
private law between the parties.82 It does not bind third
parties, i.e., those not in “privity” with the original parties.83
Thus, if the book purchaser B relates to third parties T
the plot of the purchased novel, these third parties T are
not bound, in general, by the original contractual obligation
between A and B. If I learn how to adjust my car’s carburetor
to double its efficiency, or if I learn of a poem or
movie plot someone else has written, why should I have to
pretend that I am ignorant of these things, and refrain
from acting on this knowledge? I have not obligated myself
by contract to the creator. I do not deny that contractual
obligations can be implicit or tacit, but there is not even an
implicit contract in such situations.
Nor can it be said as a general matter that I have stolen
or fraudulently acquired the information, as there are many
legitimate ways for individuals to acquire information. Artistic
works, by their very nature, typically are made public. Scientific
discoveries and innovations likewise can become
known beyond the parties to confidentiality agreements. And
it certainly cannot be said that my use of my carburetor, or
writing a novel using the same plot, physically interferes with
the creator’s use of his own tangible property. It does not
even prevent the creator from using his own carburetor idea
to improve his own car or others’, or from using that plot.
So, my adjusting my carburetor is not a breach of contract;
it is not theft; and it is not physical trespass on the
inventor’s tangible property. Twiddling my carburetor does
not violate the inventor’s rights. At most, my use of this
idea will diminish its value to the inventor by hampering his
ability to monopolistically exploit it. As we have seen, however,
one cannot have a right to the value of one’s property,
but only in its physical integrity.84
Thus, the use of contract only gets us so far. A book
publisher may be able to contractually obligate his purchasers
to not copy his book, but he cannot prevent third
parties from publishing and selling it, unless some contract
prohibits this action.