Today we bring a guest post from Professor Marcus Hurn on the Taxonomy of Property with focus on classification on Intellectual Property in the Basics of Property. He broadly looks into Property and narrows down to the issues of Intellectual Property and even Trade Secrets. This post points out to the basics on which our issues of Technology Transfer and Licensing are based on.
Professor Hurn a distinguished Professor at Pierce Law has taught fifteen different subjects during his teaching tenure and is regularly sought by practicing lawyers and legislative committees for expertise on corporate law, financial reorganization, state and local taxation, and charitable trusts. A recognized expert on white collar crime, he has testified in the prosecution of several multimillion-dollar fraud cases. He is also co-author of several statutes, including the NH Hate Crimes Law, the sexual orientation portions of the NH Law against Discrimination, the Business Corporations Act, and the Limited Liability Company Act. Professor Hurn currently teaches Property, Debtor/Creditor Relations, and Conflicts of Law.
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Brief Taxonomy of Property
There are four major classes of Property: Land, Goods, Obligations, and Intellectual Property. They differ based on whether they are tangible or not, physically movable or not, universal or not, and exhaustible or not. The traditional classification system has a superstructure, and there are significant sub-categories.
Property
is real or personal.
Real property (immovables in civilian parlance) is space defined with reference to the surface of the earth, including the soil and things contained in or affixed to the soil. It is tangible but not movable. It cannot be lost, stolen, or physically destroyed. It has universal scope in the sense that an owner has rights against the whole world. It is exhaustible in the sense that only limited numbers of people can use it at one time. Its boundaries are physically ascertainable. It is ultimately controlled through possession and legal registries.
Personal
property (movables in civilian parlance) is tangible or intangible.
Tangible
personal property is goods/chattels.
It is literally movable, and can be lost, stolen, or physically destroyed. It has universal scope and is exhaustible. It physically defines its own boundaries. It is ultimately controlled through possession or sometimes legal registries.
Intangible
personal property is Obligations or IP.
At common law most intangibles were choses/things/rights in action and not treated as property, merely as rights to legally compel or prevent some action or recover damages. Now nearly all obligations are assignable property in our system. (The major exception is some claims for personal torts.)
Obligations are rights to demand a performance or payment from some definite person or finite group of persons, thus they are not universal. They are not literally movable. All obligations are exhaustible.
Obligations
are of two kinds: Wholly Intangible or
Chattelized.
Wholly intangible obligations (e.g. contract rights, uncertificated stock, licenses) cannnot be lost, stolen, or physically destroyed, are defined by proof of the legal obligation, and are ultimately controlled by notice to or coercion of the obligor (assignment, garnishment).
Chattelized Obligations (e.g. negotiable instruments, bills of lading, certificated investment securities and their modern electronic analogues) can be lost, stolen, or physically destroyed. They are defined by the words of the document/record and the law, and are controlled by transfer of the document by endorsement and delivery or encrypted transfer of the unique record. Loss of the document or record does not necessarily destroy the underlying obligation-- if the document can properly be accounted for, the obligation can be enforced.
Intellectual
Property
IP, as intangible property, cannot be lost, stolen, or physically destroyed. The "boundaries" are defined by grant or usage and the relevant law. It is ultimately controlled by assignment and, for some types, registries. Uniquely, it is inexhaustible -- a potentially infinite number of persons can use it simultaneously or successively. Its oddity comes from combining one characteristic of tangible property-- universality-- with inexhaustibility.
Hybrids
There are, of course, some boundary problems and hybrids: e.g. fixtures, products of the soil, software embodied in goods. In a sense chattelized documents are hybrids. The paper form supplies the convenience of physical goods, and the electronic form (ignoring the physicality of the server) preserves that convenience (unique record) in intangible form.
Trade secrets are also a hybrid. They grow out of a combination of the law of tangibles (trespass to land, trespass to chattels-- the safe, files, or computer) and obligations (confidentiality agreements). Trade secrets look universal, but are essentially finite obligations-- anyone breaching the contract/tort security web is a wrongdoer, but one who learns the secret without culpability is not bound to defer to the original owner.
