Property Week 5 - Intellectual Property, Fees Simple

What is intellectual property?

Law of patents, copyrights, trademarks, trade secrets

Theories of IP

• Public Benefits: Give incentive to engage in socially useful work

• Natural Rights: People should inherently get the value of their work

• Public Choice: Powerful parties create IP law to benefit themselves

Patents

• Type of IP

• Right: 20 years of exclusive rights of use/sale/manufacturing

• For: diverse technology

• Elements:

  • Patentable subject matter

  • Novelty/New

  • Useful

  • Non-obvious

Design Patent

protects look and design, not what it does

Utility Patent

protects function and structure

Copyrights

• type of IP

• Right: Affirmative use right for life of author + 70yrs

• Elements

  • Fixation

  • Originality

  • Work of Authorship

  • Not a system/method/idea (Expression is copyrightable, but idea being expressed is NOT)

Trademark

• type of Ip

• Right: Rights develop as consumers associate marks on goods with a single source

• Elements: Different elements for each basis for liability below

• For: To protect consumers, not owners, from being deceived as to the origin of goods bearing the relevant marks (slogans, branding, etc)

3 kinds of liability for trademarks

Confusion, Dilution, Tarnishment

Tarnishment → type of TM liability

1. Mark is being used in an unwholesome context/used in a context that is out of keeping with trademark’s high-quality image

   1. Precondition: presumption that both products come from the same manufacturer, which wouldn’t happen with an obvious parody

Dilution → type of TM liability

1.   protects famous trademarks from being weakened by the unauthorized use of a similar mark by another party

   About not associating the mark with a particular thing

Confusion → type of TM liability

1.  when consumers made an incorrect mental association between the involved commercial products or their producers. 

   1. Factors:

      1. Degree of similarity

      2. Intent of actor in adopting (e.g., to parody or to deceive?)

      3. Relation in use or manner of marketing

      4. Degree and care likely to be exercised by purchasers

Trade Secrets

• IP type

• Right: Right of exclusive access to / competitive use of information, lasting as long as secrecy of said information is maintained

• For: Valuable business information kept private to the business (e.g. Coke’s recipe)

International IP Protects

1. Every country has its own IP laws, ONLY protecting w/in its borders

2. IP Treaties = movement to harmonize international IP

3. Ethical considerations: Stricter IP rules limit poorer countries’ development (ex: expensive drugs)

Will

designation of who will receive one’s property upon death

Holographic Will

Handwritten and signed by testator, but don’t require a witness

same thing as a will just no witness

Decedent

person who died

Testate

adjective; if they died w/ a will, they died testate

Testator

person who died testate

Intestate

died w/o a will

Heirs

Relatives designated by state “intestate succession statute” to receive property of a decedent who (1) died intestate AND (2) did not otherwise devise/bequeath the property.

• ONLY exist upon D’s death. Before that, they’re just “presumptive heirs”

• ONLY have property interest once death occurs (nothing before)

• Includes spouse and “issue” (kids and their descendants)

Conveyance

• Transfer of property while alive (lifetime transfer)

• Can be any type of property, any type of transfer

• NOT by a will

Intentional transfer

Devise

• Clause giving property by will / Property given by will / giving of property by will

• BY a will

• Devisee: recipient of the devise

Intentional transfer

Bequest/Bequeath

• Personal property given via will

• Legatee: recipient of bequest

Intentional transfer

Escheat

• reversion of any property (real or personal) to state, on owner dying (1) with no legal heirs AND (2) w/o valid will (intestate)

• NOT by will

• Unintended transfer

Lapsed gift

• Gift made by will, but to someone who predeceased testator

• BY will

• Unintended transfer

Rules used to split property across heirs when property is passed via intestacy:

1. Per Stirpes

   1. by LINE

   2. i.e., if I have 2 kids (who both die leaving “issue”), split my stuff in half, then each kid’s issue split their respective 1/2

2. Per Capita

   1. by PERSON

   2. i.e., if I have 2 kids (who both die leaving “issue”), add up the number of issue who take and split my stuff between them

      1. So, one “line” could end up with more than 1/2, if it has more takers

Meaning of “Estates”

1. Everything I own right now

2. Entity created upon my death

3. Estate in real property = totality of my legal ownership in a parcel of land

Present Interest

You can take possession and use the property right now

Future interest

You must wait until some future time to take possession

Types of present estates

1. Fee simple

2. Life Estate

3. Leasehold

Leasehold

right of exclusive possession for a specific period of time

Types of Fee Simple

• Fee simple absolute

• Defeasible fees

  • FSSCS

  • FSD

  • FSSEL

Fee Simple Absolute (FSA)

• gives owner land now until infinity (indefinite)

• no restrictions on how they use the property

• O to A [and his heirs]

  • this gives FSA to A but nothing to the heirs

Fee Simple Subject to Condition Subsequent (FSSCS)

• Subject to defeasance if the specified condition occurs and the grantor exercises the right of re-entry (not automatic)

• Words of Conditions:

  • To A if…

  • To A upon the condition that…

  • To A provided that…

Fee Simple Determinable (FSD)

1. Fee simple estate that automatically ends and returns to grantor if some future condition occurs 

2. Mere expression that property be sued for particular purposes is not itself enough to turn FSA to FSD. Need to include “until”/”so long as” etc. Saying to use for “school purposes” is not enough. Roberts v. Rhodes

3. Words of Duration

   1. To A until…

   2. To A so long as…

   3. To A while…

   4. To A during..

   5. To A unless…

Fee Simple Subject to Executory Limitation (FSSEL)

1. Grantor conveys a defeasible fee simple that passes to someone other than the grantor when the specified condition occurs

2. Executory interest: B’s interest in this situation 

3. Words: either condition or duration language PLUS passing to a 3rd person

   1. To A, but if X thing happens, then to B 

Words of purchase

who gets the stuff (“to A”)

Words of limitation

limit the terms of the conveyance or disposition (“so long as”/”subject to”)

Rules of construction

1. Rule of Testator Intent: Most important. Ascertain from language of entire instrument read in light of the circumstances.

2. Rule of Construction: W/ambiguity in language, most states follow a clear hierarchy (either by statute or CL): FSA > FSSCS > FSD > FSSEL