Right on Time: First Possession in Property and Intellectual Property

College of William & Mary Law School

William & Mary Law School Scholarship Repository

Faculty Publications Faculty and Deans

2019

Right on Time: First Possession in Property and

Intellectual Property

Dotan Oliar

James Y. Stern

William & Mary Law School, jyst[email protected]

h4ps://scholarship.law.wm.edu/facpubs

Repository Citation

Oliar, Dotan and Stern, James Y., "Right on Time: First Possession in Property and Intellectual Property" (2019). Faculty Publications.

1906.

h4ps://scholarship.law.wm.edu/facpubs/1906

395

RIGHT ON TIME: FIRST POSSESSION IN PROPERTY AND

INTELLECTUAL PROPERTY

DOTAN OLIAR & JAMES Y. STERN



BSTRACT

How should we allocate property rights in unowned tangible and intangible

resources? This Article develops a model of original acquisition that draws

together common law doctrines of first possession with original acquisition

doctrines in patent, copyright, and trademark law. The common denominator is

time: in each context, doctrine involves a trade-off between assigning

entitlements to resources earlier or later in the process of their development and

use. Early awards risk granting exclusivity to parties who may not be capable

of putting resources to their best use. Late awards prolong contests for

ownership, which may generate waste or discourage acquisition efforts in the

first place. While the doctrinal resolution of these timing questions varies in

different resource contexts, the determination depends upon a recurring and

discrete set of functional considerations. This Article applies its theory to assess

a host of doctrinal features in our patent, copyright, and trademark laws, to

analyze recent intellectual property law developments, and to suggest directions

for reform.



Professor of Law, University of Virginia School of Law and Associate Professor of Law,

William & Mary Law School, respectively. We thank Avi Bell, Hanoch Dagan, John Duffy,

Peter Menell, Gideon Parchomovsky, Ariel Porat, Betsy Rosenblatt, George Rutherglen, and

Paul Stephan, as well as participants at the 2017 meeting of the American Law & Economics

Association, the Intellectual Property Scholars Conference, the Property Works-In-Progress

Dotan Oliar & James Y. Stern.

396 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

CONTENTS

NTRODUCTION ............................................................................................... 397

I. FIRST POSSESSION: FORMS AND FUNCTIONS ............................................. 404

II. ORIGINAL ACQUISITION IN INTELLECTUAL PROPERTY .............................. 417

A. Patent ........................................................................................... 420 

B. Trademark ................................................................................... 428

C. Copyright ..................................................................................... 435

III. GRASPING POSSESSION ............................................................................ 440

A. Doctrinal Implications ................................................................. 440

1. Patent Trolls: Of Abstract Ideas and IPRs ............................. 440

2. The Hunt for Secondary Meaning ......................................... 444

B. Institutional Implications ............................................................. 446

1. Possession, Information, and Intellectual Property ............... 446

2. Intellectual Property as Property: Flexibility and

Standardization ...................................................................... 451



C. Theoretical Implications .............................................................. 453

1. On Defining IP Goods ........................................................... 453

2. Divided Possession Rules ...................................................... 456

CONCLUSION ................................................................................................... 457

2019] RIGHT ON TIME 397

INTRODUCTION

Time is central to intellectual property (“IP”) law. Congress, courts, and

scholars rightfully give considerable attention to questions about when IP rights

should end,

but there is comparatively little analysis of when they should begin.

While ownership of IP rights might be expected to start at original acquisition

through creation

or use,

matters are not quite so simple.

The foundation of ownership is first possession. Though some treat this as a

normative or philosophical proposition,

this Article means it in a positive,

practical sense. Ordinarily, someone comes to own something by acquiring title

from someone else who owned it, who acquired title from someone else who

owned it before that, and so on, until one gets back to the very first owner and

the so-called “root” of title.

But how did the first owner come to own it? How,

in other words, do things come to be owned?

The basic answer property law

gives is first possession: ownership of an unowned resource goes to whomever

does something referred to as “possessing” it before anyone else.

See U.S. CONST. art. I, § 8, cl. 8 (empowering Congress to secure IP rights that last for

“limited [t]imes”); 15 U.S.C. § 1127 (2012) (defining “abandoned” trademark as among other

things, when mark becomes a generic name for goods it designates); 17 U.S.C. § 302(a)

(2012) (stating that copyrights of individual authors generally expire seventy years after

author’s death); 35 U.S.C. § 154(2) (2012) (stating that patents generally expire twenty years

after they are applied for); Eldred v. Ashcroft, 537 U.S. 186, 189 (2003) (upholding

constitutionality of copyright term after it was extended by twenty years against arguable

violation of “limited [t]imes” clause); W

ILLIAM D. NORDHAUS, INVENTION, GROWTH, AND

WELFARE: A THEORETICAL TREATMENT OF TECHNOLOGICAL CHANGE 76-80 (1969) (providing

canonical theoretical framework for setting optimal patent term).

See 17 U.S.C. § 102 (stating that copyrights are generally granted to whoever fixes

original work of authorship in physical object); 35 U.S.C. § 101 (stating that patents are

generally granted to whoever invents any new and useful invention).

Trademarks have long been awarded to whoever was the first to merely adopt and use a

mark in commerce. See Hydro-Dynamics, Inc. v. George Putnam & Co., 811 F.2d 1470, 1473

(Fed. Cir. 1987) (“The requirements of both adoption and use devolve from the common law;

trademark rights in the United States are acquired by such adoption and use . . . .”); see also

15 U.S.C. § 1127 (defining “use in commerce” as “bona fide use of a mark in the ordinary

course of trade”).

See, e.g., JOHN LOCKE, TWO TREATISES OF GOVERNMENT 306 (Peter Laslett ed.,

Cambridge Univ. Press 1960) (1690) (“He that is nourished by the Acorns he pickt up under

an Oak, or the Apples he gathered from the Trees in the Wood, has certainly appropriated

them to himself. . . . I ask then, When did they begin to be his? . . . And ‘tis plain, if the first

gathering made them not his, nothing else could.”).

See Carol M. Rose, Possession as the Origin of Property, 52 U. CHI. L. REV. 73, 73

(1985).

See id. (theorizing why certain actions, namely possession, allow one to obtain ownership

of things).

See 2 WILLIAM BLACKSTONE, COMMENTARIES *3 (noting that “whoever was in

occupation of any determinate spot of [ground] . . . acquired for the time a sort of ownership”);

398 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

Modern readers may be tempted to dismiss first possession as an essentially

antiquarian topic, given that so much of the tangible substance of the planet is

already owned, but the temptation should be resisted.

There are a number of

reasons why an understanding of first possession remains valuable, and this

Article concentrates on one of particular significance: first possession is the

principal device used to award exclusive rights to the products of human

imagination and ingenuity—that is, in the field of intellectual property.

This is

no small matter. In recent years, more than one million new IP rights have been

registered with the U.S. government annually, reflecting claims to everything

from pharmaceutical drugs to pop songs and from product logos to computer

code,

and many more have been created but not registered.

Information is the

most valuable resource of our age and the yet-to-be-owned expanses of human

creativity are seemingly endless. Attention to the rules allocating IP rights

remains critical.

Are we doing a good job propertizing creations of the mind? Do existing laws

and doctrines tend to “promote the Progress of Science and useful Arts,” the

constitutional aim of U.S. patent and copyright laws?

Or can these rules be

Dean Lueck, First Possession, in 2 NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW

132, 133-36 (Peter Newman ed., 1998) (describing first possession as rule which “grants an

ownership claim to the party that gains control before other potential claimants”).

The 1890 Census declared that the frontier region of the United States no longer existed.

See FREDERICK JACKSON TURNER, THE FRONTIER IN AMERICAN HISTORY 1 (1920) (“[A]t

present the unsettled area has been broken into by isolate bodies of settlement that there can

hardly be said to be a frontier line.”); Thomas W. Merrill, Accession and Original Ownership,

J. LEGAL ANALYSIS 459, 460 (2009) (suggesting principles of accession are primary

mechanism by which original title to property is established).

Cf. JOHN F. KENNEDY, “LET THE WORD GO FORTH”: THE SPEECHES, STATEMENTS, AND

WRITING OF JOHN F. KENNEDY 101 (Theodore C. Sorensen ed., 1988) (declaring “New

Frontier” beyond which “are the uncharted areas of science and space”).

For example, more than three hundred thousand patents were issued, and three hundred

thousand trademarks and four hundred thousand copyrights were registered in 2016, the last

year for which all statistics are available. See U.S.

REPORT 16 (2016), https://www.copyright.gov/reports/annual/2016/ar2016.pdf [https://perma

.cc/4XUA-C5YC] (stating that 414,269 copyrights were registered in 2016); U.S. P

ATENT &

TRADEMARK OFFICE, PERFORMANCE AND ACCOUNTABILITY REPORT 178, 193 (2016),

https://www.uspto.gov/sites/default/files/documents/USPTOFY16PAR.pdf [https://perma.cc

/GF8M-A77D] (stating that 334,107 patents were issued in 2016 and that 309,188 trademarks

were registered).

Copyrights and trademarks do not require registration as a prerequisite for their validity,

which depends only on fixation of an original work in a physical object or on the use of a

distinctive mark in commerce, respectively. See, e.g., 17 U.S.C. § 102(a) (2012); 15 U.S.C.

§ 1052(f) (2012).

U.S. CONST. art. I, § 8, cl. 8; Dotan Oliar, Making Sense of the Intellectual Property

Clause: Promotion of Progress as a Limitation on Congress’s Intellectual Property Power,

94 GEO. L.J. 1771, 1845 (2006) (arguing that promotion of progress is not merely preambular

2019] RIGHT ON TIME 399

improved to better advance knowledge and human welfare? As the major

frontiers left for the human race to conquer increasingly become intangible, a

thorough understanding of the principles of first possession can help us perfect

our management of this legal frontier by implementing the lessons from the

common law’s long experience with the award of rights in physical resources.

This is particularly so in light of the special challenges that intangible resources

present. However difficult the concept of possession may sometimes be to apply

to physical goods,

it is immensely more complicated for “things” that exist

only in the mind’s eye. Custom and intuition provide less reliable safety nets,

making a good theoretical grip on the concept of possession particularly

valuable.

What, then, counts as first possession under traditional legal principles? For

centuries, the common law wrestled with the concept of possession and the

problem of defining those actions sufficient to confer rights in things that are

unowned.

The rule of first possession was applied across a broad swath of

resources, and the specific conduct qualifying as possession varied with the

nature of the resource.

Behavior as diverse as the snaring or killing of a wild

animal,

diverting a stream of water to farmland,

digging above a mineral

statement of purpose, but rather constitutional limitation subject to deferential standard of

review).

See, e.g., Popov v. Hayashi, No. 400545, 2002 WL 31833731, at *1, *2 (Cal. Super. Ct.

Dec. 18, 2002) (determining owner of historic home run ball when one individual had actual

possession, while another made substantial steps towards possession before being illegally

interfered with by a third party in his attempt).

See Rose, supra note 5, at 73 (“The law tells us what steps we must follow to obtain

ownership of things, but we need a theory that tells us why these steps should do the job.”).

John F. Duffy, Rethinking the Prospect Theory of Patents, 71 U. CHI. L. REV. 439, 447

(2004) (noting that although “rule-of-capture” is applied to both mining and patent claims,

application of rule varies with each subject).

See Pierson v. Post, 3 Cai. 175, 175 (N.Y. Sup. Ct. 1805) (holding that possession of

wild animal required capturing or mortally wounding it, rather than simply giving chase);

ALE D. GOBLE & ERIC T. FREYFOGLE, WILDLIFE LAW: CASES AND MATERIALS 98-100 (2002)

(describing early notions of property rights in hunting and capturing “beasts of the forest”).

See, e.g., Eddy v. Simpson, 3 Cal. 249, 251-52 (1853) (holding first possession of water

not to be possession of fluid itself, but rather its use).

400 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

deposit,

and viewing a sunken ship at the bottom of the ocean with a

submersible camera

have been treated as acts of possession.

As varied and idiosyncratic as these different actions may seem, patterns can

nevertheless be discerned. One of the clearest ways to make sense of the seeming

hodgepodge of possessory rules is to think about them in terms of a common

metric: time. Each of these possessory practices can usefully be placed on a

chronology starting with the first preliminary steps necessary to appropriate the

resource at issue and ending when the resource is consumed, commercialized,

or otherwise put to use.

The common law has tended to embrace either of two

approaches to first possession within the context of this chronology. One

recognizes an exclusive claim upon a resource when a claimant has undertaken

substantial investments and remains in hot pursuit—what this Article calls a

first-committed-searcher rule.

The other approach withholds any protection

until a claimant has somehow changed the resource in such a way that the

claimant is able to control and use it—what this Article calls a rule of capture.

This distinction between first possession rules in physical resources is key to

understanding original acquisition rules in IP law.

We begin by exploring the relative advantages and disadvantages of these

approaches in their application to tangible goods, setting out a framework to

analyze first possession questions. Prior scholarship noted many of the issues

See Union Oil Co. v. Smith, 249 U.S. 337, 346-48 (1919) (holding that while one

permissibly explores public lands for minerals, one has substantial interest in any minerals as

long as one puts forth persistent and diligent effort in ones prospecting).

See Columbus-America Discovery Grp. v. Atl. Mut. Ins., 974 F.2d 450, 465 (4th Cir.

1992) (holding that viewing sunken ship with submersible camera was sufficient to create

possessory interest in ship).

See Richard A. Epstein, The Allocation of the Commons: Parking on Public Roads, 31

J. LEGAL STUD. 515, 515 (2002) (analyzing how different systems of allocation in parking,

including possession of spaces, metered parking, and parking permits, effect formation and

transformation of property rights in parking spaces); Gregg W. Kettles, Formal Versus

Informal Allocation of Land in a Commons: The Case of the Macarthur Park Sidewalk

Vendors, 16 S.

CAL. INTERDISC. L.J. 49, 72-73 (2006) (discussing practices allocating

sidewalk spots to street vendors in Los Angeles).

See Arun S. Subramanian, Assessing the Rights of IRU Holders in Uncertain Times, 103

COLUM. L. REV. 2094, 2102-04 (2003) (asserting that most modern commentators view rights

of use, possession, and disposition as essential to establishing property rights); see also 26

U.S.C. § 7701(e)(1)(B) (2012) (identifying transfer of control as indicative of lease transfer);

Property, B

LACK’S LAW DICTIONARY (10th ed. 2014) (defining property as right to possess,

use, and enjoy). Property has been defined as requiring “control over [an] item and an intent

to control it or to exclude others from it.” R

OGER BERNHARDT & ANN M. BURKHART, REAL

PROPERTY IN A NUTSHELL 4 (7th ed. 2016).

See WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC STRUCTURE OF

INTELLECTUAL PROPERTY LAW 17 (2003).

See Lueck, supra note 7, at 135 (describing actual capture as “capturing or ‘reducing to

possession’ a flow from the asset”).

2019] RIGHT ON TIME 401

that first possession rules present, but does so in a fragmented and often

unidirectional manner, with some commentators stressing the problems we

attribute to later awards and others stressing the problems we associate with

earlier ones.

What is missing is a comprehensive overview of the

considerations at play and an understanding of how these concerns relate to one

another and to the structure of first possession.

The essential tradeoff this Article identifies is as follows. On the one hand,

when exclusive rights vest early in the process of ultimate appropriation and use,

there is a risk those rights will be awarded to a party who will ultimately fail to

capture and use the resource.

On the other hand, when exclusive rights vest

late in the process, there is the danger either of a longer period of potentially

wasteful investment by parties competing to own the resource

or of potential

capturers opting to stay home because of the risk of losing investments prior to

capture—especially to free-riders profiting from the work they have done.

its core, first possession presents an ever-present tension between two recurring

sets of opposing concerns, one of which counsels in favor of earlier awards and

the other in favor of later ones. That tension does not necessarily result in a

stalemate, however, and its proper resolution in one context does not entail a

single solution to problems in all others. In different areas, the optimal timing of

an award of property rights is a function of the relative strength of these

countervailing concerns.

Elaborating on this tradeoff, this Article develops a framework to analyze and

evaluate the rules that govern the award of IP rights. In different areas within

our patent, copyright, and trademark systems, legal doctrine uses variants of the

two conceptions of the first possession rule to determine when exclusive rights

See supra notes 17-23 and accompanying text (discussing articles and cases that dealt

with some of respective problems with late and early rewards of possession).

See Columbia Motor Car Co. v. C. A. Duerr & Co., 184 F. 893, 904-11 (2d Cir. 1911)

(discussing controversial Selden patent, where Selden was awarded automobile patent before

Henry Ford, but court held that Ford did not infringe on patent due to Selden’s inferior

combination of automobile components and alleged lack of advancement of automobile

industry); U.S. Patent No. 549,160 (filed May 8, 1879). Other potential drawbacks of early

awards include the creation of incentives to carry out actions that are not ultimately necessary

to the ultimate deployment of the resource.

Yoram Barzel, Optimal Timing of Innovations, 50 REV. ECON. & STAT. 348, 348-49

(1968) (recognizing that “competition between potential innovators to obtain priority

rights . . . from innovations can result in premature applications of discoveries”).

Cf. Edmund W. Kitch, The Nature and Function of the Patent System, 20 J.L. & ECON.

265, 266 (1977) (viewing system which follows prospect theory of patents as set of

opportunities to pursue technological advances with associated set of probabilistic costs and

returns). Other potential costs include overinvestment in other aspects of the claiming process,

such as by inefficiently accelerating the process of development, as well as what might be

called anticompetitive behavior like secrecy and sabotage. See infra Part I (discussing first

possession rule).

402 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

are established and who among competing claimants should receive them. One

of the lessons that emerges from the study of IP doctrine is the dual function that

first possession rules play. Most obviously, first possession serves to resolve

disputes among rival contenders for exclusive rights in the same resource. But

first possession also sets the conditions for the acquisition of exclusive rights as

such, establishing what a person must do for exclusive rights to vest, whether in

tangible property or intellectual property.

The picture that emerges is complex, but modeling the rules governing the

award of IP rights in terms of first possession helps us understand those rules

and their implications more clearly. For example, many of the reforms

undertaken in response to what are thought to be abuses by so-called “patent

trolls” reflect an attempt to push the award of patent rights later in time.

This

suggests, on the one hand, that the patent troll problem is connected with early

awards of patent rights, and on the other hand, that policymakers should be

vigilant to ensure that the benefits of delaying the award of rights are compared

against the full range of the costs associated with later awards cataloged in the

discussion that follows.

Analogizing intellectual property to property is not free from difficulty,

and

the limits of our approach should be understood. The conceptual structure

borrowed from traditional property law can illuminate principles at work in IP

law. At the same time, however, the notion of intellectal property is an analogy,

not necessarily an identity. What this Article wishes to highlight here are

fundamental similarities with respect to the theory and doctrines of original

acquisition. This does not deny substantial theoretical and doctrinal differences

between property and intellectual property.

Modeling intellectual property with a possessory framework must be done

with sensitivity to differences in context. In the IP arena, concerns over notice

and information are much more pronounced than they are with respect to

tangible resources. Often, such concerns can be substantially mitigated through

the creation of registries and other notice mechanisms, and once in place, such

institutional devices may facilitate a more flexible approach to original

acquisition than might otherwise be feasible. The rules can more closely track

the idealized trade-off that shapes first possession doctrine, but they are also

more fluid because the nature of the claimable resources themselves is more up-

for-grabs. Not surprisingly, IP doctrine entails greater variation in the rules that

See infra notes 39-49 and accompanying text (reviewing criteria under which one may

gain exclusive rights through first possession).

See infra Part III.A.1.

Compare Mark A. Lemley, Property, Intellectual Property, and Free Riding, 83 TEX.

L. R

EV. 1031, 1032 (2005) (resisting notion that property law provides proper conceptual

framework for directing our thinking about IP law), with Frank H. Easterbrook, Intellectual

Property Is Still Property, 13 H

ARV. J.L. PUB. POL’Y 108, 118 (1990) (suggesting there is no

conceptual difference between tangible and intellectual property).

2019] RIGHT ON TIME 403

set the time of a right’s award than does common-law property.

There are also

many instances in which IP doctrine changed the specific time at which

exclusive rights can be acquired. Sometimes, doctrinal change pushed that time

of acquisition earlier, such as in the case of intent to use applications in

trademark law, but other times later in time, such as in the case of the America

Invents Act. This variation, this Article suggests, has to do with the more

frequent changes in the relative costs and benefits of awarding rights earlier and

later in time, and of providing notice and administering exclusive rights in

information, in the dynamic market settings in which IP rights operate.

This Article is not the first academic work to explore the practical effects of

first possession rules,

but it is the first to develop a comprehensive account of

the major considerations that shape the doctrinal form of first possession and to

describe the design of first possession rules in terms of a consistent set of policy

tradeoffs between early and late awards of rights. Neither is this Article the first

to suggest parallels between IP doctrines and first possession

or to raise

questions about the timing of the award of IP rights.

It is, however, the first to

E.g., Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat. 284, 329 (2011)

(codified as amended in scattered sections of 35 U.S.C.) (amending time in which patents

expire).

The leading article is Dean Lueck, The Rule of First Possession and the Design of the

Law, 38 J.L. & ECON. 393, 430-31 (1995) (observing effects of first possession rules on variety

of legal fields).

See Abraham Drassinower, Capturing Ideas: Copyright and the Law of First

Possession, 54 CLEV. ST. L. REV. 191, 191 (2006) (analogizing originality requirement in

and Patent Law’s Possession Paradox, 23 HARV. J.L. & TECH. 1, 4 (2009) (discussing

similarities and differences between patent and property law in applying principles of actual

and constructive possession); Timothy R. Holbrook, Patent Anticipation and Obviousness as

Possession, 65 E

MORY L.J. 987, 1035 (2016) (drawing parallel between enablement in patent

law and possession in property); Timothy R. Holbrook, Possession in Patent Law, 59 SMU

L. REV. 123, 175 (2006) (arguing that enablement is best means to demonstrate property-like

possession in patent law); Lisa Larrimore Oullette, Pierson, Peer Review, and Patent Law, 69

AND. L. REV. 1825, 1826 (2016) (comparing grant of possession in Pierson to more causal

standard applied in patent law which favors early chasers who put in little effort); Alfred C.

Yen, Restoring the Natural Law: Copyright as Labor and Possession, 51 OHIO ST. L.J. 517,

531 (1990) (outlining “basic copyright doctrines of originality and the idea/expression

dichotomy and then comparing them to the natural law of property through labor and

possession”).

See, e.g., Christopher A. Cotropia, The Folly of Early Filing in Patent Law, 61 HASTINGS

L.J. 65, 70 (2009) (criticizing legal incentives to file for patents early); Paul R. Gugliuzza,

Early Filing and Functional Claiming, 96 B.U.

L. REV. 1223, 1227 (2016) (noting

complexities and variables in determining optimal timing of patent issuance); Kitch, supra

note 27, at 285 (considering how awarding patents based on priority induces inefficiency in

early invention); Mark A. Lemley, Ready for Patenting, 96 B.U.

L. REV. 1171, 1186 (2016)

(noting problems with early filing on patent issuance).

404 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

undertake a systematic examination of first possession in IP law and to explicate

the similarities, and differences, in the functional considerations that underlie

first possession doctrines in physical property and across the three major areas

of IP law: patent, copyright, and trademark.

This Article proceeds in three stages. Part I outlines the role of first possession

doctrines in property law, pointing out differences in the way first possession is

approached in different contexts and discussing reasons for these differences. It

advances a general framework of original acquisition to guide inquiries into the

timing of property awards built around the characteristic tradeoffs that early and

late awards entail. Part II turns to intellectual property. It examines patent,

trademark, and copyright law to show how a variety of doctrines work together

in each of these fields to establish what is in effect a system based on original

acquisition. It points out ways in which the same core concerns first possession

rules present in the realm of tangible property illuminate the approach to the

award of IP rights. Part III steps back to engage in a more critical analysis, noting

ways in which existing doctrine gets things right and others in which it does not.

This Article concludes by considering the major themes that emerge from

considering the original acquisition concept as it plays out in the domain of

intellectual property, identifying lessons for both property and IP law.

I. F

IRST POSSESSION: FORMS AND FUNCTIONS

First possession is a bedrock principle of property law. Property regimes have

developed possessory claiming rules for the allocation of rights in all manner of

resources, ranging quite literally from diamonds

to dung.

Yet despite a

seemingly unitary doctrinal construct, important differences remain in the way

possession rules operate in different contexts. The key variable is time. Imagine

a chronology that begins with the first actions a person may take having any

relationship to a resource, like simply becoming aware of its existence or

forming an intent to use it. The timeline then proceeds through the various

actions necessary for a person to derive a benefit from the resource: preparations

for its pursuit; pursuit itself; the successful completion of pursuit by bringing the

resource within one’s control; cultivation and improvement to enable beneficial

use; and finally actual use, enjoyment, consumption of the resource, or its

transfer to another.

In theory, property law could have picked any point along this temporal

continuum as the one at which property rights vest. In practice, property law

essentially limited its choices to two. In some contexts, property law has deemed

“possession” to be satisfied at a comparatively early point in time. Under this

approach, possession occurs when a person has undertaken significant steps

toward the resource’s appropriation and use, even though actual control has not

yet been achieved. This Articles calls this variant of first possession a “first-

See Armory v. Delamirie (1722) 93 Eng. Rep. 664, 664 (KB).

Haslem v. Lockwood, 37 Conn. 500, 500 (1871).

2019] RIGHT ON TIME 405

committed-searcher rule.”

Alternatively, and more commonly, property law

has deemed possession to be satisfied at a later point in time. Under this

approach, possession occurs only after a person has obtained control over the

resource. This Articles calls this variant of first possession a “rule of capture.”

These are very much ideal types, but they roughly represent two notional points

around which property law’s first possession doctrines tend to coalesce.

The property canon offers clear illustrations of each approach. Consider

Pierson v. Post,

a staple of first-year American property law curricula. The

case involved a hunter, Post, who chased a wild fox for some period of time,

only to lose the animal to a farmer, Pierson, who suddenly appeared on the scene

and quickly killed it.

The hunter sued the farmer to recover the value of the

animal’s pelt, but the court sided with the farmer.

The dissent argued that it

was enough to claim a wild animal if “the pursuer be within reach, or have a

reasonable prospect . . . of taking” it.

In our terms, it advocated awarding the

fox to the first committed searcher. The majority, however, rejected this course,

holding that “pursuit alone vests no property or right in the huntsman.”

In the

majority’s view, possession of wild animals required either “actual bodily

seizure” or having otherwise “wounded, circumvented or ensnared them, so as

to deprive them of their natural liberty, and subject them to the control of their

pursuer.”

The majority, in other words, held that first possession of foxes

would be satisfied only by the rule of capture.

A similar distinction can also be seen in the practices described in Professor

Robert Ellickson’s seminal study of nineteenth century whalers.

The usual rule

among whalers was analogous to the rule of capture adopted in Pierson v. Post:

A whaler establishes possession only after successfully lancing a whale with a

harpoon tethered and secured to the whaler’s boat.

The whale, in other words,

had to be brought under submission. This norm, known as the “fast-fish-loose-

See LANDES & POSNER, supra note 22, at 17 (stating that property law gives “first

committed searcher the exclusive right to conduct the search operation”).

See GOBLE & FREYFOGLE, supra note 16, at 98-99 (describing rule of capture based on

historical development through allocation of rights over wildlife).

3 Cai. 175 (N.Y. Sup. Ct. 1805).

Id. at 175.

Id. at 177-80.

Id. at 182 (Livingston, J., dissenting).

Id. at 177 (majority opinion).

Id. at 177-79.

See Robert C. Ellickson, A Hypothesis of Wealth-Maximizing Norms: Evidence from the

Whaling Industry, 5 J.L. ECON. & ORG. 83, 88-94 (1989) (discussing different property regime

norms in whaling industry).

See id. at 89-90 (“[The] rule was in practice likely to reward the first harpooner, who

had performed the hardest part of the hunt, as opposed to free riders waiting in the wings.”);

see also HERMAN MELVILLE, MOBY-DICK 305-06 (First Avenue 2014) (1851).

406 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

fish” rule, reflects a rule of capture approach to first possession of whales. But

some fisheries followed a first-committed-searcher approach. In waters

inhabited by the more aggressive sperm whale, custom granted an exclusive

claim to the first to lance a whale and mark its body with a harpoon, regardless

of whether the harpoon remained connected to the whaler’s vessel, so long as

the whaler remained in active pursuit.

In other words, a whaler could acquire

a claim to a whale at a stage prior to actual capture by making substantial

progress toward capture and demonstrating a commitment to following

through.

This norm, known as the “iron-holds-the-whale” rule, reflects a first-

committed-searcher approach to the first possession of whales.

The cases dealing with first possession suggest a recurring set of competing

practical considerations, some of which push for early awards of property rights

and some which push for late awards. Ideally, property doctrine would take

account of the relative strength of these considerations, which dictate the point

in time—or equivalently, the standard of performance—that should count as

satisfying the possession requirement with respect to a particular resource.

Figure 1 below illustrates the marginal benefits and costs of pushing back the

moment that is deemed to satisfy the possession requirement. Formally, the

optimal time to deem possession as having been established is the point where

the marginal benefit and marginal cost are equal. Differences in the way property

law approaches first possession can be understood as reflecting how the balance

between the relative pros and cons of early and late awards changes for different

resources along the course of their acquisition.

See Ellickson, supra note 45, at 90-92 (discussing “iron-holds-the-whale” property

norm, which required affixment of harpoon to whale coupled with fresh pursuit).

See Swift v. Gifford, 23 F. Cas. 558, 560 (D. Mass. 1872) (“[H]e who first strikes [the

whale] so effectually that the iron remains fast should have the better right, the pursuit still

continuing, it is reasonable, though merely conventional, and ought to be upheld.”).

See Ellickson, supra note 45, at 90-92. First-committed-searcher rules are frequently

coupled with a requirement that the claimant eventually complete capture before a durable

property right will be awarded. The primary role of the first-committed-searcher rule in these

situations is to provide the priority rule used to resolve disputes between two otherwise valid

claims, establishing the point in time used to resolve the contest between them.

2019] RIGHT ON TIME 407

Figure 1. Optimal Timing of Possession.

Marginal Benefit

(increased likelihood

of completion)

Marginal Cost

(discouragement &

competition waste)

Time

Understanding this balance and the shift in equilibrium from one resource

context to another depends on an analysis of the competing forces that push in

favor of early and late awards. The magnitude of these concerns varies with

changes in factors such as the characteristics of the resources at issue, the ways

people desire to use them, the manner in which they are likely to be pursued,

and the technologies available to the legal system.

But the core concerns that

underlie this tradeoff are strikingly stable across the landscape of property law.

The principal danger of awarding rights too early in the development process

is the risk that they will go to someone who will fail to complete the proverbial

The curves are drawn schematically and need not be straight lines. While in many cases

it is reasonable to assume that the marginal benefit curve is downward sloping and that the

marginal cost curve is upward sloping, other depictions can fit equally well without any

significant change in the analysis. For example, the marginal cost curve may be flat. The only

essential assumption for the argument about a reasonably administrable optimal timing for

possession is that the marginal benefit curve initially lies above the marginal cost curve, and

that they intersect just once. When these assumptions are violated, first possession may not

be a suitable candidate for allocating property rights over previously unowned resources,

which is consistent with alternative social mechanisms for resource management, such as

common property or auctions. The discussion of such mechanisms is beyond the scope of this

Article.

Cf. Elinor Ostrom, Private and Common Property Rights, in 2 ENCYCLOPEDIA OF LAW

AND

ECONOMICS: CIVIL LAW AND ECONOMICS 332, 338 (Boudewijn Bouckaert & Gerrit De

Geest eds., 2000) (arguing that optimal strategy is to manage common property changes based

on given resource’s purpose of use, quantity, related technology, and other factors).

See infra note 69 and accompanying text (noting importance of property right timing to

optimize variety of resources).

408 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

chase, leaving the resource underused.

In such cases, it would have been better

to allow the ownership race to continue. The problem is essentially one of

misallocation. Awarding exclusive rights to a resource at an early stage when

considerable work must still be done to put the resource to use involves the

possibility that the resource will be awarded to someone who is not very good

at—and possibly incapable of—carrying out the tasks that still remain.

Late

awards can therefore be seen as a mechanism to identify the more capable, cost-

effective searchers.

When a party receives an early award but fails to follow through, the right can

sometimes be reallocated to a more capable party through voluntary exchange

or, perhaps, via abandonment and a new contest for possession.

Such

reallocations, however, will often be associated with transaction costs, which

may be prohibitive or otherwise entail significant waste, such as delay in the use

of the resource and search and negotiation costs associated with the reallocation

process itself.

Further, early awards may incentivize those who are incapable

of completing the chase but are able to take an early lead (deemed sufficient to

obtain a property right) to nevertheless join the race and do so.

But their hope

of profiting from such early lead may disincentivize more capable pursuers from

joining in. Paying to get the entitlement from the less capable yet early pursuer

would reduce their incentive to successfully complete the series of actions

necessary to bring the resource into its ultimate use.

On the other side of the ledger, a system in which rights are awarded later—

as under a rule of capture—presents two chief social costs. One is excessive and

wasteful investment in resource search and pursuit.

Efforts expended by those

See supra note 21 and accompanying text (discussing importance of timing when

conferring property interests); see also Eric R. Claeys, Exclusion and Exclusivity in Gridlock,

53 ARIZ. L. REV. 9, 10 (2011) (“[W]hen too many individuals have the rights to exclude in

relation to a resource, the resources may be underused.”).

See Lueck, supra note 32, at 394 (discussing critics who claim that early property awards

granted in homesteading, oil and gas extraction, and patent process encourage suboptimal

resource use and overexploitation).

See, e.g., Gary D. Libecap, Assigning Property Rights in the Common Pool:

Implications of the Prevalence of First-Possession Rules for ITQs in Fisheries, 22

MARINE

RESOURCES ECON. 407, 413 (2009) (noting that while first possession “rewards exploration

and risk taking,” later trade can “reallocate the resource to higher-valued users” and more

efficient uses).

See id. at 409.

Terry L. Anderson & Peter J. Hill, The Race for Property Rights, 33 J.L. & ECON. 177,

183-84 (1990) (discussing this phenomenon in context of squatters and speculators in land-

based property regimes).

See Lueck, supra note 32, at 402 (“[L]aws that rely on first possession tend to define

possession and grant ownership quite early to thwart wasteful investment.”); see also Barzel,

supra note 26, at 352 n.11 (suggesting that earlier grants of rights will prevent resources from

being wasted in course of competition); Duffy, supra note 15, at 443-44 (noting preference

2019] RIGHT ON TIME 409

who set out to capture a resource but are beaten by someone else are often

deadweight social loss, and to the extent later awards result in claimants having

to do more work to receive rights, later awards will mean that ownership races

may last longer and involve a greater number of participants and greater levels

of wasteful duplication of effort.

The other, and related, problem with late

awards concerns their incentive effects. Because those who unsuccessfully

compete for a resource get nothing for their troubles, would-be competitors may

be discouraged from entering the competition in the first place.

The greater

their troubles—i.e., the larger the investment in time, labor, and money they

must make to obtain the resource—the greater the discouragement.

Given the wasteful duplication problem, this could be a good thing, up to a

point: fear of losing might reduce the number of competitors and therefore the

amount of wasted investment.

But it would be the rare case that these two

factors would be perfectly offsetting.

In many cases, late awards will not have these two offsetting effects on entry

simultaneously, as the two often arise in different settings. Excessive entry that

leads to wasteful, duplicative effort and rent dissipation is likely to arise in

settings where participants are reasonably assured that the per-participant

expected value of joining the race are greater than or equal to the cost of

participating.

Good examples are the fishery,

a grazing commons, and

for granting property rights early can avoid wasteful duplications of effort); Aditya Bamzai,

Comment, The Wasteful Duplication Thesis in Natural Monopoly Regulation, 71 U.

CHI. L.

REV. 1525, 1525 (2004).

Peter S. Menell & Suzanne Scotchmer, Intellectual Property Law, in 2 HANDBOOK OF

LAW AND ECONOMICS 1475, 1489 (A.M. Polinsky & S. Shavell eds., 2007).

Steve P. Calandrillo, An Economic Analysis of Property Rights in Information:

Justifications and Problems of Exclusive Rights, Incentives to Generate Information, and the

Alternative of a Government-Run Reward System, 9 FORDHAM INTELL. PROP. MEDIA & ENT.

L.J. 301, 307 n.17 (1998) (“However, we must not lose sight of the wasted effort put forth by

the loser of the race, which is a social loss that is usually unrecoverable. The reward system

would not solve this dilemma, but the existence of the problem militates towards a scheme in

which the beneficiary of the reward should be recognized early on . . . .”).

This concern extends more broadly than the concern about wasteful duplication of effort.

If a competitor is able to capitalize on a would-be claimant’s contributions, there is no social

waste as such, but there is a private loss when the claimant is unable to recoup her costs. The

disincentive to participation this creates can thus result in what is ultimately a social loss.

Cf. Lueck, supra note 32, at 399-400 (suggesting heterogeneity among claimants may

reduce wasteful competition by discouraging entry).

Richard S. Higgins, William F. Shughart II & Robert G. Tollison, Free Entry and

Efficient Rent Seeking: Efficient Rents 2, 46 P

UB. CHOICE 247, 255 (1985) (“[W]hen there are

no restrictions on the number of individuals who may vie for the right to capture . . . entry

will occur, and resources will be spent up to the point where the expected net value of the

transfer is zero.”).

For a classical treatment of one such case, see H. Scott Gordon, The Economic Theory

of Common-Property Resource: The Fishery, 62 J.

POL. ECON. 124, 130-31 (1954)

410 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

multiple-party drilling into a common oil reservoir. To illustrate, imagine an

open fishery governed by the rule of capture. Assume that the per-day costs and

benefits, as a function of the number of fishermen, are as follows:

Table 1. The Fishery: Public and Private Costs and Yield as a Function of the

Number of Fishermen (in Dollars).

Fishermen Total

Cost

Total

Expected

Yield

Net Expected

Social Value

Net Expected Profit

per Fisherman

0 0 0 0 0

1 10 16 6 6

2 20 29 9 4.5

3 30 40 10 3.33

4 40 49 9 2.25

5 50 56 6 1.2

6 60 61 1 0.16

7 70 64 (-6) (-0.85)

The first column in Table 1 simply designates different numbers of fishermen

that may operate on the fishery. The second column reflects the assumption that

operating a boat on the fishery costs ten dollars, such that the total social cost of

fishing is ten times the number of fishermen. The third column reflects an

assumption of diminishing marginal returns per unit of effort, a general

phenomenon observed in the world. Here, this assumption can be motivated by

the realization that fishery congestion reduces the fishery’s yield.

The fourth

column is simply the difference between the third and the second columns. The

last column divides the fourth column by the first to obtain the per fisherman net

expected return.

As Table 1 suggests, it would be socially optimal that only three fishermen

operate on the fishery, which would maximize the fourth column, “Net Expected

Social Value.” However, since all are free to join the fishing race, as many as

six fishermen would enter, because the expected private return to entry would

still be positive (see the last column). Though such entry would be privately

beneficial, it is excessive from a social point of view because it decreases the net

social value of the fishery. Each of the fourth, fifth, and sixth entrants increases

(suggesting that, on common properties with free entry, number of entrants would be

excessive, tending to dissipate value of the resource). A similar scenario applies for an oil

field that lies beneath land parcels owned by many owners, from which each could drill and

extract oil.

The diminishing returns assumption can be motivated easily respecting the fishery.

Doubling the number of boats on the fishery from one to two, say, will not likely result in

double yield because of friction between the two fishermen: sometimes one would catch a

fish that the other would have caught had it been alone on the fishery, or because they would

get in each other’s way occasionally and slow down.

2019] RIGHT ON TIME 411

social costs by ten dollars, but increases social value by an amount lesser than

ten. In essence, each fisherman joining the fishery disregards the negative

externality it imposes on others. For our purposes, an implicit assumption

supports the conclusion of excessive entry, which is that fish are many, that a

fishing day involves the fishing of many fish, and that all fishermen are similarly

situated and can observe the number of fishermen on the fishery. In such cases,

each fishermen knows, virtually with certainty, that she will cover her costs and

will not operate at a loss.

Things are different in a scenario where race participants are not assured of

recouping their participation costs with reasonable certainty. Such is

characteristically the case when there is one prize, allocated to one winner at the

end of a relatively costly and prolonged pursuit. Take, for instance, a potential

company pursuing a pharmaceutical patent where the expected revenue—if the

chase is successful—is $1.5 billion, but where research and development

(“R&D”) is expected to last five years and cost $1 billion. Patents are awarded

under a rule of capture to the first to complete R&D. Firms cannot know how

many others are participating in the R&D race. If firms believe that there’s a

significant chance that a rival might get the patent before they do, the firms may

be reluctant to begin R&D, fearing a worst case scenario where they may invest

nearly the full one billion dollars only to discover that a rival filed for a patent

before they did. In contrast to the first scenario, a participant in this race cannot

be assured to cover costs (i.e., there is a greater risk involved), and does not

know exactly how many others are already in the race (so she might join a race

with a negative expected value).

Later awards may further deter entry in cases where a claimant can free-ride

on the investments of others who have accomplished earlier steps that enable

capture.

While free-riding avoids duplication of effort, it can lead to especially

sharp disincentive effects to the extent it weakens the correspondence between

the size of investment and the likelihood of winning the competition.

ownership is assigned to someone who merely delivers the coup de grâce, others

will be reluctant to undertake costlier or more difficult parts of the hunt that

make the ultimate kill possible.

The downward sloping curve in Figure 1 represents the marginal benefit of

delaying the moment that the law regards as possession in the chronology of a

resource’s pursuit. The curve is positive, indicating that there is always some

benefit to delaying the award of rights. The further along in the chronology of

the chase the pursuer is, the greater the probability that she will complete it

See, e.g., Lemley, supra note 30, at 1039-40 (“The professed fear is that property owners

won’t invest sufficient resources in their property if others can free ride on that investment.”).

Jerome H. Reichman, How Trade Secrecy Law Generates a Natural Semicommons of

Innovative Know-How, in T

HE LAW AND THEORY OF TRADE SECRECY: A HANDBOOK OF

CONTEMPORARY RESEARCH 185, 196 (Rochell C. Dreyfuss, Katherine J. Strandburg & Edward

Elgar eds., 2011) (noting that free riding by competitors creates disincentives to invest in

innovation in the first place).

412 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

successfully. Gains represented by increases in the probability of success often

accrue at a decreasing rate, however.

To illustrate, imagine a hunter chasing a fox in a dense forest. Assume that

the hunter is moving at twenty feet per second and the fox at ten feet per second,

and that the probability that the hunter will catch the fox is a decreasing linear

function of the area that the hunter needs to scout in search of the fox. If the

hunter spots the fox from one hundred feet away, by the time she reaches the

place she saw it, the fox could be hiding anywhere in a circle with an area of

roughly 2,500ߨ square feet (ߨ*50

), because the fox could have traveled fifty

feet in any direction during that time. By the same logic, if the sighting were

from eighty feet away, the fox would have to be searched for in an area of 1,600ߨ

square feet, and if it were seen from sixty feet away, the search area would be

900ߨ square feet. The first twenty foot movement reduced the search area by

900ߨ square feet (from 2,500ߨ to 1,600ߨ), the next twenty foot movement

toward the fox reduced that area by only 700ߨ square feet (from 1,600ߨ to

900ߨ). So while the benefits of progressing in the race toward the fox remain

positive, they accrue at a decreasing rate.

The upward sloping curve in Figure 1, meanwhile, represents the marginal

cost of delaying the moment defined as possession. Again, this curve is positive

because there is a cost to prolonging the race—racers will incur duplicative and

wasteful costs throughout the relevant timeframe. It is drawn as upward sloping

because longer races may be more costly per unit of time: longer hunting races,

for example, generally require the participants to carry more equipment and

provisions. Moreover, races that last longer may allow more parties to join. The

likelihood of either wasteful duplication of effort or depressed participation

resulting in underdevelopment can therefore be expected to increase with time.

A few further comments about the relationship between time and resource

waste are in order. The literature on possession has given considerable attention

to issues of wasteful competition associated with possession-based regimes,

with a special emphasis on timing issues.

Any rule for claiming resources has

While Figure 1 depicts what we believe are the most likely shapes of the marginal cost

and benefit curves associated with ownership races, these shapes are not essential. For

example, our analysis applies equally well to races characterized by a fixed marginal cost. In

that case, the marginal cost curve would be flat, and nothing in the analysis would change

materially. The optimal time of possession would still be determined by the intersection of

the two curves, and a relatively high fixed marginal cost would suggest that possession should

be awarded earlier in time during the race compared to an alternative of a lower fixed marginal

cost. See supra note 50.

See, e.g., Anderson & Hill, supra note 57, at 177 (“Economics literature on the evolution

of property rights has increasingly emphasized the optimal timing for establishing those

rights.”); Richard A. Epstein, Past and Future: The Temporal Dimension of the Law of

Property, 64 W

ASH. U. L.Q. 667, 670 (1986) (“Time offers a unique measuring rod, sufficient

in principle to resolve two or two thousand competing claims for priority.”); David D.

Haddock, First Possession Versus Optimal Timing: Limiting the Dissipation of Economic

2019] RIGHT ON TIME 413

the potential to distort people’s behavior because in theory, a rational claimant

should be willing to spend up to the expected value of a given resource itself in

order to obtain it.

Unless there is social value in the actions that the law requires

a person to take to establish a claim to a resource that is at least equal to the

value of the resource to a claimant, the rule will lead to excessive claiming and

deadweight loss (including the value of establishing ownership). It might not be

the end of the world to have to queue up the night before to get tickets to a rock

concert, for example, but on the whole, the queuing process itself wastes

people’s time and is justifiable only if there is no better way to distribute tickets.

In this last case, an auction rather than a first possession based queue might be

the better allocation mechanism.

Early awards under a first-committed-searcher rule present a special problem

in this regard. The genius of anchoring the award of rights in possession is that

they can avoid the sort of waste that a claiming protocol might otherwise

generate because they require claimants to perform a task that is itself necessary

for the resource to be used. A rule awarding ownership of a parcel of farmland

to the best dressed person at City Hall next Tuesday creates incentives to engage

in otherwise pointless behavior—showing up at City Hall in fancy clothes on

Tuesday. By contrast, a rule awarding ownership of the land to the person who

begins the process of cultivating it only encourages a claimant to do something

she would have done anyway to enjoy the property. It is effectively costless.

This singular advantage of reliance on possession is less likely to hold true,

however, to the extent possession rules adhere to a first-committed-searcher

model. Since first-committed searcher-rules identify steps that are more

preliminary in the overall process of putting a resource to use, there is a greater

risk that those steps are not actually optimal, or even necessary, to the resource’s

ultimate development.

So, for example, one problem with awarding possession

Value, 64 WASH. U. L.Q. 775, 783 (1986) (“Timing is also a concern when modeling

innovation and the sometimes valuable patents and copyrights that follow.”); Lueck, supra

note 32, at 398 (“Maximizing resource value is, in effect, a problem of optimally timing the

establishment of rights . . . .”); Ronen Perry & Tal Z. Zarsky, Queues in Law, 99 I

OWA L. REV.

1595, 1629 (2014) (suggesting that allocation of “specific assets at a relatively early stage,

when claimant heterogeneity is still large” can partly resolve issue of wasteful races and

duplicative investments).

The value of the resource would be discounted by the probability of being unsuccessful

in claiming it.

See supra note 50.

There may be costs and distortions, however, to the extent the action constituting

possession does not facilitate a particular use, or worse, is actually incompatible with that use.

Animal conservation, for instance, is at odds with a rule requiring mortal wounding, and an

interest in confidentiality of an expressive work would conflict with a rule requiring

publication.

See Claeys, supra note 53, at 10 (noting that early award of property rights can lead to

underutilization of resources).

414 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

of the fox in Pierson v. Post to the first person to saddle up and mount a horse

is that it might not actually be necessary to use a horse to catch the fox—as

farmer Pierson showed.

Even when possession rules are perfectly designed, there is still the potential

for distortion, however, insofar as they center on first possession and therefore

reward not just the ability to take possession but to do so faster than anyone else.

Awarding a pot of gold to the first person across the finish line creates identical

incentives to invest in training, whether the race itself is a one-hundred-meter

sprint or a marathon. The sprinter will train just as hard as the marathoner to win

the race, even though the amount of energy needed to move a human body 26.2

miles is much greater than the amount needed to move it one hundred meters.

And unlike possession itself, faster possession is not necessarily essential to the

optimal use of the resource.

For this reason, first-committed-searcher rules

may have some value to the extent they do not require as much work to be

completed before ownership is awarded. How much this is true is uncertain,

however. If instead of doing more to develop a resource, claimants direct their

energies to qualify as first-committed searchers faster, early awards may face

the same problem of inefficient racing for resources.

In addition, faster

claiming and faster resource development may often be valuable in and of itself

and also generate positive external benefits—particularly for intellectual

property.

Concerns about wasteful racing may therefore be less pressing than

they are sometimes made out to be.

It should also be noted that, apart from

investments in speed, competition can generate social waste by encouraging

behavior intended to tilt the competitive field—theft and fencing, espionage and

secrecy, sabotage and conflict.

To the extent later awards translate to more

protracted competition, they present a greater danger of social cost through such

anti-competitive conduct.

Figure 2 sets out the central concerns in the design of rules for awarding

property rights. The costs identified are relative: in most cases, the drawbacks

that are listed can occur at some level with either late or early awards, but they

See Lueck, supra note 32, at 399 (noting that “rush” of competitors can lead to early

grant of possession that is neither socially optimal nor valuable).

See Donald G. McFetridge & Douglas A. Smith, Patents, Prospects, and Economic

Surplus: A Comment, 23 J.L. & ECON. 197, 201 (1980) (noting negative effects when

possession rights go to “first rather than the best” claimant).

See Douglas W. Allen, Homesteading and Property Rights; or, “How the West Was

Really Won,” 34 J.L.

& ECON. 1, 1-6 (1991) (arguing that incentives for faster settlement

created by 19th century homesteading policies reduced enforcement costs and helped secure

U.S. government claims to western land).

See Duffy, supra note 15, at 467-68 (noting that inefficiencies of racing in intellectual

property are not significant).

See ROBERT D. ATKINSON & STEPHEN J. EZELL, INNOVATION ECONOMICS: THE RACE FOR

GLOBAL ADVANTAGE 190 (2012) (“[T]he race for global innovation advantage creates both

global opportunities and threats, because countries can implement their innovation policies in

ways that are either ‘good,’ ‘bad,’ or ‘ugly.’”).

2019] RIGHT ON TIME 415

are thought to be comparatively more serious with one model than with the other.

At least within the context of intellectual property, failure to follow through is

generally the most significant danger associated with early awards—especially

where early awards result in rights that are broader than anything the claimant

could possibly develop—while disincentives to compete and wasteful

duplication are generally the most significant drawback of late ones.

Figure 2. Early vs. Late Awards.

Costs of Early Awards

(First Committed Searcher)

Costs of Late Awards

(Actual Capture)

 Deadweight loss from misallocation to

less capable/incapable claimants

▫ Resource underuse/non-use

▫ Transaction and reassignment costs

 Wasteful claiming conduct

▫ Inefficient racing to begin search

▫ Unnecessary search behavior

 Slower capture/completion

(when faster development desired)

 Greater uncertainty as to resource

boundaries and characteristics

 Often an ambiguous standard that

requires discretion in application (e.g.,

as to what “committed” means)

 Disincentives to compete from risk of

lost investment, especially with free-

riding

 Wasteful duplication of effort

 Wasteful claiming conduct

▫ Inefficient racing to capture

▫ Inefficient capture rates

(e.g., endangered species)

 Where rights are time-limited, longer

effective exclusivity period

 Other competitive waste

▫ Self-help, fencing, secrecy

▫ Theft and espionage

▫ Interfering capture activities

▫ Sabotage, conflict, violence

The basic trade-off discussed above and depicted in Figures 1 and 2 has been

idealized and simplified in our discussion so far. In practice, administrability

concerns are a third variable that is often critical.

In Figure 1, the proper point

in time to award property rights would in theory be time t*—the exact point in

the possession continuum where the marginal benefit of delay just equals its

cost. For a number of reasons, however, the meaning of possession in various

contexts will also be shaped by practical demands like the need for clear rules,

intuitive concepts, and notice to race participants. To avoid wasteful duplication

of effort and lost investments, for instance, it is important for would-be

Michael W. Carroll, One Size Does Not Fit All: A Framework for Tailoring Intellectual

Property Rights, 70

OHIO ST. L.J. 1363, 1424-30 (2009) (discussing importance of

administrability when creating effective IP regime).

416 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

competitors to be able to observe and understand what counts as possession

fairly easily so that, e.g., they know not to continue expending efforts to win a

race that has already ended.

It does not do much good to end the race early

(i.e., declare a winner and stop the simultaneous search effort) if the other

participants do not know it is over. A clear test for possession also helps forestall

conflict among would-be competitors, encourages investment and facilitates

exchange by providing security of holdings, and reduces the costs of

administering and policing a property system.

While the need for clear and

intuitive tests for possession does not intrinsically align with either early or late

awards, in practice it tended to skew in favor of later awards at common law

because actual capture is often, though not always, more unambiguous than a

committed search.

The technology of the hunt determines what points in its chronology can even

be considered as viable candidates for possession from the perspective of

providing notice. In the context of hunting foxes, for example, it seems that such

informational considerations push for the rule of capture. What earlier stage in

the hunt could be set as the standard for a first-committed searcher? A certain

distance from the fox? A wound? If so, what type of wound confers property

rights (a scratch or mortal wounds)? What are the chances that other hunters

would be able to see both the hunter and the fox and determine the distance

between them in a dense forest? In the context of whaling, by contrast, the act

of sinking a harpoon into the body of the whale in the open sea by a party in hot

pursuit is a clear—or at least much clearer—informational marker to third

parties, and makes the first-committed-searcher rule a much more viable

candidate. The administrability concern adds to those discussed previously, and

can push the timing of grants of exclusive rights to either earlier or later points

in time.

To return to the example of Ellickson’s whalers cited earlier,

the trade-offs

embodied in the choice between first-committed-searcher and actual capture

models are evident in both the features that were universal among whaling norms

across all whaling fisheries and the ways in which those norms differed. As

Ellickson notes, no group of whalers adopted a rule awarding exclusive rights in

a whale to the first crew to lower a boat in pursuit.

That would be too soon.

Why? It would create too great a risk of awarding the prize to someone less

Cf. Kitch, supra note 27, at 278 (arguing that patents act as signaling devices to

competing firms to reduce amount of duplicative investment in innovation).

Joseph William Singer, The Rule of Reason in Property Law, 46 U.C. DAVIS L. REV.

1369, 1376 (2013) (noting that clear property regime “allows actors to invest in reliance on

clear rules of the game, avoids unfair surprise, controls the arbitrary discretion of judges, and

promotes equality before the law by treating like cases alike”).

See supra notes 45-49 and accompanying text (discussing Robert Ellickson’s seminal

study of nineteenth century whalers).

See Ellickson, supra note 45, at 88 n.14, 95 (noting that certain norms, including “first

boat in the water” were not observed in whaling industry).

2019] RIGHT ON TIME 417

capable of completing the task of capture, it would create incentives to get boats

in the water earlier than would be optimal, and it would not send a clear signal

as to which whale the whaler intended to pursue. At the other end of the

spectrum, neither did any of the whaling communities wait until a whale was

actually killed to assign claims to the animal. Among other difficulties, such a

rule would risk rewarding free-riders seeking to benefit from the significant

efforts others had already made to subdue a whale. Rather, both rules—iron-

holds-the-whale (first-committed searcher) and fast-fish-loose-fish (rule of

capture)—pick points that are in between.

The same concerns also help account for the way norms among whalers

differed in different contexts. Sperm whales tend to be relatively fast swimmers

and vigorous fighters,

prone to diving when harpooned, which often made it

necessary for the fishermen to cut the line lest their ship sink. Their hunt

involved costly and prolonged chases—over days—during which the whale

would be tired out. Waiting until a sperm whale had been brought under actual

control before giving a whaler a claim to the animal risked failing to reward

those whose early efforts made later capture possible—the free-riding problem.

The iron-holds-the-whale rule therefore seems to have been adapted to

conditions presented in sperm whale fisheries.

The right whales predominant

elsewhere, by contrast, were comparatively slow swimmers with docile

temperaments.

There was little need to award possession sooner, and waiting

until the whale had been brought under actual control ensured that the whale

went to the person who had “performed the hardest part of the hunt.”

To summarize: the primary problem with early awards is the risk that a

claimant will fail to proceed successfully with development of a resource after

being awarded it. The primary problems with late awards are the potential for

prolonging costly multiparty races and disincentivizing race participation when

participation is time-consuming and costly. Determining the moment of

possession should be made in light of the ability to convey clear notice to race

participants as to the moment in which a resource is taken into possession. Those

considerations play out differently for different resources.

II. O

RIGINAL ACQUISITION IN INTELLECTUAL PROPERTY

The concept of possession might not seem like it has much to do with

intellectual property. Possession has a certain physical flavor,

and the

resources IP law governs are intangible by definition. A human being cannot

See id. at 425 (discussing nature of sperm whales).

See id.

Id.

Id. at 89.

See OLIVER WENDELL HOLMES, JR., THE COMMON LAW 216 (Little, Brown & Co. 1945)

(1881) (“To gain possession, then, a man must stand in a certain physical relation to the object

and to the rest of the world . . . .”).

418 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

literally reach out and grab an idea, much less skewer it with a harpoon. As one

venerable eighteenth-century jurist put it, “But how is possession to be taken, or

any act of occupancy to be asserted, on mere intellectual ideas? . . . All writers

agree that no act of occupancy can be asserted on a bare idea of the mind.”

Yet the concept of possession can be extended to apply to intellectual

creations without conceptual or linguistic violence. We certainly speak of

possessing intangibles, like a sense of humor

or a secret.

Indeed, IP doctrines

occasionally invoke the concept of possession explicitly, most obviously in the

case of patent law’s “written description” requirement.

Just like “property”

serves as an imperfect analogy to “intellectual property,” so does “first

possession” to “original acquisition of intellectual property.”

The concept of possession, as property law has traditionally conceived it, is

oriented around the notion of control, a state of affairs that brings a person

substantially closer to being able to put a resource to use.

Although the various

doctrines governing the award of IP rights for the most part avoid the language

of possession, the basic concept of possession carries over to intellectual

property and the model of first possession developed in property law can be

usefully extended to major segments of IP law. This Articles stresses that there

is no single first possession doctrine in these fields. Multiple interacting

doctrines and concepts that together function as a system of original acquisition

govern the award of rights.

Millar v. Taylor (1769) 98 Eng. Rep. 201, 231 (KB) (Yates, J., dissenting).; see also

Wheaton v. Peters, 33 U.S. (8 Pet.) 591, 669 (1834) (Thompson, J., dissenting) (discussing

Justice Yate’s dissent in Millar).

See, e.g., David E. Engdahl, John Marshall’s “Jeffersonian” Concept of Judicial

Review, 42 DUKE L.J. 279, 329 (1992) (stating that Chief Justice John Marshall “possessed a

self-effacing charm and good humor”).

See, e.g., ELIZABETH A. ROWE & SHARON K. SANDEEN, CASES AND MATERIALS ON

TRADE SECRET LAW 14-17 (2012) (noting that for over a century and a half since founding,

trade secrecy law in the United States developed primarily through common law

adjudication).

A patent specification must “demonstrate that the patentee was in possession of the

invention that is claimed.” Capon v. Eshhar, 418 F.3d 1349, 1357 (Fed. Cir. 2005). Further, a

patent filing must “put the public in possession of what the party claims as his own invention.”

Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 924 (Fed. Cir. 2004) (quoting Evans

v. Eaton, 20 U.S. (7 Wheat.) 356, 433-34 (1822)). If a prior disclosure of the invention was

sufficient to place the invention “in the possession of the public,” however, no patent can

issue. Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 471 F.3d 1369, 1375 (Fed. Cir. 2006).

See Pierson v. Post, 3 Cai. 175, 178 (N.Y. Sup. Ct. 1805) (requiring acts that bring

animal within person’s “certain control” before that person can be said to be in possession of

it).

Indeed, patent law’s written description requirement, which refers to possession by

name, plays a relatively peripheral role in the larger set of issues we are concerned with and

is not a major focus of this Article’s analysis.

2019] RIGHT ON TIME 419

Conceptually speaking, first possession has several basic hallmarks. It is, of

course, a device that establishes when property rights begin and the identity of

the first person to hold them.

It is, moreover, a relatively decentralized

mechanism for doing so: initial ownership depends on the performance of some

sort of act by the first owner that, in principle, does not require any direct

involvement with a governmental authority.

Perfection of rights can be made

contingent on registration with or verification by some government body that

the requisite action has been performed—i.e., that the claimant has taken

possession—but the act of taking possession is itself undertaken by private

actors at their own initiative.

In terms of its more specific content, first possession is a system based on

temporal priority—the first person to do something wins. Others who carry out

the necessary steps are precluded if someone else did so before them. As for the

possession element, it entails more than mere desire or plotting and less than

ultimate consumption, or even the completion of every task necessary for

consumption to occur.

Possession is oriented around the notion of practical

control, in which the would-be owner stands in a special relationship to the

resource and changes its character in a manner consistent with its eventual use

and consumption.

In what follows, this Article reviews a number of patent,

trademark, and copyright doctrines which together align with this set of features.

Original acquisition rules play two related yet analytically distinct roles. First,

these rules determine winners and losers in priority disputes among competitors

who are racing simultaneously to own the same resource.

100

This may be thought

of as the “first” part of “first possession.” While this context generally parallels

the discussion of common law priority contests featured prominently in Pierson

v. Post, intellectual property brings its own quirks.

Second, original acquisition rules also determine the point in time—and

equivalently the standard of performance—at which entitlements vest,

See, e.g., Lueck, supra note 32, at 425 (describing how first possession-based whaling

customs made it clear who had valid claim to whale and when).

Rose, supra note 5, at 76 (“Possession thus means a clear act, whereby all the world

understands that the pursuer has ‘an unequivocal intention of appropriating the [property] to

his individual use.’” (quoting Pierson, 3 Cai. at 178)).

John L. McCormack, Torrens and Recording: Land Title Assurance in the Computer

Age, 18 WM. MITCHELL L. REV. 61, 67 (1992) (noting that recording land deed with the

government is way to perfect ownership, but is not required to have valid legal claim to

property).

Detroit Edison Co. v. Mich. Air Pollution Control Comm’n, 423 N.W.2d 306, 310

(Mich. Ct. App. 1998) (“To constitute a protectable right, a person must have more than an

abstract need, desire or unilateral expectation of the right.”).

Nicole L. Johnson, Property Without Possession, 24 YALE J. ON REG. 205, 223 (2007)

(noting that right to surface water, for instance, is partly determined by the extent the owner

puts resource to “beneficial use”).

100

See, e.g., Pierson, 3 Cai. at 175.

420 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

irrespective of the existence of a priority contest.

101

This may be thought of as

the “possession” part of “first possession.” This can often take the form of a

determination about what it is that can be possessed and become the subject of

property rights. This function is more pronounced in intellectual property: while

the nature of a fox is unchanged whether it is owned under either a first-

committed-searcher rule or a rule of capture, in intellectual property, the thing

owned often differs with the rule of original acquisition. Since the would-be

owner often creates and perfects the thing to be owned, a later time of acquisition

practically means that intellectual creations (or ideas) at an earlier stage of

development are not subject to ownership. This function of original acquisition

rules implicates questions about both the acquisition of any rights whatsoever as

well as the scope of protection in cases where some rights have clearly been

acquired.

These two functions are intimately connected. Whether a claimant has

performed the action necessary to acquire exclusive rights will very frequently

dispose of any priority questions. The two issues can be disaggregated, however,

and the discussion that follows examines them separately, at least in part.

Questions of what might be thought of as pure priority, involving conflicting

claims by multiple actors for the very same resource are discussed under the

heading of “priority.” Questions that center more squarely on the standard for

protection itself are discussed in terms of “protectability.” The partial separation

in the analysis grows out of a recognition that protectability questions are more

pronounced for intellectual property than for physical resources. Nevertheless,

it should be remembered that there is a great deal of overlap between the two

aspects of claiming by possession and the division should be understood only as

differences in emphasis and not as establishing mutually exclusive categories of

doctrine.

A. Patent

Priority. The process of invention can be broken down into a series of mental

and physical steps beginning with conception of the core inventive idea—what

is often imagined as the “Eureka!” moment

102

—and ending with what patent

lawyers call “reduction to practice,” which can be accomplished by assembling

a working version of the invention or by filing a valid patent application that

101

See, e.g., Lueck, supra note 32, at 425 (describing customary standards of performance

required to establish valid claim to whale); see also supra notes 45-49 and accompanying text

(discussing Ellickson’s seminal study of nineteenth century whalers).

102

Or perhaps, “hmm, that’s funny . . . .” See CRAIG C. LUNDBERG & CHERI A. YOUNG,

FOUNDATIONS FOR INQUIRY: CHOICES AND TRADE-OFFS IN THE ORGANIZATIONAL SCIENCES

378 (2005); J

ESSICA SILBEY, THE EUREKA MYTH: CREATORS, INNOVATORS, AND EVERYDAY

INTELLECTUAL PROPERTY 25-26 (2015) (discussing role of “Eureka” moment in process of

innovation and law’s treatment of “Eureka” moment).

2019] RIGHT ON TIME 421

teaches others how to do so.

103

For our purposes, the process is analogous to the

hunt of wild animals like foxes and whales, which similarly goes through stages

of inspiration, pursuit, capture, and use.

104

Patent law decides between rival

claimants to inventive technologies by identifying the first person to reach a

certain stage on this developmental timeline, and in this way it can be mapped

onto the general model of first possession that describes common law property.

Even more so than with tangible goods, reliance upon first possession in the IP

context raises questions about how to model possession.

The two basic approaches to first possession we have discussed—first-

committed searcher and actual capture—produce the same result when the same

actor is first to both begin and complete the hunt. But often this does not occur,

and when it does not, the two rules come apart. Suppose, for example, that

Edison has an idea for a particular invention before Tesla, a lightbulb let’s say.

But Tesla is nevertheless the first to complete the intellectual hunt, building an

actual working version of the idea. In the language of patent law, Edison was the

first to conceive the invention but Tesla was the first to reduce it to practice.

Such a fact pattern is depicted in the timeline in Figure 3.

Figure 3. Priority Disputes.

Edison

conceives

Tesla

conceives

Tesla reduces

to practice

Edison reduces

to practice

In U.S. patent law from the start of the republic and for more than two

centuries thereafter, this sort of invention race was governed by what was in

effect a first-committed-searcher rule. Even today, for patent applications filed

103

See Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir.

1986) (requiring inventor to reduce conception to practice, which “requires that the claimed

invention work for its intended purpose”); Brunswick Corp. v. United States, 34 Fed. Cl. 532,

583-84 (1995) (noting importance of timing of reducing conception to practice).

104

Conception requires more than simply a general idea of how to proceed. See Burroughs

Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994) (“Conception is

complete only when the idea is so clearly defined in the inventor’s mind that only ordinary

skill would be necessary to reduce the invention to practice, without extensive research or

experimentation.”).

422 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

before March 16, 2013,

105

the patent would be awarded to whomever was first

to conceive of the invention provided that party exercised “reasonable diligence”

in reducing the invention to practice.

106

Under this regime, Edison would receive

the patent, so long as he remained in diligent pursuit of the ultimate working

invention. Such priority disputes were adjudicated through quasi-judicial

“interference proceedings” before the Board of Patent Appeals and

Interferences. This so-called first-to-invent priority rule is a clear patent law

analog to the first-committed-searcher model of first possession.

The first-to-invent rule was abandoned following enactment of the Leahy-

Smith America Invents Act (“AIA”) in 2011, the most comprehensive overhaul

of U.S. patent law in at least half a century.

107

Its most prominent change was to

replace the first-to-invent rule with a first-to-file system, or more precisely, a

system that awards patents to the first person to disclose their invention to the

public, whether by filing a patent application or through other public acts.

108

The

AIA thus pushes back the temporal lynchpin from the beginning of the inventive

process to its end.

109

The upshot of this new rule is that even if someone sets out in pursuit of an

invention before the competition and is thus the first committed inventor, the

race goes on and may very well be won by another who manages to complete

the process first. Under the AIA, the patent in the situation described in Figure

105

See Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 146(1)(n), 125 Stat. 284,

293 (2011) (codified as amended in scattered sections of 35 U.S.C.).

106

See 35 U.S.C. § 102(g) (2012), (supplanted by Leahy-Smith America Invents Act in

2011); Griffith v. Kanamaru, 816 F.2d 624, 625-29 (Fed. Cir. 1987) (applying first to invent

priority rules).

107

Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified as amended in scattered sections of

35 U.S.C.); Joe Matal, A Guide to the Legislative History of the America Invents Act: Part I

of II, 21 FED. CIR. B.J. 435, 435 (2012) (stating that the AIA “arguably makes the most

substantial changes to the law since those imposed by the Patent Act of 1836”).

108

Still more precisely, the AIA awards patents to the first to invent and then either file or

publicly disclose, whether by written description, commercial sale, or acts otherwise making

the technology available to the public. See 35 U.S.C. § 102 (stating that patent exists if

invention is “patented, described in a printed publication, or in public use, on sale, or

otherwise available to the public”). While forms of public disclosure other than filing can be

used to establish priority, filing an application and the issuance of a patent by the U.S. Patent

and Trademark Office (“USPTO”) is still required for any patent rights to be awarded.

109

Technically, exclusive rights vest upon the filing of a valid patent application

(considered “constructive reduction to practice”). See

U.S. DEP’T OF COMMERCE, U.S. PATENT

& TRADEMARK OFFICE, MANUAL OF PATENT EXAMINING PROCEDURE § 2138.05(I) (2014).

Alternatively, rights vest upon the publishing of an “enabling” disclosure, followed by timely

filing within twelve months; an enabling disclosure is one that allows those skilled in the

relevant art to make the invention without “undue experimentation.” See id. § 2164. On the

relationship between invention-based rights and filing, see Adam Mossoff, Who Cares What

Thomas Jefferson Thought About Patents? Reevaluating the Patent “Privilege” in Historical

Context, 92 C

ORNELL L. REV. 953, 995-97 (2007).

2019] RIGHT ON TIME 423

3 would now go to Tesla rather than Edison because Tesla was the first to file a

valid application.

110

The AIA, in other words, can be seen as moving the U.S.

patent system from a first-committed-searcher model to one representing a rule

of capture.

Protectability. The possessory timeline also speaks to the nature of what can

be patented at all, even in the absence of a priority dispute. At a very basic level,

the answer is that a patent must be issued by the U.S. Patent and Trademark

Office (“USPTO”)—something that was true even before the AIA was

enacted—and this in turn requires actual or constructive reduction to practice.

But the choice described above between a first committed inventor and an actual

capture approach can be illuminated further by situating it within a still-broader

chronology. That chronology begins with the discovery of basic scientific truths,

mathematical axioms, and other abstract principles; it proceeds through applied

research either to find real-world uses for such knowledge or to apply such

knowledge to solve known problems; it continues to the actual invention of a

device or process having some practical and beneficial use; from there it

proceeds to the perfection of the invention to generate a commercially desirable

product; from there to production and marketing; and then it concludes with the

sale or use of the invention and the enjoyment of whatever benefits it provides.

Both the pre- and post-AIA regimes allow inventors to receive exclusive rights

at points some distance removed from either end of that larger timeline.

111

One of the fundamental preconditions to patentability under U.S. patent law

is that an invention be “useful,” a principle known as the utility requirement.

112

Patent law could adopt a rule allowing the award of exclusive rights as soon as

a person comes to grasp a general principle that is likely to lead to one or more

practical applications. It is hardly a stretch of the English language to say that,

for instance, the idea of producing light by passing an electric current through a

material with a moderately high level of electrical resistance is in some sense a

“useful” one. Alternatively, patent law could condition the award of exclusive

rights on actual commercial exploitation through the sale of a working product

based on that information. On this view, an invention simply is not useful until

it is actually put to real-world use of demonstrated value. Patent law adopts

neither of these positions. Instead, it follows something of a middle course,

110

Filing a complete and enabling application with the USPTO qualifies as constructive

reduction to practice. See 35 U.S.C. § 100(i).

111

In addition to the priority rules described here, the time bar in patent law makes

patentability depend on filing for patent protection relatively early, even if there is no danger

of being beaten by a competitor. See id. § 202(g).

112

See U.S. CONST. art. I, § 8, cl. 8 (empowering Congress “[t]o promote the Progress of

Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive

Right to their respective Writings and Discoveries” (emphasis added)); 35 U.S.C. § 101

(stating that patent may be granted to one who invents something “new and useful”).

424 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

requiring that a patent applicant demonstrate a non-speculative practical

application for the invention.

113

This is a relatively minimal showing and makes it possible to receive a patent

at a fairly preliminary stage, when more needs to be done before the patentee

can benefit from the patent.

114

Claimants do not need to show that an invention

is commercially feasible or genuinely valuable,

115

and often decades—

sometimes even centuries—pass before patents are commercialized in

markets.

116

Nor must a claimant obtain regulatory approvals necessary to make

or sell an invention—a crucial consideration with pharmaceuticals.

117

Nothing

more is required to receive a patent, even under the AIA, once invention has

occurred and been disclosed.

That said, the patent system as a whole does have features that push awards

further down the developmental timeline, a number of which have become more

113

See ROBERT P. MERGES, PETER S. MENELL & MARK A. LEMLEY, INTELLECTUAL

PROPERTY IN THE NEW TECHNOLOGICAL AGE 186 (6th ed. 2012) (explaining that invention

must have purpose and be able to perform that purpose).

114

“The threshold of utility is not high: An invention is ‘useful’ under section 101 if it is

capable of providing some identifiable benefit.” Juicy Whip, Inc. v. Orange Bang, Inc., 185

F.3d 1364, 1366 (Fed. Cir. 1999); see also Brooktree Corp. v. Advanced Micro Devices, Inc.,

977 F.2d 1555, 1571 (Fed. Cir. 1992) (“To violate § 101 the claimed device must be totally

incapable of achieving a useful result . . . .”); Stiftung v. Renishaw PLC, 945 F.2d 1173, 1180

(Fed. Cir. 1991) (“An invention need not be the best or the only way to accomplish a certain

result, and it need only be useful to some extent and in certain applications . . . .”).

115

See, e.g., E. I. du Pont de Nemours & Co. v. Berkley & Co., 620 F.2d 1247, 1260 n.17

(8th Cir. 1980) (“A small degree of utility is sufficient. The claimed invention must only be

capable of performing some beneficial function. An invention does not lack utility merely

because the particular embodiment disclosed in the patent lacks perfection or performs

crudely. A commercially successful product is not required. Nor is it essential that the

invention accomplish all its intended functions, or operate under all conditions, partial success

being sufficient to demonstrate patentable utility. In short, the defense of non-utility cannot

be sustained without proof of total incapacity.” (citations omitted)). Commercial success

nevertheless does play an important role in many cases in showing that an invention satisfies

the separate requirement of non-obviousness. Id. at 1263 (stating that commercial success

might be utilized as secondary consideration to determine obviousness or non-obviousness).

116

See Kitch, supra note 27, at 272 tbl.1 (showing that great stretches of time often pass

before patent grant and its commercialization).

117

See, e.g., In re Brana, 51 F.3d 1560, 1568 (Fed. Cir. 1995) (“FDA approval, however,

is not a prerequisite for finding a compound useful within the meaning of the patent laws.

Usefulness in patent law, and in particular in the context of pharmaceutical inventions,

necessarily includes the expectation of further research and development. The stage at which

an invention in this field becomes useful is well before it is ready to be administered to

humans. Were we to require Phase II testing in order to prove utility, the associated costs

would prevent many companies from obtaining patent protection on promising new

inventions, thereby eliminating an incentive to pursue, through research and development,

potential cures in many crucial areas such as the treatment of cancer.” (citations omitted)).

2019] RIGHT ON TIME 425

pronounced of late. For one thing, while the utility requirement is generous, it

has its limits.

118

An invention must actually work to be considered useful, even

if it need not work especially well.

119

Moreover, the mere possibility, and

perhaps even likelihood, that some use for an invention will later be discovered

is insufficient to support a patent grant.

120

In addition, the invention must have

some demonstrated benefit, however slight. Significantly, the Supreme Court

has held that a substance cannot be considered useful merely because it is an

object of active research by scientists, who suspect it may have beneficial

properties.

121

This restriction, too, has been expanded upon and given more teeth

in recent cases.

122

So while patent law does award rights at an earlier stage in the

overall developmental process than it might, it also contains rules that limit early

awards. The utility requirement thus serves as a doctrinal tool that draws the line

between information that is and is not subject to individual ownership.

Other features of patent law also limit the availability of patents at very early

stages of the inventive process. Under a set of long-standing judge-made

exceptions to the statutory provision governing patentable subject-matter,

abstract ideas and laws of nature, though often very valuable, are categorically

excluded from patent protection.

123

Only practical applications of such

118

See Arti K. Rai, Fostering Cumulative Innovation in the Biopharmaceutical Industry:

The Role of Patents and Antitrust, 16 BERKELEY TECH. L.J. 813, 839 (2001) (asserting that

only utility requirement is particularly useful in determining how far removed research is from

commercial end product to explain that strict interpretation of usefulness can be limiting).

119

See Newman v. Quigg, 877 F.2d 1575, 1581-82 (Fed. Cir. 1989) (rejecting patent for

perpetual motion device because it was inoperable and therefore lacked utility).

120

See Brenner v. Manson, 383 U.S. 519, 532-36 (1966) (explaining that patents should

not be granted on speculation of future usefulness).

121

Id. at 534-36 (“Unless and until a process is refined and developed to this point—where

specific benefit exists in currently available form—there is insufficient justification for

permitting an applicant to engross what may prove to be a broad field.”).

122

See, e.g., In re Fisher, 421 F.3d 1365, 1373 (Fed. Cir. 2005) (rejecting patent where all

“asserted uses represent mere hypothetical possibilities”); see also Utility Examination

Guidelines, 66 Fed. Reg. 1092, 1093 (proposed Jan. 5, 2001) (stating that “specific,

substantial, and credible utility” is necessary to fulfill utility requirement).

123

See Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (“The laws of nature, physical

phenomenon, and abstract ideas have been held not patentable.”); Parker v. Flook, 437 U.S.

584, 594 (1978) (“Even though a phenomenon of nature or mathematical formulation may be

well known, an inventive application of the principle may be patented. Conversely, the

discovery of such a phenomenon cannot support a patent unless there is some other inventive

concept in its application.”); Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“Phenomena of

nature, though just discovered, mental processes, and abstract intellectual concepts are not

patentable, as they are the basic tools of scientific and technological work.”); Funk Bros. Seed

Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948) (“He who discovers a hitherto unknown

phenomenon of nature has no claim to a monopoly of it which the law recognizes.”); O’Reilly

v. Morse, 15 U.S. (15 How.) 62, 112-21 (1854) (explaining that one cannot patent use of

steam, however developed, as motive power for particular purpose); Le Roy v. Tatham, 14

426 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

discoveries can be patented.

124

In recent years, the Supreme Court has enforced

this constraint with particular vigor.

125

Other doctrines carry this principle

further, so that even some ideas involving practical solutions to concrete

problems are too far from practical success to be patentable. The specification

of an invention in a patent application, for instance, must enable others to make

and use the invention without resorting to “undue experimentation.”

126

As a

result, merely identifying the general form a solution to a problem will take

without actually sorting out the details necessary to put the solution into action—

think of the example of the incandescent light bulb above—is inadequate.

127

The considerations that lie behind the various doctrines used to structure the

timing of patent grants echo traditional thinking about first possession.

Awarding an exclusive right to a compound merely because it may have

beneficial properties could easily result in someone unable to discover its uses

holding the right and impeding those who could do so. Generating the new

substance is only half the battle; no rights in it will vest until at least some

practical benefit has been discovered, apart from keeping labs busy. As the

U.S. (14 How.) 156, 175 (1853) (“A principle, in the abstract, is a fundamental truth; an

original cause; a motive; these cannot be patented, as no one can claim in either of them an

exclusive right.”).

124

See Parker, 437 U.S. at 594 (stating that inventive concept in application of

phenomenon of nature may be patentable); Mackay Radio & Tel. Co. v. Radio Corp. of Am.,

306 U.S. 86, 94 (1939) (“While a scientific truth, or the mathematical expression of it, is not

patentable invention, a novel and useful structure created with the aid of knowledge of

scientific truth may be.”).

125

See Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354, 2360 (2014) (finding

system and media claims “add nothing of substance to the underlying abstract idea” and

therefore are patent ineligible); Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133

S. Ct. 2107, 2117 (2013) (finding no patentable discovery when gene separated from

surrounding genetic material); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.

66, 92 (2012) (finding application of natural law of relationship between concentration of

metabolites in blood and likelihood thiopurine drug will be ineffective to merely claim

underlying law of nature, and therefore be unpatentable); Bilski v. Kappos, 561 U.S. 593, 612

(2010) (finding claims that “attempt to patent the use of the abstract idea of hedging risk in

the energy market and then instruct the use of well-known analysis techniques to help

establish some of the inputs into the equation” do not sufficiently add to underlying abstract

principle).

126

In such a case, for instance, the specification of the invention in the patent application

will not enable others to make and use the invention without resorting to “undue

experimentation.” See 35 U.S.C. § 112 (2012) (“The specification shall contain a written

description of the invention, and of the manner and process of making and using it, in such

full, clear, concise, and exact terms as to enable any person skilled in the art to which it

pertains . . . to make and use the same . . . .”); In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988)

(“[E]xperimentation needed to practice the invention must not be undue experimentation.”).

127

See Incandescent Lamp Patent, 159 U.S. 465, 475-77 (1895) (finding complainant not

entitled to “monopoly of all fibrous and textile materials for incandescent conductors”).

2019] RIGHT ON TIME 427

Supreme Court explained it, “[A] patent is not a hunting license. It is not a

reward for the search, but compensation for its successful conclusion.”

128

The

Court did not cite Pierson v. Post in making this pronouncement, but it might

well have. A grant prior to the development of a practical application risks

ending the race too soon. Those more capable of putting the compound to

practical use may be prevented from doing so if it is already subject to patent’s

exclusivity.

129

At the same time, an approach deeming the invention useful later in time—

upon commercialization, say—would create serious risks of either wasteful

duplication of effort or lost investment, undercutting much of the incentive to

obtain patent protection and, by hypothesis, to innovate in the first place.

130

the pharmaceutical context, for instance, moving from the search for some

practical application to commercialization requires clinical trials, a process that

often takes around five to seven years and involves a cost that usually exceeds

the preceding research.

131

If usefulness depended on crossing these additional

thresholds, it is more likely that pharmaceutical companies would be deterred

from joining the race to develop new drugs since there would be a greater

likelihood of losing a considerable investment if another company manages to

128

Brenner v. Manson, 383 U.S. 519, 536 (1966). Note that while the first to invent rule

of priority, in place when Brenner was decided, would grant the exclusive right to the party

who started the chase slightly earlier than its competitor, the utility requirement sets the

location of the utility bar in patent law on the broader invention procurement timeline.

129

A similar point can be made about improvements to patented inventions. If those who

discovered improvements on existing technology were precluded from obtaining patent

protection for them, in effect by granting a complete patent right to the holder of the original

patent at the moment of its issuance, the contest to develop such improvements might be

ended too soon. See Mark A. Lemley, Economics of Improvement in Intellectual Property

Law, 75 T

EX. L. REV. 989, 1000-10 (1997) (explaining that trying to improve existing

invention is integral to competitive process and that improvers must avoid literal scope of

patent claims); Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent

Scope, 90

COLUM. L. REV. 839, 872-77 (1990) (“If a property right on a basic invention covers

a host of potential improvements, the property right holder can be expected to develop the

basic invention and some of the improvements. But we would expect a single rightholder to

underdevelop—or even ignore totally—many of the potential improvements encompassed by

their broad property right.”).

130

See Duffy, supra note 15, at 445 (explaining that allowing “patenting prior to the bulk

of the investment needed to bring the innovation to market” makes competition more efficient

by “ensuring that the predominant private cost of patent racing is not the premature

expenditure of resources on developing the innovation or the duplication of innovative

efforts”).

131

See Joseph A. DiMasi, Ronald W. Hansen & Henry G. Grabowski, The Price of

Innovation: New Estimates of Drug Development Costs, 22 J.

HEALTH ECON. 151, 167 (2003)

(finding that clinical testing costs outweigh preclinical research costs per approved new drug).

428 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

complete the lengthy and expensive commercialization process more quickly.

132

A grant of exclusive rights somewhat before or around the conclusion of the

applied research phase, as current doctrine allows, promises the inventor the

right to pursue the inventive process through commercialization without the

danger of losing this investment.

133

Broadly speaking, patent doctrine strikes a

plausible balance between the dangers of early grants and the dangers of late

ones along the R&D chronology.

B. Trademark

Priority. Trademark law is a system based upon temporal priority—

conflicting claims to the same mark are resolved using a first-in-time

principle.

134

As is characteristic of such systems, parties often compete in a race

to own trademarks.

135

That first-in-time principle applies to the conduct of rival

claimants: trademark rights generally go to the first to use a distinctive

136

mark

in commerce.

137

This requirement has two elements: use and distinctiveness.

Requiring “use” of a trademark has a fairly clear connection to possession.

138

Possession is the basic precondition of use, and to use a resource is almost

132

Id. at 468-71 (detailing how probabilities will impact motivations for companies to

enter race for developing given innovation).

133

See In re Brana, 51 F.3d 1560, 1568 (Fed. Cir. 1995) (“Were we to require Phase II

testing in order to prove utility, the associated costs would prevent many companies from

obtaining patent protection on promising new inventions, thereby eliminating an incentive to

pursue, through research and development, potential cures in many crucial areas such as the

treatment of cancer.”).

134

See 15 U.S.C. § 1057(c) (2012) (stating that filing application to register mark confers

right of priority except against person who had previously used or applied to register the

mark).

135

See Zazu Designs v. L’Oreal, S.A., 979 F.2d 499, 503 (7th Cir. 1992) (“[O]ne must win

the race to the marketplace to establish the exclusive right to a mark.”).

136

See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-10 (2d Cir. 1976)

(expounding concept of distinctiveness).

137

See Lanham Act § 1(a), 15 U.S.C. § 1051(a) (providing trademark registration for mark

“used in commerce”); U.S. PATENT & TRADEMARK OFFICE, TRADEMARK MANUAL OF

EXAMINING PROCEDURE § 900 (2018) (allowing for registration of trademark only if

application includes verified statement that mark was in use in commerce as of filing date).

But see Lanham Act § 1(b), 15 U.S.C. § 1051(b) (allowing for registration of mark based on

“intent-to-use” within six months of filing).

138

See Hanover Star Milling Co. v. Allen & Wheeler Co., 208 F. 513, 516 (7th Cir. 1913)

(detailing that trademark infringement does not damage trademark, but instead damages trade

and business by removing trademark’s meaning in use); F

RANCIS H. UPTON, A TREATISE ON

THE

LAW OF TRADE MARKS WITH A DIGEST AND REVIEW OF THE ENGLISH AND AMERICAN

AUTHORITIES 10 (1860) (“[P]roperty in trade marks, exclusive and absolute, has existed and

been recognized as a legal possession, which may be bought, and sold, and transmitted, from

the earliest days of our recorded jurisprudence.”).

2019] RIGHT ON TIME 429

axiomatically to possess it.

139

Trademark law’s requirement of possession is thus

implicit in the use requirement: only one who has seized upon a distinctive mark

as the emblem of her business or its product can use it as its trademark.

140

The distinctiveness requirement adds a conceptual wrinkle. Distinctiveness

refers to a characteristic of the mark, namely its capacity to designate the source

of goods and services.

141

Protectable marks fall into two different categories.

Some are considered inherently distinctive because they are either wholly

invented, as with “fanciful” marks like Exxon, or because they do not refer to

any particular characteristic of the products they are associated, as with

“arbitrary” marks, like Apple for computers.

142

For these sorts of marks,

trademark protection begins as soon as they are used in commerce. Other marks,

however, require more. Most notably, a mark will be considered descriptive if it

connotes some characteristic of the product or service it pertains to, such as

Holiday Inn used in connection with hotels.

143

Descriptive marks are not

considered inherently distinctive and can only be protected if and when they

have “acquired distinctiveness,” often referred to as having obtained “secondary

meaning.”

144

In essence, this requires that consumers who encounter the mark

recognize that in addition to any dictionary meaning or descriptive quality—

vacation lodgings in the case of Holiday Inn—the term also designates a specific

139

The commercial aspect of the necessary use is arguably inherent in the nature of

trademarks. Trademarks are commercial emblems, and thus the kind of use that is relevant is

use as a way of designating commercial products. See Hanover Star Milling Co., 208 F. at

515 (“Use of an arbitrary and distinctive mark to indicate the origin or ownership of articles

of trade—the dealer’s ‘commercial signature’—is very old.”).

140

See id. at 515-16 (stating that “the property or right in the trade is protected from injury

by preventing a fraud-doer from stealing the complainant’s trade by means of using the

complainant’s ‘commercial signature’”).

141

See Abercrombie & Fitch Co., 537 F.2d at 8-9 (explaining that mark is distinct if it

comes to identify company, not the product, because competitors cannot be deprived of

calling product by its name).

142

See 15 U.S.C. § 1125(c)(1) (stating that “the owner of a famous mark that is distinctive,

inherently or through acquired distinctiveness” is entitled to injunctive relief if someone

causes dilution of mark); Abercrombie & Fitch Co., 537 F.2d at 11 n.17 (“[T]he term

‘fanciful,’ as a classifying concept, is usually applied to words invented solely for their use as

trademarks. When the same legal consequences attach to a common word, i.e., when it is

applied in an unfamiliar way, the use is called ‘arbitrary.’”). This also includes “suggestive”

marks, like Sunkist as applied to oranges, that may imply something about a product but stop

short of actually describing it. See Stix Prods., Inc. v. United Merchs. & Mfrs., Inc., 295 F.

Supp. 479, 488 (S.D.N.Y. 1968) (“A term is suggestive if it requires imagination, thought and

perception to reach a conclusion as to the nature of goods.”).

143

See Stix Prods., Inc., 295 F. Supp. at 488.

144

See Lanham Act § 2(f), 15 U.S.C. § 1052(f) (prohibiting registration of descriptive

marks unless acquired distinctiveness has been shown); In re Hehr Mfg. Co., 279 F.2d 526,

528 (C.C.P.A. 1960) (requiring that “unless a design is inherently distinctive it is registrable

only if sufficient evidence is presented to show it has acquired secondary meaning”).

430 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

brand.

145

Secondary meaning can develop over a period of time in which the

public gets to meet the mark in market settings such as on products and services

and in advertisement. So far as trademark law is concerned, a descriptive term

or symbol simply is not a trademark until secondary meaning has been

acquired.

146

In this way, the treatment of descriptive marks also aligns with the

rule of capture model.

Over time, there have been some adjustments to this basic model. Trademark

law has come to embrace elements of a first-committee-searcher model. In 1988,

Congress moved away from its mandatory prerequisite of actual use in

commerce. For the first time, it allowed parties, in the alternative, to reserve

exclusive rights to marks based on a mere “intent to use” them in commerce.

147

By filing an “intent to use” application, a party intending on adopting a mark

within six months (a period that can be extended up to three years, if the

applicant files periodically with the USPTO and affirms that she maintains a

bona fide intention to use the mark)

148

can protect itself against another who has

actually adopted a confusingly similar mark in commerce during that period.

This exclusivity depends on the applicant retaining its intent to use and is

conditioned on the eventual use of the mark in commerce. If the applicant fails

to use the mark in commerce within the relevant time period, the trademark

becomes free for others to adopt.

149

Thus, this statutory amendment adds a first-

committed-searcher track to claiming a trademark. For trademarks, as with

sperm whales, the prey becomes available for others to pursue if the hunter fails

to maintain pursuit. Claiming an intent to use thus signifies a change of approach

regarding priority disputes. Trademark law has evolved to allow first committed

pursuers of particular trademarks to shift the rule governing priority disputes to

a first-committed-searcher rule by filing an intent to use application and putting

all potentially competing pursuers on notice. They can secure property rights at

a relatively early point along the propertization timeline, thus enabling

themselves to end the race early and establish priority to a mark before any

145

Secondary meaning requires a showing “that the primary significance of the term in the

minds of the consuming public is not the product but the producer.” Kellogg Co. v. Nat’l

Biscuit Co., 305 U.S. 111, 118 (1938). The requirement of secondary meaning applies to a

broad range of marks, including descriptive marks, surname marks, sensory marks (sound,

sight, scent, or color marks), some geographical marks, and product configuration trade dress.

146

See Abercrombie & Fitch Co., 537 F.2d at 10 (stating descriptive terms may be

trademarked where demonstrated to be distinctive of producer’s product in commerce).

147

See Trademark Law Revision Act of 1988, 15 U.S.C. §§ 1051-1128. The Act became

effective on November 16, 1989. To some extent, this change may have curtailed what was

in effect a more generous understanding of actual use sufficient to confer priority.

148

See 37 C.F.R. § 2.89 (2018) (allowing “[e]xtensions of time for filing a statement of

use”).

149

See 15 U.S.C. § 1051(d) (requiring applicant to submit statement that mark has been

used in commerce within six months of notice of allowance).

2019] RIGHT ON TIME 431

commercial use takes place.

150

Just like in the case of sperm whales, doing so

protects the first committed pursuer against third party intervention—which may

involve free-riding—in the hunting process.

Along similar lines, the rise of the “analogous use” doctrine in trademark law

signals a move away from a rule of capture approach and toward a first-

committed-searcher model when it comes to priority disputes among competing

pursuers. The analogous use doctrine allows trademark developers to claim

priority based on certain activities that make the mark known to the consuming

public—such as widespread preannouncement of a product in advertisement that

uses the mark—occurring before actual use in commerce of the good or

service.

151

Like intent-to-use applications, the doctrine of analogous use

guarantees a first committed pursuer of a mark—who might be engaging in

prerelease promotional use—priority over a second-comer who is the first to

actually use the mark in commerce.

In the case of descriptive marks, however, trademark doctrine moved in the

other direction, pushing priority disputes away from a first-committed-searcher

rule towards a rule of capture. Since descriptive marks require the development

of secondary meaning, which is often a lengthy process, the possibility of

simultaneous adoption is pronounced. Priority disputes similar to the sort

described for patent law in Figure 3 arise frequently with descriptive marks.

152

Imagine a situation in which Firm A decides to adopt a descriptive term as a

trademark and begins using it in commerce. Firm B subsequently decides to use

the same term as its own trademark and then manages to acquire secondary

meaning first, while Firm A is still working toward that goal. Between the two,

who should have an exclusive right to the mark, the one who first used the

descriptive term in commerce in a trademark-like way or the one who was the

second to use, but the first to achieve secondary meaning?

At one time, some courts and commentators advanced the idea that Firm A

should be protected against Firm B’s use, so long as Firm A’s secondary meaning

150

Id. § 1051(b) (offering protection for six months, and possibly up to three years, before

actual use in commerce as long as there is a bona fide intent to use).

151

See, e.g., Md. Stadium Auth. v. Becker, 806 F. Supp. 1236, 1239 (D. Md. 1992) (stating

that “sale of goods or services using an unregistered mark is not necessary to establish use of

the mark” and that under certain conditions advertising and promotion may suffice); Shalom

Children’s Wear, Inc. v. In-Wear A/S, 26 U.S.P.Q.2d 1516, 1519 (T.T.A.B. 1993) (“Use

analogous to trademark use . . . is nontechnical use of a trademark in connection with the

promotion or sale of a product under circumstances which do not provide a basis for an

application to register . . . . [S]uch use has consistently been held sufficient use to establish

priority rights as against subsequent users of the same or similar marks.”).

152

See, e.g., U.S. PATENT & TRADEMARK OFFICE, PROTECTING YOUR TRADEMARK:

ENHANCING YOUR RIGHTS THROUGH FEDERAL REGISTRATION 14 (2016) (explaining that

applicant may have strong rights to priority based on long use and may be able to intervene

in opposition proceeding if applicant’s rights are stronger than another applicant who applied

first).

432 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

was “in the making.”

153

In a sense, they applied a first-committed-searcher rule

to the first possession of descriptive marks: if Firm A was the first to start

pursuing secondary meaning in a descriptive term, and remained committed to

that goal, it would prevail over Firm B, who adopted the term later and then

grabbed the secondary meaning from under Firm A’s hands. In other words, they

followed the model advocated by the Pierson v. Post dissent and adopted, for

among others, sperm whales and patentable inventions prior to the AIA. Others,

however, held that in these circumstances, rights in the mark should go to Firm

B, the party who was second to join the race yet first to acquire secondary

meaning in the mark.

154

This approach can be said to follow the conception of

first possession grounded in actual capture: rights in a descriptive mark go to the

first claimant to actually acquire secondary meaning for the mark, not just to set

out and try to do so. Support for the secondary meaning in the making doctrine

eventually dissipated and today courts award priority to the first party to

complete the process of acquiring secondary meaning, regardless of whether

they were the first to begin trying.

155

Protectability. Trademark law involves choices about the timing of rights not

simply in the sense of determining which of two essentially simultaneous

competitors will receive trademark protection, but also the rights a trademark

holder will receive against remote and future rivals. For one thing, trademark

law has long given trademark holders priority not only within the confines of the

current geographic and product markets in which their marks are used but also

in those in which they are likely to expand.

156

A similar issue concerns the type

of protection received. The cornerstone of classical trademark law, for instance,

is protection against “consumer confusion,” meaning that consumers

erroneously select the wrong product, or at least have a harder time ascertaining

which of two products is the one they want. Generally speaking, trademark law

153

See Jolly Good Indus., Inc. v. Elegra Inc., 690 F. Supp. 227, 230-31 (S.D.N.Y. 1988)

(finding where secondary meaning is in making a mark will be protected against intentional

infringers); Metro Kane Imports, Ltd. v. Federated Dept. Stores, Inc., 625 F. Supp. 313, 318

(S.D.N.Y. 1985), aff’d sub nom. Metro Kane Imports v. Brookstone Co., 800 F.2d 1128 (2d

Cir. 1986) (explaining secondary meaning doctrine derives support from second comer

doctrine, which states senior user has right not to have second comer intentionally cause

confusion); 3 R

UDOLF CALLMAN, THE LAW OF UNFAIR COMPETITION, TRADEMARKS AND

MONOPOLIES 356-57 (3d ed. 1971) (“A mark with secondary meaning in-the-making should

also be protected, at least against those who appropriate it with knowledge or good reason to

know of its potential in that regard, or with an intent to capitalize on its goodwill.” (footnote

omitted)).

154

See, e.g., Cicena Ltd. v. Columbia Telecomms. Grp., 900 F.2d 1546, 1549 (Fed. Cir.

1990).

155

See Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 791 (5th Cir. 1983)

(citing cases where acquiring secondary meaning established trademark rights).

156

See, e.g., AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979) (listing

likelihood of expansion of product lines trademark infringement factor).

2019] RIGHT ON TIME 433

does not protect against all uses of a word or other source signifier, but only

against those that involve its use as a trademark within the relevant market

context.

157

In recent years, however, trademark protection has expanded in a

number of ways, such as protection against uses that are likely to mislead with

respect to sponsorship or endorsement.

158

Still other provisions of trademark law

expand protection in other ways having to do with the contest over what

precisely trademark law allows to be claimed. Perhaps most notably, the Anti-

Cybersquatting Act gives trademark-holders special rights in domain names

incorporating their trademarks.

159

These are all examples of a particular kind of shift away from a rule of actual

capture toward earlier claiming. They reflect ways in which trademark law

allows “capturing” one thing—a particular trademark in a particular market—to

trigger an award of rights in something else that has not itself been captured. It

is like awarding title to fishery by virtue of having caught one of the fish within

it. In this sense, they represent an early claiming approach to the award of

trademark rights.

Trademark law also showcases another potentially useful dynamic of

institutional design where possessory rules are concerned. The basic model we

have depicted so far is essentially binary, but it is possible to use additional

points on the developmental timeline to confer additional rights. Trademark

protection is strengthened in various ways for holders of marks who have

completed steps beyond simple capture. For example, one of the factors used to

assess likelihood of confusion,

160

the lynchpin of trademark infringement, is the

strength of a trademark.

161

Trademark doctrine explicitly makes it easier for

157

Id. at 350 (identifying product market, price, and proximity as factors used to determine

infringement).

158

Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125 (2012) (listing as

actionable confusion with respect to affiliation, sponsorship or approval).

159

Id. (creating cause of action against registration or use of domain name confusingly

similar to trademark). Relatedly, respecting the priority element of first possession, the Anti-

Cybersquatting Act also grants a trademark holder a superior claim to a website address even

though someone else was the first to claim and use it, if that use was not made in good faith.

See id. §1125(d)(1)(A)(i) (giving right of action for bad faith intent to profit from protected

mark similar to domain name).

160

See Sleekcraft Boats, 599 F.2d at 348-49 (setting forth non-exhaustive eight-factor test

to determine likelihood of confusion between marks).

161

For marks that are not inherently distinctive, strength is measured in terms of the degree

of secondary meaning that has been acquired. See Star Indus. v. Bacardi & Co., 412 F.3d 373,

381 (2d Cir. 2006) (“Alternatively, even if not inherently distinctive, the mark may be

distinctive by virtue of having acquired a ‘secondary meaning’ in the minds of consumers.”);

Timothy Denny Greene & Jeff Wilkerson, Understanding Trademark Strength, 16 S

TAN.

TECH. L. REV. 535, 539 (2013) (identifying brand strength as separate from trademark

strength).

434 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

owners of stronger marks to show infringement.

162

Anti-dilution law provides

an even clearer example of this tendency. In 1996, Congress amended the

Lanham Act to confer rights against having one’s trademark “diluted” by

someone else’s, even if the other person’s mark does not create any confusion

in the minds of consumers as classic trademark principles require.

163

But this

protection is available only for “famous” marks

164

and requires widespread

brand recognition among the general consuming public.

165

It goes well beyond

the level of consumer recognition and mental association sufficient to establish

secondary meaning for descriptive marks, for which recognition among a

smaller subset of consumers is sufficient.

166

To use the hunt analogy, before

rights against dilution will be awarded, trademark law requires not just capture

but something like outright slaughter. Upon the pursuer’s reaching a later point

in time in the chase chronology—the point of fame, or equivalently, upon

meeting a higher standard of performance regarding the trademark, trademark

law awards the pursuer additional property. With greater possession, one might

say, come greater rights. Note that rights against trademark dilution do not

involve the priority element of first possession, but only the protectability aspect.

In dilution settings, there is typically only one potential claimant who can argue

for nationwide fame in a particular mark, and trademark dilution doctrine

controls the award of property rights even in the absence of any actual ownership

race.

167

A similar point can be made about trademark registration. Priority in

trademark law has traditionally been geographical as well, not only temporal.

168

Rights in unregistered trademarks go to the first to use a distinctive mark in

162

Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4, 10 (2d Cir. 1976) (“The term

which is descriptive but not generic stands on a better basis.”).

163

Federal Anti-Dilution Act of 1995, Pub. L. No. 104-98, 109 Stat. 985 (codified as

amended at 15 U.S.C. §§ 1125, 1127) (“The term ‘dilution’ means the lessening of the

capacity of a famous mark to identify and distinguish goods or services.”).

164

15 U.S.C. § 1125 (c)(1) (granting dilution protection respecting “famous” marks); id.

§ 1125(c)(2) (defining when mark is famous and detailing facts to consider).

165

See id. § 1125(c)(2)(B) (listing “degree of recognition of the famous mark” as factor in

determining whether another mark is likely to cause dilution by blurring).

166

See Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1379 (Fed. Cir. 2012)

(identifying consumer studies as factor for consideration of whether mark has attained

secondary meaning).

167

See 15 U.S.C. § 1125 (noting that burden of proof in dilution claim first requires

proving fame).

168

See Thomas J. Carroll & Son Co. v. McIlvaine & Baldwin, 183 F. 22, 26-28 (2d Cir.

1910) (denying trademark protection for plaintiff in New York but recognizing protection

rights in Baltimore); Mark P. McKenna, The Normative Foundations of Trademark Law, 82

OTRE DAME L. REV. 1839, 1889 (2007) (“Other parties had the right, however, to use a mark

in other markets in which the senior user had not labored.”).

2019] RIGHT ON TIME 435

commerce in a particular geographical area.

169

For example, as between a New

York user and a California user of the same unregistered mark, the rights to the

mark in Kansas go to the first to use the mark in commerce there. Federal

registration of marks, however, establishes nationwide constructive use,

conferring priority in all geographical markets, including those where the mark

has not yet been used.

170

Registration can thus be seen as awarding an exclusive

nationwide right at an early time, one that is prior to actually using the mark in

each and every jurisdiction. So while it is true that trademark law generally

requires actual use, which is akin to actual capture, to establish priority, the

availability of registration allows claiming earlier in time in new geographic

markets, thus giving the registrant the exclusive right to complete the nationwide

chase uninterrupted.

C. Copyright

Priority. On its face, copyright law does not appear to entail a priority-based

system akin to those in patent and trademark law. Copyright only protects

against copying; a copyright-holder cannot sue a second-comer who

independently generated a similar, or even identical, work.

171

But appearances

can be deceiving, and there is a more substantial priority element in copyright

law than is often realized. Suppose Picasso and Peter separately produce highly

similar paintings and it is undisputed that Picasso’s was painted a year before

Peter’s. In theory, Peter should not be liable for copyright infringement because

he created his work independently. In practice, however, he may have a hard

time making his case in court. Were Picasso to sue Peter, the court would have

no crystal ball to determine whether this was a case of independent creation or

copying. The court would likely resolve the case—as courts usually do—using

circumstantial evidence by looking to the degree of access Peter had to Picasso’s

work and the similarity between the two works.

172

The more accessible Picasso’s

painting was to Peter and the more similar Peter’s work is to Picasso’s, the more

plausible the inference that the similarities between the two resulted from

169

See Stone Creek, Inc. v. Omnia Italian Design, Inc., 875 F.3d 426, 436 (9th Cir. 2017)

(“[C]ommon-law trademark rights extend only to the territory where a mark is known and

recognized, so a later user may sometimes acquire rights in pockets geographically remote

from the first user’s territory.”).

170

Even holders of unregistered marks, moreover, enjoy priority in markets where

expansion is considered natural or likely. See United Drug Co. v. Theodore Rectanus Co., 248

U.S. 90, 99-103 (1918); Hannover Star Milling Co. v. Metcalf, 240 U.S. 403, 405-09 (1917).

171

See Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 54 (2d Cir. 1936) (“[I]f by

some magic a man who had never known it were to compose anew Keats’s Ode on a Grecian

Urn, he would be an ‘author,’ and, if he copyrighted it, others might not copy that poem,

though they might of course copy Keats’s.”).

172

See, e.g., Arnstein v. Porter, 154 F.2d 464, 468-69 (2d Cir. 1946) (expounding on use

of circumstantial evidence in copyright infringement cases).

436 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

copying. Creators of commercially successful or other widely distributed works

are thus often able to show that the creator of a later-produced work had access

to their own earlier work.

173

The more widely distributed the earlier work is, the

greater the likelihood that courts will conclude that the alleged infringer actually

encountered the work,

174

whether she actually did so or not. Thus, in practice,

priority plays an important role in copyright law.

Note that in addition to the formal law of copyright, copyright-like rules also

develop in the informal context of social norms. Indeed, as a driver of economic

and social value, priority may be of the utmost importance, even without any

particular emphasis or importance under formal law. As between two authors—

standup comedians, for example—the first to publish or reach the market is

likely to get most of the acclaim or profit, even when the second-comer who

created independently cannot be accused of formal copyright infringement.

175

As a practical matter, a later independent creator will often reap no substantial

reputational or financial benefit from her work.

176

For these economic and social

reasons as well, copyright law involves a substantial element of priority.

The award of copyrights follows what can be thought of as a rule of capture.

177

Under copyright law as it stands today, copyright protection essentially turns on

two requirements. First, a work must be “fixed in any tangible medium of

expression,”

178

meaning that it is embodied in physical form—written down,

173

See Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir. 1987) (“Because direct evidence

of copying is rarely available, a plaintiff may establish copying by circumstantial evidence

of: (1) defendant’s access to the copyrighted work prior to the creation of defendant’s work,

and (2) substantial similarity of both general ideas and expression between the copyrighted

work and the defendant’s work.”).

174

Access is itself indirect evidence of exposure to the work. It is very hard to avoid

concluding that copying has occurred if the second creator actually knew the earlier work:

one cannot dream up an idea that one already has in mind, so unless a person has forgotten

something to which they were exposed before producing their own work, actual exposure will

tend to rule out the possibility of independent creation.

175

See Dotan Oliar & Christopher Sprigman, There’s No Free Laugh (Anymore): The

Emergence of Intellectual Property Norms and the Transformation of Stand-Up Comedy, 94

A. L. REV. 1787, 1826-27 (2008) (noting that under informal norm system among standup

comedians, ownership of joke goes to first to tell it publicly, notwithstanding formal copyright

of second comedian who created it independently).

176

See Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in Books,

Photocopies, and Computer Programs, 84 HARV. L. REV. 281, 299-308 (1970)

(demonstrating different benefits to first creator, and also that even without copyright law

second copier may reap no benefits due to powerful position that first to reach market

possesses).

177

See Drassinower, supra note 33, at 191 (“Because it specifies the mode of acquisition

in copyright law, the originality requirement is analogous to the requirement of first

possession or occupation in property law.”).

178

See 17 U.S.C. § 102 (2012).

2019] RIGHT ON TIME 437

filmed, painted, printed, and so on.

179

This requires a considerable degree of

specificity and completeness, consistent with a rule of capture. Only those works

that have been completed, in the sense of actually being recorded and preserved

in material form, are protectable.

180

Second, a work must be original.

181

This

does not require uniqueness, but it does require that the work either be created

independently of any identical work or that it depart from any materials from

which it borrows in a way that includes a minimal exercise of creativity.

182

while pure copying will not support copyright protection, courts do not inquire

into the aesthetic or expressive merit of a work.

183

Similar to the patent law’s

generous utility requirement, copyright requires that a claimant produce a work

having some creative element, but it need not represent a significant commercial

or artistic accomplishment.

184

It is possible to imagine a system in which the

award of rights was delayed beyond mere capture—to publication, for instance,

or a demonstration that a work is either a commercial success or a source of

substantial social value. And to the extent copying is assessed by considering

how widely the work has been distributed, priority as a practical matter is to

some extent resolved in this way. But generally speaking, copyright law

corresponds with an ordinary capture model, requiring that the work be in hand,

but not that it be cultivated or put to use.

185

Protectability. Timing issues are also affected in important ways by a variety

of rules and principles that shape the scope of copyright protection. One critical

issue involves the assignment of rights to derivative works. A derivative work is

a creation based upon one or more underlying copyrightable works, such as a

179

See Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 460-61 (1984)

(acknowledging fixed physical form to be sufficient prerequisite to copyright protection).

180

An earlier draft of a work can be protected under copyright law, however, as though it

were a final edition.

181

See 17 U.S.C. § 102 (“Copyright protection subsists, in accordance with this title, in

original works of authorship . . . .”).

182

See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991) (“Original, as

the term is used in copyright, means only that the work was independently created by the

author (as opposed to copied from other works), and that it possesses at least some minimal

degree of creativity.”).

183

See Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251 (1903) (“It would be

a dangerous undertaking for persons trained only to the law to constitute themselves final

judges of the worth of pictorial illustrations, outside of the narrowest and most obvious

limits.”).

184

See Feist Publ’ns, Inc., 499 U.S. at 363 (“As a constitutional matter, copyright protects

only those constituent elements of a work that possess more than a de minimis quantum of

creativity.”).

185

Cf. Stewart v. Abend, 495 U.S. 207, 228-29 (1990) (stating that “nothing in the

the copyright”).

438 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

translation, a sequel, a movie version of a book, or an abridgement.

186

Here,

rights to derivative works were often assigned to those who produced them and

were awarded only after they had been produced. A famous 1853 case, for

example, decided that the copyright to a German translation of Uncle Tom’s

Cabin belonged to the person who was first to actually produce that translation,

rather than to Harriett Beecher Stowe.

187

At that time, copyright law awarded

rights to derivative works using a rule of capture.

188

Translations were treated,

in essence, like right whales: the first person to create a translation would have

a copyright in their translation (though another independent translator would

have a copyright in whatever translation they produced).

189

translations attached only when the translation was completed. Under modern

underlying original work.

190

Ownership of derivative works is established when

the original, not the derivative work is produced.

191

The author of the underlying

original enjoys the exclusive right—secured for the limited time of the duration

of the copyright in the original—to complete the chase for any follow-on

creations, uninterrupted. So far as derivative works are concerned, copyright law

awards rights very early, at the point an author has created the underlying work

upon which the derivative is based.

192

Outside the context of derivative works, however, copyright law generally

resists such early stage awards. Copyright doctrine determines the point (on the

continuum of actions necessary to produce and disseminate a creative work) at

which an author is deemed to be in possession of the work, having made enough

progress for copyright protection to attach. In copyright infringement cases, the

critical question is often whether the plaintiff came into possession at all, and

thus ownership, of the allegedly infringed elements in her work. The chief

principle of copyright law directed to this question is embodied in the so-called

186

See 17 U.S.C. § 101 (defining derivative works).

187

See Stowe v. Thomas, 23 F. Cas. 201, 201-08 (C.C.E.D. Pa. 1853) (No. 13,514)

(holding that translation is not copying).

188

It was not until the Copyright Act of 1976 that derivative works were granted

protection. Copyright Act of 1976, Pub. L. No. 94-553, § 103, 90 Stat. 2541, 2545 (codified

at 17 U.S.C. § 103) (extending copyright protection to limited derivative works).

189

See Stowe, 23 F. Cas. at 207-08 (dismissing notion of copyright covering translation as

ridiculous).

190

17 U.S.C. § 106(2) (asserting that original copyright holder has right “to prepare

derivative works based upon the copyrighted work”).

191

See id. (asserting that completion of original work triggers rights in derivative works);

U.S. COPYRIGHT OFFICE, COPYRIGHT IN DERIVATIVE WORKS AND COMPILATIONS 2 (2013),

https://www.copyright.gov/circs/circ14.pdf [https://perma.cc/B3HX-TCBH] (“Only the

owner of copyright in a work has the right to prepare, or to authorize someone else to create,

an adaptation of that work.”).

192

See 17 U.S.C. § 106(2) (asserting that original creator has right to prepare derivatives).

2019] RIGHT ON TIME 439

idea-expression dichotomy. It is black-letter law that copyright law does not

protect “ideas,” only original expressions of them.

193

While the “idea-expression

dichotomy” seems to posit dichotomous categories, in practice the doctrine

acknowledges that idea and expression are opposing ends of a metaphorical

spectrum, and that between lies a wide and often rather murky borderland. The

classic test distinguishing unprotectable idea from protectable expression was

set out by Judge Learned Hand, in a case dealing with an original stage play and

an allegedly infringing movie having certain plot similarities:

Upon any work, and especially upon a play, a great number of patterns of

increasing generality will fit equally well, as more and more of the incident

is left out. . . . there is a point in this series of abstractions where they are

no longer protected, since otherwise the playwright could prevent the use

of his “ideas,” to which, apart from their expression, his property is never

extended.

194

Hand’s Levels of Abstraction test, as it has come to be called, can be reframed

in terms of our now-familiar possessory continuum. A playwright sets out to

write a play. She starts out with an abstract and preliminary motivating idea, and

as she moves further along the creation path she develops the plot scene after

scene, adding detail—such as names, times, places, and characters—and

gradually making her idea less abstract and more concrete. Somewhere along

this continuum of increasing concretization lies the point at which expression is

distinguished from idea. Any version of the work lying to the “left” of that point

would be regarded by copyright doctrine as an abstract idea, free for the

taking.

195

Any version of the work lying to its “right” is regarded by copyright

doctrine as an original expression, subject to possession and thus property, and

whose copying may trigger liability for infringement. The point at which an

author passes from idea to expression is copyright’s equivalent of capture. Up

to that point, the work of authorship is still evanescent. But as the author moves

across the borderline between idea and expression, she has completed the chase

and has established her property right.

196

Like the utility doctrine and the abstract idea exclusion from patentable

subject-matter, copyright’s idea-expression dichotomy seeks to ensure that

protection is awarded only after the completion of substantial steps along the

developmental timeline. In some cases, the real breakthrough—the hardest part

to achieve and the source of the greatest overall value—may lie in the general

193

See id. § 102(b) (“In no case does copyright protection for an original work of

authorship extend to any idea, procedure, process, system, method of operation, concept,

principle, or discovery . . . .”).

194

See Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930).

195

See, e.g., Idema v. Dreamworks, Inc., 162 F. Supp. 2d 1129, 1185 (C.D. Cal. 2001)

(rejecting use of earlier drafts of screenplay to establish infringement).

196

See Edward Samuels, The Idea-Expression Dichotomy in Copyright Law, 56 TENN. L.

REV. 321, 341 (1989) (discussing “abstraction test” for explaining nature of idea-expression

dichotomy (citing Nichols, 45 F.2d at 121)).

440 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

concept. One writer or musician’s work may spawn an entire genre of

subsequent works, a creative style, or a go-to technique. But the view taken in

works embodying it concretely, and it is only when those works are completed

that protection arises. Only an author actually in possession of a specific,

concrete expression of a general idea can claim copyright protection.

III. G

RASPING POSSESSION

This Article has thus far shown that IP doctrines can be analogized to first

possession rules, both conceptually and in terms of their underlying functional

foundations. This Part now explores implications. The previously described

framework suggests ways to think about some pressing current questions in

intellectual property and to evaluate the way the law has developed in recent

years. In the discussion that follows, this Part begins by looking at several

specific IP rules and policies that affect the initial award of IP rights. Outlining

an integrative and prescriptive analysis of original acquisition in intellectual

property across doctrinal boundaries, this Part offers some broader observations

about the challenges of intellectual property and its relationship to the institution

of property.

A. Doctrinal Implications

1. Patent Trolls: Of Abstract Ideas and Inter Partes Review

Much patent law and policy in recent years has centered on perceived

problems associated with the phenomena variously referred to as patent assertion

entities (“PAEs”), non-practicing entities, or, most pejoratively, patent trolls.

There is some disagreement about how exactly to define a patent “troll” and

what the trouble with them actually is. The major concern with PAEs, one that

was discussed by the Supreme Court, is that they profit by wielding hold-out

leverage in cases where the patent at issue covers a relatively insignificant aspect

of a much larger product, a problem that is particularly serious when notice of

the patent was inadequate during the process of product development.

197

Another line of criticism associates patent trolling with nuisance or strike suits,

where defendants settle infringement actions involving “weak” or bad patents

simply because it is cheaper than litigating.

198

While some highlight certain

197

See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 396 (2006) (Kennedy, J.,

concurring) (suggesting injunctive relief should be denied “[w]hen the patented invention is

but a small component of the product the companies seek to produce and the threat of an

injunction is employed simply for undue leverage in negotiations”).

198

See id. at 397 (noting “potential vagueness and suspect validity” of some business

method patents).

2019] RIGHT ON TIME 441

social benefits associated with PAEs,

199

a recent study by the Federal Trade

Commission voiced concerns about the business model of litigation-reliant

PAEs, which tend to obtain litigation settlements that “might be considered

nuisance value.”

200

The aforementioned major concern with PAEs can be understood within the

framework developed here: it is simply the problem of premature allocation of

patent rights. As discussed above, a danger in early awards of property rights is

that they may be given to parties who are initially leading the chase but who are

eventually incapable of completing it successfully. As mentioned, such early

misallocations involve subsequent transaction costs, in this case the cost of

licensing the patents, under the threat and cost of pending litigation, to practicing

entities who have often developed the same technology independently. The costs

further involve the taxing of, or disincentivizing of, the activity of such capable,

practicing entities. The proper solution to patent trolling is therefore pushing the

moment of the patent grant to a later stage by requiring the performance of

further steps along the patent’s prospect before exclusive rights are granted. The

natural and preferred way to do so doctrinally would be to invigorate the utility

prerequisite to patentability, which is currently very low. Unfortunately, the

legal system has treated the problem only symptomatically thus far.

The legal system has responded to concerns about patent trolls in at least two

major ways. The first, a judicial response, is the Supreme Court’s renewed

emphasis on non-statutory exclusions from the domain of patentable subject

matter for natural laws and abstract ideas, which appears to have resulted in a

significant reduction in patents issued in areas like software and business

methods.

201

The second, a legislative response, is the expansion of mechanisms

that permit the USPTO to reconsider and cancel issued patents—chiefly through

the inter partes review and post-grant review procedures, commonly referred to

as “IPRs” and “PGRs.”

202

Both the expansion of patentable subject-matter

exclusions and procedures for expanded administrative review of patents can be

understood as measures that delay the award of patent rights, albeit in different

ways. Both reforms, however, show signs of a failure to appreciate the larger set

of concerns and policy tradeoffs relevant to timing the award of IP rights and

199

See, e.g., Michael Risch, Patent Troll Myths, 42 SETON HALL L. REV. 457, 491 (2012).

200

See FTC, PATENT ASSERTION ENTITY ACTIVITY: AN FTC STUDY 8-9 (2016) (giving

statistics showing early settlement in patent suits brought by PAEs).

201

See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (describing Supreme

Court’s willingness to understand 35 U.S.C. § 101 (2012) as having “exclusionary principle”);

Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012) (“‘[L]aws of

nature, natural phenomena, and abstract ideas’ are not patentable.” (quoting Diamond v.

Diehr, 450 U.S. 157, 185 (1981))).

202

See 35 U.S.C. § 311 (2012) (outlining procedure for IPRs of issued patents); id. § 321

(outlining procedures for PGRs of issued patents).

442 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

could be modified to respond to the challenges of early awards while better

avoiding the drawbacks of later ones.

The patentable subject-matter exclusions reflect an emphasis on applied uses

and a concern that principles and knowledge should not be withdrawn from the

public domain.

203

It is not enough to come up with an application of a newly

discovered scientific principle or a newly created mathematical algorithm if the

process of adapting those ideas into a practical application is itself purely

obvious or routine. The Court’s instinct is firmly grounded in basic principles of

patent law. Patent law is concerned only with practical applications, rather than

general truths about the world, and should therefore only award protection when

such an application has been developed.

204

Furthermore, a patent on the

application of such a general truth can sometimes amount to what is in effect a

patent on a general truth itself, which may frustrate the overall goals of the patent

system by inhibiting further discovery and innovation.

205

The Supreme Court’s

concern that the patentable subject-matter exclusions not be evaded through

artful drafting

206

is perfectly sound.

But the reason for those exclusions must be kept in mind. Important

discoveries about the world are excluded from patent protection in order to

facilitate further discovery and the development of practical uses thereof. The

Supreme Court’s announced test for separating the abstract from the practical

essentially asks how much value and innovation of a particular invention resides

in the a novel principle’s implementation, as distinguished from the principle

itself.

207

But if the concern is to ensure, on the one hand, that the hunt really is

completed and, on the other, that others remain free to compete for those prey

not yet captured, this test misses the mark. Rather than focusing on the relative

proportions of abstract knowledge versus practical insight in a particular

invention, it would make more sense to consider the extent to which protection

for a particular application would in practice amount to protection of the

203

See Bilski v. Kappos, 561 U.S. 593, 612 (2010) (dismissing patent claim as abstract

idea).

204

See Brenner v. Manson, 383 U.S. 519, 536 (1966) (stating that “patent system must be

related to the world of commerce rather than to the realm of philosophy”).

205

See Mayo Collaborative Servs., 566 U.S. at 86 (“[T]here is a danger that the grant of

patents that tie up their use will inhibit future innovation premised upon them, a danger that

becomes acute when a patented process amounts to no more than an instruction to ‘apply the

natural law,’ or otherwise forecloses more future invention than the underlying discovery

could reasonably justify.”).

206

See id. at 72 (“[T]o transform an unpatentable law of nature into a patent-eligible

application of such a law, one must do more than simply state the law of nature while adding

the words ‘apply it.’”).

207

See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) (describing the

Supreme Court’s two-step process for determining patent eligibility); Mayo Collaborative

Servs., 566 U.S. at 82 (denying patent for simply instructing application of known natural

law).

2019] RIGHT ON TIME 443

unpatentable principle. So, for example, in Mayo Collaborative Services v.

Prometheus Laboratories, Inc.,

208

a patent essentially reciting certain

discoveries about human metabolism and only obliquely suggesting anything

particular be done with those discoveries presents a serious risk that any other

useful application of the biological facts discovered will infringe the patent,

including those that do not reflect genuine “improvement[s]” upon it.

209

When a patentee really has developed a useful application of a principle, the

patent chase ought to be considered over, so far as that application is concerned.

The real problem lies in the possibility that by claiming a particular specimen,

the patentee will have de facto rights to a larger genus. Particularly in the context

of process patents—where most of the mischief is thought to reside—the

giveaway is usually in the verbs. Where the action that is described or called for

is vague, there is a serious danger that the patent will cover not simply a

particular application but a wider array of uses of a more general principle. Mayo

Collaborative Services involved a patent purporting to claim a method of

medical treatment, but whose central instruction to those performing it was that

a specified level of a particular compound present in certain medical patients

“indicates a need” to increase their drug dosage, while another specified level

“indicates a need” to decrease it.

210

The phrasing was highly abstract; the verb

referred to the compound itself, rather than to anyone who would carry out the

method. There was therefore an obvious risk that the patent would apply not to

a particular way that a fact about human metabolism might be put to use, but to

a set of essentially unrelated uses of that information. In other words, the

doctrine governing exclusions of natural laws and abstract ideas should function

more like the patent equivalent of copyright’s merger doctrine, which bars

idea would effectively wall off any expression of the idea.

211

The guiding

concern ought to be the likelihood that patent protection will tie up general

research and the development of novel applications unrelated to the particular

application invented by the patentee.

While patentable subject-matter exclusions push patentability later in time

conceptually speaking, IPRs and PGRs push the grant of patent protection later

in a more practical sense. Although it has always been possible to challenge the

validity of a patent in actual patent litigation, IPRs and PGRs have significantly

expanded the ability to oppose patent grants while still in an administrative

setting. In practice the effect has been to open up the question of validity

substantially so that, in some sense, it is much more uncertain whether a patent

208

566 U.S. 66 (2012).

209

See id. at 67-69; see also 35 U.S.C. § 101 (2012) (listing improvement as necessity for

patent).

210

Mayo Collaborative Servs., 566 U.S. at 75.

211

See Baker v. Selden, 101 U.S. 99, 102 (1879) (decrying copyright claim for particular

accounting system using ruled lines as fraud against public).

444 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

is ever valid. Bad patents are, of course, bad, and weeding them out is

unobjectionable so far as it goes. As previously stated, early awards risk

assigning patents to a party that is not able to follow through with a useful

application. They may reward unhelpful research activity intended to obtain a

patent whose value derives overwhelmingly from holding up the activities of

others. But later awards have their costs too—disincentivizing innovation for

fear of invalidation and duplication of effort. Indeed, with the recent enactment

of the first, general, federal law of trade secrecy,

212

the net effect of these

changes may be a significant shift of incentives away from public disclosure of

inventions to their secret practice in some fields.

2. The Hunt for Secondary Meaning

Concerns about premature claiming have also resulted in confusion in

trademark law, particularly as it relates to the doctrine of secondary meaning in

the making, discussed earlier.

213

The now-discarded secondary meaning in the

making doctrine would have created something like a first-committed-searcher

rule for descriptive marks. This analysis suggests two conclusions about the

doctrine.

First, while rejecting the doctrine was likely the right result, it was reached

for the wrong reason. In essence, opponents argued that any recognition of

incipient secondary meaning was “inimical” to the purpose of trademark law.

214

To protect a party that is merely working toward acquiring secondary meaning

in a mark, it was said, flies in the face of trademark law’s commitment to

protecting marks only when they were, in fact, marks—devices that distinguish

one class of products from another. But this overlooks the difference between

the two modes of establishing possession that we have explored. A first-

committed-searcher rule gives a party who already began the chase priority over

212

See Defend Trade Secrets Act of 2016, Pub. L. No. 114-153, 130 Stat. 376 (codified in

scattered sections of 18 U.S.C.).

213

See supra notes 136-37 and accompanying text.

214

See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 13 cmt. e (AM. LAW INST. 1995)

(“The [secondary meaning in the making] doctrine, if taken literally, is inimical to the purpose

of the secondary meaning requirement.”); see also Laureyssens v. Idea Grp., Inc., 964 F.2d

131, 138 (2d Cir. 1992) (“Moreover, ‘[t]he doctrine, if taken literally, is inimical to the

purpose of the secondary meaning requirement.’” (quoting R

ESTATEMENT (THIRD) OF

UNFAIR COMPETITION § 13 cmt. e (AM. LAW INST. 1995))); Joel S. Armstrong, Secondary

Meaning “In the Making” in Trademark Infringement Actions Under Section 43(a) of the

Lanham Act, 14 G

EO. MASON L. REV. 603, 619 (1992) (“The secondary meaning in the making

doctrine is therefore rejected as being inimical to the theoretical and economic underpinnings

of trademark law.”); Willajeanne F. McLean, The Birth, Death, and Renaissance of the

Doctrine of Secondary Meaning in the Making, 42 A

M. U. L. REV. 737, 757 (1993) (“Legal

scholars opposed to the doctrine of secondary meaning in the making thought that the doctrine

was generally ‘inimical to the purpose of . . . secondary meaning’ . . . .” (quoting

ESTATEMENT (THIRD) OF UNFAIR COMPETITION § 13 cmt. e (AM. LAW INST. 1995))).

2019] RIGHT ON TIME 445

later entrants, and possibly some rights against interference, but it need not entail

full, permanent rights of exclusion without further development of the resource.

A whaler in hot pursuit of a sperm whale has priority over other whalers, but he

does not come to own the whale unless the chase is actually completed within a

fairly compressed timeframe. Indeed, this very fact is evident in trademark law

itself: while an intent-to-use application secures priority in a mark, no action for

infringement can be brought until that mark has actually been used in

commerce.

215

The logic of the argument used to defeat legal recognition of

incipient secondary meaning would essentially deny the possibility of a first-

committed-searcher standard in first possession doctrine.

Nevertheless, not recognizing a secondary meaning in the making doctrine

for descriptive marks is justified in our view because of the difficulty courts

would face defining who is a “committed” searcher. Importantly, there is no

clear way for a court to set a time limit on a party’s attempt to acquire secondary

meaning. This problem is less acute for resources like whales. The timeframe at

issue is relatively short—a few days at most—and the first committed whaler

must be in hot pursuit, which, though certainly not free from of any ambiguity

or exercise of judgment, nevertheless has a fairly apparent meaning where

pursuit is not just a metaphor but a simple physical fact. The process of building

a brand, by contrast, is much less straightforward. There is no clear timeframe

in which to complete the process of developing secondary meaning, given

differences in marketing techniques and strategies, the marketing channels

appropriate to different products, the structure of the market, and the cross-

section of the consuming public to be targeted. Since it would be difficult for

courts to develop a standard by which to measure the commitment to following

through, the secondary meaning in the making doctrine involved the risk of

granting rights in a mark to a party that would not eventually develop such

secondary meaning while denying these rights to a rival party who did.

Second, contrary to what the courts rejecting a secondary meaning in the

making doctrine supposed, the problem is not one that is somehow conceptually

intrinsic to trademark law. While courts may not be positioned to initiate such

changes, the story may be different for Congress. It is possible to adopt a

possession rule based on a first-committed-searcher model and grant rights

earlier in the development process if a proper system of registration is

established in order to provide adequate notice to others. This can be

accomplished practically only by legislation. Legislation can address the proper

limitations on such a system—the time window necessary to establish secondary

meaning and the degree of diligence that must be shown to remain in “hot

pursuit.” Indeed, intent to use applications represent a legislative intervention

that has just these features and can be used today by first committed adopters of

descriptive marks. This institutional innovation provides both the notice to

215

See 15 U.S.C. § 1114 (2012); 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400,

412 (2d Cir. 2005) (clarifying that “use,” “in commerce,” and “likelihood of confusion” are

three distinct elements necessary for establishing trademark infringement).

446 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

others about the committed search and a time limit for the completion of the

hunt.

B. Institutional Implications

These reflections on existing doctrine and the general framework this Article

develops point toward some larger observations about first possession in IP law.

The analogy to first possession helps us to see the stakes at issue when it comes

to the rules that determine the award of IP rights, but there are also important

differences in the way those concerns play out that shed light on the deeper

structure of both IP law and the first possession mechanism more generally.

1. Possession, Information, and Intellectual Property

Recall that first-committed-searcher rules can minimize wasteful duplication

of effort and mitigate the disincentive effects that could otherwise result because

of the risk that substantial investments made to claim a resource will be lost if

someone else wins the contest for it. An effective first-committed-searcher rule

ends the race when one of the contenders reaches a point where eventual capture

is likely, and thus saves on what would otherwise be duplicative and wasteful

simultaneous search and investment efforts in an ongoing race.

This advantage of the first-committed-searcher rule depends critically on the

ability to give notice to others that the race has in fact ended, and indeed, on the

confidence of competitors for a resource that they will be informed when and if

the race ended.

216

With physical resources, it is easy to overlook the importance

of this precondition. In general, it is relatively easy for one person trying to

capture or develop a physical resource to learn that someone else is also doing

the same. In Pierson v. Post, for instance, it appears to have been entirely clear

to Pierson that Post was chasing the fox.

217

Similarly, it would generally be

apparent to a whaler who happened upon a sperm whale that a rival was already

in hot pursuit and managed to harpoon it.

The same cannot be said of intellectual property. Since firms often conduct

R&D in private—indeed, often in secret—one firm could easily undertake

extensive work to develop a cure for a given disease or plan an advertising

campaign centering on a new trademark without knowing that a competitor up

the street was doing the very same thing.

218

Telling the firms that the first

committed searcher will be protected against later pursuers of the resource does

216

Kitch, supra note 27, at 266 (suggesting that to create efficient system there must be

communication of information to competing firms at efficient rate, such as publicly recorded

ownership of patents shortly after discovery).

217

Pierson v. Post, 3 Cai. 175, 175 (N.Y. Sup. Ct. 1805) (“Pierson, well knowing the fox

was so hunted and pursued, did, in the sight of Post, to prevent his catching the same, kill and

carry it off.”).

218

Kitch, supra note 27, at 278 (“Under a regime of trade secrecy, the competitive firm

might never learn of a competitor’s processes and would not learn of the technology

incorporated in a new product until it was marketed.”).

2019] RIGHT ON TIME 447

not do much to reduce duplicative search efforts, for example, if race participants

cannot figure out if someone else’s search is already underway before choosing

to embark on it themselves.

Absent registration, for instance, firms planning to introduce products or

services under a particular branding scheme face the very real possibility that

some other business will enter the market ahead of them using a similar set of

emblems. Preparing to launch is often a very costly investment that involves the

choice of a mark, the preparation and timing of a pre-launch campaign, and

potentially inscribing the mark on tens of thousands of items—athletic shoes,

computers, soda bottles, and so on—in advance of shipment. The risk that these

efforts would have to be scrapped would be a very serious problem for firms

contemplating intensive marketing campaigns. While races for physical

resources governed by a first-committed-searcher rule tend to be conducted

under conditions of relatively symmetric information that forestalls wasteful

investment, this is not generally as likely with intellectual property.

The vital role played by centralized registries in IP law responds to this

difficulty by offering an independent mechanism to supply notice without

relying on actions taken in the course of the race alone. In trademark law, the

creation of intent-to-use applications allows a company to inform all others that

it is in hot pursuit of a particular branding space.

219

And even before intent-to-

use applications were introduced, courts took advantage of ordinary registration

based on actual use of a mark to address information concerns, interpreting the

requirement of use in commerce somewhat more leniently for registered marks

than for unregistered ones. Registered marks still required some degree of use

in order to prevent firms from grabbing marks without actually doing anything

productive with them—failure to follow through, in other words.

220

But

registered marks require less use than unregistered marks because registered

marks gave notice to the world that limited commercial sales did not.

221

Trademark law’s traditional use in commerce requirement is thus justified not

only as a waste prevention feature, but also on informational grounds. Use in

commerce puts competitors on notice that the mark is being used. As Judge

Easterbrook explained in a well-known opinion, registering a mark enables

parties to negotiate over the mark before one of them unwittingly “commit[s]

large sums to marketing,” only to discover someone else claimed it first.

222

219

See 15 U.S.C. § 1051(b)-(d) (describing process for applying for bona fide intent-to-

use trademark).

220

See Zazu Designs v. L’Oreal, S.A., 979 F.2d 499, 503 (7th Cir. 1992) (“By insisting

that firms use marks to obtain rights in them, the law prevents entrepreneurs from reserving

brand names in order to make their rivals’ marketing more costly.”).

221

Id. (“Registration modifies this system slightly, allowing slight sales plus notice in the

222

Id. at 504 (“Liberality in registering marks is not problematic, because the registration

gives notice to latecomers, which token use alone does not. Firms need only search the register

448 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

Public sales similarly “let others know that they should not invest resources to

develop a mark similar to one already used in the trade.”

223

Intent-to-use bsaed

registration carried this model a step further, making it possible to move the

priority point back even earlier, from slight sales to no sales at all, while at the

same time requiring that substantial sales follow in relatively short order.

224

Intent-to-use applications overcome the notice problem that is so acute for first-

committed-searcher rules in intellectual property, and thereby enable the law to

respond more effectively to the problems associated with insisting on actual

capture. Thus understood, one reason for the common law prevalence of the rule

of capture versus the first-committed-searcher rule is likely informational: actual

capture of physical resources is a clear informational signal, in a way “a first

committed searcher” is not. But once it is possible to give notice to third

parties—such as through registries—the first-committed-searcher rule becomes

a more viable alternative.

A similar dynamic has happened in copyright law under a slightly different

heading. In certain contexts, creators working to bring a work to the public have

had to confront a serious risk that the work would be leaked to the public before

its official release, in effect snatching an important aspect of the work from their

hands in a manner not unlike the taking of the fox in Pierson v. Post. Until

relatively recently, that was the case with copyrighted works. The often-critical

statutory damages remedy was only available if the work infringed was already

completed and registered with the copyright office. Since registration requires

deposit of the work, copyright owners could not, practically speaking, register

until the work was completely finished.

225

In the well-known Harper & Row,

Publishers, Inc. v. Nation Enterprises

226

case, for example, the famous

publishing house was set to release Gerald Ford’s presidential memoir and

sought to whet the public’s appetite for the book by allowing Time Magazine to

print a few select excerpts in advance of release.

227

Another magazine, however,

managed to obtain a “purloined copy” of the memoir and rushed to publish the

juiciest portions, preempting Time’s publication.

228

Harper & Row sued and won

before embarking on development. Had ZHD registered ZAZÚ, the parties could have

negotiated before L’Oréal committed large sums to marketing.”).

223

Id. at 503.

224

See 15 U.S.C. § 1051(b)-(d) (requiring registrant file verified statement that mark is in

use in commerce within six months after allowance of intent-to-use application).

225

17 U.S.C. §§ 407-408 (2012) (requiring owners of copyright to deposit copies of

protected work within three months after publication of work). Theoretically, copyright

owners could register versions of a work periodically while they were working on it and thus

avail themselves of the statutory damages remedy, but this practice would be costly,

monetarily and organizationally, and not very practical.

226

471 U.S. 539 (1985).

227

Id. at 539.

228

Id. at 539-40 (“[P]etitioners, as the copyright holders, negotiated a prepublication

licensing agreement with Time Magazine under which Time agreed to pay $25,000 ($12,500

2019] RIGHT ON TIME 449

a judgment of infringement, but the company was ultimately unable to recover

statutory damages, making its victory rather limited. In another major prerelease

infringement incident in 2003, a non-final version of the movie “Hulk” leaked

to the Internet prior to official release, resulting in a harm that the studio claimed

amounted to sixty-six million dollars.

229

In 2005, following the Hulk incident, Congress amended the Copyright Act

to add a provision allowing for the preregistration of “works being prepared for

commercial distribution.”

230

Under this new statutory framework, a party who

has begun the process of generating a creative work can preregister it prior to

completion, making it possible to recover statutory damages and attorney’s fees

for any subsequent act of infringement.

231

The preregistrant must eventually

follow up and r

egister the work once published,

232

although, surprisingly, the

it.

Preregistration gives authors security to complete the chase without

interruption by substantially increasing the sanctions on the “saucy intruder,” in

the language of the Pierson v. Post dissent.

233

It marks the limited introduction

of a first-committed-searcher model. Observed patterns of use of copyright

preregistration claiming are consistent with what the theory developed in this

Article predicts: early claiming becomes more attractive as the “hunt” becomes

more expensive, since higher costs are more likely to deter firms concerned

in advance and the balance at publication) in exchange for the right to excerpt 7,500 words

from Mr. Ford’s account of his pardon of former President Nixon.”).

229

See Troy Graham, N.J. Man, 24, Is Sentenced for Net Bootleg of ‘The Hulk,’ PHILA.

INQUIRER, Sept. 27, 2003, at B1 (“Vivendi Universal Entertainment, which produced The

Hulk, commissioned several studies to determine what Gonzalez’s actions cost the studio.

While assigning a dollar amount is an inexact science, the studio settled on about $66 million

in a victim-impact statement to the federal court.”). For another example, see Rebecca Pahle,

A Brief History of Movies Being Leaked Onto the Internet, F

ILM JOURNAL (Dec. 5, 2014),

http://www.filmjournal.com/content/brief-history-movies-being-leaked-internet

[https://perma.cc/K5MN-5UJC] (illustrating multiple instances of movies being leaked before

official release).

230

See 17 U.S.C. § 408(f) (“[T]he Register of Copyrights shall issue regulations to

establish procedures for preregistration of a work that is being prepared for commercial

distribution and has not been published.”).

231

On preregistration, see Dotan Oliar & Nicholas Matich, Copyright Preregistration:

Evidence and Lessons from the First Seven Years, 2005-2012, 55 ARIZ. L. REV. 1073, 1073

(2013) (“Preregistering a work allows copyright owners immediate access to courts and an

expanded menu of remedies.”).

232

See 17 U.S.C. § 408(f)(3) (requiring registration no later than three months after

publication of work).

233

Pierson v. Post, 3 Cai. 175, 181 (N.Y. Sup. Ct. 1805) (Livingston, J., dissenting) (“But

who would . . . pursue the windings of this wily quadruped, if . . . a saucy intruder, who had

not shared in the honours or labours of the chase, were permitted to come in at the death, and

bear away in triumph the object of pursuit?”).

450 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

about losing their investments if someone else beats them to the punch. Movies

are generally the most expensive copyrighted works to create, and,

unsurprisingly, they are the category for which preregistrations is most

consistently used.

234

Again, however, this earlier protection centers on a

registration regime.

advantage of deterring a bona fide third party from entering the race, here via

independent creation. But it does entail another benefit associated with this rule,

namely assuring (or increasing the assurance of) the first committed searcher

against a third party’s interference throughout the course of the hunt, while free

riding on the first pursuer’s effort. True, in this context there is no danger that a

third party will own the copyright rather than the creator, as the third party is an

infringer and the owner’s formal copyright is not in danger. However, it is of

little consequence to the copyright owner by which mechanism the value of her

investment went to zero. She wishes to secure the fruits of her investment, and

the enhanced remedies that preregistration confers tend to do so, thus

maintaining her incentives to make costly investments.

The relationship between notice considerations and the timing of exclusive

rights is perhaps most apparent in the patent context. Although U.S. patent law

followed a first-committed-searcher model until enactment of the AIA, its ability

to shore up incentives to innovate and discourage waste in the development

process was undercut by informational barriers. To return once again to the

situation described in Figure 3, the pre-AIA regime tended to encourage both

Tesla and Edison to carry out the entire inventive process, even though the

priority rules followed a first-committed-searcher model. Unless Tesla had some

way of knowing that Edison came up with the idea first and was diligently

attempting to see it through to its conclusion, Tesla would often see no reason

not to carry out the entire inventive process simultaneously to its end, only to

discover that he was actually the second pursuer. Such surprise would not arise

in first-committed-searcher rule races over physical resources: any onlooker

would readily see whether a sperm whale is at large or is rather being hotly

pursued.

One may wonder how such a seemingly inefficient aspect of our patent system

survived for so long? It turns out that for a good part of the nineteenth century,

starting with the Patent Act of 1836, patent doctrine had a mechanism that helped

inventors receive timely notice of others’ pursuits. By filing a so-called “patent

caveat,” inventors were entitled to receive notice from the patent office

whenever a rival inventor filed a patent application for inventions that were

234

See Oliar & Matich, supra note 231, at 1100 (“The film industry is both the industry

most likely to benefit from preregistration and the system’s most consistent commercial

user.”).

2019] RIGHT ON TIME 451

similar to those the caveat filer was working on.

235

Caveats were eventually

abolished in 1910, and without them a first-to-invent patent system makes less

sense. In their absence, a first-to-file system, such as the AIA, is preferable on

notice grounds. The touchstone of priority under the AIA is disclosure, whether

by filing with the patent office or by making the invention or information about

it available to the public in a context where someone having skill in the relevant

art might be likely to look.

236

To that extent, the AIA makes a good deal of sense.

2. Intellectual Property as Property: Flexibility and Standardization

With the AIA, patent law adopted an actual capture rule to govern the award

of exclusive rights, thereby coming into alignment with the general approach

taken in copyright and trademark law. But since not all whales are subject to the

same rule of first possession,

237

we might well ask whether one rule should apply

uniformly across either patent law or IP law more widely.

The fact that our patent system has—or had—mechanisms that awarded the

right to the first committed searcher makes sense in light of the theory of

possession developed here. Patents are very often extremely expensive to

acquire in a way copyrights by and large are not.

238

The pharmaceutical

company Amgen spends an average of $3.7 billion on R&D for every drug that

it has approved; AstraZeneca spends more than four times as much.

239

The

likelihood that these investments will be lost is also higher. The probability of

two inventors discovering the same technology is higher than the probability of

235

See John F. Duffy, Embryonic Inventions and Embryonic Patents: Prospects,

Prophesies, and Pedis Possessio, in PERSPECTIVES ON COMMERCIALIZING INNOVATION 234,

263-64 (F. Scott Kieff & Troy A. Paredes eds., 2011) (“By filing a caveat, a party was entitled

to notice from the Patent Office if any other party filed a patent application on the same subject

matter described in the caveat.”).

236

See 35 U.S.C. § 112 (2012) (detailing disclosure requirements of patent application);

see also id. § 102(b)(1)(A) (providing priority through grace period exceptions for disclosures

by applicant or third party who received disclosed information from applicant).

237

Compare Ellickson, supra note 45, at 90-94 (describing “iron-holds-the-whale” rule

wherein whale is owned by first party to attach harpoon to whale), with Swift v. Gifford, 23

F. Cas. 558, 559-60 (D. Mass. 1872) (comparing different standards for rule of capture of

whales generally with that of the sperm whale species).

238

The cost of producing copyrighted works is not as obvious as it might seem. Subject to

certain caveats, across-the-board increases in the compensation to producers of creative works

should in principle always result in greater creative output, though the costs, including both

access and opportunity costs, may not be worth it.

239

See DiMasi, supra note 131, at 151 (“The estimated average out-of-pocket cost per new

drug is US$ 403 million (2000 dollars).”); Matthew Herper, The Truly Staggering Cost of

Inventing New Drugs, FORBES MAGAZINE (Feb. 10, 2012, 7:41 AM),

https://www.forbes.com/sites/matthewherper/2012/02/10/the-truly-staggering-cost-of-

inventing-new-drugs/#704dda74a948 [https://perma.cc/E85P-BBE7] (presenting research

spending per new drug for several major pharmaceutical companies).

452 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

two creators generating the same creative work, since the inventive solution is

dictated and constrained by real-world functional considerations. It seems far

more probable that two firms would both invent acetylsalicylic acid (aspirin)

than that two painters would both paint Starry Night.

Inventors also face a more serious threat from products and ideas similar to

their own. Consumers will often be indifferent as between two technologies that

do the same thing by different means, treating one as a substitute for the other.

If George decides to purchase a gas stove for his kitchen, he is unlikely to

purchase an electric stove too; if he takes Zocor to reduce his cholesterol, he is

unlikely to take Lipitor as well. By contrast, demand for creative works is less

likely to be mutually exclusive. A person might want to see all the superhero

movies Hollywood can produce in a year. Indeed, rather than suppress demand,

one superhero movie may stimulate demand for others.

For all these reasons, we would generally expect inventors to need greater

protection from competitors during the process of generating their intellectual

goods than creators of artistic works. Simply put, developing new

pharmaceuticals often costs hundreds of millions of dollars,

240

and firms will

often be reluctant to proceed unless they have sufficient confidence they will

reap the rewards if those investments do indeed produce results.

241

In copyright,

ownership and priority are generally determined by the moment of capture,

fixation of particular expression in a physical copy.

242

Translating to the

terminology of patent law, this is essentially the point where creative

abstractions are reduced to actual practice. On average, the costs of copyrighted

works are less than those of patents, and the claiming moment is later, as the

theory this Article proposes would suggest.

Yet not all patents and not all copyrights are alike. While some patents are

extremely expensive to procure, not all of them are so. And some creative

works—think of Hollywood blockbusters—require huge investments. There can

be substantial variability in costs across different kinds of IP products, and some

patents may look more like the typical copyright, and some copyrights like the

more investment-intensive patents. Software or business method patents are

probably less costly to come up with than the average pharmaceutical patent.

Movies or software are more expensive to produce than the average haiku.

That not all whales are alike, and that different ones are subject to different

doctrines of first possession, suggests that perhaps a degree of differentiation

240

See DiMasi, supra note 131, at 151 (“Capitalizing out-of-pocket costs to the point of

marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of

US$ 802 million (2000 dollars).”); Herper, supra note 239 (“The average drug developed by

a major pharmaceutical company costs at least $4 billion, and it can be as much as $11

billion.”).

241

See Duffy, supra note 15, at 469-75 (providing numerical calculations to show when

theoretical firms may refrain from investment due to uncertain return).

242

17 U.S.C. § 302 (2012) (“Copyright in a work . . . subsists from its creation

and . . . endures for a term consisting of the life of the author and 70 years after the author’s

death.”).

2019] RIGHT ON TIME 453

may be appropriate also with respect to particular doctrines that govern the

claiming of any one type of IP right. Given that the greater levels of investment

offer more reason to adopt early claiming, the balance of considerations may

come out differently in different areas within patent, copyright, and trademark

law. Some differentiation can be accommodated within existing doctrinal

frameworks simply by providing an alternative route for earlier claiming in cases

where the chase is costly or protracted, as with trademark intent-to-use

applications and copyright preregistration. But, subject to concerns about

administrability and any costs of diminished standardization, the law should

probably go further. It is unclear, for instance, that a first-to-file rule is superior

to first-to-invent across all patent types as a matter of first best.

243

In contexts

like pharmaceuticals with high upfront development costs, earlier claiming

should be offered. Conversely, in areas where the danger of squatting or

misallocation is especially significant—as is likely the case with many business

method patents for instance—the award of rights should generally be delayed.

Admittedly, courts generally cannot simply propound different doctrines for

different subject-matters within the same branch of IP law. Often, such changes

can only be brought about legislatively. But this discussion of the treatment of

possession questions both for physical and intellectual property suggests there

is room for courts to consider ways in which the claiming of IP rights can be

more closely tailored to incorporate the concerns identified here. When the

USPTO or a trial court evaluates whether a patent satisfies the utility

requirement, for instance, the cost of developing the type of invention at issue is

an appropriate consideration. Insofar as the utility requirement shapes the nature

of possession in patent law, it should reflect the underlying nature of possession

rules and tilt toward later awards of rights when the costs of developing a

technology are low and earlier awards of rights when the cost of developing a

technology are high.

C. Theoretical Implications

1. On Defining IP Goods

This discussion of claiming rules is, for the most part, absolute. We assumed

that there was one clear rule for the “capture” of IP rights and, by extension, a

relatively clear sense of when the chase was underway that would culminate in

capture. This intuition stems from our physical property antecedents. Whatever

room for debate there may be at the margins, it is fairly obvious when a person

does and does not succeed in capturing a fox. We certainly have a pretty good

idea what a fox is, and a good intuition about what it means to actually capture

a fox versus merely to chase it. But IP law helps us see that these notions can be

situated within a wider continuum of development. What ultimately looks like

243

For these purposes, we set aside the benefits of international harmonization, which may

outweigh the value of any departure from a first-to-file regime.

454 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

actual capture, as opposed to simply some important step along the way, is a

function of how the legal system defines the thing to be captured. In IP law, the

nature of the thing itself is not given but is a creature of law. The result is both

greater uncertainty and greater flexibility.

244

Intellectual property shows that the

terms “committed search” or “actual capture” are not inevitable names for

concrete moments in a resource’s chase chronology, but rather mere names for

early or late points in time along that chronology, and that it is possible for the

legal system to work with more than just two points along this continuum.

For example, since 1976, a creative work has been protected by federal

published, as prior federal copyright statutes required.

245

If we think of the

works, using fixation to define possession looks like a rule of capture. If,

however, we think of federal copyright law as a system centered on publication,

granting copyrights based on fixation looks less like a rule of capture and more

like a first-committed-searcher rule. In trademark law, similarly, use in

commerce looks like a rule of capture if trademark law is conceived as simply

the creation of a brand name, but it looks like a first-committed-searcher rule if

we think the ultimate object of trademark law is a successful, well known, and

highly valued mark, like the famous marks protected against dilution.

In IP law, more is up for grabs than with physical property. The “things” of

IP law used to organize IP rights are more variable than those of physical

property.

246

This is part of what compounds the difficulties of notice and clear

conceptual thinking in intellectual property, which can be ameliorated somewhat

through devices like rights registries. But it also provides for greater flexibility

and tailoring, helping to facilitate the sometimes sliding-scale quality of IP

protection. Trademarks receive some protection upon the registration of mere

intent to use. Then greater protection is given after use in commerce is shown

and, where required, the acquisition of secondary meaning, but more protection

244

Cf. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666,

675 (1999) (considering but rejecting various candidates for “property” created by Lanham

Act false advertising provisions).

245

See 17 U.S.C. § 302(a) (creating copyright in work at time of creation). Common law

principles offered some protection for unpublished works under state law. See Stanley v.

Columbia Broad. Sys., Inc., 221 P.2d 73, 78 (Cal. 1950) (en banc) (“[C]ommon law prohibits

any kind of unauthorized interference with, or use of, an unpublished work on the ground of

an exclusive property right, and the common-law right . . . exist[s] until lost or terminated by

the voluntary act of the owner . . . .”).

246

See Henry E. Smith, Intellectual Property as Property: Delineating Entitlements in

Information, 116 Y

ALE L.J. 1742, 1755 (2007) (“‘Invention space’ and original expressions

do not come pre-carved into things. That is, we are implicitly treating an invention as a thing

when the interest in its use—the various activities—are described at a high level of generality

not tied directly to the activity itself.”).

2019] RIGHT ON TIME 455

if they are “strong” and still more if they are “famous.”

247

more obviously like a system of temporal priority for works that are widely

circulated since copying is more easily shown when a work is well known.

248

Patent law, too, has doctrines that afford greater protection to inventions that are

more developed. For instance, while commercialization is not required for a

patent to issue, commercial success is an important factor in analyzing whether

a patent satisfies the all-important requirement of non-obviousness.

249

Likewise,

pioneer patents generally receive stronger protection than those covering

improvements.

250

In the final analysis, IP law itself can be characterized as a kind of first-

committed-searcher rule writ large, at least where the rights at issue are

understood as essentially commercial in character. Patents and copyrights grant

inventors and authors a head start over others in capturing market share and

building customer goodwill. This is no small thing—indeed, it is one of the

ironies of IP law that a patent-holder’s commercial success can be so complete

that it results in the destruction of its trademark rights by causing the patent-

holder’s trademark to become generic.

251

And trademark law itself even more

clearly aligns with this conception of intellectual property as a kind of limited

protection in the process of acquiring property through actual commercial

exchange. Trademark law requires active use of a mark,

252

renewal of

registration,

253

and the ongoing payment of fees.

254

Though trademark law is not

247

See, e.g., AMF, Inc., v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979) (setting

forth test for trademark infringement in which infringement depends, inter alia, on strength of

mark).

248

See supra notes 163-67 and accompanying text (describing trademark dilution

protection requiring widespread brand recognition).

249

See Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966) (noting commercial success

as “indicia of obviousness or nonobviousness”); MPEP § 2141(II) (9th ed. Rev. 3, Jan. 2018)

(noting that examiners should consider secondary considerations put forth in Graham v. John

Deere including “commercial success, long felt but unsolved needs, [and] failure of others”).

250

See Wright Co. v. Herring-Curtiss Co., 211 F. 654, 655 (2d Cir. 1914) (endorsing Judge

Learned Hand’s lower court reasoning giving liberal interpretation for pioneering inventions).

251

See, e.g., Murphy Door Bed Co. v. Interior Sleep Sys., Inc., 874 F.2d 95, 97 (2d Cir.

1989) (“We hold that ‘Murphy bed’ is a generic term, having been appropriated by the public

to designate generally a type of bed. Consequently, defendants could not have infringed on

plaintiff’s trademark alleged to be Murphy bed . . . .”).

252

Abandonment is presumed after three years of non-use. See Lanham Act § 45, 15

U.S.C. § 1127 (2012).

253

See id. § 1059(a) (“[E]ach registration may be renewed for periods of 10 years at the

end of each successive 10-year period following the date of registration upon payment of the

prescribed fee and the filing of a written application, in such form as may be prescribed by

the Director.”).

254

See id.; U.S. PATENT & TRADEMARK OFFICE, FEE SCHEDULE (2018),

https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-

456 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

subject to fixed terms of duration in the manner of patent and copyright law, it

is even more clearly limited by a kind of hot pursuit requirement. Its origins in

unfair competition law illustrate its core purpose—to secure to a firm that has

managed to establish goodwill in the mind of a consumer an exclusive right to

capitalize upon it, in a quest for the ultimate good to be captured: the consumer’s

business.

255

2. Divided Possession Rules

The first possession discussion in the literature has often been conducted

under an implicit assumption that largely identical pursuers will race to own a

resource, and that the only task left for the law is to determine the optimal timing

of possession. While true in many contexts, sometimes efficiency dictates the

division of labor among two or more pursuers, where each is uniquely positioned

to conduct one crucial phase in the resource’s hunt or development. In such

cases, a different type of original acquisition rule might be called for, one which

would coordinate the actions of several unrelated pursuers, incentivizing each to

conduct one crucial step along the pursuit’s chronology.

Indeed, Ellickson’s seminal treatment of whalers’ norms discusses, if at lesser

extent, a rule of this sort in fisheries where the value of a whale’s carcass would

be “split between the first harpooner and the ultimate seizer,” in some cases on

a fifty/fifty basis. The efficiency rationale suggested to support this rule was one

of division of labor: this rule would incentivize the first harpooner to meet a

school of whales (characteristic to those fisheries) to focus on striking as many

of them as quickly as possible before they dissipated, while, at the same time,

incentivizing other whalers to chase and capture the many dissipating

encumbered whales.

256

This rule would arguably result in a greater yield than

either the first-committed-searcher rule or the rule of capture, which would focus

the first whaler’s attention on completing the hunt of one whale at a time, start

to finish.

The possiblity of divided awards is not foreign to IP law. Most notably, the

notion of “blocking patents” in patent law can be thought of as splitting rights

over a larger inventive space between a first-generation inventor and a follow-

on improver. Each obtains a right to control aspects of the improved invention,

such that both need to come to terms in order for the improvement to be used.

The doctrine incentivizes each to perform important tasks in the invention

schedule#TM%20Process%20Fee [https://perma.cc/P4TW-XHLZ] (defining various fees for

trademark processing at the USPTO, including trademark renewal fees).

255

See McKenna, supra note 168, at 1840-41 (“[T]rademark law was not traditionally

intended to protect consumers. Instead, trademark law, like all unfair competition law, sought

to protect producers from illegitimate diversions of their trade by competitors.”).

256

See Ellickson, supra note 45, at 92-93.

2019] RIGHT ON TIME 457

chronology that they are uniquely capable of performing.

257

Abstracting away

from particular detail, property and IP doctrine can form original acquisition

rules that create entitlements, which are in some sense shared among several

parties in ways that induce them to move cooperatively along the chronology of

a resource’s pursuit and development.

One may wonder why explicit reliance on divided entitlements is not

undertaken more widely in IP law. Part of the reason may have to do with the

difficulty of obtaining the information needed to assess relative contributions of

different parties and their unique capabilities in various settings. One can also

view patent and copyright laws’ limited duration—a feature absent from

common-law property—as a primary mechanism to coordinate between

different generations of authors and inventors, incentivizing each to come forth

with their unique contributions to the advancement of the arts and sciences.

ONCLUSION

Long before the legal academy became interested in whaling norms, Herman

Melville took up the subject of first possession, devoting an entire chapter of

Moby-Dick to the fast-fish/loose-fish doctrine.

258

The world, Melville

concluded, is full of fast-fish—of people and places captured and controlled by

others. Yet, he continued, even more plentiful are the world’s loose fish—all

those materials as yet free but available for the taking by whomever can capture

them first. He asked, “What are men’s minds and opinions but Loose-Fish?”

259

“What is the great globe itself but a Loose-Fish? And what are you, reader, but

a Loose-Fish and a Fast-Fish, too?”

260

Ultimately, possession is not about mere law any more than Moby-Dick is

about mere whales, especially when it comes to intellectual property. Once a

relatively obscure set of fairly technical disciplines, Intellectual property has

proliferated over the last century to occupy a central position in the law, both

within the United States and globally. Its domain is human ingenuity and the

substratum of much contemporary life—technology, communication,

entertainment, and commerce. What chunks of these are free for capture, and

what it takes to capture them, are critical in determining the direction and

composition of society. These grand themes, however, still depend on the

particulars of legal doctrine and the conceptual framework that shapes and is

shaped by them. The sound development of intellectual property’s possessory

doctrines requires careful attention to detail and a systematic understanding of

257

See Robert Merges, Intellectual Property Rights and Bargaining Breakdown: The Case

of Blocking Patents, 62 TENN. L. REV. 75, 81 (1994) (“Blocking patents thus represent an

interesting property rights institution that balances incentives for pioneers with incentives for

independent inventors to push pioneering technology forward.”).

258

See MELVILLE, supra note 46, at 329.

259

Id. at 1219.

260

Id.

458 BOSTON UNIVERSITY LAW REVIEW [Vol. 99:395

the considerations that are at play. Simply put, we cannot get it right if we do

not understand what is going on.

This Article set forth an account of the central features that drive first

possession in the law, describing both the forms first possession rules take and

the functions different approaches perform. IP law is subject to the same basic

set of trade-offs that shape traditional first possession doctrines—particularly

the danger of failure to complete the chase, on the one hand, and the risk of

wasteful duplication and reluctance to compete due to fear of lost investments,

on the other. At the same time, however, the balance between these concerns

differs in important respects, as do the institutional possibilities IP law affords.

Intellectual property faces particularly acute problems of asymmetric

information, but it also allows for greater flexibility through the use of

centralized registries and a wider array of possibilities in defining the “things”

that can be protected. In some ways, the law sensibly responds to these

differences between the tangible and the intangible, but often imperfectly and

without a clear understanding of the underlying stakes. By confronting these

issues in a systematic and integrated way, this Article set out a useful platform

from which to survey the wider horizon of intellectual property and better chart

the course that lies ahead. The need for a clear grasp of the fundamentals will

prove critical in the decades to come, for intellectual property is still in its

relative infancy and if, as Melville might say, it is in some respects a fast-fish,

but in others it is very much a loose-fish too.