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Intellectual Property Rights

CASE ANALYSIS

Now that we understand what each type represents, we can analyze what happens with IP rights in each permutation of types, this is, in each case.

Case #1 - Homesteading / Wishing to retain ownership

This is the case where the medium carrying IP information can be homesteaded (i.e. owned) by other people. It is also the case where the owner of the absolute rights to the IP wishes to retain them.

What are the facts?

The owner has made a voluntary decision to attempt achieving an economic benefit from the IP.

In order to receive said economic benefits, the owner voluntarily encoded the IP in a transmission medium, hence accepting the potential risk of losing absolute IP rights.

The owner was fully aware that the transmission medium could be freely owned by other people but took no further precaution(s).

The question is this: is there an implied unilateral contract at work?

Let's analyze this.

Is Ulrich's action unilateral? Does it this action require the interaction of another party? The answer is not. It only requires the actions of one party. Therefore it is a unilateral action by the absolute IP rights owner.

Is there an implied message? For that, we need to ask ourselves what does the term "implied" means. Implied simply means that through a set of actions or inactions a person is sending a message which is more or less understandable. But if this is the case, who gets to interpret the message, the issuer or the receiver? In principle both.

However, when we put together both elements; the fact that it is a unilateral action and that it is conveying a message; we have a valid unilateral implied "offer".

What does the "offer" say?

You can read the book for free, no strings attached. If this would not be the case, contract's terms and conditions would have been clearly stated.

If a person then "accepts" this offer, we have a valid unilateral implied contract. This contract specifies that the owner of the absolute IP rights has given away his/her absolute rights to other people without any further conditions.

This is so because the instant that other people "accept" the offer, the former owner of absolute IP rights has lost them.

The issue here is that, as we have mentioned before, contracts are fallible. If the terms and conditions are flawed, then the only solution is for both parties to re-negotiate the contract. However, if one party refuses to do so, there is no valid appeal.

This would be the case where Ulrich is reading the book on the beach and Manuel is glancing over his shoulder.

In this case if the "accepting" party (i.e. Manuel) refuses to remain silent about the book's content, there is nothing that Ulrich can do about.

The result of this case is that in this scenario the owner of absolute IP rights may lose them in a valid manner.

This could also be expressed in its vernacular (common) manner: if the IP is valuable, don't do stupid things. If you do, whatever happens is your fault.

Case #2 - Homesteading / Wishing to give away ownership

This is the case where the absolute IP rights owner wishes to gift other people with IP rights. There is no conflict here since the transmission medium can be owned by other people through homesteading and the absolute IP rights owner is declaring a unilateral contract (implicit or explicit) which states that anybody can use the IP as they see fit.

The result of this case is that in this scenario the owner of absolute IP rights will lose them in a valid manner.

Case #3 - Homesteading / Wishing to sell ownership

The owner of the absolute IP rights takes precautions to limit the chance of somebody homesteading the transmission medium while at the same time making his intentions quite clear. For example, Ulrich is reading the book on the beach but under an umbrella (to prevent over-the-shoulder readers) with a large sign in front of him stating that he is selling the book.

In this case, the initial action is still unilateral but the terms and conditions are not implied. They are written down and subject to bilateral negotiations which, if concluded satisfactorily, will lead to a bilateral contract. If this process takes place, absolute IP rights will be transferred to the new owner.

Does this mean that this case prevents all possible valid loss of absolute IP rights? The answer is no. The issue here are not the technical elements of security but the fact that Ulrich encoded the IP in a transmission medium. The determining fact is that Ulrich voluntarily decided to take a risk.

For example, if Manuel somehow reads the book using a powerful telescope from a distant hill, it is still conceivable that Ulrich is presenting a unilateral and implied offer, at least in Manuel's view. This is so because the reasons of all economic transactions are subjective and there is no requirement to understand what those reasons are in order to have a valid contract. In this case, Manuel simply chooses to accept Ulrich's "offer". Furthermore, as property rights are absolute, there is nothing preventing Ulrich from making this "offer".

The result of this case is that in this scenario the owner of absolute IP rights will likely be able to transfer them to a new owner, but this is not certain nor guaranteed.

Case #4 - Owned transmission medium  / Wishing to retain ownership

This is the case where the medium carrying IP information cannot be homesteaded (i.e. owned) by other people because it already has an owner. It is also the case where the owner of the absolute rights to the IP wishes to retain them.

In this case, the transmission medium and the IP it carries are absolute properties of one person and they are fully (and perfectly) controlled. In this case, there is no way in which an IP owner can lose its absolute IP rights in a valid manner. However, it is to be noted that this is simply a theoretical scenario that is not real, will never be real and it only serves to illustrate the point. The problem with this scenario is that there is no way in the real world to guarantee 100% containment. What happens in real life is described by the "Fault" types.

In this case Ulrich is reading the book in a windowless room with a light source that he owns. No light gets out. Furthermore,  let's say that Ulrich allows another person to be present in the room (also his property). As a condition for this person to be there and read the book, this person signs a Non-Disclosure Agreement (NDA). This person is allowed to read the book but disallow to re-transmit its content by contract. Under these circumstances, Ulrich has not lost his absolute IP ownership.

The result of this case is that in this scenario the owner of absolute IP rights cannot lose them in a valid manner.

Case #5 - Owned transmission medium  / Wishing to give away ownership

This is the case where the medium carrying IP information cannot be homesteaded (i.e. owned) by other people because it already has an owner. It is also the case where the owner of the absolute rights to the IP wishes to give the away.

In this case and if the owner of the IP rights also owns the transmission medium there are no conflicts. The owner has simply issued a unilateral offer without any terms of conditions. It is up to other people to accept it or reject it.

The result of this case is that in this scenario the owner of absolute IP rights will lose them in a valid manner.

Case #6 - Owned transmission medium  / Wishing to sell ownership

This is the case where the medium carrying IP information cannot be homesteaded (i.e. owned) by other people because it already has an owner. It is also the case where the owner of the absolute rights to the IP wishes to sell them.

There are two possible sub-cases:

Sub-case #1: In this case if the IP owner does not use a transmission medium in the process of selling the IP, then the transfer can occur in such a manner that the new owner obtains absolute IP rights.

For example, if Ulrich wants to sell the book without either him or the buyer having to read it first. As the book is never read, there is no transmission medium and hence there is no possibility to lose IP ownership.

Sub-case #2: This is the same case as the Case #4 above with the difference that the IP is sold instead of retained.

The result of these sub-cases is that in this scenario the owner of absolute IP rights cannot lose them in a valid manner and can sell the IP with the new owner retaining absolute rights.

The difference is that the sub-case #1 is real (i.e. achievable in the real world) while the sub-case #2 is theoretical only.

Note: please see the Glossary if you are unfamiliar with certain words.

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