Why Sell What You Can License?: Contracting Around Statutory Protection of Intellectual Property

Abstract

Historically, the transfer of goods has been through sale, a model regulated by public legislation. Increasingly, however, the transfer of goods is occurring through licensing, a model regulated by private legislation. Privately-legislated licenses - for such chattels as musical and written works and agricultural goods - are being used to circumvent publicly-legislated restrictions on intellectual property. Private legislation should not circumvent public legislation, and intellectual property owners should not be allowed to circumvent the statutory scheme for protection of intellectual property. Licenses that augment publicly-legislated protection of intellectual property support the traditional role of contracts and should be enforced. Licenses that circumvent public legislation protect neither the public interest nor licensees in the transfer of tangible goods and should not be enforced. The scope of private legislation must be limited to the transfer of goods through the use of licenses, with the primary purpose of augmenting, rather than circumventing, public legislation.

Keywords: license, contract, patent, copyright, intellectual property