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Restrictive Covenants, Reserved Rights, and Copyright

In yet another installment of Kinsella the libertarian answer man. This is an edited version of an interaction with a conversant (my, how legalistic Kinsella can be with his wording). Some background reading or things half-referenced in my rambling but brilliant screed of an answer:

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Hi Stephan, I have had a quick Google around your site and again and re-read parts of Against Intellectual Property. I didn’t though find what I was looking for. Have you ever written on the difference between restricted covenants and reserved rights (in say book sales where you say you sell on the condition you don’t make a copy of the book)? I imagine you think the former is licit but I’m trying to understand why your critique of reserved rights doesn’t hold in the following scenario. Suppose someone purchases a house from the original purchaser who made an agreement with the developer not to do x,y,z. Is the second, non-original purchaser, bound by the restricted covenant even if they didn’t agree it with the sale with the original purchaser? Many Thanks
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Stephan

This is an area I think I should write on more explicitly, because it confuses everyone and is in need of development. I’ve touched on it here and there e.g. http://c4sif.org/2011/06/intellectual-property-rights-as-negative-servitudes/

But my basic view is that divided ownership is possible. The case of restrictive covenants or negative servitudes is perfectly possible. The law views this is as a matter of real rights, not contractual (in personam) partly b/c the law has a semi-incoherent understanding of property and contracts. Only a reformed (Rothbardian) understanding of property, property rights, and contract, can ultimately sort this out. In the meantime, my view is that yes, for a particular *scarce resource*–especially real property, land, but even other things, like cars, or books–you can use contract to divide rights up between A and B and then as against the world (C, D, E) A and/or B have better rights, and then as between A and B, their personal contract can be adverted to, to settle any issues (there is something similar for marriage, and community property, BTW: husband and wife, H&W, “jointly” own things, and as between them, their rights are determined by default suppletive marital law, or by a prenup etc.).

Now personally I think issues like restrictive covenants can be dealt with by the standard law on this topic. A developer buys a big tract of land and then subdivides it according to a published plan, and then any buyers A, B, C, buy it subject to this plan–HOA restrictions, etc. The way I analyze this is: the plots of land in this zone are all owned in co-ownership fashion by a number of people: the primary resident, or owner, and his neighbors. Primary user has the right to sleep in the house, to sell it, and so on; others have the right to veto certain uses of his house (painting it orange). But the point is the owners are identifiable. In the civil law there are different types of negative servitudes–personal, or predial. Connected to the identity of the owner of hte right, or connected to the owner as identified by owning a neighboring estate. To me these are interesting, as a lawyer; but as a political theorist, as a libertarian, only trivial details. The point is you can set up an arrangement where its clear that the current possessor of an estate has 99% rights but they are subject to some rights by determinable others. (By the way similar reasoning can be used to show that corporations and trusts can have perpetual duration, as Robert Hessen briefly adverted to in his classic book on In Defense of the Corporation.)

So in essence, I think that if you own some land you can “sell” some of the rights to your neighbors, and now they are in control of some uses of your own property. I think you can do it so that the owners are not identified by name, but by “whoever owns Greenacre can vote to stop the owner of Blackacre from painting it orange”. So then if A who owns Blackacre wants to sell it, he can only sell what he owns–so whoever buys it, buys Blackacre subject to these conditions.

All this is fine and interesting, and I have touched on it, and I think the law mainly gets it right, though I think I or others could clarify it, but …. the point is: this only helps to justify the case for restrictive covenants, HOAs, (voluntary negative servitudes [IP rights are involuntary negative servitudes], and even the case for corporations and things like trusts etc. BUT it does NOT help the case for IP for a number of reasons. Rothbard was just confused on this issue whcih I did try to elaborate on, in the “reserved rights” section of Against IP. Because in his argument, he sneaks in the assumption that when you reserve rights you can reserve “the right to copy”. For a variety of reasons, which I’d be happy to elaborate on, this simply doens’t work. THis can’t be made into a real right. Rothbard was too rationalistic here, IMO. and he didn’t understand how IP law worked, so he got into academic mode which is la la land.

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So if I own a book I can “sell it” subject to some constraints. If it’s worth it for a $9 object to work up a contract between me and the buyer, I can restrict his rights in it. Why he would ever agree to this is a mystery, and I think the entire idea of this breaks down. But in principle–sure. A can sell B a book and A can retain some rights in it. So that if B uses the book in certain ways, B is …. I dunno, committing trespass? The problem is that this is a small purchase and B would never agree to this bullshit, esp. b/c he can just get a free, pirated copy not subject to this crap. And also because, the problem is not B. I don’t know why anyone thinks an author A can get his loyal fans B to buy his book and contractually agree to pay tons of money if they USE THE KNOWLEDGE IN THE BOOK, but fine. Ignore that problem. The real problem is that sure, fine, if B tries to sell the book to C and B has agreed not to do so, sure, in theory, A can get “the book back” from C. Fine. It’s like a stolen watch scenario. BORING. BORING. BORING. STOP BORING ME, PEOPLE.
But the point is: what is “the book”? This is where IP-tards f*ck the analysis up. They think of the book as “the pattern of information.” But they start their reasoning by looking at the physical copy of the book; everyone agrees there is a discrete, identifiable owner of “a book”–meant, as, a physical object. A scarce resource. But then they switch gears and use “the book” to mean “any object that has this pattern embedded on its surface” blah blah blah. So it’s basically equivocation–totally dishonest reasoning. So that was Rothbard’s mistake. He saw that yes, you can “divide up” property rights, and he just assumed “well one of these is the ‘right to copy'”. but this is not a discrete right of ownership. This was his mistake. Buy wording it this way he assumed that there are property rights in information, but… this is question-begging. And there is not.
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