Property Outline

I. II. POLICY ..........................................................................................3 ACQUISITION OF PROPERTY.................................................3 a. b. c. d. Acquisition by Discovery .............................................................................3 Acquisition by Capture ................................................................................4 Acquisition by Creation - Intellectual Property .......................................4 Subsequent Possession .................................................................................7 i. ii. iii. iv. Bailments.................................................................................................................. 7 Acquisition by Find ................................................................................................. 8 Acquisition by Gift .................................................................................................. 8 Adverse Possession .................................................................................................. 9 III. CONSTITUTING OWNERSHIP ..............................................11 a. b. c. d. e. "Bundle of Sticks" View of Ownership ....................................................11 The Right to Exclude .................................................................................11 The Right to Transfer ................................................................................11 The Right to Destroy ..................................................................................12 The Public Trust and the Public Domain ................................................12 IV. POSSESSORY ESTATES ..........................................................12 a. Feel Simple, Fee Tail, and Life Estate ......................................................12 b. Defeasible Estates .......................................................................................14 V. FUTURE INTERESTS................................................................15 a. b. c. d. e. Overview .....................................................................................................15 Future Interests Retained by Transferor.................................................15 Future Interests in Transferees ................................................................15 Trusts...........................................................................................................16 Rule Against Perpetuities ..........................................................................16 VI. SERVITUDES, EASEMENTS, AND COVENANTS ..............17 a. b. c. d. e. Classifying Servitudes ................................................................................17 Classifying Easements................................................................................17 Ways to Create an Easement ....................................................................18 Methods for Terminating Easements .......................................................20 Covenants Running with the Land ...........................................................21 VII. CO-OWNERSHIP AND MARITAL INTERESTS ..................24 a. Modern Concurrent Estates ......................................................................24 1 b. Marital Interests .........................................................................................25 VIII. LEASEHOLD ESTATES............................................................26 a. b. c. d. Types of Leasehold Estates........................................................................26 Subleases and Assignments .......................................................................27 Defaulting Tenant ......................................................................................27 Landlord's Duties .......................................................................................28 IX. INTRO TO BUYING AND SELLING REAL ESTATE .........32 a. b. c. d. X. The Contract of Sale ..................................................................................31 The Deed .....................................................................................................35 Financing Real Estate Transactions .........................................................37 Title Assurance (Recording, Indexing, Blockchain) ...............................39 LAND USE CONTROLS ............................................................42 a. Nuisance, Property Rules, and Liability Rules........................................42 b. Zoning: Constitutionality, Nonconforming Uses, and Achieving Flexibility ....................................................................................................44 c. Eminent Domain, Just Compensation, and Ad Hoc Balancing .............47 d. Categorical Rules for Eminent Domain ...................................................49 e. Public Use and Judicial Takings ...............................................................50 f. Exactions .....................................................................................................51 2 I. POLICY a. Coase theorem: when there are competitive markets with no transaction costs, parties negotiate to an efficient outcome b. Pareto efficiency: the optimal allocation of resources for which it is impossible to reallocate so as to make any one individual (or preference) better off without making another worse off c. Cheapest cost avoider: person who can avoid an event (traditionally an accident) at the lowest cost i. We want to put the cost on the cheapest cost avoider (best able to bear the cost) d. Negative externality: cost suffered by a third party as a result of an economic transaction i. May adversely affect Pareto-efficient outcomes e. Positive externality: a benefit enjoyed by a third party as a result of an economic transaction f. Freeloader problem: a market failure that occurs when people take advantage of being able to use a common resource g. Holdout problem: when someone holds out to sell their land until buyer raises their price, knowing the buyer needs that property for a project (especially when buyer already purchased surrounding properties) h. Penalty default: sometimes a court might decide a case in a way the parties don't want, which induces the parties to be more careful/clear next time when contracting i. Transaction cost: expenses occurred when buying or selling (e.g. broker fee) j. Tragedy of the commons: situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action i. If you give someone a property interest they will care for the property over time k. Cost-benefit analysis: weighing the costs and benefits of a decision to determine most efficient outcome l. Property rationales (particularly for IP): i. Utilitarianism: if inventors knew someone could just copy their work, there's less incentive to be innovative, as others will just copy your idea and take your profits 1. Protecting IP encourages creation and innovation a. Costs of protecting: prevents others from making the product more efficiently and potentially at a cheaper price to consumers ii. Locke labor theory: you gain ownership by putting your work into something to make it better (or by creating something) iii. Personality theory: creations are an expression of oneself m. Rules vs. standards n. Functional vs. formalistic reasoning II. ACQUISITION OF PROPERTY a. Acquisition by Discovery i. M'Intosh (1823) 1. Facts: Plaintiff was granted land by Indian tribes. State of Virginia subsequently claimed the land. US government sold the land to defendant 35 years later. (Note: defendant is actually there/using the land and plaintiff is not.) 3 2. Rule: Land title transfers are only valid when made under the current prevailing government. b. Acquisition by Capture i. Overview 1. Constructive possession: a landowner is considered as being in possession of a resources that is on or in her land even if she does not have physical possession of it a. Ratione soli: an owner of land has constructive possession of wild animals on the owner's land 2. Rule of capture: One acquires the property right in fugitive resources (i.e. moving resource) or animals by "so entrapping/ensnaring the resource as to render its escape virtually impossible" (or mortally wounding for animals) a. Modern issue: overexploitation an excessive use of natural resources ii. Hickeringill (Queen's Bench 1707) 1. Facts: Plaintiff set up a decoy pond on his land to lure wildfowl as a profitmaking venture. On three separate occasions, defendant fired gunshots at plaintiff's pond to scare away the wildfowl that had gathered there. 2. Rule: A property owner has a right to make lawful use of his property for profit or pleasure without malicious interference from others. iii. Post (N.Y. 1805) 1. Facts: Plaintiff was hunting a fox (not on his private land) and defendant, who was aware plaintiff was hunting the fox, killed and captured the fox. 2. Rule: Property in wild animals is acquired by occupancy (physical possession, capturing from a distance, or mortally wounding) a. Court noted this was efficient considering it follows industry custom iv. Hayashi (Ca. 2002) 1. Facts: As a homerun ball reached the standards, the ball made contact with plaintiff's glove, but it's unclear whether he maintained possession of it before he dropped to the ground and lost the ball (dropped because people swarmed him, but the court found defendant played no intentional role in doing so). Defendant picked the ball up off the ground and placed it in his pocked, claiming ownership. 2. Rule: When a person completes a significant portion of the steps to achieve possession of an abandoned item, but is thwarted by the unlawful conduct of another, that person is entitled to a pre-possessory interest of the item. a. Conversion: the wrongful exercise of possession over the possession of another (requires actual and intentional interference with owner's use of the property) c. Acquisition by Creation - Intellectual Property i. Generally 1. Goods that are not non-excludable and non-rivalrous are public goods a. Non-excludable: a resource that, once created, people cannot be prevented from gaining access to it despite not paying for it b. Non-rivalrous: a resources that may be used by one person without preventing simultaneous use by others 4 2. Doctrine of accession (doesn't only apply to IP): when a person in good faith applies labor alone or labor plus materials to some object that another person owns to create a fundamentally different product, the first party acquires ownership of the new product (first party will still have to pay second party the value of the original product) 3. Justifications for protecting IP: a. Utilitarian justification: if inventors knew someone could just copy their work, there's less incentive to be innovative, as others will just copy your idea and take your profits i. Protecting IP encourages creation and innovation 1. Costs of protecting: prevents others from making the product more efficiently and potentially at a cheaper price to consumers b. Locke labor theory: you gain ownership by putting your work into something to make it better (or by creating something) c. Personality theory: creations are an expression of oneself 4. INS (1918) a. Facts: INS was bribing AP employees and obtaining its news sources in other ways before publication and publishing it as its own. It was also taking news from AP publications immediately after it was published and using it as it's own. b. Rule: A quasi-property right exists in published news such that appropriating the published news gathered by another for further commercial purposes constitutes unfair competition in trade. 5. White v. Samsung (9th Cir. 1992) a. Facts: Samsung ran an ad that featured a robot that allegedly was a depiction of White (from Wheel of Fortune), albeit not mentioned by name, and White never consented nor received compensation. b. Rule: A common law right to publicity will be violated when a celebrity's identity has been commercially exploited, regardless of the way in which it is exploited (e.g. name, picture, etc.) i. Can be possible that this is present even without her name or likeness ii. Right to publicity persists after death iii. Dissent: This is a case of overprotecting intellectual property, which can be damaging to society. Doesn't agree that Samsung used White's likeliness in its ad because nobody would've thought it was supposed to be her. Thinks the majority is giving her this right simply because of what she does for a living rather what what she looks like or who she is. 6. Moore v. Regents of the University of California (Ca. 1990) a. Facts: Plaintiff's spleen was removed and subsequently the hospital took cell samples, which were being used for research (because they're unique) without plaintiff's consent. The doctors made a breakthrough and developed products with market value potentially in the billions. 5 b. Rule: Once cells leave a patient's body, they are no longer that patients property, but doctors still have a duty to disclose any research they may intend to do with the cells. i. To establish an action for conversion plaintiff must establish an actual interference with something plaintiff has title or possession of ii. Consider doctrine of accession iii. [Policy: want to structure property such that cheapest cost avoider can distribute the costs efficiently (hospital in this case)] ii. Patents 1. Overview a. "To promote the Progress of Science and the useful Arts…" (U.S. Const. art. I, §8) i. Protects the patent holder from others making, using, selling, etc. 1. 20-year term (cannot be extended) b. Requirements for patent applications to be granted (35 U.S.C. §101): (1) patentability ("process, machine, manufacture, or any composition of matter, or any new improvement thereof"); (2) novelty; (3) utility; (4) non-obviousness; and (5) enablement i. Patent thicket: if we allowed patenting basic building blocks such as laws of nature, people conducting experiments and creating new things would have to pay out countless royalties 2. Diamond (1980) a. Facts: Plaintiff applied for a patent after creating a geneticallyengineered bacterium that possessed a characteristic not possessed by any naturally-occurring bacteria. b. Rule: Laws of nature and natural phenomenon are not phenomenon i. Anything "under the sun" that has a distinctive name, character, and use should be patentable ii. Left question open as to whether other living organisms can be patented iii. Copyright 1. Overview a. "To promote the Progress of Science [i.e. general knowledge] and the useful Arts…" (U.S. Const. art. I, §8) b. Requirements for copyright protection (17 U.S.C. §102): (1) originality (independent creation of the author AND demonstrate at least some degree of creativity); (2) work of authorship (statute identifies 8 types of work: literary (includes computer programs), musical, dramatic, choreographic, pictorial, graphic and sculptural, motion pictures and other audio-visual works, sound recordings, and architectural works); and (3) fixation (i.e. fixed in some tangible medium) c. Copyright holder has the right to prevent others from: (1) reproducing the work; (2) creating derivative works; (3) distributing copies of the work to the public; (4) performing the work publicly; (5) 6 displaying the work publicly; and (6) performing the work by digital audio transmission. i. Life of author + 70-year term (cannot be extended) ii. Holders can sell licenses for their work to be used and can assign their copyrights to another d. To establish infringement, must prove (Feist Publications): (1) ownership of a valid copyright; (2) copying of constituent elements of the work that are original; and (3) the copying was "improper appropriation" (i.e. copied so much of the original material that the two works are substantially similar) 2. Feist Publications (1991) a. Facts: Plaintiff published a phonebook with subscriber names and phone numbers. Defendant published a similar one but covering a larger area. b. Rule: For a compilation of facts to be copyrightable, there must be some degree of creativity with respect to the selection and arrangement of the facts. iv. Trademarks 1. Overview a. Any "word, name, symbol, or device" used by a person "to identify his or her goods" from those sold by others, and "to identify the source of the goods." (15 U.S.C. §1127) i. Protects the first to use a distinctive mark in commerce ii. Doesn't technically have to be registered to be protected (using "TM" gives notices even if not registered) iii. A registered mark can be cancelled at any time if it becomes generic b. Requirements for trademark protection: (1) distinctiveness; (2) non-functionality (because if functional then it would fall under patent law); and (3) first use in trade 2. Cordua (Fed. Cir. 2016) a. Facts: Restaurant attempted to trademark the stylized form of "CHURRASCOS" in connection with "Bar and restaurant services; catering." The trademark examiner rejected the application because "Churrascos" is a generic word in the industry referring to beef or grilled meat generally. b. Rule: If a word or phrase is generic in an industry, it is trademarkineligible with respect to that industry. i. Pluralization commonly does that alter the meaning of a mark ii. Ginn two-step test: (1) what is the genus of goods or services at issue; (2) is the term sought to be registered or retained on the register understood by the relevant public primarily to refer to that genus of goods or services? d. Subsequent Possession i. Bailments 1. Bailment: transfers possession, but not the title, to the bailee 7

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