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Oxford Journal of Legal Studies, Vol. 34, No. 1 (2014), pp. 181-200 doi:10.1093/ojls/gqt029

Published Advance Access October 21, 2013

Pluralism, Principles and Proportionality in Intellectual Property

Justine Pila

Introduction

Over its 600-year history, intellectual property (IP) has been dogged by persistent disagreement over its normative foundations, and whether they justify the various IP regimes then extant.1 Particularly heated have been the debates over the proprietary nature of IP rights, due to the perceived implications of a right's formal characterization as `property' for its duration,

A review of RP Merges, Justifying Intellectual Property (Harvard University Press 2011) (JIP).

For example, 400 years after the first patent legislation was introduced in Venice, Switzerland remained steadfast in its refusal to establish a patent system on the basis of the `pernicious and indefensible' principle of patent protection. F Machlup, An Economic Review of the Patent System: Study of the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary (US Govt Printing Office 1958) 4.

enforceability and legal status, and over the capacity of IP systems to accommodate `new' technologies, such as film, the internet and biotechnology. A common starting point for these debates has been the intangible nature of the various subject matter that IP rights protect. In addition to making conventional arguments for the existence of real and personal property inapplicable, the non-rivalrous and non-depletable nature of works, inventions and other such subject matter support their perception as `public goods' inappropriate for individual ownership. In so doing these features of IP subject matter contribute to another widely held belief within academic circles: that IP exists for essentially historical and pragmatic reasons, and that while our investment in it is sufficient to make its abolition infeasible, it has no positive justification as such.

It is against this background that Justifying Intellectual Property (JIP) has been written. In this book, Robert Merges responds to his disillusionment regarding the empirical claims of utilitarian arguments for intellectual property by searching for an alternative model capable of justifying the existence of its various regimes. The result is a liberal, pluralistic account of IP, built on

a commitment to individual ownership as a primary right, respect for third-party interests that conflict with this right, and, from the philosophy of John Rawls, an acceptance of redistributive policies intended to remedy the structural hardships caused by individual property rights.

Put differently, it is a model of IP as a means of protecting `personal but unselfish'5 property rights, justified not by their alleged benefit to the community, but by arguments from morality and natural law, including particularly Kantian theories of freedom and autonomy.

That the justification for IP remains in contention six centuries after the first IP legislation suggests a certain disconnect between its roots and day-to-day operation. And indeed, central to Merges's account is his claim that foundational theories of IP have limited practical significance; that there are many plausible arguments for IP, and that our choice between them is of little operational importance.6 The reason is his belief that the application and development of IP systems depend not on which theory we support, but on which `midlevel principles' we prioritize. Hence the paradox of his book, which offers both a justification for IP, and a justification for not worrying too much about trying to justify IP, and an argument for paying greater attention

In the oft-cited words of Fritz Machlup (ibid 80), `[i]f national patent laws did not exist, it would be difficult to make a conclusive case for introducing them; but the fact that they do exist shifts the burden of proof and it is equally difficult to make a really conclusive case for abolishing them'. See JIP 6. instead to the four principles which he identifies as having the greatest operational significance: dignity, efficiency, non-removal from the public domain and, above all, proportionality.

In this article I respond to Merges's expansive and thought-provoking book by offering a European perspective on his thesis. My suggestion is that European jurisprudence offers broad support for his pluralistic, principles- based model of IP. On the other hand, it also challenges certain aspects of Merges's analysis, such as his `one size fits all' foundational theory, his account of key rules and practices, and his choice and conception of midlevel principles. In so doing it draws attention to the utilitarian bias of his operational model; a bias which undermines his model's pluralistic claims, in part by undermining his own deontological argument for IP. The result is an approach that unintentionally underlines the limits of a regime unconcerned with its own normative basis, and the need for more rather than less discussion of IP theory, including more work of the type that Merges undertakes.

This response is presented in three parts. The first introduces Merges's justification for IP and his pluralistic account of its day-to-day operation with reference to IP theories generally, other pluralistic legal models, and patterns of judicial reasoning in the patent and copyright fields. The second explores the details of his operational model of IP with assistance from European copyright and patent law, highlighting certain problems with his choice and conception of IP principles and the rules and practices from which they derive. And the third returns to the question running through Merges's book of what it means to take certain values, such as autonomy and dignity, seriously in IP.

1. Theories and Principles of IP and Their Practical Significance

The idea that intellectual property systems exist for essentially historical and pragmatic reasons alludes to the value of history in understanding the various IP regimes that exist, including the general forms that they take.8 Broadly speaking, and focusing on its two paradigm systems of patent and copyright law, the historical origins of IP lie in two philosophical traditions aligned with the civil and common law, respectively. While it has become common to downplay the differences between these traditions with a view to emphasizing the nuances of each and the similarities between the civil and common law more generally, they account for important aspects of the development of European and other IP regimes as well as the forms which those regimes take.

On the historical origins of copyright and patents particularly see eg, and from a vast literature, A Birrell, Seven Lectures on the Law and History of Copyright in Books (Cassell 1899); M Rose, Authors and Owners: The Invention of Copyright (Harvard University Press 1993); C Hesse, `The Rise of Intellectual Property, 700 B.C.- A.D. 2000: An Idea in the Balance' (2002) 131 Daedalus 26; Machlup (n 1).

See eg JIP 156 (describing the attribution of different IP traditions to a civil / common law divide as an `old convention' which `has a tendency to be wildly overblown', and then noting that the dignity principle is a particular feature of European copyright). cf also JC Ginsburg, `A Tale of Two Copyrights: Literary Property in

The civil law tradition of IP is perhaps best captured by the statement of Le Chapelier, when presenting the French Playwrights Decree in 1791, that `[t]he most sacred, the most legitimate, the most unassailable, and, I may say, the most personal of all properties, is the work which is the fruit of a writer's thoughts'.10 Implicit in this statement is that the law recognizes property rights in the products of authorial (and other forms of intellectual) labour in the belief that the nature or value of such labour or of the products themselves merits such recognition, and/or that such recognition is necessary or desirable either to enable authors to flourish as autonomous human beings, or to protect their rights in respect of their personhood or intellectual labour.11 Each of these arguments is a matter of considerable controversy, as is its focus on the rights and interests of individual creators. They are also the departure point for the second tradition of IP, epitomized by the United States' (US) copyright and patent clause, which empowers 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'. Implicit in this clause is that the justification for granting IP rights lies not in moral or natural law arguments, but in a policy commitment to encouraging the production and distribution of intellectual artefacts through the conferral of property. Such conferral, it is said, benefits the public economically by resolving the market failure which the intangibility of those artefacts creates, as well as socially by supporting a robust public domain of expressive, informa- tional and other intellectual (including technical) subject matter. For example, and speaking again of copyright and patents, they create a false scarcity with respect to works and inventions by excluding others from their use, thereby enabling the right holder to preserve the possibility of exploiting them commercially in the hope of recovering the costs of their creation and dissemination along with sufficient profit to undertake further such activities. Thus, by granting IP rights in the medium term, the state secures the unlimited availability of IP-protected subject matter in the long term, and this for the good of society.

As with deontological arguments for IP, the premise of utilitarian theories has been widely critiqued. That authors and inventors have no deeper claim than positive law to exclude others from the unauthorized use of their

Revolutionary France and America' (1990) 64 Tulane L Rev 991 with JC Ginsburg, `European Copyright Code

- Back to First Principles (with some additional detail)' (2011) Auteurs et Meґdias <http://ssrn.com/ abstract=1747148> accessed 13 August 2013.

G Davies, Copyright and The Public Interest (Max Planck Institute for Foreign and International Patent, Copyright and Competition Law 1994) 79 (quoting from Archives Parlementaires de 1787 a` 1860, Receuil complet des deґbats leґgislatifs et politiques des Chambres francёaises (vol xxii, Paris 1887) 210.

On IP rights as promoting human flourishing see JIP 38, 105. A further argument from harm and unjust enrichment is that not recognizing such rights would cause harm to authors or enable third parties to enrich themselves unjustifiably at an author's expense. Merges also supports this argument as linked to Kant; see JIP 89.

The United States Constitution, art 1, s 8. intellectual creations seems counter-intuitive in an age in which they are held in exulted status and rights-talk dominates many areas of private law.13 Equally contentious are the empirical assumptions of utilitarianism, including: that authors and inventors are motivated by economic considerations more than communicative, reputational or truth-seeking ones; that property rights are required and able to cure the market failure which exists in respect of IP subject matter; and that market-based systems of incentivizing creation and dissemination through the grant of exclusionary rights benefit the public more than they harm it.14 And it is Merges's doubt regarding those assumptions-- and his belief in particular that the data `support a fairly solid case in favor of IP protection-but not a lock-solid, airtight case'15--that leads him to effect a philosophical shift from social utility to fundamental rights in JIP. That this shift comes from such a prominent and well-regarded academic working within the utilitarian and law-and-economics schools of US IP scholarship adds to the interest of his book, in addition to explaining certain aspects of the approach it advocates.

Two ideas motivate Merges's foundational theory. The first is that IP is `really property', and the second is that, as a result of this, the modern literature on property has relevance for it, along with the works of Locke, Kant and Rawls on which that literature builds.20 Starting with Kant, Merges describes `individual autonomy and freedom' as the basic foundations of IP, and as requiring legal rules of (intellectual) property that `maximize the freedom of all members of civil society'. The result is a view of IP systems as `respect[ing] individual property claims at a deep level and ... simultaneously car[ing] about the practical impact of [those] claims on the lives and fortunes of others'. Put differently, and in the language favoured by contemporary IP scholarship, it is a view of IP as `balancing' individuals' property interests on the one hand with third party and societal interests on the other.24 Hence the question of how that balance is appropriately effected, including what it requires. On these issues, Merges tells us, Kant's work is silent, prompting him

On talk of IP rights as rights see JIP 3.

For critical perspectives on these assumptions see eg, and also from a vast literature, L Lacey, `Of Bread and Roses and Copyright' [1989] Duke LJ 1532; S Breyer, `The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs' (1970) 84 Harvard L Rev 281; E Hettinger, `Justifying Intellectual Property' (1989) 18 P&PA 31.

See eg ibid 10-11 (`I do not want you to think that [my foundational shift from utilitarian to deontological theory] undermines my prior work or my commitment to analyzing detailed doctrines and rules, and the institutions that surround them, from the perspective of efficiency.') to look to Locke's theory of property, including Locke's provisos and other limitations on appropriation claims. This leads him to a `conception of individual property coupled with state-backed limitations and taxation', which also represents, he says, a basic liberty in a fair society. Moving thus from Locke to Rawls, Merges argues that the institutional protection of IP rights is justified by the legitimate desert claim which creators have on the basis of their dedicated development and application of talent, and by the recognized (albeit lesser) interest of society in that same talent and effort. Hence Merges's view of IP regimes as having a solid justificatory basis in the deontological theories not only of Kant and Locke, but also of Rawls; a view which he describes as `hardly new' but `often overlooked' by IP theorists, and as having important implications for the way we approach those regimes.

Most choose to channel all their discussion of the proper balance between individual and society into the arena of IP law itself, as though each doctrine and each controversy must be engineered so as to get the balance right. The more systemic view supplied by Rawls's way of thinking can get us out of the unproductive and often divisive trap of thinking that each individual rule of IP must balance out perfectly. Rawls's approach frees us from this excessively internalist perspective and ought to be embraced for that reason alone.

As can be seen from this paragraph, a central aspect of Merges's foundational theory is his view that IP systems can and ought to be trusted as effecting an appropriate balance overall between competing individual and societal interests, and that to subject `each doctrine' and the resolution of `each controversy' to detailed scrutiny with a view to ensuring that they individually effect such a balance would reflect a lack of perspective by ignoring the wood of IP for its trees. This argument has particular importance given the number of open-textured concepts in IP. For example, copyright in the UK subsists in original literary, dramatic, musical and artistic works, and is infringed by the unauthorized copying or other reserved use of a substantial part of such works. It is also subject to various defences, including where the unauthorized use of the work is a `fair dealing' with it for the purpose of criticism, review, reporting current events, non-commercial research or private study.30 In Merges's view, such open-texturedness in the core concepts of IP is essential to enabling the courts to fine-tune the system in order to achieve `the proper balance between individual and society' referred to above, and their interpretation and application of those concepts ought (therefore) not to be second guessed.

According to Merges, one of the virtues of proportionality is that it enables this balance to be achieved through the application of rules that `disguise' the balancing exercise. See JIP 190 (discussing proportionality).

While attributed to the systemic perspective which his argument for IP entails, this view also reinforces his account of its day-to-day operation by relieving specific IP rules and practices of the burden of protecting third party rights and interests in individual cases.

JIP is not the first work to offer a pluralistic account of IP built around midlevel principles. For example, in his 2003 essay entitled `A Pluralistic Account of Intellectual Property', David Resnik analyzed six approaches to IP based on Lockean property theory, US-style utilitarianism, Hegel's theories of freedom, self-expression and property, privacy and egalitarianism, including Rawls's pluralistic conception of justice. The conclusion he reached was that none of these approaches accounts adequately for the existence of IP, with each instead emphasizing a different value or goal which IP supports, including autonomy (or freedom), privacy, utility and justice. He argued that an alternative understanding of IP is therefore required, and expressed his preference in that regard for a pluralistic one, explained with reference to the inadequacy of the other approaches in isolation, the diversity among the different IP regimes, and the pluralistic nature of modern democratic societies, all of which he described as militating against a `one size fits all approach' to IP (or any other form of property).

Resnik's description of the practical implications of his pluralistic model elucidates Merges's model by highlighting some important similarities and differences between the two. According to Resnik, when resolving IP disputes a court ought to decide which of the values having primacy in IP are at stake, and then weigh and balance those values to decide which ought to have priority in the particular case. While all IP values are a priori equal in Resnik's account, the extent of their engagement in a case depends in part on the IP right involved and its social and legal function. For example, because (US) patent law exists to `promote the progress of science and the useful arts', utility ought to have a higher priority in patent disputes than privacy and autonomy. The reason is social pluralism, which Resnik views as requiring a commitment to a certain legal pluralism as well, not only in the sense of tolerating different individual beliefs as to the nature of or reason for law, but also in the sense of allowing that the different aspects of a legal institution such as IP be governed by different `basic values' according to its different `legal and social function[s]'. Hence Resnik's choice of primary IP values, which reflect in combination his view of the different legal and social functions of the main IP regimes.

It is clear from Resnik's essay that his values share the `midlevelness' of Merges's principles, and exist as principles in the Dworkinian sense:

This is apparent in his discussion of essential medicines, considered below.

D Resnik, `A Pluralistic Account of Intellectual Property' (2003) 46 J Business Ethics 319.

The United States Constitution (n 12).

Resnik (n 33) 331. cf JIP 47.

See RM Dworkin, Taking Rights Seriously (Harvard University Press 1978) 22ff; also J Raz, `Legal Principles and the Limits of Law' (1972) 81 Yale LJ 823; M Bayles, `Mid-Level Principles and Justification' in occupying an intermediary space between moral values and legal rules; deriving their force from both their moral content and their fit with existing institutional facts; and existing to be optimized in individual cases by a process of weighing and balancing. While not expressed identically, Merges's approach seems very close to this, the main differences being: his choice of midlevel principles (dignity, efficiency, non-removal and proportionality instead of autonomy, privacy, utility and justice); his `one size fits all' theory of IP; and his eschewal of a method of decision-making which involves identifying the function of the IP regime involved and/or weighing and balancing the principles at stake according to the facts of the case. Indeed, weighing and balancing principles in individual cases is all but obviated by Merges's systemic account of IP, and resort to the function of IP is supported only as part of an enquiry into the purpose of IP in those exceptional cases in which a `tiebreaker' between principles subsisting `in equipoise' is required.

An initial question raised by this discussion is whether these arguments regarding the theory and principles of IP are borne out by current legal practice. For example, when interpreting and applying IP legislation, do the courts routinely consider the purpose of IP, including the moral rights of authors and inventors and/or the value to the public of having access to works and inventions? Contrary to Merges's suggestion the answer seems clearly to be `yes', including in the USA. For example, in June 2013 the US Supreme Court held that the patentability of isolated genes could not be determined without regard to the purpose of the US patent system. In its opinion, as that purpose is to promote creation, and the act of isolating a gene from its natural environment does not involve the creation of anything, isolated genes are not patentable under US law, contrary to the position in Europe and elsewhere. Such policy-based reasoning in IP is common, including in the UK, as two further recent examples serve to demonstrate.

The first is Lucasfilm Ltd v Ainsworth, involving a claim of artistic copyright in the storm trooper helmet from Star Wars as a `sculpture' within the meaning of the Copyright, Designs and Patents Act 1988. In considering the claim, the

JR Pennock and JW Chapman (eds), Justifications: Nomos XXVIII (New York University Press 1986) 49; K Henley, `Abstract Principles, Mid-Level Principles, and the Rule of Law' (1993) 12 L & Phil 121; L Alexander and K Kress, `Against Legal Principles' (1996-97) Iowa L Rev 739.

See Merges (n 38) 14 (`[T]here are not that many ties to break. There is no need to resort to lower levels of analysis in many cases.')

Association for Molecular Pathology v Myriad Genetics Inc 569 US 12-398, 132 SCt 1794 (2013). For a discussion see J Pila, `Isolated Human Genes: The patent equivalent of a non-copyrightable sound recording'

Court noted the difficulty of understanding the legislative provisions in question without reference to their original purpose and historical develop- ment. According to its analysis, that purpose and development were very different from those of literary copyright, which was introduced with the utilitarian aim of protecting `the commercial interests of stationers (the early publishers) and booksellers, and [controlling] unlicensed (and possibly subversive) publications, rather than the vindication of the legal and moral rights of authors'. In contrast to this, the recognition of artistic copyright in three-dimensional objects was, the Supreme Court held, part of a scheme of graduated protection aimed at distinguishing artistic from functional objects. It followed that the category of artistic copyright in sculptures was to be interpreted narrowly--`quite unlike the protection afforded by the indiscrim- inate protection of literary copyright'--so as to be confined to truly artistic works, viz, works of an artistic nature created by a person meriting the description `author', as distinct from mere `works with ``eye appeal'' '. On the basis of this definition, the helmet was held not to be a sculpture in which artistic copyright subsisted.

So too in the patent case of Human Genome Sciences Inc v Eli Lilly, the

legislative purpose of IP protection helped to determine the legal issue in dispute. That issue was the meaning of the requirement that an invention be susceptible of industrial application in order to be patentable. In deciding it, Lord Neuberger invoked his understanding of `the purpose of the patent system' as being `to provide a temporary monopoly as an incentive to innovation, while at the same time facilitating the early dissemination of any such innovation through an early application for a patent, and its subsequent protection'. In his opinion, this purpose justified relaxing the industrial applicability requirement for pharmaceutical inventions. The reason was the particular importance of patents in the pharmaceutical field as a means of securing funding for pharmaceutical research, and the public interest in facilitating such research and (therefore) in facilitating the grant of patents to assist in securing funding for it.

Four inferences of current importance may be drawn from these cases, each of which challenges JIP while supporting Resnik's approach. One is that the principled application and development of IP depends on agreement over its normative basis. Another is that one cannot understand its normative basis without knowing something of its historical origins and function. A third is that the various regimes that fall under the umbrella of IP do not have a uniform history or foundation; and that even when restrictively defined to cover patents and copyright, IP is far from a monolithic legal entity. And a fourth (related to this third inference) is that the purpose of IP regimes is understood differently by different courts in different jurisdictions, with concrete implications for their scope and application. Thus, and as reflected in the reasoning in AMP and HGS above, whereas the US Supreme Court regards the purpose of the US patent system as being to promote creation, the UK Supreme Court regards it as being to promote innovation, including by ensuring that researchers have the monopoly rights they need to attract the external funding required to pursue their research.47 The result is very different implications for the scope of IP rights, as the outcomes in AMP and HGS themselves demonstrate.

In sum, courts commonly invoke the historical and theoretical roots of IP to assist in the interpretation and application of modern copyright and patent legislation. In addition, it seems reasonable to expect that the day-to-day importance of those roots will increase in the UK and other jurisdictions as a result of the impact of European and international harmonization in promoting teleological methods of interpretation and challenging UK understandings of IP law and policy. On the other hand, other recent UK decisions point to a further result of that impact in the form of an increased judicial reliance on principles rather than foundational theory when interpreting and applying IP legislation. An example may again be offered from recent UK Supreme Court opinions, this time involving the scope of the EU exemption from copyright infringement covering temporary acts of reproduction in the digital environ- ment. According to the Court in Public Relations Consultants Association Ltd (PRC) v The Newspaper Licensing Agency Ltd (NLA), the lower courts' view of copyright as prohibiting any `consumption of [a] work,' including any unauthorized copying of a webpage made on a computer screen in the course of internet browsing, was not justified by `the policy of the EU to maintain a ``high level of protection of intellectual property'' ' as had been argued. The reason, it held, was the need to read that policy in light of the EU's further commitment `to allow[ing] the ordinary use of the internet'. Thus, it was the principles of ensuring a high level of IP protection and not impeding the ordinary use of the internet that determined Lord Sumption's opinion in PRC v NLA, rather than the reasons (past or present) for such protection per se. While this outcome seems contrary to that advocated in JIP, the reasoning cf Myriad (n 40) 2116 (excerpted at n 84). The theory of patents supported in HGS is effectively that argued for in EW Kitch, `The Nature and Function of the Patent System' (1977) 20 J L Econ 265-90, namely, that patents are prospects for developing technological opportunities. L Hoffmann, unpublished FHS patent law seminars delivered at the University of Oxford (Hilary Term 2012).

Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society [2001] OJ L 167/10 (Information Society Directive) art 5(1).

See ibid 83 (suggesting that a Kantian perspective of this issue would result in IP rights trumping the interests of would-be licensees so as to require online permissions).

deployed in reaching it supports the turn from foundational theory to principles that it is the book's main purpose to support.

That one should see evidence of that turn in the UK's Europeanised IP regime is, it is submitted, unsurprising, given the importance of principles in European law more generally. In addition, and further supporting Merges's (and Resnik's) analysis, that importance may be attributed to the function of principles in pluralistic legal models as a means by which foundational (social and legal) differences can be transcended via the pursuit of common `midlevel' objectives.53 For example, in the European legal order it has long been predicted that principles will displace the autonomous orders of EU Member States and the conflicting traditions which underpin them in support of a form of harmonization that accommodates legal and social diversity. The predic- tion underlines the commonalities between the IP and EU legal fields on account of the diverse traditions and philosophies on which each is built, and thereby explains the support which Merges's pluralistic approach to IP receives from European jurisprudence. Moreover, the analogy between Merges's and European principles-based legal models is underlined by the central role of proportionality in each, reflected also in Resnik's approach. In Merges's model that role is described as being two-fold. First, proportionality is said to explain and justify the legal restrictions on the scope and enforcement of IP rights; and second, as the midlevel principle, it is said to explain and justify the function of principles in IP generally. Similarly in Europe, proportionality is among the most important principles of the EU legal order, and serves two central functions to that end. First, it represents a constraint on the exercise of EU legal competences and a means by which the primary values of the European community are expressed and reconciled. And second, it supports a model of law built around those values, each of which has a priori equality and exists to be maximized via a process of weighing and balancing on the facts of individual cases. At first glance these roles and conceptions appear to differ. For example, in European law (and consistent again with Resnik's approach) intellectual property pluralism copyrigh

See JIP xi, 10, 139-41. In Merges's account this results in a conception of midlevel principles as philosophically neutral, in the sense of being simultaneously explicable with reference to utilitarian and non- utilitarian arguments for IP. See n.

See eg N MacCormick, `Beyond the Sovereign State' (1993) 56 MLR 1. See further G Itzcovich, `Legal

Order, Legal Pluralism, Fundamental Principles. Europe and Its Law in Three Concepts' (2012) 18 ELJ 358.

cf JIP 159 (describing proportionality as `the most undertheorized of the four midlevel principles', and as `rarely identified as a stand-alone principle').

See The Treaty on European Union [2010] OJ C83/13, art 5(4); T Harbo, `The Function of the Proportionality Principle in EU Law' (2010) 16 ELJ 158; A Ohly and J Pila (eds), The Europeanization of Intellectual Property Law: Towards A European Legal Methodology (OUP 2013, forthcoming) chs 1, 8, 9, 13.

593 [17] (Lord Steyn) (`The interplay between articles 8 and 10 [ECHR] has been illuminated by the opinions in the House of Lords in Campbell v MGN Ltd ... . For present purposes the decision of the House on the facts of Campbell and the differences between the majority and the minority are not material. What does, however, emerge clearly from the opinions are four propositions. First, neither article has as such precedence over the other. Secondly, where the values under the two articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary. Thirdly, the justifications for proportionality is a methodological tool by which substantive principles such as dignity and efficiency are optimized in individual cases via a process of weighing and balancing, whereas in Merges's account it is a substantive principle, equivalent to dignity and efficiency. On closer inspection, however, this difference dissipates. The reason is Merges's definition of proportionality as requiring that an IP right `not confer on its holder leverage or power that is grossly disproportionate to what is deserved in the situation',59 where what is `deserved in the situation' depends on the social usefulness and value of the subject matter in which the right subsists.60 Thus defined, proportionality in Merges's account supports a conception of IP rights as a fair (not grossly disproportionate) market-based reward for an author's or inventor's provision of an object having an identifiable social use and value. In this way it expresses certain values and ensures that they are reflected in the detailed rules and practices of IP. Whether those values are consistent with his foundational theory is another and more difficult question returned to below.

In sum, and like that of Resnik, Merges's model of IP maps closely to European legal models, making it unsurprising to find evidence of the turn to principles which he supports in the UK's Europeanized IP system, and natural to look to that system as a further testing ground for his account of the day-to- day operation of IP more generally.

2. Pluralism versus Utilitarianism in Merges's Principles

The European Union has been active in the field of IP since the 1950s, when it began work on the creation of unitary patent and trademark systems for the then members of the European Economic Community. Its first IP legislation was introduced in 1980, and followed in 1991 with the first EU copyright Directive. Seven years (and several further copyright directives) later came the first EU legislation in patent law, covering the field of biotechnological inventions, followed in 2001 by a near-complete code for copyright in the form of the Information Society Directive.

Both the Information Society and Biotech Directives have had an enormous impact on UK law. The Information Society Directive, being the more extensive instrument, requires that EU Member States grant authors certain interfering with or restricting each right must be taken into account. Finally, the proportionality test must be applied to each. For convenience I will call this the ultimate balancing test.') rights in respect of their works subject to certain permissible defences. Since its introduction, the Court of Justice of the EU (CJEU) has been busy defining who is an author, what is a work, and what acts copyright owners are entitled to prevent. From its jurisprudence two main themes can be identified. The first is that copyright exists to ensure a high level of protection for authors, consistent with European traditions of authors' rights and with the recognition of copyright as a constitutionally protected species of property. Thus, the CJEU has held that copyright subsists in and only in subject matter which expresses an author's own intellectual creation (in the sense of resulting from an author's free expression of his or her creative abilities and bearing his or her personal mark), that it is limited in scope accordingly, and that its defences must be interpreted restrictively as derogations from an author's primary rights. And the second theme is that the high level of protection for authors' rights must accommodate certain third party rights and European public interests, including fundamental rights, the four freedoms of the single market, and the need to promote technological development. Thus, the CJEU has recognized legal certainty as a further reason for interpreting copyright defences restrictively, the EU exhaustion doctrine as applying to all `transfers of ownership' for payment, including transfers of ownership effected by the provision of a digital copy of a work, and mechanisms for enforcing copyright on the internet as needing to take account of users' privacy, freedom of expression and data protection rights, in addition to service providers' freedom to conduct a business--each of which is guaranteed, alongside the protection of IP, by the EU Charter on Fundamental Rights.

It seems clear from these themes that the European copyright system is premised on a `personal but unselfish' rights model of IP similar to that which Merges advocates. According to that model in its European guise, the aim of copyright is to ensure a high level of protection for authors through the grant of morally justified property rights, which also take account of third party rights and public interests. On the other hand, and following from this, while EU law also prioritizes certain operational principles in copyright, they are somewhat different from the midlevel principles that Merges identifies. One reason is their derivation from the EU Treaties and Charter rather than the detailed rules and practices of copyright. Thus, in the European context, the operative principles of copyright restate the established basic values of the European community, thereby ensuring that the specific rules and practices of the regime are tethered to those values. Hence the primacy among them of the free movement of goods, services, people and capital throughout EU Member States (guaranteed by the TFEU71 and expressed, inter alia, in Recitals (1) toof the Information Society Directive), the protection of property and dignity (guaranteed by Articles 17(2), 1 and 13 of the EU Charter and expressed, inter alia, in Recitals (3), (4), (9) and (11) of the Information Society Directive), and the protection of freedom of expression and educational values (guaranteed by Articles 11 and 14 of the EU Charter and expressed, inter alia, in Recital (3), (14) and (34) of the Information Society Directive). The position is different with respect to the EU patent system. Still confined to the field of biotechnology, that system is premised less on a `personal but unselfish' rights model of IP than the utilitarian model reflected in the decisions of the UK and US Supreme Courts above. According to that model in its EU form (and consistent with the reasoning of HGS particularly), the aim of the patent system is to promote European industry and the internal market by ensuring sufficient harmonized legal protection to encourage investment in biotech research and development while also respecting national regulatory provisions regarding such research and development; the public domain of (non-patentable) discoveries; and `fundamental principles safeguarding the dignity and integrity of the person', as well as values of individual autonomy and the right to have an opportunity to consent to the use of one's own biological materials. Thus, and as in European copyright, one sees an emphasis on ensuring a high level of protection for inventors, albeit for utilitarian rather than deontological reasons, and still subject to certain Charter-derived third party rights and societal interests. Principal among those rights are human dignity and the integrity of the person, which the Directive recognizes as supporting the exclusion from patentability of a range of biotechnological subject matter, in addition to informing basic principles of patentability themselves.

Among other things, this discussion draws attention to the way in which the principles in Merges's account are derived. Rather than stemming from the basic values of a community or IP regime(s), the source of Merges's principles is said to be the individual rules and practices of IP themselves. Those rules and practices include: for non-removal, the exclusion of non-artefactual subject matter (such as information and laws of nature) from copyright and patent protection, and requirements of copyright and patent protection; for efficiency, the patentability requirement for inventive step and the fair use defence to copyright;80 for dignity, authors' and inventors' moral rights of paternity and the fabric of all copyright systems; and for proportionality, the fair use defence (again), and the rules limiting injunctive and compensatory relief, preventing snippets of gene sequences from being patented, and requiring that patent claims be commensurate with the specification's teaching.

Given a pluralistic theory of IP, these explanations seem surprising, and normatively less neutral than Merges suggests. For example, it seems counter-intuitive to attribute the exclusion from protection of non-artefactual matter and snippets of gene sequences to a concern for the public domain and proportionality rather than the nature of IP as a reward or incentive for intellectual creation--as they were indeed attributed in AMP--unless one supports an exclusively utilitarian understanding of the purpose of patents. And so too it seems counter-intuitive to attribute the fair use defence to efficiency, and a desire to prevent irrational refusals by copyright owners to See JIP 140 (`Midlevel principles engage foundational values in a number of ways, but they do not depend on any particular set of values for their validity. They spring from doctrine and detail, from the grain of actual practice.')

See ibid 150-51, ch 6. On the connection between proportionality and the requirement that patent claims be commensurate with the specification's teaching see further J Pila, `Chemical Products and Proportionate Patents Before and After Generics v. Lundbeck' (2009) 20 KLJ 489. On proportionality and patent scope more generally see J Pila, `Patent Eligibility and Scope Revisited in the Light of SchuЁ tz v Werit, European Law, and Copyright Jurisprudence' in RC Dreyfuss and JC Ginsburg (eds), Intellectual Property at the Edge (CUP 2013) ch 18.

See JIP 144-5 (principles are `theoretical or policy-oriented; yet because they are not rooted in any specific normative framework, they avoid what might well be a fruitless debate if conducted at that level.') See also ibid 6-8, 130-31 (connecting efficiency and non-removal to utilitarian theories of IP, proportionality to Lockean, utilitarian and Rawlsian theories, and dignity to non-utilitarian and continental European IP systems). Compare the view of Resnik (n 33).

The point is alluded to by Merges himself; see JIP 39. See also Mayo Collaborative Services v Prometheus Laboratories Inc 566 US 10-1150, 132 SCt 1289, 1293 (2012) (justifying the exclusion from US patent protection of natural phenomena, mental processes and abstract intellectual concepts with reference to the purpose of patent law in promoting innovation. According to the Court, `monopolization of those [basic] tools [of scientific and technological work] through the grant of patent might tend to impede innovation more than it would tend to promote it.'); Myriad (n 40) 2116 (`As we have recognised before, patent protection strikes a delicate balance between creating ``incentives that lead to creation, invention, and discovery'' and ``imped[ing] the flow of information that might permit, indeed spur, invention.''... We must apply this well-established standard to determine whether Myriad's patents [in respect of isolated human genes] claim any ``new and useful .. . composition of matter'' '); but cf Myriad (n 40) 2116-17 (justifying the exclusion from US patent protection of isolated human genes (as products of nature) with reference to the purpose of patent law in promoting creation, and the consequential need for an act of creation to support a patent).

license the use of their works (as Merges does), rather than, for example, to autonomy, and a desire to protect its instantiation in such third party rights and interests as freedom of expression and education--unless one again supports an exclusively utilitarian understanding of the purpose of copyright. This is particularly given the widespread connection of the fair use defence to such rights and interests, the centrality of autonomy to Merges's foundational theory, the difficulty of squaring that theory with the view of fair use which Merges advocates, and the law-and-economics premise of that view in a conception of copyright as conferring a right to a certain market power with respect to a work (rather than a right to exclude others from its use). Regarding the latter particularly, even if we accept Merges's claim that autonomy requires a conception of IP rights as including `a right to try to make some money'--a claim which seems doctrinally and normatively problem- atic--it does not follow that IP rights confer only such a right. To suggest otherwise seems difficult to defend other than on an explicitly utilitarian understanding of IP as existing to facilitate a market in IP rights and their related subject matter for economic or other societal reasons.

The same utilitarian bias underpins Merges's discussion of patent rights and essential medicines. There he writes that as `[t]he dignity interest of researchers who develop the drug is not directly at issue, [and] nor is the nonremoval principle', the issue of access to essential medicines is appropriately conceived as one `of efficiency and, to a lesser extent, proportionality'. The result is a discussion in which considerations of utility again eclipse the individual rights and interests of third parties, notwithstanding the well-established link between dignity and health care, and the centrality of dignity to both Merges's foundational theory and operational model of IP. Thus, he writes, that `the real question' is not whether human rights trump property rights to require access to essential medicines, but `what is the best way to maximize the number of effective pharmaceutical products that are brought to bear on [human]

See eg JIP 155, 251 (describing Merges's `enthusiasm for individual IP rights' as putting him on `the side of those who would be cautious in finding a particular practice to be fair use, lest a rush to apply the fair use label will stifle the formation of a market.')

This is consistent with Merges's further claim that `[a]uthors gain nothing without a market': JIP 155; but cf JIP 295 (`the essence of property is the right to exclude' (emphasis added)).

JIP 81; see also ibid xi, 40.

IP rights do not confer a right to use a particular subject matter, much less exploit it commercially. See eg Biotech Directive (n 62) (14) (`Whereas a patent for invention does not authorise the holder to implement that invention, but merely entitles him to prohibit third parties from exploiting it for industrial and commercial purposes'). And so too normatively, the conception of property rights as rights to turn a profit has no clear basis in accepted understandings of property.

On the utilitarian premise of market failure views of fair use see M Spence, `Intellectual Property and the Problem of Parody' (1998) 114 LQR 594.

JIP 278.

This connection has been particularly influential in Indian patent law; for a discussion see J Pila, `Some Reflections on Method and Policy in the Crowded House of European Patent Law and their Implications for India' (2012) 24 NLSIR 54.

diseases?' The result is the same conclusion as that reached by Resnik. In Resnik's account, however, it is the product of `a careful balancing of three values--utility, autonomy, and justice--in light of the facts and circumstances of the case, and a view of utility as having special weight on account of the function of patent law in `promot[ing] the progress of science and the useful arts'.

In sum, the emphasis on market-based considerations of efficiency and proportionality in Merges's model of IP enables utility to eclipse the values which he professes to hold most dear in his foundational theory, including those of autonomy and dignity, thereby undermining that theory and the pluralistic claims of his model itself.

Two questions arise from this. The first is: what would an IP regime, which did prioritize those values, look like? And the second is: to what, if any, extent, can European law itself be said to support such a regime? In the final section of this article these questions are considered with reference to the UK's Europeanized fair dealing defence and exclusions from European patentability.

3. Taking Autonomy and Dignity Seriously in IP

In UK and European copyright law, third party rights and societal interests are mainly protected after the establishment of a valid IP interest, at the point of deciding: (a) whether a competing interest is also engaged by the allegedly infringing act, so as to enable a legislative or other copyright defence to be raised; and (b) the implications of any such interest and defence for the defendant's liability and the claimant's entitlement to relief. Thus, to identify the reconciliation of competing rights and interests in copyright we need to look beyond its general tests of subsistence and infringement to its statutory and other defences and remedies. And of central importance in that regard are the fair dealing defences, which--and as noted above--permit dealings with a work for the purpose of criticism or review, reporting current events, and non- commercial research or private study provided they are `fair'. Hence the role of the courts in effecting the balance between IP owners' and third party fundamental rights in UK copyright via determinations of fairness.