Interpretation of Institutional Management Innovation in the Restriction of Intellectual Property Rights

Author: USA IP Reasearch Team                          Published time: 04/12/2024

Abstract
Rights are interests protected by law, that is, freedoms determined by law. If people exercise their rights beyond their boundaries, they will ultimately not only harm the rights and freedoms of others, but also damage their own rights and freedoms. Rights and restrictions on rights always coexist. Intellectual property rights are private rights and also a new type of civil right, which must likewise follow the fundamental operational rules of rights.

Keywords: Intellectual Property, Restriction of Rights, Rationality, Interpretation

I. Overview of the System of Restrictions on Intellectual Property Rights

The exercise of rights and the restriction of rights are essentially consistent in nature. Regarding restrictions on rights, two relatively authoritative theories have basically been formed in jurisprudence: the external theory and the internal theory. Among them, the representative figure of the external theory, the German scholar Cohen, pointed out that rights are inherent matters existing prior to the state and law. Therefore, the scope of rights reflected by their inherent nature constitutes the boundary of rights. State law may impose restrictions external to rights. Restrictions on rights imply two things—rights and restrictions. The so-called rights refer to rights in themselves, which are unrestricted; then there exists a right after restriction, which may be referred to as a limited right. Hence it is called the external theory. Generally speaking, rights should be restricted, but rights themselves may exist in an unrestricted state, and there is no necessary connection between restriction and rights. Only when a person’s rights are required to coexist harmoniously with the rights of others or with public interests does this connection become apparent.

As far as restrictions on intellectual property rights are concerned, their essential meaning is to constrain the exclusive and monopolistic nature of intellectual property rights so as to achieve a balance between public interests and individual interests. Their ultimate purpose is to provide institutional guarantees for the public to access, obtain, and share knowledge. They are also the basic means and methods for balancing private interests and public interests. However, scholars have not yet reached a consensus on the meaning of restrictions on intellectual property rights, either academically or methodologically.

China’s intellectual property expert Mr. Zheng Chengsi offered an even more incisive understanding of this issue. He believed that restrictions on intellectual property rights refer to situations in which certain acts should originally constitute infringement upon intellectual property rights, but because the law treats these acts as exceptions to infringement, they no longer constitute infringement. In the laws of some countries, restrictions on rights are referred to as exceptions to acts controlled by exclusive rights. Restrictions on the territorial effect and term of protection of intellectual property rights may all be regarded as restrictions on intellectual property rights. However, content that does not originally fall within the scope of intellectual property protection is not considered a restriction on intellectual property rights.[1]

II. Institutional Judgment on Restrictions of Rights and Boundaries of Rights

The exercise of any right has certain boundaries, and no right is unrestricted. Generally speaking, restrictions on rights further reduce rights that have already been legally obtained. Their prerequisite is the existence of lawful and valid rights; otherwise, restrictions on rights cannot even be discussed. The boundary of rights refers to the limits and scope within which a rights holder may exercise rights. It generally does not involve reducing existing rights, but merely requires rights holders to exercise their rights within lawful limits and scope. To further explain this issue, philosopher John Searle’s explanation of the nature of rules may be borrowed to demonstrate the distinction between restrictions on rights and boundaries of rights.

Based on the above understanding, boundaries of rights belong to constitutive rules, whereas restrictions on rights belong to regulative rules, namely adjustments to existing rights rather than the creation of new rules. Accordingly, restrictions on intellectual property rights have the following implications:

First, as a basic legal system, the core function of restrictions on intellectual property rights is to balance the exclusive rights already obtained by intellectual property holders with social public interests, so that the public’s freedom and right to obtain knowledge and information are not affected by the creative activities of intellectual laborers.

Second, the content of restrictions on intellectual property rights does not itself belong to the exclusive rights of intellectual property. However, because rights holders may abuse their monopolistic rights in the process of exercising their rights and thereby infringe upon the public’s freedom to obtain knowledge and engage in re-creation, the law must regulate such conduct.

Third, the object of restrictions on intellectual property rights is legally acquired rights. It further reduces existing intellectual property rights and transfers the reduced portion to the public for the purpose of balancing private rights and public power. Therefore, territoriality, temporality, and the limited nature of objects do not belong to restrictions on intellectual property rights, but are merely characteristics of already acquired intellectual property rights or conditions necessary for their lawful and valid existence.

Accordingly, this article holds that restrictions on intellectual property rights refer to the further reduction of legally valid intellectual property rights during their exercise and utilization, thereby achieving a balance between public power and private rights.

III. Institutional Management Innovation in the Rationality of Restrictions on Intellectual Property Rights

Intellectual property law both encourages people to create intellectual achievements and grants them exclusive rights within a certain period and territory, while at the same time necessarily imposing appropriate restrictions on such monopolistic rights in order to achieve a balance between public interests and private interests. This article believes that the rationality of restrictions on intellectual property rights may be explained and understood from the following aspects:

3.1 Based on the Need for Fairness and Justice

Human pursuit of fairness and justice has never ceased, and with the progress of the times and the development of society, this pursuit has become increasingly urgent and clear. What, then, are fairness and justice? How does the concept of restricting intellectual property rights embody fairness and justice? Philosophers believe that the main issue of justice concerns the basic structure of society, or more precisely, the manner in which major social institutions distribute rights and obligations and determine the allocation of benefits arising from social cooperation.

The ancient Greek philosopher Democritus believed that justice contains two levels of meaning. First, justice requires people to fulfill their obligations, whereas injustice causes people to neglect and betray their obligations. Second, the power of justice lies in firmness and fearlessness in judgment, whereas injustice results in fear of misfortune. Plato believed that justice exists in the harmonious relationship among the various parts of the social organism. If each class concentrates on its own work and does not interfere with the work of another class, then justice exists. In other words, justice means doing one’s own work without meddling in others’ affairs. The fundamental principle of justice is that every person must perform in the state the task best suited to his nature. When merchants, auxiliaries, and guardians each perform their own functions without mutual interference, justice arises, thereby making the state a just state.

Justice is the central star governing all society, the axis around which the political world revolves, and the principle and standard of all things. Every action between people occurs in the name of justice and depends upon it. Justice is by no means a product of law; on the contrary, in all situations involving human interaction, law is merely the expression and application of justice.②

In the words of Hayek, although there are indeed differing conceptions of justice, this fact does not exclude the possibility that there exists an objective standard for detecting injustice—a negative standard with which many, though not all, systems of rules of just conduct may conform. The pursuit of the ideal of justice (like the pursuit of truth) does not presuppose that justice (or truth) is already known; rather, it presupposes only that we know what we regard as unjust (or erroneous).

In essence, restrictions on intellectual property rights involve the allocation and coordination of the interests enjoyed by holders of intellectual achievements among public users and disseminators. They are not only tools for allocating benefits, but also embody the values of fairness and justice. This distributive conception of justice protects the interests of creators while also safeguarding fairness and justice in the public’s access to and use of knowledge. The two complement each other and are mutually beneficial. Ultimately, they realize the fundamental values and goals of fairness and justice underlying intellectual property rights, thereby strengthening and supporting the foundation of the intellectual property system.

3.2 Based on the Need for Public Interest

With human progress and social development, people’s values are constantly adjusted within this process of development. The value system of civil law, centered on autonomy of private law, is always influenced by both socio-economic and political factors. Changes in its legal principles are one manifestation of this influence. In the pre-capitalist period, the value orientation of civil law was obligation-centered. After entering the capitalist era, civil law adopted a rights-centered value orientation. From then on, civil law became the law of rights. Civil law became a declaration of rights, during which individualism and autonomy were greatly promoted and human individuality developed significantly. By the late nineteenth and early twentieth centuries, however, individuality became restricted and autonomy of will was correspondingly modified. Civil law thus shifted from a rights-centered orientation to a society-centered orientation. Intellectual property law, as an important component of the civil law system, was likewise profoundly influenced by this intellectual trend. What, then, is meant by a society-centered orientation?

The essential meaning of a society-centered orientation is that social and individual development should be balanced on the basis of public interest and the coordination between public and private interests. Public interest constitutes the rational basis for restrictions on intellectual property rights. Under the influence of public interest ideology, intellectual property rights must undergo scrutiny under this perspective, and the exclusive rights of intellectual property holders must be appropriately restricted so as to promote comprehensive social, economic, cultural, and technological development. The public may thus enjoy the common fruits of knowledge progress and prosperity. As Article 27 of the United Nations Universal Declaration of Human Rights states, everyone has the right freely to participate in the cultural life of the community, to enjoy the arts, and to share in scientific advancement and its benefits. The establishment of public interest not only makes it possible and convenient for the public to obtain knowledge and information, but also provides creators with richer sources of inspiration and intellectual material. From the perspective of jurisprudence, a person’s humanity has never been treated merely as a means. We may simply conclude that restrictions may be imposed on conduct involving others for the sake of public interest.

It can therefore be seen that people regard public interest as an absolutely indeterminate concept, whose connotation and extension are unclear. Nevertheless, it stands in opposition to private interest and is composed of the combined interests of an unspecified majority of individuals. Restrictions on intellectual property rights exist precisely for the benefit of this unspecified majority. Among them, creators themselves are also members of this unspecified majority. When creating intellectual achievements, they are inspired by the thoughts of predecessors and build upon prior achievements in engaging in re-creation. There are no completely original intellectual achievements in the world. Thus, the public is not viewed as illegitimately encroaching upon the privileges of actors within the private sphere; rather, through their own conduct, the public creates, maintains, and genuinely embodies the existence of necessary public interests.③

Indeed, restrictions on intellectual property rights benefit every intellectual laborer, because they too have previously—and still do—use the intellectual achievements of others as members of the public. It is precisely the existence of such public interests that enables intellectual achievements to be continuously created and subsequently replaced by newer intellectual achievements. Intellectual achievements are thus continuously extended through cycles of creation and re-creation, promoting social development and progress while simultaneously realizing the interests of intellectual property holders.

3.3 Based on the Need to Reconcile the Contradiction Between Public Interest and Private Interest

Intellectual property rights embody both public interests and private interests, and the relationship between them is dialectically unified. This is determined by the dual nature of intellectual property rights themselves. On the one hand, intellectual achievements cannot arise without the creative labor of individuals. It may be said that without intellectual labor, intellectual achievements would not exist. On the other hand, no intellectual achievement can exist independently of the absorption and reference to preexisting knowledge and information. All new intellectual achievements are produced under the inspiration and guidance of previous ideas; therefore, intellectual achievements always exhibit continuity in content and duration over time. As the British scholar Bernal pointed out, “No science can conscientiously claim an exclusive right to a technology.”

However, public interests and private interests are not absolutely conflicting. Mandeville once pointed out that “the universal motive in human nature—self-love—may be directed in such a way that the pursuit of personal interests also promotes public interests.”

Although public interest is the ultimate objective of the intellectual property system, and the intellectual property laws of all countries take the promotion of social, economic, cultural, and technological development as their ultimate legislative purpose, intellectual achievements are not self-generating and self-destroying objects. They must be produced through human intellectual labor, and only humans possess this unique intellectual capacity. Therefore, every intellectual achievement inevitably bears the imprint of human intellectual creation. In this respect, creation is the source of intellectual achievements. Without individual creative activity, there could be no rich and diverse intellectual achievements in society. This demonstrates that intellectual achievements are inherently private in nature. Clearly, contradictions between the public interest and private interest inherent in intellectual achievements are inevitable. Their conflicts cannot be fundamentally eliminated; they can only be alleviated so as to achieve an approximate balance among creators, users, and disseminators. This is precisely the original intention behind establishing restrictions on intellectual property rights.

Therefore, although restrictions on intellectual property rights and protection of public interests naturally involve contradictions and frictions, in order to reconcile these contradictions and ultimately achieve harmonious development between the two, it is necessary to reduce intellectual property interests to a certain extent and to establish institutional guarantees enabling the public to obtain, use, and disseminate knowledge and information. In this way, conflicts may be minimized, allowing both sides to achieve mutual benefit and common development.

IV. Reflections on Institutional Management Innovation in Intellectual Property Systems

First, prerequisite conditions do not permit the construction of property rights merely because such rights are beneficial to social welfare. If intellectual property rights are granted solely for reasons of utility or social welfare, this may greatly reduce the ability of third parties to use common intellectual resources, thereby leading to inequality in the exercise of common property rights. In this sense, if the prerequisite conditions are satisfied, the construction of property rights is permissible regardless of whether a non-property status might better serve socially efficient objectives. For Gordon, Locke’s proviso serves as a dominant criterion of judgment, according to which intellectual property rights are legitimate so long as they satisfy this prerequisite condition.

Second, the prerequisite condition provides only limited protection to members of the public. If the common rights people enjoy are not adversely affected by creators’ property rights, then they have no grounds for complaint. The equal rights people enjoy and their rights to use common property are likewise subject to restrictions. This restriction derives from Locke’s proviso. Specifically, as long as creators’ enjoyment of intellectual property rights does not adversely affect others, others’ rights in common property may not exclude creators’ intellectual property rights. Locke’s proviso not only restricts creators’ intellectual property rights but also defines the proper scope for the exercise of public common rights. This dual nature of restriction makes Locke’s proviso appear more reasonable and thus more attractive.

Third, the elective condition regards only certain harms as relevant to the purpose of constructing property rights. It protects property from diminishing common resources; that is, so long as intellectual property rights increase the common stock of knowledge, even if they do cause harm to others, such harm is permitted—or even required—by the prerequisite condition. In effect, this ensures the enrichment of common resources. According to Gordon, the maintenance and expansion of the knowledge commons are required by Locke’s proviso. As long as intellectual property rights maintain or expand the knowledge commons, they possess legitimacy.

Although Gordon regarded Locke’s proviso as the standard for measuring the legitimacy of granting intellectual property rights, and also as the theoretical basis for restricting intellectual property rights, in reality any creator’s activities require the use of public resources and public intellectual achievements. These public resources are the common wealth of humanity, available for everyone’s use but not for appropriation as exclusive private rights. Otherwise, public resources would gradually be exhausted, public and private interests would become unbalanced, and human creative activity and social progress would ultimately be hindered.

References

[1] Li Yang. “Research on Innovation of the Intellectual Property System in the Context of the Digital Economy” [J]. China Legal Science, 2022(5): pp.112–130.

[2] Wang Liming. “Protection of Data and Network Rights and Interests from the Perspective of the Civil Code” [J]. Jurist, 20230(4): pp.3–15.

[3] Yang Lixin. “Research on the Legal Nature of Online Virtual Property” [J]. Social Sciences in China, 2021(2): pp.89–104.