Statutory Domain and the Commercial Law of Intellectual Property

For more than a century, the commercial law of intellectual property has generated intense controversy with ever-growing stakes. The central fulcrum in the area—the “first sale” or “exhaustion” doctrine—has produced four recent Supreme Court cases, a host of lower court decisions, and a mountain of scholarly criticism. Scholars who otherwise agree on little unite in excoriating the doctrine as a “per se,” “ham-handed,” “sterile” rule that is “frustratingly under-theorized” and grounded in “a set of arid technicalities of no particular value.” Champions of intellectual property dislike the doctrine because they want infringement suits to enforce contractual restrictions on goods embodying intellectual property. Skeptics of intellectual property want a stronger doctrine that would sweep away all contractual restrictions and encumbrances on such goods. We argue that both camps wrongly assume that the doctrine was created through common law reasoning in pursuit of substantive policies such as fostering an unencumbered flow of goods in commerce. This Article demonstrates that, in both its historical origins and its current application, the law in this area is based on statutory interpretation and is directed toward the more nuanced goal of limiting the domain of intellectual property statutes to avoid displacing other areas of law. This thesis explains why the foundational cases reject intellectual property infringement claims but are agnostic as to whether the unsuccessful plaintiffs could achieve their goals under contract or property law theories. The century-long development of law in this area also provides useful insights for statutory interpretation theory by illustrating precisely how courts limit a statute’s domain so that one area of law appropriately yields to another.