Property in Licences and the Law of Things

McGill Law Journal Revue de droit de McGill

PROPERTY IN LICENCES AND THE LAW OF THINGS

Christopher Essert*

A theoretical account of property rights
needs to identify what, if anything, is distinctive
about property rights as opposed to other sorts
of rights; what makes them the sorts of rights
that they are. An important and prominent ac-
count of the distinctiveness of property rights
claims that they are rights to things. I argue
against this view: I show that a government-
issued licence (to fish or to drive a taxi or to op-
erate a radio station, say) is not a right to a
thing but should nevertheless count as a prop-
erty right. I consider two different arguments
for this rights-to-things view: one is based on
the Hohfeldian structure of property rights, and
one relies on the importance of information
costs in the law of property. While each of these
arguments teaches us important lessons about
property, none can properly support the conclu-
sion that property is rights to things. I suggest
that abandoning the rights-to-things view of
property can lead to important insights into
property theory more generally.

Pour expliquer les droits de proprit par
le biais de la thorie, il faut identifier ce qui
rend ces droits distinctifs par rapport aux
autres types de droit. Autrement dit, il faut
identifier ce qui les rend le type de droit quils
sont. Une dmarche importante du caractre
distinctif des droits de proprit prtend que ces
droits portent sur des biens. Je moppose ce
point de vue : je dmontre quun permis accord
par le gouvernement (par ex. pour pcher, con-
duire un taxi ou exploiter un service de radiodif-
fusion) ne confre pas de droit un bien mais
devrait tre considr comme un droit de pro-
prit tout de mme. Je prends en considration
deux arguments diffrents pour laborer cette
ide : le premier se base sur la structure des
droits de proprit propose par Hohfeld, et le
deuxime concerne
limportance des cots
dinformation. Mme si chacun de ces argu-
ments peut nous faire des leons importantes en
matire de la proprit, aucun ne permet de
conclure de faon adquate que les droits de
proprit sont des droits un bien. Je suggre
quon abandonne la perspective selon laquelle le
droit de proprit porte sur des biens; cet aban-
don peut nous mener des ides importantes en
thorie de la proprit plus gnralement.

* Assistant Professor, Queens University Faculty of Law. For helpful discussion and
comments on earlier drafts, Im grateful to Hanoch Dagan, Larissa Katz, Arthur Rip-
stein, Henry Smith, and Katrina Wyman. Thanks also to Ted Brook for his excellent re-
search assistance.

Citation: (2014) 59:3 McGill LJ 559 Rfrence : (2014) 59 : 3 RD McGill 559

Christopher Essert 2014

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Introduction

I.

Two Methodological Comments

II.

Licences

III.

Things and In Rem Claim Rights

IV.

Information Costs, Things, Interests, Concepts

V.

Ideal and Actual Licences

Conclusion

561

566

569

574

582

590

593

PROPERTY IN LICENCES AND THE LAW OF THINGS 561

Introduction
Youve probably heard that property is a right, not a thing.1 This idea
is hardly newsindeed, its a part of the so-called bundle of rights view
of property, the predominant view since the middle of the twentieth cen-
tury at least. Recently, however, some theorists have tried to restore the
central role played by things in our understanding of property, while at
the same time recognizing the obvious plausibility of the rights, not
things idea, by claiming that property is, distinctively, rights to things.2
In this article, I show why this claim is mistaken. But I do so in a non-
skeptical way. Let me begin by explaining what I mean by that. The best
way to do so is with a brief tour of some aspects of the historical develop-
ment of property theory.

In the beginning there was Blackstone.3 His well-known account de-
picts (or is said to depict) property rights as absolute rights to exclude
othersthe sole and despotic dominionfrom the external things of
the world.4 However, in the twentieth century, property law and theory
were dominated by the rejection of Blackstones view and the embrace of
the bundle of rights picture of property.5 This rejection had two parts.
Onethe one that gets most of the presswas a rejection of Blackstones
absolutism. Early into a property law course, students learn that, in fact,
the dominion of an owner over her property is often neither sole (co-

1 The phrase is CB MacPhersons. See his introduction in CB MacPherson, ed, Property:
Mainstream and Critical Positions (Toronto: University of Toronto Press, 1978) at 23.
2 See e.g. Henry E Smith, Property as the Law of Things (2012) 125:7 Harv L Rev 1691
[Smith, Law of Things]; JE Penner, The Idea of Property in Law (New York: Oxford
University Press, 1997) [Penner, Idea of Property]; Ben McFarlane, The Structure of
Property Law (Portland, Or: Hart, 2008) [McFarlane, Structure].

3 Well, not really. Of course there were theories of property before Blackstones: Platos,
Aristotles, Aquinass, Grotiuss, Hobbess, and Lockes, to take just a few examples. But
Blackstones account plays an important originating role in Anglo-American legal
thinking about property. For discussion of Blackstones influence, see e.g. Carol M Rose,
Canons of Property Talk, or, Blackstones Anxiety (1998) 108:3 Yale LJ 601.

4 William Blackstone, Commentaries on the Laws of England, 2d ed (Oxford: Clarendon
Press, 1767) vol 2 at 2. The parenthesized phrase in the text is a reference to the idea
that, taken as a whole, Blackstones account of property is far more subtle than the fa-
mous sole and despotic description leads one to think. See e.g. David B Schorr, How
Blackstone Became a Blackstonian (2009) 10:1 Theor Inq L 103; Rose, supra note 3.

5 Three representative works are AM Honor, Ownership in AG Guest, ed, Oxford Es-
says in Jurisprudence (London: Oxford University Press, 1961) 107; Charles A Reich,
The New Property (1964) 73:5 Yale LJ 733; Thomas C Grey, The Disintegration of
Property in J Roland Pennock & John W Chapman, eds, Property: NOMOS XXII (New
York: New York University Press, 1980) 69.

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ownership, leases, mortgages) nor despotic (nuisance law, easements).6
The othermy concern herewas a rejection of Blackstones idea that
property rights are rights to the external things of the world. Again, this
move is familiar to anyone who paid attention in their property law
course: we now think about property not just in terms of land and chat-
tels, but also in terms of intangibles such as choses in action, intellectual
property, and other more unusual entities (markets in hot news, profes-
sional licences, business goodwill, commercial exploitation of public imag-
es).
We can trace this second part of the rejection of Blackstone to the legal
realists. Based on Hohfelds explanation of private law rights in terms of
his fundamental legal conceptions,7 the realists argued that property
has ceased to describe any res, or object of sense, at all, and has become
merely a bundle of legal relations.8 But this view of property as a bundle
of rights is tied to a sort of skepticism about property rights; for the real-
ists, there is no there there when it comes to property. This skepticism
leads to both theoretical and legal problems: theoretically, it abandons the
plausible and intuitive idea that the concept of property has content (that
is, that it is the concept of some thing)9, and legally, it causes trouble for
those questions (about bankruptcy, takings, marriage, and so on) that
turn on whether or not a given right is a property right. Vandevelde cap-
tures the gist:

Once property was reconceived to include potentially any valuable
interest, there was no logical stopping point. Property could include
all legal relations.
…

[I]f property included all legal relations, then it could no longer
serve to distinguish one set of legal relations from another. It would
lose its meaning as a category of law.

…

6 A lot of contemporary property theory engages in debates about whether property
rights confer something like a Blackstonian dominion. This isnt really my concern here.
For discussion, see e.g. Thomas W Merrill, Property and the Right to Exclude (1998)
77:4 Neb L Rev 730; Hanoch Dagan, Property: Values and Institutions (Oxford: Oxford
University Press, 2011) ch 2.

7 See Wesley Newcomb Hohfeld, Some Fundamental Legal Conceptions as Applied in
Judicial Reasoning (1913) 23:1 Yale LJ 16 [Hohfeld, Some]; Wesley Newcomb
Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning (1917)
26:8 Yale LJ 710.

8 Arthur L Corbin, Taxation of Seats on the Stock Exchange (1922) 31:4 Yale LJ 429 at

429.

9 For more on this point, see JE Penner, The Bundle of Rights Picture of Property

(1996) 43:3 UCLA L Rev 711.

PROPERTY IN LICENCES AND THE LAW OF THINGS 563

[T]he determination of whether an interest was property was not

one of logic, but of politics.10

This is the reason that the deconstruction of property was, for some, in-
tentional: their idea was that policy decisions should be made based on
explicit political grounds rather than based on a discredited legal concep-
tual category. Thus we see the skepticism of the bundle of rights view of
property: it is a skepticism about the distinctiveness of the legal concept of
property in favour of what is taken to be a pragmatic view about policy
decision making.11

This skeptical view of property as a bundle of rights is now the domi-
nant one.12 Recently, however, some prominent property theorists have
begun to move away from the skepticism that is central to the bundle of
rights view of property. These scholars have instead attempted to take se-
riously the conceptual structure internal to property law and tried to
make sense of it on its own terms. Henry Smiths architectural approach
to property law illustrates the point: Smith argues that even the meta-
phor of a bundle of rights fails to explain the juridical fact that property
entitlements tend to be grouped together in certain distinctive ways, and
he argues that failing to notice this architecture of property law is a sig-
nificant drawback of the bundle of rights view.13
Instead, Smith and others have offered a non-skeptical view about the

nature of property. According to this view, roughly, the distinctiveness of
property rightswhat makes them the rights that they areis that they
are rights to exclude others from things. The view is non-skeptical be-
cause it attempts to explain property on its own terms and to make sense
of the idea that there is such a thing as the law of property.

10 Kenneth J Vandevelde, The New Property of the Nineteenth Century: The Develop-
ment of the Modern Concept of Property (1980) 29 Buff L Rev 325 at 362, 364. See also
Stephen Waddams, Dimensions of Private Law: Categories and Concepts in Anglo-
American Legal Reasoning (Cambridge: Cambridge University Press, 2003) ([o]nce the
concept of property has been extended beyond land and tangible things, there is no way
of saying what is property, or what is not property, without consulting a particular sys-
tem of law at a particular time at 174).

11 On skepticism and pragmatism, see John CP Goldberg, Introduction: Pragmatism and

Private Law (2012) 125:7 Harv L Rev 1640.

12 Just take a look at the opening pages of a property law textbook: see e.g. Mary Jane
Mossman & William F Flanagan, Property Law: Cases and Commentary, 2d ed (Toron-
to: Emond Montgomery, 2004) at 12; Bruce Ziff, Principles of Property Law, 5th ed
(Toronto: Carswell, 2010) at 2; Joseph William Singer, Property, 3d ed (New York: As-
pen, 2010) at 2; William B Stoebuck & Dale A Whitman, The Law of Property, 3d ed (St
Paul, Minn: West, 2000) at 6; Jesse Dukeminier et al, Property, 7th ed (New York: As-
pen, 2010) at 83.

13 Smith, Law of Things, supra note 2.

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Substantively, the non-skeptical view is in some ways a return to the
Blackstonian view. Just as in Blackstones case, the view has two interest-
ing parts. One part claims that property rights are rights to exclude; as
Ive already said, this part of the view is not my interest here and so Ill
leave it aside. The other partthe subject of this articleclaims, just as
Blackstone did, that property rights are rights to things. Indeed, one re-
cent article by Smith is called Property as the Law of Things; Ill adopt
that title and refer to the view shared by Smith and others as the law-of-
things view of property.

This non-skeptical view that property rights are rights to things has
been taken in two directions, each premised on a different understanding
of things. One understanding takes things to mean, roughly, concrete
physical thingsbasically, land and physical objects. This concrete view
essentially rejects the lessons of the twentieth century and denies what
most take to be trite lawthat there exists intangible property. It is hard
to see how this could be a plausible way of looking at property law; never-
theless, Ill consider one recent account that takes this line, because see-
ing why it fails on its own terms will be helpful in rejecting more plausible
views. The other prevalent version of the law-of-things viewSmiths
owntakes a much wider view of its core concept. For Smith, the theory
itself defines what a thing is to begin with.14 This is not as circular as I
am making it seem; rather, Smith has a way of defining what counts as a
thing that allows him to say that property rights in intangibles also
count as rights to things. As well see, however, this thought is subject to
problems of its own.
Now I can properly explain what I meant when I said at the outset
that I would propose a non-skeptical denial of the claim that property
rights are rights to things. The bundle of rights view that dominated
property theory in the twentieth century is a skeptical denial of the claim:
it says that property rights are not rights to things because, basically,
there is nothing distinctive about property rights at all. The law-of-things
view rejects that skepticism and tries to provide an account of property
that makes sense of its distinctiveness. In what follows, Ill suggest that
this is where property theory took a wrong turn, but Ill do so non-
skeptically. I agree that we must take propertys internal conceptual
structure seriously and try to make sense of the law on its own terms. But
I think that we can and should do that without committing to the law-of-
things view.
My way of entry into the argument will be to consider the idea that
the rights conferred on the holder of a government-issued licence to par-

14 Ibid at 1703.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 565

ticipate in some activity (like a taxi licence or a fishing licence or a radio
spectrum licence) might be property rights. Intuitively, I think that these
rights are property rights. The law seems (generally) to agree.15 In this ar-
ticle, Ill investigate this intuition with an eye, ultimately, to vindicating
it, and in so doing to further our understanding of the law of property.
My thought will be that the fact that the rights of a licensee count as
property rights gives us good reasons to doubt the law-of-things view, be-
cause the considerations that count in favour of that view can be accom-
modated just as well by a wider view of the nature of property rights. Ac-
cording to that wider view, property rights can be understood as (poten-
tially) transferable or alienable rights, good against the world, that others
not perform some action without the owners permission. Ill consider the
two arguments that I mentioned above about property as rights to things,
and aim to show that this alternative view of property better addresses
those concerns, while also vindicating the intuition that a licensee has a
property right.
My plan is as follows: First, I need to make two methodological com-
ments (Part I). The articles main arguments begin (Part II) with an in-
troduction to licences and their key features; here I also introduce what I
call the Ideal Licence, a thought experiment that allows us to better see
the nature of property rights and their (nonexistent) relationship to
things. Then I turn to the claim that property is the law of things. I con-
sider and reject two recent arguments that it is.16 First (Part III), I reject
the extreme form of the argument, based on the Hohfeldian structure of
property rights, which claims that only rights to land and tangible physi-
cal things can count as property. Next (Part IV), I consider a different sort
of argumentexemplified by Smiths viewthat in effect defines things
according to the law of property. I then (Part V) consider the relationship
between the Ideal Licence and actual licences. And I close with some dis-
cussion of the further questions raised by my arguments here.

15 For a recent case, see Saulnier v Royal Bank of Canada, 2008 SCC 58, [2008] 3 SCR
166 [Saulnier]. See also V(GG) v V(J) (1992), 98 DLR (4th) 265 (sub nom Verschuur v
Verschuur), 72 BCLR (2d) 387 (CA) [V(GG) v V(J)]; Attorney General v Chan Nai-keung,
[1988] 1 HKLR 70, [1987] 1 WLR 1339 PC [Chan Nai-keung].

16 Another argument, which I dont consider here, says that rights to things, in contrast
with the rights of a licensee or holder of other intangible property, have some sort of
pre-legal existence tied to the physical control of the physical object (for such an argu-
ment, see Boudewijn Bouckaert, What is Property? (1990) 13:3 Harv JL & Pub Poly
775 at 797). The argument fails because property rights distinctly provide protection
absent physical control, allowing owners to have property rather than merely hold it. So
there really are no rights to physical things absent the state, and the fact that the licen-
sees rights depend on the state cannot distinguish the two cases. See Immanuel Kant,
The Metaphysics of Morals, ed and translated by Mary Gregor (Cambridge: Cambridge
University Press, 1996) at 42, Ak.6:253.

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I. Two Methodological Comments
Before the argument of the article begins, I want to make two meth-
odological points. The first is about my choice to argue against the law-of-
things view based on the claim that a licensee can have a property right.
The second is about why it is important to try to provide a non-skeptical
account of property law at all.

First, why spend so much time on property in licences, a question that
after all seems rather peripheral?17 I think that property theorists ought
to consider the project of providing an analysis of the core features of the
concept of propertyin the common law as well as in our social lives more
generallythrough an investigation of some peripheral and controversial
cases of property. While much important work on property has been done
by focusing on the core casesbasically, property in land and in tangible
physical goodsfurther (or different) progress can be made by investigat-
ing non-core cases and asking what it is about them that leads us to think
that they do (or do not) count as instances of property.18 By non-core cases,
I mean those that seem property-like in some ways and not very property-
like in others. Consider as an easy example the definition of property
found in the Canadian Bankruptcy and Insolvency Act:

property means any type of property, whether situated in Canada
or elsewhere, and includes money, goods, things in action, land and
every description of property, whether real or personal, legal or equi-
table, as well as obligations, easements and every description of es-
tate, interest and profit, present or future, vested or contingent, in,
arising out of or incident to property.19

17 This is as good a place as any for me to flag an awkward terminological point: the word
licence in the law of property sometimes refers to a government-issued privilege to,
say, drive a taxi or fish or operate a radio station, and other times to a permission to en-
ter or use anothers property. My interest here is the former and not the latter; I also
make no claim about any relationships between the two senses of licence. For recent
discussion of the property status sort of licence, see Christopher M Newman, A License
is Not a Contract Not to Sue: Disentangling Property and Contract in the Law of Copy-
right Licenses (2013) 98:3 Iowa L Rev 1101.

18 Hanoch Dagan has suggested to me that my selection of core cases here is problemat-
ic. Shouldnt intellectual property be on the list? he asks. For my part, I am not sure.
There are arguments that intellectual property is a form of property, and there are ar-
guments that it is not. At the least we can agree that it is hard to categorise intellectu-
al property rights (McFarlane, Structure, supra note 2 at 134). So it seems to me that
this is an open question and not a point we should begin with. Rather, the only truly
uncontroversial cases of property rights seem to me to be rights in land and physical
goods. Following my own methodological advice, I hope in the future to consider what
other forms of peripheral property tell us about property in general.

19 RSC 1985, c B-3, s 2.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 567

The definition is extremely broad: it includes the core cases (land, person-
al property), but also quite a lot of other cases (even including obliga-
tions). Compare it to a definition of property rights offered in an im-
portant British property text: A property right has two key features: it
relates to the use of a specific thing; and it imposes a prima facie duty on
the rest of the world. … A thing [is] an object that can be physically locat-
ed.20 This latter definition plainly excludes much of the statutory defini-
tion above (where are obligations physically located?). In a different
work, its author suggests that a conceptual definition [of property rights]
should be distinguished, for example, from the question of what meaning
should be given to the term property or property right in the context of a
particular statute.21 But why? Even granting that there are core cases of
property, and that these core cases are, roughly, rights in land and in
moveable physical goods, we might wonder why the lawand much of the
rest of the social world in which a concept of property is activeseems to
think that the concept has a much wider application than these core cas-
es.
We can get at the point better by returning to the statutory definition.
Given that the purpose of the definition in the context of the Act relates to
circumscribing what assets of a bankrupt debtor are subject to seizure
and division among creditors, it is not hard to see why the definition has
the breadth that it does. But we might wonder why the Act bothers to
claim that this is a definition of property: Why not just say that it is a
definition of the debtors assets, and then say that it is her assets that are
subject to seizure and division upon bankruptcy? Why use the word
property at all? I suggest that we should look at these non-core or pe-
ripheral cases of property to see what it is about them that leads legisla-
tures and courts and people to think of them as property. Our working
hypothesis should be that, when legislators and courts and other people
talk about these non-core cases as cases of property, they are not just em-
ploying a sort of faon de parler but are actually relying on an underlying
conceptual connection between the core and peripheral cases.
My hope will be this: that these peripheral cases will help us to under-
stand property is because, lying as they do at the periphery of property,
they provide us with a much better vantage point from which to view its
borders than does its centre. Now Ill turn to the licence-as-property ques-
tion directly, taking it for granted that a licence, if it is a form of property,
is a peripheral form. And then the proof of the pudding will be in the eat-

20 McFarlane, Structure, supra note 2 at 132.
21 Simon Douglas & Ben McFarlane, Defining Property Rights in James Penner & Hen-
ry E Smith, eds, Philosophical Foundations of Property Law (Oxford: Oxford University
Press, 2013) 219 at 239, n 88.

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ing: if, by thinking about property in licences, I can make some interest-
ing or novel claims about property, then I think I will have shown that
thinking about these peripheral cases can be theoretically profitable.
My second methodological comment is about the notion of distinctive-
ness that I think is at play in claims about what is distinctive of property
rights. We can get at the notion by beginning with what it is not: it is not
the notion of the subject matter of the rights in question. Those who think
that private law rights can be helpfully sorted into distinctive categories
see a division between contract rights and property rights as a paradig-
matic instance of such sorting. Yet As right that B not paint her house
red could be a contract right, or it could be a right under a restrictive cov-
enant. More generally, an account of the distinctiveness of a sort of right
in terms of its subject matter would need to be accompanied by an account
of the distinctiveness of subject matter generally: Why are, say, foxes and
houses similar enough that they can both be the object of property rights,
whereas foxes and people are not? A more promising approach is to focus
on the form or structure of the rights in question.22 To show that an area
of law is distinctive because of its form is to show that it operates with its
own distinctive set of concepts and inferential relations among them.23
This form can be filled in with various contents.24 The most well-known
and successful version of this kind of analysis is the so-called bilateralism
critique of the economic analysis of law, which showed that distinctive of
private law is the bilateral relationship between plaintiff and defendant:
defendant is defendant not just because he acted wrongly (or inefficiently
or whatever) but because he wronged plaintiff and, conversely, that plain-
tiff is plaintiff not just because she was injured wrongly but because she
was injured as a result of defendants wronging her.25

Thus, my hope in talking about the distinctiveness of property rights
is to show that the form of property is distinctive not because of anything
to do with things, but rather because of the way in which property rights

22 This approach is associated most closely with Ernest Weinribs views, as in Ernest J
Weinrib, The Idea of Private Law (Cambridge, Mass: Harvard University Press, 1995).
For interesting criticism of this sort of view, see Hanoch Dagan, The Limited Autono-
my of Private Law (2008) 56:3 Am J Comp L 809; Waddams, supra note 10 at 194.

23 See Benjamin C Zipursky, Pragmatic Conceptualism (2000) 6:4 Legal Theory 457;
Jules L Coleman, The Practice of Principle: In Defence of a Pragmatic Approach to Legal
Theory (New York: Oxford University Press, 2001).

24 And, as such, this account is at least not at odds with Henry Smiths account of formal-
ism as context-invariance; see Henry E Smith, On the Economy of Concepts in Proper-
ty (2012) 160:7 U Pa L Rev 2097.

25 I try to show how property law has that bilateral form in Christopher Essert, The Of-

fice of Ownership (2013) 63:3 UTLJ 418 [Essert, The Office].

 PROPERTY IN LICENCES AND THE LAW OF THINGS 569

impose duties on others not to act in certain ways.26 The claim that prop-
erty is the law of things can be understood as a claim about the form of
property rights. This is not a claim about what property rights people
have, but rather a claim about how those rightswhatever their con-
tentare distinct from other rights. Contract rights have a bilateral in
personam form, since they are rights that obtain solely against the coun-
terparty to the contract; a plaintiffs remedial rights also have a bilateral
form, since they obtain against the defendant in the case (as per the text
above). Property rights, in the law-of-things account, are multilateral or
omnilateral in rem rights, which obtain against the world, and are also
transferable or alienable, which distinguishes them from body or personal
rightsthe rights protected by the torts of battery, negligence, defama-
tion, etc. This claim about form is consistent with one I made in an earlier
article27 that owners are the holders of a legal office, such that part of
what is distinctive about ownership (and thus about property) is the way
in which the rights of owners (whatever the substance of those rights) are
owed not to a given individual, but rather to an office and its holder. It is
also, importantly, consistent with a wide variety of claims about the sub-
stance of property rights. That is, it might be the case that whatever the
form of property rights, in our legal system that form may only be proper-
ly filled out by certain content or subject matter. And it might be the case
that the idea of a thing plays some role there. I will talk about this brief-
ly at the end of this article. Ill turn now to my argument.28

II. Licences

Simply put, a government-issued licence to engage in some particular
activity can be an extremely valuable asset. A fishing licence on the east
coast of Canada can be worth over $150,000.29 A New York City taxi me-
dallion can be worth over $1,000,000.30 Because these assets are so valua-
ble, people treat them as property. And when things go bad, sometimes

26 Henry Smith at least sees his law-of-things account in explicitly formalist terms (albeit,
as he put it to me in correspondence, functionally motivated formalist terms): see
Smith, Law of Things, supra note 2 at 1692, 171012.

27 Essert, The Office, supra note 25.
28 For an interesting recent article that takes both of the comments of this section into ac-
count and applies them to an analysis of the concept of property in American constitu-
tional law (reaching a different result than the one I argue for here), see James Y Stern,
Propertys Constitution (2013) 101:2 Cal L Rev 277.

29 In Saulnier (supra note 15 at para 6), four fishing licences were found to be worth over

$600,000.

30 See Michael M Grynbaum, 2 Taxi Medallions Sell for $1 Million Each, The New York
Times (20 October 2011), online: The New York Times City Room .

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people go to court over the value of these assets in situations where enti-
tlement to the assets value depends on whether or not the asset counts as
a form of property. Two such situations are most familiar from introducto-
ry property law textbooksbankruptcy and divorce. Suppose that L holds
a taxi licence, and uses that licence as collateral for a loan from X, which
he spends on the materials he needs to run a taxi business (a car). And
then suppose L goes bankrupt: Can X seize the licence as part of the
bankruptcy proceedings? Or suppose that L is married to Y but that
things go south and L and Y divorce. Upon dissolution of the marriage,
when the property of the couple is divided, does the licence count as some-
thing that must be dividedthat is, as property?31

These questions arise because licences have some of what we tend to
see as the core features of property while at the same time are missing
some other of those core features. To see this point, we can compare Ls
legal position as licensee to As legal position as owner of a bicycle.32 As
weve seen, the licence is a valuable asset, just like the bike. The licence is
also transferable. Just like it does for the bike, it makes sense to talk
about a creditor seizing the licence or an ex-spouse getting it in the di-
vorce in a way that it does not make sense to talk about seizing or getting
someones skills or talents. This is putting things too simply, because li-
cences are often issued in a way that limits the legality of transferring
them, effectively making
them non-transferable. But this non-
transferability could apply to a bike, tooit does apply to other physical
things that we think of as property, such as prescription drugs33and,
more importantly, this sort of legal non-transferability is very different
than the sort of non-transferability that applies to our skills and talents.
While the taxi licence that is mine today could be yours tomorrow, the
same is not true of my law society membership, which is necessarily mine
and nobody elses.34

31 Ill sometimes follow common non-legal usage and refer to licences as property, but we
should keep in mind that the real question is, does the right conferred upon the licensee
count as a property right?

32 Here I say legal position to remind us of Hohfelds central insight that ownership in-
volves a variety of legal relationsrights and duties, powers and liabilities, privileges
and no-rights, immunities and disabilitiesbetween owners and others (see Hohfeld,
Some, supra note 7). But going forward, if every time I talked in general terms about
property, I used the phrase legal position or some longer phrase invoking all of the
Hohfeldian incidents, things would get ugly in a hurry. So I am going to just say prop-
erty rights unless the context requires me to be more specific about the Hohfeldian in-
cidents that are relevant.

33 See Food and Drug Regulations, CRC, c 870, s G.02.001.
34 This is actually a pretty subtle point, which I explore in detail in Inalienability and
Property ([unpublished, manuscript on file with the author]), and in less detail in The

 PROPERTY IN LICENCES AND THE LAW OF THINGS 571

Two apparent contrasts between Ls right as licensee and As rights in
the bicycle do stand out. First, As rights seem to be rights to a particular
physical thingthe bikein a way that Ls do not. And next, As rights
are good against the world in a way that Ls rights may not be. Lets
consider them in turn. A fishing licence is the right to (catch) fish, not the
right to (a given) fish. Similarly, while in New York City the taxi medal-
lion is an actual physical medallion that needs to be attached to the car,
its clearly possible that a taxi licence could be a completely intangible
rightto engage in the activity of driving a taxi in a particular jurisdic-
tionwhose existence is merely noted on some regulators ledger.35 These
licences are not in any plausible sense rights to tangible physical things.
What about the good against the world part? Here things are tricky
because, as in the case of transferability, the conceptual question tends to
be clouded by the legalities. Start with this: Suppose L holds a licence to
.36 Its clearly the case that L has a right that othersX, Y, and Zdo
not have. So Ls right is in some sense exclusive, since anyone who doesnt
have the licence to is not allowed to . Of course this is similar to As
rights in the bike: A has the right to ride the bike, which X, Y, and Z do
not. There are complications here, but in this way licences are like core
property rights, because they give the holder of the right a legal privilege
to do something, a privilege that others do not have.
But As right is better thought of not just as a privilege to do some-
thing, but rather as the right to prevent others from doing that thing (or to
control how they do it): what A has is the right that nobody else ride her
bike (at all or without her permission). And if X infringes on that right by
riding the bike, X has wronged A, and A has a claim against X in tort. Li-
cences tend not to work like that: if you drive around in an unlicensed cab,
its not at all clear that the owners of the valid medallions have a claim
against you (in fact its rather clear that they do not).
Careful attention reveals that this difference between Ls rights as li-
censee and As rights as owner of the bike are, like the differences in
transferability, just a matter of legal technicalities. That is because it is a

Office (supra note 25). Penner (Idea of Property, supra note 2, ch 5) also has a great
discussion. Here Ill just assume without arguing that property rights are, at least in
principle, transferable in a way that skills and talents are not.

35 In law, actually, the taxicab medallion is an intangible asset: see Golden v Winjohn
Taxi Corp, 311 F (3d) 513, 517 (2d Cir 2002), citing Re Property Clerk, Police Depart-
ment, City of New York v Rosea, 472 NYS (2d) 657 at 658 (Sup Ct App Div 1984).

36 To save words Im going to follow a philosophers convention and use the Greek letter
(phi) as a variable standing in for an action verb. So when I say suppose L holds a li-
cence to , I mean to include licences to fish, licences to drive taxis, licences to produce
milk or tobacco, licences to operate a radio station, and so on.

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572

simple matter to imagine a licence that is not subject to these limitations;
that is, it is simple to imagine a licence that does confer a right good
against the world on its holder. We need to suppose that such a licence
could exist in order to see if there are any genuine conceptual differences
between the licence-holders and the bicycle-owners rights. As we will see,
there arent. Once we have done that, we can return to the legal technical-
ities and see how important they are in understanding property rights.

Let me say a bit more about the role of the imaginary licence in the
arguments of this article. The claim that property rights are rights to
things is a conceptual claimthat is, it is a claim about what is true of
property rights just insofar as they are property rights, a claim about
what makes property rights the rights that they are.37 Because it is a con-
ceptual claim, it is subject to objections that it does not properly account
for potential, but non-actual, instances of property.38 So if we can imagine
some potential right that seems to be a property right but is not in any
plausible way thought of as a right to a thing, the proponent of the law-of-
things view is forced to decide, were this potential right to exist, whether
it would be a property right. If the answer is no, the law-of-things propo-
nent needs to explain why we might erroneously think that the right is a
property right. If the answer is yes, the rights-to-things view is in trouble.
And this is all true even if the imagined right doesnt exist, since the
claim is a conceptual one.39

37 James Penner is explicit that he is making a conceptual claim about the nature of prop-

erty and its relation to things (Penner, Idea of Property, supra note 2 at 23).

38 A parallel point can be seen in an important debate in general jurisprudence. Some
John Austin, Jeremy Bentham, James Madisonthink that sanctions are necessary for
the existence of a legal system; Madisons famous quote, If men were angels, no gov-
ernment would be necessary, illustrates the underlying idea (The Federalist No. 51
in The Federalist with Letters of Brutus, ed by Terence Ball (Cambridge: Cambridge
University Press, 2003) 251 at 252). OthersH.L.A. Hart, Joseph Razsay that even
in a society of angels, the confused man, as Hart put it, who just wants to do the right
thing, would sometimes need the law to tell him what the right thing is. (Kant makes a
similar claim but for different reasons.) Although no such society of angels exists, and
sanctions are in fact a (practically) necessary part of every existing legal system, the
possibility of a sanction-less legal system shows that sanctions cannot be, as Austin
thought they were because of their role in defining commands, the key to the science of
jurisprudence. Henry Smith makes a similar point in discussing language: If all lan-
guages have a certain feature but languages could have been otherwise, that is a fact
worth explaining. In other words, we want to explain why universal structures are uni-
versal and why we do not find the ones that are universally absent (Law of Things,
supra note 2 at 1699).

39 For more on the notion of a conceptual argument I am employing here, see e.g. Cole-
man, supra note 23; Zipursky, supra note 23; Scott J Shapiro, Legality (Cambridge,
Mass: Harvard University Press, 2011) at 13ff; Christopher Essert, Legal Obligation
and Reasons (2013) 19:1 Legal Theory 63 at 68, n 20. This kind of conceptual analysis,

 PROPERTY IN LICENCES AND THE LAW OF THINGS 573

So lets imagine. Consider what I will call the Ideal Licence. Suppose
that some jurisdiction issues to a single individual,40 L, the exclusive right
to operate a taxi business within that jurisdiction. L, and only L, can op-
erate a taxi business, although the details of the business, the number of
taxis, etc., are all within Ls sole discretion. L is granted a private right of
action41 against anyone else in the jurisdiction who purports to operate a
taxi business (by, say, driving taxis); of course this is a right of action, so L
need not pursue such claims and is free to waive them if she wishes. L al-
so has the right to subauthorize others to drive taxis on her behalf. And
Ls right is completely alienable, so that L can sell or grant it to whomever
she wants.

we can note, is plainly suited to understanding social institutions like property or law,
and is not committed to the thought that property has anything like an essence. That
said, I do think that, while property is evidently a (partially) socially constructed insti-
tution, the law of property does provide us with good grounds for thinking that there is
something distinctive about property that we can grasp through conceptual analysis.

40 Another distinction between (real, rather than ideal) licences and property in tangible
things might be thought to arise herenamely, the facts that property in tangible
things tends to be held by one person, and licences tend not to be exclusive. Who ever
heard of a town with a single taxi driver? The size of the set of right holders is certainly
a factor that we will want to think about in understanding property, generally and in li-
cences. Ill say some more about it in Part V, below. But let me make two comments
here that should at least dispel the impression that this is a serious problem, in favour
of the thought that it is a mere technicality. First, while sole ownership may be the
norm when it comes to tangible goods and land, it is of course not the only option; the
common law has not one but two forms of co-ownership. And second, while multiple li-
cence-holding may be the norm, it is not the only option. A single taxi licenceholder
might seem like an idealized case, but as Katrina Wyman pointed out to me, in Los An-
geles in the past, taxi licences were actually assigned to individual holders on a geo-
graphic basis (see Ross D Eckert, The Los Angeles Taxi Monopoly: An Economic In-
quiry (1970) 43:3 S Cal L Rev 407); this was also true, basically, of American air routes
before airline deregulation (see Michael E Levine, Is Regulation Necessary? California
Air Transportation and National Regulatory Policy (1965) 74:8 Yale LJ 1416 at 1421
22). For a great deal more information on taxi licences (real, rather than ideal), as well
as an interesting law and economics analysis of the property issues they give rise to, see
Katrina Miriam Wyman, Problematic Private Property: The Case of New York Taxicab
Medallions (2013) 30:1 Yale J on Reg 125. In addition, consider (i) radio licensing
(about which more at the end of Part III, below), where only a single person can hold a
licence to broadcast at a given frequency, and (ii) the Ontario Public Vehicles Act (RSO
1990, c P.54), which governs intercity bus transportation in Ontario, and allows for the
possibility that a single licence holder will be permitted to operate an intercity bus ser-
vice between two cities (as in fact is the case between Kingston, Ontario and Toronto,
Ontario) (see Jessica McDiarmid, Coach Canada Threatens Students Fledgling
Queens University Bus Service, The Toronto Star (4 January 2013), online: The To-
ronto Star ).

41 Most (real, rather than ideal) licensees lack such a right, but I think this is a technicali-

ty related to the one mentioned in the previous note. More on this in Part V, below.

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574

Because it shares so many of the features of core property rights, the
Ideal Licence seems to me to count as a kind of property.42 In what fol-
lows, Ill defend the claim that the Ideal Licensee holds a property right.
Ill do so by considering some arguments that property rights are rights to
things and showing that the considerations that lead toward these argu-
ments can be adequately addressed by accepting a different view of prop-
erty rights, one that allows for property in licences. This different view, I
claim, will thus be superior because it both addresses the considerations
that seem to favour a law-of-things view and makes sense of the intuition
about property in licences.43 Lets turn now to the law-of-things argu-
ments.

III. Things and In Rem Claim Rights
A particularly stark account of property as rights to things is argued
for, jointly and severally, by Simon Douglas and Ben McFarlane (whom
Ill call D&M).44 In this account, property rights are those rights which
have the two characteristics of being exigible against the world and relat-
ing to a physical thing.45 They offer various justifications of this view but
none hold up to scrutiny. At one point, for example, McFarlane appears to
defend the account based on information costs, arguing that physical ex-
istence makes it easier for owners to control objects and for third parties

42 The legal analysis in various non-ideal licence cases (see supra note 15) suggests that

the law would agree with me here.

43 You might worry here that Ive chosen the Ideal Licence precisely because it proves my
point, in that it shows the conceptual issues in a light that makes my argument about
the law-of-things view seem especially plausible. That is true in a way, because the Ide-
al Licence is a kind of property right that clearly and undeniably is not a right to a
thing. I could have chosen other examplesintellectual property rights (which I discuss
briefly toward the end of the article) or natural resource rights such as riparian rights
or rights to oil, gas, or wind. I didnt choose those rights because in those cases it is too
easy to characterize those rights as rights to things, albeit erroneously. More important-
ly, though, I chose the Ideal Licence because, as it will emerge below, there is a sense in
which it is the paradigmatic property right, since it lays bare the formal structure of
property rights in a way that helps to clarify what all property has in common. This is a
parallel point to the thought that, rare though it may be, a harmless trespass is the
paradigmatic trespass since it shows us what is really wrong with all trespasses, even
those that cause harm: see Arthur Ripstein, Beyond the Harm Principle (2006) 34:3
Philosophy & Public Affairs 215.

44 See Simon Douglas, The Argument for Property Rights in Body Parts: Scarcity of Re-
sources (2014) 40:1 Journal of Medical Ethics 23 [Douglas, Body Parts]; McFarlane,
Structure, supra note 2; Ben McFarlane, Equity, Obligations and Third Parties (2008)
Sing JLS 308 at 31112; Douglas & McFarlane, supra note 21.

45 Douglas, Body Parts, supra note 44 at 23. See also McFarlane, Structure, supra note 2

at 13132.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 575

to know their obligations.46 This argument fails, as Ill show in Part IV,
where I consider Smiths much more sophisticated version. Elsewhere,
Douglas claims that the contours of legal doctrine can justify his view:
[M]any of the rules that constitute the law of property presuppose the ex-
istence of a physical thing and become incoherent when applied to rights
which do not relate to physical things.47 For example, the law requires
physical possession to become owner of, say, a fox, but it since it is impos-
sible to take physical possession of an idea (or, in this context, we can as-
sume, the Ideal Licence), it cannot be the subject of a property right. This
is a very bad argument: different acts are required to establish ownership
of different kinds of physical goods,48 and it is an easy step to see that in
the case of non-physical objects the acts required to establish ownership
would be different still.49 So far we do not have a good argument for this
very austere version of the law-of-things view.

In a recent paper, 50 Douglas and McFarlane defend their account
based on a close examination of the structure of the Hohfeldian entitle-
ments that property owners have. This argument fails, too, but its very
worth our while to consider why. They begin by wondering about the
owners so-called right to use her land. Its plainly the case that B, owner
of Blackacre, is allowed to do pretty much whatever she wants on Black-
acre. But we might wonder just what kind of right this is. D&M suggest
that the right to use Blackacre isnt a right in Hohfelds sense at all but
rather a privilege to use Blackacre. We know this because the jural cor-
relative of a privilege is a no-right, whereas the jural correlative of a right
is a duty.51 And it is a no-right that much better describes the jural posi-
tion of non-owners (X, Y, Z, etc.) with respect to Bs use of Blackacre: they
have no right that B not use Blackacre as she sees fit, since B does not
(prima facie) wrong X in her use of Blackacre. By contrast, the entire idea

46 Ibid at 13536.
47 Douglas, Body Parts, supra note 44 at 23.
48 Compare the tests required to establish ownership in, for example, Pierson v Post, 3 Cai
R 175 (NY 1805); Swift v Gifford, 23 Fed Cas 558 (Dist Ct Mass 1872); The Tubantia,
[1924] P 78, [1924] All ER Rep 615; Popov v Hayashi, 2002 WL 31833731 (Cal Super
Ct).

49 See Abraham Drassinower, Capturing Ideas: Copyright and the Law of First Posses-
sion (2006) 54:1&2 Clev St L Rev 191. However, Douglas does help us to see how
abandoning the law-of-things view opens an extremely interesting research program in
property law: if property rights are not just rights to things, then we need broader ex-
planations of many of the core doctrines of property law (like rules about possession,
transfer, etc.), which explanations presumably would show how the thing-based ver-
sions of those doctrines are special cases of more general phenomena.

50 Douglas & McFarlane, supra note 21.
51 Hohfeld, Some, supra note 7 at 30.

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of Bs having a (claim-)right against X to use Blackacre is difficult to un-
derstand. D&M note, relying on a remark of Finniss, that a (claim-)right
is not a right to do something, but a right that someone else do some-
thing.52 So a (claim-)right to use Blackacre would need to be correlated
with a duty in X (Y, Z, etc.) that they do or not do something. And the
most plausible candidate would seem to be a duty that they not interfere
with Bs use of Blackacre.

The next move in the argument is to show that, as a matter of law and
as a matter of legal principle, B does not have such a right, since X is not
in general under a duty not to interfere with Bs use of Blackacre. This
point is easiest to see by reference to nuisance-type cases where the de-
fendant stands successfully on his right to build up on his own land.53 If I
build a garage on my land that blocks the sun to your lemon tree and thus
interferes with your use of the land, I do you no wrong. Conversely, if I
knock my garage down and take away the shade in which you sit to drink
lemonade, again you have no cause of action against me, even though in
both cases I have interfered with the use you were making of your own
land.54 So owners of real property do not have a right that others not in-
terfere with their use of their property. (The argument also goes, say
D&M, for chattels. Ive omitted it here to save space.) The question is,
what does this tell us about the rights that owners do have? D&M take it
to show that what an owner must have is a right that others not interfere
with the thing itself.55 The argument has one premisethere is no duty
not to interfere with usewhich is supposed to lead to the conclusion
there is a duty not to interfere with the thing.

52 Douglas & McFarlane, supra note 21 at 221, 22627; John Finnis, Some Professorial

Fallacies About Rights (1972) 4:2 Adel LR 377 at 380.

53 See e.g. Fontainebleau Hotel Corp v Forty-Five Twenty-Five, 114 So (2d) 357 (Fla Dist

Ct 1959).

54 These are examples are from Arthur Ripstein, Force and Freedom: Kants Legal and Po-
litical Philosophy (Cambridge, Mass: Harvard University Press, 2009) at 7778. The
point is even easier to see with respect to ownership of chattels. Two recent UK cases il-
lustrate. In one, a defendant government agencys carelessness in issuing a detention
notice to a cruise ship owner, which prevented the owner from being able to use his
ship, was held not to be wrongful since the negligence involved no interference with the
ship itself (since the plaintiff was free to sail the ship, just not to use it as a cruise ves-
sel): Club Cruise Entertainment and Traveling Services Europe BV v Department for
Transport (The Van Gogh), [2008] EWHC 2794 (Comm), [2009] All ER (Comm) 955. In
the other, a similar instance of government carelessness in issuing a quarantine order
against the plaintiffs pigs was held not to be wrongful since the pigs themselves were
not interfered with: D Pride & Partners v Institute for Animal Health, [2009] EWHC
685 (QB) (available on QL). These cases are both cited by D&M.

55 And they marshal a series of cases that demonstrate that an owner is wronged whenev-
er someone interferes with the physical object that she owns, a point I am happy to
grant.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 577

That argument is invalid. Interpreting D&M charitably, we can make
the argument valid by adding the additional premise that these are the
only two duties that a non-owner could owe an owner. (I implied the
premise at the end of the paragraph before the last, when I suggested that
the most plausible candidate for the owners right was the right that
others not interfere with a things use.) But while adding this premise
makes the argument valid, it doesnt make it sound. The additional re-
quired premise is not plausible. There are an indefinite number of duties
that a non-owner could owe an owner; in excluding the vast majority of
these, D&M rely, I think rightly, on the case law discussing what kinds of
actions by a non-owner constitute a wrong against the owner. Their
thought here, I take it, is that only a duty not to interfere with the physi-
cal thing itself can make sense of all of the particular wrongs that the law
displays. But this move does not work. It is well-known that an indefinite
number of rules can be constructed consistent with a set of past actions.56
But we can even set aside the conceptual point, and focus on what the ar-
gument is designed to show. A better version of D&Ms suggestion is that
a duty not to interfere with the thing is the simplest and most obvious
way to account for all of the wrongs that the common law contemplates as
falling under the property torts in a way that is consistent with the in rem
nature of the owners right. Unfortunately even this is wrong. To see why,
we need to explore the alternative possibilities.
We can turn to the Ideal Licence in order to illustrate the problem
with D&Ms argument. In fact we can go through D&Ms argument to
show how a licence could satisfy property laws apparent requirement
that property rights be rights good against the world.57 The first step,
again, is to acknowledge the distinction between privileges and rights. If
the Ideal Licensee is genuinely the holder of a property right (as I say she
is), then that cannot be the right to operate a taxi service, since thats a

56 See Saul A Kripke, Wittgenstein on Rules and Private Language: An Elementary Expo-

sition (Cambridge, Mass: Harvard University Press, 1982).

57 I say apparent here for the following reason: consistent with the methodological point I
made in the introduction that we ought to think seriously about peripheral property
claims, I am not sure that I actually want to argue that property rights are necessarily
good against the world. My worry arises from questions about property in corporations,
shares, bonds, funds, and choses in action generally. Many of those things are treated
as property for the purposes of things like the bankruptcy statute that I cited above. So
I want, actually, to hold off on making a determination on that issue. For the purposes
of this article, I will simply grant for the sake of argument that property rights are good
against the world, and show how that does not count against thinking of licensees as
holders of property rights. Ill save the substantive question about good against the
world for another day. For discussion of the way that the good against the world re-
quirement functions in respect of property and contract, see Ernest J Weinrib, Private
Law and Public Right (2011) 61:2 UTLJ 191 at 20406.

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privilege and not a right. By operating the taxi service, the licensee
wrongs nobody. D&Ms key point means that the licence is only a right if
it correlates with a duty that others do or not do some action. In the case
of normal property rights, D&M argue that the right could only corre-
late with a duty not to interfere with the thing, and that there is no right
correlative to a duty not to interfere with the use of the thing. But in the
case of the licence, there is no thing on which to base such a distinction.
Instead the parallel division might be between, on the one hand, a duty
not to interfere with the licensees exercise of the privilege granted by the
licence and, on the other hand, a duty not to do that thing which the licen-
see is granted the privilege to do. That is, the licensee could have an in
rem right that others not do what she is allowed by the licence to do. So
the holder of my Ideal Licence has a right that nobody else drive a taxi
within the relevant jurisdiction.58

This interpretation of the Ideal Licence, if it is correct, tells us some-
thing significant about the structure of property rights more generally.
Recall that D&Ms claim was that, in the normal property case, the owner
of a thing has a privilege to use it, but no (claim-)right to use it since there
is no correlative duty on others not to interfere with its use. Instead, the
thought is that an owner has a (claim-)right that others not interfere with
the thing. But if I am right that licences are a form of property, what we
need to do is to look for a way to describe both the right that a licence
holder has and the right that a normal owner has. And the answer is
simple: each has the right to determine how, by whom, and to what extent
certain privileges will be exercised. Look at this suggestion made by Ar-
thur Ripstein: The basic rule of property, then, does not give you notice
that you [i.e., a non-owner] cannot change a thing or take advantage of its
empirical features. It tells you only that you cannot determine how it will
be used to the exclusion of others.59

The core idea of the basic rule of property, for Ripstein, is the idea
that it is the owner who gets to make decisions to the exclusion of others.
Here he puts the same point slightly differently: Either you are the own-
er, in which case you are entitled to determine how the thing is used, or
you are not, in which case you may not determine how it is used except

58 I noted above (in Part II) that, subject to the exceptions in note 40, actual licensees do
not have, as a matter of positive law, any private right of action against someone who
does what she is allowed to do as licensee. But this is a legal technical problem, not a
genuine conceptual problem. That is, there is no reason why the holder of the taxi li-
cence couldnt have such a right. The argument also suggestshappily, since I think
this is rightthat the licensee does not have any right that others not interfere with
her business by, say, changing the circumstances so that she cannot run her taxi busi-
ness profitably (by selling cars or renting bicycles very cheaply, perhaps).

59 Arthur Ripstein, Possession and Use in Penner & Smith, supra note 21, 156 at 177.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 579

with permission of the owner.60 But if I am right about how we should
understand the licensees right, and I am right that the licensee can be
seen as an owner, then we need to rephrase Ripsteins claim, because as I
said, there is no thing whose use the licensee gets to determine. Instead,
we should say something like:

Either you are the owner, in which case you are entitled to deter-
mine whether others , or you are not, in which case you may not
except with the permission of the owner.

Ive just substituted for Ripsteins idea of the use of a thing. So now we
have a description of an owners right that is applicable both to the case of
the licence (where = drive a taxi) and to the normal property case
(where = use the thing).

Let me make this point clearly. My claim is that we can understand
the distinctiveness of the form of property rights according to the follow-
ing thesis: A has a property right when A has the (transferable) right, good
against the world, that others not without her permission.61 Thus both
Bs rights to Blackacre and Ls rights as licensee count as property rights.
Even better, this is consistent with the thought that there is some sort
of formal continuity between the rights that owners have in regard to
their property and the rights that we all have in our person. Heres Rip-
stein again:

You are master of your own body, but not of mine, and I am master
of mine but not yours. Taken together, these thoughts turn out to be
equivalent to the more general thought that each of us is sui juris as
against the other, that is, the normative structure is relational. In
the case of property, each property owner is master of his or her
property, as against others.62

Ripsteins thought suggests that the simple answer I articulated above is
overbroad: when I described the right of an owner (either of some physical
thing or of a licence) to determine whether or not all others will be able to
, I might also have been describing the rights that we have in our bodies
(and pretty much everyone agrees that those rights are not property
rights). But the solution to that problem is just the recognition that a fun-
damentally important feature of property is that the rights of owners are
not the rights of the people who happen to be owners, but rather the

60 Ibid at 167.
61 Keeping in mind that I am assuming the transferability point without arguing for it
(see note 34, supra) and assuming the good-against-the-world point for expository ease
(see note 57, supra).

62 Ripstein, Possession and Use, supra note 59 at 176. I discuss the relational structure

of ownership in Essert, The Office, supra note 25.

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rights of the office of ownership, exercised by the person who holds the of-
fice.63 That recognition explains why our rights to our person are not
property rights, since it is only we who can exercise them. This is a much
more formally rigorous distinction than the distinction between rights to a
thing and rights to a person. It is a distinction between the form of the
rights (i.e., transferable or not) rather than between the subject matter of
the rights (i.e., to a thing or not). Thus an investigation into the Hohfeldi-
an form of property rights actually supports the idea that licences are
property, and so that property rights are not just rights to things.64
Before leaving this section of the article, let me make one more com-
ment based on the argument here. Thomas Merrill and Henry Smith have
at times criticized the account of property that they take to be prevalent
in law and economics scholarship, including that of Ronald Coase, on the
grounds that it is not sensitive to (what they say is) the fact that property
is about rights to things.65 Merrill and Smith argue that the economists
picture of property as a collection of use rights authoritatively prescribed
by the state for each resource is problematic in that it obscure[s] the in
rem character of property rights.66 That criticism is sound, but the argu-
ments in this section show that we can accept it without committing to
what Merrill and Smith take to be its upshot, that property is better seen
as rights to things. Thats because, as Ive just shown, it is possible to take
a via media, and see a property right as a kind of (in rem) claim-right to
determine whether or not others . To illustrate this point briefly, we can
consider Merrill and Smiths discussion of radio broadcast rights.
According to Coases proposal, a radio spectrum right is the right to
use a piece of equipment to transmit signals in a particular way.67 As
weve just seen, of course, this is better seen not as a right but as a privi-
lege. So property, on this view, is a collection of use privileges. Merrill and

63 See ibid.
64 James Penner suggested to me in conversation that physical things are inherently ri-
valrous in a way that, say, driving a taxi is not, and that this difference could ground a
relevant distinction between these two sets of rights. But in fact the idea of somethings
being rivalrous is not as simple as it appears, and once you start to see property rights
in terms of the action (various s) whose performance by others the owner controls,
the idea and its purported relation to property rights become difficult to grasp clearly.
This is related to the point I made above (supra note 49) that abandoning the law-of-
things view opens new and interesting questions in property theory.

65 See Thomas W Merrill & Henry E Smith, What Happened to Property in Law and
Economics? (2001) 111:2 Yale LJ 357; Thomas W Merrill & Henry E Smith, Making
Coasean Property More Coasean (2011) 54:4 JL & Econ S77 [Merrill & Smith,
Coasean].

66 Ibid at S80, S82.
67 RH Coase, The Federal Communications Commission (1959) 2 JL & Econ 1 at 33.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 581

Smith contrast Coases view with a contemporary alternative view, Jora
Minasians, according to which radio spectrum rights were defined in ref-
erence to a particular segment of bandwidth that could be broadcast over
in a particular areawith the owner given a right to exclude all admis-
sions by others into this frequency in this area.68 For Merrill and Smith,
this latter view is squarely grounded in a conception of property as an in
rem right of exclusion69 over a thing.70 But the arguments above can help
us to see that this latter view can be accommodated without having to say
that the spectrum or frequency is a thing in which there is a property
right. Rather, much more intuitively and simply, the right is just the right
to control who gets to , where = broadcast at a given frequency in a
given area.71 The via media, then, is to see that the property right is nei-
ther a right to a thing nor a set of use privileges but rather a (possibly
transferable, good against the world) right to determine how others act.

68 Merrill & Smith, Coasean, supra note 65 at S86. The alternative view is set out at
length in Jora R Minasian, Property Rights in Radiation: An Alternative Approach to
Radio Frequency Allocation (1975) 18:1 JL & Econ 221.

69 Merrill & Smith, Coasean, supra note 65 at S86.
70 Smith has confirmed to me in correspondence that he sees this latter view as more

based on a thing than the former view.

71 Note that, consistently with my suggestion, Minasian sets out the right at length with-

out any mention of a thing. My emphasis below emphasizes the thought:

A set of property rights in electromagnetic radiation that incorporates the
desirable economic attributes discussed above would consist of the following:
(1) Emission Rights
Emission rights would consist of the right to radiate energy on a specified
frequency bandwidth, at a specified time within a three-dimensional space
defined in terms of a power level not to be exceeded at its boundaries. …
(2) Admission Rights
The right holder would have the right to refuse others permission to radiate
energy in excess of a pre-determined level on the frequency and within the
space to which his rights pertain, and at the time to which his rights pertain.
(3) Use
The uses to which a right holder puts his property would be determined by
himhe would be free to choose from among those alternatives legally open
to him. These rights are, therefore, comprehensive of all the permissible ac-
tions and uses which are not declared illegal in the society.
(4) Transferability
As with rights in other resources, admission and emission rights in radia-
tion would be transferable to others, in whole or in part, at the discretion of
the right holder (supra note 68 at 232 [emphasis added]).

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IV. Information Costs, Things, Interests, Concepts
Ill turn now to Henry Smiths own powerful law-of-things account of

property. Smith begins by noticing that a crucial feature of the in rem na-
ture of property rights is the costs they impose on their duty-bearers,
namely, everyone else. A contract can be as complicated as the parties
want it to be, since the parties, having participated in drafting the con-
tract, will be fully aware of the duties imposed by its terms. Property isnt
like that: property imposes duties on everyone regardless of any agree-
ment that they have entered into. This suggests that property duties must
be easy to understand.72 What are the implications of this idea?
A particularly implausible suggestion might be that only duties not to
interfere with physical things could satisfy that requirement.73 But, again,
the case of the Ideal Licence helps to see that this is not the way to go.
How difficult is it to understand the duty correlative to the right of the
Ideal Licensee? All X, the non-owner, needs to know is that he, X, does not
have the right to drive a taxi.74 He does not actually need to know the
identity of the licensee or any special facts about taxi driving. All he needs
to do is not drive a taxi. The taxi licence involves an in rem right that oth-
ers not , where here has nothing at all to do with interfering with a
particular physical thing (the duty is obviously not a duty not to interfere
with the taxi or with some physical instantiation of the licence). This is
really not a very difficult duty to understand at all.

Perhaps one might object that I am making the duty appear simpler
than it actually is. To prohibit driving a taxi appears simple but in fact
it isnt: Does the duty prohibit driving a jitney? Or pulling a rickshaw? Or
operating a New-York-City-outer-boroughstyle car service that cannot
pick passengers up on the side of the road? Certainly these questions do
not have obvious answers. But its hard to see how they are more complex
than the associated questions about non-interference with, say, land: Does
my emission of smoke onto your land count as a trespass? What about set-

72 See e.g. Henry E Smith, The Language of Property: Form, Context, and Audience
(2003) 55:4 Stan L Rev 1105; Thomas W Merrill & Henry E Smith, Optimal Standardi-
zation in the Law of Property: The Numerus Clausus Principle (2000) 110:1 Yale LJ 1.

73 A suggestion hinted at in McFarlane, Structure, supra note 2 at 13536.
74 A point made by Smith on the duties owed to owners of tangible property: [property]
gives an owner control over uses of a thing by defining the thing in an on/off manner
that indirectly relates to those uses, thereby sending a simple message to outsiders to
respect the boundary (Law of Things, supra note 2 at 1709 [emphasis added]); tres-
pass and conversion send a simple message of keep off and dont take (without per-
mission) (ibid at 1717). See also Penner, Idea of Property, supra note 2 at 2327, 7375;
Essert, The Office, supra note 25.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 583

ting up a fan that blows over your daffodils and kills them?75 In both cas-
es, the costs of determining what counts as conformity with the duty are
low, but they are not zero and never will be.
What if the non-owner wants to deal with the ownerperhaps to ask
her permission to drive a taxi some of the time or to buy the licence from
her? Here, too, things are no more difficult than they would be with a
piece of tangible property. Suppose I want to buy or lease an uninhabited
field close to my farm. Since it is uninhabited and the owner never seems
to be there I cannot just wait around to ask her if she wants to make a
deal. Instead my best bet is to go to the land registry and inquire as to the
identity of the owner. Things are no different in this case than they are in
the case of the taxi licence: I can call the taxi licenceissuing authority to
ask the identity of the taxi licensee and get in touch with her that way.

So the requirement that the duty be one that is not too difficult to
comply with cannot ground a view in which property rights are just rights
to physical things. A much better argument is Smiths own. Smiths ac-
count of property is a rich and subtle one, to which I cannot hope to do
justice here. But, really briefly, I think we can capture the core insights
that are relevant to my investigation in this article as follows. Smiths
thought is that a fully explicit Hohfeldian decomposition of the legal rela-
tions arising out of each piece of property could be done: Bs ownership of
Blackacre would be decomposed into a set of claim rights that B has that
X, Y, Z, etc., not enter Blackacre without Bs permission; a set of liberties
that B has to use Blackacre to , , , whatever; a set of no-rights for X, Y,
Z, etc., to use Blackacre in those ways; a set of powers for B to transfer
Blackacre to C, D, E, etc.; a set of powers for B to create various ease-
ments and other servitudes; and so on. But while we could understand
property this way, Smith says, it would plainly be too costly to do so in a
world (such as ours) of transaction and information costs.76 Instead we or-
ganize property into modules, a system that allows chunks or compo-
nents of the system to be partially walled off and the interconnections be-
tween these chunks and the rest of the system to be deliberately lim-
ited.77

that serves to minimize these costs. Here Smith explains the basic idea:

The core idea is that we define things in the law of property in a way

75 This example is from Japa Pallikkathayil, Persons and Bodies [forthcoming in Sari
Kisilevsky & Martin J Stone, eds, Freedom and Force: Essays on Kants Legal Philoso-
phy (Oxford: Hart, 2014)].

76 Brian Angelo Lee & Henry E Smith, The Nature of Coasean Property (2012) 59:2 Intl

Rev Econ 145 at 14748.

77 Smith, Law of Things, supra note 2 at 1701.

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584

Because it makes sense in modern property systems to delegate to
owners a choice from a range of uses and because protection allows
for stability, appropriability, facilitation of planning and investment,
liberty, and autonomy, we typically start with an exclusion strategy.
… The exclusion strategy defines a chunk of the worlda thing
under the owners control, and much of the information about the
things uses, their interactions, and the user is irrelevant to the out-
side world. Duty bearers know not to enter Blackacre without per-
mission or not to take cars, without needing to know what the owner
is using the thing for, who the owner is, who else might have rights
and other interests, and so on. …
The exclusion strategy defines what a thing is to begin with. A
fundamental question is how to classify things, and, hence, which
aspects of things are the most basic units of property law. …
Property clusters complementary attributeslands soil nutri-
ents, moisture, building support, or parts of everyday objects like
chairsinto the parcels of real estate or tangible and intangible ob-
jects of personal property.78

And in a footnote on the same page he says, The definition of a legal
thing is facilitated by the identification of separable collections of resource
attributes.79
An example might make the idea clearer. In the case of property in
Blackacre, property law does not list the complete set of Hohfeldian inci-
dents I alluded to above, but rather clusters those incidents into the mod-
ule, Blackacre. When property law talks about Bs rights as owner of
Blackacre, then, this is a sort of shorthand for all of those various
Hohfeldian incidents.80 So while B, as owner of Blackacre, really does
have a set of claim-rights, duties, liabilities, powers, etc., with respect to a

78 Ibid at 17023 [footnotes omitted, emphasis added].
79 Ibid at 1703, n 44. In another article, Smith argues that, [t]o get from unfair competi-
tion to full-blown property rights, we need to define a thing to be the object of exclusive
rights against the world. I have argued elsewhere that the thing here, whether it is
culturally or legally defined, can be regarded as the byproduct of delineating exclusion
rights (Henry E Smith, Intellectual Property as Property: Delineating Entitlements in
Information (2007) 116:8 Yale LJ 1742 at 1755 [Smith, Intellectual Property as Prop-
erty]). The elsewhere in the previous passage refers to this statement: In ordinary
legal discourse we speak of things and rights to them when, partly for reasons of infor-
mation costs, we have chosen to employ the exclusion strategy rather than a govern-
ance strategy focused on activities and externalities (Henry E Smith, Property and
Property Rules (2004) 79:5 NYUL Rev 1719 at 1745).

80 See Smiths recent elaboration of this idea in terms of the distinction between inten-

sions and extensions. More on this in a moment.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 585

wide range of other people, property law economizes by simply talking
about Blackacre as a modular thing that B has a right to.81
Crucially, Smiths argument is meant to apply to a case like the Ideal
Licence. After all, he talks at the end of that last quote about tangible or
intangible objects of personal property. The licence, even though it is in
no plausible sense a physical thing, is for Smith a modular thing for the
purposes of the law of property.82 We can talk about the licensees right to
drive a taxi as a shorthand for all of the various Hohfeldian incidents that
the licensee has. So the licence, for Smith, is a thing (at least as far as the
law of property is concerned), and its status as a kind of property does not
after all count against seeing property as the law of things. Is my argu-
ment sunk?
Not quite. Smith, of course, is free to define his terms however he
likes. And of course there is no harm in saying that property is the law of
things where by things we mean a modular collection of Hohfeldian inci-
dents that need not themselves relate to any pre-existing thing. But that is,
I take it, a very different sort of claim. And if our goal here isas I think
it must beto understand the law of property, then there are reasons to
be worried about talking about property as the law of things, even if we
are clear about defining things in the way that Smith asks us to. For one,
there is a tension between Smiths embrace of the ideawhich he shares
with James Penner83that property protects an interest we have in using
things, and this claim that things are defined by the law of property. In
addition, the kinds of considerations that Smith relies on in his most re-
cent work (about the nature of concepts) do not, it seems to me, justify the
claim that property is a distinctive area of law.84 Ill take these worries in
turn.

81 You might deny Smiths claim here on the grounds that there are lots of features of
physical objects and landsuch as their appearance or the shadows they castthat are
not grouped together with the other features as part of the thing that the owner has a
right to. Ill leave this objection aside and grant Smith this point.

82 Smith makes this claim in the context of patent law: [W]e are implicitly treating an in-
vention as a thing when the interest in its usethe various activitiesare described at
a high level of generality not tied directly to the activity itself (Smith, Intellectual
Property as Property, supra note 79 at 1755).

83 See Penner, Idea of Property, supra note 2 at 4951; Smith, Law of Things, supra note

2 at 1693, n 5.

84 McFarlanes view, which I mentioned at the start of this Part, shows us another reason:
his argument tries to rely on Smiths own views about information costs and modularity
to claim that only tangible physical things can be the subject of property rights (McFar-
lane, Structure, supra note 2 at 13536). But it is clear that it is not Smiths own view,
and moreover that it is not a plausible view, as Ive already shown, because the kinds of
information-cost considerations that Smith relies on count just as much in favour of

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586

First worry: Things and Interests. James Penner, like Henry Smith,

thinks that property is the law of things. And Penner, like Smith, thinks
that what counts as a thing is in some sense dependent on the institution
of property:

The beginning of wisdom here is to realize that there is not a world
of things out there all ready to be appropriated as property.
Thing here is a term of art which restricts the application of prop-
erty to those items in the world which are contingently related to
us.85

Penners account, too, is rich and subtle, and I cannot go into its details
here.86 I do want to touch on one aspect of Penners account that Smith
seems to have adopted. That aspect is the claim that property, as an insti-
tution, is justified by our interest in using things.87 Here is Smith again:

The purposes of property relate to our interest in using things. De-
sirable features of a system of propertystability, promotion of in-
vestment, autonomy, efficiency, fairnessrelate to the interest in
use. There is no interest in exclusion per se. Instead, exclusion strat-
egies, including the right to exclude, serve the interest in use; by en-
joying the right to exclude through torts like trespass, an owner can
pursue her interest in a wide range of uses that usually need not be
legally specified.88

Briefly, Smith claims that we have an interest in using things, and the
rules of the system of property work, although not always directly, to
promote that interest.

The problem here is this: we cannot say, on the one hand, that proper-
ty is justified by our interest in the use of things and then, on the other
hand, that what a thing is is determined by the law of property. That is
circular, or close to it. And even if it isnt circular, the claim that we have
an interest in the use of things, which seems plausible enough on its face,
loses a great deal of that plausibility once it is expanded to include any set
of entitlements that are lumped together for information cost reasons.
Our lives might go better in some particular way if we can have access to
land, bicycles, pickles, etc., and to the ability to do what we like with
them. However, it is not at all clear how that interest can also provide a
distinctive justification for monopolies on economic activity, protection of

some forms of intangible property (licences, IP) as they do in favour of tangible physical
property.

85 Penner, Idea of Property, supra note 2 at 126 [emphasis added, footnote omitted].
86 I go into some (critical) detail in Essert, The Office, supra note 25.
87 Penner, Idea of Property, supra note 2 at 6874. Penner thinks that this interest serves

to define property as a distinct part of the legal system: ibid at 4956.

88 Smith, Law of Things, supra note 2 at 1693 ^×..

 PROPERTY IN LICENCES AND THE LAW OF THINGS 587

inventions and expressions, and all of the other kinds of intangibles that,
at least prima facie (consistent with my methodological point from Part
I89), count as kinds of property.90
Second Worry: Things and Concepts. A different sort of worry about

Smiths account arises upon considering the implications of his recent
suggestion that the modularity of property is similar to the modularity of
concepts. Here Smith draws on the thought that concepts help us to or-
ganize the world by organizing particulars together into easier-to-manage
groupings, an idea he traces back to Locke. So, the concept HORSE91 organ-
izes into one grouping all of Bucephalus, Secretariat, and Pie-O-My; we
can refer to all of those different particulars with the single concept.92 The
same particulars can be referred to by different concepts. Famously, the
distinct concepts MORNING STAR and EVENING STAR refer to the same par-
ticular, the planet Venus. And in such a case, sometimesand this is the
crucial point for Smithone concept will be easier to use than the other.
In Smiths example, an early riser will find MORNING STAR an easier con-
cept to use to refer to Venus than EVENING STAR, which would better suit
a night owl.

Smith applies this notion to property: he says, roughly, that the fully
decomposed set of Hohfeldian incidents that exist in a given society are
like particulars, and that the things of property are like concepts, in that
they organize together the particulars into groupings, which are easier to

89 And also, I think, on Smiths view: see e.g. Smith, Intellectual Property as Property,

supra note 79.

90 There is much more to say about what interest(s) support the law of property. Perhaps
we might say that the interest is a deontic or normative interest (in the sense proposed
in David Owens, Shaping the Normative Landscape (Oxford: Oxford University Press,
2012)) in having (perhaps transferable, perhaps good-against-the-world) rights that
others not , but that would be a totally different claim and not at all one about things.
Ripstein (Possession and Use, supra note 59) raises some related ideas, in effect seem-
ing to suggest that we have an interest in exclusion. Another ideain some respects not
far off from Smiths own accountmight be that property is appropriate only when its
particular form is necessary to protect some other interest. This seems to be the inter-
pretation of Locke suggested by Seana Valentine Shiffrin: So, for those items that have
a use that requires exclusive possession, the institution of private property would be
justified and consistent with the purposes of Gods grant (Lockean Arguments for Pri-
vate Intellectual Property in Stephen R Munzer, ed, New Essays in the Legal and Polit-
ical Theory of Property (Cambridge: Cambridge University Press, 2001) 138 at 14647).
91 Here Im following another philosophers convention, which uses SMALL CAPS to refer to

concepts.

92 I am simplifying some of Smiths linguistic-philosophical apparatus here. Sometimes he
talks about what I am calling concepts in terms of Fregean senses or intensions;
similarly he talks about what I am calling particulars in terms of Fregean referents
or extensions. See Henry E Smith, Emergent Property in Penner & Smith, supra
note 21, 320 at 32527.

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588

grasp and to use. Rather than talking about all of the possible particular
duties owed by everyone to B, the owner of Blackacre, not to step onto
Blackacre, ride a bicycle across Blackacre, dig ten or fifteen or eighteen
feet underneath Blackacre, throw a pickle through the airspace above
Blackacre, and so on, we can talk instead of a general duty not to interfere
with Blackacre. The cost savings are clear even from that simple example.
Smiths thought is that property law in effect defines Blackacre as a thing
when it does this grouping. The problem here is that this process, I think,
is by no means unique to the law of property, and even when it does oper-
ate in the law of property, it need not make reference to things.

Take this last point first. One way that, for Smith, things (as defined
by law) are important to property law lies in the way that a right that
others not interfere with the thing groups a set of Hohfeldian incidents in-
to a baseline entitlement of the owner. 93 But as Smith himself has
shown in a different context, the law of property sometimes sets this base-
line not by use of modular things, but instead by making reference to
pre-existing customs.94 He discusses Miller v. Shoene,95 where the Su-
preme Court of the United States held that a certain regulationone
that, in order to control a fungus that infected apple trees and red cedars
and killed the apples, prescribed cutting down the cedar trees (but not the
apple trees) without any compensation (for the lost value of the trees) for
the cedars ownerswas not a taking. Smith argues that the decision was
based on an established and well-known custom that cedars would be
cut and apple trees saved to fight the rust,96 and so the owners of the ce-
dars were not deprived of any right. It seems obvious that the cedar-
owners and the apple-owners each had roughly the same thing, namely
the land and the trees. But what they owned was different: the apple-
owners had the privilege to remove the cedars whereas the cedar-owners
had a duty not to remove the apple trees. The point is that it was the cus-
tom that set these entitlements, rather than any considerations about
what thing each set of parties owned. And because the custom was es-
tablished and well-known, relying on it was cheap from an information
costs standpoint. This suggests that, at least in some cases, the kind of
work that Smith wants his conception of things to do is done without
any reference to things at all.

93 Merrill & Smith, Coasean, supra note 65 at S9899.
94 Henry E Smith, Community and Custom in Property (2009) 10:5 Theor Inq L 5 at 36

41 [Smith, Community and Custom].

95 276 US 272, 72 L Ed 568 (1928).
96 Smith, Community and Custom, supra note 94 at 3940. Smith relies in part on an
insight in William A Fischel, The Law and Economics of Cedar-Apple Rust: State Ac-
tion and Just Compensation in Miller v. Shoene (2007) 3:2 Rev L & Econ 133.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 589

More generally, the process of organizing particulars into coherent
groups, which Smith points to as a central core of the law of property, is
by no means unique to the law of property. For example, Section 265 of
the Canadian Criminal Code reads, in part, [a] person commits an as-
sault when without the consent of another person, he applies force inten-
tionally to that other person, directly or indirectly.97 Clearly this provi-
sion employs concepts in the same way that Smith says property law does:
it just mentions force, rather than saying that a person commits an as-
sault if they punch or kick or slap someone, whether they do so with their
hands or feet or a stick or a baseball bat or a hockey stick or a pickle, and
so on. The tort of negligence provides another example, in its insistence
that we take reasonable care for the safety of others: the genius and im-
portance of Donoghue v. Stevenson and MacPherson v. Buick Motor Co lie
in part in their recognition that this broad concept of reasonable care
counts as some general conception of relations … of which the particular
cases found in the books are but instances.98 And this applies to our nor-
mal lives, too: thats why everyone remembers and repeats the summary
of Poloniuss advice to Laertes, To thine own self be true, rather than
the lengthy set of particulars that precede it.

The fundamental point can simply be put as follows: concepts do the
work in the law of property just as they do elsewhere. Just as we have a
concept ENTERING BLACKACRE that we use to understand the rights that B
has as owner of Blackacre, we have a concept DRIVING A TAXI that we can
use to understand the rights that L has as holder of the Ideal Licence.
And in neither case do we need any special notion of a thing, as defined
by law or otherwise, to understand the nature of these rights. Smith is
right to say that we use concepts in our lives to save on the cost of think-
ing and communicating about particulars; moreover, he is correct that
property law needs some form of grouping in order to reduce information
costs associated with its duties.99 But, as concepts can do this work in the
law of property just as well as they can in the rest of our social lives,

97 RSC 1985, c C-46, s 265(1)(a).
98 Donoghue v Stevenson, [1932] AC 562 at 580, 1932 SC (HL) 31; MacPherson v Buick

Motor Co, 217 NY 382, 111 NE 1050 (1916).

99 In his recent paper, Emergent Property (supra note 92), Smith discusses my article
The Office (supra note 25) and suggests that the result of the analysis there can be ac-
complished more easily by attending to the distinction between intensions and exten-
sions in property law. I agree with his analysis and with his claim that we need to
group Hohfeldian incidents together somehow, but I think that my suggestion that
ownership is a kind of office is plausibly understood as a different account than Smiths
of what the relevant intension is in the law of property; that is, I think we might better
conceive of property in terms of modular offices than modular things.

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590

Smiths insight does not require us to say that property is the law of
things.

V. Ideal and Actual Licences

I used the Ideal Licence to suggest that the kinds of considerations
that some have suggested count in favour of the law-of-things view of
property do not actually lead us to that view. Nevertheless, I hope to have
shown how each of those considerations helps us to see something im-
portant about property more broadly. In this section, I want to consider
some of the ideal features of the Ideal Licence and ask whether the fact
that most genuine licences do not have these features presents a problem
for my arguments. Ill concentrate on three ways in which the rights of the
holders of actual licences, unlike those of the Ideal Licensee, seem to di-
verge in their legal form from the rights of owners: (i) generally there are
a lot of licence holders; (ii) generally licence holders do not have a remedi-
al claim against those who act without a licence (or purport to use the li-
censees licence without her permission); and (iii) generally licence holders
do not have the power to authorize others to act under their licences.100
Before I un-idealize, however, I want to briefly make things even more
unrealistic to really drive home the point about the nature of property and
the fact that its distinctiveness is not located in its relation to things. We
can see this point most clearly by noticing that, even in a world without
things, there could still be property rights. Imagine a society of angels.
Angels have no need for food, shelter or any permanent physical location,
or any physical goods whatsoever. We can imagine that they are physical-
ly embodied but that, wherever they are located, they are the only things
that are physically embodied. Clearly such angels could have a law of
torts and a law of contracts; indeed, they could have a legal system.101 But
could they have a law of property? I think they could, given the conception
of property I offered above. The property that these angels would have
would consist in their transferable, exclusive rights to determine who per-
forms certain activities. So one angel could have the right to decide who
can dance a waltz and another could have the right to decide who could
sing Sugar Mountain and so on. We might wonder why these angels
would want enforceable property rights in such activities, but our focus on
the form of property abstracts away from any questions about the justifi-

100 Im skipping a fourth, that licences are generally not transferable, because I set trans-

ferability aside here. See supra note 34.

101 This is a well-known argument in analytic jurisprudence. For examples and discussion,
see Joseph Raz, Practical Reason and Norms, 2d ed (Oxford: Oxford University Press,
1999) ([e]ven a society of angels may have a need for legislative authorities to ensure
co-ordination at 159). See also Shapiro, supra note 39 at 17374.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 591

cation for them. This, to me, suggests quite definitively that things are
not central to making property rights the rights that they are.102 But
enough about angels. Lets step back into the real world to consider the
potential problems I mentioned in the last paragraph.
First Problem: Numerous Right-Holders. While there is only one per-

son who has the rights provided by the Ideal Licence, in the real world
things are usually very different. Taxi licences, fishing licences, and so on,
are generally spread out among a large group of licensees, such that each
licensee has a far from exclusive privilege to participate in the activity; by
contrast, ownership of real and personal property is generally concentrat-
ed in a single person. Its easy to see, however, that this contrast is over-
drawnthere are real-world licences where a single party is the licen-
see 103 and the common law contains not one but two forms of co-
ownership. Moreover, a consistent theme in political theory about proper-
ty has been the insistence that we recognize other forms of property own-
ership, like common property and collective property,104 for at least some
of which there is no single person who can be said to own anything. So the
lines are not nearly as bright as they might seem. Moreover, since the
point I am trying to make using the Ideal Licence is conceptual, this legal
technicality doesnt really matter: as long as we can imagine a real licence
that has a single owner, the fact that none might actually exist is immate-
rial.

102 Smiths claim that property rights would not exist in a world without transaction costs
(since in such a world we could costlessly enumerate the complete set of in personam
claims between every pair of individuals: see Smith, Law of Things, supra note 2 at
16991700; Merrill & Smith, Coasean, supra note 65; Lee & Smith, supra note 76) is
interestingly relevant here. We can suppose that the world of the angels would have
transaction costs just like the real world does; on that supposition, Smiths thought
about the relationship between transaction costs and property rights seems correct.
Again, though, Smiths argument does not require us to conclude that property is the
law of things, since in the world of the angels there are no things.

103 The radio spectrum licensing proposal suggested by Jora Minasian (and discussed in
supra notes 6571 and accompanying text) provides an example of a case in which a
single licence-holder is required by the nature of the licenced activity. A radio spectrum
licence provides for broadcasting rights over a given frequency in a given geographical
area, and because of the nature of electromagnetic radiation, only one radio station can
broadcast on each frequency. So while of course there are lots of radio stations in any
given area, we should think of the electromagnetic spectrum as being divided into given
frequencies and the right to broadcast each on each frequency as being the right of a
sole right-holder. Moreover, it is arguableas we will see in the next paragraphthat
a patent is a (transferable, in rem) licence with a single holder, albeit a time-limited
one. See also supra note 34.

104 See Jeremy Waldron, The Right to Private Property (Oxford: Clarendon Press, 1988) at

3746.

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Second and Third Problems: Remedial Claims and Authorizations.

Here we have more difficult questions. Ive suggested in the past that an
owners power to bring a claim against someone who has violated a duty
owed to her is a central feature that needs to be accounted for in under-
standing property law as a branch of private law.105 But most licences
dont have such a private right of remedial action. This problem might be,
factually at least, related to the previous one. Where many individuals
hold the same type of licence, it would be very difficult to institute any
remedial right held jointly or in common by those individuals against
people who purport to perform the relevant activity when they lack a li-
cence. A solution in such a case might lie in seeing the governments ad-
ministrative actions against unlicensed activity as a sort of vicarious pow-
er held in trust for the licensed parties. More importantly, however, we
might be able to find licences that do provide remedial powers if we
broaden our investigation.106 It seems to me that some intellectual proper-
ty rights come very close to looking like the rights of the Ideal Licensee.
There are of course complications here, having to do with the limited time
frame of intellectual property rights and so on, but the basic idea of an in-
tellectual property right as a transferable in rem claim that others not do
somethingreproduce this expression, work this invention, take ad-
vantage of this goodwillseems to me at least prima facie plausible.107

The Ideal Licensee can sublicense others to drive her taxi for her and
can also choose not to pursue the remedial claim she has; similarly B, as
owner of Blackacre, can of course allow others onto Blackacre and can
choose to waive her rights to bring actions in trespass. By contrast, a typi-
cal real licensee cannot sublicense others to participate in the relevant ac-
tivity; nor can she decide, if others do participate in the activity without a
licence, to let things slide (since, as we have already seen, she has no re-
medial power to waive). The suggestion that we can understand intellec-

105 Essert, The Office, supra note 25.
106 The Public Vehicles Act, which governs intercity bus transportation in Ontario, allows
for the holder of a licence (as an interested person) to start a proceeding to determine
if another person is operating without a licence, but does not provide any remedial
claim to the licensee (supra note 40, ss 1(1), 11(1)). Benjamin L. Fine proposes an inter-
esting idea for a pre-capture right in wild animals under pursuit, which can be under-
stood as a licence providing an exclusive right to determine who may pursue the animal
(An Analysis of the Formation of Property Rights Underlying Tortious Interference
with Contracts and Other Economic Relations (1983) 50:3 U Chi L Rev 1116 at 1126
31). Popov v Hayashi, supra note 48, could be seen as vindicating that suggestion.

107 A different tack might be to abandon the idea that the remedial power is central to the
concept of property, and that owners need not have any private law recourse when oth-
ers violate the duties owed to them. Larissa Katz suggested this possibility to me; I am
not sure if she actually believes it. I dont, for the reasons set out in Essert, The Office,
supra note 25.

 PROPERTY IN LICENCES AND THE LAW OF THINGS 593

tual property rights along the model Ive suggested here helps us to see
that this is not as much of a problem as it might seem to be. Moreover, as
I said in regard to the first problem, since the question is conceptual, what
really matters is not whether there is a licence that looks like the Ideal
Licence, but whether there could be, and what we would say about that
case.108
Of course, I shouldnt push this point too far. When the rubber hits the
road and courts need to make actual decisions about whether or not some
actual, real-life licence provides its holder with a property right, questions
about the nature of the governmental regulation over the licence, the
ways in which the licence is transferable, the rights that the licensee has,
and so on, are going to be the key questions on which the case turns.109
But my central claim here is the conceptual one about the Ideal Licence
and its implications for property theory, so I leave the specifics of any par-
ticular licence aside.

To conclude, I want to mention two implications of the arguments of

Conclusion

this article.

First, Smiths version of the law-of-things account is much more suc-
cessful if we understand it not as a conceptual claim but rather as a set of
empirical (or perhaps functional) claims. These empirical claims would be
roughly of the following sort: they would be claims about why property
rights, understood as (perhaps transferable, perhaps in rem) rights that
others not without an owners permission, have certain of the features
that they do in our actual world of positive transaction costs. In particu-
lar, Smiths arguments are particularly well-suited to explain why proper-
ty rights tend to be rights to things and why property rights tend to have
the architecture that they do. These are important and valuable claims,
but I do think it is important that we keep in mind that they are not con-
ceptual claims about what property is.

Second, if we abandon the law-of-things account as a conceptual anal-
ysis of property, a wide variety of important theoretical questions about

108 That point also tells against a final potential objection, which is that, at least in the US,
some licences are explicitly deemed by legislation not to count as property (to avoid tak-
ings protection). Here of course we have the clearest example of a contingent legal, as
opposed to conceptual, fact that one could find, and so this is not really an objection to
the argument I make here. In fact, it strengthens it, since if these licences were not the
sort of rights that could plausibly be understood as property rights, there would be no
need for such legislative deemings.

109 See e.g. Saulnier, supra note 15.

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property open themselves up to investigation from new and important di-
rections. Should property be understood as the right to exclude, or as
some sort of authority over others?110 What is the role of scarcity in prop-
erty? Some say that scarcity … is a presupposition of all sensible talk
about property,111 but the account offered here might suggest that we can
have property absent scarcity, and so we need an explanation of its im-
portance.112 And finally, consider the question of what interest or interests
justify the law of property. As I said above in criticizing Smith for relying
on an interest in the use of things as part of this account of property, it
seems hard to imagine that a single interest can be behind the rights that
we have in land, in bicycles, in pickles, in our expressions and inventions,
in the use of our images for advertising, and in the licences that we hold.
Perhaps different property institutions, as Hanoch Dagan calls them, are
explained by reference to different interests (or regulative principles);113
perhaps interests are not part of the explanation of property;114 or perhaps
a different answer is required.115 These are all questions best left for an-
other day. But if my arguments here are correct, we are much better
placed to answer them.

110 See Larissa Katz, Exclusion and Exclusivity in Property Law (2008) 58:3 UTLJ 275.
111 Waldron, supra note 104 at 31.
112 The same goes for rivalry. See note 64, supra.
113 Pluralism and Perfectionism in Private Law (2012) 112:6 Colum L Rev 1409.
114 See Ripstein, Possession and Use, supra note 59.
115 See note 90, supra.