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As should be apparent, copyright and patent seek to preventthe owners of tangible property—scarce resources—from using their own property as they see fit. For example, they are prohibited, under patent law, from practicingpatented methods, using their own property, or from shapingtheir own property into patented devices, even if theyindependently invent the method or device. Under copyrightlaw, third parties who have not contracted with theauthor are prevented from copying or profiting from theauthor’s original work. Clearly, sellers of novel devices orliterary works can contract with buyers to prevent thesebuyers from reproducing, or even re-selling, the item.These contractual webs can be elaborate; a novel writer canlicense his story to a movie studio on the condition that thestudio require all movie theaters to require customers toagree not to reproduce the plot of the movie, and so on.

Third parties, then, who are not parties to the contract and are not in privity with the contractual obligor and bligee, are not bound by the contractual relationship. Forthis reason, although an innovator can use contract to stopspecified individuals from freely using his ideas, it is difficultto use standard contract law to prevent third partiesfrom using ideas they glean from others. Perhaps sensing this problem, some quasi-IP advocates shift from a purelycontractual approach to a “reservation of rights” approachin which property rights in tangible resources are seen as adivisible bundle of rights.

The law, then, should protect individual rights to one’sbody, and to legitimately acquired scarce resources (property).There is not a natural right to ideal objects—to one’sintellectual innovations or creations—but only to scarceresources. Many opponents of IP rights typically supportonly contractual arrangements to protect ideas and innovations—private contracts between property owners. Suppose,for example, that A writes a book and sells physicalcopies of it to numerous purchasers B1, B2 . . . BN, with a contractualcondition that each buyer B is obligated not to makeor sell a copy of the text. Under all theories of contract, any of the buyers B becomes liable to A, at least for damages,if he violates these provisions.