Intellectual Property Auctions: Hendrix

There is apparently a push to create a market for intellectual property auctions, which I am not quite sure how to interpret. Apparently companies like Ocean Tomo have set up auctions where you can bid for the intellectual property embodying a particular object, not necessarily the objects themselves.

Jimi Hendrix's entire music portfolio was up for auction and was purchased by a phone bidder for $15 million. Hendrix's music was--allegedly--the property of his manager, Michael Frank Jeffery, who died in the late 1970's. The beneficiaries of his estate are a number of charities in the U.K. Jeffery's estate put the songs up for sale to the highest bidder. But Hendrix's family--who believe that Jeffery never had rights to the music--is going fight: "Whoever bought this bought themselves the right to be a litigant."

The most common reaction I hear when I tell people about this story is how terrible it is that Hendrix's songs are being traded, and that the family deserves the money. Perhaps I've already been indoctrinated by the property rights-centric canon of IP law, but I think I've read enough cases to know that practically every party, often the author him or herself, is a rent-seeker.

In this case, it is difficult to identify the "good guy." Is the family trying to make some profit on the 600,000 records Hendrix still sells a year? Should the fact that the beneficiaries of the Jeffery estate include the Asthma Research Council, the British Heart Foundation and the Kings College Hospital sway my opinion? The answer, I'm not sure and, frankly, I don't much care.

Courts and law professors often make character judgments based on the parties (and I suppose that's what good lawyers have to do). At any given time, a movie studio can be an evil corporation or a business held hostage. An author can be a powerless cog in corporate machinery or an unoriginal pirate. An estate can be a greedy rent-seeker or a deserving widow. Knowing just how fickle and opaque these characterizations are most of the time, I'm willing to suspend judgment in this matter.

An interesting aside on IP auctions: at this auction, a number of trademarks were also up for sale. This seems a bit counter intuitive to me because I always assumed that the sale, transfer or assignment of a trademark included "the goodwill of the business connected with the use of and symbolized by the mark.” If so, I wonder how smart it is to open up the sale of a trademark to anyone willing to bid on it without asking whether the buyer has any interest in using the mark for similar goods or services.