I recently wrote a similar article about Software Rights. This article here is very much a follow up to the software rights article. It uses the same philosophical theories and builds upon them. I would advise you to read the other article first. If you've done so you can skip the introduction and the explanation of Munzer's property theory and directly jump to section three Physical Devices And Software.

Contents

  1. Introduction
  2. Munzer's Theory Of Property
    1. Munzer On Property
    2. Digital And Physical Goods
  3. Physical Devices And Software
    1. The Core Problem: Owning the Hardware, Not The Software
    2. Property And Expectations
    3. Just Copies
    4. A Solution?
  4. A Misaligned Rights Distribution
  5. Conclusion
  6. References

1. Introduction

Most theories of property or ownership are based on rights and their distribution. In doing so, they are quite compelling in ascribing physical goods to their respective owners. What most of those theories lack is the ability to convincingly allocate digital goods to their owners or to be more precise: they are bad in explaining as to what it means to own or possess a digital copy of a digital good (e.g. movies, music).

This paper’s aim is to assess the problem classical notions of property have with digital goods. It will be guided by the question how standard theories of property treat digital goods and specifically how they treat the special case of software enabled hardware devices. I will argue that the problem does not lie with such theories, at least not fully, it lies with current policies regarding copyright and Digital Rights Management (DRM).

Section two will delineate Munzer’s theory of property and its core assumptions, whilst also making a definition of digital goods.

The core problem will be discussed in section three. How do standard theories of property treat the special case of owning a physical device which contains a digital good on it that is vital to the continued use of that device (software enabled hardware devices like computers and smartphones).

Solving this problem will allow us in the fourth section to have a brief look at the current distribution of rights between copyright holders and someone purchasing a software enabled hardware device.

2. Munzer’s Theory Of Property

This section will briefly discuss and sketch out Munzer’s theory of property and then turn it’s attention to an important differentiation, the one between physical goods and digital goods.

2.1 Munzer On Property

Munzer’s theory of Property is very much built upon Hohfeld’s theory of rights and Honoré’s theory of ownership respectively. Hohfeld claimed that there are 4 “fundamental legal relations” which all come as bundles of correlatives1.

  • privilege - no-right
  • right - duty
  • power - liability
  • immunity - disability2

This means that if A has a privilege (the term liberty is also commonly used to express the same idea) B must have the corresponding no-right to hinder A from exercising his privilege, whatever A’s privilege may be. The same scheme applies to the other three bundles. These bundles do express relations between persons, which means that every relation has someone holding one side (privilege, right, power, immunity) while someone else must hold the corresponding correlative. Hohfeld tried to narrow the use of the term “right” and only applied it to one side of one relation. What he called a right is usually referenced to as a claim-right or simply as a claim. It is also common to use “right” as a term for every side of the four relations Hohfeld proposed; a privilege is as much a right as is a power as is a disability3.

Munzer built his theory of property very much upon the thinkings of Hohfeld since he claims that

[t]he idea of property […] involves a constellation of Hohfeldian elements, correlatives, and opposites; a specification of standard incidents of ownership and other related but less powerful interests; and a catalog of things (tangible and intangible) that are the subjects of these incidents.4

Important to Munzer’s notion of property is that “property also includes less powerful collections of incidents that do not rise to the level of ownership”5. He calls those lesser instances of property “limited property”6.

Munzer points out that understanding property in Hohfeldian terms has the advantage that one can more accurately describe the relations between persons and things when it comes to property. Understanding those relations is at the very core of understanding property. The disadvantage is of course that it is really difficult to know when the term “property” will be applicable and when it will not be. As Munzer himself admits, his theory does not offer a clear answer as to what property is, but it allows for a clear path of assessment. After listing the rights present in a thing, we only need to decide whether those rights amount to “ownership, limited property rights, or something else”7.

Munzer’s theory is in itself very elegant and simple. This notion of property is rights-based. If we are able to determine which rights apply to whom, concerning a certain thing, we will gain the possibility to understand what concept is applicable to which right-holders. Because we will use the rights-distribution for our understanding of property we are allowed to make much more fine-grained observations and we will be able to also describe very weak cases of property

2.2 Digital And Physical Goods

Since this paper will mainly focus on digital goods and how we can possess such things, I want to briefly sketch out how we can understand the difference between physical and digital goods.

A digital good is a good which can be wholly expressed by 0’s and 1’s. It does not have a distinct physical form, it is only represented physically as either electrical charge or magnetic alignment (part of a HDD or some kind of memory, SSD).

To illustrate this: A BluRay itself is a physical product, usually a disc within a case. The disc itself can never be expressed in 1’s and 0’s but the content which the disc carries is fully expressible in such a form and is therefore a digital good.

That means that the range of digital goods is very wide, they include everything from software to music. Of importance to us will mostly be software and within this category we will look at operating systems and firmware.

3. Physical Devices And Software

The previous section explained the core theory on which we will build our assessment in this section and build our argument concerning the rights distribution of digital property in the next. Munzer understands property as a complex concept with no clear catalog of criteria to be met but with a clear path of assessment. We need to understand the distribution of rights to be able to ascribe concepts such as property or limited property to different right-holders in respect to things. This section will introduce what I understand as the most difficult, the core problem a theory of digital property has to solve.

3.1 The Core Problem

Suppose Martha purchases a new smartphone. Suppose also that in purchasing said device she gains the full stack of ownership rights possible for a physical device.

After starting the device Martha is greeted with an End User Licensing Agreement (EULA). The EULA she sees is pretty much a standard form every user of a smartphone is greeted with. The EULA states what rights and duties will belong to her and what rights will belong to the smartphone manufacturer. If Martha does not agree with the terms of the EULA presented to her she will not be able to use the device. So she quickly agrees to the terms and starts using her phone.

If Martha would have read the rights expressed in the EULA more thoroughly, she would have recognized that the ownership rights of the software (software means here firmware, operating system and applications already on the device) remain with the phone manufacturer and not with her. The only right she has been granted is the one of use, which can be revoked by the manufacturer at any time8.

That example I just described happens a thousandfold every day. It happens almost every time someone purchases a physical device which contains software on it. Even if the EULA of a device does allow for installing another operating system on it (most do not), the firmware (the software interface between hardware and operating system) usually remains the property of someone else.

This is the hardest problem a theory of digital property needs to solve: Is something our property if we own the thing wholly on the physical layer but only have use rights on the software side, granted that the software is of vital importance to the continued use of the device?

To put this another way: A smartphone without software on it is a black mirror with plastic casing. It only becomes the thing we purchased it as, a smartphone, when we are able to use it with software. A good theory of property should not only be able to explain property for physical or digital goods, it should also be able to explain how property is possible at the intersection of these two.

Before we discuss this problem further we need to look first at expectations as an important aspect of property and second at digital goods and their relation to copies.

3.2 Property And Expectations

One important aspect of property has been disregarded in our discussion of property so far: Expectations.

If we don’t include expectations in our conception of property the example above can be easily dismissed. Martha purchased a smartphone, which it was at the time of purchase. Future use and with that the rights she has regarding to the software are not of concern. Understanding property in such a way, though, does not do justice to Martha’s situation. She not only purchased a thing, she purchased a thing to do certain things with it. An understanding of property disregarding that fact does not own up to the complexity of Martha’s property.

Munzer writes in regard to expectations and his property theory that:

The relevant connection between property and expectations is that property, conceived as a legal structure of Hohfeldian normative modalities, makes possible legal expectations with respect to things. This structure is a ground for the disposition to predict […] the future use and enjoyment of things together with the attitude of feeling entitled to count on them. Moreover, only an attenuated form of property would fail to ground expectations.9

Noteworthy is the direction of expectations; they are predictions about future use. So we can explain what is troublesome with Martha’s case: the expectations she has relating to the thing she owns are not well founded. All she possesses along with the physical device is a revocable right to use. It is very much possible that future use will be prohibited to her, or only be possible under different pretenses than the ones she started out with.

But even though Martha’s expectations may be met, and may even be reasonable, - most people’s smartphones and the software on it tend to work for a reasonable amount of time - they are not well founded concerning the rights Martha possesses. A revocable use right is not a solid foundation for depicting future use.

So our problem remains intact. We could then try and argue that Martha possesses her smartphone since she has the physical good in her possession. That would be the simple understanding of property in which property are just things.

Such an understanding would fail here because owning the physical good is not enough, as explained above. A smartphone without software is not a smartphone, it fails to fulfill it’s function. Martha’s expectations will not be met as soon as the software of her device stops working. The expectation in purchasing the device was to use it as a software enabled hardware device with certain functions (browsing, calling etc.), without working software the device will loose those functions.

We could dismiss those argumentations and instead argue that since we own the thing, we also own the main drive of the device which contains the software. Therefore we own a copy of the software and therefore the software. This however, would be to misunderstand digital goods (and rights based property theories): Digital goods are copies by virtue of them being digital. Or more bluntly: Having in possession a copy of a digital good does not make it one’s property.

3.3 Just Copies

By virtue of being digital, everything is a copy. Even through the act of creation a digital good is already a copy, or it exists also as a copy respectively (represented in the cache and the memory, or on the HDD). Stefik discusses the legal nature of copies and concludes that strictly speaking, since copies are so inherent to digital goods that on a strict understanding of a copy, “copyright would be infringed several times by any computer with a reasonably modern architecture before any person could even see the work”10, simply because there would already be dozens of copies of a file before it has even opened properly. This again emphasizes the point that digital goods are copies by virtue of them being digital.

That is by itself not that noteworthy of a discovery. What is noteworthy tough is that by being a copy, the thing itself and/or its copy (meaning here the representation through magnetic alignment or electric charge) becomes worthless. The copy as thing by itself and any instances of it do not have inherent value. They only gain value through the attachment of rights. A physical book can be read as soon as one comes into possession of it, a digital book can only be read when one has the proper rights to do so. One may possess a copy but without the accommodating right to use, be unable to open the file and read it.

Only a theory that does not relate itself directly to things but looks at the distribution of rights, has any power in explaining to whom and in what respect digital things belong to. Since every digital good is a copy, obtaining a copy is not in itself a worthwhile endeavor. It does not matter whether you possess a copy of a digital good, it does matter what rights you gained in relation to the good when obtaining it.

This does of course also happen with tangible things:

If Martha purchases a BluRay Disc, she only gains the right to watch the film at her home, privately. The right to a public screening is a right she has to acquire separately. The difference between physical and digital goods is that any legal purchase of physical goods does come with at least some rights. You do have the thing in your possession, whereas a purchase of a digital good may only come with one right, the right to use. The main difference is that the rights in relation to physical goods are sometimes non enforceable: No one can guarantee and force Martha to no lend her BluRay copy of the film she purchased to a friend, whereas that is very much enforceable with digital goods through so called Digital Rights Management (DRM).

The critical reader may ask what the point of those remarks may be. The point is that digital goods and their intangibility pose different requirements to a theory of property. Expectations we may have in relation to physical things are usually well founded: My book will remain readable as long as it doesn’t fall apart or I spill liquid over it. Expectations translated from physical goods to digital goods may be less well founded: The expectation that the e-book I purchased from Amazon will be available to me next month and the month after that is not as well grounded as the same expectation relating to the physical book I purchased from the very same place11.

3.4 A solution?

The last two subsections extended the property theory with expectations and introduced copies as a vital part of digital goods. We still haven’t discussed the core problem I illustrated before, mostly because understanding expectations as a part of property and understanding copies and their relation to digital goods are prerequisites to understanding why we can’t solve Martha’s problem with Munzer’s property theory.

Martha purchased a physical device. Said physical device contained software. The software was licensed to Martha to use by the device manufacturer (let’s, for convenience’s sake, assume that software and hardware are both from the same company). Said license gave Martha limited use rights while the manufacturer maintained full ownership rights. Without the use of software, the device fails the expectations Martha has for it. Here, expectations are not well founded but they are reasonable. She depicts future use cases from a device of which she has full ownership rights (in her opinion), at least on the physical side12.

Before we make any further remarks, let’s just quickly use Munzer’s theory to assess Martha’s situation: Honoré names 11 rights that if all, or most, of them are present, represent full ownership: Those are the the rights to possess, use, manage, to the income, to the capital, security, incident of transmissibility, incident of absence of term, prohibition of harmful use, liability to execution and residuary character13. If we look at Martha’s smartphone as just a physical thing, she possesses all of those rights and is therefore the owner of the device14.

The software manufacturer on the other hand does not grant Martha such a plethora of rights. The only right Martha has is that of very limited, revocable use. All other rights are reserved by the manufacturer. The manufacturer is therefore the owner of the software on Martha’s smartphone15.

As you can see, we stand now in front of the problem that brought us here: Martha owns the physical thing and the manufacturer of the thing owns the software on the thing. Without the software, the thing is not the thing anymore.

This does lead me to conclude that Martha does not own her device and here’s my argument for it: The same shift we observed when talking about digital goods and copies, that owning a copy becomes worthless, happens here: Owning the physical side of a device whose functions are software enabled and software dependent becomes the worthless part of the equation.

The ownership rights the manufacturer has do extend beyond the digital: There were some cases of legally purchased smartphones that were resold by their “owners” where the phone manufacturer made the phones unusuable for the new owners, for the simple fact that they reserved the incident of transmissibility for the physical device to themselves16.

To put this in Hohfeldian terms, the phone manufacturer holds a power over Martha, to which she is liable. The right to possess, as Honoré called it, does not lie with her, it lies with the phone manufacturer.

My argument could go on but I think that it suffices to show that the right to possess does not really lie with Martha to deny her any sort of ownership. The right to possess is of such vital importance to ownership as a concept that there really can’t be any ownership when the right to possess isn’t given.

The advantage the concept of property has over the concept of ownership is of course that there can be lesser instances of it, what Munzer calls limited property.

But even such limited property is not given here. The power the manufacturer holds, because they own the software to the fullest extent Honoré’s theory allows, is so strong that it puts any of Martha’s rights under liability. So is for example the right to security under liability if the manufacturer is no longer able to maintain the software.

This case shows us the utter failure of standard concepts of ownership and property. My solution to this is simple, I will argue in the next section that not our conceptions of ownership and property are misguided, they are still valid and useful, our distribution of rights is misaligned. We stand under the impression to own and purchase things, to make them our property but we don’t. We rent them at best.

To summarize, Martha does theoretically possess all ownership rights concerning her smartphone as a physical thing, however, those rights are worthless. The manufacturer gains, by owning the rights to the software, power over Martha and her ownership rights of the physical thing. She is under a liability to the manufacturer concerning her smartphone. The manufacturer can’t take away her smartphone physically but they can make it unusable, therefore all of her rights are under a liability to the phone manufacturer17. And possessing rights that are under a liability to a third party does seem like there is really no ownership at all.

4. A Misaligned Rights Distribution

In discussing the moral basis of property rights Lawrence Becker names three kinds of problems. The first one asks why there even should be property rights, the second one asks “[w]hat sorts of things should be owned, and in what ways” and the third one is that “[g]iven that a specific kind of property is justifiable, who, in particular, should have title to existing pieces of it”18.

The first question is already answered in Martha’s case, there is property, whether such property be moral or not. Of interest to us will mostly be the second and in some part the third problem. We concluded in the last section that Martha does not really own her smartphone, the software is owned by the manufacturer, so the manufacturer holds all power. What we will need to discuss is how her smartphone should be owned and by whom.

To make this clear, this paper is not concerned with a moral argument, it discusses the rights distribution of software enabled hardware devices and looks briefly at the difficulties the current state of the rights distribution poses19.

The second question seems easy to answer, Martha purchased the smartphone with the expectation of obtaining a full stack of ownership rights through the exchange of money. She did gain those rights but only over the device as a thing, not over the device as a thing with expectations of future use. As Becker rightfully pointed out, use rights are often constrained and we could therefore argue that it is normal, even when owning something, that one’s use rights are constrained in certain ways20.

Such an argument would then sa that smartphones clearly are limited property but that this is a normal state of affairs, present in many other forms of property. I would hold against such an argument that not only use rights are constrained, all property rights are constrained. The problem of them being constrained is not that there is such a constriction, it is that those can be changed at will by the manufacturer. Again, Martha only holds the right of revocable use. Meaning that the right can be revoked at any time and at will by the manufacturer. Her right is not constrained, it is a courtesy at best. She holds no power over her use rights and holding no power over one’s right is like not holding them at all. Non-enforceable rights are not really held by someone, they are a mere fiction.

Chang noted that the core idea of copyright was to to strike a balance between copyright holder (owner or in our case the manufacturer) and user (owner of a copy or in possession of a copy and use rights)21. Our argumentation so far should have made clear, that I don’t see this balance as given anymore. The distribution of rights is so far on one side, that only the copyright holder holds power, the user only holds some liabilities and some courtesy rights given to her by the manufacturer.

A similar angle to this problem was used by Douglas. He looked at the social disutility of software if certain rights are reserved by the software developer and not given to the user22. He does not discuss the right at stake here but the idea is quite applicable to our approach. The social disutility of withholding the right to make one’s device properly function is enormous. Not having that right as de facto owner of a device is huge.

This section is nothing more than a rough sketch out of what a proper theory and discussion of the current distribution of ownership rights should be but I hope that it does point out the difficulties we as a society face when purchasing a device only grants full ownership rights on the surface.

The last thing I want to mention here is that I don’t see this discussion as a failure of either Honoré’s ownership theory or Munzer’s property theory. To the contrary, they proved to be valuable concepts and guidelines to properly assess the distribution of rights described in the core problem. Our intuitions may fail here but - without wanting to make a lengthy argument - I do think that our intuitions and their failure do not point us to a failure of our concepts of property and ownership. They point us to a misalignment of rights that grants too many rights to the copyright holder (manufacturer) and too little rights to Martha.

5. Conclusion

Our endeavor was guided by the question how standard theories of property treat digital goods and specifically the special case of software enabled hardware devices.

After delineating Munzer’s theory of property, I proposed a differentiation between digital and physical goods. The second section introduced the core problem: A smartphone owner that does have ownership rights over a physical device while holding only a revocable use right on the software side and all other rights being held by the software manufacturer. After extending Munzer’s property theory with expectations and discussing copies and their relation to digital goods, we were finally able to answer our main question.

I argued that a standard theory of property does fail when it comes to the core problem of software enabled hardware devices if the software rights are held by the device manufacturer. Or it does at least fail our intuitions. If such a device is owned, it is owned by the manufacturer, not the person acquiring the full stack of ownership rights for the physical device.

The last section sketched out and argued for the misalignment present in the current distribution of software rights. It did not make a moral argument but the argument made in the previous sections strongly pointed to a form of copyright that does not do justice to our current practices and language.

The current situation presents itself as such that if someone means to purchase a software enabled hardware device, that she does not gain the full stack of ownership rights she think she does gain. Our current language points to purchases whereas most EULA’s and terms and conditions clearly state that our purchases do not gain us ownership rights.

References

Becker, Lawrence C. 1980. “The Moral Basis of Property Rights.” Nomos 22. JSTOR: 187–220.

Carey, DAVID H. 1993. “Should Computer Programs Be Ownable?” Metaphilosophy 24 (1/2). Wiley: 76–84.

Chang, Yu-Lin. 2007. “Who Should Own Access Rights? A Game-Theoretical Approach to Striking the Optimal Balance in the Debate over Digital Rights Management.” Artificial Intelligence and Law 15 (4). Springer: 323–56.

Douglas, David M. 2011a. “A Bundle of Software Rights and Duties.” Ethics and Information Technology 13 (3). Springer: 185–97.

———. 2011b. “The Social Disutility of Software Ownership.” Science and Engineering Ethics 17 (3). Springer: 485–502.

Gallagher, Sean. 2017. “Black Market Blackphones Get Sent a Kill Message That Bricks Them.” Link.

Hohfeld, Wesley N. 2010. Fundamental Legal Conceptions. as Applied in Judicial Reasoning. Edited by Walter Wheeler Cook. Clark, New Jersey: The Lawbook Exchange, Ltd.

Honoré, Anthony M. 1961. “Ownership.” Oxford Essays in Jurisprudence 107. Oxford: Oxford University Press: 107–47.

Johnson, DEBORAH G. 1985. “Should Computer Programs Be Owned?” Metaphilosophy 16 (4). Blackwell Publishing Ltd: 276–88.

———. 1993. “A Reply to ‘Should Computer Programs Be Ownable?’” Metaphilosophy 24 (1/2). Wiley: 85–90.

Kerr, Ian, and Jane Bailey. 2004. “The Implications of Digital Rights Management for Privacy and Freedom of Expression.” Journal of Information, Communication and Ethics in Society 2 (2): 85–95.

Munzer, Stephen R. 1990. A Theory of Property. Cambridge: Cambridge University Press.

Stefik, Mark. 1997. “Shifting the Possible: How Trusted Systems and Digital Property Rights Challenge Us to Rethink Digital Publishing.” Berkeley Technology Law Journal. JSTOR, 137–59.

Stone, Brad. 2009. “Amazon Erases Orwell Books from Kindle Devices.” Link.


  1. Hohfeld 2010, 36

  2. Hohfeld 2010, 36

  3. See Hohfeld 2010, 36–38

  4. Munzer 1990, 23

  5. Munzer 1990, 23

  6. Munzer 1990, 23

  7. Munzer 1990, 43

  8. See Douglas 2011a on the different rights of software and their distribution.

  9. Munzer 1990, 29. Emphasis by me.

  10. Stefik 1997, 145

  11. Amazon has been known to actively delete purchased e-books from user’s devices. See Stone 2009 on this.

  12. Just to make this clear, the example here used is not imaginative, cases such as Martha’s have happened. They don’t happen that often (yet) but they do occur. See for example this article by Gallagher 2017 about a real occurrence of the illustrated problem.

  13. Honoré 1961, 113–28

  14. This is of course only true if we think Honoré’s ownership theory to be valid.

  15. An interesting follow up question to this problem would be as to whether we can ever really own software that is proprietarily (all rights except that of use reserved by developer) licensed. It could also be extensible to all digital goods. After solving the problem of software enabled hardware devices a theory of digital property would of course also have to solve those instances.

  16. See Gallagher 2017 for an article about those incidents.

  17. See on the issue of this power shift also Kerr and Bailey 2004.

  18. Becker 1980, 187

  19. On the moral argument whether software should be ownable see Johnson 1985; Johnson 1993; Carey 1993.

  20. Becker 1980, 206, 213

  21. Chang 2007, 324

  22. See Douglas 2011b