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Maryland May Use Eminent Domain to Take Over the Preakness:

Maryland state legislators are considering legislation that would enable them to use eminent domain to condemn the Preakness Stakes horse-racing track, as well as the trademark and other intellectual property rights associated with the famous race which is part of the Triple Crown [HT: VC reader John Thacker]:

Under the bill, the state could seize the tracks as well as the Woodlawn Vase and Preakness-related trademarks, copyrights and contracts, if doing so prevents "the loss of the historically, culturally, and economically important" horse racing legacy . . .

The last-minute legislation was prompted in part by reports that Pikesville developer Carl Verstandig was interested in razing Pimlico and turning the Northwest Baltimore property into a shopping center. He has since said he would prefer to keep the Preakness at Pimlico, as have other potential bidders.

Magna Entertainment Corp., the firm that currently owns the Preakness and the Pimlico race track, is facing bankruptcy. And Maryland officials, including the governor, claim that the threat of eminent domain is needed to keep the Preakness from being moved out of state, as the Baltimore Colts were in 1984.

This argument doesn't make much sense. As I pointed out in a recent post, the Colts' famous midnight departure to Indianapolis was itself precipitated by the state's threat to use eminent domain against them. More generally, state efforts to use eminent domain against mobile assets tend to be self-defeating. They cause owners of those assets to flee the jurisdiction and also deter new firms from moving to the state. I suspect, therefore, that Maryland's efforts to use eminent domain to keep the Preakness in-state will be unsuccessful. They may even bring about the very result that state legislators say they want to avoid.

However, there is a complication. It's not clear to me whether the most valuable elements of the Preakness really are mobile assets or not. Since I don't know much about horse-racing, I'm not sure whether the truly valuable commodity here is the Pimlico race track (which is static) or the trademarks and other intellectual property rights associated with the annual Triple Crown race (which can potentially be held at a different race track in another state). In other words, would horse-racing fans be just as willing to watch a Preakness race held in a different state? Or is there something unique about the Maryland site that would make the race significantly less popular if it were moved elsewhere? If the latter is true, then Maryland's threat to use eminent domain might accomplish its objective of keeping the Preakness race going in-state. Ironically, it would do so precisely because the race can't really be moved out of state without losing much of its profitability. The owner's only realistic options would be to either keep the race in Maryland or shut it down entirely in favor of some other use for the land; eminent domain can prevent Magna from picking the latter option. Perhaps readers with greater knowledge of horse-racing can enlighten me as to the true nature of the Preakness' value.

Even if Maryland's eminent domain threat is rational in the sense of having a real chance of achieving its goal, I'm not convinced it is good policy. If the owners of the Preakness track prefer to shut it down and use the land for other purposes, the state probably should not intervene. After all, the owners have the strongest incentives to allocate the land to its most valued use; unlike state legislators, they have their own money at stake. If the highest valued use of the land turns out to be something other than horse-racing, I don't see any good reason for government intervention to prevent it. Indeed, if the new use produces more economic value than the race track does, preventing the change might actually hurt the state's economy during an already difficult time.

ShelbyC:
Anyone know of any history of an eminent domain taking of a trademark? I would imagine that there are 1st amendment issues.
4.9.2009 7:08pm
cboldt (mail):
My guess is that the track and the IP are effectively a single unit; where if the state "condemns" the track in order to retain its use as one leg of the Triple Crown, it must also, in order to retain the "Triple Crown," take the track name and other TM rights.
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The threat to replace the track with a shopping center triggered the counter-threat. I don't know if the track owner intended to abandon the TM rights, or indeed, if they would even survive if the track was removed.
4.9.2009 7:12pm
ChrisTS (mail):
The track is a particular one, like many of the older racing venues, so it does have some physical characteristics of interest to followers of the Triple Crown. I wonder whether there would be a Triple Crown if the real Preakness were not run.

Also, even if people would watch a 'Preakness' located elsewhere, on television, the loss of the track might cause some costs to Maryland in terms of tourism, etc.
4.9.2009 7:16pm
Ilya Somin:
My guess is that the track and the IP are effectively a single unit.

Not necessarily. Unless a contract prevents it, the owner could simply move the race to another track in a different state without moving the Maryland track anywhere.
4.9.2009 7:17pm
Ilya Somin:
even if people would watch a 'Preakness' located elsewhere, on television, the loss of the track might cause some costs to Maryland in terms of tourism, etc.

I don't doubt there would be some costs to Md if the race moved. However, the issue of whether people would watch an out of state Preakness goes to the heart of the question of whether the valuable asset here is mobile or not. If it isn't, there is at least some rationality to Maryland's threat.
4.9.2009 7:19pm
cboldt (mail):
-- Not necessarily. Unless a contract prevents it, the owner could simply move the race to another track in a different state without moving the Maryland track anywhere. --
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I don't disagree with that. My point was that as a matter of public association with the name (the TM), and other artifacts of the race, it may be that the name and the track are entwined in a way that makes it impractical to separate them. This isn't like a franchise.
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E.g, calling some tower in Springfield, Illinois "The Empire State Building," while removing that name from that building on Manhattan just "wouldn't work." The public association between the name and the place is itself the TM property.
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Separately, under this proposed condemnation, would the state become the operator of the race?
4.9.2009 7:23pm
Dilan Esper (mail) (www):
Pimlico is an old track, but racing fans care about the Preakness because it is the second jewel in the Triple Crown. Other big races, such as the Belmont Stakes (the third jewel) and the Hambletonian (the most important harness race), have moved around over the years. If Magna ran the Preakness at a another track, it would be just as valuable and important.

And they should. Screw Maryland. They don't own the Preakness, Magna does.
4.9.2009 7:25pm
aces:
The Preakness, although it originated at Pimlico, hasn't always been run there:


In 1890 Morris Park Racecourse in the Bronx, New York hosted the Preakness Stakes after which there was no race run for three years. For the 15 years from 1894 through 1908, the race was held at Gravesend Race Track on Coney Island, New York.


http://en.wikipedia.org/wiki/Preakness_Stakes

Not sure what this proves, given that nobody alive today can remember a Preakness run elsewhere...
4.9.2009 7:26pm
anon!:
Apropos of ShelbyC's question: there was a story in LA recently about the government's plan to seize the intellectual property belonging to one of the big biker gangs. IIRC, the goal was to give law enforcement another tool to use when detaining suspects--suspicious-looking people whose actions did not otherwise warrant police attention could be detained for wearing the gang's insignia.
4.9.2009 7:43pm
New Pseudonym:

the issue of whether people would watch an out of state Preakness goes to the heart of the question of whether the valuable asset here is mobile or not.


Which is why I watch the Miss America Pageant when it is broadcast the weekend after Labor Day from Atlantic City, NJ. More seriously, I doubt it's current audience from wherever it is held approaches that of the era when Bert Parks sang, "There she is . . ." so the asset may devalue when it is separated from its traditions. If the Preakness left Maryland, would it require a new flower for the winner's garland, too?
4.9.2009 7:44pm
rogerthis:
If you moved it to another horse lovin' state a bit farther west, perhaps it would have the opposite outcome: bigger ratings and interest. Instead of 3 east coast facilities hosting the Triple Crown, maybe you open it up to an Indiana facility and broaden the appeal to the midwest.

Hey, they took the Colts, maybe Indiana can take the horses, too.
4.9.2009 7:44pm
Ilya Somin:
My point was that as a matter of public association with the name (the TM), and other artifacts of the race, it may be that the name and the track are entwined in a way that makes it impractical to separate them. This isn't like a franchise.

Agreed. It's this possibility that I raised in the part of the post where I said that maybe the Preakness can't be equally profitable if run elsewhere. Due to my ignorance of horse-racing, I just don't know whether this is true or not.
4.9.2009 7:46pm
Dilan Esper (mail) (www):
Trust me, the Preakness could be MORE profitable if it were run at Santa Anita (also owned by Frank Stronach's Magna Corp.). It's a better track with better sightlines and a bigger fanbase in a nicer area in a nicer state.

Stronach LOSES some potential profits by holding the race at dumpy old Pimlico.
4.9.2009 7:57pm
bjw:
I'm a little bit more familiar with the Preakness, as I've spent a few rather inebriated third Saturdays in May at Pimlico. (It's a _great_ time.) I agree, for the most part, with Dilan -- I don't think fewer people would pay attention to the Preakness if it was held outside of Maryland. It's, on balance, more watched than the Belmont Stakes, because at the running of the Preakness, there's always the possibility of a Triple Crown. As long as it retains its designation as a triple crown race, people will remain interested. I suppose that if the Preakness moved out of state, the Pimlico owners (either Maryland or a private party) could start a new race and claim that it's the "true" Preakness. I doubt there's any chance they could elevate it to Triple Crown status, however. The Preakness is a very, very popular event; well over 100,000 people attend every year, and it may be that a relocated Preakness couldn't draw that kind of attendance. That would decrease the value of the event somewhat, but I'd imagine that the bulk of revenue comes from television rights and out-of-town betting. That would remain reasonably constant, and so the diminution in value which would result from a move would be minor.

In any event, I am completely certain that the Preakness itself is more valuable than Pimlico itself. Pimlico is on a huge piece of property, but it's in a bad part of Baltimore so the land isn't worth much. Furthermore, because it's in a bad part of town, attendance is terrible for pretty much every race other than the Preakness. It's my understanding that without the Preakness, Pimlico would have gone into bankruptcy a long time ago.

What I do think is interesting is how this would be pretty much the ultimate example of state subsidies of sports for "civic pride" reasons. Ilya, I know you've been critical of public funding for stadiums, in part because they never deliver the public benefits which are promised. Well, this is a situation where the only public benefits would be tourist revenue to local businesses one day per year, and the preservation of whatever state pride is associated with continuing to have the race in Maryland. To achieve these arguably insubstantial benefits, the State of Maryland is proposing to spend many millions of dollars to purchase Pimlico and the Preakness through condemnation, and then to absorb the huge yearly losses which will inevitably follow from ownership of the track. (If a private owner can't make the track profitable, I'm damned sure the State can't.) That's quite an expenditure for a cash-strapped state to absorb simply to preserve tradition and other intangible effects.

In any event, I hope the Preakness stays in Maryland. I think it's a great event, a ton of fun, and obviously its important to the state's collective psyche. But if I was a Maryland resident, I wouldn't be too thrilled if the state decided to go through with this.
4.9.2009 8:00pm
David M. Nieporent (www):
Apropos of ShelbyC's question: there was a story in LA recently about the government's plan to seize the intellectual property belonging to one of the big biker gangs. IIRC, the goal was to give law enforcement another tool to use when detaining suspects--suspicious-looking people whose actions did not otherwise warrant police attention could be detained for wearing the gang's insignia.
Uh, no, they couldn't.

There is no offense of "wearing someone else's trademark."
4.9.2009 8:02pm
Xenocles (www):
"If the highest valued use of the land turns out to be something other than horse-racing, I don't see any good reason for government intervention to prevent it. Indeed, if the new use produces more economic value than the race track does, preventing the change might actually hurt the state's economy during an already difficult time."

And that, sadly, is the test in post-Kelo America. "It's my property" doesn't wash anymore.

I wonder how far off we are from having major corporations (or even high-income earners) being banned from relocating out of state because of the "damage to the community" and the loss of state revenue. The only argument against it I can see at this point is the thirteenth amendment, and I predict that will be successfully avoided by making attempted relocation a crime.
4.9.2009 8:02pm
Steve Donohue (mail) (www):
The Preakness would never be run at Santa Anita because trainers will never send their horses from Kentucky to California to New York in a five week stretch.

Pimlico is a dump, and if it weren't for the Preakness (the least interesting of the three triple crown races for a whole bunch of reasons) most racing fans would ignore it. That's a shame, because Maryland racing was once an elite circuit. If Pimlico goes, the Preakness might exist at some other east coast or Florida track- maybe even Arlington in Illinois, although that's a polytrack and owned by a different entity than Magna- but I'd rather just treat the Ky Derby, Belmont and Travers at Saratoga as the true triple crown.
4.9.2009 8:03pm
cboldt (mail):
-- It's this possibility that I raised in the part of the post where I said that maybe the Preakness can't be equally profitable if run elsewhere. --
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It's a matter of degree - I wasn't thinking just about profitability, my speculation was that the names of the track and the race couldn't even be separated from the place, without rendering the TM meaningless.
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Could one run the Indianapolis 500 at Daytona? How about running the Kentucky Derby elsewhere, and call it the Kentucky Derby? That's the sort of situation that was in my mind.
4.9.2009 8:03pm
Dilan Esper (mail) (www):
The Preakness would never be run at Santa Anita because trainers will never send their horses from Kentucky to California to New York in a five week stretch.

Up until a few years ago it was quite common for horses to ship like this. Affirmed, for instance, won the Hollywood Derby in late April 1978 before shipping back to win the Derby on the first Saturday in May en route to the Triple Crown.

Trainers will do anything to win the Triple Crown.
4.9.2009 8:10pm
cboldt (mail):
-- IIRC, the goal was to give law enforcement another tool to use when detaining suspects--suspicious-looking people whose actions did not otherwise warrant police attention could be detained for wearing the gang's insignia. --
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TM includes the power to exclude other from using the mark, ostensibly to preserve a public association between the mark and the product or service. IIRC, the state's objective in taking the biker gang's TM was to forbid the use of the colors in public, and the sale of objects with the TM (which sales were a source of revenue for the gang).
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The "taking" is contra-TM-principle, in that the government had no intention of using the TM property. It really wanted to destroy any value the TM had, and in particular, destroy it for the group that created it. The aim of the government is to prohibit use of the mark to ALL. The TM becomes a forbidden form of expression.
4.9.2009 8:12pm
cboldt (mail):
-- There is no offense of "wearing someone else's trademark." --
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It's not criminal, but the generic term is TM infringement, and it is actionable.
4.9.2009 8:15pm
Tatil:

If the owners of the Preakness track prefer to shut it down and use the land for other purposes, the state probably should not intervene. After all, the owners have the strongest incentives to allocate the land to its most valued use; unlike state legislators, they have their own money at stake.

I disagree. There might be some benefits that does not bring in revenue for the owners, but enjoyed by the public. It may "theoretically" make sense to pay for it up to the value provided by the facility to the public. As long as that value is equal or more than the money the state has to pay so that the owners get as much as they could in a free market, I don't see a problem. There are many foundations and state funds that purchase land to turn them into parks for example.

Of course, in this instance, the legislators are probably overreacting, as race tracks usually occupy a large area, but get used in only a few days out of a year.
4.9.2009 9:24pm
Steve Donohue (mail) (www):

Up until a few years ago it was quite common for horses to ship like this. Affirmed, for instance, won the Hollywood Derby in late April 1978 before shipping back to win the Derby on the first Saturday in May en route to the Triple Crown.


That's the key. Affirmed also ran about a dozen times before the Derby. Those days are over. If you have an elite west coast horse that runs in the Santa Anita Derby 4 weeks before the Ky Derby, that horse would have a lot of miles under his belt by the first Saturday in June... then he'll have to go 1.5 miles. If they have to, trainers will do it, because they want to be the guy that won the triple crown. But ex ante, they'll all hate it.

I've always hated the Preakness. 9.5 furlongs is a length that practically no races in the US are run at. The winner of the derby is obliged to go, but very few other horses go because no stakes horses run twice in two weeks anymore. Of the 20 derby starters last year, two ran in the preakness, so all you're left with (usually) are the also-rans from March and April. And unfortunately, the most memorable Preakness from the past decade or so was 2006 when Barbaro broke down.

The three most important 3yo races are the Ky Derby, the Preakness, and the Travers. Let's call that the triple crown, give horses the amount of rest that they are used to having in this era, and spread interest in horseracing beyond the 5 weeks in late spring it occupies now.

(Oh, and it's funny how many constitutional issues horseracing is involved in right now, between this and the takings clause fight surrounding Hawthorne in Illinois. It's a shame the state doesn't use eminent domain to close that dump, but seeing as how it's surrounded by gravel factories and water treatment plants I don't know how much public reclamation is possible.)
4.9.2009 9:25pm
Steve Donohue (mail) (www):
EDIT: I meant the Ky Derby, Belmont, and Travers are the most important.
4.9.2009 9:27pm
Dilan Esper (mail) (www):
The three most important 3yo races are the Ky Derby, the Preakness, and the Travers. Let's call that the triple crown, give horses the amount of rest that they are used to having in this era

Actually, this is off topic, but (1) Saratoga (site of the Travers) is old and crowded and unsafe and insufficient enough without hosting a Triple Crown race, and (2) one of the GOOD things about the Triple Crown is that it forces trainers to actually race their horses. The reason horses don't run so much any more is because if you win one big race you have secured the horse's breeding value and it becomes worthwhile to duck competition and claim phony injuries and ailments. The last thing we would want to do is make it so that the only thing left that still forces trainers to run their horses with regularity was wiped from the calendar.
4.9.2009 9:36pm
Soronel Haetir (mail):
What I find amazing about horse racing is how injuries are tolerated. Compared to sled dog racing as an example where an injured dog has to be carried to the finish or the team drop out as an example.

In horse racing injuries seem to be an "Oh well, it happens" thing.
4.9.2009 9:50pm
MLS:
I do have to wonder what the tax (federal and state)consequences would be if the State of Maryland was to "take" the land and all rights associated with "Preakness"? A "forced sale of land"? Likely capital gains. A "forced sale of rights"? This has me stumpped because unlike land the rights can not be replaced in the manner of a like-kind-exchange.

It would be the ultimate insult to dispossess someone of their intangible rights, and to then tax them for payment received.

On a brighter note, perhaps the "taking" of such intangible rights might present the opportunity, if challenged, for the courts to finally answer the question "Are patents, copyrights, trademarks and the like 'property' to which the 5th Amendment applies?"
4.9.2009 10:05pm
DeezRightWingNutz:

What I find amazing about horse racing is how injuries are tolerated. Compared to sled dog racing as an example where an injured dog has to be carried to the finish or the team drop out as an example.


You're right. I think the jockeys should have to carry broken down horses to the finish.
4.9.2009 10:06pm
Avatar (mail):
Trademark infringement might be actionable, but it's NOT enforced by the police.
4.9.2009 10:12pm
ChrisIowa (mail):
If the London Bridge can be moved to Arizona, why can't Pimlico racetrack be moved?
4.9.2009 10:22pm
Cornfed (mail):
How would regulating the contractual / property right to move the race be any different from regulating land use to within an "nth" of a taking without having to provide any compensation?
4.9.2009 10:24pm
ForestGirl (mail):
I don't think Pimlico's assets are really mobile the way other sports events might be--there's an actual physical aspect to the track itself. To real horse racing fans, the thing that makes the Triple Crown so special is that the three races (and to some extent the tracks they are run on) are very different. Even though the race lengths are within 3/8 mile of each other, they are seen as a sprint (Preakness), a long-distance (Belmont), and something in between (Derby). The tracks have different consistencies and cushion thicknesses and turn radiuses. I think moving the race would essentially end the historicness of the Triple Crown.
4.9.2009 10:26pm
David M. Nieporent (www):
It's not criminal, but the generic term is TM infringement, and it is actionable.
I do this for a living. Wearing someone else's trademark is not infringement, because (inter alia) it's not a use in commerce. Of course, manufacturing and selling new apparel with the trademark would be actionable, but the fact that I'm wearing a shirt with your trademark on it does not in any way establish infringement.

And, as even you concede, it's not criminal, so it really wouldn't accomplish what the OP suggested.
4.9.2009 11:04pm
CMH:
One the government's seizure of the Mongol biker gang's trademark, some background is here

I don't know enough about this area of the law, so I'll defer to Randazza's conclusion that the legal strategy rests on "a fundamental misunderstanding of trademark law." It certainly does seem like a tenuous theory, and the First Amendment implications are disconcerting, to say the least.
4.9.2009 11:34pm
cboldt (mail):
-- I do this for a living. --
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Then you understand the oddity in playout in the case where the state took the bikers TM, with the aim of eradicating use of the mark.
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My comment above was awfully misleading in its brevity, because it is naturally taken as "wearing a TM is TM infringement." That's obviously an "it depends" issue (depending on how the TM came to be on what I was wearing); and the vast majority of worn TM is not the result of an infringing affixing.
4.9.2009 11:39pm
Bob from Ohio (mail):
For profit company that owns other profitable tracks can't make a go of it but bureaucrats with no racing experience will. Sure.
4.10.2009 12:01am
EPluribusMoney (mail):
This government seizure of private property trend is really getting out of hand. We need some kind of major smack-down.
4.10.2009 12:09am
Can't find a good name:
If I wear a bootleg "Calvin and Hobbes" T-shirt, does that entitle the government to seize the shirt off my back as a trademark infringement? I don't think so, unless I'm missing something in the U.S. Code.
4.10.2009 12:59am
Malvolio:
If I wear a bootleg "Calvin and Hobbes" T-shirt, does that entitle the government to seize the shirt off my back as a trademark infringement?
Certainly bootleg merchandise gets seized everywhere else on the supply chain, from the manufacturer to the retail sale. Are you saying the final consumer is immune from seizure?
4.10.2009 1:12am
JHU BME:
Sorry to be off topic, but:

Regarding the biker gang, can the government own trademarks? It seems to me that a trademark is a mark used to identify the source of goods in commerce. As such, the governmental "taking" (and subsequent ownership) of a trademark would require that the government actually use the mark in connection with goods in commerce. Only then could the government claim trademark infringement (since trademarks are not meant to be placeholders). Can anyone clarify how this would work and how it can be distinguished from a plain free speech violation?
4.10.2009 2:21am
theobromophile (www):
It's not criminal, but the generic term is TM infringement, and it is actionable.

In civil court, not in criminal court. Then, as per above, there are both First Amendment issues and the problem of proving damages. If the state seizes the mark with the intention of making it useless, it's not in a position to complain when its value is diluted.

Back to the Preakness, etc: it is utterly moronic (sorry, being blunt) to create a situation in which people are penalised for running a successful business. In fact, that's a really great way to ensure that businesses will never want to set up shop in the state.
4.10.2009 2:29am
theobromophile (www):
On a brighter note, perhaps the "taking" of such intangible rights might present the opportunity, if challenged, for the courts to finally answer the question "Are patents, copyrights, trademarks and the like 'property' to which the 5th Amendment applies?"

Silly question, but why wouldn't they be (or at least patents and copyrights)? Art. I, Sec. 8, cl. 8, which predates the Fifth Amendment, provides for protection of IP in the United States. Clearly, patents and copyrights as "property" worthy of protection (by the government, but not necessarily from it) was on the radar screen in the late 18th century. Moreover, one of the largest reasons for this was because the English had messed up their patent system back in the 17th century, with this business of granting patents to some people but not others, and allowing the government to seize patents. (IIRC on all that, dates included.)

If you ask the question in one direction (i.e. "Does the Fifth Amendment apply to IP rights?"), the answer is not clear. If you ask the negative of it (i.e. "Did the Framers intend to exclude IP from "property" in the Fifth Amendment, such that patents could be seized by the government for any use and without just compensation?"), it seems as if the Fifth Amendment must apply to IP rights.
4.10.2009 2:36am
Dilan Esper (mail) (www):
Actually, theo, while we casually use the shorthand "intellectual property", that term is relatively modern. And intellectual property differs from tangible property in some key ways that certainly could be argued to affect the determination of whether they constitute "property" for purposes of other laws (e.g., limited time, fact that it is possible for multiple users to use at the same time, scope of right of exclusion is much narrower than for tangible property). Certainly it's quite possible to conceive of IP laws as NOT creating "property" rights, but rather something closer to a license or government-created short-term monopoly, which might not be a property right.

Further, the Copyright Clause of the Constitution does not say anything about trademarks (or indeed any form of IP other than copyrights and patents). The Lanham Act is enacted under the Commerce Clause and extends only to uses in interstate commerce (admittedly a broad definition given the Court's commerce clause jurisprudence, but at least in theory not unlimited). So even if the Copyright Clause were construed to authorize the creation of property rights, it wouldn't mean that trademarks are property.
4.10.2009 2:46am
cboldt (mail):
-- So even if the Copyright Clause were construed to authorize the creation of property rights, it wouldn't mean that trademarks are property. --
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I think your comment means to admit that TM is a form of property, just not a form that's in the ambit of the particular enumerated constitutional power that pertains to authors, inventors, writings and discoveries.
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Another aspect of TM, that differentiates it from CR and Patent, is that TM, theoretically, has an unlimited lifetime. It remains attached for as long as it is suitably used and protected by its owner.
4.10.2009 7:05am
cboldt (mail):
-- can the government own trademarks? --
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Yes. It does. For example ...

UNITED STATES POSTAL SERVICE EST. 1775 OFFICIAL LICENSED PRODUCT
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But your 1st amendment "freedom of expression" question about the seizure of the biker gang TM, with the intention of creating "disuse," is a good one.
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As for copyright or patent rights being "taken" for the public good, I can't think of any cases decided in the framework of a 5th amendment taking with it's attendant "just compensation." But some patent holders are forbidden to work their inventions due to secrecy (munitions, including but not limited to atom bombs) or some other regulatory burden. When the public welfare is involved, the US government can impose compulsory licensing on an inventor. City of Milwaukee v. Activated Sludge Inc., 69 F.2d 577 (7th Cir. 1934).

In that case, the 7th U.S. Circuit Court of Appeals provided a de facto compulsory patent license by refusing to grant an injunction stopping the city of Milwaukee from infringing a patent on a sewage treatment method.
Brazil and Abbott Labs Reach accord on AIDS drug
4.10.2009 7:37am
Amiable Dorsai (mail):
Regarding the biker gang, stupid question from a non-lawyer: Could, say, the owners of the Coca Cola trademark decide to seize authentic old Coke merchandise that had been legally purchased just because it has the Coca Cola logo on it?
4.10.2009 7:42am
cboldt (mail):
-- Could, say, the owners of the Coca-Cola trademark decide to seize authentic old Coke merchandise that had been legally purchased just because it has the Coca-Cola logo on it? --
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Assuming that the merchandise was created without infringing the right (i.e., Coca-Cola authorized the production), then the sale of the good "exhausts" the right to seize the goods.
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As a practical matter, if the presentation of the TM doesn't harm their business (I think the TM on tee-shirts would generally be seen as enhancing the brand), they are probably happy to have the TM appear, even if the TM affixing wasn't authorized in the first place. Plus, as a practical matter (RIAA aside), it isn't cost effective to go after lone infringers. A substantial amount of TM enforcement is accomplished by US Customs agents, who deal with container-loads of infringing product; e.g., Rolex knock-offs, unlicensed Nike gear.
4.10.2009 7:57am
A. Zarkov (mail):
"After all, the owners have the strongest incentives to allocate the land to its most valued use; unlike state legislators, they have their own money at stake."

That's true, but sometimes this market value approach fails. For example the great Penn Station in New York, see here, and here, got demolished because the railroad sought more profitable use of the land. As a result, this is what you walk through today when using the train terminal-- one feels like a sewer rat. This great, irreplaceable piece of 19th Century architecture now lies as rubble in the New Jersey Meadowland swamps. We can never get this back. It was the product of an age with a far greater aesthetic sense than we are capable of today.

Just walking through the original Penn Station was a thrill that I remember as a child. Walking through the current Penn Station is nothing short of depressing. Even the people are depressing now that NYC has imported the world's riff raff, which haunts the corridors of the current station.
4.10.2009 8:21am
Aultimer:
Maryland would be smarter to allow the change in use and condemning only the IP so it can license the Laurel race track (in the DC suburbs) to hold the Preakness. Of coure, just threatening the condemnation may be enough to get the same result more cheaply.

I used to work up the street (the Mount actually), from Pimlico. It's a blighted neighborhood that sees little benefit from the current use of the land, so I'd applaud demolition of the track and construction of modern retail and roads by the landowner. Maryland could keep the goodwill and revenue from the triple crown race, and run it at a much nicer facility with 10x better infrastructure.
4.10.2009 8:58am
John Thacker (mail):
Aultimer:
Maryland would be smarter to allow the change in use and condemning only the IP so it can license the Laurel race track (in the DC suburbs) to hold the Preakness.


Magna, who owns Pimlico, also owns the Laurel race track. Perhaps Maryland would be smarter in merely trying to convince Magna to keep the Preakness in MD, but move it from Pimlico to Laurel.
4.10.2009 12:09pm
theobromophile (www):
Dilan: I'm well aware of that. Please re-read the first line of my 2:36 am comment.
4.10.2009 11:29pm
Dilan Esper (mail) (www):
theo:

But you don't draw the right conclusions from it.

Seriously, while "intellectual property" is an acceptable shorthand, it's not really fully descriptive of what we are talking about. Something like "limited government-granted monopoly rights in particular ideas and expressions" is more accurate.

And when expressed that way, the claim that these things "must be" Fifth Amendment-protected "property" seems a lot less certain.
4.10.2009 11:49pm
RAH (mail):
The Preakness was the creation of a Pimlico owner and was adopted as the second test race of the Triple Crown. The Derby is the classic length 1 1/4 miles which is very hard to 3 yr old TB's, some of which are not yet three when they run the race. The Preakness at Pimlico is a little shorter but the turns are tight and hard. Sprinters try to win the Preakness and the inner position has been favorable for that reason. The fact is the Preakness is a test of 3 yr old potential champions since it is so close to the Derby and the horses may be tired. The Belmont is 1 1/2 miles and rare to have any races in the US at that length. The Triple Crown is a test of speed, stamina and soundness to be able to win all three races in a short period, 5 wks. It is suppose to test the breeding of the TB and the breeders have failed; so rare is the horse that can be hardy, fast and has the stamina to accomplish this. Barbaro obviously did not have the soundness or was hardy enough to race in the Preakness. Injuries are one way that is a test of the breeding for soundness and being hardy. If an injury takes out a horse, that colt should not be bred to eliminate that weakness from the gene pool.

That may seem heartless but the goal is to breed a superior horse that can race back to back and is fast and can carry speed over the long race.
The Triple Crown was won more often when the horses was stressed with racing every week and the value was the purse not the breeding contract.

Horses that are gelded race for many years and their value is only the purses and so are not babied.

Too many colts are left as stallions and the poor breeding by pulling them early and not requiring testing by survival and winning classic races reduces the chances of improving the breed.

I ride and owned TB's , I had a TB mare that I rode until 28 years. She had speed, endurance and agility and was very sound. I ran her over hard and uneven ground with no ill effect. Dressage one day and a hunt race the next. She could handle either.

But she had flat feet and was not as fast, but had jumping ability and endurance. She would have lost on the dirt but did well as an eventer and hunter, which are very hard, but the horses are expected to have a long work life.

Private owners do not have the money to keep unproductive horses and race trainers are the same. They sell or geld poor performers by 2-3 years, if there is no promise of a winning horse. Those horses get transformed to pleasure and sport horses and if stay sound livelong lives. They are not bred usually except a mare might be. I bred my mare but not again as the resulting colt was not what I was looking for, and so he was gelded at one year. It is too expensive to keep a stallion without exceptional promise.

The rest of the poor injured horses are put down since no one can easily afford $5 k/yr to keep a non-performing horse alive and vet care is expensive.

For those bleeding harts, horses do not live in the wild much beyond 5 yrs since the herd abandons them if they can't keep up. Domestic horses are fed and brushed and have vet care and shod once a month. They do little work and live into the teens and the twenties.

The Preakness has tradition and TM but the state has no ownership. Plus MD is claiming the property that is the Woodlawn Vase that is the prize the winning owner keeps for a year and then given back to the new winner. The value of the vase in not the silver but the intangible value as the symbol for the winner. Without the Vase the Preakness will lose the symbolic value. The race could easily be held somewhere else and is owned by Magma. MD can buy the track and run the racetrack and try to make a profit. But the state ruined racing and has looked at racing as only a cash cow and not put anything back.

Most of the revenue from MD racing is not the receipts from the betting but the breeding and the associated horse business in the state. Without any major tracks breeders will sell the farms and move where they have good access to tracks to train and test their stock.

Virginia had to build a training track for that reason since they had no tracks. My guess is that the race may move to Delaware, NJ or NY. Any of those states appreciates the revenue and tradition of racing and would gladly accept the Preakness and the Woodlawn vase.

Md was warned that without allowing slots that Magma would lose money and go under. Since they allowed one company to own all the states tracks. This bad management affects all the owners, breeders, trainers and riders and sellers of horse merchandise in the state.

Now the Governor realized that the warning was real and that MD could lose 5 billion in Preakness week sales and they are now trying to keep the race. Hah. Let MD lose it and maybe they will value a traditional industry in retrospect.
4.11.2009 9:18am
einhverfr (mail) (www):
PAH:

You seem to know a fair bit about horses. I am interesting to know if you have read much of David Anthony's work on archaeology of horse domestication? Fairly good summaries are found in "The Horse the Wheel and Language." It seems that truly wild horses (Przewalski's Horses), stallions don't even start to reproduce until about age 5. (until age 2, part of the herd, ages 3-5 in bachelor herds, and only at around age 5 capable of competing for herds themselves).

I assume feral horses might be quite different.
4.11.2009 1:05pm
Soronel Haetir (mail):
einhverfr,

It would not surprise me if the stats are significantly different for stallions and mares in the wild. Wild mares tend to breed early and it it very hard on their bodies. I adopted two BLM horses when I was living in Idaho, both female. One though of age had managed to avoid being bred, the other I adopted to get her foal. The mare was extremely stunted and was never good for anything.

The unbred female was the best horse I ever had. My experience with western riding and cattle working horses may very well differ from someone whose interest is in racing or other equestrian pursuits.
4.11.2009 1:39pm
einhverfr (mail) (www):
Soronel Haetir:

It also wouldn't surprise me if the stats were different from fully wild horses (Preswalski's Horses, died out in the wild but recently reintroduced) vs feral horses (mustangs). Technically the horses you adopted would have been feral (wild horses descended from domesticated horses). I don't know how much selective breeding has impacted wild lifespan of horses. I would typically assume that feral horses would be less able to survive for long times too.....

Preswalski's Horses are somewhat different from domesticated animals both physically and genetically. Among other things, domestic horses have the same number of chromosomes (64) as the Tarpan (another Eurasian wild horse which is now extinct), while Preswalski's Horses have 66. Despite the chromosome differences, it is believed that Preswalskis were the closest wild horses in recorded history to the original domesticated horse.

Most of my interest is historical rather than riding/working/racing.
4.11.2009 6:26pm
RAH (mail):
Feral horses diifer based on locality. Assateagues ponies are large ponies and feed well. The matres breed about every two years due to stress intsead of yeqrly. These ponies are not vaccinated and have diseases that can affect domesticated herds.

Racing is a outcrop of normal human desire to see what horse id faster than another, just lik ecar racing. Human will race anything and later the sport becomes regulated.

Steeplechasing at recognized tracks died in 1979 but was kept alive at farms and hunt clubs with small purses put up and local interets. Recognized steeplaxhases cam back and some track built to satisfy that interets. The problem is when the state sees a revenue source and then regulates it to death.

Maryland has a a history of being a large racing state and had many tracks. The dirt tracks weere reduced to 2 Laurel and Pimilco b the state. The state had the power to determine racing days since tracks did niot want to have racing the same day.

Horse owners and riders will race in organized or unorganized fashion. When the more organized race occurs the event becomes entertainment for the area residents.


Laureland Pimlic serve two main interests; the trainers and owners and the public who attend and bet. For the public it is entertainment and the tracks have done a poor job of addressing that market. Racing is done in the daytime and not when the market can attend at night. If they had night racing the attendance would increase and they could make some money at gate receipts.



If the state wants to buy the tracks and run them they may have some interests, but MD is just greedy and wants the betting recipts. It took 3 years for Omalley to understand that the Preakness was endangered. The State has an interest but does not own the race. It is owned by the owner of the track Magma and Magma has done a poor job invigorating the tracks. The di some real maintance to surfaxe but not to the stands and the barns and other building s such as th estaff housing.

Churchill Downs did a major uplift with state money, because the state appreciates the income from Kentucky Derby.
4.12.2009 4:12am

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