Condemnation of Intellectual Property

by Ken Levy

A couple of days ago I had nothing to do and so I decided to noodle around the Internet. Actually I had a lot to do but decided that noodling around the Internet for 20 minutes was more satisfying than researching a complex condemnation question. In any event, I came across a very recent South Carolina case holding that the partial destruction by the Police of a building in which a suspect was hiding in order to effect an arrest was not a compensable taking.

This result stirred my curiosity about the recent case involving Apple and San Bernardino terrorists. As you may recall, the FBI wanted access to the terrorists’ cell phones so that they could determine with whom the terrorists were in contact and whether there were other suspects to be identified and investigated. The FBI claimed that without Apple’s help, the cell phones could not be unlocked and that the information could not be obtained. Apple, after defending what perceived to be its duty to protect the privacy of its customers, complained that the task requested by the FBI would take untold man hours and would cost a staggering amount of money, perhaps in excess of $300 million dollars. After a Court ruled that Apple had to cooperate, the FBI found that it didn’t need Apple’s cooperation. The FBI apparently found some 17 year old kid who hacked into the cell phone in exchange for a Pokemon.

When the incident occurred, I, having been accused on many occasions (especially by Richard Hubert) as being a tool of government, wondered whether the government could condemn intellectual property. I also wondered how intellectual property would be valued.

I do believe that under the proper circumstances intellectual property can be condemned. As to how it’s to be valued, I’ll leave that for others having far greater expertise than me.

Through this article, I invite those having the same intellectual curiosity that I have regarding this issue to come forward, conduct research, and prepare an article for presentation at our February seminar or a forthcoming “Lunch and Learn”. If there are contradicting opinions on the issue, I would welcome a healthy debate. I also would like to extend an invitation to any appraiser or anyone else who has any thoughts as to how intellectual property is to be valued to come forward and share those thoughts with us.

I look forward to your response. Until then, please consider hiring a 17 year old to help you with your information technology management needs. A Pokemon goes a long way!!!

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Ken Levy | Eminent Domain Law Section Chair 2016-17