What’s the “rights package”?

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The bundle of rights is a concept used to illustrate the set of related rights that property owners have over their real estate and intellectual property. Owners may lease, license, or waive some of their rights while retaining ownership. These rights can be restored through a series of activities. In the bundle of rights metaphor, each right is like a stick in a bundle. The owner can distribute the sticks without giving up the entire stroke and can take back the sticks and reintegrate them into the bundle.

The application of this concept to real estate is relatively old, as owners generally have the right to own, control and enjoy their property. They can choose to exclude people from their land and have the right to final disposition. The landlord may choose to lease the property, in which case the tenant has tenure and enjoyment rights, taking those sticks from the bundle. Likewise, tenants can decide to exclude unwanted people from their property.

The lease does not weaken other rights; the owner still decides ultimately how to dispose of the land, for example. Owners can also grant other rights, such as easements, that do not violate the rights package. When a road passes through a farm, for example, the government responsible for the road cannot dictate how the land around the road should be used. The rights package concept allows for the selective distribution of different property rights, without endangering the underlying property.

It is possible to place restrictions on ownership, another example of the labor rights package. A lien house cannot be alienated without the owner’s permission, but the owner still controls the property. When the owner terminates the lien, the right to dispose is forfeited, and the lien holder no longer has any ability to dictate terms of sale.

This concept can also be applied to intellectual property. A copyright holder owns a copyright and may choose to license or lease it, or to donate the license in case of charitable activity. Copyright owners have control over how their intellectual property may be used and can refuse some uses while accepting others. They have a number of rights provided by law, which they can choose to exercise in the ways they prefer. Giving up one right doesn’t automatically endanger others, which allows for tighter control of intellectual property while facilitating free trade because copyright holders don’t have to worry about diluting their rights.

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