Personal Property Servitudes on the Internet of Things

Small appliances such as thermostats, watches, jewelry, and eyewear are now being made available with networking capability. These networked objects make up the growing Internet of Things-pieces of personal property that run software and connect to the global Internet. These products are typically governed by terms of service or end-user license agreements that create restrictions on how products can be used or transferred- restrictions which would be unenforceable if the inside of the product consisted of gears rather than processing chips. This Article explores the question of when use and transfer restrictions should be enforceable on networked appliances and other digital objects by returning to a nearly century old question from property law that has remained largely unanswered: why are complex and non possessory personal property interests disfavored, while comparative flexibility is permitted in real property?

The Article concludes that greater flexibility in property interests is most beneficial when property is distinct, valuable, and rarely encountered. In contrast, greater standardization is appropriate when property is fungible, lacks value, and is casually or frequently interacted with. By establishing a new framework for deciding when property interests should be flexible and when they should be standardized, this Article not only answers a longstanding question from property law, but renders the answer highly relevant to some of the most interesting and novel types of property we encounter today.