What is Intellectual Property?

What is Intellectual Property?

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Intellectual property is loosely defined as some type of a creation, and may include an invention, an artistic work, a name, an image, or a symbol.  Commonly, intellectual property is divided into four main categories: copyright, patent, trademark, and trade secrets.

A good example of intellectual property may be found in a hypothetical company we’ll call Fanda.  Fanda may have a core invention (sometimes referred to as the ‘crown jewel’) that is the basis for the company.  Such a core invention may be eligible for patent protection which may protect the company.  Additionally, Fanda may use a secret system to produce the product, which system may be eligible as a trade secret.  After the product is produced, the product must be marketed and sold to the public.  In displaying its name to the world, Fanda may protect its brand through a trademark.  Further, any literature that is produced (e.g. instruction manuals, websites, etc.) may be eligible for copyright protection.  Although this is just one possible example, you can see very quickly how intellectual property provides protection from many angles.

Intellectual property is considered a property right, meaning that it is a right that belongs to the owner.  According to the Universal Declaration of Human Rights (1948), of which the United States played an active role in creating, Article 27 states:

• Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.
• Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

The Universal Declaration of Human Rights therefore provides a foundation for creators (e.g. of an invention, a book, musical piece, etc.) to receive protection (and an interest in) for any creation.  Additionally, other intellectual property rights may be found in the Paris Convention for the Protection of Industrial Property (1883), which focused on industrial property (e.g. patents, trademarks, trade secrets, etc.), and the Berne Convention for the Protection of Literary and Artistic Works (1886), which focused on copyrights.  As discussed further below, the United States has provided statutory protection for many areas of intellectual property. 

In addition to defining the ‘what’ of intellectual property, it is also important to recognize the ‘why.’  As illustrated above with our Fanda example, intellectual property can permeate into almost any and all facets of a business. The National Chamber Foundation has indicated that counterfeiting and piracy cost the United States alone $200 to $250 billion per year. ^[1]What are Counterfeiting and Piracy Costing the American Economy? (2005), available at http://www.fnal.gov/directorate/OQBP/sci/sci_reference_docs/SCI%20Costs%20to%20Economy%20U.S.C.hamber.pdf.  So protecting intellectual property isn’t simply a theoretical exercise, it is a necessity in order for a business to survive. 

The U.S. Department of Commerce has further indicated that theft of intellectual property related items stifles innovation, slows economic growth, and weakens the competitiveness of U.S. employers. ^[2]See, e.g., U.S. Department of Commerce, About STOPfakes, available at http://www.stopfakes.gov/about. Intellectual property theft therefore has an impact on innovation, commercialization, and the economic success of the entire nation.  Beyond these considerations, intellectual property protections act as an incentive to creators, for they are guaranteed a right and a reward (e.g. public recognition, monetary gains, etc.) for their effort.  Intellectual property is therefore worth protecting.