In law, intellectual property (IP) is an umbrella term for various legal entitlements which attach to certain names, written and recorded media, and inventions. The holders of these legal entitlements may exercise various exclusive rights in relation to the subject matter of the IP. The term intellectual property reflects the idea that this subject matter is the product of the mind or the intellect. The term implies that intellectual works are analogous to physical property and is consequently a matter of some controversy.

* A patent may be granted for a new, useful, and non-obvious invention, and gives the patent holder a right to prevent others from practicing the invention without a license from the inventor for a certain period of time (typically 20 years from the filing date of a patent application).

* A trademark is a distinctive sign which is used to distinguish the products or services of different businesses.

* An industrial design right protects the form of appearance, style or design of an industrial object (e.g. spare parts, furniture, or textiles).

* A trade secret (which is sometimes either equated with, or a subset of, "confidential information") is secret, non-public information concerning the commercial practices or proprietary knowledge of a business, public disclosure of which may sometimes be illegal.

Patents, trademarks, and designs rights are sometimes collectively known as industrial property, as they are typically created and used for industrial or commercial purposes.

Controversy

The basic public policy rationale for intellectual property laws is that they facilitate and encourage the pursuit of innovation and the disclosure of knowledge into the public domain for the common good, by granting authors and inventors exclusive rights to exploit their works and invention for a limited period. Many people believe that intellectual property provides a temporary monopoly that protects the use or exploitation of that good, supported by legal enforcement mechanisms.[1] The United States Supreme Court frequently refers to a patent as providing a "limited monopoly." This is not, however, appropriate usage of the term monopoly in the economic sense. In fact, intellectual property protection cannot properly be thought of as providing an economic monopoly, at least in part, because a monopoly can only exist in the presence of a market and the ability of an actor to manipulate the market to a point where higher than competitive prices are able to be maintained, which is something that is rarely achievable by an owner of intellectual property. [1]

However, various schools of thought are critical of the concept and treatment of "intellectual property"; indeed, some argue that use of the term "property" in this context is itself misleading. Some characterise IP laws as intellectual protectionism. There is ongoing debate as to whether IP laws truly operate to confer the stated public benefits, and whether the protection they are said to provide is appropriate in the context of innovation derived from such things as traditional knowledge and folklore, and patents for software and business methods. Manifestations of this controversy can be seen in the way different jurisdictions decide whether to grant intellectual property protection in relation to subject matter of this kind, and the North-South divide on issues of the role and scope of intellectual property laws.

Furthermore, due to the non-rivalrous nature of intellectual property, comparing the unauthorized use of intellectual property to the crime of theft presents its own unique problems. In common law, theft requires deprivation of the rightful owner of his or her rights to possess, use, or destroy property. Example: When Joe steals Jane's bicycle, Jane cannot use or have access to it. But since intellectual property (for example, ideas and various transcriptions into written words, audible sounds, or electronic media) are so easily reproduced, no such deprivation to the owner occurs. Example: When Joe makes a copy of the music Jane recorded, Jane is not denied access to her original copy. In this sense, many forms of intellectual property meet the non-rival test for public goods: the use of the good by one individual does not reduce the use of that good by others.

The global harmonisation of intellectual property legislation under the WTO has also been criticized, for example by the alter-globalization movement.

The exclusive rights granted by intellectual property laws are generally negative in nature, and therefore only grant the holder of IP the ability to exclude third parties from infringing on their monopoly. For example, the owner of a registered trademark has an exclusive right to use their mark in relation to certain products or services, and can exclude others from using that mark in relation to those products or services (sometimes marks which are recognised as "famous" or "well known" are deemed to have developed sufficient goodwill and reputation to be protected across unrelated classes of products and services).

The exclusive rights conferred by intellectual property laws can generally be transferred (with or without consideration), licensed (or rented), or mortgaged to third parties. Like other forms of property, intellectual property (or rather the exclusive rights which subsist in the IP) can be transferred (with or without consideration) or licensed to third parties. In some jurisdictions it may also be possible to use intellectual property as security for a loan.

Exclusive rights are generally divided into two categories: those that grant exclusive rights only on copying/reproduction of the item or act protected (e.g. copyright) and those that grant a right to prevent others from doing something. The difference between these is that a copyright would prevent someone from copying the material form of expression of an idea, but could not stop them from expressing the same idea in a different form, nor from using the same form of expression if they had no knowledge of the original held by the copyright holder. Patents and trade marks on the other hand, can be used to prevent that second person from making the same design even if they had never heard of or seen the claimed "property". Those rights must be applied for or registered and are more expensive to enforce.

There are also more specialized varieties of "sui generis" exclusive rights, such as circuit design rights (called mask work rights in USA law, protected under the Integrated Circuit Topography Act in Canadian law, and in European Union law by Directive 87/54/EEC of 16 December 1986 on the legal protection of topographies of semiconductor products), plant breeders' rights, plant variety rights, industrial design rights, supplementary protection certificates for pharmaceutical products and database rights (in European law).

Exclusive rights differ by subject matter, the actions they regulate with respect to the subject matter, the duration of particular exclusions, and the limitations on those rights. Policies are conventionally categorized according to subject matter, including inventions, artistic expression, secrets, and industrial designs.

Generally, the activity regulated by exclusive rights is unauthorized reproduction or commercial exploitation. However, as indicated above, some rights go beyond this to grant a full suite of exclusive rights on a particular idea or product. Generally, it is true to say that exclusive rights grant the holder the ability to stop others doing something (i.e. a negative right), but not necessarily a right to do it themselves (i.e. a positive right). For example, the holder of a patent on a pharmaceutical product may be able to prevent others selling it, but (in most countries) cannot sell it themselves without a separate license from a regulatory authority.

Most exclusive rights are nothing more than the right to sue an infringer, which has the effect that people will approach the rightsholder for permission to perform the acts to which the rightsholder has exclusive right. The granting of this permission is termed licensing, and exclusive rights licenses stipulate the extent of the licensee's ability to perform the acts the rightsholder may control. Other kinds of licenses attempt to establish additional conditions beyond the acts the rightsholder may control, and these licenses are governed by general contract principles. In many jurisdictions the law places limits on what restrictions the licensor (the person granting the license) can impose. In the European Union, for example, competition law has a strong influence on how licenses are granted by large companies.

Copyright licenses grant permission to do something. A patent license is a declaration not to do some things, under certain conditions. Exclusive rights policies in certain countries provide for certain activities which do not require any license, such as reproduction of small amounts of texts, sometimes termed fair use. Many countries' legal systems afford compulsory licenses for particular activities, especially in the area of patent law.

Most exclusive rights are awarded by a government for a limited period of time. Economic theory typically suggests that a free market with no exclusive rights will lead to too little production of intellectual works relative to an pareto efficient outcome [citation needed]. Thus by increasing rewards for authors, inventors and other producers of intellectual works, overall efficiency might be improved. On the other hand, granting exclusive rights is by no means the only viable method to finance "intellectual property" production in a market system [2]. "Intellectual property" law creates transaction costs that could in some circumstances outweigh these gains. Another consideration is that restricting the free reuse of information and ideas will also have costs, where the use of the best available technique for a given task or the creation of a new derived work is prevented. Equally important, granting monopoly rights on production introduces a deadweight loss into the economy, and incentivizes rent seeking behavior.

Other criticisms include[citation needed]: a copyright holder may refuse permission to publish or copy a work at all, or only allow distribution of a modified version reflecting the views of the copyright owner (rather than the original author), thus effecting a form of private censorship; intellectual property rights held by different people often overlap on the same work, which can create a rights thicket with extremely high transaction costs; an intellectual property right for which the ownership cannot be traced may prevent the use of a covered work (an orphan work) at all, due to fear of future lawsuits.