What You Should Know About Intellectual Property

July 09, 1998

Summary
Think of your car and you understand the basics of "property" immediately. As owner, you have the right to drive your car, store it away in a garage, rent it, sell it, or do just about anything else you want with it. Most importantly, you have the power to exclude others from using your asset. So it is with intellectual property. The owner of an intellectual property asset commands the exclusive right to decide how it will be used. What makes intellectual property different, and the reason why it is called "intellectual," is that it is the intangible product of someone's mind. Intellectual property exists in information, symbols, concepts, or creative expression.

Think of your car and you understand the basics of "property" immediately. As owner, you have the right to drive your car, store it away in a garage, rent it, sell it, or do just about anything else you want with it. Most importantly, you have the power to exclude others from using your asset.

So it is with intellectual property. The owner of an intellectual property asset commands the exclusive right to decide how it will be used. What makes intellectual property different, and the reason why it is called "intellectual," is that it is the intangible product of someone's mind. Intellectual property exists in information, symbols, concepts, or creative expression.

But like any other piece of property, be it your car or any other good, intellectual property results largely from the expenditure of human capital. This is why the law protects ownership of it. Imagine how unfair and wasteful it would be if an originator's effort could be pirated by anyone else. Who would bother inventing something if she didn't have the exclusive right to profit from the invention? So while at first the idea of giving exclusive ownership--a monopoly--over an intellectual property asset may seem undemocratic, in reality it greatly benefits economic activity by encouraging invention, creativity, and open trade.

Congress and the courts of this country have developed a very detailed set of legal rules designed to give owners of intellectual property a monopoly over their mental products. The rules differ based on the various kinds of products the mind can create.

The law of patents, for example, protects the innovative principles of new products, processes, compositions of matter, and improvements. A person who makes a better mousetrap may well own a patent that stops others from making the same kind of mousetrap.

With a patent, an inventor obtains the exclusive right from the federal government to manufacture, use, and sell an invention for a fixed period (usually 17 years); in exchange he discloses his invention to the public. The emphasis in patent law is on technology, as opposed to fundamental ideas and principles. One may obtain a patent registration for a new machine or device (such as an integrated circuit or motor), a new process (such as for making a semiconductor chip), or a new composition of matter (such as a chemical or bioengineered life form). The basic requirements of patentability are that an invention be new or novel, and that an actual invention result from the patentable idea.

A patent first exists when it is granted by the federal government. For this reason inventors should make sure their inventions are not disclosed publicly for a significant period before they apply for a patent registration.

The law of trademarks protects the ways businesses use commercial symbols to distinguish themselves from the cacophony of competitors in the marketplace. The mousetrap maker may call his mousetrap the "Mouse-a-geddon," and the law will stop a competitor from calling its mousetrap the same thing.

In general, a trademark is a distinctive symbol or device which a commercial enterprises attaches to its goods or services so they are identified in the market. Trademarks are not limited to verbal symbols. They may protect designs, distinctive features of clothing and buildings, sounds, smells, and even "trade dress", which covers the design, packaging, and manner of sale of products and services.

Trademark rights come into being through adoption and use of a particular commercial symbol in the marketplace. Thus, unlike patents, they must be announced to the public in order to be valid, and they do not necessarily depend upon governmental registration. Nevertheless, registration with the federal or applicable state government can greatly impact the rights of a business in a trademark dispute.

The law of copyrights covers original works of authorship fixed in any tangible medium of expression; it is not limited to works of artistic expression. The mousetrap maker may write a jingle that he uses to advertise his product, or he may author an instruction manual. Copyright may well protect both.

Copyrights can also protect books, magazine articles, speeches, music, motion pictures, other audiovisual works, computer programs, computer databases, maps, architectural plans, sculpture, other works of fine art, and poetry. A copyright comes into being when the author fixes his expression in a tangible medium, and usually lasts for 28 years. Copyright does not protect ideas, principles, themes, or facts embodied in recorded expression. Also, certain matters are excluded from copyright protection, including words and short phrases such as names, titles, and slogan; familiar symbols or designs; and mere listings of ingredients or contents. Copyrights may be registered with the federal government; application for registration is necessary to sue for infringement.

The law of trade secrets protects any piece of commercial information that is valuable as a result of its limited availability. The mousetrap maker may have customer and price lists that represent hours of his effort. He does not want a competitor to get a leg up by knowing exactly who buys his mousetraps, and so he keeps his customer list a closely-guarded trade secret. The law would prevent his disgruntled employee from copying the list and giving it to a competitor.

The right of publicity protects a person's commercial identity. The mousetrap maker may become a national celebrity on the strength of his new invention. His commercial identity may not be appropriated without his permission. For example, the maker of a roach killer could not advertise by saying "endorsed by the makers of Mouse-a-geddon" unless it were true.

While these subfields of intellectual property law all protect products of the mind, each has its own historical underpinnings, buzz words and legal rules. For the average businessperson, navigating a safe way through this complex legal maze is practically impossible. That is why a businessperson's most important task is to identify what intellectual property assets the business has. Most businesses approach the task by focusing on their core products or services, so they can be protected from unlawful duplication by competitors. Once the assets are identified, the work toward legally protecting them begins.