intellectual property: Definition from Answers.com

Intellectual property is an intangible creation of the human mind, usually expressed or translated into a tangible form, that is assigned certain rights of property. Examples of intellectual property include an author's copyright on a book or article, a distinctive logo design representing a soft drink company and its products, unique design elements of a web site, or a patent on the process to manufacture chewing gum. Intellectual property law covers the protection of copyrights, patents, trademarks, and trade secrets, as well as other legal areas, such as unfair competition. In effect, intellectual property laws give the creator of a new and unique product or idea a temporary monopoly on its use. The value of intellectual property to an individual or company is not based on physical properties, such as size and structure. Instead, intellectual property is valuable because it represents ownership and an exclusive right to use, manufacture, reproduce, or promote a unique creation or idea. In this way, it is perhaps the most valuable asset a person or small business can own.

Development of Intellectual Property Laws

The laws protecting intellectual property in the United States exist at both the state and federal levels. State laws cover a broad spectrum of intellectual property fields, from trade secrets to the right of publicity. The laws differ somewhat from state to state. At the federal level, the Constitution and legislation authorized under the Constitution deal exclusively with patents and copyrights, and partially with trademarks and related areas of unfair competition.

Intellectual property protection first became an important issue at an international level during trade and tariff negotiations in the nineteenth century, and has remained so ever since. One of the first international treaties relating to intellectual property in the broadest sense was the International Convention for the Protection of Industrial Property, or the Paris Convention. Written in 1883, the treaty created under the Paris Convention provided protection for such properties as patents, industrial models and designs, trademarks, and trade names. Over 100 countries have signed the Paris Convention treaty, and it has been modified several times. Two of the most important provisions of the treaty relate to the rights of national treatment and priority.

The right of national treatment ensures that those individuals seeking a patent or trademark in a foreign country will not be discriminated against and will receive the same rights as a citizen of that country. The right of priority provides an inventor one year from the date of filing a patent application in his or her home country (six months for a trademark or design application) to file an application in a foreign country. The legal, effective date of application in the foreign country is then retroactively the legal, effective filing date in the home country, provided the application is made within the protection period. If the invention is made public prior to filing the home country application, however, the right of priority in a foreign country is no longer applicable.

Enforcement and protection of intellectual property at the international level has historically been extremely complex. Laws have varied significantly from country to country, and the political climate within each country has influenced the extent of protection available. Separate legislation and treaties specifically addressed relevant procedures, conventions, and standards for each area within the scope of intellectual property, such as copyright or trade secrets.

Many U.S. and international laws relating to intellectual property were significantly altered with the 1994 passage of the General Agreement on Tariffs and Trade (GATT). In fact, the member nations that signed the GATT committed themselves to a higher degree of intellectual property protection than had been provided under any earlier multinational treaties. Under the guidance of the World Trade Organization (WTO), all member nations were required to adopt specific provisions for the enforcement of rights and settlement of disputes relating to intellectual property. Under these provisions, trademark counterfeiting and commercial copyright piracy are subject to criminal penalties.

Today, the strong protections of intellectual property are recognized as one of the cornerstones of the formation and growth of small businesses in the United States, especially since the advent of the Internet and other new technologies have placed a premium on new ideas and innovations. Intellectual property allows individuals who come up with a new idea to enjoy the exclusive use of that idea for a certain period of time, which can be a significant monetary incentive for entrepreneurs. But intellectual property law is extraordinarily complex, so small business owners interested in IP issues should consult a legal expert in order to protect themselves to the full extent of the law. "The law on intellectual property … is everywhere both comparatively new and in flux, " observed The Economist (US). It is also important for would-be entrepreneurs to be aware of the legal rights of others as they prepare to engage in business activities. After all, few small companies can withstand the rigors of defending themselves from patent infringement lawsuits (especially if the charge is legitimate).

Further Reading:

Epstein, Eve. "What Is Intellectual Property?" Info World. June 19, 2000.

Foster, Frank H., and Robert L. Shook. Patents, Copyrights & Trademarks. Wiley, 1993.

Gartman, John, and Kevin McNeely. "A Summary Checklist for Dealing with Intellectual Property." Providence Business News. June 26, 2000.

Lickson, Charles P. A Legal Guide for Small Business. Crisp Publications, 1994.

"Markets for Ideas: Rights in Intellectual Property." The Economist (US). April 14, 2001.

McCarthy, J. Thomas. McCarthy's Desk Encyclopedia of Intellectual Property. Bureau of National Affairs, 1991.

Miller, Arthur R., and Michael H. Davis. Intellectual Property: Patents, Trademarks, and Copyright in a Nutshell. West, 1990.

Prencipe, Loretta W. "Intellectual Property Due Diligence." Info World. October 30, 2000.

"Protecting Intellectual Property: An Introductory Guide for U.S. Businesses on Protecting Intellectual Property Abroad." Business America. July 1991.

Tabalujan, Benny. "Keeping the Fruits of Your Intellectual Pursuit to Yourself." Business Times. July 1993.

See also: Inventions and Patents; Work for Hire

Intellectual Property describes the interests protected by the laws of patents, copyrights, trademarks, and trade secrets. It is a phrase of convenience rather than a term of art; its precise boundaries are not agreed upon, or crucial. Patents, copyrights, and trademarks all predate the term "intellectual property," which, though known in the nineteenth century, was not widely used until the 1960s. Historically, property was divided into two classes, real and personal. Real property consisted of interests in land; personal property consisted of everything else. Personal property included not only tangibles, such as goods, but intangibles such as shares of stock, rights to receive payment, and copyrights and patents. It was understood by the eighteenth century that patents and copyrights were socially desirable because potential inventors and authors, unless rewarded, would underinvest in inventing and writing. Patents and copyrights provide rewards proportional to the value of the work. By exploiting monopolies over patentable and copyrightable subject matter, creators can charge amounts sufficient to recapture their capital investment plus make a profit; this is comparable to granting farmers the exclusive rights to harvest crops that have required labor to plant and tend.

Patents are granted after examination by the Patent Office and confer twenty (previously seventeen) years of monopoly rights in works that have the characteristics of utility, novelty, and nonobviousness. Copyrights arise upon embodiment of works of authorship in a tangible medium and now last for much longer than previously; today, in most cases, they endure for the life of the author plus seventy years. Registration, though desirable, is not essential.

Trademarks are usually counted as intellectual property but have quite a different rationale and arise differently from either patents or copyrights. The reason for protecting trademarks is not to promote investment in their creation but to protect consumers from being deceived as to the origin of goods bearing them. Trademark rights develop as consumers associate the marks on the goods with a single source. Courts have often said trademark rights are not property rights but are part of tort law (though recent developments arguably render trademarks more property like).Whatever the theory, the practice persists of calling trademarks a species of intellectual property, if only because the same lawyers who do patent and copyright work also advise on trademark questions.

Trade secret law confers on those who manage to keep valuable information to themselves the competitive advantage of exclusive access to that information. It is arguably tort law, rather than property law, but since the subject matter of the secret is often identical to the subject matter of the patent or copyright, its designation as intellectual property is not surprising.

Bibliography

Chisum, Donald S., and Michael A. Jacobs. Understanding Intellectual Property Law. New York: Matthew Bender, 1992.

Halpern, Sheldon W., Craig Allen Nard, and Kenneth L. Port. Fundamentals of United States Intellectual Property Law: Copyright, Patent, and Trademark. The Hague, Netherlands: Kluwer Law International, 1999.

This entry contains information applicable to United States law only.

Intellectual property describes a wide variety of property created by musicians, authors, artists, and inventors. The law of intellectual property typically encompasses the areas of copyright, patent, and trademark law. It is designed to encourage the development of art, science, and information by granting certainproperty rights to all artists, which include inventors in both the arts and the sciences. These rights allow artists to protect themselves from infringement, or the unauthorized use and misuse of their creations.

Copyright laws have roots in eighteenth-century English law. Comprehensive patent laws can be traced to seventeenth-century England, and they have been a part of U.S. law since the colonial period. The copyright and patent concepts were both included in the U.S. Constitution. Under Article I, Section 8, Clause 8, of the Constitution, "The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The first trademark laws were passed by Congress in the late nineteenth century.

The bulk of intellectual property law is contained in federal statutes. Copyrights are protected by the Copyright Act (17 U.S.C.A. § 101 et seq. [1994]), patents are covered in the Patent Act (35 U.S.C.A. § 101 et seq. [1994]), and trademark protection is provided by the Lanham Act (also known as the Trademark Act) (15 U.S.C.A. § 1501 et seq. [1994]).

Intellectual property laws give artists the exclusive right to profit from their work for a particular limited period. For copyrighted material, the exclusive right lasts for fifty years beyond the death of the author. The length of the right can vary forpatents, but in most cases it lasts for twenty years. Trademark rights are exclusive for ten years, and can be continually renewed for subsequent ten-year periods.

Intellectual property laws do not fall in the category of criminal law. Some copyright laws authorize criminal penalties, but by and large, the body of intellectual property law is concerned with prevention and compensation, both of which are civil matters. This means that the artist, not the government, is responsible for enforcement.

Intellectual property laws provide artists with the power to enforce their property rights in civil court. They provide for damages when unauthorized use or misuse has occurred. They also provide forinjunctions, or court orders, to prevent unauthorized use or misuse.

The property protected by intellectual property laws must be in a tangible form. For example, a musician cannot claim copyright protection for a melody unless it has been written down or somehow actualized and affixed with a recognizable abbreviation. A formula or device cannot receive patent protection unless it has been presented in whole to the Patent and Trademark Office. A symbol cannot receive trademark protection unless it has been placed on goods or used in connection with services.

Copyright

Copyright laws grant to authors, artists, composers, and publishers the exclusive right to produce and distribute expressive and original work. Only expressive pieces, or writings, may receive copyright protection. A writing need not be words on paper: in copyright law, it can be a painting, sculpture, or other work of art. The writing element merely requires that a work of art, before receiving copyright protection, must be reduced to some tangible form. This may be on paper, on film, on audiotape, or on any other tangible instrument that can be reproduced.

The writing requirement ensures that copyrighted material is capable of being reproduced. Without this requirement artists could not be expected to know whether they were infringing on the original work of another person. The writing requirement also enforces the copyright rule that ideas cannot be copyrighted: only the expression of ideas can be protected.

Copyrighted material also must be original. This means that there must be something new about the work that sets it apart from previous similar works. If the variation is more than trivial, the work will receive copyright protection.

Functionality can be a factor in copyright law. The copyrights to architectural design, for example, are generally reserved for architectural works that are not functional. If the only purpose or function of a particular design is utilitarian, the work cannot be copyrighted. For instance, a person may not copyright a simple design for a water spigot. If, however, a person creates a fancy water spigot, the design is copyrightable.

Copyrighted material can receive varying degrees of protection. The scope of protection is generally limited to the original work that is in the writing. For example, assume that an artist has created a sculpture of the moon. The sculptor may not prevent others from making sculptures of the moon. However, the sculptor may prevent others from making sculptures of the moon that are exact replicas of his own sculpture.

Copyright protection gives the copyright holder the exclusive right to (1) reproduce the copyrighted work, (2) create derivative works from the work, (3) distribute the work, (4) perform the work, and (5) display the work. The first two rights are infringed whether they are violated in public or in private. The last three rights may be infringed only if they are violated in public. Public is defined under the Copyright Act as a performance or display to a "substantial number of persons" outside of friends and family (17 U.S.C.A. § 101).

Infringement of copyright occurs whenever someone exercises the exclusive rights of the copyright owner without the owner's permission. The infringement need not be intentional. Copyright owners usually prove infringement in court by showing that copying occurred, and that the copying amounted to impermissible appropriation. These showings require an analysis and comparison of the copyrighted work and the disputed work. Many general rules also relate to infringement of certain works. For example, a character created in a copyrighted work may not receive copyright protection unless the character is developed in great detail and a character in the disputed work closely resembles that character.

The most important exception to the exclusive rights of the copyright holder is the "fair use" doctrine. This doctrine allows the general public to use copyrighted material without permission in certain situations. These situations include educational activities, literary and social criticism, parody, and news reporting. Whether a particular use is fair depends on a number of factors, including whether the use is for profit, what proportion of the copyrighted material is used, and what economic effect the use has on the copyright owner.

Patent

Patent laws encourage private investment in new technologies by granting to artists the right to forbid all others to produce and distribute technological information that is new, useful, and nonobvious. The statutory requirements for patent protection are more stringent than those for copyright protection. Furthermore, because patent protection for commercial products or processes can give a tremendous market advantage to businesses, those seeking patents often find opposition to their applications. Patent protection can be obtained only through the U.S. Patent Office. Generally, only new, useful, and nonobvious processes or products will be approved for patent protection.

The novelty requirement focuses on events that occur prior to the invention. Under section 102 of the Patent Act, an invention is not novel if it is publicly used, sold, or patented by another inventor within twelve months of the patent application. This definition implements the public policy that favors quick disclosure of technological progress.

Often, two inventors apply for a patent for the same product or process within the same twelve-month period. Three factors determine who wins the patent: the date and time that the product or process was conceived, the date and time that the product or process was reduced to practice, and the diligence used to pursue patent protection and perfect the discovery. Generally, the first inventor to conceive the product or process has priority in the application process. However, if the second inventor is the first to reduce the product or process to practice, and the first inventor does not use diligence to obtain patent protection, the second inventor is given priority in the application process.

The utility requirement ensures that the product or process receiving patent protection will have some beneficial use. The inventor must specify in the application a specific utility for the invention. If the application is for a process, the process must be useful with respect to a product. A process that is new and nonobvious but useless does not increase knowledge or confer any benefit on society.

Nonobviousness is not the same as novelty. Not everything novel is nonobvious. However, anything that is nonobvious is novel, unless it has already been patented. The nonobvious requirement focuses on existing technology, or prior art. In determining whether an invention is nonobvious, the Patent Office analyzes the prior art, examines the differences between the invention and the prior art, and determines the level of ordinary skill in the art. Generally, if an invention is obvious to a person of ordinary skill in the relevant art, it is not patentable.

When an inventor claims that his or her patent has been infringed, the court generally engages in a two-step process. First, the court analyzes all the relevant patent documents. Then, the court reads the patent documents and compares them with the device or process that is accused of infringement. If each element of the accused device or process substantially duplicates an element in the patented device or process, the court may declare that the patent has been infringed. Infringement can occur only if another person uses, makes, or sells the patented device or process without the permission of the person who has received the patent, or the patentee.

When a patented device or process is infringed, the patent holder may recover in damages an amount equal to a reasonable royalty. If the infringement was willful, the infringing party may be forced to pay three times the reasonable royalty. If successful in court, the patent holder may also recover court costs and attorneys' fees. If the patent holder anticipates infringement, she or he may apply for an injunction, or court order. An injunction in such a case would prohibit a certain party from infringing the patent. An injunction may also issue after a finding of infringement, to prevent repeat infringement.

Trademark

Trademark laws allow businesses to protect the symbolic information that relates to their goods and services, by preventing the use of such information by competitors. To receive trademark protection, a mark must be distinctive. Distinctive generally applies to any coined or fanciful word or term that does not closely resemble an existing mark. No mark will receive trademark protection if it is a common or descriptive term used in the marketplace.

To receive trademark protection, a mark must be used in the marketplace. If two or more marketers claim ownership of a certain mark, the first user of the mark will usually receive the protection. However, if the mark is known only in a limited geographic area, it may not receive protection in areas where it is unknown to consumers.

Infringement occurs if a mark is likely to cause confusion among consumers. In determining whether confusion is likely, the court examines a number of factors, including the similarity between the two marks in appearance, sound, connotation, and impression; the similarity of the goods or services that the respective marks represent; the similarity of the markets; whether the sale of the goods or services is inspired by impulse or only after careful consideration by the buyer; the level of public awareness of the mark; whether shoppers are actually confused; the number and nature of similar marks on similar goods or services; the length of time of concurrent use without actual confusion on the part of shoppers; and the variety of goods or services that the mark represents (In re E. I. duPont de Nemours & Co., 476 F.2d 1357, 177 U.S.P.Q. 563 [1973]).

Defenses to infringement include fair use and collateral use. Fair use occurs when the second user, or repossessor, uses a protected mark in a nonconspicuous way to identify a component of a good or service. For example, a restaurant can use a protected mark to advertise that it serves a particular brand of soft drink without infringing the mark. The restaurant cannot, however, identify itself by the mark without infringing the mark.

Collateral use is use of the same mark in a different market. For example, assume that a tree surgeon has received trademark protection for the mark Tree Huggers. This protection may not prevent a business that sells logging boots from obtaining the same mark. However, if the mark for the boots is written or otherwise appears with the same defining characteristics as the mark for the tree surgeon, it risks being denied trademark protection, depending on whether it can be confused by consumers.

Remedies for infringement of a protected trademark consist of damages for the profits lost owing to the infringement, recovery of the profits realized by the infringer owing to the infringement, and attorneys' fees. A trademark holder may also obtain injunctive relief to prevent infringement.

Other Forms of Intellectual Property The body of intellectual property law also includes laws relating totrade secrets, unfair competition, and the right of publicity. Trade secret laws protect any formula, pattern, device, or compilation of information that provides a business advantage over competitors who do not use or know of the formula, pattern, device, or compilation of information. A strategy to increase worker productivity, for example, is a trade secret. Trade secrets do not receive patent protection because they are not inventive. Trade secret laws are included in intellectual property laws because, like other intellectual property laws, they prevent the unauthorized use of certain information.

Unfair competition laws cover the misuse and misappropriation of a product for financial gain, by protecting valuable information of a business that does not qualify for copyright or trademark protection. For example, assume that a business has developed a popular cologne with distinctive packaging. Now assume that another business has begun to manufacture the same product with virtually identical packaging in an attempt to capitalize on the success of the original cologne. Even though the knockoff is not an exact copy of the original and does not infringe trademark protection, the first business may protect itself through unfair competition laws. The test to determine whether a business is liable for unfair competition is whether the two products could be confused by a reasonable shopper.

The right of publicity is the right of a person to control the commercial value and exploitation of his or her name and likeness. Because right-of-publicity laws promote artistic pursuits, they are included in intellectual property law. These laws are usually reserved for celebrities and other public figures whose name and image are important to their career. By allowing celebrities the right to control the commercial use of their name and image, right-of-publicity laws protect the commercial potential of entertainers.

Recent Developments

One big problem that artists face is protecting their property in other countries. Not all countries subscribe to international agreements regarding intellectual property, and this has led to widespread unauthorized copying. In the 1990s China and Mexico were identified as serious offenders. In both countries music and films were copied and sold openly without compensation to the creators. The United States threatened to impose trade sanctions against China if it did not observe international copyright treaties. Such threats illustrate that the United States places a high priority on protecting the right of artists to profit from their work.

See: Art Law; Copyright, International; Entertainment Law; Literary Property; Music Publishing.