What is Intellectual Property?

Intellectual property, a term generally encompassing patents, trademarks, copyrights, trade secrets, rights of publicity and privacy, and moral rights, plays an ever-increasing role in the commercial world.

Ownership of ideas seems strange if you’re not used to thinking about it. How can an idea be “property”? The intuitive notion of property is some concrete, physical thing that can be hoarded or shared. But ideas are recorded in an intangible medium: brainwaves, the firing of neurons, the crackle of electrochemical activity in the brain. Intuitively, the boundaries of property can be marked and patrolled, and those who would violate it by theft or invasion can be easily seen and straightforwardly stopped. In the realm of intellectual property, however, borders are anything but visible, and attackers are anything but straightforward.

According to the World Intellectual Property Organization, an agency of the United Nations, there are two main branches of intellectual property, or IP:

While these things aren’t necessarily material creations, all of them are the products of human labor. Instead of being made of nuts and bolts, they are made of the blood, sweat, and tears of their creators. You may not be able to hold it in your hand, but intellectual property has unquestionable value nonetheless – and not just in the almost maternal way that an artist might value his painting or a writer her novel. Intellectual property has real market worth as well. The Marlboro trademark, for instance, is the most valuable piece of intellectual property in the world.

The Legal Concept of Property

Assets such as patents, copyrights, or the Marlboro trademark, are valued not necessarily for their physical incarnations (how much is that cellophane cigarette wrapper really worth? Or the paper a book is printed on?), but rather for the often intangible rights that accompany them. Legally speaking, “property” is more than just the cellophane a trademark is printed on, more than just the paper and glue that make up a book. In legal terms, property is not the object itself. It is not the book you hold in your hand, not the car that you drive to work. Property is the rules and relationships that society has built up around those objects, the set of ways that you and everyone else relate to owned things. (Remember that those things aren’t necessarily physical objects – in the case of IP, they can be intangible as well.) Property is a set of rights that govern the way other people treat your things and the way you treat other people’s things. In other words, your car itself is not property: property is the right you have to prevent others from using it (for example, driving it away when you’re not looking).

The importance of the concept of property ultimately rests on the state’s physical willingness to enforce property rights. It’s you against the world, and the world is a whole lot bigger than you are. You rely on the state to help you protect what’s yours. The state backs you up — enforces your property rights — in the form of injunctions, which are in effect court orders to “keep off the grass;” they demand that other people do not enjoy the benefits of your possessions unless you have given your permission to do so. The physical enforcement part comes in if someone decides to go joyriding in your car without clearing it with you first: the state will punish him with a fine or with jail time.

It’s important to keep this weird caveat in mind: the property right is a right of exclusion, which prevents others from using your possessions, but ownership does not automatically give the you, the owner, the right to use your possessions yourself (this is especially important for patents). Think of the fireworks laws in some states, for instance. It’s okay for you to own fireworks, and property ownership keeps other people from legally walking off with your personal stash of them, but it’s not okay for you to use your fireworks – you can’t legally set them off. What’s the point of that? you ask. Well, they are yours. You can always sell them to someone in another state who might be able to use them. And some of them do make great wall hangings.

Case Study: Types of Intellectual Property

Picture this. Your time has come. You’ve been laboring for years to perfect it. Now you’re ready to show the world what you’ve invented, and you want to make sure that all your bases are covered, that your invention will be protected to the hilt. Here’s a brief overview of all the different ways you can protect your intellectual property, your baby, your brainchild (drumroll, please) … your all-new “Method of Exercising a Cat”! We’re not kidding, this is a real patent, issued August 22, 1995.


A patent provides the patent holder, or patentee, the right to exclude others from making, using, selling, offering for sale, or importing his invention for 20 years from the date the inventor files his application. In essence, a patent is a government-sponsored monopoly, designed to reward the inventor by providing him with incentive to risk time, effort, and money in developing new technologies. The right to exclude others gives the inventor the first-to-market advantage in developing his product, and it allows him to prevent competition in the early stages of his commercialization effort. Patents are applied for and granted by the U.S. Patent and Trademark Office. Unlike other types of intellectual property, patents are only granted to inventions that fulfill exacting standards of novelty, usefulness, and nonobviousness. As a result, the application and review process can be expensive and lengthy, often lasting up to four years.

Patentable material includes machines, processes, articles of manufacture, compositions of matter, and improvements on any of these items – for all intents and purposes, anything produced by humans or the methods of such production. Aside from these utility patents, two other categories of patents are design patents, which cover ornamental design features of an item, and plant patents, which cover new varieties of cultivated plants (but not those discovered growing wild). Laws of nature, physical phenomena and abstract ideas cannot be patented.

How this applies to you: You’ve filed a patent with the USPTO, with the claim “A method for inducing cats to exercise consists of directing a beam of invisible light produced by a hand-held laser apparatus onto the floor or wall or other opaque surface in the vicinity of the cat, then moving the laser so as to cause the bright pattern of light to move in an irregular way fascinating to cats, and to any other animal with a chase instinct.” The PTO issues to you U.S. patent number 5,443,036.


A trademark is a crucial element of branding a product, and it can be a word, name, or symbol that is used to distinguish one company’s products from another’s. Trademark rights cover – no surprise here – only the use of the mark in commerce as connected to the product, not the mark itself (except for some famous marks) or the product the mark represents. For instance, the Oreo trademark does not prevent Hydrox from making round chocolate sandwich cookies. Trademark law can be thought of as a consumer protection statute. A rival use of a mark will be prevented only if there is a likelihood of consumer confusion, or in some cases if the impact of the mark on consumers will be diluted by the rival use. Thus, the same mark is often used by different parties in connection with different goods, because consumers don’t necessarily assume the same party is the provider of all of the different goods bearing a particular mark. Thus, a “Whopper” could be a tasty burger, or a malted milk ball, depending on the context.

Trademarks can be registered with the U.S. PTO, but rights also arise from use in some countries (including the U.S.) under common law principles. Although registration is not required to establish trademark rights, it is advantageous in the case of conflict. Unlike patent and copyright protection, trademark rights can potentially be of unlimited duration, lasting as long as the mark is in use by its owner.


The 1976 Copyright Act permits the owner of a copyright to exclude others from reproducing, displaying, performing, or distributing ideas expressed in a fixed medium such as text, film, video or sound recording, computer disk, or 3-dimensional form. They protect only the form in which an idea is fixed, not the substance of an idea, which lies in the territory of patent protection. This is why there can be about a thousand different equivalents of X Subject for Dummies: each one has a different series title, and all are written in different words, even though the idea itself – namely, teaching a reader how to do something complex in a simple, easy-to-understand way – is the same across the board. Copyrights do not need to be issued by or registered with a government agency except to be eligible for infringement litigation, in which case they must be registered with the Copyright Office of the Library of Congress. The copyright is effective as soon as the work, published or unpublished, is “created in fixed form.”

How this applies to you: You wrote a training manual, which takes cat owners step by step through your process and includes inspirational poetry for cats, entitled There Once Was a Cat From Nantucket…©.

Trade Secrets

A trade secret is any information, design, device, process, composition, technique, or formula that is not publicly known, and that provides those who know it with a competitive business advantage. Trade secrets are potentially unlimited in duration, but protection is lost if someone else discovers the information either independently or by analyzing or dissecting a product (“reverse engineering”). Like copyright and trademarks, trade secrets do not need to be registered with or granted by any government agencies; the inventor or company holding the information merely has to make a reasonable effort to keep their secrets secret. Trade secret protection is a state right under the Uniform Trade Secret Act or similar state laws, and it mainly provides relief in the case of an information leak to competitors. Since patented inventions are made publicly available upon granting of the patent, patent protection and trade secret protection are mutually exclusive; however, since patent applications are kept confidential until and unless they are approved, an invention can remain a trade secret if the patent application is rejected. Types of trade secrets include chemical formulas or recipes (such as soda or cosmetics formulas), and manufacturing processes or techniques (such as how to make fireworks or form the eye of a sewing needle).

How this applies to you: Shhh! You happen to know that if you wiggle the laser pointer around as you move it, the cat has more fun. You don’t mention it in your patent or training manual because you want to be able to make a big splash later on when you produce an infomercial touting a New and Improved Method of Exercising a Cat which utilizes the wiggling technique. You’ve sworn everyone you know to secrecy.

And the Rest

Other forms of intellectual property include service marks (much like trademarks), moral rights, rights of publicity and privacy, and trade names.