Trademarks, Trade Secrets, Patents, and Copyrights.
The law of intellectual property has become far more important recently because the value of
these intangible assets has increased in recent years.
Intellectual property law is based on several fundamental concepts:
Intellectual property law protects certain types of knowledge, ideas, and expressions
by granting exclusive rights to creators.
These exclusive rights are a type of intangible
When someone else violates these rights, the violator is actually engaging in a form of
It is a type of competition that has been declared unlawful, but is
(EXAMPLE) Suppose X (or the company he works for) invests
time, energy, and money in coming up with a new invention that provides a benefit to
Using the knowledge that X developed, Y begins making and selling a new
product that is the same as X’s invention.
If X has no way to protect his investment in
inventing, he is less likely to make these kinds of investments in the future.
If we have
patent laws, if his invention meets the requirements for obtaining a patent, and if he is
able to successfully sue Y for patent infringement, X is more likely to continue
investing in the inventive process in the future.
IN MANY SECTORS OF THE
ECONOMY, THE MOST IMPORTANT TYPE OF COMPETITION IS THE
COMPETITITVE RIVALRY TO INNOVATE.
The same can be said of investing time
and money in the creative efforts of writing books, music, and software.
copyright law creates certain exclusive rights that are intended to encourage people to
continue engaging in these socially desirable creative activities.
property laws essentially prohibit certain kinds of conduct (such as infringing on
someone else’s patent, copyright, trade secret, or trademark) that are competitive in
the short run, with the objective of creating greater incentives for people and
companies to engage in innovative and creative activities that tend to promote
competition and also benefit society in other ways (such as the cultural value of
creativity) in the long run.
Such laws can go to far.
For example, patents are granted on inventions that really
don’t deserve such protection, society pays the short-term price of less competition
but does not receive the long-term benefits from innovation.
If a copyright law
protects too much or too long (which many knowledgeable observers believe to be the
case today), society pays more for access to creative works in the short run without
receiving properly corresponding benefits in the long run.
An IDEAL SYSTEM provides protection to intellectual property that is no greater than is
necessary to create and maintain the desired incentives to innovate and create over time.
A country cannot fully participate in today’s global economy without a full slate of intellectual