What Is Intellectual Property?

Intellectual property (IP) is a type of intangible property, protected by law, that encompasses original creations of the human mind. Intellectual properties are the expression of ideas, concepts, and inventions. People who create these things can protect them so that no one else can use them without the creator's permission.

In addition to being intangible, intellectual properties differ from other kinds of property in other ways. For example, real property includes fixed items like land, buildings, and roads, while personal property includes movable objects like furniture or automobiles. Both of these property types may be protected by the Takings Clause, which is a part of the Fifth Amendment and states that “private property shall not be taken for public use, without just compensation.”

In an economic sense, intellectual properties are public goods—that is, they are not diminished in quality or quantity by use and are provided to all members of society. For instance, a person who writes a book can obtain a copyright on their ideas expressed in that book. That copyright protects the author from someone else reproducing and selling that book without the author's permission. But no matter how many books the author (or someone with the author's permission) prints and sells, the intellectual property itself—the ideas expressed in the book—has not been used up. The laws that protect intellectual properties must not inhibit their use. The main purpose of intellectual property laws is to protect the person who created the intellectual property from those who would use it for their own benefit without permission. However, one of the values of intellectual properties, at least for society in general, is that an intellectual property can be improved and can lead to completely new intellectual properties. Intellectual property laws must, therefore, find a balance between protecting the rights of the owner and allowing improvement and innovation.

A copyright provides exclusive legal right to reproduce, publish, sell, or distribute the matter and form of something. But there is more to this concept. Copyrights protect the expression of an idea or concept, not the idea or concept itself. Any number of books can be written about the idea of global warming, for example, but each book that is a different expression of the idea of global warming can be copyrighted. To be eligible to be copyrighted, a work must meet three basic criteria:

• The work must be in a fixed, durable, tangible medium of expression
• The work must be original
• The work must be creative

Federal law allows copyrights to be formally registered with the U.S. Copyright Office, the office of the government that registers original material and issues copyrights for that material. However, a common-law copyright provides protection of an original work and exists as soon as a work is put in a fixed, durable, tangible medium of expression. Of course, it makes sense to formally register a copyright. Registration is notice to the world that the copyright exists and establishes the time that the copyright was created.

The United States Copyright Act of 1790 and the English Copyright Act of 1842 provided protection for authors' works within those countries, but protection for authors' works outside of those countries became an issue that needed to be addressed. The Berne Convention for the Protection of Literary and Artistic Works, adopted in 1886, is an international agreement that extends the protection of authors' works within the countries that adopted the convention as well as to unpublished works—the convention recognizes that an author has rights in work as soon as it is created and put in physical form, not just when the work is published and registered under the laws of a country.

The time during which an author's work is protected under U.S. copyright law has been revised and extended several times, and the protection as of 1998 is for the life of the creator plus 70 years. A patent protects intellectual property that is related to an invention, process, or machine. While a copyright exists as soon as a work is created, patents are created only when the U.S. Patent and Trademark Office—which registers inventions, issues patents, and registers trademarks—grants an inventor the right to keep others from using the invention without permission. That protection lasts 20 years from the date the patent is issued for utility patents and 14 years for design patents. The Patent Act of 1790 was the first patent statute passed by Congress to protect inventors from unauthorized use of their inventions.

The U.S. Patent and Trademark Office has issued more than 10 million patents, some substantive advancements and useful inventions and some more in the nature of novelties. In 2004 GoPro, a manufacturer of action cameras, received a patent for a harness that safely attached its cameras to a user of the camera so that the camera would not dislodge during strenuous activities. Another example was a patent issued in 2000 for a device that is fitted to a vehicle that can determine if what the vehicle has struck was a pedestrian. And in 1989 a patent was granted for a smoker's hat that included a fan to draw in smoke exhaled by a smoker. The hat contained a system that filtered contaminants out of the smoke and then exhaled the purified air into the surrounding environment.

Patent infringement, the unauthorized use of intellectual property, can have serious consequences, particularly for technological advancements. In 2012 Samsung was found by a court to have used smartphone and tablet features that had been patented by Apple. Though liability for patent infringement in that case was found in 2012, the amount of damages that Samsung would have to pay Apple for those patent infringements was not resolved until six years later, when in 2018 Samsung was ordered by the court to pay Apple $539 million. In a similar suit in 2017, Nintendo was ordered to pay iLife Technologies $10 million for infringing on patents granted to iLife. iLife had patented wearable technology for use in medical devices that could determine if a person had fallen so that an ambulance could be called automatically. Nintendo was found to have used that technology, without the consent of iLife, in the game controllers for Nintendo's Wii game systems.

To receive a patent, an invention must be genuine, novel, useful, and not obvious. Considered individually, the meanings of these words provide some help in understanding what can be patented. Something that is genuine is real and authentic—not an imitation. The invention cannot be an imitation or simple improvement of something that already exists or that has already been patented. Something is considered novel if it is original or unique. Likewise, something is useful if it has value, but not necessarily value in the sense that the invention will produce commercial success. With respect to the requirement that something cannot be obvious in order to be patented, the courts have offered some guidance. In Graham v. John Deere (1966) the U.S. Supreme Court considered whether improvements made by Graham to a chisel plow patented by John Deere could be patented. In finding that Graham's improvement was not patentable, the Supreme Court set out steps in an analysis that should be undertaken in considering whether an invention is not obvious. The core of that analysis is whether the improvement required a level of skill that was more than putting together existing pieces to create something new. In the court's discussion, if there was no teaching on what could or should be done to create the invention, and if no suggestion had been made that what was done could or should be done, and if there was no existing need for doing what was done, then what was done was not obvious and therefore patentable.

It may be that the requirements that an invention must be genuine, novel, useful, and not obvious are more instructive when not considered as separate requirements. Instead, taken together, these requirements mean that in order to be patented, an invention must be more than something that has not been done before. The invention must be new and exhibit a high level of inventive genius.

Also, an invention must fall into one of the following categories to receive a patent: a unique process (treatment of materials to produce a specific result), a machine, a product, a composition of materials, a significant improvement of something already patented, an ornamental design, or an architectural design. A trademark is a representation that identifies a product or service and differentiates it from similar offerings. The common law grants a trademark to anyone who actually uses the trademark.

As an example, in the automotive market, there are a number of automobile manufacturers and distinctive trademarks that immediately identify the maker of the automobile. The Ford trademark is an oval with a royal blue background with the word Ford written in white script inside the oval. The Toyota trademark is a distinctive combination of three overlapping silver ellipses with the word Toyota in block letters below the ellipses, usually in red. The Honda trademark consists of a square slightly wider at the top than at the bottom containing a stylized H with the word Honda in block letters below the emblem. Although each of these companies competes in the automotive market, each of these trademarks is distinctive and differentiates each company's product from the other products in the market.

A federal law called the Lanham Act, also known as the Trademark Act of 1946, provides that if a person or firm registers a trademark under that law, then that person or firm has the right to use that trademark anywhere and no one else can use it. Once a trademark is registered, it can be renewed anytime between the fifth and sixth year after it was registered. Thereafter, the trademark can be renewed every 10 years.

The rationale for protecting intellectual property is that the person who created something should control and benefit from its use. If a copyright has been registered under the federal Copyright Act, then the owner of the copyright has the legal right to sue anyone using the material for copyright infringement—that is, using the copyrighted property without appropriate permission from the holder. However, the federal government recognized the need to find a balance between protecting the owner of copyrighted material and the legitimate need to use some copyrighted material. For this reason, the Copyright Act of 1976, the most recent law passed by Congress to protect the creator's right in original work from unauthorized use, provides that fair use of copyrighted material is not an infringement on the rights of the owner of the copyright. Fair use is created but limited in the Copyright Act, which allows use of a portion of copyrighted material only for specific purposes: criticism, comment, news reporting, teaching, scholarship, and research.

There are some exceptions to copyright protection. If someone wants to comment on a recently published book, then the writer of the comment might want to quote from the book. The fair use exception allows the use of this quotation. Similarly, a teacher might want to use a map from a website in a lesson. The fair use doctrine allows the use of that map.

Courts have struggled from time to time in determining whether a particular use of copyrighted material fits within one of the permitted categories. Those struggles have led to an additional court-created purpose to which the fair use doctrine also applies—parody and satire. For example, if a television show wants to create a parody version of a television commercial, then the partial use of copyrighted material is permitted under fair use.

In deciding whether the fair use exception applies in a particular case, the Copyright Act of 1976 also instructs courts to consider four criteria:

• the purpose and character of the use (whether it was transformative use, which means it used the material in a new way)
• the nature of the copyrighted work that was used
• the amount or extent of the copyrighted work that was used
• whether the use of the copyrighted work affected the potential market for or value of the copyrighted work

An author is entitled to protection of their work without regard to whether they are profiting from the work, but when a claim is made that a copyrighted work can be used under the fair use exception, a court will place emphasis on how the use of the copyrighted work will affect the value of that work to its author.