Intellectual property (I.P. or IP) is a type of property encompassing the products of original human thought. Common examples of intellectual property include: the contents of a book, designs of an invention, computer software, company logos, and music.
Intellectual property differs from other forms of property in that it is non-tangible, and non-rivalrous. Unlike other forms of property, intellectual property can be used by infinitely many people without depriving the original owner of the use of their property. This characteristic of intellectual property makes it particularly vulnerable to free rider problems, creating unique challenges for authors and inventors who wish to monetize their work.
Intellectual property rights were created to ensure that authors and inventors are compensated for their efforts to incentivize the production of further works for the benefit of the public. They combat the free rider problem by giving intellectual property owners a near monopoly over the use of their creations for a set period of time. This allows intellectual property owners to license their intellectual property, and to recover monetarily from those who infringe on their intellectual property rights through piracy or wrongful use. However, intellectual property rights are not absolute, and are subject to a myriad of exceptions and affirmative defenses, such as the fair use doctrine.
- In the United States, patents and copyright are regulated exclusively by federal law, as outlined in the Intellectual Property Clause.
- Trademarks are areas of shared jurisdiction between federal and state governments, with the federal government deriving their power to regulate trademarks through the Commerce Clause.
- Trade secrets are largely regulated by states through unfair competition laws.
[Last updated in June of 2023 by the Wex Definitions Team]