What is Intellectual Property and why do we have it?

Jane Lambert

Intellectual property is shorthand for a bundle of rights that protect investment in intellectual assets.

Intellectual assets are the je ne sais quoi that give one business a competitive advantage over all others.  They could be a company's reputation in the marketplace, the appearance of its goods, its technology or maybe a snazzy website or brochure.

The development of such assets costs money.   Sometimes oodles of money in the case of a new drug or airframe. Nobody will invest that kind of dosh without the chance of an adequate return.   And there is no chance of an adequate return if anyone is allowed to make the product, operate the service or otherwise exploit such asset an without the permission of the person who invested in it...

To encourage innovation and creativity, the law grants a range of monopolies and exclusive rights to the person responsible for such innovation or creativity.   To tempt inventors into making and dedicating to the public new products or processes, it grants monopolies of the manufacture, importation. distribution and storage of the products or of the use of the processes known as patents.   To guarantee the source of a product it gives the person who registers a distinctive sign for a range of goods as a trade mark the right to prevent everyone else from using that sign or anything like it in relation to the same or similar goods.   To encourage  new radio and TV programmes, novels and musical scores the law of copyrights grants the broadcaster, author or composer the right to prevent anyone else from copying, publishing or performing his or her work. That is one function of intellectual property law.

However, there is also another. The exclusive rights and monopolies that encourage innovation and creativity restrict competition which in turn drives up prices and reduces choice just like any other monopoly.   Unless limited in some way those rights can do a lot of harm.   The laws that grant the monopolies and other exclusive rights also set conditions for their use and duration.

Thus, intellectual property strikes a balance between two conflicting interests.  Incentivizing creativity while preserving competition.  Should you wish to discuss this article or any other aspect of intellectual property call me on 0161 850 0800 or complete my contact form. You can also follow me on  Facebook, Linkedin, twitter or Xing.

Further Reading
Jane Lambert    "Introduction to Intellectual Property" 1 July 2913 four2fuve
HM Government "How to protect your intellectual property" 30 May 2013 Direct.Gov