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Intellectual property (IP) is an intangible creation of the human mind, usually expressed or translated into a tangible form, that is assigned certain rights of property. Examples of intellectual property include an author's copyright on a book or article, a distinctive logo design representing a soft drink company and its products, unique design elements of a web site, or a patent on a particular process to, for example, manufacture chewing gum. Intellectual property law covers the protection of copyrights, patents, trademarks, and trade secrets, as well as other legal areas, such as unfair competition. In effect, intellectual property laws give the creator of a new and unique product or idea a temporary monopoly on its use. The value of intellectual property to an individual or company is not based on physical properties, such as size and structure. Instead, intellectual property is valuable because it represents ownership and an exclusive right to use, manufacture, reproduce, or promote a unique creation or idea. In this way, it has the potential to be one of the most valuable assets a person or small business can own.

In an era of globalization, IP rights must be protected and regulated at an international level. The U.S. Department of State explains why countries protect inventions; literary and artistic works; and symbols, images, names, and designs used in commerce on a Web site it dedicates to this subject. Countries protect IP "because they know safeguarding these property rights fosters economic growth, provides incentives for technological innovation, and attracts investment that will create new jobs and opportunities for all their citizens . In the United States alone, for example, studies in the past decade have estimated that over 50 percent of U.S. exports now depend on some form of intellectual property protection, compared to less then 10 percent 50 years ago."

The laws protecting intellectual property in the United States exist at both the state and federal levels. State laws cover a broad spectrum of intellectual property fields, from trade secrets to the right of publicity. The laws differ somewhat from state to state. At the federal level, the Constitution and legislation authorized under the Constitution deal exclusively with patents and copyrights, and partially with trademarks and related areas of unfair competition.

Intellectual property protection first became an important issue at an international level during trade and tariff negotiations in the nineteenth century, and has remained so ever since. One of the first international treaties relating to intellectual property in the broadest sense was the International Convention for the Protection of Industrial Property, or the Paris Convention. Written in 1883, the treaty created under the Paris Convention provided protection for such properties as patents, industrial models and designs, trademarks, and trade names. Over 100 countries have signed the Paris Convention treaty, and it has been modified several times. Two of the most important provisions of the treaty relate to the rights of national treatment and priority.

The right of national treatment ensures that those individuals seeking a patent or trademark in a foreign country will not be discriminated against and will receive the same rights as a citizen of that country. The right of priority provides an inventor one year from the date of filing a patent application in his or her home country (six months for a trademark or design application) to file an application in a foreign country. The legal, effective date of application in the foreign country is then retroactively the legal, effective filing date in the home country, provided the application is made within the protection period. If the invention is made public prior to filing the home country application, however, the right of priority in a foreign country is no longer applicable.

Enforcement and protection of IP at the international level has historically been extremely complex. Laws have varied significantly from country to country, and the political climate within each country has influenced the extent of protection available. Separate legislation and treaties specifically addressed relevant procedures, conventions, and standards for each area within the scope of intellectual property, such as copyright or trade secrets.

Many U.S. and international laws relating to intellectual property were significantly altered with the 1994 passage of the General Agreement on Tariffs and Trade (GATT). In fact, the member nations that signed the GATT committed themselves to a higher degree of intellectual property protection than had been provided under any earlier multinational treaties. Under the guidance of the World Trade Organization (WTO), all member nations were required to adopt specific provisions for the enforcement of rights and settlement of disputes relating to intellectual property. Under these provisions, trademark counterfeiting and commercial copyright piracy are subject to criminal penalties.

Today, the strong protections of intellectual property are recognized as one of the cornerstones of the formation and growth of small businesses in the United States, especially since the advent of the Internet and other new technologies have placed a premium on new ideas and innovations. Intellectual property allows individuals who come up with a new idea to enjoy the exclusive use of that idea for a certain period of time, which can be a significant monetary incentive for entrepreneurs. But intellectual property law is extraordinarily complex, so small business owners interested in IP issues should consult a legal expert in order to protect themselves to the full extent of the law. "The law on intellectual property is everywhere both comparatively new and in flux," observed The Economist (US). The rapid and worldwide spread of access to the Internet as well as the ease with which electronic data may be copied and manipulated pose new challenges to the existing network of IP regulations. Laws surrounding IP rights will likely see many changes in the coming years as we adjust them to the new demands created by the information age.

SEE ALSO Inventions and Patents; Work for Hire

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Foster, Frank H. and Robert L. Shook. Patents, Copyrights & Trademarks. Wiley, 1993.

Gartman, John, and Kevin McNeely. "A Summary Checklist for Dealing with Intellectual Property." Providence Business News. 26 June 2000.

Lickson, Charles P. A Legal Guide for Small Business. Crisp Publications, 1994.

"Markets for Ideas: Rights in Intellectual Property." The Economist (US). 14 April 2001.

Prencipe, Loretta W. "Intellectual Property Due Diligence." InfoWorld. 30 October 2000.

"Protecting Intellectual Property: An Introductory Guide for U.S. Businesses on Protecting Intellectual Property Abroad." Business America. July 1991.

Spinello, Richar A. and Herman T. Tavani. Intellectual Property Rights in a Networked World. Idea Group, Inc. (IGI), 2004.

Tabalujan, Benny. "Keeping the Fruits of Your Intellectual Pursuit to Yourself." Business Times. July 1993.

U.S. Department of State. International Information Programs. Field, Thomas G. Jr. "What is Intellectual Property."usinfo.state.gov/products/pubs/intelprp/ January 2006.

World Trade Commission. "Intellectual Property: Protection and Enforcement."www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm Retrieved on 16 March 2006.

Hillstrom, Northern Lights

updated by Magee, ECDI