The term 'Intellectual Property' is included in the Economics edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Check for lowest price here...
Intellectual property, also known by its acronym of IP, is the concept having to do with creations from a person’s mind. The ownerships of such property are recognized as rights that can be possessed, bought, and sold. As such, they have also given rise to relevant fields of law.
As a result of this intellectual property rights and law, creators and owners of many intangible assets obtain exclusive rights to them. This includes literary, musical, and art works; inventions and discoveries; and also phrases, designs, symbols, and words. The most prevalent forms of intellectual property are then trademarks, copyrights, trade secrets, patents, and industrial design rights.
Intellectual property rights go back to the 1600 and 1700’s in early modern Great Britain. The Statute of Monopolies from 1623 is viewed as the origin of patent law, while the Statute of Anne from 1710 is looked at as the basis for copyright laws. The phrase intellectual property arose in the 1800’s. It finally became common in the U.S. in the late 1900’s.
Intellectual property rights are believed to create economic growth and a flourishing free enterprise system. This is because such rights of exclusivity permit the creators and owners of these intellectual properties to realize financial benefit from their creation. It gives individuals and businesses motive to develop and invest in intellectual property. With patents, such businesses are willing to come out of pocket for the development and research costs because of this incentive.
Because of this, the creation and maintenance of these intellectual property laws are given the credit for major contributions made to great economic growth in the Western World like the United States and Great Britain. Many economists point out that around two thirds of big businesses’ value lies in intangible assets. It is also said that industries that use intellectual property intensively create as much as seventy-two percent more added value for every employee than do those industries that do not use intellectual property intensively. This is to say that a great deal of economic growth is generated by intellectual property rights and associated industries.
Critics of intellectual property rights do exist. Those in the free culture movement hold up intellectual monopolies as examples of things that hold back progress, damage health, and concentrate ownership to the disadvantage of the common people. They argue that the public good is hurt by monopolies that constantly grow out of software patents, extensions of copyrights, and business method patents.
Besides this, some claim that intellectual property rights that are strictly enforced slow down the transfer of technological advances and scientific break through to poor countries. Still, developing nations are beneficiaries of developed nation technologies like vaccines, the Internet, mobile phones, and higher yielding crops. Critics claim that patent laws come down too hard in favor of the people who develop innovations versus those who employ them.