Intellectual property

Some have characterized intellectual property law as an obsolete device suited to protecting tangible goods. To varying degrees, information is intangible, so how can it be protected? Recent legislation has sought to modify existing laws to cover online media and other intangible goods. As these laws are written and applied, considerable ambiguity is expected in defining intellectual property infringements. Once the laws are established and understood uniformly, protection will be more easily granted to the rightful owners.

Intellectual property (IP) is a legal concept which refers to creations of the mind for which exclusive rights are recognized. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets.

There are many reasons a party may wish to obtain patent protection, and the brief discussion presented here is not intended to be all-inclusive. One reason for obtaining a patent is to protect your intellectual property. Thus, the holder of the patent may be able to prevent competition by preventing others from taking advantage of the invention. Others may decide not to compete at all in the particular area, or may decide to spend significant amounts of time and money developing processes or products that do not infringe on your patent. Alternatively, if both sides are willing, the patent holder may license part or all of the patent to another party for a fixed fee, a royalty, or some combination of the two. A license is basically an agreement between a licensor (patent holder) and licensee that the licensor will not sue the licensee for what would otherwise constitute infringement of some or all of the patent claims.

Another reason for obtaining a patent is more defensive. For example, Company B may be reluctant to sue Company A for infringement of Company B's patent, if Company B thinks that Company A may countersue for infringement of Company A's patents. Often, such a situation may result in cross-licensing between the two parties, in which each agrees not to sue the other for infringement of all or part of each other’s patents.
Yet another reason for obtaining a patent, especially for start-up companies, is for attracting investment. Investors like to know that there is some value in whatever they are investing in, and the existence of one or more patents (or even pending patent applications) may be an indication of a company’s viability.