Basic Intro to Intellectual Property.

Most of us have heard of IP being applied in the technology sector. What comes to mind when we hear about IP. I think most people will think of some invention by a research team or a research organization. IP stands for Intellectual Property. Since it is a property there is a concept of ownership associated with the term. But we cannot touch IP like we can touch a car. So what kind of asset is this? IP resides in our brain, thus the term intellectual in the acronym IP. This asset is called an intangible asset. Something we cannot touch. I think smell or thinking would fall under intangibility. Ferrari cars would fall under tangible assets. In the 20th century most organizations had tangible assets on their balance sheet. Now, in the 21sr century top organizations have intangible assets that exceed their tangible assets by a large number, especially the technology companies. Most of their value is under IP. Thus this century is said to be a knowledge economy, where intellect is rewarded in the creation of wealth. Now that we have talked about IP, we wonder are there any offshoots to that word or concept. Of course, there are many types of IP. Patent is one example. Whenever we think of patent, invention comes to mind and that is the right way to think about it. Technology companies file patents under law, that protects their inventions. That is their ownership, their intellectual property as one would say. Patent are applicable for a limited time span after which they expire. That is common in the pharmaceutical industry where research and development leads to blockbuster drug, and the company is rewarded for their inventions by patents, which allows them to be the sole seller of the drug. That drug is an invention through intellect and without incentive and ownership, this model will likely fail and slow down the innovation process. They have a monopoly in the industry for that drug. 

Some people have argued against IP, saying that it prevents technology innovation because there is no competition. The two views are debatable, but most people would go for the enforcement of IP under law. Thus, now we know what an IP is, we can move further in other posts.