Intellectual Property Rights and Innovation

Intellectual property rights are legal protections for creations of the human mind. They include patents, copyrights and trademarks as well as trade secrets.


Violation of intellectual property rights (either infringement or misappropriation) can result in civil or criminal penalties. Discover how intellectual property laws can benefit your organization.

Do you know the difference between a patent, an industrial design and a copyright?

Protection of Ideas

It is widely acknowledged that the protection of intellectual property plays a critical role in encouraging progress and innovation. In general, intellectual property law provides inventors, authors and creators with exclusive rights for a specified period of time to make money from their creative work. This in turn motivates them to continue developing new products and generating more ideas to benefit the economy.

The four primary categories of intellectual property protection are copyrights, patents, designs and trademarks. Copyrights cover tangible inventive, musical and literary works such as books, lyrics and paintings. Patents protect inventions that may be tangible or intangible and range from machines to chemical compounds. Designs protect the visual appearance of products or brands and trademarks cover words, names or symbols that distinguish one product from another in commerce.

Although it is possible to take a concept or idea from the mind and materialize it into something that can be protected through intellectual property laws, in and of themselves ideas are not monetarily valuable. The process to transform a concept into a useful product or work that is worthy of legal protection involves a considerable investment in brainpower and time of skilled labor and the production of valuable intellectual assets. This heavy investment by individuals and businesses has been justified on utilitarian grounds that systems of intellectual property protection optimize social utility.


Innovation is the process of transforming creative concepts into tangible outcomes that improve efficiency, effectiveness and create new value. It encompasses a wide range of activities, from introducing new products and technologies to new organizational processes, business models and ways of working. It is essential for a business to have a culture that supports and encourages innovation. This includes establishing an open and inclusive environment where individuals feel free to contribute ideas and take risks. It also requires adequate resources, including dedicated funding, skilled human capital, technology infrastructure and access to relevant data and information.

Effective innovations are often simple and don’t necessarily aim to revolutionize an industry. A classic example is Thomas Edison’s phonograph, which made it possible for moving vehicles to draw power from rails and helped reduce dependence on gasoline. Another example is the elementary notion of putting the same number of matches into a matchbox, which led to the development of the Swede’s automatic matchbox machine, which held a world monopoly on the product for half a century.

Innovation is a critical factor in business success and many companies make it one of their top three business initiatives. The Boston Consulting Group reports that the most innovative companies are more likely to have a culture of collaboration and a focus on science, technology and development. Moreover, the best innovations are driven by internal needs and changes in the external environment.

Economic Development

Intellectual property plays a pivotal role in economic development. It is the basis for a country’s economic growth and prosperity, driving innovation, technology transfer and trade, and adding value in the global economy. It also provides a foundation for developing economies to grow into higher income levels, enabling the creation of jobs and improving living standards.

In contrast, nations that fail to enforce or implement robust IP rights end up harming their own economic development opportunities in at least three principle ways: First, they deter future invention by putting the burden of protecting innovation on the firms themselves, which is expensive and slows down the process. Second, they discourage trade and foreign investment that is critical to their own economic advancement. And finally, they hinder their own enterprises’ ability to access best-of-breed technologies vital to boosting domestic productivity.

IPR opponents sway public opinion by presenting the following narrative: IPRs enable the rich North to impose monopolistic rents on poorer countries (“the South”) by locking in their intellectual property, thus stifling growth and development; IPRs are central to international trade imbalances that undermine human rights and impede development; and consumers’ interest in low prices overrides all other interests. These claims are refuted by examining the scholarly literature on how robust IPRs benefit all nations, developed and developing, by fostering the most efficient global innovation-driven trade.

Human Rights

Intellectual property rights are legal protections in the form of limited exclusive ownership monopolies over inventions and creative works such as writing, music, designs, computer software and paintings. These protections give inventors and authors an incentive to create and disclose their work for social benefit by providing them with a return on their investment of time and labor. Generally, the protections are for a set period of years.

Human rights are a general concept of values or capabilities thought to enhance human agency and protect human interests, and declared universal in character or equally claimed for all humans, present and future. They are often framed as a moral and legal requirement or as a consequence of inherent human vulnerability that justifies a social order in which they can flourish. The philosophical justification of human rights is a wide and extensive sub-field of political and legal philosophy.

It is widely agreed that the basic human rights guaranteed by the United Nations Declaration of Human Rights and international treaties are: The right to life; equality before the law; freedom of movement, expression and assembly; freedom of thought and belief; the right to privacy; and the right to education. Violations of these rights may be criminal or civil and are punishable under domestic and international laws. The rights are indivisible and interdependent, with progress in the realization of some leading to advances in others.