This post is preliminary to a response I have yet to compose to Adam's post on The Open Source of Art. I believe it's necessary to provide this background first, which is ruthlessly condensed from what it probably should be.
There are three principle types of intellectual property: patents, trademarks, and copyrights. Each of them awards exclusive rights over an intangible creation or tangible invention, which is balanced by a recognized need for a free flow of ideas to foster further creativity.
In the area of patents, a creation might be a business method, a design for a manufactured item, or an invention or improvement on an invention. A patent owner is given a monopoly on use and/or license of the patented creation for a period of 20 years, after which the property falls into the public domain. In obtaining patent rights, the workings of an invention become public information, and others are encouraged to design around the patent to improve technology. If disclosure is undesirable, an inventor may decide not to seek patent rights and keep the invention secret. The recipe for Coke is an example of a trade secret.
In the area of trademarks, a monopoly is granted to use a word, phrase, slogan, design, logo, or combination of these to distinguish the source of certain goods and/or services. Most of us are familiar with trademark use in connection with brand development. Trademarks are renewable in perpetuity.
In the area of copyrights, the creator of a work, such as a novel, a poem, a painting, or a musical composition, is granted a monopoly to copy, modify, distribute, perform, and display the work publicly. Copyright duration for a work created after 1976 is the life of the author plus 70 years, after which point the work falls into the public domain.
Public domain means that anyone, for any reason, can use, adapt, and/or reproduce the work without having to pay a licensing royalty to the creator or his/her assigns. Shakespearian plays are public domain, as are the writings of Thomas Jefferson, or the musical compositions of Johannes Brahms. The mere fact that something is made public does not mean that it is public domain.
U.S. intellectual property law stems from English Common Law. Intellectual property rights are granted in the U.S. Constitution (Article 1, Section 8, Clause 8.), which states that Congress shall have the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The first United Kingdom patent was issued in London in the fifteenth century; in the U.S., the first patent was granted in 1790. The first United Kingdom trademark legislation was in the late nineteenth century; in the U.S., the first Federal trademark legislation was enacted in 1870. In the United Kingdom, the Statute of Anne from the eighteenth century established the first copyright protection; in the U.S., the first copyright law was passed in 1790.
Ongoing tension exists between the right of a creator to enjoy the fruits of his own creation and the public's desire to either make use of other's creations (often in a derivative sense) or simply copy a creative work — especially when technology allows for an efficient and low-cost or cost-free mechanism for doing so. It is considered an infringement of the rights of an intellectual property owner to defy the exclusive rights granted to him or her and enshrined in law. The government does not generally police acts of infringement. It is up to the owners of intellectual property to monitor use of a creation and to seek redress for unlawful use. Unlike other laws, a decision to not seek redress for infringement — sitting on rights — does not relinquish those rights. The monopoly includes the right to tolerate a certain level of infringement.