Intellectual Property is a broad term that includes several specific types of rights. Patents, for instance, protect new inventions and grant the inventor exclusive rights to use and commercialize the invention for a certain period, typically 20 years. Copyright protects literary and artistic works such as books, music, and films, giving the creator exclusive rights to reproduce, distribute, and perform the work. Trademarks protect brand names, logos, and slogans that distinguish goods or services in the market, while industrial design rights safeguard the aesthetic aspects of products.

Several legal tools and agreements are associated with managing and protecting IP. Non-Disclosure Agreements (NDAs) are used to protect sensitive information shared between parties from being disclosed to third parties. Licensing agreements allow IP owners to permit others to use their IP in exchange for royalties or other compensation. Franchising agreements enable businesses to expand by allowing others to operate using their brand and IP.

Companies often use IP strategically to gain competitive advantages. Trade secrets, which include formulas, practices, processes, and designs, are protected by keeping them confidential and can provide a business edge. First-mover advantage refers to the competitive edge gained by being the first to enter a market with a new product or service, often protected by IP rights. Barriers to entry are obstacles that IP holders can create to prevent other companies from entering the market. Brand licensing allows companies to extend their brand's reach by permitting other companies to use their brand on different products. Lastly, proprietary technology, which is unique technology owned by a company, can be protected through various IP rights, ensuring that the company retains its competitive position.