Certainly most larger companies have lawyers on staff for this sort of thing. However they tend to only get involved when something goes terribly wrong, or someone brings the issue to their attention. Knowing the basics of intellectual property law makes it likely that you can prevent former case. Further, because the field is so new, our government tends to consider and make changes at a rapid rate. As a professional in the field you have a responsibility to form and express an opinion on what bills are good and which are bad.
Because we are in the United States, this document focuses on the laws and rules of the US. The basic ideas tend to apply in most other nations, but don't count on it. Also, because of the nature of the web, some of the links in this document may be broken as you read this. Sorry, they were there when I wrote it!
The key things here are the reason such laws are to be created (to promote the progress of Science and the useful arts) and the limited time such rights are to be held. MSNBC as a nice write-up of the historical issues (but also see this discussion of the article).
A second type of IP is copyright. Copyright basically gives the creator of a work (such as a book, a play, or a dance) certain rights over that work. These include the right to reproduce, copy, display or perform the work. It also include the right to make a new work based on the old work (called a derivative work.) Copyright protects a work but (usually) not the ideas found in that work.
A third type of IP is the trademark. ``Trademark law governs the use of a device (including a word, phrase, symbol, product shape, or logo) by a manufacturer or merchant to identify its goods and to distinguish those goods from those made or sold by another. Service marks, which are used on services rather than goods, are also governed by `Trademark law.' '' [2]. Trademarks (we will use the work trademark to include service marks) are generally used to protect the good name of a company, service or product and to prevent confusion in the market place.
There are other types of IP. For example, there are moral rights which include the right of an author to be attributed for their work, even if they sold the copyright. But the three described above cover the vast majority of cases.
In general this means that quoting a small portion of a work is usually acceptable. Notice that what constitutes a ``small portion'' and a ``work'' can be very hard to figure out. In fact all of these ``tests'' are difficult. What if I write a negative review for Time magazine of a book of poems, and quote one four-line poem as evidence of how bad the whole book is? Well, the judge could rule that the poem, and not the book, is the actual work. Thus, on the 3rd point I may be in trouble even though I only quoted a very small portion of the book. And if I was paid for my review and it was published in Time magazine it is clearly of commercial nature. If my negative review likely harmed sales of the book then the 4th test might also be against me. Would a court conclude it wasn't fair use? Maybe. My point is that fair use is a very fuzzy concept.
Obviously there is a large barrier to the above happening: the book needs to be scanned in and converted to a useful format. Given scanner errors and other issues, not to mention the raw time needed to scan in each page, this is still unlikely. However, in the digital age the publisher often does all of the work for our hypothetical hoodlum. Many books are now available in digital format, and certainly music (on CDs) have been available in digital format for quite some time. The net result is that copyright holders find their rights violated, and potentially lose significant amounts of revenue. This is the heart of the case against the music-sharing company Napster. Napster allowed people to freely share music, including copyrighted music ripped from CDs.
While music has become the classic example of the Internet's impact on copyright holders, there are certainly other cases. Software piracy, that is the illegal copying of software, is quite common. Microsoft claims that 40% of all software is pirated. Warez, that is cracked software, can be found all over the Internet with a bit of looking. The same is apparently true of movies and other media.
OK, hopefully I've established that A) the Internet makes mass copying easier then it would otherwise be and B) people are actually doing this. But so what? Well, the net effect is that copyright owners are trying to find ways to reduce the illegal copying. One way this is done is to encrypt their content so that only those purchasing access to the content can use it. The other method being used is to change and/or add laws that make copyright violations much harsher. For example the ``No Electronic Theft'' Act (called the NET act) amends the code so that someone who copies more than $1000.00 worth of material in a 180 day period could be sent to jail for 5 years on a first offense.
The Digital Millennium Copyright Act (DMCA) of 1998 signalled a significant change in the copyright law. The DMCA has a number of important provisions (as well as some very obscure ones...)
The case mentioned above raises two very important issues.
But this opens itself up to abuse for a huge number of reasons. One good example is that the company could include a time bomb which deletes the software whenever an upgrade comes out. Or even, as in the shrink-wrap case above, makes it so that the software can do nothing or even delete your hard drive, and you can't sue for false advertising or for harm done. But why would anyone agree to such a license? Well, first of all, few people read or understand them. Secondly, if you need the software (say you are a contractor and your boss requires your reports be in Microsoft Word) you really don't have a real choice. Finally, lets say you buy a new computer and get MS-windows shipped with it. You decide you don't want to agree to their license. The way their license reads now, you have to return the whole computer, probably with you footing the bill for shipping. Basically you are being required to agree to a license you don't get to see ahead of time, that you probably won't understand when you do get it, and that can say whatever the vendor wants it to say. At least if you want to buy a computer from Dell or Gateway... (Yes, I know you can by Linux boxes from them now...)
It should be noted that ``open source software'' and GPLed software are different. Open source requires that the source code is freely available, but doesn't' necessarily require that any changes you make to the program be freely available.
Microsoft has attacked [1, 2, 3, 4] GPLed code and the Open Source movement. Their primary issue seems to be with the ``viral'' nature of the GPL. That is, if you use GPLed code, you have to GPL your code. This seems a bit odd, because if that same code were owned by someone else, you couldn't use it without their permission in any case.
Of course the free software movement people have responded [1,2, 3].