Legal Definitions - intangible property

Intangible property refers to assets that do not have a physical form but still hold significant value and ownership rights. Unlike tangible property, which you can touch or see, intangible property exists as a legal concept, a right, or a piece of information. Despite its non-physical nature, it can be bought, sold, licensed, and protected by law, often contributing substantially to an individual's or company's overall wealth.

Here are some examples illustrating intangible property:

• A Software License: Imagine a graphic design firm that purchases a license to use a specialized photo editing software program for all its designers. The firm doesn't own the physical software discs (if any) or the underlying code itself; rather, it owns the right to use the software according to the license agreement. This right is intangible property because it cannot be physically touched or held, yet it is a valuable asset essential for the firm's operations and is legally enforceable.
• A Business's Brand Goodwill: Consider a long-standing, highly respected local restaurant known for its unique recipes and exceptional customer service. When the owner decides to sell the business, the sale price includes a significant amount beyond the value of its kitchen equipment, furniture, and building. This extra value represents the restaurant's "goodwill"—its strong reputation, loyal customer base, and established brand recognition. This goodwill is intangible property because it has no physical form but is a crucial asset that attracts customers and generates future revenue, making the business more valuable than just its physical assets.
• A Professional Sports Team's Broadcast Rights: A major league sports team signs a multi-year agreement with a television network, granting the network exclusive rights to broadcast its games. The broadcast rights are a form of intangible property. The team isn't selling a physical item; instead, it's selling the exclusive right to transmit its games to viewers. This right is immensely valuable, generating substantial revenue for the team, even though it cannot be physically touched or stored in the same way equipment or a stadium can.