The true nature of intellectual property

UK report: knowledge should be public good first, private right second
  The third model in this article (also the one recommended by the commission) makes tons of sense to me.  When knowledge (more precisely known as Intellectual Property, and confusingly abbreviated as IP) is just a commodity, as it basically is in America, the process of creativity is isolated away from everyday life and everyday people.

Sadly, Americans generally take it as truth that intellectual property is primarily property, the possession of an individual or company.  Secondarily, almost reluctantly, property is given up at some arbitrary point in the future to become "public domain."  Why?  The average American couldn't tell you why, just that that's what we've always done.

The third model from this study makes clear a wiser model for understanding knowledge: it is, at its core, primarily, something that belongs to the community.  But because we want to encourage innovation and creativity, we allow creators to receive financial gain for a reasonable, limited period of time.  Here, "reasonable" would mean something like "long enough for the innovator to recoup their financial investment, and for society to monetarily acknowledge the value of the innovation."

Before you read this entry, did you have a firm idea of why creative works enter the public domain?  Is this idea something that is more broadly known than I realize?