I would still claim that the distinction you're drawing is arbitrary. Yes physical objects and ideas are different and the ways one goes about defending them will, of course also be different. The defense of intellectual property does not, in principle, require enforcement by a coercive third party. I could defend it by keeping it a secrete, or announce to the word that I am in fact the inventor (ownership of an idea does not necessarily have to imply exclusive use of it).
You're claiming that the attribute of physical exclusivity is essential to the notion of "property"; I can argue that it is incidental. The import thing is that thorough appropriating your property, I am depriving you of some tangible benefit. In case of physical property, the benefit is the (necessarily) exclusive use of that property. In case of intellectual property, the benefit maybe competitive advantage (if I choose to keep my knowledge secret), or a revenue stream (if I choose to allow others to benefit from my knowledge in return for compensation), or reputation and status (in being acknowledged as the inventor).
That paper makes the same erroneous assumption:
"Only tangible, scarce resources are the possible object of interpersonal conflict, so it is only for them that property rules are applicable."
This obviously wrong. Reputation, influence (political religious, etc), honor, status, competitiveness -- all quality sources of "interpersonal conflict".
In fact, the paper conveniently avoids tackling some forms of intellectual property--trade secretes and trademarks-- by dismissing them as "less problematic" (thus tacitly acknowledging the validity of the concept of "intellectual property") and instead chooses to focus on copyrights and patents (both of which are indeed severely flawed -- today even more so then when the paper was originally published). It is thus drawing an arbitrary distinction between different forms of intellectual property -- something it goes on to condemn later. Note that the classification of physical property is also essentially arbitrary (e.g. the notion of "private property", as applied to physical objects, was far weaker in the Soviet Union, and still is elsewhere in the world, than it is in the US).
EDIT: grammar + clarity.