9. IP

1. Appropriability: The degree to which a firm is able to capture the rents from its innovation.

•Appropriability is determined by how easily or quickly competitors can copy the innovation.

2. Patents: rights granted by the government that excludes others from producing, using, or selling an invention.

•Utility patents protect new and useful processes, machines, manufactured items or combination of materials.

•Design patents protect original and ornamental designs for manufactured items.

•Plant patents protect distinct new varieties of plants.

3.Trademarks and Service Marks: a word, phrase, symbol, design, or other indicator that is used to distinguish the source of goods form one party from goods of another (e.g., Nike “swoosh” symbol)

4. Copyright: a form of protection granted to works of authorship.

5. Trade Secret: information that belongs to a business that is generally unknown to others.

6. Protection Mechanism：

Advantages of Protection：

•Proprietary systems offer greater rent appropriability.

•Rents can be used to invest in further development, promotion, and distribution.

•Give the firm control over the evolution of the technology and complements

Advantages of Diffusion：

•May accrue more rapid adoptions if produced and promoted by multiple firms

•Technology might be improved by other firms (though external development poses its own risks).

Factors influencing benefits of protection vs. diffusion：Production Capabilities, Marketing Capabilities, and Capital

1. Can firm produce the technology at sufficient volume or quality levels?

2. Are complements important? Are they available in sufficient range and quality? Can the firm afford to develop and produce them itself?

3. Is there industry opposition against sole source technology?

4. Can the firm improve the technology well enough and fast enough to compete with others?

5. How important is it to prevent the technology from being altered in ways that fragment it as a standard?

6. How valuable is architectural control to the firm? Does it have a major stake in complements for the technology?