Assignment 8

MGMT 8143 Students

An important step in formulating an innovation strategy is deciding whether to protect it. Traditionally
new innovation is aggressively protected in order to maximize returns to the company. Sometimes not
vigorously protecting an innovative technology is to the company's advantage, which encourages other
competitors and complimentary products, to support the use of the innovative technology and encourage
its rate of diffusion and the likelihood of rising to the position of dominant design. In Chapter 9 we look at
the factors that shape technology diffusion and the different mechanisms available to protect innovation.
We look at the trade-offs between an open and proprietary strategy and factors to consider in formulating
a innovation protection strategy

. Read Chapter 9, answer Discussion Question 1, pg. 205. Give an example of when you would use the
three protection methods

1. What are the differences between patents, copyrights, and trademarks?

These help the firms to secure their inventions or ideas or products or services or processes and increases
their appropriability. All the three differs either in type or duration of protection or renewals or rights
provided to owners.

A patent is a limited duration property right that protects a process or product or design. Design patent
could be a unique style of a product, packaging, etc. and Utility patent could be tools, machines, games,
electronics, chemicals, programs, etc. In the US, Utility patents could have a protection term of 20 years
and design could have 14 years.

A trademark protects the distinctive signs or logos or words that distinguishes the source of good from its
comparable products. Trademarks include names, logos, designs, etc. The protection duration could be as
long as the trademark is in use with periodical renewal.

Copyright protects the work of authorship which includes artistic work, architectural designs, and literary
works. Copyrights include books, plays, art, painting, photography, music, movies, etc. This has a limited
duration of the creator’s life plus 70 years.

Which protection to use depends on the industry as firms can invent around any protection mechanism.

Patent: If it is a pharmaceutical company, the firm files for a utility patent on the new drug to protect its
innovation (compound mix). The amount of R&D and time the firm invested, they need this protection to
avoid replica products.

Trademark: In the same pharma industry, I would trademark the drug as it will create a reputation during
the patent period and protect the brand identity. For example, the trademark played an important role in
Viagra. When Viagra patent is about to expire, generic drugs expected to reign the market with the same
efficacy and less price. Nonetheless, if anyone thinks about erectile dysfunction, they will recognize by the
trademark “Viagra”.

Copyright: If a firm wants to protect and control its work, it must copyright. In the music industry, singers
copyright their songs, so they have the control to either make copies or sell or license or perform and not
let people steel their work.
All three are legal mechanisms to protect innovation, but they apply to different types of goods and vary
in the length of time they protect the item or process. Patents provide property rights protecting a
process, machine, manufactured item (or design for a manufactured item), or variety of plant. The
protection is limited to twenty years. Trademarks are words, phrases, symbols, design or other indicator
that distinguishes the source of goods from one party from the goods of others.

Trademarks can be protected indefinitely provided they continue to be used and the registration is
renewed. Copyrights protect works of authorship and last a limited time, depending on when the work
was created. Trademarks and copyrights can be established by use, but patents must be applied for and
approved.

A patent protects an invention, and a trademark protects words or symbols intended to distinguish
the source of a good. A copyright protects an original artistic or literary work
Thus, a typical computer might have components whose designs are protected by patents, logos such as
“IBM Thinkpad” that are protected by trademark law, and software that is protected by copyright

almost every country assigns a protection term of 20 years to utility patents

Trademark rights may be used to prevent others from using a mark that is similar enough to be confusing,
but they may not be used to prevent others from producing or selling the same goods or services under a
clearly different mark

A trademark is a word, phrase, symbol, design, or other indicator that is used to distinguish the
source of goods from one party from the goods of others.
Unlike patents and copyrights, trademark protection can last as long as the trademark is in use, but the
registration requires periodic renew

Copyright is a form of protection granted to works of authorship

Before 1978, copyright protection lasted only 28 years from the time it was secured
(though during the last year the author could opt to renew the protection for an additional term).
Revisions to U.S. copyright law, however, give copyright protection to
works created after 1978 that lasts for the author’s life plus an additional 70 years.

Unlike patent protection, copyright protection is secured automatically when an eligible work is
created and fixed in a copy or phonorecord for the first time
In some industries, such as pharmaceuticals, legal protection mechanisms such as patents are very
effective. In other industries, such as electronics, patents and copyright provide relatively little protection
because other firms can often invent around the patent without infringing on it

. It is also notoriously difficult to enforce patents protecting industrial processes such as manufacturing
techniques. If patents provide little protection, the firm may rely more heavily on trade secrets; however,
the ability to protect trade secrets also varies with the nature of the technology and the industry context.
To protect a trade secret, a firm must be able to expose its product to the public without revealing the
underlying technology, but in many cases, revealing the product reveals all.