Protecting Intellectual Property and Appropriating Value from Innovations in Weak Appropriability Regimes

Abstract

Overview: How can multinational enterprises (MNEs) protect their intellectual property (IP) when patents are weakly enforced? An imitator will only take action to appropriate an innovator’s value if the imitator has the financial motivation, opportunity, and ability to copy and commercialize the innovator’s product/service. If the innovator can decrease one of these conditions to a level that demotivates or inhibits the imitator from taking action, the innovator will have protected its IP. In this article, we introduce the constructs of barrier to imitation and barrier to commercialization, two separate hurdles that can block imitators from appropriating MNE rents. We prescribe MNE IP strategies contingent on country characteristics, local imitator capabilities, an MNE’s barriers to imitation and commercialization, and the value chain activities the MNE desires to locate in the country of interest.

Keywords::

• Weak appropriability regimes,
• Non-patent IP protection mechanisms,
• Value appropriation

Additional information

Notes on contributors

James Nebus

James Nebus is Department Chair and an associate professor in the strategy and international business department in Suffolk University’s Sawyer Business School, US. He has 22 years of industry experience, including 10 years in international management positions in Europe and Asia. He received a PhD in international business and an MBA from the University of South Carolina, as well as a BS in electronic engineering and a BA in economics from Rutgers University. He has published in the Journal of International Business Studies, Academy of Management Review, IEEE Transactions on Engineering Management, and Journal of International Management, among others. [email protected]

Kah-Hin Chai

Kah-Hin Chai is currently an associate professor at the industrial systems engineering and management department, National University of Singapore (NUS). His research and teaching interests include product and service innovation, problem-solving, and energy efficiency. He has published in journals such as Journal of Product Innovation Management, IEEE Transactions on Engineering Management, Technovation, and Journal of Service Research. Prior to joining NUS, he worked in the semiconductor manufacturing and management consulting industries. He obtained his PhD in manufacturing management from Cambridge University in 2000. [email protected]

Annapoornima M. Subramanian

Annapoornima M. Subramanian is currently an associate professor with the Department of Industrial Systems Engineering and Management, National University of Singapore. Her research interests include how human capital and interorganizational collaborations affect innovation performance of firms. She has published her research in many journals, including Journal of Operations Management, Production & Operations Management, Research Policy, Journal of Business Venturing, IEEE Transactions on Engineering Management, Technovation, Journal of Technology Transfer, Long Range Planning, Journal of Engineering and Technology Management, and Research-Technology Management. She received her PhD in management of technological innovation from the School of Business, National University of Singapore. [email protected]