Innovation Beyond Patents: Technological Complexity as a Protection against Imitation

Francisco Ruiz-Aliseda
Authors registered in the RePEc Author Service: Emeric Henry

No 8870, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A large portion of innovators do not patent their inventions. This is a relative puzzle since innovators are often perceived to be at the mercy of imitators in the absence of legal protection. In practice, innovators however invest actively in making their products technologically hard to reverse-engineer. We consider the dynamics of imitation and investment in such protection technologies, both by the innovator and by imitators. We show that it can justify high level of profits beyond patents and can account for the differences across sectors in the propensity to patent. Surprisingly, in general, the protection technologies that yield the highest profits for the innovator are expensive and do not protect well. Our model also allows us to draw conclusions on the dynamics of mobility of researchers in innovative industries.

Keywords: Complexity; Dynamic games; Imitation; Innovation (search for similar items in EconPapers)
JEL-codes: C73 O31 O32 O33 O34 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~ and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Working Paper: Innovation beyond Patents: Technological Complexity as a Protection against Imitation (2013)
Working Paper: Innovation beyond Patents: Technological Complexity as a Protection against Imitation (2013)
Working Paper: Innovation beyond Patents: Technological Complexity as a Protection against Imitation (2013)
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