College of Administrative and Financial Sciences
Assignment 3
Management of Technology (MGT 325)
Deadline: 04/05/2024 @ 23:59
Course Name: Management of
Technology
Course Code: MGT325
Student’s Name:
Semester: 2nd
CRN:
Student’s ID Number:
Academic Year:2023-24
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 10
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
•
Assignments submitted through email will not be accepted.
•
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
•
Students must mention question number clearly in their answer.
•
Late submission will NOT be accepted.
•
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
•
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
•
Submissions without this cover page will NOT be accepted.
Course Learning Outcomes-Covered
? Recognize the dynamics and the importance of managing technological innovation
strategically. (LO-1)
? Explain of the concepts, models for formulating strategies, defining the organizational
strategic directions and crafting a deployment strategy.(LO-3)
Assignment
Marks: 10
Students are requested to read chapter 9 “Protecting Innovation” from their book Strategic
Management of Technological Innovation.
Based on the conceptual knowledge and understanding obtained from the readings Section 1: Theoretical Foundations (3 Marks)
Q1. Explain the concept of intellectual property (IP) and its importance in protecting
innovations. (1.5 Mark)
Q2. Differentiate between patents, copyrights, trademarks, and trade secrets, providing an
example of what each might protect in the realm of technological innovation. (2.5 Marks)
Section 2: Scenario Analysis (7 Marks)
Consider a scenario where a small tech startup has developed a revolutionary new type of battery
technology that could significantly extend the battery life of electronic devices. The startup is
concerned about protecting their innovation from competitors.
Q3. Based on the scenario, recommend the most appropriate IP protection mechanisms
the startup should use. Justify your recommendations. (3 Marks)
Q4. Discuss potential challenges the startup might face in protecting its innovation and
how it might overcome them. (3 Marks)
NOTE: It is mandatory for the students to mention their references, sources and support each
answer with at least 2 peer reviewed journal.
Chapter Nine
Protecting Innovation
The Digital Music Distribution Revolutiona
Fraunhofer and MP3
In 1991, Fraunhofer IIS of Germany developed an algorithm that would set in
motion a revolution in how music was distributed, stored, and consumed. The
algorithm (commonly referred to as a codec) allowed compression of digital
audio to approximately one-tenth of its original size with minimal compromise
in audible quality. The format also enabled song information such as the song
title and artist to be embedded within the file. This format for compressed audio
files was later dubbed MPEG-1 layer 3—a.k.a. MP3. By 1995, software programs
were available that enabled consumers to convert tracks from compact discs
to MP3 files. This technology transformed how music could be manipulated—a
song was now a file that could be kept on a hard drive, and the file was small
enough to be shared over the Internet. The MP3 format became wildly popular by users sharing their music online, and software companies began releasing many variants of MP3 encoders (utilities that compress files into MP3s) and
decoders (utilities that play back MP3s). Hardware manufacturers decided to
capitalize on this new trend and several hardware MP3 players began appearing
on the market.
With the growing popularity of the file format, Fraunhofer was faced with
a dilemma—should it enforce its patent on the use of the MP3 algorithm and
attempt to collect royalties for its use, or should it allow users and software/hardware manufacturers to make free use of the algorithm, allowing the momentum
of the format to build? If it was to limit the use of the algorithm, it faced the risk of
established rivals such as Microsoft and Sony developing competing formats, yet
if it allowed free use of the algorithm, it would be difficult to profit on its invention.
Fraunhofer decided to pursue a partially open licensing approach, partnering with Thomson Multimedia as the exclusive licensing representative of MP3
patents in 1995.b Thomson, in turn, negotiated agreements with several companies including Apple, Adobe, Creative Labs, Microsoft, and many others. Such a
broad base of MP3 licensees (100 by April 2001) provided consumers with easy
access to encoders, decoders, and the format in general. Licensees generally
197
198 Part Two Formulating Technological Innovation Strategy
opted to provide decoders free of charge, while charging a nominal fee to those
who wished to encode MP3s.
Fraunhofer continued to innovate, introducing the mp3PRO format and working on the Advanced Audio Coding (AAC) format with Dolby that Apple would
later use. Many other companies also developed or adapted their own audio
compression codecs including Sony (ATRAC codec, originally developed in 1991
for use with Mini Discsc) and Microsoft (WMA, launched in April 1999d). However,
by 1996, MP3s could be found on computers worldwide, and it appeared that
MP3 had won the battle for dominant design in compressed audio formats.
Napster Takes the Lead
In 1999, while a student at Northeastern University in Boston, Shawn Fanning
released Napster—a software program that allowed users with Internet access to
easily share MP3 files. Napster provided a user-friendly solution to music fans wishing to share and find music online. Napster provided a user interface with a search
box that pointed individuals to other users with the files they wished to download.
The Napster servers did not host any MP3 files; rather they hosted a database with
information on which users had which files to share and whether they were online,
and connected one computer to another for downloading. Napster was one of the
first widely adopted “peer-to-peer” applications, and helped popularize the term.
Napster was free, and as the growing number of people with Internet access
realized, so was the music that it allowed them to access. Users were increasingly trading copyrighted material—commercial records and songs. In fact, the
great majority of music downloaded through Napster was copyrighted material.
By March 2000, 5 million copies of Napster had already been downloaded.e At
its peak, there were 70 million Napster users.f
While “music pirates” around the world embraced Napster, the Recording
Industry Association of America (RIAA), the trade group that represents the leading music business entities in the United States, grew increasingly alarmed. The
RIAA worried that the growing illegal trade of music would result in a loss of profits for its constituents—record labels that owned the rights to much of the popular
commercial music that was being traded online. The RIAA initiated legal action
against Napster and Napster users in an effort to take the service offline and
curtail illegal file sharing. This move was controversial for several reasons. Some
analysts believed that it would be difficult to fight a technological advance such
as this by legal action alone, and that the RIAA would not be successful unless it
offered a legitimate alternative for users who wished to purchase music online.
Other analysts took an even stronger stance, arguing that the record labels were
not only fighting to protect the rights of artists, but to protect a business model
that had become outdated.g They argued that the popularity of Napster was partially due to the rigid and overpriced traditional music distribution model, where
fans were forced to buy albums for prices that some felt were inflated, and did
not have the choice to buy individual songs. This was not the first time the entertainment industry had resisted a change in business models and was reluctant
to embrace a new technology. A 2001 article in The Economist pointed out that
“Phonographs were going to kill sheet music, the rise of radio threatened to
Chapter 9 Protecting Innovation 199
undermine sales of phonograph discs, video recorders were going to wipe out
the film industry, and cassette recorders spelt doom for the music business. . . . In
each case, their fears proved unfounded. The new technologies expanded the
markets in unprecedented ways.”h Some commentators believed that the new
technology could be beneficial for the recording industry. If harnessed appropriately, it could enable an inexpensive distribution method, as well as direct
intimate interaction with consumers that allowed for targeted marketing.
In 2001, Napster offered the RIAA a partnership that included a legitimate digital distribution model that would make online music available via a subscription
service. The RIAA declined, and instead continued to pursue a legal judgment
against Napster. In July 2001, the court ruled in the RIAA’s favor, and the Napster
service was taken offline. It was a blow to peer-to-peer fans worldwide.
Though the record labels had won the battle against Napster, they began to
realize the war was far from over. Services similar to Napster began to sprout up
online, offering “users in the know” the opportunity to continue pirating music.
The record labels continued to pursue legal action against peer-to-peer services and users who engaged in illegal file trading, while coming to terms with
the need to offer a legitimate alternative service. Subsequently, Warner Music
teamed up with BMG, EMI, and RealNetworks to introduce MusicNet, and Sony
Entertainment and Universal created Pressplay, both of which were subscription services that enabled individuals to download music legally from the Web.
However, in an attempt to control their music catalogs, the labels used proprietary file formats and severely limiting digital rights management (DRM) schemes
that confused users. Furthermore, neither service offered the breadth of selection offered by unauthorized peer-to-peer services such Kazaa or Gnutella. The
popularity of peer-to-peer music swapping continued to grow. The RIAA needed
a savior. Steve Jobs offered to be that guy.
iTunes Just in Time
On April 28, 2003, Apple opened its iTunes Music Store. After striking agreements
with the five major record labels (Sony, Universal, BMG, Warner Music Group, and
EMI), iTunes launched with an initial catalogs of 200,000 songs for purchase at
99 cents per song.i iTunes showed immediate signs of success, boasting 50 million
downloads within the first year, and quickly became the leading distributor of music
online.j Apple got the blessing of the recording industry after guaranteeing them
that the files offered via the Music Store would allow for protection against illegal
sharing thanks to the “FairPlay” DRM scheme. In essence, the iTunes Music Store
offered audio in two file formats—Advanced Audio Coding (AAC) and modified
MP3s. With Apple’s Fairplay DRM, song files could be loaded on up to five computers only, and could not be played on non-iPod MP3 players. In addition, the files
could not be e-mailed or distributed over the Web, and files were “hidden” on the
iPod through a subdirectory structure that made it difficult to copy songs from a
friend’s iPod. All of these features helped to prevent users from mass-distributing
songs to others, helping to ease the minds of record company executives.
The success of iTunes was fueled by a number of factors. The company
had a “cool” image that was attractive to the recording industry and users alike.
200 Part Two Formulating Technological Innovation Strategy
The company also used the familiar MP3 format, offered an attractive price tag
for online music, and its licensing agreements with all five major labels enabled
it to offer a one-stop source for customers. In addition, the FairPlay DRM was not
as restrictive as other competing formats,k and this was important to many users.
The success of iTunes was also accelerated by the success of Apple’s iPods.
iPods are hard-disk–based portable MP3 players that are well designed, well
marketed, and user-friendly. Though there had been some criticisms concerning their dependability (chiefly related to battery life)l and sound quality issues,m
casual music consumers took to these players in large numbers. To the appreciation of the RIAA, the iPods required synchronization with one’s music collection
via the iTunes application, thereby making it difficult to share music stored on the
iPod, or purchased from iTunes.
The recording industry had found a new channel of distribution that earned
significant revenues (about $0.70 of every $0.99 sale on iTunes is delivered
directly to the record labelsn), and Apple had licensing agreements with all the
major labels, which afforded Apple access to huge catalogs. Apple leveraged
these catalogs to entice users to buy music through its iTunes Music Store, and
this in turn helped drive sales of the Apple iPod, since files bought on iTunes
could not be played on rival MP3 players. Apple was well positioned, but threats
loomed on the horizon.
In March 2006, the French National Assembly approved a bill requiring Apple
to open its FairPlay DRM technology to industry rivals in France.o This meant that
Apple would have to allow songs downloaded from the French iTunes Music
Store to be played on non-iPod MP3 players, and that iPods would need to play
competing file formats, such as Sony’s ATRAC3 files purchased through the Sony
Connect online music store. Many users could appreciate this interoperability, yet
it would challenge the “single operator license model” that had eased the minds
of the recording industry and created a large and loyal customer base for Apple.
Initially analysts speculated that Apple would withdraw from the French market,
but instead Apple began working on negotiating fewer DRM restrictions from
the record labels. By March of 2009, Apple had convinced all the major labels
to permit their songs to be sold through iTunes without DRM. In return, Apple
adopted the tiered pricing model that the major labels had long requested.
The rise of smartphones that could hold users’ music digital libraries in addition
to offering a host of other useful functions helped to fuel the growth of digital music
sales. By 2011, digital music sales exceeded physical sales in both the United
States and South Korea, and by 2016 digital music sales exceeded physical music
sales in roughly half of the major music markets of the world.p However, an even
bigger transition was also changing the landscape of music. Rapidly growing services such as Spotify, Pandora, and Apple Music were now streaming music over
the Internet, enabling listeners to hear whatever music they wanted, whenever they
wanted, on a wide range of devices, without the user ever taking ownership of the
music. Though many had feared that a transition to streaming would be disastrous
to the recorded music industry, instead paid music streaming subscriptions fueled
record-setting market growth. In 2016, the global recorded music market grew by
almost 6 percent—the highest rate since 1997—to a total of US$15.7 billion.
Chapter 9 Protecting Innovation 201
Discussion Questions
1. What industry conditions led to the revolution in audio distribution described
above? Which stakeholders stand to benefit most (or least) from this revolution?
2. Why did the music stores created by the record labels fail to attract many subscribers? What, if anything, should the record labels have done differently?
3. What factors led iTunes to be successful?
4. How do you think a move away from owning music led to record-setting
music revenues?
a
Adapted from a New York University teaching case by Shachar Gilad, Christopher Preston, and Melissa
A. Schilling.
b
“Thomson Multimedia Signs 100th mp3 Licensee,” press release (PR Newswire), April 18, 2001.
c
Junko Yoshida, “Sony Sounds Off about Mini Disc,” Electronic World News, no. 41 (June 3, 1991), p.15.
d
Jack Schofield, “Music Definitions,” The Guardian, October 5, 2000, p. 3.
e
Karl Taro Greenfeld, “The Free Juke Box: College Kids Are Using New, Simple Software Like Napster to
Help Themselves to Pirated Music,” Time, March 27, 2000, p. 82.
f
Michael Gowan, “Easy as MP3,” PC World 19, no. 11 (November 2001), p. 110.
g
“The Same Old Song,” The Economist 358, no. 8210 (January 24, 2002), pp. 19, 20.
h
Ibid.
i
Michael Amicone, “Apple Took a Big Bite Out of the Market,” Billboard 116, no. 16 (April 17, 2004), p. 2.
j
“iTunes Music Store Downloads Top 50 Million Songs,” press release, March 15, 2004.
k
Ibid.
l
“Apple Faces Class Action Suits on iPod Battery,” Reuters, February 10, 2004.
m
Randall Stross, “From a High-Tech System, Low-Fi Music,” New York Times, July 4, 2004, p. 3.
n
Alex Veiga, “Recording Labels, Apple Split over Pricing,” Associated Press, April 2, 2006.
o
Rob Pegoraro, “France Takes a Shot at iTunes,” WashingtonPost.com, March 26, 2006, p. F06.
p
International Federation of the Phonographic Industry Global Music Report 2017.
OVERVIEW
A crucial element of formulating a firm’s technological innovation strategy is determining whether and how to protect its technological innovation. Traditionally, economics and strategy have emphasized the importance of vigorously protecting an
innovation in order to be the primary beneficiary of the innovation’s rewards, but the
decision about whether and to what degree to protect an innovation is actually complex. Sometimes not vigorously protecting a technology is to the firm’s advantage—
encouraging other producers (and complementary goods providers) to support the
technology may increase its rate of diffusion and its likelihood of rising to the position of
dominant design. In this chapter, we first will review the factors that shape the degree
to which a firm is likely to appropriate the returns from its innovation, and the mechanisms available to the firm to protect its innovation. We then will consider the continuum between a wholly proprietary strategy and a wholly open strategy, examining
the trade-offs inherent in decisions about whether (and to what degree) to protect or
diffuse a technological innovation. The chapter concludes by listing factors the firm
should consider in formulating its protection strategy.
202 Part Two Formulating Technological Innovation Strategy
APPROPRIABILITY
appropriability
The degree to
which a firm is
able to capture
the rents from its
innovation.
tacit
knowledge
Knowledge that
cannot be readily
codified or transferred in written
form.
socially
complex
knowledge
Knowledge
that arises from
the interaction
of multiple
individuals.
The degree to which a firm can capture the rents from its innovation is termed
appropriability. In general, the appropriability of an innovation is determined by how
easily or quickly competitors can imitate the innovation. The ease with which competitors can imitate the innovation is, in turn, a function of both the nature of the technology itself and the strength of the mechanisms used to protect the innovation.
Some technological innovations are inherently difficult for competitors to copy; the
knowledge underlying the technology may be rare and difficult to replicate. A firm’s
unique prior experience or talent pool may give it a foundation of technical know-how
that its competitors do not possess. If this knowledge base is tacit (i.e., it cannot be readily codified into documents or procedures) or socially complex (i.e., it arises through
complex interactions between people), competitors will typically find it very difficult to
duplicate.1 For example, a firm that has a team of uniquely talented research scientists
may have a rare and difficult-to-imitate knowledge base. While some of the skill of the
research scientists may be due to imitable training procedures, talent typically implies
that an individual (or group) has a natural endowment or ability that is very difficult,
if not impossible, to replicate through training. Furthermore, if the unique capabilities
of the research team arise in part from the nature of the interactions between the scientists, their performance will be socially complex. Interactions between individuals can
significantly shape what each individual perceives, and thus what each individual—and
the collective group—discovers or learns. The outcomes of these interactions are path
dependent, and thus are idiosyncratic to the combination of individuals, the moment of
the interaction, and the nature of the interaction. This means that knowledge can emerge
from the interaction of a group that could not be replicated by any individual or any
different group.
Many innovations, however, are relatively easy for competitors to imitate. Individuals and firms often employ legal mechanisms to attempt to protect their innovations.
Most countries offer legal protection for intellectual property in the form of patent,
trademark, copyright, and trade secret laws.
PATENTS, TRADEMARKS, AND COPYRIGHTS
patent
A property right
protecting a process, machine,
manufactured
item (or design
for manufactured
item), or variety
of plant.
trademark
An indicator
used to distinguish the source
of a good.
While patents, copyrights, and trademarks are all ways of protecting intellectual property, they are each designed to protect different things. 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 the Starbuck’s mermaid that are protected by trademark law, and software that is
protected by copyright (though as discussed later in the section on patents, many types
of software are now also eligible for patent protection).
The purpose of intellectual property protection is to provide recognition and incentive for creative work. Patents and copyrights, for example, provide a legal means for
individuals to protect their creative work and earn rewards from it, in exchange for
making the knowledge underlying their work public. Making this knowledge public is
important because it helps others to build upon that knowledge, driving technological
Chapter 9 Protecting Innovation 203
copyright
A property right
protecting works
of authorship.
and social advance. In absence of those protections, people might prefer to keep their
discoveries and inventions secret.
Patents
In many countries, inventors can apply for patent protection for their inventions. An
invention can be a product, such as a new type of battery, or a process, such as a new
way to manufacture bagels. In the United States, patents are categorized into different
types such as a utility patent for a new and useful process, machine, manufactured item,
or combination of materials; a design patent for an original and ornamental design for
a manufactured item; or a plant patent for the discovery and asexual reproduction of a
distinct and new variety of plant.
Each country has its own patent system with different requirements, and unless a
patent is filed under a regional patent office or an international treaty, the rights it is
granted are applicable only in the country in which the patent is filed.
To qualify for a patent, an invention must usually meet the following criteria:
1. It must be useful (i.e., it must produce a desirable result, solve a problem, improve
on or propose a new use for an existing development or show potential of doing so).
2. It must be novel (i.e., it must not already be patented or described in public literature, or be in public use for more than a year).
3. It must not be obvious (i.e., a person with experience or skill in the particular art
of the patent would not be expected to achieve the same invention with a normal
amount of effort).
In most countries, the discovery of scientific principles that pertain to natural laws
(e.g., gravity) cannot be patented because they are considered to have always existed.
Additionally, the following are not typically patentable:
?
?
?
?
?
Substituting one material for another (e.g., plastic for metal).
Merely changing the size of an already existing device.
Making something more portable.
Substituting an element for an equivalent element.
Altering an item’s shape.
Printed materials are not typically patentable, but it may be possible to protect them
by copyright, as discussed in the next section. Historically software algorithms were
not considered patentable, but in 1998, a U.S. Supreme Court case upheld a patent
on a computerized method of managing mutual funds that relied on software algorithms, unleashing a flood of patent applications for software. From 1997 to 2000,
patent filings in the United States for software-enabled methods of doing business
increased more than 700 percent.2 For example, Amazon patented its “1-click” system
that streamlines the process by which customers place orders.3
Patenting an invention is a serious undertaking. To apply for a patent, the inventor must explain how to make and use the invention, and make claims about what
it does that makes it a new invention. Drawings of the new invention are also often
required. In the United States, this application is reviewed by a patent examiner who
may modify the scope of the claims made by the patent. The patent is then published
204 Part Two Formulating Technological Innovation Strategy
FIGURE 9.1
Patent
Applications
in 2015 and
2016 in the 10
Largest Patent
Offices around
the World
Source: WIPO Patent
Statistics Database,
September 2017.
Australia
Canada
Russian Federation
India
Germany
European Patent Office
Rep. of Korea
Japan
United States
China
–
Patent applications 2016
500,000
1,000,000
1,500,000
Patent applications 2015
for a time in which other inventors can challenge the patent grant (if, e.g., they believe
that the patent infringes on previously granted patents). If the standards for patentability are met, the patent is then granted. The entire process from application to granting
is lengthy. For example, the time from filing to grant is between two and five years
in the United States, three and five years in Europe, five and six years in Japan, and
five and seven years in India. In industries in which product lifecycles are short, such
delays significantly diminish the usefulness of patenting. This has led to a number of
proposals for how the patenting system might be reformed to make it more efficient.
The number of patent applications being filed is growing around the world, but
nowhere faster than China, which had both the largest number of patent applications
in 2015 and 2016, and the largest rate of growth in patent applications (21.5 percent)
between 2015 and 2016 (see Figure 9.1).
A number of costs are also involved in filing and maintaining a patent. Fees vary
by patenting office. In the United States, the entire patenting process for a “small
entity” (e.g., an independent inventor, a small business, or a nonprofit organization)
costs around $1500 in filing fees (and roughly double that for large entities), and
$5000–$10,000 in attorney fees. In most countries, patent protection lasts for 20 years.
In a major study of historical success rates for U.S. patent applications, Michael
Carley, Deepak Hegde, and Alan Marco followed the history of the 2.15 million new
patent applications filed at the USPTO after 1996 and found that only 55.8 percent
of the applications became granted. Patent applications in the “Drugs and Medical
Instruments” sector had the lowest success on average (42.8 percent), and applications
in the “Electrical and Electronics” had the highest (66.6 percent). They also found that
success was generally lower for small firms and that overall, success rates for all types
of applications had gone down over time.4
Major International Patent Treaties
There is currently no “world patent,” and a patent granted in one country does not
automatically provide protection in other countries. In some regions, however, there
Chapter 9 Protecting Innovation 205
are regional patent offices (such as the European Patent Office and the Africa Regional
Intellectual Property Organization) that grant patents valid in all the member nations
of that program.
Significant differences exist in national patent laws. For example, in most countries, publication of information about the invention before applying for a patent will
bar the right to a patent, but the United States allows a one-year grace period (i.e., an
inventor can publish an invention up to a year before applying for the patent). Thus,
if international patent protection will eventually be sought, inventors must uphold the
stricter standard of applying for patent before publishing information about the patent, even if they plan to first patent the invention in the United States. Many countries
also require that the invention be manufactured in the country in which a patent was
granted within a certain time frame (often three years) from the time the patent is
granted. This is called the “working requirement,” and it effectively prevents inventors from patenting inventions in countries in which they have no intention of setting
up production.
Many inventors wish to patent their inventions in many countries simultaneously.
To make that easier, several international treaties have been negotiated between countries that seek to harmonize the patent laws around the world. Two of the most significant are the Paris Convention for the Protection of Industrial Property and the Patent
Cooperation Treaty.
The Paris Convention for the Protection of Industrial Property (also known as the
Paris Convention Priority) is an international intellectual property treaty adhered to by
177 countries as of March 2018. Under the Paris Convention, a citizen of any member
country may patent an invention in any of the member countries and enjoy the same
benefits of patent protection as if the inventor were a citizen of those countries. That
is, the Paris Convention eliminates (for its member countries) any differential patent
rights afforded to citizens of the country versus foreign nationals. Furthermore, the
treaty also provides the right of “priority” for patents and trademarks. Once an inventor has applied for patent protection in one of the member countries, the inventor may
(within a certain time period) apply for protection in all the other member countries.
The time period is 12 months for utility patents and six months for design patents and
trademarks. Most important, the applications to these later countries will be treated as
if they were made on the same date as the first application. This enables the inventor to
establish priority over any other patents applied for in those countries after the inventor made the first application. For example, if an inventor applied for a utility patent
for an invention in Madagascar in January 2003, and another inventor applied for a
patent for a very similar invention in France in June 2003, the Madagascar inventor
could have applied for patent protection in France in December 2003 and claim priority over the French invention. The French inventor would have to prove that his or her
invention was substantively different from the Madagascar invention, or the French
inventor’s patent would be denied.
As mentioned previously, in many countries, public disclosure of an invention
makes it impossible to subsequently patent that invention. However, with the priority
rights established under the Paris Convention, an inventor who patents an invention in
one of the member countries can then publicly disclose information about that invention without losing the right to patent the invention in the other countries—each patent
206 Part Two Formulating Technological Innovation Strategy
application will be treated as if it were applied for at the same time as the first application, and thus as if it were applied for before public disclosure. Without this treaty, it
would be nearly impossible for