The impact of intellectual property rights on preserving the competitive advantage.
A case study of Apple Inc’s iPhones
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Word Count: 14,014
Abstract
The world today has rapidly developed into a services industry where knowledge is power. Knowledge provides means of acquiring newer technologies which then businesses can then use to create new products. In this context, IPRs become a valuable asset that firms can use strategically to lessen or prevent competition. IPRs are basically the legal rights given to the inventor/creator of the product/process such that the inventor can reap benefits of the invention by using/selling the invention solely for a defined period of time.
It is an established fact that the protection …show more content…
Since then, in the modern world the need of intellectual property was badly felt. Everything being in order it is, however, seen that the behaviour towards intellectual property in different regions in the world is different. For the sake of better implementation of IPR various countries have tied a knot between them under the International Convention of the protection for intellectual properties. In order to promote the idea of IPR at global level for the people, TRIPS agreement has played a vital role resulting in the better economic conditions and foreign trade. But in the developing countries there were some weak notions in the understanding of intellectual property which resulted in slowed down use of IPR …show more content…
In absence of the IPR, the companies may lack the motivation to allocate significant amount of resources to research and development as they may be unable to reap the benefits of their developed goods and services in an effective manner. Though the problem is observed at an worldwide level, China is seen to be the main defaulter with a vast majority of pirated goods. According to the United States International Trade Commission, IP intensive companies that conducted business in China in 2009 reported losses of approximately $48.2 billion in sales, royalties, or license fees due to IPR infringement in China. This estimate falls within a broad $14.2 billion to $90.5 billion range; the breadth of this range is explained by the fact that many firms were unable to calculate such losses. Of the $48.2 billion in total reported losses in 2009, approximately $36.6 billion (75.9 percent) was attributable to lost sales, while the remaining $11.6 billion was attributable to a combination of lost royalty and license payments as well as other unspecified