Strategic Management: Formulation and Implementation

Methods Of Protecting Technology

There are legal and managerial approaches to protecting technology. Legal means include patent, trademark, copyright, and contracts.

The appropriate strategy depends on the type of technology. If the knowledge possessed by the firm is a manufacturing process that produces a new product, that process and the product can be protected with a patent in most countries. If the knowledge is embodied in a book or manual that can be sold, then a copyright will protect the document against copying, though the knowledge itself will need patent protection as well. If the knowledge is embodied in the product, and it implies a high standards of quality or service, then often a trademark can be obtained for protection.

Other methods for protecting technology include hiding if from competitors. This strategy work especially well when the key aspect of technology is simply to understand but embodied in the product in a complex manner. Then, unless competitors can obtain the "formula" for using the technology, the proprietor can preserve its advantage. Another method is to require employees developing new products to sign a contract prohibiting their use of the new technology outside the firm, so that they cannot leave the proprietor firm and use their knowledge of the new technology to compete against it.

Despite the methods of protection discussed above, there are still many situation in which adequate protection may not available. For example, Hong Kong, South Korea, Singapore, and Taiwan are notorious form producing imitations of branded, patented, copyright, and otherwise protected products.

A problem with multinational firms in particular have to deal is the difference in rules on technology use and technology transfer in different country.