A Case Study: Apple's Iphones

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LSM The impact of intellectual property rights on preserving the competitive advantage. A case study of Apple Inc’s iPhones . 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…
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 losses. IP –intensive industries play a key role in job creation with them accounting for nearly 20 per cent of all jobs in 2010 and which contribute to over a third of GDP. This is mainly because IP-intensive industries higher more educated workforce who have higher incomes and thus contribute more towards the trade and GDP at an overall level. Also,…show more content…
They are generally unable to prevent IP infringement or take legal action if the same occurs. Data on investigations initiated and completed by the U.S. ITC show that while small businesses represent 79.0 percent of all businesses in the U.S., they comprise only 10.5 percent of firms filing complaints regarding intellectual property infringement. Vast majority of firms, 78.9 percent, that request an investigation into the infringement of intellectual property are large and often public firms. This could be due to the inability of small firms to take legal recourse in case of IP infringement but it could also be indicative of the possibility that larger firms are more targeted in case of IP

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