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Lecture notes Capturing Value from Innovation
- Instelling
- Rijksuniversiteit Groningen (RuG)
This document contains all lectures for the course Capturing Value from Innovation.
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CVFI lecturesCapturing value from innovation - lectures
Lecture 1 - Introduction to Value Appropriation 1
Lecture 2 - Value appropriation and Teece 5
Lecture 3 - Creating and capturing value in two-sided platform settings 12
Lecture 4 - Value appropriation in the entertainment industry 15
Lecture 5 - Open vs. closed business models 21
Guest lecture Teddy 26
, CVFI lectures
Lecture 1 - Introduction to Value Appropriation
Value creation = the ability of innovators to create value with their innovations to stakeholders
Value appropriation = the ability of innovators to capture the value of their innovations
A firm that introduces something that is new to the market:
Innovation = when no identical or similar products have been introduced at an earlier date by
other firms operating in the same industry
Imitation = when competitors copy the innovator (without consent), even though it is something
new for them
Diffusion = the adoption of an innovation
Two sides can be adopted:
- By buyers: buyer diffusion
- By competitors: seller diffusion
- May be initiated and stimulated by the innovator (dissemination)
- May be deterred or prevented by the innovator (prevention of imitation)
Direct and indirect network effects: utility increases with more adopters and users. Strategy:
increase the pie, then share the pie.
Intellectual property rights (IPP) and legal protection mechanisms
Intellectual property (IP) = a legal field referring to creations of the mind such as musical,
literary, and artistic works; inventions; and symbols, names, images, and designs used in
commerce
Examples of IP:
- Copyrights = creator of artwork gets exclusive rights to control its distribution for a
certain time period
- Trademarks = a distinctive sign which is used to prevent consumer confusion among
products in the marketplace
- Patents = protection for a new, useful, and non-obvious invention, in exchange of public
disclosure
- Related rights = e.g. trade secrets
The holder of the IP has certain exclusive rights (rights to distribute, copy, exclude others from
producing) to the creative work, commercial symbol, or invention by which it is covered.
Copyrights
Copyright = gives the owner of a document, musical composition, book, or other piece of
information, the right to decide what others can do with it. Copyrights are exclusive rights to use
or authorize others to use the work on agreed terms.
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, CVFI lectures
- Application: automatically granted / no need to register
- Copyright only covers works that are a form of material expression: recorded
compositions, not just a song in your head
- Duration: limited
- Lasting 70 years after the author’s death
- Or 70 years after first publication, if the author is an organization
- Expectations to copyright:
- Fair use/citation
- Private copy
- Educational use
- Parody
- Reselling legal copies (first-sale doctrine)
Examples: writings, music, drawings, dances, computer programs, architectural buildings,
movies and also databases. Not included: ideas, concepts, principles, brute facts, and tacit
knowledge
Trademarks
Trademark = a distinctive sign used by an organization to identify that its products/services
with which the trademark appears originate from a unique source of origin in order to distinguish
its products/services from competitors
™ = trademark
® = registered trademark
- Examples: name, word, phrase, logo, symbol, design, image, audible sign, or a
combination of these elements can be trademarked
- Application: not required to register (™), but is possible at federal offices/trademark
centers ®. Owner must show that the mark is not likely to be confused with other
trademarks for items in the same general class. In lawsuits, organizations need to prove
that they have invested in the trademark.
- Trademarks can last indefinitely as long as the are used in commerce
- Costs of application and renewal, and legal action
Patents
Patent = a set of exclusive rights granted by a state to an inventor for a fixed period of time in
exchange for a disclosure of an invention. Protection of the idea itself in a certain area for a
given time (e.g. max 20 years)
- Types:
- Utility patents = protects the functionality of a given item
- Design patents = covers the ornamental design for an object, including designs
of beverage containers, furniture, computer icons, industrial designs
- Plant patents = protects distinct and new variety of plant
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