Instructor’s Manual
ANSWERS TO OPENING CASE DISCUSSION QUESTIONS
1. What industry conditions lead to the revolution in
audio distribution described above? Which stakeholders
stand to benefit most (or least) from this revolution?
From the perspective of competitors in the recorded music industry (i.e.,
record labels), some of the industry conditions that lead to the audio
distribution revolution include:
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 ditierently?
The music stores initially created by the record labels only carried music from
those labels. This meant that consumers would likely have to visit multiple
music stores to purchase the range of music desired. Furthermore, since
consumers are often not versed in which labels produce the music of a
particular artist, consumers may have had a hard time tiguring out where to
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3. What factors led iTunes to be successful
Both the iPod and the iTunes store are inherently very imitable. Apple doesn’t
own the music it sells, making it reliant on other suppliers. A big part of their
current success stems from a) successful branding, and b) the network
4. What new models of music distribution have emerged,
and what do you think will influence whether they
endure?
Many students in class will likely already be enthusiastic users of Pandora
(akin to a personalized internet radio station where the customer puts in an
artist or song to “seed” a list, and the service serves up related artists/songs
that the customer tunes by clicking a “thumbs up” or “thumbs down” to
particular songs) or Spotify (which enables customers to stream specitic songs
ANSWERS TO DISCUSSION QUESTIONS
1. What are the differences between patents, copyrights, and trademarks?
All three are legal mechanisms to protect innovation, but they apply to different types of
goods and vary in the length of time they protect the item or process. Patents provide
property rights protecting a process, machine, manufactured item (or design for a
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Education
Instructor’s Manual
2. Consider a firm that is considering marketing its innovation in multiple
countries. What factors should this firm consider in formulating its protection strategy?
The important issue in attempting to develop a protection strategy that crosses national
boundaries is to have a clear understanding of whether or not the appropriate protection is
3. When will trade secrets be more useful than patents, copyrights or
trademarks?
Trade secrets are often useful when the item does not meet the requirements for protection
under another form. For example, a recipe would have to be protected by trade secret
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Instructor’s Manual
4. Can you identify a situation in which none of the legal protection
mechanisms discussed (patents, copyrights, trademarks, trade secrets) will prove
useful?
None of the mechanisms for protection will be effective when it is possible to “invent
around” a patent. If, for example, the functions of a technology can be reproduced without
5. Describe a technological innovation not discussed in the chapter, and identify
where you think it lies on the control continuum between wholly proprietary and wholly
open.
Students should come up with a variety of examples. The instructor can provide the example
of Dupont’s Teflon. Dupont patented the chemical discovery, polymerized
tetrafluoroethylene (PTFE) in 1941, and registered the trademark Teflon. Initially only
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Instructor’s Manual
6. What factors do you believe influenced the choice of protection strategy used
for the innovation identified above? Do you think the strategy was a good choice?
Most chemical products are straightforward to protect via patent, and the combination of the
patent and the trademark for the name Teflon seems to have been a very successful choice for
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Education