For trade secrets to effectively protect intellectual property, it is important

Question

For trade secrets to effectively protect intellectual property, it is important that the innovation cannot be easily reverse engineered, a process by which a firm can take a riva's product and determine how it was produced. Patents are important when reverse engineering is easy n the chemical business, firms try to develop lower-cost processes for producing chemical products, but the chemical product itself does not change. Therefore, examining the product does not reveal the new process, so reverse engineering is not feasible. With a computer chip, on the other hand, the innovation is embodied in the chip so rivals can copy the chip. Which industry would you expect to rely more on trade secrets than patents for intellectual property protection? Explain briefly O A. B. C. D. O E. The computer chip industry relies on trade secrets more because they have more free-riders. The chemical industry relies on trade secrets more because they have less need for patents. The chemical industry relies on trade secrets more because their innovations are often copyrighted. The chemical industry relies on trade secrets more because they use less marketing. The computer chip industry relies on trade secrets more because their innovations create externalities.

Explanation / Answer

C. The chemical industry relies on trade secret more because their innovations are often copyrighted.

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