Abhatoo - Centre Nationale de Documentation

This paper examines the relationship of a firm's strategic framework and its business environment with the probability of becoming the target of product piracy. Using survey data, we empirically examine the role of firm's intellectual property protection strategy, its general strategic business alignment and factors exogenous to the individual firm. Furthermore, we discuss mechanisms of piracy and analyze how business operations induce “enabling” and “signaling” effects and how these influence the likelihood of bein illegally imitated. We find that firmexogenous factors (e.g. industry characteristics) are an important determinant and that successful protection strategies should show a strong complementary relationship between IP strategy and general business strategy. Paradoxically, “enabling” factors (such as information disclosure in patent documents) have a stronger effect on the counterfeiting of labels and brands than on the imitation of technological components. Market signals induced by trademark registrations or high research intensity equally affect both types of product piracy. Management implications for successful strategies against product piracy and counterfeiting are derived.