Answered: competitiveness of ABC’s machines in…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

ABC’s machinery contains some high-technology components developed in Canada by ABC. ABC registered its patents and designs in Canada and the U.S. ABC’s Chief Technology Officer, Bill, is concerned that Chinese buyers of ABC’s machines can possibly copy the designs and use them to start manufacturing their own equipment. What is the best choice of action for Bill to preserve the competitiveness of ABC’s machines in China?

A.Do nothing else—registering ABC’s patents and designs in the U.S. will provide protection in China because of extraterritorial application of U.S. intellectual property protection laws.

B.Sell old versions of ABC’s machines to China, because even if Chinese customers reverse engineer ABC’s equipment, they will not get access to ABC’s latest technology.

C.File patents for ABC’s technology and register ABC’s industrial designs in China to obtain protection for ABC’s intellectual property locally and be able to pursue the infringers.

D.Leave the Chinese market. The risk to ABC’s intellectual property is not worth the opportunities in the Chinese market.