Question content area

Part $1$

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$$ rival's product and determine how it was produced. Patents are important when reverse engineering is easy.$$

In 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.

Part $2$

A$.$

The

chemicalchemical

industry relies on trade secrets more because their innovations are often copyrighted.

B$.$

The

computer chipcomputer$$chip

industry relies on trade secrets more because they use less marketing.

C$.$

The

computer chipcomputer$$chip

industry relies on trade secrets more because they have more$$ free$-$riders.

D$.$

The

computer chipcomputer$$chip

industry relies on trade secrets more because their innovations create externalities.

E$.$

The chemical industry relies on trade secrets more because they have less need for pate