Use Design Choices to Prevent Imitation

Adding or removing design elements to your innovations can help protect intellectual property.

- By Samuel C. MacAulay and Dmitry Sharapov

WHY WOULD AN INVENTOR like Charles Babbage insert deliberate errors into the blueprints of the world’s first computer? And why did Apple mislabel early iPhone prototypes as iPods? Actions like these may not seem intuitive but are in fact central elements in an innovation strategy that has long flown under the radar.

Babbage, like many inventors since, was concerned about a rival gaining access to his blueprints and foreclosing his first-mover advantage. By adding errors to his blueprints, Babbage ensured that any competitor that obtained them would struggle to imitate his design.¹ Similarly, Apple’s deliberate mislabeling of iPhone prototypes as iPods reduced the likelihood of the groundbreaking innovation being leaked before launch, which could have hurt the company’s ability to profit from it.

Managers often mistakenly assume that the knowledge underlying an innovation is something that is inherently imitable or inimitable. However, the above cases are examples of innovators proactively using design to manipulate the imitability of knowledge. This approach dramatically widens the scope for managerial choice in crafting an innovation strategy. More choice is critical in a world where the losses from intellectual property theft have reached dizzying heights — including an estimated $600 billion annually in the U.S. economy alone — and legal mechanisms for profiting from innovations are weakening.²