Industry rivalry is affected by competitive advantages gained by focusing on a sustained development of new technologies.
Firms gain competitive advantages and influence industry rivalry by focusing on protecting innovative product and process technologies and excluding competitor access to patented products and methods.
IP protection ensures that competitive advantages are not easily eroded by plagiarism and copying of successful products.
Rivalry as well as threats of new entrants and substitutes arise with the development of new technologies.
For example, novel medicaments having greater efficacy or fewer undesirable side-effects will continue to drive industry competition in the pharmaceutical industry. Different dosage regimens or methods for treatment of diseases by alternative and more convenient routes of administration also influence industry rivalry.
Manufacturing firms may want to focus on IP protection for certain compounds needed for manufacturing a patented product. Likewise, patent claims directed to selected uses of patented products generate brand recognition and influence buyer power.
Patents are important for gaining and sustaining competitive advantages when new technologies play a significant role in determining industry rivalry.