Great expectations : Learning the boundaries of design rights

Abstract

We present a case study of an increase in design right filings and concurrent design right litigations in an industry that previously had little experience of design right protection. The motives for and outcomes of filing, and how these changed over time are discussed. We go on to explore the events, which offered the decision makers opportunities to update their beliefs about the scope of design right protection. We find that filing motives changed from specific protection goals to freedom to operate over time. We also find that the actors faced several, but sometimes contradictory, learning opportunities. There are two types of learning relating to the usage of design rights: 1) learning the initial scope of protection and 2) learning the dynamism of scope that results from the growing number of designs in the product category. The evidence suggests that the scope of existing design rights is negatively affected by new design right grants. Our findings highlight the essential role of belief formation and updating in innovation activity and intellectual property rights-based competition. We conclude that uncertain design rights and information asymmetries may have fostered entrepreneurial optimism.