First mover advantage provides competitive benefits even without patents
Dean Baker et al, 2017 - co-director of the Center for Economic and Policy Research in Washington “Innovation, Intellectual Property, and Development: A BETTER SET OF APPROACHES FOR THE 21st CENTURY.” https://cepr.net/images/stories/reports/baker-jayadev-stiglitz-innovation-ip-development-2017-07.pdf //DH
Indeed, there are some who suggest that the marginal cost of any patent protection exceeds the marginal benefit, at least in many industries. The earlier analysis which said that without patent protection firms would have no way of appropriating returns to innovative activity oversimplified the issue in many critical ways. The first mover - the inventor of a new product - has distinct advantages over successors. He can move down the learning curve, producing at a lower cost or refining the product in ways that make it more attractive to customers. Though there may be instances of ‘leapfrogging’, where a new entrant leapfrogs the first entrant, these are rare, and noteworthy because they happen so seldom. In some industries, the costs of patenting (including that associated with the disclosure requirements, which provides valuable information to rivals) exceed the benefits. These industries rely on trade secrets. (Dosi and Stiglitz, 201438 )