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Proprietary technology is a system or process developed by a specific business entity that can be used internally or to gain a market advantage. It is closely guarded and can be patented, copyrighted, or trademarked to prevent unauthorized use by competitors. The pharmaceutical industry is a prime example of proprietary technology.
Proprietary technologies are any type of system, tool or technical process developed by and for a specific business entity. Technologies of this type are often developed as part of a company’s ongoing research efforts, but they can also result from the ingenuity of employees in positions not directly related to the research and development effort. In any case, the ideas developed and submitted by employees are generally considered the intellectual property of the employer, thus allowing them to qualify as proprietary technology.
It is important to note that proprietary technology can be developed for exclusive use within the company or be used to create a product that gives the company an absolute market advantage. For example, if a company develops a specific formula for a cleaner that uses ingredients not used by similar products, it is likely that a new cleaner would allow the company to capture additional market share, based on the uniqueness of the formula. Since the formula uses ingredients that are unique in the industry, it would be possible to patent the formula and thus hold the proprietary rights to the use of that formula.
In general, proprietary technology developed for use internally or for sale to customers is closely guarded. Only company officials who need to know the details of the technology will have access to the details of the technology’s process or development. In addition to internal security measures, it is not uncommon for the company to apply for copyright, patent, and other legal registrations that effectively prevent any other entity from using the technology, without the express permission of the technology owner.
Many companies in different industries own the proprietary technology. One of the best examples is the pharmaceutical industry. Many pharmaceutical companies develop new drugs for use with specific diseases. Patents are obtained on such drugs, as well as trademark copyrights, essentially giving the companies proprietary rights to both the use of the formula and the chemicals and trademarks of the drugs. A company can then determine whether to market a drug exclusively or to allow other companies to manufacture the drug in generic form, using information provided by the patent holder. In both cases, the owner of the technology benefits from exclusive rights and control of the proprietary product and effectively prevents unauthorized use of the proprietary technology by competitors.
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