Proprietary Technology

AAA

DEFINITION of 'Proprietary Technology'

A process, tool, system or similar item that is the property of a business or an individual and provides some sort of benefit or advantage to the owner. Companies that are able to develop useful proprietary technologies in-house are rewarded with a valuable asset: they can either use it exclusively or profit from the sale of licensing of their technology to other parties.

INVESTOPEDIA EXPLAINS 'Proprietary Technology'

For example, let's say a biotech company successfully develops a new drug to treat a major disease. By patenting the process, method and end result of the drug, the company is able to reap substantial rewards from its efforts to develop its proprietary technology.

In some industries, proprietary technologies are a key determinant of success. As a result, they are guarded closely within a corporation and are protected legally by patents and copyrights.

RELATED TERMS
  1. Absolute Advantage

    The ability of a country, individual, company or region to produce ...
  2. Rate Of Adoption

    The number of members of a society who start using a new technology ...
  3. Visual Basic For Applications - ...

    A computer programming language developed by Microsoft which ...
  4. Crowdsourcing

    A method of acquiring news about current events. Crowdsourcing ...
  5. Non-Competition Agreement

    A legal agreement in which one party is restricted from working ...
  6. Comparative Advantage

    The ability of a firm or individual to produce goods and/or services ...
RELATED FAQS
  1. What are the elements of an effective value proposition?

    In the modern world’s ultra-competitive marketplace, a critical factor in determining the success of a company is how good ... Read Full Answer >>
  2. What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ... Read Full Answer >>
Related Articles
  1. Markets

    Intangible Assets Provide Real Value To Stocks

    Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value.
  2. Markets

    Buying Into Corporate Research & Development (R&D)

    Investors take note: companies that cut research and development are in danger of saving today but losing big tomorrow.
  3. Investing

    What is Equity Financing?

    Companies that are short on cash may need financing to pay for short-term needs or long-term capital expenditures.
  4. Investing

    The Production Possibility Frontier (PPF)

    A production possibility frontier (PPF) is a range of answers to the question, “What is our maximum production capacity?”
  5. Investing

    The Motley Fool vs. TheStreet: Which Is Which?

    Motley Fool and TheStreet.com provide financial news and other investment services, but each has unique traits that will appeal to different users.
  6. Investing News

    Millennial Investing Techniques Are Changing The Game

    Millennials are taking advantage of social media and a variety of high-tech tools to plow their wealth into investment vehicles of their choice.
  7. Professionals

    What are Core Competencies?

    Core competencies are the essence of what a company does well. A business uses its core competencies to make and develop products, goods and services according to its company mission. Core competencies ...
  8. Personal Finance

    Indeed vs. LinkedIn

    There are a large number of employment websites to choose from and not all of them operate the same way, making finding a job online both time consuming and difficult.
  9. Investing

    Which Is Better For Me: MarketWatch Or Bloomberg?

    As part of a series comparing popular finance websites, Investopedia conducts an unbiased review of MarketWatch and Bloomberg.
  10. Professionals

    Types of Business Guidance Funded by Government

    To access the right type of advice and support for your business from a variety of government-funded services, know what's out there and what you need.

You May Also Like

Hot Definitions
  1. Loan-To-Value Ratio - LTV Ratio

    A lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage.
  2. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  3. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  4. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  5. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  6. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
Trading Center