Proprietary Technology

What is 'Proprietary Technology'

Proprietary technology is 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.

BREAKING DOWN '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. Proprietary Trading

    When a firm trades for direct gain instead of commission dollars. ...
  2. Information Management Technology ...

    Information management technology is the distribution, organization ...
  3. Medical Patent

    A legal protection against market competition that a government ...
  4. Proprietary Reverse Mortgage

    A loan that lets senior homeowners retrieve the equity in their ...
  5. Disruptive Technology

    A technology that significantly alters the way that businesses ...
  6. Patent Reexamination

    A process conducted by the U.S. Patent and Trademark Office (USPTO) ...
Related Articles
  1. Investing

    Understanding Proprietary Trading

    A firm engages in proprietary trading when it uses its own money to trade financial instruments in order to profit for itself.
  2. ETFs & Mutual Funds

    Mutual Funds: Brand Names Vs. House Brands

    Find out whether an in-house fund will serve you better than a major company's fund offerings.
  3. Investing

    Key Financial Ratios to Analyze Tech Companies

    Understand the technology industry and the companies that operate in it. Learn about the key financial ratios used to analyze tech companies.
  4. Markets

    Risks and Rewards of Biotech Companies

    We look at the risks and rewards of investing in biotech companies.
  5. Investing

    How To Do Qualitative Analysis On Biotech Companies

    These analytical methods will help you size up a biotech company and make a winning investment.
  6. Personal Finance

    Patents, Trademarks and Copyrights: The Basics

    The decision to pursue a patent, trademark or copyright depends on the type of intellectual property you’re trying to shield.
  7. ETFs & Mutual Funds

    IYW: iShares US Technology ETF

    Understand how the iShares US Technology exchange-traded fund (ETF) is managed, how it tracks its benchmark and for which investors it is most appropriate.
  8. ETFs & Mutual Funds

    3 Technology ETFs To Watch

    The CES show has investors interested in technology. We'll take a look at the chart of three technology ETFs to try and determine where they are headed.
  9. Markets

    Technology, The Biggest Threat For Big Banks

    Technology is the biggest threat to the future of big banks as we know them.
  10. ETFs & Mutual Funds

    The Top 5 Technology Mutual Funds for 2016

    Discover the benefits and risks with investing in the technology sector, and learn which technology mutual funds are worth considering for 2016.
RELATED FAQS
  1. What is the drugs sector?

    Learn more about the drug industry and how new drugs are brought to market. Find out about how drug research is financed ... Read Answer >>
  2. Can you realize capital gains on intangible property?

    Learn more about capital gains and losses and how they may apply to intangible assets. Find examples of intangible assets ... Read Answer >>
  3. How does government regulation impact the drugs sector?

    Learn about how drugs are regulated by the U.S. government as well as the role of the Food and Drug Administration during ... Read Answer >>
  4. What are the primary risks associated with investing in the drugs sector?

    Learn more about the primary risks facing investors in the pharmaceutical and biotechnology industries. Find out how regulation ... Read Answer >>
  5. How does the strength of the IPO market affect the drugs sector?

    Discover how the strength of the IPO market affects the drugs sector. A strong IPO market reflects healthy risk appetites ... Read Answer >>
  6. What factors make the drug sector good for value investing?

    Discover what makes the drugs sector good for value investing. The perfect ingredient for value investors is to find undervalued ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center