Case Assignment #6 – LEGO Group
Henry Surya Jaya #57424103

Question 1: How much know-how should LEGO share with its tool suppliers? How practical is it in reality to prevent knowledge spillovers?

From the case, we learned that LEGO place an important value on ensuring the quality of its manufacturing process. Tool suppliers were selected by the LEGO on the basis of their patent position on the methods and reputation, and these suppliers undoubtedly played an important role in helping LEGO achieve better quality assurance. At the end of the day, these suppliers were the ones responsible to make all the tools necessary to build the LEGO products, hence information sharing between LEGO and their tool suppliers should be sufficient enough as not to limit the suppliers’ ability to make great tools. Unless LEGO could make tools on their own, it is almost impossible to prevent knowledge spillovers. Instead of worrying about potential steal of knowledge, LEGO could work to strengthen their relationship with their tool suppliers, which could ultimately lead to building trust. Preventing knowledge spillovers is hardly practical. Employees who left a company carried knowledge in their heads with them, so they posed a spillover risk, especially in the emerging market where loyalty to a firm was low and multiple companies set up manufacturing plants within small geographical regions. Even if it were possible, the cost would be really high. In this case, it might involved setting up a secret and highly isolated manufacturing plant where only certain people are allowed to have access and all bound by contract or some kind of agreement to disclose everything.

Question 2: How should the LEGO group protect their intellectual property of the molding platform? Focus on the trade-off between patenting, trade secrets and open disclosure. Obtaining a patent