Add to ORKGRecent models of multi-stage R&D have shown that a system of weak intellectual property rights may lead to faster innovation by in-ducing firms to share intermediate technological knowledge. In this article I introduce a distinction between plain and sophisticated tech-nological knowledge, which has not been noticed so far but plays a crucial role in determining how different appropriability rules affect the incentives to innovate. I argue that the positive effect of weak in-tellectual property regimes on the sharing of intermediate technologi-cal knowledge vanishes when technological knowledge is sophisticated, as is likely to be the case in many high tech industries. ∗I am very grateful to Vincenzo Denicolò, Patrick Rey and to partic...