This paper examines how multinational corporations (MNCs) protect their research and development (R&D) activities that are conducted in weak intellectual property rights (IPR) regime countries. Findings from a small scale survey and four case studies in China show that MNC R&D labs in China are innovating for the global market. Furthermore, a hierarchical modular R&D structure can be an effective way for MNC R&D labs to protect their intellectual property, and thus facilitate appropriation of returns in weak IPR regime developing countries.