Abstract: In the service industry, most product or service innovation lacks the protection of property rights and the existence of imitating cost. When an enterprise makes any innovation, other enterprises will make instantaneous imitation, thus the enterprise is deficient of incentives to carry out product innovation. Based on the game theory, this paper studies the enterprise innovation at the levels where the innovation products are imitated by the imitating enterprises instantaneously or hysteretically and we have the conclusion that on the condition where there is no property right protection, if the innovator's sales speed is faster than the imitator's imitation speed, it is favorable for the innovation, and if it takes the imitators longer to make the imitation, it is also favorable for the innovation.

Key words: unprotected property rights, innovation, imitation