There is growing interest in improving the performance of SMEs’ innovative activities inKorea. It is widely accepted that SMEs have to utilize various external sources of innovationdue to their limited internal resources. However, there has been few systematic empirical studieson the effects of incoming knowledge spillover, technological collaborations, appropriabilitymechanisms on the innovation performance. We have analysed 117 Korean SMEs (KIS 2010 data) to uncover the relationship betweenthese factors and innovation performance, especially focusing on the moderating effects ofpatent activities. Main empirical findings are as follow. First, vertical collaboration networkappear to have a positive effect on the innovation performance while the network with partneroutside of the supply chain shows a negative impact. Second, the strategic appropriabilitymechanisms appear to show a significant positive impact on innovation performance. Third,patent activities exhibit two significant moderating effects; it shows a negative moderatingeffect on the relationship between vertical collaboration and innovation performance, and itshows a positive one on the relationship between incoming knowledge spillover and innovationperformance. The results suggest that SMEs need to develope different technological collaboration strategiesaccording to types of their partners. Strategic appropriability methods can be used moreeffectively than patent to appropriate the innovation outputs. Additionally, it suggests that patent activities can have negative impact on technological collaboration network in some case,especially when it deals with commercially sensitive information with vertical partners. Finally,patent activities can affect(or reflect) the firm's knowledge management capability, which isessential to make use of incoming knowledge spillover to innovation performance. All of thesefindings can provide important practical implications to the Korean SMEs's innovation strategies.