I analyse a differential duopoly game where firms, through capital accumulation over time, supply vertically differentiated goods. I show that (i) the instantaneous RD effort of the high quality firm is larger than the low quality firm's, and therefore (ii) there are quality ranges such that, in proximity of the steady state, the low quality firm's profits are larger than the high quality firm's; (iii) the optimal quality ratio is 4/7, as in the static model by Choi and Shin (1992).