In the name of TRIPS: The impact of IPR harmonisation on patent activity in Latin America

We analyse the effect of country-specific regulatory changes consistent with mandates included in the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement on patenting activities in Latin America (LA) with the aim of contributing to the ongoing debate on patent regimes, innovation and development. TRIPS implied tight negotiations between developed and developing countries. By analysing national legislation on IPR in 36 countries, we build a variable that captures when each country exhibits “the spirit of TRIPS”, which may occur before or after signing TRIPS. We follow two goals: i) to assess whether the impact of changing regulation was different in LA in contrast to developed countries; ii) to analyse specifically the impact on patent activities of residents and non-residents in LA in contrast to developed countries. Our results show that regulatory changes aligned with TRIPS increased patent activities in LA more than in developed countries, but only by non-residents. This is consistent with the political economy argument stating that the international agenda on intellectual property rights was pushed by large multinational corporations headquartered in developed countries as part of their globalisation strategies. Our results are also consistent with the economics of innovation literature that suggests that stronger patent regimes only have positive effects on innovation after some national income threshold is attained.