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National patents, innovation and international agreements


  • Phillip McCalman


One of the most contentious issues arising from the Uruguay Round of trade negotiations was the attempt to harmonize patent policy. However, previous theoretical models have failed to provide a clear rationale for the coordination of patent policy, indeed they imply that world welfare may decline as a result of coordination. This paper argues that the conclusions of previous studies have been derived from definitions of patents that neglect to specify their duration. As a consequence, the monopoly distortion associated with patents has been overemphasized. In contrast, this paper models the choice of the hazard of imitation under a patent as a policy variable. This allows for a more detailed analysis of the determinants of patent policy in an international context, and isolates two externalities when countries set patent policy independently. These externalities arise from a free-riding incentive (policy competition) and the international spillovers from an innovation. Since these considerations influence the patent strength in both developed and developing countries, patents set on a national basis are inefficient from a global perspective. This provides an economic rational for international coordination of patent policy.

Suggested Citation

  • Phillip McCalman, 2001. "National patents, innovation and international agreements," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(1), pages 1-14.
  • Handle: RePEc:taf:jitecd:v:11:y:2001:i:1:p:1-14
    DOI: 10.1080/09638190110093136

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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, vol. 94(5), pages 1635-1653, December.
    2. Anja Breitwieser & Neil Foster-McGregor, 2012. "Intellectual Property Rights, Innovation and Technology Transfer: A Survey," wiiw Working Papers 88, The Vienna Institute for International Economic Studies, wiiw.
    3. Linda Cohen, "undated". "Patented drugs, generic alternatives, and intellectual property regimes in developing countries," American Law & Economics Association Annual Meetings 1066, American Law & Economics Association.
    4. Schäfer, Andreas & Schneider, Maik T., 2015. "Endogenous Enforcement Of Intellectual Property, North–South Trade, And Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 19(05), pages 1074-1115, July.


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