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Compulsory licensing, price controls, and access to patented foreign products

  • Eric Saggi


    (Department of Economics, Vanderbilt University)

  • Saggi Saggi


    (Department of Economics, Vanderbilt University)

Motivated by existing multilateral rules regarding intellectual property, we develop a North-South model to highlight the dual roles price controls and compulsory licensing play in determining Southern access to a patented Northern product. The Northern patent-holder chooses whether and how to work its patent in the South (either via entry or voluntarily licensing) while the South determines the price control and whether to issue a compulsory license. The threat of compulsory licensing benefits the South and also increases global welfare when the North-South technology gap is significant. The price control and compulsory licensing are complementary instruments from the Southern perspective.

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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 12-00006.

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Date of creation: 07 Mar 2012
Date of revision:
Handle: RePEc:van:wpaper:vuecon-12-00006
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