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Compulsory licensing and patent protection: a North-South perspective

Author

Listed:
  • Eric W Bond

    (Vanderbilt University)

  • Kamal Saggi

    (Vanderbilt University)

Abstract

In a stylized model involving a developing country (called South) and a foreign patent-holder, we analyze whether and how the incidence and social value of compulsory licensing (CL) depends upon the South's patent protection policy. If South is free to deny patent protection, CL fails to arise in equilibrium and the option to use it makes both parties worse off. If South is obligated to offer patent protection, CL can occur and even yield a Pareto improvement. The ability to control price increases the South's incentive for patent protection as well as the likelihood of CL.

Suggested Citation

  • Eric W Bond & Kamal Saggi, "undated". "Compulsory licensing and patent protection: a North-South perspective," Vanderbilt University Department of Economics Working Papers 16-00011, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:vuecon-sub-16-00006
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    References listed on IDEAS

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    9. Gene M. Grossman & Edwin L.‐C. Lai, 2008. "Parallel imports and price controls," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 378-402, June.
    10. Santanu Roy & Kamal Saggi, 2023. "Equilibrium parallel import policies and international market structure," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 15, pages 349-363, World Scientific Publishing Co. Pte. Ltd..
    11. Eric W. Bond & Kamal Saggi, 2017. "Bargaining over Entry with a Compulsory License Deadline: Price Spillovers and Surplus Expansion," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 31-62, February.
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    Cited by:

    1. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    2. Bond, Eric W. & Saggi, Kamal, 2020. "Patent protection in developing countries and global welfare: WTO obligations versus flexibilities," Journal of International Economics, Elsevier, vol. 122(C).
    3. Senra de Morais, Rafael Pinho, 2017. "Compulsory licensing of pharmaceuticals by the developing south," Economics Letters, Elsevier, vol. 161(C), pages 74-77.
    4. Carmine Guerriero, 2023. "Property rights, transaction costs, and the limits of the market," Economics of Governance, Springer, vol. 24(2), pages 143-176, June.

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    More about this item

    Keywords

    Patented Products; Compulsory Licensing; Imitation; TRIPS; Quality; Welfare.;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F2 - International Economics - - International Factor Movements and International Business

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