Working Paper: CEPR ID: DP3118
Authors: Gene Grossman; Edwin L.C. Lai
Abstract: We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size, in their capacities for innovation and in their absolute and comparative advantage in manufacturing. We associate the strength of IPR protection with the duration of a country?s patents that are applied with national treatment. After describing the determination of national policies in a non-cooperative regime of patent protection, we ask, ?why are patents longer in the North?? We also study international patent agreements by deriving the properties of an efficient global regime of patent protection and asking whether harmonization of patent policies is necessary or sufficient for global efficiency.
Keywords: harmonization; intellectual property; patents; TRIPS
JEL Codes: F13; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher wages (J39) | longer patents (O34) |
| market size (L25) | marginal costs and benefits of patent extensions (D45) |
| longer patents in the north (O34) | patent lengths in the south (K11) |
| Nash equilibrium patent lengths (D45) | longer patents in the north (O34) |
| optimal patent length (O34) | independent of market size in a closed economy (E10) |
| optimal patent length (O34) | affected by relative sizes of markets in an open economy (F41) |