International Protection of Intellectual Property
Gene Grossman, Edwin L.-C. Lai
NBER Working Paper No. 8704
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.
Published: Grossman, Gene M. and Edwin L.-C. Lai. "International Protection Of Intellectual Property," American Economic Review, 2004, v94(5,Dec), 1635-1653.