Patent protection in developing countries and global welfare: WTO obligations versus flexibilities

• 成果类型: Article
• 署名作者: Bond, Eric W.; Saggi, Kamal
• 署名单位: Vanderbilt University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2019.103281
• 发表日期: 2020
• 关键词: patent protection; Compulsory licensing; Exhaustion policies; imitation; TRIPS; QUALITY; welfare; WTO

摘要

This paper develops a North-South model to evaluate the South's incentive for patent protection when a Northern firm's investment in quality-enhancing research and development (R&D) is affected by its patent policy. The model is used to (a) evaluate the impact of requiring the South to fulfill its key WTO obligation of instituting patent protection and (b) to address the role of two major flexibilities that wro members enjoy with respect to their patent policies: the freedom to implement exhaustion policies of their choosing and the right to use compulsory licensing (CL) subject to certain stipulations. Two forces drive the model: how much the firm invests in R&D and whether or not selling in the South maximizes its global profit. CL improves consumer access in the South and can even raise innovation and global welfare. Provided the South implements patent protection, innovation and welfare are higher if the North follows national as opposed to international exhaustion. However, the South's incentive for patent protection is not necessarily stronger under national exhaustion. Not only is CL more likely to be used under international exhaustion, the welfare gain resulting from its application is also higher relative to that under national exhaustion. (C) 2019 Elsevier B.V. All rights reserved.