Strengthening the Patent Regime: Benefits for Developing Countries - A Survey

Abstract

This paper reviews theoretical and empirical literature that originated predominantly during and after TRIPS, focusing on the influence of changes in patent protection on developing countries. Previous studies identify two channels of gain for developing countries, from strong patent rights. Firstly, the promotion channel whereby, patent rights affect innovativeness of the South and concomitantly its economic growth. Theoretical studies do not give unambiguous hypotheses concerning the influence of patent protection on domestic innovation leaving it for empirical investigation. The empirical studies vary in their approach and produce mixed results. Secondly, theory suggests that the patent rights of the South facilitate the transfer of technologies from the North, by means of trade, FDI, and licensing. With reference to the technology transfer, though empirical studies yield some positive results, however, the vintage of the technology and its appropriateness still remain unexplored. The paper concludes that though patent protection has been made exogenous to economy, the impact of the same is still dependent upon the relative financial realities of an individual economy.