National patents, innovation and international agreements

Abstract

One of the most contentious issues arising from the Uruguay Round of trade negotiations was the attempt to harmonize patent policy. However, previous theoretical models have failed to provide a clear rationale for the coordination of patent policy, indeed they imply that world welfare may decline as a result of coordination. This paper argues that the conclusions of previous studies have been derived from definitions of patents that neglect to specify their duration. As a consequence, the monopoly distortion associated with patents has been overemphasized. In contrast, this paper models the choice of the hazard of imitation under a patent as a policy variable. This allows for a more detailed..