Strategic Model of Intellectual Property Protection Across Nations (original) (raw)

Abstract In a two-country framework we study the strategic interacation between the gov- ernments regarding the choice of optimal patent policies and show that there always exist patent agreements that increase the welfare of each country. We then examine whether, in an optimal agreement, patent protection within each country will be dis- criminatory or uniform. On the assumption that countries are identical, we have shown that if cross-border imitation is perfect, the maximum welfare attainable under either regime is exactly equal. The positive marginal social gain from a uniformity clause arises only when imitation is imperfect. Keywords: Intellectual property rights; uniform protection; discriminatory protec- tion; research and development. JEL classifications: O31; O34; O38.