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Northern and Southern Patent Novelty Requirement Harmonization, Growth and Trade

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Author Info
Gilles Koléda

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Abstract

We study the incentive that governments have to protect IPR in a trading world economy, focusing on the patent novelty requirement and its effect on growth and trade. We consider a world economy with ongoing innovation in two regions. The North is assumed to have a higher wage than the South and a greater capacity for innovation, the South is assumed to have a larger population than the North. We introduce heterogeneity in innovation size together with the obligation, imposed by Patent Office inside each region, that innovation size must be higher than the patent novelty requirement. This patent characteristic stands to be a useable instrument to promote innovation and growth, and also a strategic trade policy instrument. We numerically determine the Nash equilibrium of the strategic game that results of the patent novelty requirement setting by each regional authority. We then compare, in terms of welfare, the non-cooperative equilibrium with the equilibrium that results from the patent novelty requirement harmonization, when the level of this common patent novelty requirement is set by a supra-regional organization.

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Publisher Info
Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c012_011.

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Length: 33 pages
Date of creation: Jun 2007
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Handle: RePEc:deg:conpap:c012_011

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Related research
Keywords: patent novelty requirement; innovation; growth; quality ladders; harmonization; North and South;

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Find related papers by JEL classification:
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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References listed on IDEAS
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    Other versions:
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  18. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring. [Downloadable!] (restricted)
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