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Compulsory Licensing and Patent Protection: A North†South Perspective

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  • Eric W. Bond
  • Kamal Saggi

Abstract

In a stylised model involving a developing country (called South) and a foreign patent holder, we analyse whether and how the incidence and social value of compulsory licensing (CL) depends upon the South's patent protection policy. If South is free to deny patent protection, CL fails to arise in equilibrium and the option to use it makes both parties worse off. If South is obliged to offer patent protection, CL can occur and even yield a Pareto improvement. The ability to control price increases the South's incentive for patent protection as well as the likelihood of CL.

Suggested Citation

  • Eric W. Bond & Kamal Saggi, 2018. "Compulsory Licensing and Patent Protection: A North†South Perspective," Economic Journal, Royal Economic Society, vol. 128(610), pages 1157-1179, May.
    • Handle: RePEc:wly:econjl:v:128:y:2018:i:610:p:1157-1179
    DOI: 10.1111/ecoj.12434
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    Cited by:

    1. Morita, Hodaka & Nguyen, Xuan, 2021. "FDI and quality-enhancing technology spillovers," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    2. Eric W. Bond & Kamal Saggi, 2023. "Patent protection in developing countries and global welfare: WTO obligations versus flexibilities," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 22, pages 505-520, World Scientific Publishing Co. Pte. Ltd..
    3. Geng, Difei & Saggi, Kamal, 2022. "Tariff barriers and the protection of intellectual property in the global economy," European Economic Review, Elsevier, vol. 144(C).
    4. Carmine Guerriero, 2023. "Property rights, transaction costs, and the limits of the market," Economics of Governance, Springer, vol. 24(2), pages 143-176, June.
    5. Xuan Nguyen & Yuqing Xing, 2022. "Exporting independently or entering the global market as a contract manufacturer?," GRIPS Discussion Papers 22-04, National Graduate Institute for Policy Studies.

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