The Impacts of Intellectual Property–Related Preferential Trade Agreements on BilateralPatent Applications

Intellectual property rights have become a central emphasis in the negotiation of “deep”preferential trade agreements containing provisions on regulatory environments besides trade policy. Theseprovisions typically require member countries to implement heightened standards on various aspects of intellectualproperty rights, such as coverage and enforcement, that go beyond the baseline requirements of internationalintellectual property rights agreements such as the World Tarde Organization’s Trade-Related Aspects of IntellectualProperty Rights agreement. This study implements a structural gravity framework to investigate empirically theimpacts of these agreements on bilateral international patenting, to quantify the effects of countries’ membershipin intellectual property–related preferential trade agreements on within-agreement patent applications atnational patent offices, as well as extra–preferential trade agreement patenting at member country destinationsoriginating from non-member countries. The study further explores the heterogeneity of these effects as originatingfrom the attributes of the agreements, such as whether the major partner in the agreement is the United States or theEuropean Union/European Free Trade Association, and the presence of key “Trade-Related Aspects of IntellectualProperty Rights–Plus” provisions in the agreement texts. The findings suggest that intellectual property rights standardsin preferential trade agreements tend to generate positive impacts on international patenting, and that the specificfeatures of the agreements give rise to significant disparities in these impacts. Most intriguing is that thoseagreements involving multiple Trade-Related Aspects of Intellectual Property Rights–Plus norms significantlyincrease patenting within members compared to patenting from outside those areas, while other types of intellectualproperty rights encourage more patenting from non-members.