Lecturer: Kamal Saggi (Vanderbilt University)
Tpoic: The case for non-discrimination in the international protection of intellectual property
Time：June,18th, 15：30-17：00
Venue：Boxue 1120
Abstract:We evaluate the case for non-discrimination in the international protection of intellectual property. If trade is not subject to any barriers or frictions then requiring national treatment (NT) in patent protection does not have any consequences for innovation (and welfare) since, from the perspective of firms, unfavorable discrimination abroad is fully offset by favorable discrimination at home. In the presence of trade barriers, however, such international offsetting in patent protection is incomplete and innovation incentives are actually lower under NT. Furthermore, by introducing a wedge between the marginal benefit of foreign and domestic innovations, trade barriers make discrimination against foreign firms socially optimal. We extend the model to a three country setting and find that the formation of a free trade agreement (FTA) increases the effective global protection available to members without affecting the protection available to the non-member. Though such discrimination violates the most favored nation (MFN) clause, it makes all countries better o¤ by increasing innovation in FTA members. Coordination over patent protection between FTA members raises effective global protection for all countries.