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This chapter explores the role of intellectual property rights in the process of soft innovation, and the extent to which the standard analysis is appropriate and can provide insight or requires modification. Analysis usually applied to patents is extended to copyrights, trade marks and design rights. The functioning of the UK (and European) IPR system is also discussed, as is the benefit of contestable markets.

This essay focuses on the impact of intellectual property rights (IPRs) on low- and middle-income countries’ health care. There are two different reasons why poor countries may not have access to needed vaccines and drugs. In the case of global diseases, such as diabetes or cancer, patents may hinder the diffusion of pharmaceuticals. In the case of neglected or tropical diseases, such as malaria, tuberculosis, and leishmaniasis, the corresponding vaccines or drugs are not developed because of low profitability due to the poverty of potential customers. The important role of compulsory licensing for low- and middle-income countries is discussed.

This essay focuses on the impact of intellectual property rights (IPRs) on low-and middle-income countries’ health care. There are two different reasons why poor countries may not have access to needed vaccines and drugs. In the case of global diseases, such as diabetes or cancer, patents may hinder the diffusion of pharmaceuticals. In the case of neglected or tropical diseases, such as malaria, tuberculosis, and leishmaniasis, the corresponding vaccines or drugs are not developed because of low profitability due to the poverty of potential customers. The important role of compulsory licensing for low- and middle-income countries is discussed.

This chapter offers a sort of roadmap for the analysis of the relationship between intellectual property right protection and industrial development. The general point is that all successful catching-up episodes occurred under condition of weak IPR regimes, allowing easier knowledge acquisition and imitation. Conversely, strong IPR regimes are strongly promoted by countries on the innovation frontier. Nowadays, the latter, and in particular the US, strategically use IP protection as a mechanism to protect the rent-generating potential stemming from the technological capabilities accumulated in their firms. This is a de facto industrial policy and an “anti-developmental” one, which ought to be matched by “pro-diffusion” policies in catching-up countries.

Considers the efficiency effects of intellectual property rights (IPR), with a focus on patent rights. Specifically, it examines the dilemma facing policy‐makers in fostering innovation: how to reconcile the restrictions that intellectual property rights impose on the use of innovations—to encourage their creation by knowledge providers—with society's interest in maximum use of innovative products. First discusses two types of efficiency—static and dynamic—and the different considerations for achieving them. It then examines how IPR can influence the balance between the two types of efficiency. Next, it considers the options available under the TRIPS (Trade‐Related Aspects of International Property Rights) Agreement to increase either or both. Finally, it discusses the possibility of compulsory licensing as a means of increasing static efficiency.

This chapter introduces some of the most salient aspects of the debate regarding the relationships between stronger intellectual property rights (IPRs) regimes, innovation, and development. Despite increased knowledge on the subject, little is known on the relationships between IPRs, innovation, and growth, especially as developing countries are concerned. It focuses on the pharmaceutical patenting activities in Brazil using domestic patent data. Firstly, it shows that the adoption of TRIPs had substantial positive impact on the number of patent applications in Brazil, but that the great majority of these new patent applications have come from nonresidents, most likely as extensions of foreign patents. It is too early to assess if this substantial increase in (foreign) patents is due to pipeline patents or if it will become a permanent characteristic of patenting activity in Brazil. Secondly, it shows the growth of the share of the chemical and pharmaceutical patents compared to other fields.

After reviewing the scope and intentions of the proposed WIPO development agenda, this chapter poses two general questions that might give observers pause about its ultimate implications, if adopted. The first is whether it is sensible for many developing countries, from the standpoint of ensuring access to international technology transfer, to resort to extensive use of such so-called “TRIPS flexibilities” as limitations on patent eligibility, compulsory licensing, working requirements, and unimpeded parallel imports. These policies may be effective components of domestic industrial policy in some development contexts. However, the nature of contemporary technology transfer and integrated production networks means that such limitations on intellectual property protection can reduce the attractiveness of local economies to the activity of international firms. Second, if the development agenda were to insist on significant derogations of IPR rules from TRIPS standards, the developed countries would expect some compensation in other forms of protection, such as harmonization of patent examination procedures and significant investments in IPR enforcement.

Research on the effects of patent protection on innovation and technology transfer in the cross-country pharmaceutical industry adds to our understanding of the underlying forces driving a country's innovation level. This chapter extends the research of Qian (2007) to evaluate the effects of patent reforms on inward foreign direct investment (FDI) establishments and imports in the pharmaceutical sectors. It also attempts to integrate all the findings on innovations, technology transfer, and international trade, and discusses potential policy implications. By thoroughly controlling the country covariates, through a combination of matched sampling techniques with fixed-effect panel regression models, the analyses arrive at robust results across the various model specifications. First, national pharmaceutical patent protection alone does not stimulate domestic innovation, as estimated by the US patent awards and domestic R&D. FDI establishments and pharmaceutical exports did not increase significantly either. Imports, however, did flourish. Second, national patent law implementation demonstrates conditional importance for innovation acceleration and technology transfer, conditional upon certain country variables. Third, terms of trade are likely to decline immediately upon the new implementation of IPR.

There is no “magic bullet” driving industrialization. The process of accumulation of technological and organizational capabilities does play a crucial role, as highlighted by the many contributions to this book. But such process has to be matched: first, by a congruent “political economy” offering incentive structures conducive to “learning-based” rent-seeking while curbing rent-seeking tout court; and second by a congruent macroeconomic management. Together, it is possible to identify some regularities in the ingredients and processes driving industrialization, including an “emulation philosophy” vis-à-vis the most promising technological paradigms; various measures safeguarding the possibility of “infant industry learning”; explicit policies of capability-building directed both at education and at nurturing and shaping specific corporate actors; a “political economy of rent-management” favourable to learning and industrialization, while curbing the exploitation of monopolist positions; measures aimed to foster and exploit a weak Intellectual Property Rights regime; and strategies aimed at avoiding the “natural resource course”. Further, the chapter discusses the opportunities and constraints associated with the current regimes of trade and IPR governance, and puts forward some basic building blocks of a proposed new pro-developmental consensus.

This introductory chapter lays out the premise for the rest of the book and suggests that industrial policies have been a fundamental ingredient of all development processes. The notion of “industrial policy” is understood here in a quite expansive manner. It comprises policies affecting “infant industry” support of various kinds, but also trade policies, science and technology policies, public procurement, policies affecting foreign direct investments, intellectual property rights, and the allocation of financial resources. The contributions to this book analyze from different angles the role played by industrial policies, in the foregoing broad sense, and by institution building within that great transformation leading from traditional, mostly rural, economies to economies driven by industrial activities (and nowadays also advanced services), able to learn systematically how to implement and eventually how to generate new ways of producing existing and new products under conditions of dynamic increasing returns. The preface pulls together the major threads linking the various chapters of the book, addressing on the grounds of different national and regional experiences the patterns of knowledge accumulation, its political economy, the related distribution of rents, the role of trade, competition and IPR policies; the impact of institutions supporting technological learning, and the interaction between macro policies and corporate behaviors.

China has committed itself to becoming an "innovation economy." This chapter examines the institutional arrangements that will most facilitate its accomplishment of that goal. This is especially important as China attempts to close the knowledge gap that separates it from more advanced industrial countries. Much of this chapter is devoted to intellectual property, but sees intellectual property as only one part of a country's innovation system—and a part that has often been overemphasized. Because China’s circumstances are markedly different from those of the United States and Western Europe, the dictums emanating from Western governments regarding a model IPR regime should be viewed with some skepticism. In fact, the IPR regime that dominates much of the world largely designed to maximize the profits of a few sectors that derive their returns from intellectual property rights rather than to either maximize innovation or the benefits that society derives from innovation. Such rights (like all property rights) are social constructions and must be adapted to the circumstances, history, and objectives of each country. China needs a development-oriented intellectual property regime. The chapter discusses what a development-oriented intellectual property regime might look like, and how various design features of the IPR regime affect the pace, efficiency, and direction of innovation. While intellectual property typically introduces a static inefficiency in the economy (both in the use of information and in the extent of competition), a poorly designed IPR regime can actually inhibit innovation, direct innovation in unproductive ways, and impose unacceptably high transactions costs. IPR needs to be seen as one component of a "portfolio," consisting also of government supported research and prizes, which together constitute a country's innovation system. The chapter argues that there should be greater emphasis on a prize system and less on the patent system. The chapter concludes with an analysis of some global perspectives on innovation and IPR, including an analysis of how the burden of financing the production of knowledge, viewed as a global public good, should be shared, and a critique of TRIPS, the intellectual property provision of the Uruguay Round trade agreement.

This chapter examines the trend in TRIPS-Plus provisions or the standards of intellectual property (IP) protection that are higher than what is required in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It analyses patents as a form of IP to show that a rotating cycle between bilateralism, regionalism, and multilateralism not only exists in free trade agreements (FTA) but also strengthens intellectual property rights (IPR) and the obligations of nations. It discusses the important areas that are being re-negotiated bilaterally with the introduction of every TRIPS-Plus provision.

This chapter first retrospects the evolvement of China’s IPR system with special emphasis on the patent system. Then by using the data both on national and firm level, it compares the different behaviors of foreign and domestic players under the same system. It also discloses the major patenting strategies implemented by multinationals and concludes that patent deployment of multinationals in China is mainly market-oriented and strategic. Through investigating the growth process of Huawei, it describes the complicated interactions between domestic firms and multinationals, which successively occurred on native and international markets, and influenced by institutional framework as IPR system. The main findings are: First, multinationals have done remarkably well by adopting a whole set of strategies in protecting their technologies while maximizing their business benefits. Second, while multinationals’ patenting in China has created some obstacles for local firms, it has also forced them to find new ways to innovate and develop their own capabilities.

The conventional wisdom regarding intellectual property rights and economic growth is that developing countries need stronger intellectual property rights to promote economic growth. Historically, developed countries took advantage of the lack of strong intellectual property rights laws to promote technology transfers and economic growth. But developing countries are under extreme political pressure not to follow this path. This chapter offers an empirical reassessment of the arguments favouring stronger intellectual property laws for developing countries. The research presented indicates that there is reason to question at least part of the assumed relationship between IPR and economic growth. Additional evidence suggests that IPR protection is not always enacted as part of sound economic policy, but rather as a result of political pressure.

This chapter analyzes business-government relations in a single Chinese county through the lens of IPR regulation. A focus on Zouping reveals the scope of variation that exists in business-government relations more than two decades after the introduction of policies regarding the separation of business and government. Three different ideal-typical models characterize business-government relations in Zouping: the Maoist model, where state and business are fused; the local developmental state model, where state financial and administrative resources are used to create the best possible environment for business; and the regulatory state model, where the relationship between the state and business is mediated by regulatory agencies, which are independent of the state and approach business as impartial referees. This variation within the same county with regard to IPR enforcement highlights one of the main themes of this volume, namely the coexistence of both continuity and adaptive change in Zouping.

This first chapter sets out the purpose of the book, which is to analyze the impact of diverse intellectual property rights (IPR) regimes on the process of development. The relationship between IPR and development has been viewed as a matter of concern over the last decade and a half. There are two reasons for this. Firstly, it has become increasingly noted that a gap in knowledge separates developed from developing countries, and that inappropriately designed IPR regimes can present an important impediment to closing the knowledge gap, and therefore to development. Secondly, the Agreement on Trade-Related Intellectual Property Agreements (TRIPS) of the Uruguay Round imposed a Western-style IPR regime on developing countries, one which many developing countries were concerned might impede their access to knowledge, and thus their development.

This final chapter summarizes some of the arguments of this book. As the global economy has increasingly become based on knowledge and innovation, the question of intellectual property rights (IPR) has become central to the debate on global economics. The interpretation that developed countries have a comparative advantage in innovation and knowledge production in a tough IPR regime is incomplete. This chapter outlines why.

This chapter offers three rationales as to why governments intervene in the product innovation process: the principle ‘more is better’; international comparisons; and market failure. Policy instruments are discussed in the light of earlier findings that firms that are innovative in one dimension tend to be innovative in others. The constraints to innovation (also touched upon in earlier chapters), institutional intellectual property rights and the optimality of their respective lives are discussed. A number of policies are then explored, with some consideration of potential attempts to transfer activities from competing economies and the potential to generate international disputes and reactions. Some policies may operate on the demand side, stimulating the use of product innovation in the domestic economy regardless of wherefrom they come. In these discussions design and creative activities as well as R&D are considered, as are innovations that are aesthetic and not just functional.

Apple iPhones do not use the standardized micro-Universal Serial Bus (USB) port but specialized ports for their proprietary Lightning connectors. However, in October 2018, Apple’s vice-president of hardware engineering John Ternus announced the switch to USB-C for the new generation of iPads from 2019. Apple iPhone is expected to follow suit. This marks the end to a long battle over port standardization for personal computers within the Institute of Electrical and Electronics Engineers (IEEE). The change came about due to a push from the European Commission for industry to agree on a universally proprietary free standard. This chapter documents how states have been increasingly involved in steering intellectual property rights (IPR) policies within standards-developing organization (SDO) fora. Civil society too has had a role to play from the stance of open source solutions to interoperability, albeit with less and varying degrees of success across the fora. The chapter focuses on how state pressure has counterbalanced historic corporate pressure for preserving patent protection.