In the name of TRIPS: The impact of IPR harmonisation on patent activity in Latin America

ARZA, VALERIA; LÓPEZ, ANDRÉS; MONTES-ROJAS, GABRIEL; PASCUINI, PAULO

RESEARCH POLICY

NORTH-HOLLAND

Lugar: Amsterdam; Año: 2023

0048-7333

We analyse the effect of country-specific regulatory changes consistent with mandatesincluded in the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement on patenting activities in Latin America (LA). TRIPS constitutes a major milestone in terms of international harmonisation of intellectual property rights (IPR) and implied tight negotiations between developed and developing countries. Developed countries claimed that weak IPR regimes in developing countries were a barrier for legitimate trade and looked for expanding patent opportunities for their global corporations, while at the same time argued that strong patent regimes could promote innovation in emerging nations. In contrast, developing countries feared that stronger patent regimes, among other negative impacts, could slow technologicaldevelopment by constrainingopportunities tocopy and adapt foreign technologies, and would prevent them fromfollowingthe trajectories of other countries that in the past had used those opportunities for building innovation capabilities that later on allowed them to profit from strongerpatent regimes.By analysing national legislation on IPR in 36 countries, we builda variable that captures when each country exhibits“the spirit of TRIPS”. This allows us to assess the impact of paradigmatic TRIPS requirements on patenting activities in order to contribute to the ongoing debate around theconflicting views on the relation between patent regimes, innovation and economic development. We follow two goals: i) to assess whether such impact was different in LA in contrast to developed countries; ii) to analyse specifically the impact on patent activities of residents and non-residents in LA in contrast to developed countries. Our results show that regulatory changes aligned with TRIPS increased patent activities in LA more than in developed countries, but only by non-residents. This is consistent with the political economy argument stating that the international IPR agenda was pushed by large multinational corporations headquartered in developed countries as part of their intellectual property globalisation strategies. Our results are also consistent with the economics of innovation literature that suggests that stronger patent regimes only have positive effects on innovation after some income threshold is attained.