Patents, appropriate technology, and North-South trade

In this paper, the authors discuss the possibility that the North and South may have differing technological needs. Just as the North would like to develop drugs against cancer and heart disease, and the South drugs against tropical disease, so the North's labor saving innovations are less useful in the South, where labor is cheap. Southern patents might promote the development of technologies appropriate to the South that might not have been developed if there were no patents. In this case, lower patent protection in the South would not benefit the South and increased patent protection in the South can hurt the North when the resources to go into R&D are limited. The authors develop a formal model for inteellectual property rights, emphasizing the dimension of technological choice. This model allows for a continuum of potential technologies, with a range of preferences in the North and South; free entry in the R&D sector rather than duopolistic competition; and gradations of patent protection. The report concludes by reviewing the results of the analysis.