The Economics of Intellectual Property: A Review to Identify Themes for Future Research

This paper reviews the literature on the economics of intellectual property rights (IPR), with a particular focus on the main industrial property rights of patents and trade marks. Intellectual property rights arise from the legal protection accorded to certain inventions or creations. We begin with a review of studies of innovation and IPR incidence, including their relationship with market structure. Our second topic is the valuation of IPR, which has been attempted via cost-based methods and econometric studies of productivity and market value. The cost incurred in the enforcement of IPR is a growing practical concern, but the literature here is less rich than for valuation. Our fourth topic is the relationship between public science and industry, which has been evolving rapidly in recent years. We then examine policy for the promotion of IPR both in the domestic policy arena and in the international context of the TRIPS agreement. We conclude with a list of suggested questions for future research.