In a model of sequential patent races, it is examined whether or not introducing a patent law in the home country is beneficial to the firms and the society as a whole given the foreign country already offers patent protection. Before the first patent race starts, the firms and the foreign...

When the home country introduces a patent law after the winner of the patent race is known the country's welfare may rise only if the domestic firm wins. If the home country decides before the patent race ends, the welfare may be increased when the probability that the domestic firm wins is...