Over the last two decades, the proportion of goods’ value which can be attributed to intellectual property has increased significantly. As a result, the international protection of intellectual property has become a major issue for those involved in the creation of intellectual property. The negotiation of the Agreement on Trade Related Aspects of Intellectual Property at the Uruguay Round of GATT and the creation of the World Trade Organization represented a major effort by developed countries to induce developing countries to protect intellectual property.
Biotechnology has the potential to increase the proportion of agricultural goods’ value attributable to intellectual property in a similar fashion to the way microchips has in industrial goods. As a result, the efficacy of the measures negotiated in the WTO/TRIPs is of interest to those investing in the creation of agricultural biotechnology.
This paper evaluates the TRIPs potential to induce strong protection for the intellectual property of foreign biotechnology firms in developing countries. The model suggests that, over a range of possible retaliatory rules, the WTO/TRIPs disputes mechanism will not provide an incentive for developing countries to enforce intellectual property rights in all cases where the owners of intellectual property in agricultural biotechnology would desire it. In particular, developing countries will not have an incentive to enforce intellectual property rights when a pirate industry is large. The results suggest that the TRIPs will not provide sufficient levels of international protection for intellectual property and alternatives should be investigated.
One of the problems with the TRIPs is that developing countries did not see any benefit to enforcing the intellectual property rights of foreigners. Developing countries are beginning to recognize the genetic potential of their natural flora and fauna to biotechnological research. As a result, they also perceive a potential benefit from obtaining the rights to that genetic material. As a result, both sides now perceive a benefit from the international protection of property rights and there may be the basis for a mutually beneficial deal.