INTELLECTUAL PROPERTY PROTECTION, ECONOMIC POLICIES AND TECHNOLOGY TRANSFER IN DEVELOPED AND DEVELOPING WORLD

Abstract

Knowledge is typically non-excludable i.e it is not possible to prevent others from applying new knowledge even without the authorization of its creator. If a new technology has value and important, then it is likely to be copied or imitated by someone to thereby reducing the future profits of the inventor, and also remove the profit and cost of the innovative activities in the industry. Intellectual property rights (IPRs) encourage innovation by granting successful inventors’ temporary monopoly over their innovations. The consequent monopoly over the innovation provide the returns on successful investment in research and development (R&D). This return must be large enough to compensate for the high R&D investment. Once an innovation has been created by someone, then it has no rival and which suggests that its benefits will be maximized if its use is free to all at marginal cost, however this availability to all will yield benefits in the short run, but will severely damage the incentive for further innovation. But, excessive IPR protection might restrict to adequate dissemination of new knowledge, which is important for further invention. Apart from this inadequate IPR protection to some extent has stimulated Research and Development activity in many countries by encouraging and enhancing knowledge spill overs from transnational corporations (TNCs) and other domestic firms. Giving inventor absolute protection may cause to total monopoly. Entry by rivals may be impeded, and successful innovators may have reduced incentives for developing and exploiting subsequent innovations. Choice of IPR policy then reflects a balancing of these considerations. Therefor to award a timebound monopoly is the second-best thing which intend to maintain the monetary amount for further innovation, which may encourage long term growth and improved the quality of the product.