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conditions (e.g., if a developing country has a strong demand for a product not produced elsewhere), it may be in the interest of a developing country to provide stronger protection for inventions in that product technology than is provided in industrialized countries. However, although conference participants recognized as critical the question of benefits to developing countries, researchers pointed out that there are practically no data to supply an answer.

Some preliminary data useful in the analysis of the costs and benefits of strong IPRs are supplied by Mansfield's research on the effect of weak IPR systems on foreign direct investment (FDI) by U.S.-based companies. If it could be shown that the size and composition of FDI in developing countries are negatively affected by weak IPR regimes, those countries might be influenced to strengthen intellectual property rights. During the discussion, however, the question was raised of whether the same factors motivate FDI by firms based in Japan, Europe, and the newly industrialized countries that motivate U.S. firms. As firms from other countries become more significant players in FDI, developing countries may become less concerned about foreign direct investment by the United States. Moreover, if firms from other countries do not have the same incentives and concerns with respect to FDI and IPRs as U.S.-based firms, the United States can expect less cooperation from their governments in international IPR negotiations. Again, there are no data from research studies to address these questions, although anecdotes based on personal experiences suggest that Japanese companies, for example, view FDI very differently than U.S. firms do.

Another question raised during the discussion was one that is seldom raised in IPR debates—that is, are stronger IPRs in the interest of industrialized countries? It is often taken for granted that this is true. However, the current debate in the United States about patenting of software and genes has raised the possibility that intellectual property protection can be too strong and can squelch vital incremental-improvement inventions, perhaps strengthening the position of firms that have made basic inventions. This issue is related to one discussed by Paul David in Chapter 2—that enforcement of patent rights under some conditions can inhibit technological progress.

An alternative to the current (differentiated) international IPR regime, namely, a uniform, worldwide system of strong IPR protection, was explored in this section. The simple proposition that uniformity is a good thing needs to be examined carefully, however. The point was made during the conference that although uniformity in itself has certain theoretical benefits, the details of the uniform system are important. As in the case of technological standards, there may be broad agreement on the need for standards but intense disagreement on what the standards should be, based on the differing interests of the negotiating parties.

Even if all countries could be persuaded to accept the same IPR laws,



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