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costs and budgetary constraints are different makes the convergence of IPR systems still less meaningful, at least from a social welfare standpoint.1

IPR regimes should accommodate major structural shifts in the economy, particularly the progressive maturation of a production and innovation base in the country. Yet, as suggested below, changes in IPR systems should not necessarily be unidirectional or patterned after an individual model, namely that of countries at the property rights legislative and enforcement frontier (where moving the frontier forward implies increased levels of protection). Developed countries' regimes are responding to intense technological competition by attempting to maximize the returns from their technological assets on a global scale. Even in such countries, changes in IPR systems are far from consensual, and it is sometimes argued that protection may have reached excessive levels, to the detriment of diffusion and technological innovation.

The purpose here is to discuss the relative merits of a differentiated versus a homogeneous IPR system. This chapter argues for IPR regimes that are differentiated according to the level of technological and productive competence, so as to support a country's ability to absorb, adapt, and generate technology. There is little in economic theory to support convergence of IPR systems on a cross-country basis, particularly if convergence means an increase in the level of protection in developing and industrializing countries. This is true either from an individual country standpoint or from a global welfare perspective. Furthermore, countries with large research endowments do not believe it is to their benefit to loosen their IPR standards, nor do industrializing countries see benefits (except for lesser threat of retaliation) in equating their legislation and enforcement practices with those of the country that is at the forefront of the movement toward tighter regimes, namely, the United States.

This chapter suggests that it is unlikely that an industrializing country would be serving its own interest by copying the legislation and enforcement practices of a developed country. Both may want to follow or have a set of minimum standards as guidelines,2 but the definition of such standards should not be a mere reflection of the developed country's perception of what constitutes the minimum: rather it should be patterned after what is


See the excellent discussion in Estache (1990:5).


In fact, in 1979 the World Intellectual Property Organization (WIPO) introduced a model patent law that was followed by a number of developing countries and constituted a minimum standard for patent-related IPRs. The international conventions, on the other hand, do not necessarily provide for uniformity in cross-country treatment of IPRs. The most well known The Paris Convention—signed by 99 countries (as of 1989), has as a major feature, equality of treatment between domestic and foreign patentees (article 2). The specifics of the systems are generally left for individual countries to decide.

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