Intellectual property protection in a developing country: How much and for whom? Estimates of the private value of patent protection in India

Using a patent renewal model to estimate the parameters of the distribution of initial patent values, estimates of the private value of patent rights and the rate of decay of these values are provided. The Indian experience with different patent regimes also allowed for an evaluation of intellectual property protection across different institutional settings--'developed' and 'developing,' within the same country. Given the domination of patenting by foreigners another important contribution of this research has been the unveiling of the differences that exist between foreign and domestic patent values in a developing country. Inter-sectoral comparisons of patent rights encompassing all sectors of the economy have been made possible for the first time in this study. Differences in the value and decay rate of product versus process patents are also explored. The appropriability of domestic R&D expenditures through the patent system is also estimated.; The results show that in comparison to industrial nations, patent values in India are much lower and the rates of decay substantially higher. Adopting the 'developing country' model of patent protection increased the rates of decay and lowered total patenting values in the country. Foreign owned patents in India possess substantially higher values than domestic patents. The Chemical, Metallurgy and Medical Equipment sectors possess some of the highest values whereas Agriculture and Domestic Articles the lowest. Evidence that patents do not protect process inventions as well as product inventions is also found. The appropriability of R&D expenditures through the patent system is found to be negligible compared to developed nations.