The economics of intellectual property rights in the agricultural biotechnology sector

Economic theory highlights the critical importance of excludability in encouraging private research in the agri-food sector, Without it, private research will languish and social welfare could suffer. Since 1973, governments around the world have recognized this and strengthened the legal protection for biotechnology processes and products (e.g., patents, plant breeders' rights and trademarks). These new rights have been integrated into a complex system of public and private protection for intellectual property. Consequently, this new policy spurred significant private investment in biotechnology, but a number of policy concerns have arisen: levels of intellectual property protection may be too high, thereby choking off spillovers, follow-on innovations and diffusion. This has raised questions about the optimal public role in regulating, conducting and supporting research and trade in biotechnology. Ultimately, developing countries are faced with little choice but to accept the existence of private property rights and use them for their own best interests.