The Impacts of Intellectual-Property Related Preferential Trade Agreements on Bilateral Patent Applications

Intellectual property rights (IPRs) are a central emphasis in the negotiation of “deep” preferential trade agreements (PTAs) containing provisions on domestic regulatory policy. These provisions require member countries to adopt IPRs standards going beyond the baseline requirements of the World Trade Organization's TRIPS agreement. We use a structural gravity framework to study the effects of membership in such PTAs on bilateral international patenting, considering both within-agreement applications and registrations between members and non-members. We explore the heterogeneity of these effects arising from various attributes of different agreements. Our findings suggest that strong and enforceable IPRs standards in PTAs generate positive impacts on international patenting, albeit with significant disparities across agreement types. Agreements with multiple TRIPS-Plus norms increase patenting among members compared with patenting from outside those areas, while other types encourage more patenting from non-members.