Compulsory Licensing: Evidence from the Trading with the Enemy Act

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SIEPR Discussion Paper 09-026

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Published:

07/27/10

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Abstract:

Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 130,000 chemical inventions suggest that compulsory licensing increased domestic invention by 20 percent

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