Abstract

http://ssrn.com/abstract=1092577
 
 

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The Impact of Compulsory Licensing on Foreign Direct Investment: A Collective Bargaining Approach


Robert C. Bird


University of Connecticut - Department of Marketing

Daniel R. Cahoy


Smeal College of Business


American Business Law Journal, Vol. 45, No. 2, 2008

Abstract:     
The innovation impact of intellectual property compulsory licenses - government-imposed access without the authorization of the property owner - has generated great interest in the academic literature. Moreover, recent measures by the governments of Thailand and Brazil have generated increased international awareness of the issue. Equally significant, but receiving less attention is the impact of compulsory licenses on flows of foreign direct investment (FDI) to the granting nation. It is quite likely that FDI mechanisms provide an important attenuating factor that influences a country's compulsory license strategy. This paper investigates the compulsory license-FDI relationship, using essential medicines as a context. It explores the potential for collective action and bargaining on the part of licensing nations to minimize FDI losses while preserving access. Middle-developed countries (MDC) such as Egypt and Brazil are highlighted to demonstrate the extent to which nations with differing abilities to resist political pressure can influence FDI losses. The paper concludes by demonstrating optimal negotiating strategies using a unique game theory framework that models real-world licensing decisions

Number of Pages in PDF File: 48

Keywords: patent, intellectual property, compulsory license, global health, TRIPS, game theory

JEL Classification: F00, H51, I18, K11, K32, K33, O31, O34, O38

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Date posted: February 15, 2008 ; Last revised: February 18, 2008

Suggested Citation

Bird, Robert C. and Cahoy, Daniel R., The Impact of Compulsory Licensing on Foreign Direct Investment: A Collective Bargaining Approach. American Business Law Journal, Vol. 45, No. 2, 2008. Available at SSRN: http://ssrn.com/abstract=1092577

Contact Information

Robert C. Bird
University of Connecticut - Department of Marketing ( email )
Storrs, CT 06269
United States
860-486-6136 (Phone)
Daniel R. Cahoy (Contact Author)
Smeal College of Business ( email )
310 Business Building
University Park, PA 16802
United States
814-865-6205 (Phone)
814-865-6284 (Fax)
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