Global Spread of Pharmaceutical Patent Protection: Micro Evidence from the International Equivalents of Drug Patents in Japan

Abstract

We investigate the global spread of pharmaceutical patent protection as acquired by firms, based on a novel global patent database for all significant medical drugs, including biologics, introduced in Japan. It gives us the propensity of filing and grant rate for each country for patents granted in Japan. The major findings of the study are as following. Both the filing propensity to and the grant rate of major Asian countries approached those of the OECD economies by the early 2000s for chemical substance inventions. However, substantial heterogeneity with respect to other drug inventions still exists, specifically, crystal, use, formulation or combination, suggesting significant future room for international harmonization of patent granting standards. We found clear evidence of policy impact on the spread of protection for the two largest non-OECD economies. The amendments to Patent Laws in China in 1993 had an immediate and significant impact on patent filing propensity to China (30 percentage points increase), before accession to the WTO in late 2001. Furthermore, India’s ‘mailbox application system’ had a substantial effect as filing propensity reached 80 per cent of the number of corresponding European patent applications around year 2000, prior to implementing the Trade-Related Aspects of Intellectual Property Rights for drug patents in 2005. Subject classification codes: O34, O38, K29