Worldwide IP coverage of patented inventions in large pharma firms: to what extent do the internationalisation of R&D and firm strategy matter

Abstract

The paper deals with the determinants of worldwide IP coverage of patented inventions in large pharmaceutical firms. We support the core idea that the internationalisation of firm R&D and an economic presence in a foreign country are positive key factors which explain global IP coverage. For the global pharmaceutical industry, we estimate probit models on the probability that a patent will be expanded worldwide. We retain two categories of worldwide patent: the well-known triadic patent and the new triadic one (triadic + China + Korea). The data set encompasses the 17,633 priority patents applied for by 76 enterprises from several countries over the period 2003-2005. One important finding is that patenting in Japan sets up an important barrier, giving Japanese firms an advantage when triadic patenting is considered. For European and US firms, our estimation results confirm the idea that the level of firm R&D internationalisation is a significant explanatory factor in international IP coverage, together with control variables. We highlight an inverted U-shaped relationship between these two variables. The hypothesis related to a firm economic presence is also verified.