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Archived updates for Monday, November 08, 2004

The Global Distribution of Trademarks

According to "The Global Distribution of Trademarks: Some Stylized Facts" (April 8, 2004) World Bank Policy Research Working Paper No. 3270, the majority of trademarks in the world, including those in developing countries, have been registered by firms from industrial countries. At the same time, the global distribution of trademarks is not as uneven as the global distribution of invention patents. This pattern may indicate that firms in developing countries are more likely to differentiate themselves by investing in brands rather than new technologies. It also suggests that a larger number of firms in developing countries may benefit from stronger enforcement of trademarks rather than from stronger enforcement of patents.

Economists have traditionally associated asymmetric patent ownership with rent transfers from the developing to the developed world. However, it is less clear to what extent asymmetric trademark ownership may be the source of similar rent transfers. Trademarks, unlike patents, do not necessarily confer market power to the intellectual property-holding firm and can, in principle, co-exist with a competitive market structure. However, when consumers are imperfectly informed or attach a status value to products, competition may be imperfect and trademark owners may generate rents. More research is needed to assess the extent of crossborder rent transfers associated with trademarks.
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