Optimal Global Patent Design

The optimal patent breadth and length is derived for an innovating and a noninnovating country in the presence of imitation. It is found that the innovating country chooses longer or broader patent protection than the noninnovating country depending on the concavity or convexity of demand. These patents are compared to the optimal global patents designs and are found to be too weak from a global perspective. Finally, it is shown that where the optimal global patent design involves identical patents in each country that the innovating country is unambiguously better off, while the noninnovating country may be worse off with the optimal global patent design.