ABSTRACT
Similarly, in Argentina 62 per cent of patents were owned in 1953 by individual inventors, the majority of whom were Argentinians. Only 15 years later, in 1968, the percentage dropped to 25 per cent. The difference was due to patents obtained by foreign corporations [Chudnovsky and Katz, 1970, p. 1].11 The concentration of practically all of the patents of developing countries in foreign hands suggests that one of the major arguments used to justify the existence of the present patent system, namely, the incentive to domestic inventive activity, does not work in these countries. Foreign-owned patents reflect, if anything, 'non-national' inventive activity and obviously have no direct influence on domestic inventiveness. (There are indirect effects, most of them negative, which we will discuss later.) Furthermore, it is reasonable to assume that the granting of patents by Peru, Turkey or Indonesia or even by the whole Third World taken together has insignificant effects on the R&D plans of transnational corporations like Du Pont, Phillips or Mitsubishi, or on governmental spending on science and technology in, say, the United States or France. Consequently, instead of considering the effects of patents granted by developing countries on inventive activity per se, we should rather concern ourselves with such questions as whether they promote or deter foreign investment, whether they enhance or restrict technology transfer or whether they affect the terms of trade. The present patent system as an economic policy tool has as little to do with domestic inventive activity as tax exemptions on profit repatriation by foreign firms or the grant of special market privileges to foreign companies. It is probable that tariff and general import policies have more to do with domestic inventiveness than patents.
