Innovation in the Seed Market: The Role of IPRs and Commercialization Rules

What is it about?

This article deals with the impact of legal rules on incentives in the seeds sector to create new plant varieties. The first category of rules consists in intellectual property rights and is intended to address a problem of sequential innovation and R&D effort. The second category concerns commercial rules that are intended to correct a problem of adverse selection. We propose a dynamic model of market equilibrium with vertical product differentiation that enables us to take into account the economic consequences of imposing either Plant Breeders’ Rights (PBRs) or patents as IPRs and either compulsory registration in a catalog or minimum standards as commercialization rules. The main result is that the combination of catalog registration and PBRs adopted in Europe is hardly supported by the model calibrated on data for wheat in France.

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