What is IPR?
Intellectual property rights are a bundle of exclusive rights over creations of the mind, both artistic and commercial. The former is covered by impact of IP systems on six Asian countries found "a positive correlation between the strengthening of the IP system and subsequent economic growth." However, correlation does not necessarily mean causation: given that the patent holders can freely relocate, the Nash equilibrium predicts they will obviously prefer operating in countries with strong IP laws. In some of the cases, the economic growth that comes with a stronger IP system is due to increase in stock capital from direct foreign investment, as was shown for Taiwan after the 1986 reform. 1.4Economics
Intellectual property rights are considered by economists to be a form of temporary monopoly enforced by the state (or enforced using the legal mechanisms for redress supported by the state). Intellectual property rights are usually limited to non-rival goods, that is, goods which can be used or enjoyed by many people simultaneously-the use by one person does not exclude use by another. This is compared to rival goods, such as clothing, which may only be used by one person at a time. For example, any number of people may make use of a mathematical formula simultaneously. Some objections to the term intellectual property are based on the argument that property can only properly be applied to rival goods (or that one cannot "own" property of this sort). Since a non-rival good may be used (copied, for example) by many simultaneously (produced with minimal marginal cost), producers would need incentives other than money to create such works. Monopolies, by contrast, also have inefficiencies (producers will charge more and produce less than would be socially desirable). The establishment of intellectual property rights, therefore, represents a trade-off, to balance the interest of society in the creation of non-rival goods (by encouraging their production) with the problems of monopoly power. Since the trade-off and the relevant benefits and costs to society will depend on many factors that may be specific to each product and society, the optimum period of time during which the temporary monopoly rights should exist is unclear.