Intellectual property rights protection and the inflow of foreign technology and direct foreign investment: the Brazilian case

Technology has existed throughout the history of mankind. Its importance lies in the fact it provides new and efficient methods of achieving results. It has contributed immensely to countries' economic development. The possibility of making productive factors (land, labour and capital) much more efficient, and of making industrial output grow faster than population's demand has made countries eager to acquire technology. One of the most successful instruments in attracting technology and influencing its creation has been the granting of patents. Nowadays, such rights are known as 'intellectual property' (a term which comprehends designs, trademarks, copyrights etc.) and their importance has been in making it possible to secure proprietary rights in technology and in granting the inventor a monopoly on the commercialisation of the innovation. The success of patents in attracting technology has led most countries' governments to adopt similar measures.

Developing countries have also come to adopt an intellectual property rights system. However, the granting of proprietary rights in such countries are often more limited than in developed countries. This situation has made owners of technology aware of the risks involved in transferring their technological innovations and manufacturing operation to such countries. In this respect, there seems to be a contradiction between the desire of developing countries, for technology and investment, and the inadequate protection afforded to intellectual property by them.

This thesis aims to show that there is a casual nexus between adequate intellectual property protection and greater inflow of technology and foreign direct investment into a market. Brazil will be the case study. It provides a good example due to its level of economic development and the size of its market. The protection it currently gives to intellectual property will be examined, and the evidence that inadequate protection for innovation has been an obstacle to technology and foreign direct investment.