Laws of Intellectual Property in the Process of Socio-Economic System’s Development for Developing Countries.

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LAGHAI MICHAEL KIKA East Ukrainian national university named after V.Dahl, Luhansk LAWS OF INTELLECTUAL PROPERTY IN THE PROCESS OF SOCIOECONOMIC SYSTEM’S DEVELOPMENT FOR DEVELOPING COUNTRIES. This article provides an analytical overview of how socio-economic development may be promoted by an effective system of intellectual property laws or rights (IPRS). IPRS can play a positive role in encouraging new business development, rationalization of inefficient industry, and inducing technology acquisition and creation. These may harm Socio-Economic system’s development prospects by raising the costs of imitation and permitting monopolistic behavior by owners of IPRS. The potential gains and losses depend on the competitive structure of markets and the efficiency of related business regulation, including aspects of competition policy and technology development policy. Development is a multidimensional process. It seeks to create a broad based sustainable improvement in the quality of life and standard of living. Economic growth is a necessary, though not the only, condition for development. In a growing economy, development can be broadly defined as a reduction, among others, of unemployment and poverty. A core concern of development policy, especially in developing countries, continues to be as to how to increase the availability of meaningful educational and employment opportunities. The intellectual property system is one of the cornerstones of modern economic policy at the national level and a catalyst for development. It is increasingly become an important tool for sustainable development of developing countries, especially the least developed countries, in the knowledge-based society of this millennium. Problem Statement Developing nations are overwhelmingly importers of technology, suggesting that they should establish standards that encourage learning and follow-on innovation within their IPRS system. Understanding the legal and economic foundation of the intellectual property system is a prerequisite for comprehending its increasing importance and role in national strategies for enhancing competitiveness and accelerating socioeconomic development. Through its ability of create and sustain exclusivity in the marketplace, albeit for a limited period of time, intellectual

property is increasingly being recognized in the world over as an important commercial asset and a driving force for technological innovation and progress. It is a key component of the national infrastructure required for socioeconomic growth, for developing national indigenous technological capacity, and for generating export opportunities through enhancement of enterprise competitiveness. Strong and effective intellectual property protection is a crucial factor in facilitating technology transfer as well as in attracting foreign direct investment in certain sectors of the economy that are vital for sustainable and socioeconomic development. Analysis of recent researches and publications. The contribution of IPR to economic growth and development is discussed controversially in the literature. Depending on the either static or dynamic model the analysis is based on, IPR are found to be positively or negatively correlated to economic growth and development. Siebert (1991) argued that in a dynamic world, patents can be used to ensure sufficient incentive for actors in the market to further invest in the creation of new knowledge. This general argument is also supported by Fink and Primo Braga (1999). Granting a legal monopoly allows for a more certain amortization of this investment. Siebert concludes that a stronger IPRR results in a higher contribution to economic growth. Preusse (1996) called this the “innovation effect” depicted in figure 1. A further argument is that if IPR owners are given a legal tool to protect the IP they have developed, this creates a basis for technology transfer or licensing agreements. Via these devices, innovation in one...
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