Intellectual property rights are exclusive rights to the use of inventions such as new industrial products or manufacturing methods, artistic works such as literature or music, or plant varieties. Governments are responsible for granting the various forms of intellectual property rights including patents, copyrights, and plant breeders’ rights, to inventors and other creators. The granting of these exclusive rights is based on the logic that technical innovation and creative activities would be suppressed if the rights of inventors and others were not legally protected. For example, various costs are incurred in the invention of a new product, including the time, resources, and effort spent on developing ideas and carrying out experiments. If there were no prospect of recouping these development costs, the inventor might not take the trouble to carry the invention through. The patent system allows the inventor to earn monopolistic profits for a limited length of time, and thus raises the incentive for innovation.
Developing countries today are obliged to observe minimum standards concerning the protection of intellectual property rights as laid out in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement signed by members of the World Trade Organization (WTO). However, the enforcement of some types of intellectual property rights, such as pharmaceutical patents and plant breeders’ rights, is being treated cautiously in some countries. This is because in the short run, the exclusivity afforded by intellectual property rights can lead to higher prices for new products, making them less accessible to some members of society.