Intellectual property protection laws vary between nations. Developed nations are known for rigorous intellectual property regimes, while developing nations suffer from weaker property right laws and institutions. This becomes a point of contention when evaluating the impact of IPR’s on trade as a means for technology diffusion between countries.

In agriculture, the development of newer technologies such as; genetic engineering and plant breeding are resource intensive processes. However, due to the nature of seeds, barriers to limit piracy are very low. A farmer using a genetically engineered seed can so easily replant it the following season (ignoring any intellectual property claims). Therefore, the need to develop treaties to deal with intellectual property disputes between states was greatly supported by developed nations as a means to protect their investment.

In the 1960’s a few countries in Western Europe held meetings to discuss IPR’s in agriculture (Galushko 2011). The meetings where the foundation for the creation of the: International Union for the Protection Of New Plant Varieties (“UPOV”). The goal of the UPOV was to harmonize on an international scale the legal protection of plants, plant varieties, and to protect the interest of plant breeders, farmers, and society at large (Galushko 2011).

Further efforts culminated in additional international agreements that expanded the discussion of IPR’s globally. In the Uruguay Round General Agreement on Tariffs and Trade, states reached an agreement on Trade-Related Intellectual Property Rights (“TRIPS”) (Awokuse and Yin 2009). This agreement was a means to harmonize the growing need for intellectual property protection and was one of the foundations of the World Trade Organization.

The debate surrounding agreements dealing with intellectual property rights center around a core idea. Developing nations use trade as a major source of technology and innovation. Many of these nations argue that agreements such as TRIPS stifle trade and thus have a negative impact on their economic development. As a result, the study of IPR’s and their effect on bilateral trade has been a focus for economists.