Alison Butler examines one of the major new issues being negotiated in the current round of multilateral negotiations. With increased trade in high-technology products, intellectual property rights have become an increasingly important and contentious issue in international trade. The protection of intellectual property, which includes such things as patents, copyrights and trademarks, is justified by most economists as being necessary for invention, while others, primarily policymakers, argue that these rights only serve to protect the monopoly power of innovating firms. The author analyzes the questions surrounding the protection of intellectual property, how innovation is affected by trade, and the benefits of protecting intellectual property internationally. In addition, she examines why the incentive to protect intellectual property differs between industrialized and developing countries and what likely needs to happen before an agreement can be reached.