We consider a framework of one north and two southern countries where only the north can innovate but the southern countries can imitate; however, the innovation decision is endogenous--the size of the innovation depends on the extent of patent protection by the countries as a whole. We show that even if the southern countries are identical in all respect, their optimal policies might differ. In particular, we portray situations when, in a subgame perfect Nash equilibrium, one southern country accepts foreign patent protection and the other country rejects it. In our analysis we focus on the factors like imitative capability, product life vis-a-vis the patent length, and the nature of the innovation function.

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