When Patent Territoriality Meets Integrated Border Economies: Lessons from the Tirzepatide Market between Brazil and Paraguay

International patent law allocates exclusive rights through national legal orders, while regional integration increasingly organizes trade, mobility, and consumption across those same borders. This article asks whether territorial patent systems can adequately govern pharmaceutical innovation in economically integrated border regions where neighboring States maintain autonomous patent and pharmaceutical-regulatory institutions. It argues that territoriality remains legally coherent but becomes analytically incomplete when the relevant pharmaceutical market is functionally integrated across jurisdictions. The Brazil-Paraguay border and the market for tirzepatide-based products serve as a critical case. Eli Lilly’s tirzepatide patent was not extended to Paraguay—an absence reported by the Paraguayan pharmaceutical-industry chamber and consistent with the absence of any indexed Paraguayan member of the relevant patent family, though not independently confirmed against the national register—in a State that remains outside the Patent Cooperation Treaty, while at least five Paraguayan manufacturers obtained sanitary registration from Paraguay’s health authority to market tirzepatide-based products domestically; several of these products were later prohibited from entering Brazil for lack of Brazilian registration, not for patent infringement. The case is not treated as an inquiry into the validity of a particular patent claim or the safety of a particular product batch. Instead, it exposes the interaction among territorially allocated patent rights, nationally administered marketing authorization, cross-border consumer mobility, and uneven enforcement capacity. Drawing on international patent law, legal geography, comparative institutional analysis, and regional-integration theory—including a contrast with the more centralized intellectual property regime of the Andean Community—the article develops the concept of institutional mismatch: a condition in which patent law and border markets remain internally coherent but operate according to different spatial logics. The mismatch does not justify abandoning territoriality, creating supranational patent rights, or displacing the problem onto private ordering. It does, however, require scholars and policymakers to distinguish the territorial unit of legal authority from the functional unit of market analysis.