Arbeitspapier

Acquisition for Sleep

Within the policy debate, there is a fear that large incumbent firms buy small firms' inventions to ensure that they are not used in the market. We show that such "acquisitions for sleep" can occur if and only if the quality of a process invention is small; otherwise, the entry profit will be higher than the entry-deterring value. We then show that the incentive for acquiring for the purpose of putting a patent to sleep decreases when the intellectual property law is stricter because the profit for the entrant then increases more than the entry-deterring value does.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 8095

Classification
Wirtschaft
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Market Structure, Firm Strategy, and Market Performance: General
Firm Objectives, Organization, and Behavior: General
New Firms; Startups
Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
Subject
acquisitions
innovation
sleeping patents
IP law
ownership

Event
Geistige Schöpfung
(who)
Norbäck, Pehr-Johan
Olofsson, Charlotta
Persson, Lars
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2020

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Norbäck, Pehr-Johan
  • Olofsson, Charlotta
  • Persson, Lars
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2020

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