Acquisition for Sleep

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8095

Classification and Topics

• 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

Contributors, Places and Time

• 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

Further information

• Handle: http://hdl.handle.net/10419/215097
• Last update: 10.03.2025, 11:45 AM CET