Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215097 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8095
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
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.
Subjects: 
acquisitions
innovation
sleeping patents
IP law
ownership
JEL: 
G24
L10
L20
M13
O30
Document Type: 
Working Paper
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