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Acquisitions for Sleep

Norbäck, Pehr Johan ; Olofsson, Charlotta LU and Persson, Lars LU (2020) In B.E. Journal of Economic Analysis and Policy 20(2).
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.

Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
acquisitions, innovation, IP law, ownership, sleeping patents
in
B.E. Journal of Economic Analysis and Policy
volume
20
issue
2
publisher
De Gruyter
external identifiers
  • scopus:85081581903
ISSN
1935-1682
DOI
10.1515/bejeap-2019-0021
language
English
LU publication?
yes
id
bcf43bdc-2fde-44c5-9e9a-79a81d8c6bed
date added to LUP
2020-04-14 15:44:40
date last changed
2022-04-18 21:56:15
@article{bcf43bdc-2fde-44c5-9e9a-79a81d8c6bed,
  abstract     = {{<p>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.</p>}},
  author       = {{Norbäck, Pehr Johan and Olofsson, Charlotta and Persson, Lars}},
  issn         = {{1935-1682}},
  keywords     = {{acquisitions; innovation; IP law; ownership; sleeping patents}},
  language     = {{eng}},
  month        = {{02}},
  number       = {{2}},
  publisher    = {{De Gruyter}},
  series       = {{B.E. Journal of Economic Analysis and Policy}},
  title        = {{Acquisitions for Sleep}},
  url          = {{http://dx.doi.org/10.1515/bejeap-2019-0021}},
  doi          = {{10.1515/bejeap-2019-0021}},
  volume       = {{20}},
  year         = {{2020}},
}