Acquiring Patents in Secret: Disclosure Timing in Markets for Technology

George Chondrakis, Carlos J. Serrano () and Rosemarie Ham Ziedonis
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George Chondrakis: ESADE Business School
Carlos J. Serrano: HEC Paris
Rosemarie Ham Ziedonis: Boston University - Questrom School of Business

No 1559, HEC Research Papers Series from HEC Paris

Abstract: Markets for technology provide a vibrant channel through which firms purchase ownership rights to patented inventions. Although such transactions enable firms to secure access to intangible assets originating beyond their borders, they also provide cues to competitors regarding the purchasing firm’s technological investments. This study explores the timing of strategic disclosure of patent acquisitions and the conditions under which firms trade the benefits of competitor deterrence through early recordation for those of secrecy through delayed disclosure. Using evidence on the lag between the execution and recording dates for US patents purchased by publicly traded corporations, we predict and find earlier disclosure of patent acquisitions when the buyer works on related technologies and is better positioned to enforce the patents (i.e., is large and relatively litigious). As predicted by the model, we also find that the buyer delays disclosure when the seller is a large firm, suggesting that buyers take advantage of the seller’s ability to deter competitors while keeping the transaction secret. Additional analyses reveal that (a) regulatory changes reducing the value of keeping acquisitions of patent applications secret lead to shorter recording lags, and (b) increases in the enforceability of business method and software patents further accelerate the voluntary recording of patent ownership changes. The study provides new evidence on the tradeoffs that innovating firms face when determining the timing of disclosure for patents they have purchased in technology markets.

Keywords: Markets for technology; Strategic disclosure; Patent assignments; Intellectual property rights; Patents (search for similar items in EconPapers)
JEL-codes: O30 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2025-04-30
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1559

DOI: 10.2139/ssrn.5212082

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