Sleeping Patents and Computsory Licensing: An Options Analysis

Helen Weeds

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Why should a firm wish to create a new technology that it will leave unexploited for some time? Sleeping patents have long been perceived as anticompetitive devices, used by dominant firms to block entry into their market. In a real options framework with both economic and technological uncertainty, we show that a sleeping patent may arise as the result of optimal forward-looking behavior, in the absence of any anticompetitive motive. We also consider the effect of possible measures to enforce the development of sleeping patents and find that these are likely to harm incentives for firms to engage in research.

Keywords: RESEARCH AND DEVELOPMENT; TECHNOLOGY; MARKET (search for similar items in EconPapers)
JEL-codes: C61 D81 O31 O34 O38 (search for similar items in EconPapers)
Pages: 32 pages
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:577

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