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Sleeping Patents and Computsory Licensing: An Options Analysis

Weeds, Helen (1999) Sleeping Patents and Computsory Licensing: An Options Analysis. Working Paper. The Warwick Economics Research Paper Series (TWERPS) 577.

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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.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Research and Development ; Technology ; Market
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 17 Jul 2012 23:54
Last Modified: 17 Jul 2012 23:54

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