Weeds, Helen (1999) Sleeping patents and compulsory licensing: an options analysis. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers).

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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.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HD Industries. Land use. Labor K Law > K Law (General)
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Patents -- Research, Intangible property, Licenses, Commercial law, Intellectual property
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Date:	23 February 1999
Number:	No.577
Number of Pages:	34
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
Grant number:	R00429524353 (ESRC)
References:	Bar-Ilan, Avner, and William C. Strange. 1998. “A model of sequential investment.” Journal of Economic Dynamics and Control 22: 437-463. Chin, Yee Wah. 1998. Unilateral technology suppression: Appropriate antitrust and patent law remedies.” Antitrust Law Journal 66: 441-453. Cohen, Joel M., and Arthur J. Burke. 1998. “An overview of the antitrust analysis of suppression of technology.” Antitrust Law Journal 66: 421-439. Cornish, W. R. 1996. Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (third edition). Sweet and Maxwell, London. Crew, Eugene. 1998. “Symposium: Antitrust and the suppression of technology in the United States and Europe: Is there a remedy?” Antitrust Law Journal 66: 415-419. Dixit, Avinash K., and Robert S. Pindyck. 1994. Investment Under Uncertainty. Princeton University Press. McDonald, Robert, and Daniel Siegel. 1986. “The value of waiting to invest.” Quarterly Journal of Economics 101 (November): 707-728. Pindyck, Robert S. 1993. “Investments of uncertain cost.” Journal of Financial Economics 34: 53-76. Roberts, Kevin, and Martin L. Weitzman. (1981). “Funding criteria for research, development, and exploration projects.” Econometrica 49: 1261-1288.
URI:	http://wrap.warwick.ac.uk/id/eprint/1601

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