existing sales from future challengers. In this fundamental way, competition promotes innovation. We apply this basic insight … internalizes business-stealing effects arising from their parallel innovation efforts and thus tends to depress innovation … of R&D, may offset the adverse effect of a merger on innovation. We describe the possible effects of a merger on …

the social benefits of their innovations if innovation is to be suitably rewarded and encouraged. However, this paper … deadweight loss associated with the patent system and discourage innovation by others. Economic efficiency is promoted if rewards … the patent system designed to spur innovation by better aligning the rewards and contributions of patent holders …