Against the background of the patent upsurge, we first analyse the role of patenting and alternative instruments to protect intellectual property, based on a sample of German companies active in patenting. In a second step, we investigate the motives to patent, considering sector and company size effects. We find that company size matters, both for the importance of instruments and the motives to patent. Especially important are the new strategic motives to patent, like using patents to improve a company's own position in negotiations with partners, licensees and the financial sector, or to use patents as incentives for R&D personnel or performance indicators-these correlate positively with company size. We derive some possible challenges for future patent policies from these insights. © 2006 Elsevier B.V. All rights reserved.