Drawing on the resource-based view of the firm, we examine the effect of technological competition over a patent on the firm's choice of patenting strategy. We claim that technological competition makes the traditional strategy of protecting focal innovations from imitation less likely and increases the likelihood of a play strategy — i.e. using patents to avoid the risk of hold-up by other patent owners, or as a bargaining chip in litigation and cross-licensing. However, we claim also that technological competition over a target close to the firm's core technology should lead to use of a fence strategy i.e. to blocking the commercial endeavors of rivals and preempting substitute inventions. We find support for our hypotheses using data from a large-scale survey of European patent applications. •Firms can rely on various mechanisms to extract value from intellectual property.•Firms patent to exclude rivals and to reduce the risk of being blocked by others.•Technological competition affects the reasons for patenting and patent use.•Technological competition reduces the value of the commercialization of innovation.•Competition for a core technology spurs a ‘closed’ approach to patent strategy.