To make the point even sharper -- the ability to transfer inventions permits inventors to work with multiple entities, thereby permitting the growth of human capital to compound both spatially and temporally.
But one should be careful not to conclude from these studies that patents offer no benefit in high technology industries. That is because patents can have benefits beyond merely stimulating and disseminating new technology. Patents can also help to commercialize inventions. Specifically, patent rights can facilitate relationships between inventors and entities with established marketing and development capabilities. Patents can make information a tradable commodity through the use of licenses. Absent patent protection, inventors might be less willing to discuss their inventions with other firms for fear of misappropriation.
The ability to transfer inventions to other firms allows startup companies to focus exclusively on technology development and to avoid the added complexity of vertical integration. We often see in the biotech sector, for example, large, established companies acquiring promising startups once their new drug or device reaches later-stage clinical trials, which can be expensive and time consuming. To put it simply, patents facilitate specialization in invention itself.