This article examines the interplay between patent incentives and corporate innovation. It argues that innovation concerning today's complex technologies often requires efforts on a corporate organizational scale and that changes in patent and corporate laws are needed to fully promote effective and efficient innovation in corporate environments. The prevalence of patent ownership and exploitation by corporations reflects a fundamental but poorly appreciated truth about modern technological innovation. Patent incentives influencing individuals don't bring most new inventions to the public. Rather, in many recently developed technology areas, corporate-initiated efforts are the primary sources of publicly valuable innovation and, hence, the main targets of patent incentives. The encouragement of corporate financing and innovation through patent rewards can increase corporate efforts to assemble and apply the personnel, resources, and marketing skills needed for developing, manufacturing, selling, and delivering highly complex new products based on patented designs. These impacts of patents in aiding the activities of corporate innovators define the distinctive functions of corporate patents.
Available at: http://works.bepress.com/richard_gruner/6/