Intellectual property rights (IPRs) – patents, trademarks, industrial designs and copyrights – are increasingly traded in markets. Public policy plays an important role in shaping intellectual property (IP) markets and thus their impact on innovation. In today’s highly networked world, the circulation of ideas is vital to innovation. Knowledge flows make possible a broader, more diverse and better use of existing competences and knowledge, beyond the uses or applications foreseen by the sole proprietor. Inventors, designers and authors, particularly researchers in universities and public research institutes, are not always best placed to exploit their own knowledge. Organisations are therefore increasingly looking for ways to trade knowledge capital. However, high transaction costs often impede the successful negotiation of licences or other types of agreements.