Overall, our findings show that patent rights block cumulative innovation only in very specific environments, and this suggests that remedial government policies should be targeted. A ‘broad based’ scaling back of patent rights is unlikely to be the most appropriate policy. It is preferable to design policies and institutions that facilitate more efficient licensing, and thereby promote cumulative innovation without diluting the innovation incentives that patent rights provide. One interesting example of such institutions are the biological resource centers in the US studied by Furman and Stern (2011), which reduce the ‘transactional’ costs of accessing knowledge inputs.