This document refers to the relevance of IP in the knowledge economy, explaining the importance of the rapid dissemination of new and superior knowledge. However, we point out that rapid dissemination can be the enemy of innovation. In this context, we explain that the patent system has many virtues as an incentive to future inventors. However, by recognising exclusive rights, the patent restricts de facto the use of knowledge and its exploitation. Patents and other intellectual property rights (IPRs) are by no means the only solution to the problem of supporting inventors in their effort to capture benefits stemming from their work. There are many other solutions to help markets produce knowledge. In spite of some misuses of the patent system leading to high transaction costs and risks of innovation blockages, it is still a vital institution for innovation policy. The system is vital, not so much for its value of providing motivation to inventors, but for creating a secure economic environment for the very high investments taht convert ideas into reality. However, we conclude that the high value of the system as "a tool for economic growth" does not apply equally to all countries.