Intellectual property rights such as patents protect new inventions from imitation and competition. Patents' major objective is to provide incentives for invention, sacrificing short-term market efficiency for long-term economic gains. Although patents are primarily granted to private firms, policy changes over the last 25 years have resulted in greater use of patenting by the public sector. This study examines government patenting behavior by analyzing case studies of patenting and licensing by the Agricultural Research Service (ARS) of the U.S. Department of Agriculture. ARS uses patenting and licensing as a means of technology transfer in cases in which a technology requires additional development by a private sector partner to yield a marketable product. Licensing revenue is not a major motivation for ARS patenting. More widespread use of patenting and licensing by ARS has not reduced the use of traditional instruments of technology transfer such as scientific publication. Once the decision has been made to patent and license a technology, the structure of the licensing agreement affects technology transfer outcomes. As commercial partners gain experience with the technology and learn more about the market, mutually advantageous revisions to license terms can maintain the incentives through which private companies distribute the benefits of public research.