One way to define the contrast, innovation is specific software able to do something it has not done previously, while invention is software doing something that has not been done previously.
The reward for innovation is more sales of the software. The reward for invention is the payment guaranteed by a patent, should the inventor want such reward and should the invention be useful enough to be purchased.
Bill Gates's 1991 comments were part of a warning that Microsoft should obtain and store patents for trade, as a means to avoid having to pay cash for ideas. That initiative was not fully implemented until fairly recently.
I would have difficulty believing Mr. Gates would ever advocate giving IP - and associated gains in sales - away because of the harm of paying for them.
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