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The Effects of University Patenting and Licensing on Downstream R&D Investment and Social Welfare

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  • Roberto Mazzoleni

Abstract

A central argument behind the Bayh-Dole Act presumed that firms had no incentives to invest in downstream R&D aimed at developing university inventions committed to the public domain. The empirical evidence on university patenting and licensing is partly at odds with the premises of this argument. Non-exclusive licensing of university patents has been common and lucrative, and in the area of biomedical technologies university patents and licensing restrictions may be a hindrance to downstream R&D, rather than a stimulus. The paper presents a model of R&D competition based on a university invention where appropriability conditions are defined by the patentability of downstream innovations and imitation opportunities. A comparison of equilibria under “open access” to university inventions and under “university patenting” shows that only under restrictive conditions the latter regime results in increased R&D investment and social welfare. In general, university licensing royalties are therefore a poor gauge of social welfare gains from university patenting. Copyright Springer Science+Business Media, LLC 2006

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  • Roberto Mazzoleni, 2006. "The Effects of University Patenting and Licensing on Downstream R&D Investment and Social Welfare," The Journal of Technology Transfer, Springer, vol. 31(4), pages 431-441, July.
    • Handle: RePEc:kap:jtecht:v:31:y:2006:i:4:p:431-441
    DOI: 10.1007/s10961-006-0004-x
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    References listed on IDEAS

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    1. Jorge Niosi, 2006. "Success Factors in Canadian Academic Spin-Offs," The Journal of Technology Transfer, Springer, vol. 31(4), pages 451-457, July.
    2. Roberto Mazzoleni, 2005. "University patents, R&D competition, and social welfare," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(6), pages 499-515.
    3. Jerry G. Thursby & Marie C. Thursby, 2007. "University licensing," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(4), pages 620-639, Winter.
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    Cited by:

    1. Baldini, Nicola, 2009. "Implementing Bayh-Dole-like laws: Faculty problems and their impact on university patenting activity," Research Policy, Elsevier, vol. 38(8), pages 1217-1224, October.
    2. Amit Shovon Ray & Sabyasachi Saha, "undated". "Patenting Public-Funded Research for Technology Transfer: A Conceptual-Empirical Synthesis of US Evidence and Lessons for India," Indian Council for Research on International Economic Relations, New Delhi Working Papers 244, Indian Council for Research on International Economic Relations, New Delhi, India.
    3. Kenney, Martin & Patton, Donald, 2009. "Reconsidering the Bayh-Dole Act and the Current University Invention Ownership Model," Research Policy, Elsevier, vol. 38(9), pages 1407-1422, November.
    4. Öcalan-Özel, Sıla & Pénin, Julien, 2019. "Invention characteristics and the degree of exclusivity of university licenses: The case of two leading French research universities," Research Policy, Elsevier, vol. 48(6), pages 1445-1457.
    5. Sabrina Backs & Markus Günther & Christian Stummer, 2019. "Stimulating academic patenting in a university ecosystem: an agent-based simulation approach," The Journal of Technology Transfer, Springer, vol. 44(2), pages 434-461, April.
    6. Castillo Holley, Alicia & Watson, John, 2017. "Academic Entrepreneurial Behavior: Birds of more than one feather," Technovation, Elsevier, vol. 64, pages 50-57.
    7. James Cunningham & Paul O'Reilly, 2019. "Roles and Responsibilities of Project Coordinators: A Contingency Model for Project Coordinator Effectiveness," JRC Research Reports JRC117576, Joint Research Centre.
    8. Shen, Huijun & Coreynen, Wim & Huang, Can, 2022. "Exclusive licensing of university technology: The effects of university prestige, technology transfer offices, and academy-industry collaboration," Research Policy, Elsevier, vol. 51(1).
    9. G.S Ascione & L. Ciucci & C. Detotto & V. Sterzi, 2021. "Do universities look like patent trolls? An Empirical Study of University Patent Infringement Litigation in the United States," Working Paper CRENoS 202105, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    10. Pojo, Sabrina Da Rosa & Vidal, Valéria Schneider & Zen, Aurora Carneiro & Barros, Henrique M., 2013. "Management of Intellectual Property in Brazilian Universities: a Multiple Case Study," Insper Working Papers wpe_330, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.

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