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Proofs and Prototypes for Sale: The Tale of University Licensing

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  • Richard Jensen
  • Marie Thursby

Abstract

Proponents of the Bayh-Dole Act argue that unless universities have the right to license patentable inventions, many results from federally funded research would never be transferred to industry. Our survey of U.S. research universities supports this view. Results point to the embryonic state of most technologies licensed and the need for inventor cooperation in the commercialization process. Thus, for most university inventions, there is a moral hazard problem with regard to inventor effort. Our theoretical analysis shows that for such inventions, development would not occur unless the inventor's income is tied to the licensee's output by payments such as royalties or equity. Sponsored research can also be critical to commercialization, but it alone does not solve the inventor's moral hazard problem.

Suggested Citation

  • Richard Jensen & Marie Thursby, 1998. "Proofs and Prototypes for Sale: The Tale of University Licensing," NBER Working Papers 6698, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6698
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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