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Patently misguided

Giving universities the rights to academics’ inventions has backfired, say Catalina Martinez and Valerio Sterzi

Up until 2000, Germany, Austria and the Scandinavian nations allowed academics, rather than the universities that employed them, to hold the exclusive rights to patents on inventions. Now, only Sweden retains this system, called the professor’s privilege.

In the other countries, policymakers gave universities the rights to, and most of the income from, researchers’ inventions. This was intended to inspire a tech-transfer boom; it emulated the US Bayh-Dole act from 1980, which transferred the rights to profit from federally funded research from government to universities. 

In a recent study, we looked at the effects of these changes. We found that they have certainly worked to redistribute intellectual property rights. In Austria and Germany, for example, nowadays only a fifth of academic-invented patents are assigned to individuals or firms. The social and economic returns, however, are more questionable. Across Europe, we found that the end of the professor’s privilege brought a decline in the technological importance of patents owned by universities and their exploitation by technology transfer offices.

As a measure of a patent’s quality, we looked at its citation in future patents. Countries that ended the professor’s privilege saw a large fall in citations of university patents. This was not seen in patents assigned to companies, or to university patents in countries where policy remained the same.

Regarding management of intellectual property, we found that university patents were renewed on average less often or were extended internationally to fewer countries following the change. We also looked at academic-invented patents— those that name university researchers as inventors, but are not owned by universities. The technological importance of company-owned academic inventions rose in countries where professor’s privilege was abolished’

It looks as if abolishing the professor’s privilege caused the quantity of universities’ intellectual property to rise, but its quality to fall, as ownership of lower-quality academic inventions shifted from professors and companies to universities. At the same time, the culture of technology transfer in universities changed, with many opening (often inexperienced) technology transfer offices.

Our findings mirror previous studies in individual countries showing that ending the professor’s privilege dented academic entrepreneurship. Norwegian researchers, for example, halved their patenting activity after two-thirds of their patent income was transferred to universities in 2003.

The issue of whether society benefits most if universities or their researchers own academic inventions is entangled with another debate about whether and how universities should try to maximise revenue from their patents. Recent evidence shows that US universities have become more aggressive in monetising their patents. This involves enforcement actions on their own part, and also licensing and transferring patents to patent assertion entities. Sometimes called patent trolls, these acquire intellectual property rights not so they can put inventions to use, but to make money suing potential infringers. 

Patenting is a valuable part of the tech-transfer toolkit. But simply changing regulations around intellectual property without taking the context into account is unlikely to have the desired consequences—and will probably have unintended consequences. It also shows that it is a mistake to simply count patents, as some rankings do, when what you really want is economic and social benefit.

An excessive emphasis on patents as the primary means of technology transfer in universities is one consequence of a linear model of innovation, which sees inventions moving from laboratory to market in a simple process of research and development. We now know that innovation is more complex, involving many different actors, and ideas and resources moving in many different directions.

Some universities and policy-makers have started to realise this and are taking a more nuanced and multidimensional approach. This typically involves improving the staffing and expertise of technology transfer offices, looking beyond patents as a mechanism for commercialising research, and taking a more holistic view of tech transfer and its evaluation.

Universities should place more value on complementary approaches to patenting and licensing through technology transfer offices. This could include joint initiatives between academia and industry, spin-off companies, research contracts, sponsored research, staff exchanges, joint publications, conferences and specialised media, informal contacts within professional networks, the flow of graduates from university to industry—or simply serendipity.

Catalina Martinez studies the economics of science and innovation at the Institute of Public Goods and Policies in Madrid.
Valerio Sterzi is an economist at the University of Bordeaux and a research fellow at GREThA (CNRS). They write in a personal capacity.

This article also appeared in Research Europe