Ivory Tower and Industrial Innovation:
University-Industry Technology Transfer Before and After the Bayh-Dole Act
forthcoming Stanford University Press, 2004
Richard R. Nelson, David C. Mowery, Bhaven N. Sampat, and Arvids A. Ziedonis

--Summary by Arvids Ziedonis

Summary

The role of universities in industrial innovation and economic growth has received considerable attention in recent years as U.S. universities continued to expand their patenting and licensing activities. Many observers have attributed this expansion to the Bayh-Dole Act of 1980, although they have offered little hard evidence in support of this argument. Nor has much evidence been produced to show that university inventions must be patented and licensed if they are to have an impact on industry and commerce. Other, more critical accounts of the Bayh-Dole Act have suggested that the increase in academic patenting and licensing has altered the “research culture” of U.S. universities, leading to increased secrecy and shifts in the focus of academic research toward applied, commercially viable topics.

Our forthcoming book, Ivory Tower and Industrial Innovation, examines the relationship between the academy and the economy, focusing in particular on the role of patenting and licensing of academic inventions in technology transfers between universities and industry. Our evidence suggests that the Bayh-Dole Act was one of several factors that contributed to the growth of patenting and licensing by U.S. universities during the 1980s and 1990s. The Act provided a strong Congressional endorsement for such patenting and licensing and simplified the administrative processes through which U.S. universities gained title to intellectual property created by publicly-funded research. Even without the Bayh-Dole Act, however, we believe that university patenting would have grown significantly during these decades. Many U.S. universities were active patenters and licensors long before the Bayh-Dole Act was passed and expanded these activities during the 1970s and early 1980s in response to significant advances in biomedical research and changes in the legal treatment of patents on life forms. It is likely that these activities would have continued and spread, even in the absence of the Bayh-Dole Act. Nonetheless, there is little doubt that U.S. universities now are more heavily and directly involved in patenting and licensing their research results than at any previous time in their history.

The book first considers the historical evolution of university-industry relations and technology transfer in the United States. We find that the prominent role of U.S. universities in industrial innovation predates the recent period of growth in university patenting. The historical contributions of universities to industrial innovation occurred through a diverse array of channels, all of which continue to figure prominently in university-industry exchanges. Many of these contributions took place without patenting. One particularly important factor supporting the development of research links and two-way flows of knowledge and technology between U.S. universities and industry throughout the 20^th century was the unusual structure of the U.S. university system, an issue that we discuss in some detail.

The book also analyzes the debates of the 1920s and 1930s over the role of university patenting and licensing, debates that displayed both remarkable similarities and some important contrasts to discussions of the Bayh-Dole Act in the late 1970s. Through much of the 20^th century U.S. universities were ambivalent about direct involvement in patenting and licensing. Any appearance of profiteering at public expense, administrators reasoned, would be politically embarrassing. As a result, a number of leading research universities limited faculty patenting, primarily in the biomedical arena, for much of the pre-1970 period. Even where such leading research universities as MIT encouraged patenting by faculty, they avoided direct involvement in the management of these patents and associated licenses.

Our overall verdict on the Bayh-Dole Act is mixed. Much of the post-1980 upsurge in university patenting and licensing, we believe, would have occurred without the Act and reflects broader developments in policy and research. This increase in patenting and licensing, however, has been limited to a few fields of research, and any “cultural impacts” associated with such an expansion are also relatively localized. At the same time, any evidence of detrimental effects on the norms and direction of academic research, disclosure of results, conflicts of interest, and the like will take time to emerge, and indicators of such effects will be most compelling well after any damage has occurred. The Act’s emphasis on patenting and licensing as a critical vehicle for the transfer of academic inventions to industry lacked empirical support when the bill became law, and the evidence remains mixed today.

U.S. universities have long collaborated with industry on both applied and fundamental research, and channels other than patenting have been critical to this collaboration. In fact, patenting per se is less critical to any assessment of the Act’s effects on public welfare than the types of licensing policies adopted by universities. Our overall assessment of the Bayh-Dole Act therefore emphasizes the role and responsibility of universities, as well as those of policymakers. We believe that U.S. universities must exercise considerable discretion and political sensitivity in managing their intellectual property if the remarkable achievements of the past century are to continue into the new century.

This work is licensed under a Creative Commons License.