Essay of the Day: Reconsidering the University Invention Ownership Model

* Essay: Reconsidering the Bayh-Dole Act and the Current University Invention Ownership Model. By Martin Kenney and Donald Patton.

From the abstract:

“The current model within which universities own the inventions made by their researchers was enshrined in the Bayh-Dole Act of 1980. This paper finds that the current system, in which universities maintain de jure ownership of inventions, is not optimal either in terms of economic efficiency or in advancing the social interest of rapidly commercializing technology and encouraging entrepreneurship. We demonstrate that this model is plagued by ineffective incentives, information asymmetries, and contradictory motivations for the university, the inventors, potential licensees, and university technology licensing offices (TLOs). We suggest that these structural uncertainties lead to delays in licensing, misaligned incentives among parties, and delays in the flow of scientific information and the materials necessary for scientific progress. The institutional arrangements within which TLOs are embedded have encouraged some of them to become revenue maximizers.

We suggest two invention ownership models as superior alternatives to the conventional model. The first alternative is to vest ownership with the inventor, who could choose the commercialization path for the invention. For this privilege the inventor would provide the university 5 percent ownership stake in any returns to the invention. The inventor would be free to contract with the university TLO or any other entity that might assist in commercialization. The second alternative discussed is to make all inventions immediately publicly available through an open source strategy or, through a requirement that all inventions be licensed non-exclusively. Both alternatives would address the current dysfunctional arrangements in licensing university technology .”

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