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The nexus between science and industry: evidence from faculty inventions

Abstract

Knowledge transfer from science to industry has been shown to be beneficial for the corporate partner. In order to get a better understanding of the reasons behind these positive effects, this study focuses on the junction of science and industry by comparing characteristics of academic inventions that are transferred to industry and those staying in the public sector. Academic inventions are identified via patent applications of German academic scientists. We find that academic patents assigned to corporations are more likely to enable firms reaping short term rather than, possibly more uncertain, long-run returns, in contrast to patents that stay in the public sector. Firms also strive for academic inventions with a high blocking potential in technology markets. Academic patents issued to corporations appear to reflect less complex inventions as compared to inventions that are patented by the public science sector.

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Notes

  1. Mowery and Sampat (2001) and Sampat (2006) describe the increase in patenting for U.S. universities and investigate the reasons. Franzoni and Lissoni (2009) describe the move towards more engagement in entrepreneurship for European universities and provide a comparison with the U.S.

  2. We focus on the assigneeship of academic patents rather than on other potential technology transfer modes because of the fact that the majority of European academic inventions are immediately assigned to businesses and that university licensing still occurs only occasionally in Europe. In 2006, European Technology Transfer Offices (TTOs) had, on average, only 11.2 licenses, of which only 2.3 yield licensing revenue for the university (ProTon 2006). The estimated number is based on survey evidence for 325 European TTOs. The ProTon survey is the European equivalent of the AUTM (The Association of University Technology Managers) survey for the U.S.

  3. Note that for our present research question, the sequence in which the technology transfer events happen is not of primary interest. For our purpose, it does not matter whether a scientist invents something and then sells his or her idea to the business sector that subsequently takes out a patent or whether a company requests consultancy from a scientist that eventually results in a corporate patent.

  4. An immediate implication of these practices is that the contribution of European universities to business innovation development is largely underestimated if such science-industry collaborations are not taken into account (Geuna and Nesta 2006, Verspagen 2006, van Pottelsberghe de la Potterie 2007).

  5. Before the Bayh-Dole Act, there was no general law that decided about the ownership of U.S. university inventions. In the U.S. context, university research is often co-financed by federal resources like the National Institutes of Health or the National Science Foundation or by the corporate sector. The ownership of intellectual property rights had to be negotiated case by case before Bayh-Dole (Mowery and Sampat 2001). Empirical evaluations of the effect of Bayh-Dole on U.S. university patenting are provided by Henderson et al. (1998), Mowery et al. (2002), Mowery and Ziedonis (2002) and Sampat et al. (2003).

  6. The importance of university consulting for industry is also reflected in such endeavors as the “Berlin agreement”, a collaboration between the Berlin universities, industry partners and the company Patentverwertungsagentur ipal GmbH, which aims at defining a set of rules, describing the manner in which to deal with patentable inventions ensuing from research co-operations or assignments financed by industry. From the perspective of the industry partners it is most important to ensure that universities do not only transfer patented technologies but also provide consulting service and information on related inventions even if there is no intention to publish those (Goddar 2005).

  7. This change in legislation also took place in France (Della Malva et al. 2008), in Denmark and Austria. Other European countries adopted different legislations. Italy has introduced the professor’s privilege in 2001 (“Legge Finanziaria”) and Sweden maintained the professors’ privilege (see van Pottelsberghe de la Potterie 2007, for a more detailed discussion).

  8. The major U.S. initiatives are the Small Business Technology Transfer (SSTR) that fosters collaboration between universities and small firms, the Small Business Innovation Research (SBIR) that allows academic scientists to commercialize their inventions (Toole and Czarnitzki 2007, 2009, 2010), and, formerly, the Advanced Technology Program (ATP) program for encouraging university industry collaborations (Hall et al. 2003).

  9. Complementary surveys are provided by Verspagen (2006) and Geuna and Nesta (2006).

  10. To further check the completeness of our sample of academic patents, we compared the outcome with a similar search in the data from the GPTO. We used the data collected by Czarnitzki et al. (2007) which covered the time period 1990–2001. Using the GPTO data, we searched for all patents that have an EPO equivalent and that list professors as inventors in the EPO database. We found only 112 applications in which the GPTO patent listed a professor, but not the equivalent EPO patent. As we could not perform this search for the whole time period considered in this paper, we decided not to add these 112 patents to our sample.

  11. These will most likely be researchers at the labs that do not have a professor title. As we cannot be sure, however, we prefer to drop such patents.

  12. Including these patents as a separate group does not alter any of the reported results.

  13. Note that the estimated coefficient of this dummy has no interpretation in itself. Instead of zero, we could also have imputed a different number than zero, and the estimate of the slope coefficient of the share of X and Y citations would be numerically identical. Then the dummy variable would just have a different coefficient due to the arbitrary choice of the imputation value.

  14. Note that it might appear as a conceptual problem that forward citations only occur chronologically after the assignment of a patent. However, this potential conceptual problem is common to all studies using such measures. Therefore, scholars typically do not claim investigating causality but only analyze multivariate correlations as we do here.

  15. There is no obvious cut-off point for forward citations. However, most citations at the EPO are garnered before the fifth year (see e.g. Webb et al. 2005).

  16. For the U.S., Link et al. (2007) show that in particular tenured and research-grant active university scientists engage in technology transfer without involvement of the U.S. TTOs.

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Acknowledgments

We are grateful to Rene Belderbos, Georg Licht, Bart van Looy, Antonio della Malva, Jerry Thursby, Marie Thursby and three anonymous referees for helpful comments.

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Correspondence to Dirk Czarnitzki, Katrin Hussinger or Cédric Schneider.

Appendix

Appendix

See Tables 5, 6, and 7.

Table 5 Technology classes
Table 6 t-Tests on mean differences
Table 7 Bivariate correlations

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Czarnitzki, D., Hussinger, K. & Schneider, C. The nexus between science and industry: evidence from faculty inventions. J Technol Transf 37, 755–776 (2012). https://doi.org/10.1007/s10961-011-9214-y

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Keywords

  • Academic inventors
  • University-industry technology transfer
  • Intellectual property rights

JEL Classification

  • O31
  • O32
  • O34