1. University IPRs and Knowledge Transfer. Is the IPR ownership model more efficient? Gustavo Crespi (SPRU) Aldo Geuna (SPRU & ICER) Bart Verspagen (ECIS) PECS, July 2007

2. Structure of the presentation University IPRs and Knowledge Transfer: An “efficient” system? European University Patenting. First Results of Empirical Analysis: – Control function approach; – The matching approach Conclusions

3. University IPRs and Knowledge Transfer 1 Bayh-Dole like regulation for Europe. Policy literature on advantages and disadvantage of patenting. Theoretical literature on the reasons for university patenting and why market failure can occur: – Ex-ante, shirking (Aghion and Tirole, 1994); – Ex-post, searching costs (Hellman, 2005); – Downstream patenting and open access (Mazzoleni, 2005).

4. University IPRs and Knowledge Transfer 2 Aghion & Tirole model: market failure can occur when a patent is assigned to the firm instead than to the university - University- owned versus university-invented patents. Under certain circumstances university ownership would result in a more efficient system. – How can we test this prediction?

5. University IPRs and Knowledge Transfer 3 R.Q.: – Ceteris paribus, can we find a positive effect of university ownership on the economic value and/or the rate of commercial application of patented inventions? If so we find evidence of market failure and therefore support for the development of Bayh- Dole like regulation in Europe.

6. European and US University Patenting

7. European University Patenting Patval Database: – 9,000 EPO Inventors 1993-1997; 18% of EPO pats; – UK, NL, I, F, D and S. European university patents (433, 4.8%): – country of inventor, – ownership.

8. Ownership in the EU context University-owned patents 18% University-invented patents 82%

9. Ownership in the US context 87 research universities in US 1993, 34,000 scientists, 5,772 University-invented patents: University-owned patents 66% University-invented patents 34% Source: Elaboration of data from Thursby et al. 2006

10. Challenge to the “rhetoric” The rhetoric: “European universities are inefficient in technology transfer”. Academic patents in the US PTO in the period 1993- 1997 4.3%. Adjusting for university-invented patents takes it to 5.7% Some of the difference in level can be explained by: – Role of PROs in EU output; – USPTO 3 time EPO (59,000 v 169,000 in 2003); – Higher science spending; – Larger number of IPR active universities (effect of B-D?).

11. European PRO patents European PRO patents (236 ~ 2.6%) PRO-owned patents 42% PRO-invented patents 58%

12. University/PRO invented patents

13. Empirical Analysis

14. To asses the existence of a market failure we estimate if IPR ownerships (are the patents university-invented or university-owned) has an impact on the Use/Value of the patent.

15. Empirical Analysis Use: – Has the applicant/owner ever used this patent for commercial or industrial purposes? – Has this patent been licensed by (one of) the patent-holder(s) to an independent party? – Has this patent been exploited commercially by yourself or any of your co-inventors by starting a new company?

16. Empirical Analysis VALUE: “suppose that on the day in which this patent was granted, the applicant had all the information about the value of the patent that is available today. If a potential competitor of the applicant was interested in buying the patent, what would be the minimum price the applicant would demand?” The responses were structured in 10 asymmetric intervals ranging from less than E30.000 to more than E300 million.

17. Use/Value 3

18. Invented versus Owned Control variables: – Inventor background – Invention background – Technology Effects – Country effects 18 Control variables

20. Invented owned

21. Econometric/Statistical Results

22. Control function approach Treated => patent owned by the university; We estimate an average treatment effect (marginal effect at the sample mean); Control for time (diffusion and increase propensity to own patents). – Probit – OLS

24. Matching Approach Treated => patent owned by the university (77) Matching sample on 18 variables characterising the inventor and the invention, plus country and technology: – Nearest-Neighbour, one-to-one match; – Kernel, weighted average of all controls

25. Nearest-Neighbour ATT: Average treatment effect on the treated

26. Kernel ATT: Average treatment effect on the treated

27. Results of the Empirical Analysis 1 We have found preliminary evidence indicating that the ownership of academic patents by the university increased the probability of being licensed. However, ownership does not have a significant effect either on commercial use or creation of spin-offs.

28. Results of the Empirical Analysis 2 Academic ownership has an important but not significant negative effect on the value of university patents. We did some preliminary work with forward citations finding that university ownership has a negative effect.

29. Conclusions 1 The institutional set up of university knowledge transfer in Europe is different form the one in the US: less than 20% of patents with a academic inventors are owned by universities, compared to more that 60% in the US. It seems that, relative to inputs, the technological output of EU universities is not so inferior to the one of US universities as previously believed.

30. Conclusions 2 We have found preliminary evidence indicating that the ownership of academic patents by the university increased the probability of being licensed but not its use or value.

31. Conclusions 3 These results seem to indicate that there is no strong market failure and therefore there is no need neither for new Bayh- Dole like regulation nor for incentives to make universities more proactive in owning the IPR from academic patents.