Academic Patenting in OECD
Countries
Mario Cervantes, OECD
25 Nov 2003
2nd EPIP Conference - Maastricht
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Today’s Themes
(1) Academic Patenting as Policy
(2) Concerns about academic
patenting
(3) Evidence from the literature
(4) Insights from OECD Survey on
Academic Patenting
5) Lessons
25 Nov 2003
2nd EPIP Conference - Maastricht
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Academic Patenting as Policy
Before Bayh-Dole
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1920-1970s Ad hoc petitions by US universities
1970s- Institutional agreements between
Federal Agencies/Departments & Universities
“ Success” breads emulation

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Reforms to funding rules in Germany, Japan,
Korea
Abolishment of professor’s privilege in
Denmark, Germany Austria, Norway
Policies based on US “success” - and not on
evidence of under- utilisation of IP by
professor inventors
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Academic Patenting as Policy
(con’t)
- What is success?

Patents and Licenses

Royalty Revenue

New Products

Spin-off companies

Good Jobs and Growth
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Academic Patenting as Policy
(con’t)
- Stylized facts:
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US universities held 270 patents in 1970 ; and
3,617 in 2000.
US universities earned $200 million in
licensing revenue in 1991 and $1.2 billion in
2000
390 new firms by 2000.
Thousands of jobs, billions to economic
development (MIT, AUTM reports)
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The problem with success
Success in Academic patenting does
not happen in isolation

Need markets for technology

Need entrepreneurial academics

Need tacit knowledge

Need institutional structures that give TTOs
independence and credibility vis-a-vis
academia and industry

Need management and financial skills

Need luck - success is highly skewed
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2nd EPIP Conference - Maastricht
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Concerns about Academic Patenting
1. Concerns with patents in general - scope,
quality, patent strategy (to exploit, to defend),
fragmentation of IP rights (anti-commons)
2. Concerns about the mission of universities shift from basic to applied, impact on
academic freedom, conflicts of interest, costs
and benefits
3. Concerns about academic patents in
particular- will they aggravate the shift? Will
they block research? Will they stifle other
forms of knowledge transfer? Exclusive vs.
non-exclusive licenses
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Evidence from the literature
(Based on review by Sampat for OECD Working
Paper Series, forthcoming, 2003)
Shift to applied:
Jensen and Thursby 2002- 48% of university
inventions are “proofs of concept”
Thursby and Thursby - 44% licensed inventions
by firms (n=112) are “ proofs of concept.
(Mowery/Sampat 2001) difficult to disentangle
the cause as academic patenting increased in
parallel to industry-science linkages
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Evidence from the literature
Shift to applied research?
Hendersen, Jaffe and Trajtenberg 1998 found
increase in academic patenting was
accompanied by decline in quality of patents
as measured by citations but not conclusive as
to there was a shift towards applied research

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Sampat, Mowery Ziedonis (2003) find no
“quality decline” after Bayh-Dole.
Mowery et al 2001- based on bio invention
disclosures find little evidence
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Evidence from the literature
(con’t)
Does involvement in patenting “crowd out”
publication activity ?

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Agrawal and Henderson (2002) number of
patents positively related to quality of patents
as measured by citations
Stephan et al. (2002) based on NSF data find
positive relationship between patents and
publications
Involvement in post-licensing at the expense of
basic research (David 1999, Thursbys,2002)
In summary : evidence is inconclusive
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Evidence from the literature
(con’t)
Effects on secrecy, disclosure:


Blumenthal et al. 1997 found 20 of life science
faculty delayed publications, nearly half of
them in order to protect patentability
Campbell et al. 2002 found that 47% of
academics in genetics were denied data
requests resulting in delays in their
publications or inability to replicate results
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Evidence from the literature
(con’t)
Effects on research progress:

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Eisenberg 1999 finds increased administrative
burden and costs in accessing research tools
Walsh, Arora and Cohen (2002) - little evidence
that research tool patenting and licensing have
halted downstream research
Sampat (2002) finds increase in number and
share of citations to non-patent literature in
university patents since Bayh-Dole and since
1990
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Evidence from the literature
(con’t)
Effects on research progress :
Universities are patenting more upstream
research
Researchers that patent also publish more and
hence could be citing more of their or peers’
research in their patents
Effects on access are very dependent on claims
and licensing practices
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Evidence from the literature
(con’t)
SUMMARY
- Most academic licenses involve embryonic
inventions
- There has not been a dramatic re-orientation
from basic to applied
- Evidence of a growth in secrecy and limits on
disclosure
- Universities are patenting inputs to research
that were previously released in public domain
- Need for more research as well as dissemination
of safeguards
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OECD Survey on Patenting and
Licensing - background

To document the laws and regulations that affect
the protection and licensing of innovations by PROs

To measure actual PRO IP activity
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To assess nature of license agreements

To identify best practices for framework conditions
and IP management, in an effort to balance PRO
commercial objectives with research missions
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Methodology

2 surveys administered by participating countries
– 1st to national governments on legal framework
– 2nd (modelled on AUTM and national surveys) to PROs
on patents and licenses

13 countries administered questionnaire (‘00 or ‘01)
Belgium, Canada, Denmark, Germany, Italy, Japan, Korea,
Netherlands, Norway, Spain, Switzerland, Russia, USA

Questionnaire responses not directly comparable
– Mix of univs and PROs dependent on country
– Response rates range from 59% to 90 % but some
questions not answered
– Normalisation by PRO size or research intensity not possible
– Australia and US used existing survey
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A Focus on Licensing

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No int’l comparisons of licensing income
Better commercial proxy than patents
Captures broader range of IP activity
License clauses reveal information about PRO
public mission
License info helps create new indicators:
efficiency, income skew
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Legal Frameworks for IP at
PROs are Complex
Legal Frameworks
Intellectual Property Legislation
Employment Laws
Law/rules on government research funding
Contract Law
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Do countries need a Bayh-Dole Act?

Emulation of Bayh-Dole
- Japan; Germany; Korea

Reform of Employment Laws – abolishment of
“Professor’s Privilege” at Universities
- Austria, Denmark, Germany, Norway

- Issuance of National “Codes of Practice or
“IP policy guidelines”
- Canada, Ireland
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Trends in regulations

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IP policies are not well disseminated, including
among faculty and students
Administrative or legal requirements to
disclose inventions, protect and work
inventions are lacking
Royalty sharing rules sometimes set
nationally, but move to greater autonomy at
institutions
Non-IP barriers remain:
– Government limits to keeping royalty revenue
– -limits against equity ownership by universities
– Public pay-scales that limit hiring of tech-transfer
professionals
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TTO Organisation & Managment
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Most TTOs are less than 10 years old
Most have less than 5 FTE staff
Most univ TTOs are integrated into the
university but not dedicated to tech transfer
Informal relations are main channel of tech
transfer (own or researcher contacts)
Licensing-in technology is less frequent than
licensing-out
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Most TTOs less than 10 years old, less
than 5 FTE staff
100
Japan
Italy
(Univ.)
90
Italy
(PROs )
Establishement after 1990
(% responses)
80
Switzerland
(PROs )
Switzerland
(Univ.)
70
60
Korea
(PROs )
50
Germ any
Korea
(Univ.)
40
Rus s ia
30
20
Norway
10
0
0
20
40
60
80
100
Structure with less than 5 FTE
(% res pons es )
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2nd EPIP Conference - Maastricht
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Most TTOs are internal to the univ but not
dedicated to tech transfer
Specialised on technology transfer
(% reporting dedicated TTO)
100
80
Netherlands
(Univ.)
Korea
Netherlands (PROs)
(Univ.)
60
Sw itzerland (PROs) Germany
Sw itzerland
(Univ.)
40
Italy
Denmark
Japan
Norw ay
Korea
(PROs)
20
Russia
0
0
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20
40
60
Internal TTO
2nd EPIP to
Conference
- Maastricht
(% reporting
be integrated
into the PRO)
80
100
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Patent Data
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Data refers to patents assigned to
institutions
Stock of patents smaller at univs than at
other PROs (<20)
Number of patents granted per year per
PRO is <10
Most patent applications are in health
but others fields - energy, ICT,
production technologies present
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Stock of patents and renewal
of portfolio
Less than 10 patents
Less than 50 patents
100
58
43
47
78
40
20
18
38
54
33
Renew al of the portfolio
(less than 10 applications)
80
60
40
20
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2nd EPIP Conference - Maastricht
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Size of the patent portfolio
(% responses)
30
25 25
Licensing Practices

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
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Great variability in number of licenses
negotiated, IP type and technology
sector
Licensees more often small than large
firms, more often domestic than foreign
PROs uneven in their use of safeguards
in licensing agreements
No consensus yet on what are good
licensing practices
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2nd EPIP Conference - Maastricht
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Average # of licenses negotiated per PRO:
1-24 per year
30
25
avg. per PRO
20
15
10
5
0
United
States Univ.
25 Nov 2003
Germany
PROs
Netherlands ALL
Korea ALL
Russia ALL
Australia
Univ
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Japan ALL
Switzerland
ALL
Italy ALL
27 27
Norway A
% of licenses negotiated by IP type
Netherlands
Patented inventions
Patent pending
Non-patented
Copyrighted material
Industrial designs
Plant breeder's rights
Other
Total
25 Nov 2003
Univ%
PRO%
Norway
All
No.
%
8%
12%
52%
24%
0%
1%
2%
100%
8%
9%
41%
42%
0%
0%
0%
100%
9
16
12
106
3
0
0
146
6%
11%
8%
73%
2%
0%
0%
100%
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Switzerland
Univ%
PRO%
11%
17%
14%
42%
5%
1%
12%
100%
26%
23%
29%
23%
---100%
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PROs do use safeguard clauses in licenses
to protect mission, but do so
inconsistently
All
License requirem ents (all apart from the NRLs)
Some
None
35
30
% responses
25
20
15
10
5
0
Requirement to w ork
the invention
25 Nov 2003
Requirement to w ork
the invention in the
country
Right for licensee to
delay publication of
papers
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Reach-through
clauses for the
institution
Licensor has right of
first refusal for future
inventions by the
licensee institution
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Licensing Revenues
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Gross license income per PRO varies from 10k - 10m
Euros per year across OECD countries
Wide variety in the number of licenses at PROs that
are earning income: 1-90 per PRO, median or 0-5
license earn income
In most countries, only 10% active patents in a PRO
portfolio are ever licensed and earn revenue in a
given year
Cost of patenting and licensing not well documented
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In most countries, 10% active
patents are ever licensed and earn
revenue
Italy Japan Netherlands Norway Spain
PROs All Univ PROs All Univ
Switzerland
Univ PROs
Total # of active
patents
515 432 277 247 114 781 914 270
% Ever licensed
19% 21% 19% 51% 40% 8% 17% 36%
% Currently earning
income
8%
25 Nov 2003
n.a. 7% 13% 23% 4%
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8%
9%
31 31
Gross licensing revenue by type of
PRO in (1 000s)
Australia
Belgium
Germany
Japan
Korea
Netherlands
Norway
Spain
Switzerland
United
States
Russia
25 Nov 2003
Year
2000
2001
2001
2000
2001
2000
2001
2001
2001
2000
All
99 525
240
1 397
3 822
11 400
961
5 650
-
Univ
79 834
1 032
2 000
2 800
1 297 452
2001
1 375
-
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PRO
19 691
46 468
2 790
7 700
2 850
69 600
-
currency
USD
EUR
EUR
EUR
USD
EUR
EUR
EUR
EUR
USD
EUR
32 32
Lessons Learned

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Legal action can stimulate tech transfer, but national
context matters
A change in mindset is needed: more can be done to
increase awareness of IP policies and rules at PROs
Monitoring of IPR activities at PROs is ad hoc and weak
Critical size of TTOs larger than present average
No one-size fits all model of TTO organisation
University vs. non-university PROs in most countries have
taken very different approaches to tech transfer
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Lessons Learned
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IP protection and licensing differs by
field/sector
Too much focus by policymakers on
patents as outcome hides large variety of IP
activity at TTOs
PROs are experimenting with different
models of TTO (regional vs. sector)
Good licensing practices need better
identification and dissemination
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Ultimate Goal of Tech Transfer
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Too much focus on patenting as opposed to
spin-offs or other channels of tech transfer
Unpredictable nature of financial returns
Tech transfer capacity takes time and skills,
not just money
Evaluation of short vs. long term benefits of
tech transfer is necessary
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How can governments support IP
management at PROs?
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Need to establish a clear and coherent IP
framework for PROs
Need to provide incentives for PRO reporting
and disclosure by inventors
Set example for conflict of interest rules –
national research guidelines help
Mobilize National Patent Offices to disseminate
information to universities; training to tech
transfer professionals
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How can governments support IP
management at PROs?

Subsidizing Patenting and licensing costs at
PROs
- Denmark (8 million EUR over 2000-2003)
- Germany (50 million EUR to develop TTOs)
- Japan (exempt TLOs from patent fees)
BUT avoid capture and dependency culture

TTO Networking Initiatives
- UK (around hospitals)
- Germany (regional networks)
- Korea (sectoral)

Training & Awareness
- United Kingdom
- Leveraging Patent Offices (US, Denmark, Japan, UK)
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How can governments support IP
management at PROs?
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Encourage data collection
International co-ordination of surveys is
necessary, especially OECD-wide
Need follow-up work on effects of
academic patenting
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
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Thank you!
25 Nov 2003

Mario.cervantes@oecd.org

Benedicte.callan@oecd.org
2nd EPIP Conference - Maastricht
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