The Effects of University Patenting and Licensing on Downstream R&D Investment and Social Welfare

Roberto Mazzoleni

The Journal of Technology Transfer, 2006, vol. 31, issue 4, 441 pages

Abstract: A central argument behind the Bayh-Dole Act presumed that firms had no incentives to invest in downstream R&D aimed at developing university inventions committed to the public domain. The empirical evidence on university patenting and licensing is partly at odds with the premises of this argument. Non-exclusive licensing of university patents has been common and lucrative, and in the area of biomedical technologies university patents and licensing restrictions may be a hindrance to downstream R&D, rather than a stimulus. The paper presents a model of R&D competition based on a university invention where appropriability conditions are defined by the patentability of downstream innovations and imitation opportunities. A comparison of equilibria under “open access” to university inventions and under “university patenting” shows that only under restrictive conditions the latter regime results in increased R&D investment and social welfare. In general, university licensing royalties are therefore a poor gauge of social welfare gains from university patenting. Copyright Springer Science+Business Media, LLC 2006

Keywords: university patents; R&D competition; Bayh-Dole Act; downstream innovation; O310; O340 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jtecht:v:31:y:2006:i:4:p:431-441

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DOI: 10.1007/s10961-006-0004-x

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