University Licensing: Harnessing or Tarnishing Faculty Research?

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The central issue we consider is whether university patent licensing, afforded by the Bayh‐Dole Act, has diverted universities away from their basic research mission. The act, passed in 1980, was intended to stimulate the transfer of federally funded research to industry. While statistics on licensing activity suggest that it has served this purpose, they have also fueled debates as to whether licensing has also led faculty to abandon basic research agendas. We show that, quite to the contrary, when realistic complexities of the research environment are taken into account, it is just as natural to expect basic research productivity to have been enhanced by licensing. Our evidence on disclosure, funding, and publications (their nature and impact) of faculty in 11 universities lends credence to the notion that, rather than diverting faculty research, licensing is part of a flurry of activities that can be associated with fundamental discoveries from fairly basic research.