Universities and other beneficiaries of public funding for scientific research are encouraged to patent resulting inventions under the Bayh–Dole Act. This controversial framework gives academic grant recipients a direct financial stake in the success of their inventions by requiring universities to share the resulting patent royalties with inventors. This incentive for grant recipients might help justify Bayh–Dole patents when the conventional justification for exclusivity – that it is necessary for commercialization – fails to hold. But there is little evidence as to whether it works.
This article examines how one aspect of the patent incentive – the prospect of royalties – affects the behavior of university researchers. Fortuitously, different schools offer inventors different shares of patent revenue. We have created a dataset of royalty-sharing policies from 152 universities, which shows substantial variation across universities and time …
Ouellette, Lisa Larrimore and Tutt, Andrew, How Do Patent Incentives Affect University Researchers? (December 13, 2019). International Review of Law and Economics, forthcoming.