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This review was published in the Canadian Journal of Higher Education XXXIV – 3, 2004 D.C. Mowery, R.R. Nelson, B.N. Sampat, A. A. Ziedonis,    

Ivory Tower and Industrial Innovation: University-Industry Technology Transfer Before and After the Bayh-Dole Act

University-Industry Technology Transfer Before and After the Bayh-Dole Act provides an insightful multi-faceted assessment of licensing and patenting activity in the and adds additional perspective on the prevailing view of the importance of the Bayh-Dole Act (1980). What is the prevailing view?

The Act, which granted universities (and small business) patent and licensing rights to federally funded research, is often cited as a key ingredient in the significant expansion of the technology transfer and commercialization efforts of American universities which, in turn, helped fuel the economic boom of 1990s. While the authors acknowledge the importance of the Act, their basic argument is that “much of the current discussion of the economic role of the U.S. research universities and the contributions of U.S. universities to the economic boom of the 1990s, exaggerates the role of the Bayh-Dole.” (p.179) 

While the Act had a definite impact on the patent and licensing environment the authors demonstrate that patenting and licensing activities were an important part of academe for many institutions well before Bayh-Dole was passed and the Act is better seen as an evolutionary step rather than the revolutionary step that it is often purported to be. So what? Does it really matter if the Act’s importance is overstated?

The authors argue that it is important for governments and universities to recognize the various factors that actually influence successful technology transfer. By placing the Bayh-Dole Act in proper context the authors offer valuable insights and reminders for government policy-makers and university administrators.

First, there are many avenues for technology transfer besides patenting and licensing. Accordingly, governments would do well to recognize that ‘commercialization’ indicators are capturing a small part of the overall technology transfer activity and universities would be better served referring to a wide array of technology transfer activities.

Second, the U.S. success in technology transfer is a function of many interdependent factors involving universities, governments and the private sector and a long history of collaboration.  Thus, governments seeking to emulate the U.S. experience by simply adopting a version of the Bayh-Dole Act are likely to be disappointed by the results.

Third, universities that focus on intellectual property rights and establishing an infrastructure to handle commercialization, need to recognize the critical role of developing university-industry and government collaborations as the key to a sustainable and successful commercialization plan.

Fourth, at a time when governments in Canada and elsewhere are calling for greater return, or evidence of return, on investment in university research, this book offers a glimpse into the complexities associated with technology transfer and the difficulty of trying to ascribe success to a ‘one-size fits all’ model focused primarily on commercialization.  Chapter 8, for example, ‘What Happens in University-Industry Technology Transfer’, uses five case studies of inventions at Columbia University and the University of California to illustrate major differences “in the role of intellectual property rights in inducing firms to develop and commercialize university inventions, in the role of the inventor in post license development and commercialization, and in the relationship between academic and industrial research activities in different technical fields.” (p.176) Those differences, assert the authors, call into question the basic premise of the Bayh-Dole Act – that patenting and licensing are necessary to facilitate the development and commercialization of publicly funded university research.

Fifth, the authors devote time and attention to the role of managing technology transfer and the chapter on the history and operation of the Research Corporation provides a ‘business case’ in the lessons of technology transfer management. The authors do an admirable job chronicling the rise and fall of the Research Corporation, noting the perils, pitfalls and challenges of the technology transfer industry – a lesson to universities contemplating the establishment or operation of technology transfer offices.

Sixth, a review of surveys on the interaction of university research and industrial innovation concludes that, with the notable exception of the pharmaceutical industry, “For most industries, patents and licenses involving inventions from university or public laboratories were reported to be of very little importance, compared with publications, conferences, informal interaction with university researchers, and consulting.” (p.33)   

Seventh, and perhaps most importantly, “…U.S. universities have been important sources of knowledge and other key inputs for industrial innovation throughout the twentieth century, and much of this economic contribution has relied on channels other than patenting and licensing.” (p. 179) In effect, the overemphasis on the Bayh-Dole Act undervalues the many other significant contributions of The lessons, insights and messages about the complexities of technology transfer are valuable but the book has considerably more to offer. The early chapters provide a broad overview of the development of higher education in the U.S. and the arguments for and against commercialization beginning as early as 1912 and repeated, in various ways and under varying conditions, from that point onwards. In the early 1930s  for example, the basic argument for patenting university research focused on protecting the invention in the interest of the public good.  While there were also discussions about the fundamental conflict between patenting university research and the need for open, unfettered sharing of research advances, the judgment of the day sided with the protection of the public good (and the university itself). To put a Canadian ‘twist’ on this particular aspect, the authors reference Banting and Best and their decision to patent to ensure that “the public is protected against the manufacture of poor preparations and is also protected against extortionate charges…” (p.197 as cited in Apple, 1996, p.36) Fast forward to the 21st century and the notion of protecting the public good seems to have been long forgotten in the arguments for greater commercialization.

The chapter on the ‘Political History of the Bayh-Dole Act’ introduces Senators Birch Bayh and Robert Dole and their role in the formulation and passage of what was actually called the University and Small Business Patent Act. Here we learn that the federal government’s involvement in university research during and after World War II led to a variety of arrangements for the intellectual ownership of inventions funded by federal research. By 1960, bureaucratic machinations and variations in arrangements by government agencies were well recognized but it took two more decades to formally address the ownership of patentable inventions funded by all federal agencies. The Bayh-Dole Act, one could argue, was the inevitable outcome of growing concern by universities and industry of the myriad government agencies with differing operating policies, reporting requirements, and arrangements for the ownership of the intellectual property. The immediate factors leading to bi-partisan sponsorship of the Act focused on increasing concern about American economic competitiveness, a government disposition to provide evidence it was dealing with “red-tape”, and a Department of Health, Education and Welfare (HEW) review of its patent policy that actually mobilized political efforts to ensure such a review would not alter the existing policy of granting patent rights. The growing capacity of universities to manage more technology transfer and increased research activity in the biomedical area (noted for patenting and licensing opportunities) simply added more fuel to the argument.

The book’s shortcomings are few. The chapters on the evolution of patenting and licensing in the United States could have benefited from greater reference to the economic and political aspects of specific eras to help place certain developments in context. For example, the emergence of the ‘public good’ argument in the 1930s needs to seen in the context of the unbridled enthusiasm for the ‘private good’ in the late 1920s.  Interestingly, the single largest technology transfer activity – university graduates – is not mentioned by the authors. Further, there is little reference to the overall expansion of higher education in the latter half of the 20th century and the link between increases in graduate enrolment and research funding.  However, the book is well organized, well documented and blends case studies with quantitative analysis to provide a rich source of detailed information about patenting and licensing activities and the technology transfer industry. There are numerous ‘nuggets’ of information and insight that add ‘colour’ to the history of university-industry linkages and the Notes to each chapter provide considerably more than just references.  

The value of University-Industry Technology Transfer Before and  After the Bayh-Dole Act is its emphasis on the multiplicity of factors that actually influence technology transfer and the complex interaction of factors other than patents and licensing. As governments in Canada press for more concrete indicators of commercialization success they would be wise to buy a few copies of this book and sprinkle them around various parts of the bureaucracy.  Universities would be wise to adopt broader definitions of technology transfer, re-assert the importance of basic research, and carefully review the rationale for investing significant resources in patent and license activities. Mowery and his colleagues challenge the prevailing view of Bayh-Dole and in the process provide a set of information, analyses and arguments that provide a valued perspective about the true workings and impacts of university patent and licensing endeavours.

Reviewed by Ken Snowdon, Snowdon & Associates Inc.  Printable edition of this article


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