Columbia International Affairs Online: Working Papers

CIAO DATE: 12/2008

Reconsidering the Bayh-Dole Act and the Current University Technology Licensing Regime

Martin Kenney, Donald Patton

May 2008

Berkeley Roundtable on the International Economy


The Bayh-Dole Act of 1980 has been hailed by policy-makers and scholars as a critical policy innovation for ensuring the commercialization of inventions resulting from results of federally-funded research. This paper suggests that the current implementation of Bayh-Dole through university ownership of all researchers’ inventions is not an optimal system in terms of economic efficiency and social interests regarding the rapid commercialization of technology. The current regime, within which the university owns researcher inventions, is plagued by ineffective incentives, information asymmetries, and contradictory goals for the university, the inventors, potential licensees, and university technology licensing offices (TLOs). These structural uncertainties lead to licensing delays, misaligned incentives among parties, and delays in the flow of scientific information and the materials necessary for scientific progress. For the very best TLOs these difficulties can be overcome, but for the average TLO this misalignment of incentives creates suboptimal outcomes in terms of technology transfer. The institutional arrangements within which TLOs are embedded are so perverse that it has encouraged a number of them to become income maximizers and operate in a manner similar to what pejoratively have been termed patent “trolls.”

To remedy this complicated skein of perverse incentives, we suggest two alternatives: The first alternative is to vest ownership with the inventor, who could choose the commercialization path for the invention. The inventor could then choose to contract with the university TLO or any other entity. The second alternative discussed is to make all inventions immediately publicly available through an open source strategy. Either of these alternatives would be more likely to achieve the social goal of early technology adoption.