Ivory Tower and Industrial Innovation: University-Industry Technology Transfer before and after the Bayh-Dole Act (review)

The Bayh-Dole Act of 1980 allowed universities and other federal contractors to freely patent discoveries made through federally supported research. It thus superseded rules that had required special "Institutional Patent Agreements" and that had discouraged exclusive licensing. For this, the Bayh-Dole Act is commonly credited with launching the boom in university patenting.

However, Ivory Tower and Industrial Innovation challenges this view. It documents an upsurge of university patenting before 1980, and it places Bayh-Dole among a series of legislative and judicial acts that bolstered intellectual property rights in the 1980s. The conventional wisdom is not entirely wrong in invoking Bayh-Dole to symbolize these changes, but such a simplistic view precludes understanding of the larger processes at work.

This volume makes the case that patenting is only one facet of a larger and economically more consequential process of employing academic knowledge to foster industrial innovation; and furthermore, that patenting by universities only partly serves the purposes ascribed to it. The senior authors—David Mowery and Richard Nelson—have written extensively on the historical and economic dimensions of industrial innovation. Here, with younger collaborators, they have built a solid argument with historical, quantitative, and qualitative data.

An overview of patenting and university-industry relations before 1980 finds them to be contingent upon the kinds of academic research performed and the incentives faced by university researchers. An examination of the Research Corporation—the nonprofit entity that managed most university patents from the 1920s to the 1970s—provides a cautionary tale. Successful patent management required intimate knowledge of specialty areas and ongoing relationships between inventors and licensees. Such conditions tend to frustrate pure licensing agreements and, in particular, illustrate "the difficulty of managing a patent licensing portfolio solely with a view to maximizing income" (p. 84).

The authors see Bayh-Dole more as a response to than a cause of increased university patenting. By 1980, the doubts and caveats that had surrounded this issue since the 1920s were conveniently ignored. Instead, attention was focused on reversing lagging productivity in the U.S. economy and reaping potential "taxpayer benefits" from transferring the fruits of federally supported research to industry. However, the authors find little evidence that would support these hopes—not for passing the legislation nor for its subsequent effects.

Three empirical chapters build this case. A close examination of patenting at Stanford, the University of California, and Columbia reveals growing momentum for patenting at the first two institutions before Bayh-Dole and, additionally, finds that the results achieved by new-entrant Columbia closely matched those of the experienced institutions by the 1990s. Econometric analysis of academic patenting suggests little change in university research culture following Bayh-Dole and only a temporary dip in the importance or generality of academic patents. Universities, the authors conclude, "can indeed learn to patent" (p. 148).

Finally, case studies of the attempted commercialization of five technologies (written with Rob Lowe) produce such disparate patterns as to defy generalizations. Technology transfer only sometimes requires patent protection and the continuing involvement of the inventor. Adding to this confusion are the differing relationships between academic and industrial research activity in different technical fields. Even biotechnology, the driver of much academic patenting since 1980, presents a variety of patterns.

Such material provides the evidence about patenting that was absent when the Bayh-Dole Act was discussed and passed. Moreover, it provides grounding for the misgivings that the authors express over the general direction of university patenting.

The uncritical enthusiasm that has surrounded Bayh-Dole not only lacks justification, but the emphasis it places on patenting is also inimical to sound policy—in this country and in nations that seek to emulate the historically productive relationship between U.S. universities and industrial innovation. Patenting and licensing are complex endeavors that "draw...