Incentives to Invent at Universities

Prior to the 2000s, many European countries practiced something called “the professor’s privilege” wherein university professors retained patent rights to inventions they made while employed at the university. This was a “privilege” because the norm is for patent ownership to be assigned to the organization that employs an inventor; professors were an exception to this norm. American universities, in contrast, had long followed a different approach, where patent rights were typically assigned to the university, who managed commercialization efforts. Professors then split the proceeds of commercializing their inventions with the university.

There had long been a sense that commercialization of university research worked better in America, and in the 2000s a number of European countries reformed their laws to move them closer in spirit to the American system. Professors lost their privilege and universities got more into the commercialization game. 

If the goal of this reform was to encourage more professors to invent things that could be commercialized, several papers indicate this policy was a mistake.

This podcast is an audio read through of the (initial version of the) article Incentives to Invent at Universities, originally published on New Things Under the Sun.

Articles mentioned
Hvide, Hans K., and Benjamin F. Jones. 2018. University innovation and the professor's privilege. American Economic Review, 108 (7): 1860–98. https://doi.org/10.1257/aer.20160284

Ejermo, Olof, and Hannes Toivanen. 2018. University invention and the abolishment of the professor's privilege in Finland. Research Policy 47 (4): 814-825. https://doi.org/10.1016/j.respol.2018.03.001.

Czarnitzki, Dirk, Thorsten Doherr, Katrin Hussinger, Paula Schliessler, and Andrew A Toole. 2017. Individual versus institutional ownership of university-discovered inventions. USPTO Economic Working Paper No. 2017-07. http://dx.doi.org/10.2139/ssrn.2995672

Valentin, F., and R.L. Jensen. 2007. Effects on academia-industry collaboration of extending university property rights. J Technol Transfer 32: 251–276. https://doi.org/10.1007/s10961-006-9015-x

Ouellette, Lisa Larrimore, and Andrew Tutt. 2020. How do patent incentives affect university researchers? International Review of Law and Economics 61. https://doi.org/10.1016/j.irle.2019.105883.