Royalty sharing, effort and invention in universities: Evidence from Portugal and Spain

Abstract

Portuguese and Spanish universities have adopted well-defined royalty sharing schedules over the last fifteen years. We investigate whether such royalty sharing schedules have been effective in stimulating inventors' efforts and in ultimately improving university outcomes. We base our empirical analysis on university-level data and two new self-collected surveys for both inventors and Technology Transfer Offices (TTOs). Evidence from the inventors' survey indicates that one third of respondents are incentivised by current royalty sharing schedules, one third could be incentivised by higher royalty shares, and the remaining third is totally insensitive to royalty sharing. Plain regressions on university level datasets suggest that the incentive effects documented by the inventors' survey fail to translate into increased patenting or licensing income. It would seem that inventor royalty shares are not as influential as they could be, due to the poor commercial prospects of university inventions. Among other possible reasons, these poor prospects appear to reflect the fact that inventors are unable to produce potentially licensable inventions, or that eventually TTOs may not be focussing enough on commercialising their inventions.

Incentives for knowledge valorisation: a European benchmark

“…Scientists that might also be attracted by this type of recruitment tool are those experienced with entrepreneurial behaviour (Renault 2006). Obviously, these effects are mediated by the awareness of researchers on current incentive schemes as well as the perceived effectiveness of support organisations in bringing academic knowledge to the market successfully (Arqué-Castells et al 2016;Göktepe-Hulten and Mahagaonkar 2010). Although an early study on mobility between public research institutions did not find an influence of different percentages (Crespi et al 2006), more recent anecdotal evidence suggests that differential incentives are used to recruit researchers to universities (Derrick and Bryant 2013).…”

“…While we do not argue that the possible risks of conflict of interest should be ignored, the results do suggest that a less bureaucratic and more laissez-faire approach might actually benefit the societal impact of knowledge and perhaps academics should be given some slack and more support when engaging with societal stakeholders rather than be inhibited by limiting conditions. Previous studies have shown that perceived procedural justice might be an important mediating factor in determining efforts to engage in valorisation activities and subsequent likelihood of commercial success (Arqué-Castells et al 2016;Muscio et al 2016) and future studies looking into restricting conditions are encouraged to take this concept into account (see Fig. 6c).…”

“…Most studies evaluating incentives for knowledge valorisation have focused on those incentives aiming to improve the economic output of research (Arqué-Castells et al 2016;Baldini 2010;Di Gregorio and Shane 2003;Friedman and Silberman 2003;Göktepe-Hulten and Mahagaonkar 2010;Lach and Schankerman 2004;Macho-Stadler and Pérez-Castrillo 2010;Markman et al 2004;Walter et al 2013). Well-defined IP policies and licensing contracts could act as an incentive mechanism by reducing information asymmetries and by clarifying the expectations from and benefits for researchers (Jensen and Thursby 2003;Macho-Stadler and Pérez-Castrillo 2010).…”

“…Regarding the share of revenues that is shared with inventors, some studies found that researcher engagement increases when researchers benefit from a higher revenue split (Caldera and Debande 2010;Schankerman 2004, 2008;Link and Siegel 2005). A more recent study found that the actual revenue split is less important than the percentage being above a certain threshold (Arqué-Castells et al 2016). Another study found that over-allocation of income to the department (negatively) effects licensing income (Friedman and Silberman 2003).…”

The link between technology transfer and international extension of university patents: Evidence from Spain

“…1 Although at the beginning such growth was more strongly felt in the United States, it soon became a worldwide phenomenon. Many contributing factors can be cited, such as increasing public R&D expenditure (Coupe 2003;Payne and Siow 2003;Azagra et al 2006a;Acosta et al 2009); the role of public science in the emergence of the biotechnology sector and the rise of drug and medical patents (Henderson et al 1998;Zucker et al 1998); increasing researchers' incentives to patent in terms of royalty shares (Lach and Schankerman 2008;Arqué Within the extensive literature on the determinants and impact of university patenting, early studies were critical about the impact of pro-patenting policies at universities and argued that a large part of the observed increase in university patenting after the Bayh-Dole Act in the United States in 1980 had been caused by low-value filings, proxied by number of citations received, as well as by the entry of inexperienced institutions (Henderson et al, 1998). More recent studies have warned about relying too much on citations to determine the impact of university patenting, as compared to business patents, given that university patents take longer to be cited because of their more fundamental nature (Sampat et al, 2003;Sterzi, 2013).…”