University ownership shifts power to TTOs and crowds out inventor patent activity

[Christos and Merle, “University ownership and information about the entrepreneurial opportunity in commercialisation: a systematic review and realist synthesis of the literature,” The Journal of Technology Transfer volume 46, 01/04/2020, p. 1487–1513, Springer, accessed 07/17/2024, BKM GDI]

In a suggestive contribution to the debate Halilem et  al. (2017) adopt a more subtle approach to property rights regimes differentiating between ownership rights, control rights, and income-sharing rights. Their empirical findings support this disaggregation as they show that contrary to the bulk of the literature, the behaviour of academics is influenced not by ownership rights but by control rights, and the sharing of income with the university. These findings have potentially significant implications for the importance of ownership as a means of encouraging academics to disclose new technical information coming from publicly funded research. This, in turn, opens up the scope for the use of Ostrom’s (2010) distinction of bundle of property rights (differentiating between access, withdrawal, management, exclusion, and alienation) in the study of university commercialisation.

There is, however, a relatively modest amount of research exploring directly the effects of the prevailing property rights regime on the information conditions around the entrepreneurial opportunity in commercialisation. This research often compares information conditions under university ownership with those under inventor ownership. These studies show that the prevailing regime strengthens the rights of TTOs, affording them a dominant position in decision-making in comparison to the two other types of actors (the academics and the firms). Specifically, Valentin and Jensen (2007) show that following the introduction of university ownership (replacing inventor ownership in 2000) in Denmark, there has been a steep decrease in the number of academics involved in patents owned by dedicated biotechnology firms (where uncertainty is a key consideration). Damsgaard and Thursby (2013), comparing university ownership in the United States with inventor ownership in Sweden illustrate that if there are search costs in finding an established firm for licensing the average probability of commercialisation success is instead higher in the latter regime. They content that this may be linked to the centrality of the TTO in making the decision as to whether and how to commercialise in the US in comparison to the academic in Sweden. These findings support the conclusions of the theoretical constructs discussed earlier in the paper: that argue that the emergence of intermediaries (TTOs) will result in academics leaving commercialisation in the hands of the TTOs and remaining focused on their research and teaching duties (Hoppe and Ozdenoren 2005; Hellmann 2005).