Data proves inventor ownership actually returns more income to the institution than university ownership

[Gerald, “11 rationalizations regarding university compulsory patent ownership,” Research Enterprise, 08/01/16, https://researchenterprise.org/2016/08/01/11-rationalizations-regarding-university-compulsory-patent-ownership/, accessed 7/17/24, GDI-JCR]

I hear this argument in informal chats. That if university inventors are left on their own, or work with external invention management organizations, the university receives less in royalty income than when the university hires its own invention management staff. I don’t see any data that supports the argument. The argument does involve an impossible comparison–we can’t run experiments in which an inventor uses both university and external invention management agents at the same time. Given that external invention management agents typically take costs + 40% and a university policy typically takes costs plus 67%, there is a superficial truth to the argument. But the actual money received by a university is a matter of both the fee structure and the effectiveness at licensing. If an external agent is better at placing inventions, or places them in better situations, or is better at collecting royalties, then the total income to the university after the inventor’s share, even after the agent has taken 40% , may still be much greater than the university’s own efforts.

When Bayh-Dole was being debated, university folk claimed that they had a 30% licensing success rate, and the government’s rate was more like 5%. Most of that licensing success rate was the result of Research Corporation’s work, since most universities did not have their own licensing operations in 1980. Recently, the University of California reported that it had a success rate of 0.5% in licensing inventions that led to a commercial product on the market. Now, rate of licensing is not the money getting made, but without licensing, there isn’t much money. If the licensing rate for external agents was 30%, and the licensing rate for the federal government was 5%, and the current rate at a top tier university licensing program is now 0.5%, then the burden of the argument is to show that a university is a better owner of inventions than is either the federal government or an external invention management organization.