Getting Research From the Lab to Market

University Licensing and the Bayh-Dole Act

Getting more university research out of the lab and into the real world to improve the quality of people's lives sounds likes a good thing. However, the Bayh-Dole Act passed in 1980 to encourage more federally funded research to make the leap out of the lab has proved controversial. Bayh-Dole allows universities to patent and exclusively license federally funded inventions and appears to have fueled dramatic growth in university licensing over the last 20 years.

Critics charge that Bayh-Dole restricts future research on a technology, is unnecessary, and motivates researchers to pursue profitable areas of research, rather than "pure" basic research.

Georgia Tech professor Marie Thursby, the Hal and John Smith Chair in Entrepreneurship in the DuPree College of Management, and Jerry Thursby, Department Chair and Professor of Economics at Emory University, examine the evidence and address these issues in their recently published paper in the August 22, 2003 edition of the highly prestigious journal, "Science."

According to Marie Thursby, "The issues we examine in this paper are of great importance not only to universities and research institutions but also to the public at large. Huge sums of federal dollars go toward research. Licensing provides incentives for businesses to use the resulting discoveries, but it is important that these incentives not destroy the fundamental research mission of universities."

According to Jerry Thursby, "The critical nature of universities in the U.S. innovation system is well known. What is less well known, and hence our interest as economists, is how technology transfer is affected by economic incentives."

The Thursbys examine four primary questions based on their own survey data as well as data from the Association of University Technology Managers' 1991 and 2000 surveys and other studies. Full details of these conclusions are in the paper entitled "University Licensing and the Bayh-Dole Act, " in the August 22 issue of the journal.

1. Would technologies be transferred out of the lab without the Bayh-Dole Act?Yes, they would, but Bayh-Dole provides another channel beyond the traditional publications, meetings and consulting.

2. Are technology transfer offices at universities profit centers?
Profits are not the sole goal of licensing, and the average income per active license is $66,465, but only 43 percent of licenses earned royalties.

3. Does licensing technologies to outside firms restrict the spread of the academic research?
Research that is company sponsored, rather than federally funded, is usually not shared as readily.

4. Have financial incentives from licensing technology diverted faculty away from "pure" basic research to more lucrative research areas?
Based on the limited evidence available, the answer is no.

NOTE: To obtain a copy of the article, please contact Elizabeth Campell at Georgia Tech's Communications and Public Affairs office at 404-894-4233 or elizabeth.campell@icpa.gatech.edu. Reporters may also request a copy of the paper from the AAAS Office of Public Programs at 202-326-6440 or scipak@aaas.org.