The Disclosure and Licensing of University Inventions

We examine the interplay of the three major university actors in technology transfer from universities to industry: the faculty, the technology transfer office (TTO), and the central administration. We model the faculty as an agent of the administration, and the TTO as an agent of both the faculty and the administration. Empirical tests of the theory are based on evidence from our survey of 62 US research universities. We find that the TTOs reported licensing objectives are influenced by their views of faculty and administration, which supports the assumption that the TTO is a dual agent. The theory yields predictions for whether or not faculty disclose inventions and if so, at what stage, which in turn affects license contract terms. We also examine how the portion of inventions disclosed at different stages varies with faculty quality. Quality is found to be inversely related to the share of license income allotted to faculty. ∗We thank John Scott, two anonymous referees, and participants of the Workshop on the Economics of Intellectual Property at Universities sponsored by the University of North Carolina at Greensboro and Rensselaer Polytechnic Institute for comments. We gratefully acknowledge support from the Sloan Foundation and the National Bureau of Economic Research under the NBER Project on Industrial Technology and Productivity. J. and M. Thursby thank the Alan and Mildred Peterson Foundation for support through the Purdue Technology Transfer Initiative and the National Science Foundation (SES0094573). M.Thursby acknowledges support from NSF-IGERT 022160. Special thanks go to members of the Association of University Technology Managers who talked to us in the process of designing the survey.