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Not invented here: technology licensing, knowledge transfer and innovation based on public research

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Abstract

Using a new dataset encompassing more than 2,200 inventions made by Max Planck Society researchers from 1980 to 2004, we explore the way in which inventor, technology, and licensee characteristics affect the commercialization of academic inventions. We find limited evidence suggesting that domestic and external licensees outperform foreign licensees and inventor spin-offs in the commercialization of academic inventions. Controlling for selection, spin-offs are indistinguishable from external licensees. Patented technologies and inventions by senior scientists are more likely to be licensed, but patent protection is related to lower commercialization odds and royalty payments.

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Notes

  1. Patents may have an indirect effect on the assessment of individual performance in fields where the scientific community values patents (Owen-Smith and Powell 2001). Prior research indicates that, in some cases, Max Planck researchers pursue patenting activities primarily to enhance their standing in the respective communities.

  2. Before the “professors’ privilege” was abolished in 2002, the IPR regime in place at the Max Planck Society differed from that of German universities. University researchers used to be exempt from the law on employee inventions. They retained the intellectual property in their inventions (cf. Von Proff et al. 2012).

  3. Following failed attempts at constructing and marketing prototypes, in-house commercialization of Max Planck inventions was given up in the 1970s and was never taken up again.

  4. In this regard, Max Planck Innovation’s patenting policy thus appears to be closer to that of MIT than that of the UC system (cf. Shane 2002; Lowe and Ziedonis 2006).

  5. Researchers employed on a scholarship basis, mostly Ph.D. students and international postdocs, are not subject to the German law on employee inventions (Arbeitnehmererfindungsgesetz). To the extent that these individuals made inventions without other Max Planck researchers being involved, they do not show up in the data.

  6. Our invention data end in February 2005 and include six inventions disclosed early in 2005. In the subsequent analysis, these are merged into the group of 2004 inventions.

  7. In 141 cases, no patent information was found even though the inventions database identified them as patented. We suspect that most of these cases reflect cancelled applications. They are treated as not being patented in the subsequent analysis.

  8. This includes inventions coming out of temporary research groups and also, in a few cases, out of the Max Planck Society’s central administration.

  9. Patent ownership is a restrictive measure of collaborative invention (Fontana and Geuna 2009), which is reflected by the comparatively small number of collaborative inventions we thus identified. We alternatively considered using information about collaboration from the Max Planck Innovation invention database. However, since the database is updated regularly and we do not have information about when the collaboration information was entered, we did not use it in the analysis based on endogeneity concerns.

  10. In an unreported simple logit model of licensing (irrespective of licensee type), the patent indicator is significant at the 1% level.

  11. In an unreported simple logit model of licensing (irrespective of licensee type), the indicator of collaborative inventions is insignificant.

  12. To obtain propensity scores, a logit model for the likelihood of being licensed to a foreign licensee was estimated first. We use a specification similar to Model 2. Kernel-based matching of treated and untreated observations was then performed (cf. also Section 3). The common support condition is satisfied for all reported propensity score matching models.

  13. All unreported results are available from the authors upon request.

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Acknowledgements

We are grateful to Max Planck Innovation GmbH for granting us access to their data. For helpful comments and discussions we thank Joerg Erselius, Astrid Giegold, Dietmar Harhoff, Bernhard Hertel, Evelyn Kaiser, Lionel Nesta, Alexander Schacht, Vangelis Souitaris and Dieter Treichel, as well as two anonymous reviewers. Wolfgang Ziegler and Sebastian Schmidt at the Patent Information Office of the University of Jena helped us assemble the patent database. Wolfhard Kaus provided valuable research assistance. This article is based on research done while both authors were at the Max Planck Institute of Economics. The usual caveat applies.

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Authors and Affiliations

  1. Institute of Economics and INCHER-Kassel (International Center for Higher Education Research), University of Kassel, Nora-Platiel-Strasse 5, 34109, Kassel, Germany

    Guido Buenstorf

  2. Institute of Economics, University of Kassel, Kassel, Germany

    Matthias Geissler

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  1. Guido Buenstorf
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  2. Matthias Geissler
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Correspondence to Guido Buenstorf.

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Buenstorf, G., Geissler, M. Not invented here: technology licensing, knowledge transfer and innovation based on public research. J Evol Econ 22, 481–511 (2012). https://doi.org/10.1007/s00191-011-0261-1

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