Association for Public Policy Analysis & Management

We examine third-party firms that license academic research that has been sponsored by others, including other firms and the federal government. This implies a type of knowledge spillover as the third-party firms benefit from the research innovation investments of others but suggests that this knowledge is not freely available, raising questions about how these third-party firms position themselves to gain information about the inventions and then proceed to successfully execute a license. While many university technology transfer offices maintain lists of technologies available for license, the conventional wisdom is that licensing transactions require relationships with either the researcher or the university. We discover that university licensing is an insiders’ game, based on our in-depth (forensic) analysis of connected players, including those identified through prior and past research funding relationships. We find that startups benefit from the shortest average time lag and more often by licensing bundles of inventions inside a certain licensing agreement. Funding subsequent research (by the same researchers) notably decreases the time required for licensing. This suggests that universities are leveraging licensing to increase sponsored research. We have also looked in-depth into sponsors’ decisions not to license the technologies yielded from research they funded. There are indications that the drivers of such behavior include technological mis-match between the discovery and the sponsors prior patents or the use of co-publication between the sponsor and the invention team, indicating that the results may have been already appropriated.