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UW-Madison Study Finds Basic Research Is Robust Despite Spike in University Patenting


Bradford Barham
Professor, agricultural and applied economics
University of Wisconsin-Madison
Name: Bradford Barham
Position: Professor, agricultural and applied economics, University of Wisconsin-Madison, since July 2001; various academic appointments, UW-Madison, since 1987; PhD, economics, Stanford University, 1988.

Despite the boom in university patenting that has occurred in the US in the past several years, the basic, federally funded, open scientific research model still dominates at US universities, according to a study released earlier this month by researchers at the University of Wisconsin-Madison.
The study’s authors — Bradford Barham and Jeremy Foltz of UW-Madison’s department of agricultural and applied economics — randomly surveyed 1,822 life scientists at the 125 top US universities in 2005 on their publication, teaching, and patenting efforts, then compiled the results to analyze the impact of technology patenting and commercialization on the traditional research university model.
Among the study’s major findings were that patenting by university professors tends to complement, not detract from, their academic duties; and that the pace of basic research remains unaffected by commercialization activities at US universities.
The study, which is under review for publication in a peer-reviewed journal, can currently be downloaded from the UW-Madison A&AE website. BTW caught up with Barham last week to discuss how the study evolved, its major findings, and its implications for the future of technology commercialization at US universities.
What was the impetus for doing this study?
I started working on this basic issue about five years ago. I was interested in the way in which agricultural biotechnology patenting might be affecting the way that colleges of agriculture and life sciences around the country work. In particular, every state has a land grant university — some have more than one — where there are colleges of agriculture. The longstanding tradition in those colleges was for new research to be made broadly available as public information for farmers, the community, businesses, et cetera.
I was concerned that the rapid growth of patenting in agricultural biotechnology at US land grant universities might be having a negative affect on that tradition, and I was interested to see how it might be changing the way researchers at the universities were behaving.
As I worked on that, I realized that even though there had been this dramatic growth in agricultural and biotech patenting, it didn’t look as if it was coming at the expense of other research activities that university professors were doing. So I backed a little bit away from the hypothesis that it was a substitute for publishing articles, working with doctoral students, and those kinds of public-good research efforts. Instead, I thought that maybe patents are actually synergistic in the sense that if you have a research article that really puts forward a novel idea with unique value, then it might also give rise to a patent.
If instead [researchers] were saying, “I’m going to do research, but I will hold back the ideas, patent it and make a bunch of money, not publish, and I really don’t care about my doctoral students’ dissertations,” then that’s the kind of trade-off I was concerned about.
I started finding increasing evidence that [publishing and patenting], in fact, kind of went together. That is, people who published more articles were also more likely to patent, rather than the other way around. The basic logic of that would be that if you have a novel idea, and you write it up as an article, you can take it up to your technology transfer office and say, “Hey, this might be patentable.” Then they look it over and get back to you and say, “Yeah, let’s write up a patent on it.” So rather than it being a distraction in terms of time and output, it could be something that could complement the other activities of a productive researcher.
As we went along we decided to look more carefully at both agricultural life sciences and broader life sciences, because biology and biotech have recently been at the cutting edge of growth in terms of university research, and certainly in terms of university patenting. Twenty years ago, biotechnology and life science patents were trivial other than a few pharmaceutical ones, and now they’re 30 or 40 percent of the patenting that goes on at many US universities.
With the marvels of modern technology, we were actually able to survey a bunch of people in a relatively efficient manner. We sent out a cover letter to all the researchers electronically and in paper form, and we got a pretty remarkable response rate — about 70 percent.
Did you secure funding to do this study?
Yes, this funding came from the National Science Foundation. It was in the neighborhood of $150,000. It helped to basically cover some research assistants’ time, survey costs, and some summer salary for us. We had the survey designed to work on the web, and we had to contract out for that.
Did you have any interaction with the Wisconsin Alumni Research Foundation on this?
It’s interesting to see research like this come out of UW, which is one of the most active universities in the US in terms of patenting, as well as one of the most criticized.
In fact, a few weeks ago [co-author] Jeremy [Foltz] and I had a productive discussion with the director of WARF, Carl Gulbrandson, and WARF’s [emeritus patent counsel] Howard Bremer. They actually have the same view [as us]. One way of summarizing that — and this is a point that we made in the article — is that if you look at their portfolio of patents, of which they have hundreds, they probably have five to ten that produce about 80 percent of their revenues. They recognize that patents are, in a sense, a lottery ticket. Very few produce anything, and most produce very little. And then you may get a big winner. It’s still the case that the patents around vitamin D probably account for about half of WARF’s patent revenues. In that sense, they’ve also come to see that from the perspective of promoting a high level of quality research, they’re not going to be able to generate enough revenues from the patents to put a serious dent in the research budget of the university. We have a pretty good flow of funds from there, but it might be that 10 percent of the funds that are going to Wisconsin researchers are coming from patenting and licensing revenues that are recycled back through.
Another suggestion the paper makes is that the results of the study dispel the idea that universities are receiving a huge amount of money from patenting inventions, and therefore don’t need as much federal funding.
That’s exactly right. It’s in the basic numbers. If you take patent revenues, it’s one to two percent of the funds coming to the researchers. If you take industry funding and other money flows like that, it’s about seven percent, so it’s a very small proportion. For some researchers it is much more significant, but on average, it’s small. No one is going to run their lab or finance their grad students or keep a research portfolio going if they count on that, unless they’ve already got it. If I’m the one lucky winner, then of course I can use it. Everybody else is going to have to find either foundation funds, which are relatively small, or research funding from the federal government.
The concerns we have are that the continuing public nature of research and the importance of public support to keep that research enterprise going are recognized. I don’t think it gets all that much attention. The robustness of the US economy in the 1990s, and even into this era, has been due to its ability to generate new industries and technological change of all sorts. Guess what? While it’s not always a direct byproduct of the research that people do at US universities, there is no question that creates an environment of learning, new science, and new information that then gets wrapped up into all kinds of innovations in the commercial world. In fact, the leading source of information for ideas about new technologies comes from reading the same scientific articles that, when we write them, we feel like nobody else reads. But there are people out there reading them — it’s just not the general public. It’s people at the cutting edge of certain areas of industrial or biotech research.
So we really want to underscore the continuing reliance of researchers on public funding. There is a lot of other research out there showing that the returns on public research are very high over the long term. Sometimes universities get criticized because the research doesn’t immediately lead to applications — that’s a critique from the Kauffman Foundation, for instance. They would likely take our results and say, “This shows universities have failed to do technology transfer.” I don’t think that’s necessarily the case. I’m sure there are failures out there. What is more the case is that most university life science research continues to be basic, and that often gives rise only later to innovations that hit the commercial world.
Did you do any of this in response to critique from the Kauffman Foundation or others?
Not really. I’ve gone to [Kauffman Foundation] conferences and, in general, I’m not unsympathetic to the notion of the importance of entrepreneurial activity for the health and vigor of the US economy. I just think that on that particular point, they may have the wrong idea about where university research fits into the whole picture. I don’t want to argue with them that there aren’t times when it could be effectively more commercial. It’s just that to only fetishize that, and to forget that there is also core basic research that provides the foundation for all kinds of other things to happen, and when the funding is coming from sources where the mandate is to advance basic science, then it is no surprise that people compete to get their grants from those agencies. In order to get the next grant, they’ve got to advance basic science and publish articles.
I am also arguing that the addition of patenting into this research enterprise is, on average, also not a bad thing. I know there are scientists who get distracted from the public side and go off to form businesses, but that’s not necessarily a bad thing either. That can create value too. On average, most scientists, when they are doing their research work day in and day out, patenting is a later thought. If it happens, it doesn’t seem to detract from higher overall productivity and, in fact, it seems to be associated with it. I started out with a more negative view that patenting was potentially yanking the university away from the model of public knowledge creation and basic science. The truth is that it doesn’t.
The big picture rub is that if all this attention to commercialization detracts us as a society from the fact that universities are really still in the business of doing basic research, and if that basic research is not going to be funded by private sources, then it needs federal support. If we don’t continue to make that investment, which right now we’re in danger of not doing — it’s not shrinking, but it’s stagnating — then [the economy] is going to lose speed while other parts of the world make that investment or simply catch up.
Your research showed that significant patent licensing income was highly concentrated with just a handful of researchers. Did you also find that the money was concentrated at just a few larger research universities?
I think the answer to that is yes. We didn’t actually look at this with the data.
These same universities likely also receive the most federal research funding. So is this a case of the rich getting richer?
That is true. One of the things we found evidence about in earlier work published in the American Journal of Agricultural Economics is that the patenting activity was most synergistic at the top universities. We took all the articles and patents that we had in databases for these universities. We counted up the citations of them and adjusted them for the year of the article release. In other words, if I have a patent from 30 years ago, it should have more citations than one from yesterday. Adjusted for the year and the class of the patent, we have a good citation measure for each of these articles and patents, and we used that to weight their value.
When you look for evidence of tradeoffs or synergies between patenting and the other research output of US universities, you find much more evidence at the top universities. This is another way of saying that the patents that get cited a lot are from the top places.
After that, we were concerned if those more heavily cited patents would also be the ones that more often won the lottery ticket. Now we’ve got all of the citations for the professors that we surveyed [in the most recent research], so now we’ll be able to do that same kind of analysis, but also link it to people’s patent royalties. If that link exists – that the most cited patents also prove to be the most valuable – then there is a little bit of that winner-take-all story going on.
The good news on this is that patents are still a relatively small source of research funding. It’s likely not fundamentally tipping the balance of the game toward richer universities. They may be more likely to get these big winners, but since these are still a small share of the pool, getting grants and foundation support and private endowments still dominate research funding outcomes.
One of the key elements to patent reform legislation currently under review in Congress is a change from a first-to-invent system to a first-to-file system. Do you think that would change some of your findings and cause researchers to become patent-happy?
It very well might. It may make people put a premium on trying to get an idea into a patent before getting it into an article. That changes the incentive in a fairly fundamental fashion. We didn’t model that, though.
I would say, though, that after 25 years of Bayh-Dole, even though patenting has grown a lot, most life scientists don’t patent. So even with that rule change, the impact might be smaller than you might first think. This is because the average researcher has no patents; those that do have one; and there are a few stars out there that have a bunch. My guess is that it might change the behavior of a certain proportion of the research population, but for others it’s probably the case that patenting is still far in the back of their mind, as opposed to front and center.

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