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Presented by Carla F ernández- C orrales, F all 2014

Privatizing the intellectual commons: Universities and the commercialization of biotechnology Nicholas S. Argyres and Julia Porter Liebeskind Journal of Economic Behavior & Organization (1998).

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Presented by Carla F ernández- C orrales, F all 2014

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  1. Privatizing the intellectual commons: Universities and the commercialization of biotechnologyNicholas S. Argyres and Julia Porter LiebeskindJournal of Economic Behavior & Organization (1998) Presented by Carla Fernández-Corrales, Fall 2014

  2. Research purpose • Why do universities have difficulties commercializing new technologies? • Organization boundaries  Why is it challenging to manage activities that are different? • Motivation: income from technology transfer from universities to industry have not had a significant impact on budgets • Social-contractual commitment to create ‘intellectual commons’ vs incentives and contracting policies for biotechnology

  3. Social commitments and standards in universities • Universities’ mission  ‘open science’ • Governance arrangements that support this mission: incentives for academic research, self-governance, autonomy, separation of hiring and promotion from budgetary processes and prohibitions to establish private contracts. • Enforcement by external parties (e.g., alumni and donors)

  4. Biotechnology • Highly patentable • Pressures to re-contract for property rights because of relative prices and preferences • Regulatory changes  Who owns rights to IP funded by federal sources?

  5. Adaptive efforts: Privatization of intellectual property • Privatization (patenting and licensing): concern about erosion of standards of open science. Decision is held by University administrators. Other motive, to facilitate the transfer of knowledge to useful products. • Ownership: faculty ownership  conflict of interest, standard agency problem • Licensing: ‘bench rights’ instead of exclusive licensing. Restrictions to firms’ sponsorships. Narrowly-based rights. • Royalties as incentive. Effects of envy and inequities.

  6. Adaptive efforts: Commercialization • Technology transfer offices: more than patenting, even marketing. • University-owned ventures: potential envy problems. • University-based research institutes: selective intervention (e.g., contracts with researchers).

  7. Reactive adaptation: Controlling faculty behavior • Conflicts of interest due to faculty members holding management positions in firms (i.e., outside management). • Faculty consulting that diverts attention from teaching and research.

  8. Conclusion • “Barriers to privatization of a public good can arise from historical social-contractual commitments and supporting internal standards of organizations seeking or possessing property rights” (p. 452)

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