11 DO UNIVERSITIES INVESTING IN TECHNOLOGY TRANSFER VIA PATENTING LOSE MONEY? ABSTRACT Substantial investments are made in universities patenting new developments to pursue a return. To gauge the impact of the holistic costs of patenting at universities, this study provides a new methodology for quantifying the investment in intellectual property (IP) that includes not only technology transfer staff costs but also direct and opportunity faculty-related costs. It then uses the novel methodology and publicly accessible data on an average American research university case study. The results found all component costs were higher than the IP-related income, with the opportunity cost for writing patents instead of grants being more than 33 times the income realized through IP protection. Overall, the case study university loses over $9 million per year on IP with a negative ROI of -97.6%. Research universities have opportunities to increase research income >10% by ignoring IP. It is clear that Bayh-Dole Act and similar national legislation, is harming university economics. It can be concluded that as generally practiced in the U.S. now, it is not rational to continue to support university technology transfer by patents. Instead, to improve the economic bottom lines of universities, as well as increase the good that research and development does for society, universities can open source all innovations. INTRODUCTION The Patent and Trademark Law Amendments Act (known as the Bayh-Dole Act) standardized U.S. federal policy to encourage university grant recipients to patent inventions in order to encourage commercialization of tax-funded research (1980). One result of the Bayh-Dole Act was an explosion of technology transfer offices (TTOs) to support the commercialization of research and development first in the U.S. and then throughout the rest of the world as there was early economic success from a handful of universities (Bertha, 1996; Siegel & Wright, 2007; Holgersson & Aaboen, 2019). Generally, TTOs focus on IP protection including patenting (Chapple, et al., 2005; Rothaermel, et al. 2007), licensing and in some case spin-off companies (Siegel, et al., 2007). Bayh–Dole proponents argue that academic patent licensing has created $30 billion per year in the U.S. and created hundreds of thousands of new jobs (Pressman et al., 2017). Evidence for these claims is weak, however, as in general, research has found little impact from the Bayh-Dole Act for universities to actually increase technology commercialization (Henderson et al., 1998; Mowery et al., 2001; Mowery & Ziedonis, 2002). A constant stream of researchers critique the established view of IP being managed by universities (Sorensen & Chambers, 2008; Kenney & Patton, 2009; Greenbaum & Scott, 2010; Hall, et al., 2014; Kochenkova, et al., 2016; Holgersson & Aaboen, 2019) and even begun to reconsider the Bayh-Dole Act’s impact on invention at universities as a whole (Kenney & Patton, 2009). In addition, in a detailed review of the evidence Ouellette & Weires (2019) found many authors argued that Bayh–Dole costs simply outweigh the benefits (e.g. monopolistic inefficiencies (Granstrand, 1999) including raising the price of knowledge goods for both consumers and follow-on innovators (Pearce, 2012), many of whom already paid for the initial research through taxes. This bridges into the wider debate over whether intellectual property or ‘intellectual monopolies’ (Boldrin & Levine, 2002; 2005; 2008; 2009) of ODBORNÉ RECENZOVANÉ ČLÁNKY / PEER-REVIEWED ARTICLES