Effects on Academia-Industry Collaboration of Extending University Property Rights

Studying the contribution from university scientist to inventions patented by Danish and Swedish dedicated bioteck firms (DBFs), we examine effects of the Law on University Patenting (LUP) implemented in Denmark in January 2000, transferring to the employer university rights to patents on inventions made by Danish university scientist alone or as participants in collaborative research with Industry. Sweden so far has refrained from reforming academic property rights along the lines of LUP, leaving Swedish academic property rights much the way they also were in Denmark prior to the reform. Consequently, systematic comparison of Danish and Swedish research collaboration before and after LUP offers a quasi-controlled experiment, bringing out effects on joint research of regulation affecting its IPR framework.
Using original data on all 3589 inventor participations behind the 976 patents filed by Danish and Swedish DBFs during 1990-2004 we model quarterly shares of university inventors in each country as time series to test event effects of LUP on Danish academic participation rates. Whereas this rate remains significantly stable in the Swedish data, a trend of increasing Danish academic participation is identified through the 1990s, turning into a steeper decreasing trend after LUP. Concurrent with this post-LUP decline a notable increasing trend in non-Danish academic participations is identified, substituting for and finally becoming larger than the shares of domestic academic participations.
Examination of possible mechanisms by which LUP could have induced the substitution of domestic with non-Danish academics, indicate as the most likely cause that academic-industrial collaboration in this area typically addresses issues at so early stages of drug discovery that their eventual value cannot be assessed, hence precluding rational contracting of shared or transferred property rights.
The outcome implies a loss for industrial biotech research in Denmark, as well as for university scientists, for whom the focus on early and more fundamental issues in joint discovery made the collaboration attractive on pure scientific criteria. Observed trends are inconsistent with LUP’s declared objectives of “...ensuring that research results produced by means of public funds shall be utilized for the Danish society through commercial exploitation”.