Before Jerry Thursby came to Emory two years ago, he and his wife, Marie, served on the economics faculty at Purdue University. Jerry Thursby now is chair of economics in Emory College, and Marie is the Hal and John Smith Chair in Entrepreneurship in Georgia Tech’s Dupree College of Management.

All three schools—Emory, Purdue and Tech—are major research institutions heavily involved in technology transfer and licensing of the intellectual products of their respective labs, so it’s understandable that the Thursbys have been studying the economic ramifications of this practice for some time. In the Aug. 22 issue of Science, the pair published the latest of several jointly authored papers on the subject, a one-page overview of studies that have examined the effects of the 1980 Bayh-Dole Act on university licensing.

According to the paper, of 84 U.S. institutions responding to two surveys in 1991 and 2000 by the Association of University Technology Managers (AUTM), new patent applications from universities rose some 238 percent, license agreements by 161 percent—and total royalties to universities shot up by 520 percent. These numbers and others like them have prompted some critics to charge that Bayh-Dole—which grants universities sole ownership of inventions produced from federally funded research—has prompted researchers and even the universities themselves to focus more on the bottom line than a quest for scholarship.

But is it true? For their study, the Thursbys used not only AUTM data but also sent surveys to some 135 research universities (receiving responses from 62), and they surveyed businesses that actively license patents and innovations from higher education laboratories.

Though Jerry Thursby acknowledged much more work needs to be done, the results suggest that Bayh-Dole has not turned university labs into the profit centers alleged by the act’s detractors. The 2000 AUTM survey netted 156 total respondents, who reported $1.24 billion in income from royalties and “cashed-in equity net of unreimbursed legal fees.” But the average annual income per active license was only $66,465, and just 43 percent of licenses earned any royalties at all; less than 1 percent (0.56) of licenses earned royalties in excess of $1 million.

“There is often a misperception among people when they see this [$1.24 billion] income,” Thursby said. “If you only look at the bottom line, you aren’t seeing the real character of licensing, which is highly skewed toward certain universities and certain licensing.”

Indeed, while average license income per respondent was $8 million, nearly 80 percent earned less than $5 million and half reported less than $824,000. In the paper the Thursbys point out that technology transfer offices below the median averaged four employees, making it likely that those institutions spent more on the office than they received in royalties, however Jerry Thursby added that this is likely to change as both number of licenses and royalties continue to trend upward.

There is no question that licensing and patent applications have increased dramatically since Bayh-Dole was passed, but Thursby suggested the relationship between the two may be less causal than many think.

“As best as you can tell, this licensing would have been growing anyway—Bayh-Dole just made it easier,” Thursby said.

One overarching question is whether Bayh-Dole has steered university researchers into more applied fields and away from basic research. Again, though they stress that more data need to be collected (which the Thursbys are currently doing through a comprehensive survey of faculty activities) the Science paper says a study of 3,400 faculty that from six research universities from 1983–99 indicated their ratio of basic to applied research does not appear to have changed—even as licensing has increased more than tenfold.

Even if the findings were different, Marie Thursby—who serves as an adjunct faculty member to Emory’s economics department—said it might not be cause for concern.

“[A shift from basic to applied research] is not necessarily negative, as applied research is important for industrial innovation,” she said. “Also, there is evidence that applied research results often give researchers ideas or means to conduct new areas of basic research; witness Pasteur’s discoveries, which came out of his work for the brewery industry.

“University research is a key element in the national innovation system,” Marie Thursby continued. “So the efficiency of the transfer of results to industry is an issue of national interest.”