The role of equity, royalty, and fixed fees in technology licensing to university spin-offs

Management Science

Volumn 61, Issue 6, 2015, Pages 1323-1343

  Savva, Nicos ^a   Taneri, Niyazi ^b  

^a LONDON BUSINESS SCHOOL   (United Kingdom)

^b SINGAPORE UNIVERSITY OF TECHNOLOGY AND DESIGN   (Singapore)

Author keywords

Contract design; Equity; Fixed fees; Royalty; Screening games; University technology transfer

Indexed keywords

RISK MANAGEMENT;

CONTRACT DESIGN; EQUITY; FIXED FEES; ROYALTY; UNIVERSITY TECHNOLOGY TRANSFER;

TECHNOLOGY TRANSFER;

EID: 84930801066     PISSN: 00251909     EISSN: 15265501     Source Type: Journal    
DOI: 10.1287/mnsc.2014.2000     Document Type: Article

References (42)

1. Arrow KJ (1962) Economic welfare and the allocation of resources to invention, rate and direction of inventive activity. Nelson RR, ed. The Rate and Direction of Inventive Activity: Economic and Social Factors, NBER Conference Series (Princeton University Press, Princeton, NJ), 609-626.
2. Beggs AW (1992) The licensing of patents under asymmetric information. Internat. J. Indust. Organ. 10(2):171-191.
3. Bloom MG (2011) University and non-profit organization licensing in the United States: Past, present and into the future, part II. Licensing J. (June/July):9-16.
4. Bolton P, Dewatripont M (2005) Contract Theory (MIT Press, Cambridge, MA).
5. Bray MJ, Lee JN (2000) University revenues from technology transfer: Licensing fees vs. equity positions. J. Bus. Venturing 15(5-6): 385-392.
6. Choi JP (2001) Technology transfer with moral hazard. Internat. J. Indust. Organ. 19(1-2):249-266.
7. Crama P, De Reyck B, Degraeve Z (2008) Milestone payments or royalties? Contract design for R&D licensing. Oper. Res. 56(6):1539-1552.
8. Dechenaux E, Thursby J, Thursby M (2011) Inventor moral hazard in university licensing: The role of contracts. Res. Policy 40(1):94-104.
9. Dechenaux E, Thursby M, Thursby J (2009) Shirking, sharing risk and shelving: The role of university license contracts. Internat. J. Indust. Organ. 27(1):80-91.
10. Di Gregorio D, Shane S (2003) Why do some universities generate more start-ups than others? Res. Policy 32(2):209-227.
11. Erat S, Kavadias S, Gaimon C (2013) The pitfalls of subsystem integration: When less is more. Management Sci. 59(3):659-676.
12. Feldman M, Feller I, Bercovitz J, Burton R (2002) Equity and the technology transfer strategies of American research universities. Management Sci. 48(1):105-121.
13. Gallini NT, Wright BD (1990) Technology transfer under asymmetric information. RAND J. Econom. 21(1):147-160.
14. Geuna A, Nesta LJJ (2006) University patenting and its effects on academic research: The emerging European evidence. Res. Policy 35(6):790-807.
15. Giebe T, Wolfstetter E (2008) License auctions with royalty contracts for (winners and) losers. Games Econom. Behav. 63(1):91-106.
16. GoogleDPS (2012) Google definitive proxy statement 14A, filed: May 9. Technical report, SEC.
17. Hall BH, Lerner J (2010) The financing of R&D and innovation. Hall BH, Rosenberg N, eds. Handbook of the Economics of Innovation, Chap. 14 (North-Holland, Amsterdam), 609-639.
18. Himmelberg CP, Petersen BC (1994) R&D and internal finance: A panel study of small firms in high-tech industries. Rev. Econom. Statist. 76(1):38-51.
19. Jensen R, Thursby M (2001) Proofs and prototypes for sale: The licensing of university inventions. Amer. Econom. Rev. 91(1): 240-259.
20. Johnson JP, Myatt DP (2006) On the simple economics of advertising, marketing, and product design. Amer. Econom. Rev. 96(3):756-784.
21. Kamien MI (1992) Patent licensing. Aumann RJ, Hart S, eds. Handbook of Game Theory With Economic Applications, Vol. 1, Chap. 11 (North-Holland, Amsterdam), 331-354.
22. Krieger LM (2005) Stanford earns $336 million off Google stock. San Jose Mercury News (December 1), http://www.redorbit.com/news/education/318480/stanford-earns-336-million-off-google-stock/.
23. Lerner J (1999a) Venture capital and the commercialization of academic technology: Symbiosis and paradox. Branscomb LM, Kodama F, Florida R, eds. Industrializing Knowledge: University-Industry Linkages in Japan and the United States, Chap. 15 (MIT Press, Cambridge, MA), 385-409.
24. Lerner J (1999b) The government as venture capitalist: The long-run impact of the SBIR program. J. Bus. 72(3):285-318.
25. Lockett A, Wright M, Franklin S (2003) Technology transfer and universities' spin-out strategies. Small Bus. Econom. 20(2):185-200.
26. Macho-Stadler I, Perez-Castrillo D (1991) Contrats de licences et asymetrie d'information. Annales d'Economie et de Statistique (24):189-208.
27. Macho-Stadler I, Perez-Castrillo JD, Veuglers R (2008) Designing contracts for university spin-offs. J. Econom. Management Strategy 17(1):185-218.
28. Mowery DC, Sampat BN, Ziedonis AA (2002) Learning to patent: Institutional experience, learning, and the characteristics of US university patents after the Bayh-Dole Act, 1981-1992. Management Sci. 48(1):73-89.
29. Myerson RB (1979) Incentive compatibility and the bargaining problem. Econometrica 47(1):61-73.
30. Robbins CA (2009) Measuring payments for the supply and use of intellectual property. Reinsdorf M, Slaughter MJ, eds. International Trade in Services and Intangibles in the Era of Globalization (University of Chicago Press, Chicago), 139-171.
31. Rothaermel FT, Agung SD, Jiang L (2007) University entrepreneurship: A taxonomy of the literature. Indust. Corporate Change 16(4): 691-791.
32. Sen D (2005a) Fee versus royalty reconsidered. Games Econom. Behav. 53(1):141-147.
33. Sen D (2005b) On the coexistence of different licensing schemes. Internat. Rev. Econom. Finance 14(4):393-413.
34. Sen D, Stamatopoulos G (2009) Drastic innovations and multiplicity of optimal licensing policies. Econom. Lett. 105(1):7-10.
35. Sen D, Tauman Y (2007) General licensing schemes for a cost-reducing innovation. Games Econom. Behav. 59(1):163-186.
36. Shane S (2004) Academic Entrepreneurship: University Spinoffs and Wealth Creation (Edward Elgar Publishing, Cheltenham, UK).
37. Shane S, Cable D (2002) Network ties, reputation, and the financing of new ventures. Management Sci. 48(3):364-381.
38. Shane S, Stuart T (2002) Organizational endowments and the performance of university start-ups. Management Sci. 48(1):154-170.
39. Sun B, Xie J, Cao HH (2004) Product strategy for innovators in markets with network effects. Marketing Sci. 23(2):243-254.
40. Teece DJ (1986) Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Res. Policy 15(6):285-305.
41. Thursby JG, Jensen R, Thursby MC (2001) Objectives, characteristics and outcomes of university licensing: A survey of major U.S. universities. J. Tech. Transfer 26(1):59-72.
42. Xiao W, Xu Y (2012) The impact of royalty contract revision in a multistage strategic R&D alliance. Management Sci. 58(12): 2251-2271.