by government grants. As a result no one in academia had much incentive to push discoveries out of their labs and into commercial development. Most academics viewed collaboration with industry as a diversion of time and a reduction in prestige for both individual faculty members and their institutions. Even worse, some of them misconstrued the patenting of academic innovation as an unfair enrichment of select corporations at the expense of the broad public.

This approach was clearly understimulating innovation. The legal assumption that the public was already paying for research in the form of grants was correct, but empirical evidence indicated that the U.S. public was paying too little to obtain useful, marketable commercialization of these innovations. (India faced a similar problem of understimulation between 1970 and 1995, when its patent system offered to pay innovators with exclusive rights that few of those innovators deemed large enough to warrant investment.) The Bayh-Dole Act increased the price to the public by allowing universities—public and private—to seek, obtain, and hold patents on research funded partly or wholly with government grant money. Patent holding, in turn, created significant opportunities for revenue generation, including patent sales, licensing fees, industrial collaboration, and enforcement litigation.

By most accounts the Bayh-Dole Act was enormously successful at achieving its goals— motivating U.S. universities to actively engage in the technology transfer process. By letting universities retain patent rights, the legislation motivated them to devise new ways to do two things: encourage their faculty to think about the patentability of their innovations, and then to seek patents; and encourage industry to collaborate with academics on rapid commercialization.

These two changes helped motivate a third significant cultural change—namely, the rise of an entrepreneurial class on campus, whose professors and students went on to develop startup businesses. The many industrial parks that now appear near major U.S. universities—not to mention the numerous startups that powered the dot com bubble—are visible signs of these cultural changes. Both were quite rare before Bayh-Dole. A more direct and immediate consequence, however, was the rise of something else that had once been rare: the university patent licensing corporation.

Professors Mowery and Sampat, along with their colleagues Professors Richard Nelson and Arvids Ziedonis, prepared a book-length analysis of the role that Bayh-Dole has played in promoting technology transfer programs in the United States.<sup>95</sup> They emphasized that many of the cultural predicates for successful technology transfer programs predated Bayh-Dole by more than a century. In fact, some universities established patenting programs and licensing corporations decades before Bayh-Dole—even though their activity was limited to nonsponsored research.

Their analysis combines empirical data from across the U.S. university system with anecdotes and case studies, including detailed studies at three major universities with active patenting programs: Stanford and the University of California, Berkeley (whose patenting programs predated Bayh-Dole) and Columbia (which developed its program in response to Bay-Dole). Box 17 presents their summary of the most important aspects of university patenting license

> 95 _See_ Mowery and others, _supra_ n. 31.

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