However, by far the worst paper at the conference was one entitled “Do University Patents Pay Off? Evidence from a Survey of University Inventors in Computer Science and Electrical Engineering” by Professor Brian Love at the Santa Clara University School of Law. I have just learned that this paper is soon to be published in the prestigious Yale Journal of Law & Technology. The paper supposedly made the case that “university patent programs earn a negative 3.5% rate of return on high-tech patents.” Professor Love explained that filing and licensing patents was a losing proposition for universities despite the recent $184 million jury verdict for Cornell against Hewlett-Packard and the $1.5 billion judgment for Carnegie Mellon University against Marvell Semiconductors.
There are three main reasons that the paper is a ridiculous example of how our universities are putting out “research” that is terribly shoddy, detached from the real world, and simply reinforces generally faulty assumptions about how the world works.
First, Professor Love sent out only 2,387 questionnaires to tenured and tenure-track faculty members at select elite universities. This is a miniscule .15% of the 1,565,504 professors in the United States as of 2011 according to an annual study by the U.S. Education Department’s National Center for Education Statistics. Of those, only 269 professors responded to his questionnaire.
Secondly, rather than relying on financial data that could have been obtained from university records and finance departments, Professor Love relied on asking simple questions of professors who have no particular access to that information. In fact, the questions were so simple that they were significantly ambiguous. In the paper, Professor Love states:
Of respondents whose research had been patented, about two-thirds reported licensing at least one of their patents, with the median respondent-licensor reporting that licenses to his or her patents have, to date, earned his or her university a total of $30,000 in royalties.
He then goes on to state in a footnote that anecdotal evidence from four different sources (yes, all of four individual professors) indicates that the royalties are actually even lower than $30,000 because the professors were confused about how to answer the question.
Professor Love’s report is misleading on this royalty number. When the information was presented at the conference at Stanford, one of the participants in the audience asked Professor Love whether the royalty referred to the share of the royalty that was received by the professor or the total royalty received by the university. Professor Love admitted that the question was not clear, but he had assumed this was total royalty to the university. The paper does not address this uncertainty but presents this $30,000 number definitively as royalty earned by the university. However, the actual question presented to professors, listed on page 50 of the report, is “[A]bout how much total licensing revenue have your university patents earned?” This question is sufficiently ambiguous to throw the entire study into question despite Professor Love’s ignoring an issue of which he was already aware.
Finally, the most significant, glaring problem is that one of the stated conclusions on page 2 of the study is:
[F]ifty-seven percent of professors report that they do not know how, or if at all, their university shares licensing revenue with inventors.
Yes, you read that correctly. Professor Love has concluded that universities do not earn returns on their investment in patents and at the same time concluded that more than half of all respondents to his survey admitted they do not know anything about what the survey was purporting to study. This was based on their answers to the simple question on page 50 of his report, “[D]o you know (without looking it up) what percent of the revenue you are entitled to receive?”
When I pointed out this last paradox at the conference, Professor Love shrugged off my query by responding that he simply asked the questions, the professors answered them, and he compiled the results. It was as if he were a laborer on an assembly line simply pressing buttons on a calculator but not responsible for the results rather than a highly educated professor attempting to understand how the world works and disseminate truth to his students and to the public. Another professor at the conference turned to me and explained, “Yes, but these results match those of most other university research” as if consistency in the models was more important than their ability to predict reality.
This paper by Professor Love should never have been presented at a conference at Stanford. It should not be published by any journal, let alone the prestigious Yale Journal of Law & Technology. It is sloppy, careless work like this that produces worthless published papers and incorrect theories and encourages academics to simply reinforce their own beliefs without requiring any form of review, replication, or confirmation. Professor Love should be embarrassed by this report. Santa Clara University School of Law should be embarrassed by this report. And Yale Law School should not publish this report. Unfortunately this will be published and it will be used to further reinforce arguments to “reform” the patent system and weaken intellectual property rights in this country.