Academic Patent Licenses : Roadblocks or Signposts for Nonlicensee Cumulative Innovation?

Academic inventions are key drivers of technical progress in modern economies, and exclusive licensing has become the dominant means of transfer to the private sector. However, the strong licensee incentives generated by exclusive academic licensing are generally assumed to come at the expense of discouragement or diversion of research by nonlicensees. In a first test of this highly intuitive assumption, using data from university campuses and national research laboratories, we find that after exclusive licensing forward citations by private sector nonlicensees actually increase. An unanticipated exclusive license appears to be a signpost pointing out commercially relevant innovation pathways that nonlicensees follow with successful patented research. Tests using pre-license information disclosures support this signaling hypothesis