Contracting Between Corporate Sponsors and Academic Researchers
Janet BercovitzUniversity of Illinois at Urbana-Champaign
Beverly TylerNorth Carolina State University
The Landscape
Internal development alone is not adequate, given the depth and breadth of knowledge required for successful innovation
Corporations are using alliances to leverage
knowledge and create new knowledge
Increasing number of sponsored research relationships with academic institutions
Industry Sponsored Research at U.S. Academic Institutions
0200
400
600
800
1000
1200
1400
1600
1800
2000
1953 1958 1963 1968 1973 1978 1983 1988 1993 1998
Industry Sponsered Research Expenditures
Millions of Current 1992 Dollars
Source: NSF Science and Engineering Indicators
Know-How Research Funding Publication RightsBroad IP Rights Prestige: Pubs/PatentsStrong IP Position“Reasonable” Cost Financial Gains Income
Motivation Companies and academic institutions
seek to create contracts to help structure their relationship and protect their interest
There are informal as well as formal
aspects of governance
Limited understanding of what combinations constitute good alliance management
Transaction Cost Economics Perspective
Contract Terms Specified to Safeguard Against Exchange Hazards
Hold up hazards related to specific investments
Appropriability hazards associated with knowledge generation
Hazards due to technological uncertainty and measurement issues
Transaction Attributes: Monitoring and Intellectual Property
Rights Hold-up & Appropriability Concerns
H1: When the Company Partner Provides Specialized Inputs to the Research Program, Sponsor Monitoring and Intellectual Property Rights will be More Explicitly Specified in the Contract.
Technical Uncertainty & Measurement Issues H2: When the Research Program Focuses
on Basic Sciences, Sponsor Monitoring and Intellectual Property Rights will be Less Explicitly Specified in the Contract.
Relational Theory Perspective:Two Arguments
Prior experience leads to behavioral knowledge and a reduction in formal contractual safeguards (perceptions of exchange hazards decrease based on knowledge of specific partners expected behavior)
Prior experience leads to learning how to
contract and increased use of safeguards for all known contingencies (learning of all possible problems and how to safeguard against them)
Relationship Attributes:Monitoring and Intellectual
Property Rights Knowledge versus Learning
Behavioral knowledge (“Trust”) at the Individual Level; Learning to contract at the Organizational Level
H3: If the Scientist-Company Pair have Contracted in the Past, Sponsor Monitoring and Intellectual Property Rights will be Less Explicitly Specified in the Contract.
H4: As a Company’s Experience Contracting with the University Increases, Sponsor Monitoring and Intellectual Property Rights will also be More explicitly specified in the contract.
Study Design
Single private research institution Non-clinical sponsored research
agreements (SRA) <1000 signed between 1994 and 2005 Current dataset 136 research agreements
pulled using stratified random selection based on number of previous agreements between pairs
Coded core contract and statement of work
Dependent Variables
Monitoring TermsCompany Access Specified
Sponsor to Have Access to Research Site Sponsor to Have Access to Research Data Review Meetings will be Scheduled Know-How Sharing/Joint Evaluation of Results Company Representative Specifically Named Formation of Joint Scientific Advisory Panel
Range 0-5; Average 1.44
Dependent Variables
Monitoring TermsReporting Requirements Specified
Requirement to Maintain Records Final Report Interim Report Specification of No. of Interim Reports
and Dates Specific Requirements for Report
ContentRange 0-5; Average 2.17
Allocation of Intellectual Property Rights: Boilerplate Clause To the extent that the UNIVERSITY has title
to any new inventions resulting from the Research solely or jointly with SPONSOR, Sponsor is hereby granted, without option fee other than consideration of the Research sponsored herein and the reimbursement to UNIVERSITY for patent expenses incurred prior to or during the option period, an option to acquire a royalty-bearing license to UNIVERSITY’S right in the Invention.
Dependent Variables
Intellectual Property TermsAllocation of Intellectual Property Rights
Option Dimensions (World-Wide, Exclusive, Perpetual, Sub-License)
Option Delay (Exercise and Negotiation Periods) License Term (Specific Details, Processes,
Constraints) Reserved IP (Data Ownership, PI Restrictions,
Limits on 3rd Party Rights, Previous Conceptions)Range 0-11; Average 5.57
IPR – Publication Constraints:Boilerplate Clause
UNIVERSITY agrees to submit to SPONSOR, for its review, a copy of any proposed publication resulting from the subject at least sixty (60) days prior to the estimated date of publication, and if no response is received within thirty (30) days of the date submitted to SPONSOR, it will be conclusively presumed that the publication may proceed without delay. If SPONSOR determines that the proposed publication contains patentable subject matter which require protection, SPONSOR may require the delay of publication for a period of time not to exceed 60 days for the purpose of allowing te pursuit of such protection.
Dependent Variables
Intellectual Property TermsPublication Constraints
Allowed Delay/Extension Sponsor Right to Review and Comment;
Comments Considered Delay for Sponsor Concern about Content Revise in Response to Sponsor Concern
Range 1-7; Average 1.68
Independent Variables
Company contributes materials and equipment
Basic fields (biochemistry, cell biology, immunology, genetics, etc.) versus applied fields (family practice, cardiology, engineering, etc)
PI-Company history (yes, no) University-Company history (total number of
sponsored research agreements)
Control Variables
Duration (period in months) Budget (log of total monetary value) Company Age (<1980=0; 1980-<1990=1; 1990-
2005=2) Year (1996=1; 1997=2; …2005=10)
Main PredictionsExtensiveness of Terms: Variable Description: Expected
Sign
Transaction Sponsor Provides Inputs
Research Program Focus
Material Transfer (43%)
(1=Yes; 0=No)
Equipment Loaned (15%)
(1=Yes; 0=No)
PI Home Department (30%)
Basic Sciences = 1
Clinical Sciences = 0
+
+
-
Relationship
(Experience)
Scientist –Company
Company-University
Prior Research Agreements
(1=Yes; 0=No); (45%)
No. Prior SRAs; (Mean=9.6)
-
+
Summary of FindingsAccess Reporting IP Rights Publicatio
n
Material (H1) 0.474 ** (0.200)
0.579 ** (0.200)
1.823 *** (0.408)
0.373 ** (0.158)
Equipment (H1) 1.173 *** (0.307)
0.716 ** (0.308)
1.243 * (0.627)
0.001 (0.242)
Basic Sci. (H2) -0.385 * (0.209)
-0.757 *** (0.209)
-1.004 ** (0.425)
-0.134 (0.165)
PI-Co Prior Contract (H3) -0.400 * (0.198)
-0.250 + (0.198)
-0.761 * (0.403)
-0.075 (0.156)
# Co-Univ. Prior Contracts (H4)
0.008 + (0.005)
0.011 * (0.005)
0.040 *** (0.011)
0.006 + (0.004)
Year 0.088 * (0.043)
-0.008 (0.043)
0.012 (0.087)
-0.039 (0.034)
Contract Duration (Mo.) 0.042 *** (0.009)
0.042 *** (0.009)
0.083 *** (0.018)
0.033 *** (0.007)
Budget (Ln) -0.112 ** (0.043)
-0.002 (0.043)
-0.062 (0.087)
-0.051 (0.034)
Company Age -0.166 (0.129)
0.387 ** (0.129)
0.038 (0.263)
-0.127 (0.102)
R-sq 0.338 0.362 0.346 0.206
Chi-sq 69.52 *** 77.17 *** 71.99 *** 35.35 ***
Summary of FindingsAccess Reporting IP Rights Publicatio
n
Material (H1) 0.474 ** (0.200)
0.579 ** (0.200)
1.823 *** (0.408)
0.373 ** (0.158)
Equipment (H1) 1.173 *** (0.307)
0.716 ** (0.308)
1.243 * (0.627)
0.001 (0.242)
Basic Sci. (H2) -0.385 * (0.209)
-0.757 *** (0.209)
-1.004 ** (0.425)
-0.134 (0.165)
PI-Co Prior Contract (H3) -0.400 * (0.198)
-0.250 + (0.198)
-0.761 * (0.403)
-0.075 (0.156)
# Co-Univ. Prior Contracts (H4)
0.008 + (0.005)
0.011 * (0.005)
0.040 *** (0.011)
0.006 + (0.004)
Year 0.088 * (0.043)
-0.008 (0.043)
0.012 (0.087)
-0.039 (0.034)
Contract Duration (Mo.) 0.042 *** (0.009)
0.042 *** (0.009)
0.083 *** (0.018)
0.033 *** (0.007)
Budget (Ln) -0.112 ** (0.043)
-0.002 (0.043)
-0.062 (0.087)
-0.051 (0.034)
Company Age -0.166 (0.129)
0.387 ** (0.129)
0.038 (0.263)
-0.127 (0.102)
R-sq 0.338 0.362 0.346 0.206
Chi-sq 69.52 *** 77.17 *** 71.99 *** 35.35 ***
Summary of FindingsAccess Reporting IP Rights Publicatio
n
Material (H1) 0.474 ** (0.200)
0.579 ** (0.200)
1.823 *** (0.408)
0.373 ** (0.158)
Equipment (H1) 1.173 *** (0.307)
0.716 ** (0.308)
1.243 * (0.627)
0.001 (0.242)
Basic Sci. (H2) -0.385 * (0.209)
-0.757 *** (0.209)
-1.004 ** (0.425)
-0.134 (0.165)
PI-Co Prior Contract (H3) -0.400 * (0.198)
-0.250 + (0.198)
-0.761 * (0.403)
-0.075 (0.156)
# Co-Univ. Prior Contracts (H4)
0.008 + (0.005)
0.011 * (0.005)
0.040 *** (0.011)
0.006 + (0.004)
Year 0.088 * (0.043)
-0.008 (0.043)
0.012 (0.087)
-0.039 (0.034)
Contract Duration (Mo.) 0.042 *** (0.009)
0.042 *** (0.009)
0.083 *** (0.018)
0.033 *** (0.007)
Budget (Ln) -0.112 ** (0.043)
-0.002 (0.043)
-0.062 (0.087)
-0.051 (0.034)
Company Age -0.166 (0.129)
0.387 ** (0.129)
0.038 (0.263)
-0.127 (0.102)
R-sq 0.338 0.362 0.346 0.206
Chi-sq 69.52 *** 77.17 *** 71.99 *** 35.35 ***
Robustness: PI Experience w/ Other FirmsAccess Reporting IP Rights Publicatio
n
Material (H1) 0.485 ** (0.200)
0.574 ** (0.201)
1.800 *** (0.408)
0.359 * (0.157)
Equipment (H1) 1.184 *** (0.307)
0.711 * (0.308)
1.220 * (0.626)
-0.012 (0.241)
Basic Sci. (H2) -0.380 * (0.208)
-0.759 *** (0.209)
-1.015 ** (0.424)
-0.140 (0.163)
PI-Co Prior Contract (H3) -0.403 * (0.197)
-0.249 + (0.198)
-0.755 * (0.402)
-0.071 (0.155)
# Co-Univ. Prior Contracts (H4)
0.009 + (0.005)
0.010 * (0.006)
0.038 *** (0.011)
0.005 (0.004)
PI Experience w/ Other Firms 0.035(0.044)
-0.017(0.044)
-0.076(0.089)
-0.043(0.034)
Year 0.074 (0.046)
-0.001 (0.046)
0.042 (0.094)
-0.022 (0.036)
Contract Duration (Mo.) 0.043 *** (0.009)
0.041 *** (0.009)
0.081 *** (0.018)
0.032 *** (0.007)
Budget (Ln) -0.115 ** (0.043)
-0.001 (0.043)
-0.055 (0.087)
-0.047 (0.033)
Company Age -0.182 (0.130)
0.394 ** (0.131)
0.073 (0.266)
-0.107 (0.102)
R-sq/Ch-Sq 0.341/70.49***
0.363/77.40***
0.350/73.10***
0.215/37.32***
In Sum
Contract StructureTransaction Attributes Matter But the Context in which Transactions Take
Place is Important as well
Contributions Detailed analysis of actual contracts
Enhanced granularity of dimensions
Consideration of the nested nature of alliance contracts
Insights regarding key terms in sponsored research agreements (SRA)
Theoretical explanation for the mixed findings of relational research
Moving Forward
Augment the Data Set More Contracts More Universities
Investigate Sub-Categories in Terms
Consider Additional Contract Terms Termination Clauses Indemnification
Link with Outcomes
Robustness: No. of PI-CO Prior ContractsAccess Reporting IP Rights Publicatio
n
Material (H1) 0.466 ** (0.200)
0.574 ** (0.200)
1.801 *** (0.409)
0.374 ** (0.157)
Equipment (H1) 1.203 *** (0.307)
0.734 ** (0.307)
1.302 * (0.626)
0.003 (0.241)
Basic Sci. (H2) -0.404 * (0.208)
-0.769 *** (0.208)
-1.046 ** (0.424)
-0.131 (0.163)
# PI-Co Prior Contract (H3)
-0.183 * (0.097)
-0.116 (0.097)
-0.336 * (0.199)
-0.058 (0.077)
# Co-Univ. Prior Contracts (H4)
0.008 + (0.005)
0.011 * (0.005)
0.039 *** (0.011)
0.006 + (0.004)
Year 0.094 * (0.044)
-0.004 (0.044)
0.019 (0.090)
-0.034 (0.035)
Contract Duration (Mo.) 0.042 *** (0.009)
0.042 *** (0.009)
0.083 *** (0.018)
0.033 *** (0.007)
Budget (Ln) -0.108 * (0.043)
-0.000 (0.043)
-0.055 (0.087)
-0.050 (0.033)
Company Age -0.176 (0.129)
0.380 ** (0.129)
0.018 (0.264)
-0.129 (0.102)
R-sq 0.336 0.361 0.343 0.208
Chi-sq 68.72 *** 76.89 *** 70.93 *** 35.78 ***