This paper focuses on the question of whether the national production functions of patents owned by universities and public research organisations (PROs) differ. We use Eurostat patent and R&D data broken down by institutional sector for the European Union 27 and other countries in years 1982–2007, and we estimate dynamic panel models. The impact of R&D expenditure on patent ownership is higher for PROs than for universities. University patent ownership activity is dependent on business funding, while PRO patent ownership is not. We recommend a reversal of the current decline of PRO R&D expenditure and discuss whether PROs perform better at macroeconomic level vis a vis universities.