University of Texas Charging up Efforts to Commercialize Tech

Seeking a smoother ride in your sport utility vehicle? The University of Texas could have
the technology to make it possible. But until a year ago, companies couldn’t use it.

By:
Stacey Higginbotham
Austin Business Journal

Now, UT is earmarking more than $14 million to rev up its technology commercialization
efforts, which license commercially useful research to companies. Projects like the SUV
effort are helping drive UT into a new arena.

Richard Hayes, a project engineer at UT, was familiar with the Active Transport System
that researchers in his department were perfecting to improve suspension systems on
Humvees. The technology wasn’t available to the public, but through a new class at UT, he
was able to obtain seed funding for the research from two major companies.

Last year, Hayes enrolled in a new class offered to engineering, natural science, law and
business students called "The Enterprise of Technology: From Mind to Market." The goal
of the class: Prompt students and researchers to think about commercial applications for
their research, and to head down the road of patent protection and market research.

"We all knew [the active transport technology] was a good thing to commercialize
because we had a lot of people who were interested in it, so when I took the class I
decided since I had to do the work for a class anyway, it might as well be with this
project," Hayes says.

"We are not paid to [commercialize research], so I had to do it in my free time."

Hayes’ work in the class, such as developing a business plan and market research,
helped pave the way for a proposal that netted the research about $850,000 in seed
funding from the state, Litton Industries Inc. and Stewart & Stevenson Services Inc.

What happened with Hayes and the Active Transport System research should happen
more often at UT if several key people have their way — from Southwest Airlines Co.
Chairman Herb Kelleher to UT President Larry Faulkner. Their aim: Create a culture for
commercialization at UT and to encourage the university’s individual schools to work
together to bring UT research to the masses.

"I think we are trying to improve performance in all areas, and this is one where our
interface with the larger world can be improved," Faulkner says.

"There is a high degree of interest in the culture that exists here, and I see
[commercialization] as part of the larger picture of using the university and improving its
name."

Since 1987, the university has spawned 34 startups, all born from its technology research.
Fourteen of those have formed just in the past two years. They include nanotechnology
company Molecular Imprints Inc. and biotech company Evacyte Corp.

Furthermore, the Office of Technology Licensing, which manages technology
commercialization for the university, licenses 89 technologies to companies such as Dow
Chemical Co. The licenses generated $2.2 million in fiscal 2001, and $2.5 million in the
first six months of fiscal 2002.

As the university seeks to make commercialization a bigger priority, Renee Mallett,
interim director of the Office of Technology Licensing, says she’s preparing to hire two
more employees. That would increase the office’s staff to nine.

However, UT has a long way to go before it can reach the heights of research institutions
such as Stanford University or the Massachusetts Institute of Technology. John Sibley
Butler, acting director of the Kelleher Center for Entrepreneurship at UT’s McCombs
School of Business, says UT isn’t even close yet.

"Compared to MIT and Stanford, we are not even in the ball game, but we have never
paid attention to it before now," Butler says. "And at UT, once we pay attention to
something, we are going to do it."

At MIT, the technology licensing program — which has been around for more than 50 years
and is a model for UT’s efforts — generated $82.1 million in revenue in fiscal 2001. On top
of that were licensing royalty fees totaling $21.4 million.

Donald Kaiser, marketing associate for MIT’s Technology Licensing Office, says part of
the reason MIT has achieved such success with technology commercialization program is
the institute’s reputation as a research center.

"We are a world-renowned university and the quality of our science is quite high, so
anyone looking for intellectual property would be expected to see if there was relevant
science at MIT," Kaiser says.

According to Butler, MIT and Harvard University, which produced $24.9 million in
technology licensing revenue in 2001, helped hatch Boston’s tech community by
encouraging professors and students to ponder commercial applications for research.

Compared with such a heavyweight, UT’s program still needs work. UT’s Office of
Technology Licensing soon will employ nine people and has an annual budget of $1
million, while MIT’s has 30 staffers and a budget of $2.4 million.

Now that UT has zeroed in on elevating commercialization, it’s encouraging researchers
to file for patents and is encouraging the university’s individual schools to cooperate to
make those patents happen.

Steve Nichols, associate vice president for research at UT and director of the Murchison
Chair of Free Enterprise, says he was hired for the newly created position at the
beginning of 2002 for to fostering commercialization in the College of Engineering.

Nichols points to several things the university is undertaking to urge researchers to
commercialize their research.

One is in an event to be held May 2 called the Technology Forum, where several university
faculty will present their research to the representatives of several undisclosed companies
and venture capitalists. Also, UT is bringing in one of Stanford’s attorneys this spring to
talk with engineering researchers about the patent process.

Backing the technology commercialization effort are a variety of financial commitments.

UT’s Kelleher Center for Entrepreneurship was founded with $4 million from Herb
Kelleher, Southwest Airlines’ founder, and matching grants from UT. Nichols’ position is
paid for by the $5 million endowed Free Enterprise Chair.

If UT can harness its research for commercialization, the gains for Austin could be huge,
Butler says. He compares what’s happening with the university as a continuation of the
IC2 Institute, which he credits with spawning Austin’s tech success.

"What we did [with IC2] was take technologies from [nationally funded] labs and create
companies," Butler says.

"Austin was built on the notion that the technologies were here and large companies could
commercialize them. What’s exciting about what the university is doing is that we are just
continuing to build on that success using the university’s own labs."