State Intercom......June 6, 2002
Faculty find support
from Intellectual Property Office
By Barbara Hale
Increasing numbers of faculty members, students and staff members are taking on or considering the role of entrepreneur to shepherd their ideas and inventions to the marketplace.
In both 2000 and 2001, more than 200 invention disclosures were submitted through the University's Intellectual Property Office (IPO) --about four times as many disclosures as were filed in 1988 when the office was established.
To illustrate some of the many possible routes from patent disclosure to the marketplace, Intercom recently interviewed four faculty members who are commercializing their inventions. They come from the colleges of agricultural sciences, engineering, health and human development and medicine. Two of the entrepreneur's companies, Salimetrics and Advanced Interfaces, are producing and selling products. Two companies, EIEICO and Reva, have products in various stages of development.
The University holds equity in two of the faculty start-up companies, EIEICO and Advanced Interfaces. In a third case, the University has licensed technology to an existing start-up company, Reva, for an equity position and sponsored research.
Douglas Granger, associate professor of biobehavior health and human development and family studies, said, "My experience in developing Salimetrics has been well worth the time and effort. I would highly recommend taking the road to commercialization to anyone considering it. However, before taking the plunge, there is a considerable amount of homework and new learning that should be done. The challenges and issues are very different than those faculty face in academia -- but certainly they are no more challenging than running a large research grant."
EIEICO (pronounced ee-yii-ee-yii-coh) was formed in 1999 when IPO, working with an angel investor and venture capitalists, "bundled" three University agricultural inventions into the same start-up company. The inventions are a poultry feed withdrawal supplement to reduce carcass contamination during processing, a livestock genetic marker to select breeding animals with favorable meat characteristics and a gel drug delivery system for cattle.
Regina Vasilatos-Younken, senior associate dean of The Graduate School and professor of poultry science, invented the poultry feed withdrawal supplement. She said, "If your first priority is to stay in academia while commercializing your technology, then working with the University's Intellectual Property Office, Research Commercialization Office and related units is the way to go."
Pennsylvania Early Stage Partners, a venture fund, is the primary shareholder in EIEICO. The fund has identified and established a strategic alliance for EIEICO with Grain Processing Corp. for the rights to manufacture, market and distribute the poultry feed withdrawal supplement. Currently, the corporation, with Vasilatos-Younken's help, is working out technical problems and getting ready for field trials.
"I expect that it will be another year before we see if the product will sink or float, Vasilatos-Younken said. "I feel very good about the experience. If I have other technologies in the future, I will go the same route."
Granger, co-founder of Salimetrics, said that his company, started in 1997, has grown at least 60 percent in each of the last three years. The company has 16 employees and operates from 5,000 square feet in Innovation Park, the University's research park. The company manufactures and distributes salivary immunoassay kits worldwide, operates a reference laboratory for salivary biomarkers and conducts contract research and development for the immunodiagnostic industry.
Granger said he was the first faculty member in recent history in the College of Health and Human Development to pursue the commercialization path. He added, "The HHD administration was receptive and my department head, Lynn Kozlowski, was very supportive, but they hadn't had any experience with this. The IPO helped educate the college about the process and the benefits of pursuing this activity."
In addition, Salimetrics received a small grant from Ben Franklin Technology Partners of Central and Northern Pennsylvania, occupied a lab and office at the University's Zetachron Center for Science and Technology Business Development for early stage companies and received assistance from Dan Leri, director of the Research Commercialization Office, in relocating to Innovation Park.
Granger, who has followed the faculty-led, lone entrepreneur model, noted, "Traditionally academia has been cynical toward the value of commercialization, although this is changing. First, faculty members should be warned that they must be able to launch the venture and maintain stellar performance on research, teaching and service at the same time. Second, the business world is very skeptical of the value added to a business venture by a faculty member who must also be engaged in research, teaching and service."
Mark Kester, professor of pharmacology in the College of Medicine, developed a substance that, when coated on a stent used to prop open clogged blood vessels, limits secondary blockages or re-stenosis, the so-called Vice President Cheney disease. He sought assistance in commercializing the technology from the IPO staff at University Park and the technology was licensed to an angel investor-based company, now called Reva. Currently, two venture capital companies that have provided additional enabling stent technology, support Reva.
Kester said, "It has to be a dynamic partnership with information flowing back and forth between investors, investigators and the University. In that way, we have the best chance to develop and optimize coated stents for commercialization."
Kester advised faculty members interested in commercialization to be acutely aware that it is necessary to have an idea about how their invention can fill a niche in the marketplace.
"Your idea has to be equated with a product," he said, "not just something that can get grant funding."
In addition, he suggested that would-be entrepreneurs work with University publicists to develop a press release about the intellectual property.
"The press release about our work got newspaper, magazine and TV coverage," he said. "CEOs heard about the technology and contacted IPO staff members to investigate licensing agreements."
Kester noted, "We're now at the stage in the commercialization process where only one out of 50 inventions results in a product. Nevertheless, the research and product development we are doing will provide valuable information to take back to the 'bench' to ask even more insightful questions about the basic biochemical and molecular mechanisms that support the new technology."
Advanced Interfaces, founded in 2000 by Rajeev Sharma, associate professor of computer science and engineering, develops and commercializes products that use computer vision technologies for market research and for novel computer interfaces. The company is fielding solutions for measuring marketing effectiveness in the retail industry and for "smart" customer interaction.
It all started when Sharma developed a prototype system to help visitors locate campus parking lots and buildings by talking with a computer-controlled map that responds not only to the spoken word but also to natural hand gestures.
A story in the New York Times and other media about the "talking map" produced a flood of interest in the work and Sharma began to think he might be on to something. Looking back on the experience, he said, "The technologies developed at the University through basic research that were spotlighted in those news articles were not ready to be commercialized. Starting a company allowed us to do the necessary engineering to make it ready for the marketplace. It would have been very difficult to license the technologies directly to any other company without establishing its feasibility in real world conditions."
Sharma admitted, "It took much more effort than I had originally planned for, with a lot of effort devoted to raising the capital needed."
Sharma advised, "For every commercializable idea, one should consider all the different options -- each of which has different levels of commitments and chances of success. The satisfaction one gets from seeing the results of research being used in the real world can easily outbalance the efforts involved."
Conflict of interest
Starting a company or working with venture capitalists to bring an idea to market consumes vast amounts of an entrepreneur's time. Kester warned, "An inventor has to be clear when they get involved in commercialization that they will wear two hats -- and that they won't wear both at the same time."
Kester said that he keeps separate books, personnel, lab space and funding for his academic and Reva research. He says, "I have a faculty member monitor to ensure no conflicts of interest or even the appearance of conflict of interest."
Vasilatos-Younken added, "Having IPO and the other commercialization support units act as intermediaries help to keep things separate -- and keep you off the hook."
http://www.techtransfer.psu.edu for information on the overall
technology transfer process as well as details on intellectual property
and research commercialization office.
Barbara Hale can be reached at firstname.lastname@example.org.