Incubator program initiated

UM system teaches faculty and students about the patent process.
Tuesday, March 8, 2005 | 12:00 a.m. CST; updated 7:47 p.m. CDT, Sunday, July 20, 2008

After five years of primarily guiding scientists at the four University of Missouri system schools through the patent and technology licensing process, the Office of Technology and Special Projects is now trying to unleash entrepreneurs into the business world.

Terry Nixon, associate director of entrepreneurial and business development, advises those entrepreneurs.

Late last year he moved from working with licensing and start-up companies to developing a program that will help MU faculty and students capitalize on their innovations and make them more available to the public.

Nixon plans to create conferences, workshops and business-planning competitions for MU innovators interested in developing their own companies.

The workshops would teach researchers how to pitch business plans to investors.

“I am hoping to be able to involve MBA students in the process,” said Nixon. “They would be able to provide innovators with advice on how to develop strong business plans.”

“We would also like to be able to provide innovators with access to a development fund. This would provide finances for innovators who need to develop parts of their technology before it would be attractive to outside investors,” he added.

The Office of Technology and Special Projects was formerly known as the MU Patent and Licensing Office.

The expansion of office duties — and plans for a small business technology incubator and a Health Science Research Center — stem from MU’s ambition to spur financial growth and economic development through technology transfer.

During the past few years, the office has grown from five to 13 employees and has also received more funding.

The office demonstrates a complex system of regulations and paperwork to its clients.

Researchers first file a disclosure that outlines their new technology with the office.

The office recommends that promising technologies be filed with the federal government for possible patents.

Once a patent is issued, the office assists researchers with receiving what Nixon called “pre-seed” finances. The office also connects UM system scientists with companies that are interested in licensing their technology.

If a patent is licensed, the initial royalty payments are used to cover patenting costs, which range from $15,000 to $40,000 depending on the complexity of the technology. The inventor then receives one-third of the royalties from all subsequent sales. All other royalties are distributed equally among the faculty member’s department, the MU Office of Research and the Office of Technology and Special Projects.

Since its creation, according to a report provided by the office, the office has reviewed 328 disclosures and has helped file for 228 patents. As a result, 73 patents have been granted. Another 78 licenses or options to license technology have been signed by interested companies, which have generated $12.74 million in revenue.

If a scientist decides to create a spin-off company, the office requires that the prospective business owners appear before a conflict-of-interest committee to ensure that the business will not use university resources for private gain. Researchers, though, are allowed to lease lab space from MU.

But efforts to harness technology for profit at public universities are criticized by individuals who question whether researchers paid by tax dollars should create businesses.

Tom Sharpe, director of the office, said he thinks such businesses are imperative to ensure that technology developed in campus labs can be used to benefit the public.

“A primary purpose of a land-grant university is to make innovation available to the public,” Sharpe said. “This innovation won’t be available unless you can patent it and provide a limited use of the patent. It takes millions of dollars to develop them into a product that is tested and marketable to the public.”

“If it was made available to (all companies), no company would invest the money to develop it if they couldn’t (exclusively) make money on it afterward,” Sharpe added.

Sharpe’s office is currently the only one of its kind within the UM system.

The office works closely with the Missouri Innovation Center, a nonprofit organization that oversees the incubator program and provides financial, accounting and administrative support to start-up companies.

The Missouri Federal and State Technology Partnership also provides advice and services to small businesses in Missouri.

Twenty-two percent of the office’s operating budget comes from contributions from the campuses, with the bulk of the balance derived from royalties paid by companies that license MU technologies.

Approximately 90 percent of that money comes from royalties and milestone payments from two or three innovations, Nixon said.

Peter Sutovsky, a professor of animal science and founder of AndroLogika LLC, said he hadn’t even considered starting up a company until he contacted the technology office.

“They were really inspirational in the way they told me how researchers patent their discoveries and build their own company around them,” Sutovsky said.

Sutovsky’s company has developed a system that tests male fertility by marking certain proteins as a sign of health.

This differs from the conventional means of mobility testing, which require scientists to watch sperm under a microscope.

“I’m very glad I started my company,” Peter said. “I wanted to see my work being turned into something that can directly help people. You are the best person to develop (your own) technology. When others work on it, it may not always be the optimal arrangement.”

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