Rembrandts in the Attic: Utilizing University Patents To Create Entrepreneurship and Jobs
In the FY2011 budget announcement last week, the Obama Administration proposed a program to bring to market some of the over onemillion patents held by Universities and Colleges. Called IMPACT- Innovation Model Program For Accelerating The Commercialization of Technologies- a vast majority of these one million patents are driven by $50 billion in Federal research dollars. Only a limited number of startups (estimated at 550 in 2007) are spun off from this treasure trove of Intellectual Property. Recognizing this vast challenge and opportunity,the Administration and University of Southern California Provost Krisztina “Z” Holly proposes an ambitious new project.The goal of the program is to stimulate innovation, create jobs and utilize these great assets held by our universities and colleges. Theseintellectual property assets are federally funded to the tune of easily over $50 billion per year.In 2008 the Association of University Technology Managers (AUTM) estimated there were 3,388 federally funded research startups, and theimpact of these startups is estimated by researchers at over $33.5 billion. The reality is that the potential is far larger. Universitiestraditionally either license the technology to established companies or it gets to market through faculty consulting, students going to industrythemselves or on a smaller scale - University based startups. A large amount of IP sits on the proverbial shelf.There are many programs created by universities and organizations like The Indus Entrepreneur (TiE) that help bring the Technology TransferOffices closer to the entrepreneurs. But entrepreneurs are traditionally very wary of approaching universities and licensing issues. Thisprogram recognizes the difficulty of taking raw research and commercializing it.The project calls for ten beta sites to get $2 million in funding a year for five years. These beta sites would nurture a culture of entrepreneurship through three key components:• Gap funding: University research is typically early stage and translating these breakthrough works into commercial ventures is difficult.These grants would enable entrepreneurs or researchers to develop into a venture that has some “societal” impact. University based start-upsare traditionally not developed, as the Technology Transfer Offices (TTOs) are typically small and lack the reach and resources to reach anddevelop entrepreneurs. A typical TTO typically loses money as inventions can take up to ten years to generate royalty. The focus of TTOs istypically on larger licensing deals that generate revenue and rightly so.
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