Office of Technology Commercialization

Recently, Longhorn Startup Company M87 received a $500,000 seed investment from the UT System’s Horizon Fund to help commercialize the technology it has developed, a software solution that allows telecommunications companies to improve cellular coverage and capacity without making multi-million dollar changes or modifications to their existing infrastructure.

Sriram Vishwanath, an electrical and computer engineering professor, and his graduate students Vidur Bhargava and Jubin Jose developed this technology, which they then licensed through the UT-Austin Office of Technology Commercialization.  

The UT-Austin Office of Technology Commercialization (OTC) manages the transfer of UT’s intellectual property to outside entities. 

The UT System OTC, a separate office, houses UT’s Horizon Fund, an investment fund that attempts to help commercialize technology developed by UT researchers, including the technology used by M87, while providing the system with a positive return on investment. The fund has $22.5 million of capital under management that can be used to invest in any startup company with licensed UT intellectual property. These companies can be managed by students, staff, faculty or non-UT-affiliated entrepreneurs, as long as they properly license the intellectual property with the OTC office at the institution where the intellectually property was developed. 

This type of investment fund is innovative in itself, in that it abandons the traditional, conservative notion that government investment in startups is too risky. Usually, this kind of investing is left to venture capitalists, whose main job is risking large amounts of capital on new companies that they believe have the potential to provide returns five to 10 times the initial investment. 

But as the fund aims to prove, it makes little sense to fund a research project up until the results are ready to be extracted from the university environment and applied in real markets. 

Universities receive significant royalty payments from the intellectual property they license to outside entities. In 2010, the UT System raised $2.34 billion in research funding but only generated $42 million in royalty payments. The Horizon Fund is meant to provide the final leg of funding to get the technologies out of the lab and into the real world. Often, the investments made by the Horizon Fund are bridge investments that enable startups to progress far enough to secure larger rounds of funds from off-campus investors like venture capitalists. 

Within the UT System, there is a significant need to accelerate the commercialization of technologies we invent. The Horizon Fund, if administered properly, will do just this. 

Bryan Allinson, executive director of the Horizon Fund, says the nine investments the fund has already made are growing at the expected pace. His long-term vision for the fund is that it will be “a sustainable enterprise for commercializing technology out of UT System institutions.” 

If the Horizon Fund concept is proven sustainable, we will need to create more funds like it, possibly one at each individual UT System institution, seeded by surplus cash generated by the Horizon Fund. This would only further encourage an entrepreneurial culture, creating opportunities for students to manage the innovation process.  

Investing financial capital in startups involves risk, but I believe risk is necessary for entrepreneurship to be a sustainable, growing enterprise on campus. And should the fund fail to provide bottom-line financial returns, it still encourages entrepreneurship across the UT System, and entrepreneurship in itself is inherently virtuous and valuable. 

Spiller is a rhetoric and writing senior from Michigan and the director of the Longhorn Entrepreneurship Agency. You can follow Spiller on twitter @nick_spiller.

Editor's note: A previous version of this column did not distinguish between the UT System Office of Technology Commercialization and the UT-Austin Office of Technology Commercialization. Changes have been made to reflect this distinction. 

UT has appointed Dan Sharp as the director of the Office of Technology Commercialization after he took the lead as interim director a year ago.

Sharp became interim director after previous director Richard Miller resigned because of a conflict of interest by licensing UT technology to companies in which he held stock.

The office assesses discoveries and inventions made by UT researchers and faculty in order to pursue patents and analyze commercial applications and potential markets to help products succeed in the market place. The office helps connect theoretical research and start-up business ideas to products and services with industry and investors.

“Sometimes there is a bit of misconception about what we are commercializing,” Sharp said. “People may think we’re using already-made products or prototypes. The majority of the time we’re commercializing an invention that exists only in a lab notebook or a scientific journal.”

Sharp is a alumnus of the UT Cockrell School of Engineering and Lyndon B. Johnson School of Law. Sharp said that his experience as an intellectual property lawyer prior to joining the office influenced his focus as interim director.

“We’re going to continue what we’ve been doing over the past year focusing on education for faculty and researchers across the board, protecting intellectual property, obtaining quality patents and licensing technology out to the private sector, using the research that is being done at UT for the public good.”

Sharp said his time as interim director helped build a network of contacts throughout campus that will be valuable in his new permanent position.

Juan Sanchez, the vice president for research, said Sharp’s year as interim director was a positive experience and as director, Sharp will continue to enhance the work done to commercialize researchers’ work.

“I have appointed him to the post with the conviction that he will raise commercialization at UT Austin to the next level,” Sanchez said. “His knowledge and experience in intellectual property protection and licensing has improved both the quality of our patent filings and the agility and terms of our licensing deals. He is thorough, knowledgeable and communicates extremely well with UT’s internal and external stakeholders.”

In cooperation with the office, Sharp said the College of Pharmacy has developed UT’s highest grossing patent on technology to make tamper-proof Oxycontin. M. Lynn Crismon, dean of the college, said Sharp has made connections with faculty during his time as interim director.

“Mr. Sharp has reached out to us and he has been positive in his interactions,” Crismon said. “He truly appears committed to positively facilitating faculty efforts to license intellectual property. He has experience in preparing patents for submission, and he is well prepared to assume the duties as director of OTC.”

Sharp said besides commercializing products and ideas his vision for the office includes symposiums with faculty and researchers.

“There will be lectures focused on intellectual property or technology licensing but we also try to address the issues that are unique to the academic environment,” Sharp said. “We also want to hear feedback from the faculty.”

Published on January 14, 2013 as "Sharp promoted to director of tech office". 

The University’s chief commercialization officer resigned after he followed University advice to avoid conflict of interest when licensing UT technology. His resignation left an empty role in the Office of Technology Commercialization during a time of attempted growth.

Problems arose for the former chief commercialization officer, Richard Miller, when he planned to license UT technology to companies in which he held stock, associate vice president for research Robert Peterson said.

Miller divested his shares in the three companies to avoid conflict of interest issues, but he ultimately resigned. Miller did not return requests for comment.

Peterson said he became aware of Miller’s resignation at the end of November after Miller approached University officials about the issue. Miller’s resignation became effective Dec. 31.

“He resigned because he was told that he could not negotiate with himself,” Peterson said. “He would have had a tremendous conflict of interest.”

As chief commercialization officer, Miller worked with University faculty to turn their research into commercial products and startup companies. Miller received a salary of $310,000 per year at the University.

Miller hailed from Silicon Valley, and once hired at the University, it seemed as though Miller never turned his attention away from the tech industry in California, Peterson said. Miller remains an adjunct professor at Stanford University, a private college known for its success in technology commercialization.

Based on revenue generated and the number of companies created through each university, Stanford University ranks ninth in technology commercialization across the nation and UT ranks 17th, according to a report from the Association of University Technology Managers.

Peterson said Miller’s experience at Stanford may not have prepared him to work under the conditions of a public university, which Peterson said has very different rules about startups than private universities.

Miller considered licensing UT technology to the Ultimor, Graphea and Wibole companies, Peterson said, all of which Miller previously owned shares in.

Miller spoke to The Daily Texan in September and said he patented faculty ideas more selectively than UT previously did.

“We used to file almost everything that walked in the door,” Miller said.

Miller said technologies are now judged on potential for profit and market demand.

In a letter to University faculty, Vice President for Research Juan Sanchez said Miller advanced efforts to commercialize faculty ideas over the past 18 months.

“In his heart, though, Dr. Miller is still an entrepreneur and wants to work directly with startup companies in Austin and elsewhere,” Sanchez said.

Sanchez said Dan Sharp, director of the office of technology commercialization, will lead the University through this transition and continue to help faculty members turn their research into products and startups.

Peterson said the University will conduct a national search for a chief commercialization officer with a skill-set similar to Miller’s.

Printed on Wednesday, January 18, 2012 as: Conflict of interest leads to resignation

Blueprint for the Future

Editor’s note: This is the first in a four-part, weekly series examining System Chancellor Francisco Cigarroa’s plan to increase efficiency across UT institutions.

In an effort to increase revenue, the University plans to be more selective in filing patents for faculty product ideas.

In System Chancellor Francisco Cigarroa’s Framework for Excellence Action Plan, he prioritizes generating revenue from technology commercialization, which is the process of patenting products developed through faculty research.

Richard Miller, chief commercialization officer of the Office of Technology Commercialization, said UT is now more selective about which faculty ideas the office patents. Technologies are now judged based on potential for profit and market demand. He said this allows the office to get more protective patents, which are more expensive.

“Universities typically try to save money,” Miller said. “We used to file almost everything that walked in the door.”

Miller said technology commercialization through Texas research universities is increasingly important to the state because it creates more jobs.

“There’s so much focus on this because given the state of the economy, we need to create more technology that will help us as Americans,” Miller said.

Miller said the total revenue from commercialization was about $25.6 million last year at UT.

“I’m looking to make changes that increase the revenue into our office,” Miller said.

He said the Office of Technology Commercialization needs to create more startup companies based on faculty ideas while it focuses on the strongest potential patents.

From 2003 to 2010, the University created 57 startup companies.

“The biggest thing we’re doing is to think more entrepreneurially,” Miller said. “We are not just matchmakers — we are active founders.”

Betsy Merrick, associate marketing director of the Office of Technology Commercialization, said student ideas are sometimes involved in patents and startups.

Based on revenue generated and the number of companies created, the University of Utah ranks first in technology commercialization across the nation and UT ranks 17th, according to a report from the Association of University Technology Managers. The University of Utah ranks 70th in research and UT ranks 28th, according to the report.

Jack Brittain, vice president of Technology Venture Development at the University of Utah, said his university is able to achieve its high technology commercialization ranking by creating more products using cheaper patents, the strategy which UT is moving away from.

Brittain said the University of Utah focuses on student involvement and created about 50 companies last year based on student startups.

“We’re defining experiences for our students while they’re at the school,” Brittain said.

Brittain said many top research universities like UT spend too much time worrying about the strength of patents and their long-term reliability.

“I think there’s a lot of good stuff at UT that could positively impact [society] that gets stuck in the system,” Brittain said.

Printed on September 12, 2011 as: University to increase revenue by commercializing research