Richard Miller

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

Hundreds of entrepreneurs and investors listened intently Friday as Dan Street, founder of a company that attempts to connect people with their neighborhood, showed off his new spin on social connections and technology in the AT&T Executive Education and Conference Center’s amphitheater. Street’s company, Borrowed Sugar, could serve Austin’s 1,200 neighborhoods by posting on a website local events, news articles, restaurant information, deals with area businesses and a forum for communication. Borrowed Sugar can find anything happening online that is relevant to a particular neighborhood, Street said. “When you move into a new house, you can feel connected to your neighbors and connected to your community,” he said. Borrowed Sugar was one of several UT-originated business ventures on display at Friday’s inaugural Texas Venture Lab Expo, which also featured talks from UT President William Powers Jr. and other University leaders about the state of entrepreneurship at UT. For years, UT has struggled to keep up with other large public research universities in technology commercialization revenue, according to data compiled by the Chronicle of Higher Education. Though its intellectual property revenue has risen steadily since 2003, and UT spent $640 million on research in fiscal year 2010, the University accumulated only about $14 million in revenue this fiscal year. In 2010, UT received the second highest amount of research dollars in terms for public universities without a medical school, but competing universities among that group outperformed UT with fewer research dollars. Greg Fenves, dean of the Cockrell School of Engineering, said technology commercialization is crucial to the distribution of knowledge. While research journals will always be an important medium to transfer knowledge to the public, some innovations must make a splash in the market, he said. UT has a responsibility to identify those innovations and commercialize them, Fenves said. “That is an important way that we pay back society for the large investment that they make in public higher education here in Texas,” he said. “This is something that UT needs to do a better job of.” Taking up the challenge to reform the way UT’s Office of Technology Commercialization, Richard Miller, UT’s chief commercialization officer, said he was attracted to UT for its wealth of research. He said he felt that universities must be aggressive about changing the way they commercialize technology because it will be of paramount importance to the country. “In terms of process, we’re really good. But when you look at the output of all those patents filed, and all those licensing agreements and all those start ups, we actually don’t have that much to show for it,” Miller said. “That’s because we’re not thinking about it right.” Miller said the patent for UT’s most successful technology — a glucose monitor developed by former UT researcher Adam Howard — expires in 2014. A larger company acquired Howard’s company, Therasense, for $1.4 billion in 2004. The royalties UT receives from that deal make up more than 40 percent of the University’s technology revenue this year — about $6 million of a total $14 million. UT should become more selective in choosing which technologies to pursue patents for, Miller said. In fiscal year 2010, the OTC filed 300 patents, had 50 licensing agreements, 32 start-ups, but only one company raised more than $1 million. Powers said UT’s bureaucratic nature creates a challenge for businesses and the University to work together, but that UT must get hooked into the flow of the emerging wealth-creating force in the country — technology and venture capital. “I think the real challenge is that universities are going to have to become more in-tune with social and wealth-creating forces,” Powers said.