Piggybacking on existing intellectual property is becoming a popular means for companies to develop new products and services, and UTEK — as in “university technologies” — is looking for the best and the brightest.
A specialty finance company focused on technology transfer, UTEK performs its own scientific due diligence and puts its own capital on the line to purchase innovations, says chief executive officer Cliff Gross. UTEK then resells the technologies to companies, for either cash or equity — a valuable option for businesses trying to preserve cash flow.
Consumer-products company Klegg Electronics has in-house staff for research and development, but UTEK “takes off some of the strain,” according to chief executive officer Dennis Gentles. Klegg buys technologies and not marketable products, he adds — commercializing the technologies remains a job for the R&D department — but UTEK “lets us bring products to market much faster.” Benjamin Croxton, CEO and CFO of surge suppressor manufacturer World Energy Solutions, also praises UTEK’s “sophisticated bird dogging” of innovations across its wide range of university contacts.
UTEK’s public-company connections prove valuable to the universities, too, contends M. Douglas Speight, director for outreach and technology transfer at of North Carolina A&T. Speight recalls one technology — a means of analyzing structural damage in military aircraft — that proved difficult for the school to license. UTEK, he says, recognized that the technology might be valuable to a company in a quite different line of business: monitoring the structural health of some 200,000 bridges and overpasses across the country. “It gave us the opportunity to serve a whole new market that we had never anticipated,” says Speight.
Another means of matching technology buyers and sellers will take the stage next month in Chicago at an intellectual-property auction conducted by Ocean Tomo. The company, which describes itself as an “intellectual capital merchant bank,”
held its first auction last April. Of the 78 multi-patent lots up for bid, 26 sold that day — two of them for seven figures, but most of the rest for between $2,000 and $17,000. Five additional lots were later sold, privately, at an average of just over $1 million each.
Shortages of time and resources are an issue for many companies, maintains Andrew Ramer, Ocean Tomo’s director of corporate finance. Ramer explains that to develop its own intellectual property, or IP, a company needs to “engage IP counsel, go through the patent prosecution process, and wait three, four, five years until those patents issue.” An approach that many companies are taking now, he adds, is “taking funds they’d be allocating to develop new IP and using it to acquire new IP.”
An experienced intermediary can smooth the way, says James McNamara, executive director of the technology management office at University of Massachusetts Medical School. At a smaller company, he explains, it’s entirely possible that no one has ever consummated a deal with a university, “so there may be some early surprises on both sides as to what the expectations are.” UTEK’s experience in academic tech transfer, adds McNamara, “helps to make the deals more reasonable.”