UC Pushes For-Profit Research Venture : Science: The firm would include outside shareholders and nurture riskier, less-developed technologies and then attract industry support.
Seeking new ways to move scientific research from its laboratories to the marketplace, the University of California is considering a plan to form a unique for-profit corporation that would be jointly owned by UC and outside shareholders to invest in promising technologies.
The proposed company, dubbed California Technology Ventures Corp., would fund projects that have moved beyond the basic research phase but are not yet ready for the commercial market, said Carl Wootten, director of the UC Office of Technology Transfer. It would also provide seed capital and other assistance to UC scientists looking to launch start-up companies.
While a number of U.S. universities in recent years have established commercial ventures to help market laboratory inventions, most are designed to fund projects with clear market potential. Most research universities, including UC, also have well-established programs for licensing technologies to private business.
By contrast, the proposed UC company is designed to nurture riskier, less-developed technologies and then attract industry support. “We have this gap--there are a lot of promising technologies that can’t be licensed in their current form,” Wootten said. “The intent is to find new ways to make research available for the public benefit.”
In addition, UC hopes to boost the income it gets from transferring technology to the private sector. UC earned $28.8 million in royalties and fees from its inventions in 1992, and Wootten hopes to raise that figure to $170 million a year, or 10% of the $1.7 billion the system spends annually on research.
UC would retain majority ownership of California Technology Ventures Corp. but wouldn’t put up any cash. Instead, outside shareholders including companies and nonprofit foundations--would be sought to provide as much as $100 million in capital.
The UC administration is evaluating the proposal, and a spokesman said there was no timetable for a decision on whether to move forward.
Amid growing concern over the international competitiveness of U.S. industry, much attention has focused on how universities transfer discoveries in fields such as biotechnology, electronics and materials science to private industry.
Several technology policy observers said the UC proposal sounded promising. But they noted that the venture will have to be carefully structured to solve the thorny conflict-of-interest problems that arise when public institutions get involved in for-profit enterprise.
“It’s desirable to be experimenting with proposals like this,” said Roland W. Schmitt, president of Rensselaer Polytechnic Institute and a former research chief at General Electric Co. “But it will require a lot of ingenuity.”
Daryl E. Chubin, a research policy specialist at the Office of Technology Assessment, said the details on how the new organization would be staffed and specifics on conflict-of-interest rules would be very important in determining the venture’s fate.
“They seem to be going to great lengths to separate (the new organization) from the university,” he added. “It’s an interesting admission that today’s university structure can’t accommodate this kind of thing.”
