Patent News | "House pushes college patents"

By : Kelley Shannon
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Category : Patent News

AUSTIN — Universities could partner with outside entrepreneurs more often to bring new technology to market if the state provided some seed funding, researchers and business people told legislators last week.

Patents and startup companies resulting from these joint ventures generate money for the schools and jobs for communities, said James McGinity, a professor in the College of Pharmacy at the University of Texas at Austin.

"The state of Texas has some very, very smart people in universities and in the private sector. With these seed grants, we could really expand tremendously," said McGinity, who also is an entrepreneur. "We can start small and eventually grow to be a sizable force in the business community."

Funding is needed to get a company going early, even before the business prepares for venture capital or applies to the state's Emerging Technology Fund, said McGinity, focusing on faculty-generated startup companies.

He and others testified at a joint hearing of the House Higher Education Committee and Economic and Small Business Development Committee on Wednesday. Heading into the 2013 legislative session, the panels are looking at ways to promote public-private partnerships to enhance commercialization of new technological discoveries.

Rep. Dan Branch, R-Dallas, chairman of the Higher Education Committee, said university research often is the foundation for lifesaving drugs and technologies.

He said university-private partnerships have strong economic potential because universities can receive royalties from patents and, potentially, revenue from technology companies once they are thriving.

"It seems to me we ought to be encouraging more of this," Branch said.

McGinity noted that the University of Texas offers lectures on patents to graduate students and prepares them for competitive jobs.

Through his questioning, Rep. Rodney Anderson, R-Grand Prairie, asked how many of the startups don't succeed. "There are probably more failures than successes," McGinity said.

"Part of my concern in providing pre-venture capital is the failure rate," Anderson said.

Those testifying didn't recommend an amount of seed money the state should consider budgeting.

McGinity told of UT-Austin's success stories in partnering with private businesses. One case in point: Enavail, a company with offices in Austin that is launching a manufacturing center in Abilene. The company's main operation is hot-melt extrusion technology at the manufacturing center, and there is space available for other types of work, he said.

In another case, the university receives $10 million to $11 million per year in patent revenues from a formula that helps deter abuse of the drug OxyContin, McGinity said.

But, he said, of his many patents only a few are being commercialized.

Rice University Provost George McLendon said he wasn't asking for state money, but praised legislators for their support of the Cancer Prevention and Research Institute of Texas, initiated by bonds and designed to spur medical breakthroughs in Texas in the battle against cancer.

McLendon said the institute and the Texas Medical Center in Houston are in the process of attracting technology and capital to Texas from the east and west coasts.

Dan Peterson, an Austin neurosurgeon and founder and chief executive of Alafair Biosciences, told of his research partnership with the University of Texas to develop a product used to treat post-surgery scarring and pain.

To succeed, startup companies must have enough funding to get through what is known as the "valley of death," when expenses increase dramatically as a product heads into commercialization, he explained.

Meanwhile, Texas State University, recently designated as being an "emerging research" university in Texas, is in the midst of developing a new nanomaterials research center, said university President Denise Trauth. Texas State is joining with private-sector partners in work on commercialization of the minute materials, she said.

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