Hopes high for UT-MUO research

UT staff has spun off such companies as Innovative Thin Films, a two-man firm headed by Alan McMaster, above.
UT staff has spun off such companies as Innovative Thin Films, a two-man firm headed by Alan McMaster, above.

After Gov. Bob Taft signed the University of Toledo and Medical University of Ohio merger agreement on March 31, school administrators and public officials lunched on chicken, rice pilaf, and the promise of more research dollars.

Community leaders imagined the new industries that could develop from the merger. U.S. Rep. Marcy Kaptur (D., Toledo) envisioned that an improved pharmacy school could transform the region into a "nutraceutical center."

Nutraceuticals are the substances within chicken, rice pilaf, or any food product, that help treat a disease.

But what if the illness is economic stagnation?

As the U.S. automobile industry grinds its gears and the local unemployment rate treads 2 percentage points above the national average, the UT-MUO merger on July 1 comes with expectations that it should produce research capable of birthing new companies and restoring northwest Ohio to prosperity.

But the modest number of patents and research at both schools undermines these expectations.

Last year's research expenditures at UT and MUO combined still trail more than 100 universities nationwide, according to the Association of University Technology Managers, an organization of nonprofit executives involved with licensing academic research.

"Nothing is going to measurably change on July 2," said Doug Wilkerson, associate vice president for research at MUO. "Any research collaborations that will be available on July 10 were there on May 10."

Research expenditures at UT were $32.6 million last year, according to school records. Joined with MUO, that figure would grow to $53 million.

"We're not large enough to take the lead role in technological development in the city," said Daniel Kory, director of intellectual property and technology transfer at UT.

UT has doubled its research expenditures in the past five years, but the search for money and talent can be intimidating. The University of California system spent $2.79 billion on research in 2004, followed by $1.59 billion for Johns Hopkins University and $1.02 billion for the Massachusetts Institute of Technology.

"We're competing against universities across the country," said Frank Calzonetti, UT's vice provost for research. "Just like our football team is playing against Ohio State."

UT plans to boost research dollars after the merger by recruiting as many as 20 scientists who already have lucrative government and foundation grants away from other schools, rather than by seeking additional grants, said MUO President Lloyd Jacobs, who will be president of the merged institutions.

"The best way to grow that is to build and import talent," Dr. Jacobs said. "You can't grow that directly by begging, cajoling money."

Although external grants pay for some salaries, hiring new faculty members could prove expensive for a school that might need to swallow as much as $30 million in merger-related costs during the next three years.

"The foundations and fund-raising are extremely important if we're going to do it," Mr. Wilkerson said. "There's almost a free-agent market for well-funded research scientists."

Dr. Jacobs recognizes that the university will always have finite resources, which is why UT should focus its research on complementary fields.

"Pick two, or three, or five areas," he said. "Stick to them. Don't spread yourself too thin."

MUO and UT will bring 12 academic priorities to the merger, according to their soon-to-be integrated research departments: alternative energy; neuroscience; cardiovascular sciences; cancer; medical microbiology and immunology; transplantation; astronomy and astrophysics; biotechnology; environmental research; geographic information systems and remote sensing; science and technology education, and advanced films and coatings.

UT officials will further define and narrow these priorities during the next year, so that within 10 years the school will enjoy national recognition in its selected fields, Dr. Jacobs said.

The existing priorities are based on the faculty's expertise and previous success in spinning off companies such as Innovative Thin Films, which makes coatings designed to limit reflections off solar panels and evaporate any dirt covering the panels. The coatings improve the performance of the panels.

Founded in 2002 by UT chemistry professor Dean Giolando and Alan McMaster, Innovative Thin Films spent their initial four years testing the coatings. The two-person company now wants to sell the coatings to manufacturers, whose response will determine the company's fate.

"It's really one of the most difficult stages, taking the technology and turning it into a business," said Mr. McMaster, Innovative Thin Film's president. "We have to go out to customers, show them our information, and convince them this is something worth paying for."

Both UT and MUO gave their professors a financial incentive to patent research by drafting royalty-sharing policies that split net income from licensing 50/50 between the inventors and the university.

"We want to make it easy for them to do business here," Mr. Kory explained. "There is a cultural gap in our own institution we're trying to bridge with entrepreneurial activities."

UT currently holds 33 licensing agreements for its patents and has spun off five companies. Licensing revenue to UT rose from a meager $5,957 in 2002 to a profitable $672,773 in 2005.

Since 2001, MUO has received four domestic patents and 26 patents from foreign countries, none of which has generated royalties. But MUO patents dating to 1990 have yielded a total of $2.59 million.

The process of maintaining a patent consumes time and dollars. MUO data shows that there can be a two, three, or four-year lag between the date a patent is filed and issued.

And with 10 patents yielding royalties in 2005, MUO's research and grants administration received $23,733 but still faced external legal fees of more than $51,000.

UT began to manage its research for commercialization somewhat late in the game. Departing UT President Dan Johnson chose in 2001 to emphasize identifying on-campus inventions that could be patented, an academic revolution that began with the Bayh-Dole Act of 1980.

That law allowed universities to patent and license research paid for by federal grants. Almost 20 years later, the Ohio legislature passed a law that reinforced the right of public universities to own patents and carved out room in the state ethics code for the schools' professors to make money licensing new technologies.

Starting next month, Ohio's public research universities are set to devote 1.5 percent of their annual state funding for doctoral programs offered on their campuses to research programs. Encouraged by Mr. Taft, the state would match those payments during the next 10 years.

The recent government drive to capitalize on university research has been controversial. Seven years ago, Carnegie Mellon University economist Richard Florida warned that eager politicians foisted "overly mechanistic" policies on academic research that could damage a school's core mission of education.

"Universities have been naively viewed as 'engines' of innovation that pump out new ideas that can be translated into commercial innovations and regional growth," Mr. Florida wrote in a 1999 "Issues in Science and Technology" article.

"This view misses the larger economic picture: Universities are far more important as the nation's primary source of knowledge creation and talent."

Asked if the public pressure on universities to jolt Ohio's economy has become too great, Dr. Jacobs said there is really no other choice.

"It is a large expectation, no question about it," Dr. Jacobs said.

"On the other hand, I believe that education and research is the only path to prosperity."

Contact Joshua Boak at: jboak@theblade.com or 419-724-6728.