Gene Dalton | The Roanoke Times

Virginia Tech graduate student Matthew Roney works with a single channel direction finding system. The system could be used by members of law enforcement or the military to pick out and track cell phone signals.

Top VTIP licensed products

The following Virginia Tech inventions brought in the most royalties from July 1, 1992 to June 30, 2002, the most recent figures available.

• Test kit for clostridium difficile bacteria
• InterLibrary Loan Internet Accessibility Database, or ILLiad
• Peanut plant variety
• Microbubble flotation column that separates waste from coal particles
• Method for global noise reduction
• Noise control technology used in engine ducts and gas turbines
• Cybermath 1114 instruction material
• Peanut plant variety
• Medical swab
• Wheat plant variety

VTIP royalty income

• FY2006: $1,751,599
• FY2005: $2,496,125
• FY2004: $2,696,414
• FY2003: $2,208,629
• FY2002: $2,348,679

By the numbers

• 119: Invention disclosures VTIP received last year
• 241: Technologies with active licenses, in which a company is working on or selling a product that uses Tech-owned technology
• 62: Active licenses or options yielding license income
• 14: New technologies licensed or optioned by VTIP last year
• 28: U.S. patents issued last year for Tech-owned technology
• 1: Start-up companies formed last year that were dependent on the licensing of Tech technology
• 0: Number of licensed technologies that became available for consumer/commercial use last year

SOURCE: VTIP, in a FY2006 AUTM licensing survey

Gene Dalton | The Roanoke Times

Michael Buehrer, associate professor-Bradley Department of Electrical and Computer Engineering at Virginia Tech.

BLACKSBURG -- Krishnan Ramu, a Virginia Tech professor and avid inventor, finds a special satisfaction in watching his research move from university laboratory to company product line.

Licensed inventions such as his electric motor technology give faculty members "credibility" and provide "a recognition that our work has some relevance," the electrical engineering professor said.

But while the payoffs in both reputation and royalties can be significant, the road from research to commercial relevance can be hard to navigate. So hard in fact, that Mark Coburn, executive vice president of Virginia Tech Intellectual Properties, describes it as a kind of "valley of death" -- a place where many a bright idea gets waylaid by lack of attention or resources.

For the 22 years VTIP has worked to patent, protect and market faculty and student inventions, the office has skirted this valley of death with limited success.

Stretched by understaffing and inundated with invention paperwork, its licensing associates had difficulty handling all of the university's inventions, finding companies willing to pay top-dollar to commercialize them or searching Tech's halls for the next big moneymaker.

Inevitably, some technology got left by the wayside.

But now, Coburn said, VTIP -- and some of those stalled inventions -- are in resurrection mode.

In the past 15 months, the office has brought in a fleet of new employees, and officials hope the additions will increase the number of inventions VTIP licenses and double revenue in the next few years.

Based in the Virginia Tech Corporate Research Center, VTIP acts largely as a matchmaker between Tech inventors and companies that may be interested in commercializing and selling their inventions. If they find a match and the invention makes money, VTIP receives royalties, recovers its expenses and distributes the remainder to the inventor, the inventor's department and the university.

Sales of library software, a bacteria test kit and varieties of wheat and peanut plants helped bring roughly $2 million a year in royalties through VTIP in the past six years.

But though the office got by on a few high-revenue inventions, it was plagued by understaffing.

"They were very responsive, but they were very hassled," said Ramu, who began working with VTIP in the early '90s and has submitted paperwork for about 30 of his motion-control inventions.

"They had too few people and too many clients," he said.

Now, with funding from Tech, the office has hired four new licensing associates. Another is expected to join the office in the fall, bringing VTIP to 10 employees, including six licensing professionals. That's double the number of employees and triple the number of licensing professionals working a year ago.

But with extra staffing, come higher expectations.

VTIP, a nonprofit Tech-affiliate, will likely receive university funding for two to three more years, but at the end of that period it is supposed to be self-sustaining.

Coburn estimates it will take about $4 million in royalty revenue a year -- or twice its 2006 royalty revenue -- for the office to sustain itself.

Asked if this is doable, Coburn chuckled.

"We hope so," he said. "It's not a given, I guess, [but] if you do the right things, we think it will happen."

However, "it's a process that takes several years," he added. "Because even the licenses that we're putting in place today might not start generating revenue for several years."

The road to self-sufficiency is not only long, but it's also somewhat lonely.

John Fraser, past president of the Association of University Technology Managers, said that perhaps 12 of the more than 200 technology transfer offices in the U.S. are self-sufficient.

Those that are, Fraser noted, are larger, older operations, such as those at Stanford and the Massachusetts Institute of Technology.

"It's incredibly unusual for offices to be self-sufficient until after a significant amount of time," said Fraser, who is executive director of the commercialization office at Florida State University.

Working against them, he explained, is the high failure rate of transferring, developing and commercializing technology and a royalty distribution structure that often allows the technology transfer office to collect only administrative and patenting costs.

Asked about VTIP's chances, Fraser said "it might be a reasonable goal, but not in two or three years."

In spite of the odds, the hope is that as licensing associates go out and meet with faculty, the number of invention notices, or "disclosures," submitted to VTIP will increase. And, as the number of invention disclosures rises, so does the likelihood the office will license a "big hit" -- a single invention that brings in millions of dollars in royalties.

This is important because the licenses on VTIP's previous "big hit" inventions have expired and the office has no million-dollar licenses.

"We have several medium-sized hits and lots of smaller hits," Coburn said, noting that medium hits bring lifetime revenue in the hundreds of thousands of dollars while smaller hits bring less than $100,000 in revenue.

Of VTIP's more than 200 active licenses, only about 60 are bringing in revenue.

And much of that revenue simply passes through the office on its way to a technology's inventor, the inventor's department and the university.

Coburn said, historically, Tech's 40 percent cut of royalties is reinvested in VTIP, but the aim is for those funds to eventually be used for university research and education.

As a result, the pressure to develop a profitable, well-run office is not just financial. It's also closely tied to Tech's emphasis on research.

In 2000, Tech President Charles Steger announced a goal for the university to move to the top 30 in national rankings of research universities by 2010.

"We're investing a lot in research growth," said Robert Walters, Tech's vice president for research. And "the reality is, for any organization of this size that does as much research as we do, it would be a mistake not to have a concentrated effort" in technology transfer.

According to Fraser, the success of offices such as VTIP is often dependent on the quantity and quality of staff. Licensing associates, after all, are the ones who work, often one-on-one, with faculty and students to identify, legally protect and market their inventions.

VTIP licensing associate John Talerico, who joined the office last year, said he is working on more than 230 invention cases and "can't even imagine" how VTIP operated with two licensing professionals.

"My hope is that with more of us here, we'll be able to dedicate more time to specific projects and dedicate more time to all the faculty instead of worrying about trying to be a filter for finding the 'best projects,' " he said.

One of Talerico's current focuses is Wireless@Virginia Tech, a research group that works on mobile and portable radio and antenna technology.

Group director Jeffrey Reed said he has high hopes for the collaboration.

"For one, it helps our students because it raises the visibility of Virginia Tech among industry so they're more likely to recruit here," Reed said.

Second, "VTIP is very helpful in getting the word out so we're more likely to pick up industrial sponsorship, which will help for paying for students to be able to do graduate student research and pay their tuition, and overall, it helps the prestige of Virginia Tech."

Yet for all the potential benefits, some faculty are just now realizing what VTIP offers.

"Frankly, up until recently, unless you worked in industry, you really didn't have a good feel for what intellectual property was and what the process was," said Mike Buehrer, an associate professor with Wireless@Virginia Tech. Now "they're educating us on what they want to do and how they want to work with us, [so] we say, 'OK, this sounds like a workable plan; let's get involved.' "