“Let me show you something,” Hsueh-Chia Chang says, like a kid with a new toy. With that, he hunches over his laptop, taps the keys a few times and produces the image of a tornado. A funnel cloud forms at the top of the screen swirling debris ever faster, drawing it in and concentrating it down. The 10-second video brings a smile to the face of the Notre Dame chemical engineering professor nearly every time he views it because he knows how truly amazing it is. That, and how valuable it might be.
What makes the twister astounding is its size. The funnel cloud has the diameter of .0008 of a meter, and each piece of debris floating inside is half as thick as a human hair. What makes it valuable is its potential use. Chang, the director of Notre Dame’s Center for Microfluidics and Medical Diagnostics, and his colleagues have developed and patented the means to quickly mix, pump and separate incredibly minute amounts of liquid.
That ability overcomes a major technical roadblock in the development of a whole new generation of advanced diagnostic and sensing devices, ones similar to the new glucose meters for diabetics. The new meters have the potential to replace many costly and time-consuming lab tests.
Among other things, Chang’s inventions, which employ electric fields to move fluid through a silicon chip, could be used to separate blood cells from plasma or concentrate bacteria or viruses. Best of all, they can accomplish in seconds what current technology takes hours to do. Precisely how valuable the inventions may be remains to be seen, but representatives of a major pharmaceutical firm and an agricultural chemical company have demonstrated interest in the technology as well as a local Granger, Indiana, company specializing in water quality testing.
Chang’s micropump technology is just one of a spate of inventions that Notre Dame research labs have generated recently. Within the last several years, there has been a growing sensitivity at the University to what is known as “technology transfer,” marked by more faculty members applying for patents and more being issued. Some are even beginning to pay off, albeit modestly.
None, however, has come close to generating the royalties of Notre Dame’s first and most famous effort in technology transfer, Father Julius Nieuwland’s groundbreaking work with polymerized-2-chloro-1,3-butadiene, which led to two patents and the development of the first synthetic rubber, Neoprene, in 1931 by the E.I. DuPont de Nemours chemical company. That particular bit of “intellectual property” was very good fortune for the University—some $2 million when the royalty payments ceased in 1948.
Now 53 active patents are on the books for Notre Dame faculty inventions, ranging from technology to make freeze-resistant plants to potential anticancer drugs. All of these have been entered since 1972, and the bulk, 35, since 1980 when the Bayh-Dole Act came into effect. The act mandated that institutions pursue the commercialization of technologies developed with federal funds.
Prior to 1980, the U.S. government owned any invention created with federal money. But few made it to the marketplace because of bureaucratic red tape and lack of incentives, explains Richard Jensen, Notre Dame professor of economics and econometrics. Nationwide, patents from university research were rare, and so the fact that Notre Dame had few before 1980 is not unusual. In an effort to spur development, the federal legislation gave back patent rights to universities and other institutions, requiring them to make “diligent efforts” to commercialize the inventions and give the faculty inventor a share of any subsequent income.
To a fair extent, the Bayh-Dole Act has had its intended effect, says Jensen, who has written extensively on university technology transfer. As evidence, he cites a survey of the Association of University Technology Managers that shows a 176 percent increase in patents and 131 percent increase in licenses from 1991 to 1998 among the 86 responding schools. Further, the economist notes that university technology transfer has generated more than 2,000 new firms in the last decade and is estimated to support 180,000 jobs each year. Not only that, some of the most famous recent inventions have come from university labs, including the anticancer drug Taxol, the Google search engine, the MRI diagnostic machine and the famous Cohen-Boyer process for splicing genes, not to mention Gatorade.
Currently nine licenses have been granted to companies to use Notre Dame technology, and options are out on another four. Additionally, there are seven pending license agreements, four of which are with Notre Dame faculty “start up” companies. License revenue has taken an amazing jump at the University, from a paltry $250 in 1999 when the Office of Technology Transfer was established to $624,250 since then. All of this comes from a few licensed patents issued from 1997 on.
To put that in some perspective, the 10-campus University of California system, which ranks number one in technology transfer, earned $261 million in the year 2000 and had 324 patents. “Of the 220 member institutions in the Association of University Technology Management, there are about 10 ‘big dogs’ in university technology transfer, such as the University of California system, Stanford, MIT, Johns Hopkins, Wisconsin and the like,” says Mike Edwards, who heads up Notre Dame’s two-person tech transfer office. “Most are more at Notre Dame’s level. Very few universities actually make money on technology transfer. Most lose money. The majority of offices are only two- or three-person offices, which provide service to faculty, market some intellectual property and generally don’t recover enough to pay salaries.”***
With earnings of more than $300,000, a modest sum by national standards, the most valuable Notre Dame invention in recent years has the oddly intriguing name of “piggyBac.” The invention emanates from a virus that can turn a cotton boll worm into a puddle of goo within hours of infection. As amazing as that feat may be, however, it has nothing to do with the patent.
PiggyBac is a little snippet of renegade DNA that ND Biology Professor Malcolm Fraser found while studying how baculoviruses mutate. The chunk of DNA, called a transposon, has the ability to copy and insert itself into a new position within the same or a different chromosome. Using the transposon, the virus mutates by picking up bits of transposon DNA from the infected caterpillar.
The transposon’s commercial value became apparent after Fraser demonstrated its ability to move not only itself but also any genes that are placed inside it from one DNA molecule to another in cell culture systems. Subsequently a colleague at the U.S. Department of Agriculture showed this transposon could move genes into the chromosomes of Mediterranean fruit fly tissue. “That turned out to be a significant observation because it proved that it could move genes across orders of insects,” Fraser says.
Up until then researchers thought the transposon worked only with caterpillars. Since then, piggyBac, whimsically named by Fraser to reflect its transport ability and origin in the baculovirus, has been shown to work with a wide variety of insect species as well as vertebrate cells. It has become the most widely used tool for manipulating genes in insects, especially Drosophila, the fruit fly.
The pharmaceutical industry, in particular, has found piggyBac useful. “All these companies are looking for gene targets for their new drugs, and they need a nice system to screen those targets and their functions,” Fraser explains. “Ethically, of course, you can’t manipulate genes in the human genome, but Drosophila is a nice system that gives insight into a lot of fundamental processes that carry over to humans, and piggyBac, it so happens, offers the best way to manipulate Drosophila genes.”
Meanwhile, using piggyBac, Fraser and his collaborators have produced the first transgenically engineered silkworm, inserting a fluorescent green protein into its skin. The achievement is significant because it demonstrates the feasibility of harnessing the silkworm to produce a useful protein product such as human growth hormone. Fraser explains, "Since silk is a protein product, if you can genetically modify a silkworm to produce another protein of importance, you will get a large amount of that product along with silk.
Pharmaceutical companies are keenly interested in transgenically producing proteins of medicinal value. Most schemes, however, involve more complicated systems such as goats and their milk. The simplicity of the silkworm offers a distinct advantage, Fraser says. “You can transgenically engineer a silkworm much easier than a mouse or goat system,” he points out. “So in a matter of months you can get it to produce the protein of interest and in a few more months you can amplify that to production levels. In contrast, it’s much harder to engineer a goat, and to amplify that into a herd could take years.”***
Some of the spike in patent activity at Notre Dame is directly attributable to the College of Engineering’s Center for Microfluidics and Diagnostics. The center was established with seed money from the Graduate School and the College of Engineering specifically to develop fundamental research that also may have commercial potential.
And the seeds have borne fruit. Another recent Microfluidics Center invention currently in license negotiations is for something technically known as “binary solitary cross field electrophoresis,” developed by the center’s associate director, David Leighton. Mercifully, in the patenting process, the professor of chemical engineering decided to rename the technology simply “Zeta Filtration.” The Zeta filter is a clever device that uses an AC electric field to quickly separate out “biological nanoparticles,” things like bacteria, viruses or cellular components, an ability important to the development of medical analytic and diagnostic devices.
While Chang and his colleagues have concentrated their work on the microplumbing needed for biological sensing devices, Professor of Chemical Engineering Al Miller’s lab has generated a patented electrochemical technique to fabricate a minuscule grid that can be configured in a number of useful ways, as an extremely sensitive detector of E. coli bacteria, for instance, or as an infrared energy detector.
Essentially, Miller’s team discovered how to make a tray of tiny containers and place them on a silicon chip. The closely packed wells are about 15 to 30 atoms in diameter. When filled with cadmium sulfide crystals, which are sensitive to infrared energy, the chip might be used to detect minute amounts of heat. To make an E. coli detector, the wells are filled with gold, then the surrounding structure is dissolved away to form gold “nanonwires.” Then antigen molecules sensitive to E. coli antibody are added to the tip of the gold wire. If E. coli bacteria are present, the electrical resistance of the system changes, Miller explains. A startup company owned by one of Miller’s former Ph.D. students who helped to develop the technology is negotiating with the University to license it.***
Unlike most other research institutions, which established offices of technology transfer in the 1980s, the University didn’t open its own office to coordinate the management of intellectual property until 1999.
“In the old days,” says the chemical engineer Leighton, “what used to happen is that a faculty member would develop something and then send a patent disclosure to the University’s patent committee. They’d look it over, send it to a company in Arizona who would evaluate it. Then they’d look it over, send you a coffee-mug souvenir and decide whether to option it. If they optioned it for six months, they’d send you a check for $1,000. After that they’d say there’s no market and that would be that. Or they might refer it back to the University, which would release it to the inventor who would say, ‘Now what?’ So nothing happened.”
In years gone by, Al Miller says, faculty were sometimes discouraged by a perceived lack of support for the patent process and often didn’t pursue ideas because of that. “When I joined the faculty in the late ‘60s, the attitude toward intellectual property was that it was a ’trade school’ kind of thing. It was beneath our intellectual dignity, because at a university, you see, we publish scholarly papers or monographs.”
With the establishment of the Office of Technology Transfer the University affirmed with a tangible symbol that monographs and patents are not mutually exclusive. For the first time a centralized office was given the mandate of managing the University’s intellectual property from the patenting process through overseeing the licensing of technology to commercial ventures.
Also signaling more openness, when Jeffrey Kantor became dean of the graduate school in 2001 one of the first things he did was to meet personally with as many faculty researchers as possible to make them aware of the University’s patent policy and encourage them to file disclosure forms when they discover anything of potential commercial value. In fact, since then there has been such a steady increase in the number of disclosures filed—with 43 last year alone—that tough decisions must be made on which ideas to follow through on since the patent process is expensive. It runs around $25,000 for a domestic patent and twice that to protect the rights internationally.
Another tangible sign this May was when the University hosted the inaugural symposium of the Indiana Innovation Network, a new consortium bringing together business leaders and the academic research community to foster collaboration in the development of new technologies. In announcing the symposium, Kantor noted, “Research being conducted here has much potential for stimulating economic development in Indiana. Notre Dame is both committed and enthusiastic about ensuring that all steps are taken to get important discoveries into the marketplace where they can find value.”
The University and the city of South Bend also are working to develop a “technology park” in the area of the old Notre Dame Woods, south of campus. Similar to such developments at other universities, the technology park would offer research and development space to commercial interests collaborating with Notre Dame scientists and engineers.
One more change in the culture has been a new openness to faculty involvement in startup companies based on technology they have developed. For instance, Chang and his colleagues Mark McCready and Dave Leighton along with a recent MBA/engineering graduate, Andy Downard ‘02, formed a company called Microfluidics Applications to commercialize their technology. The fledgling company, which at the moment is little more than a business plan, has been aided by Notre Dame’s Gigot Center for Entrepreneurship through its IrishAngels program, which matches Notre Dame alumni entrepreneurs with fledgling businesses to help them reach their goals.
Another faculty startup company is Emu Solutions, formed by Professor of Computer Science Peter Kogge and Associate Professor of Computer Science Jay Brockman to commercialize technologies that mix memory and logic capabilities on the same silicone chip.
Jensen, whose academic specialty is the economics of University technology transfer, gives high marks to Notre Dame for an incentive system that encourages faculty to file disclosures. “Our survey of 65 leading universities showed that, on average, leading universities give 40 percent of the income from patent licenses to the inventors,” he says. "Notre Dame provides 50 percent of the first $100,000 generated by the patent to the inventor in income, 25 percent of the next $100,000 to $1 million and another 25 percent in funding for research support, and 25 percent of anything over $1 million in income.
“So Notre Dame is more generous than average for inventions that are successful but less generous for any that are enormous successes.” The tactic is a good one, Jensen says “because giant successes are quite rare, [and] providing a greater incentive for modestly successful inventions seems like a wise policy for inducing disclosures.” Moreover, he notes, “providing part of the payment to inventors in the form of funds for research support is very important and is not that widespread in practice. In fact, our survey found that faculty considered obtaining sponsored research funds as the most important objective of technology, even over cash payments.”
Of course that shouldn’t come as a surprise, since faculty are primarily interested in publishing cutting-edge scientific papers and training students. Anything that helps them do that is welcome. At Notre Dame there are numerous beneficial examples of corporate collaboration and support involving University researchers. For many years, for instance, Professor of Chemistry Marvin Miller has had a relationship with the Eli Lilly pharmaceutical firm that has resulted in eight patents. Those include compounds that combat resistant strains of staphylococcus and inhibit tuberculosis.
One notable example of beneficial ND research cooperation with commercial interests has been the collaboration between Norbert Wiech ’60 and several Notre Dame chemists and biochemists, notably professors Paul Helquist and Olaf Wiest.
Wiech, who owns a small pharmaceutical firm in Baltimore specializing in treatments for rare diseases, several years ago enlisted the aid of Helquist and Wiest to help him further his development of a novel compound called CG1521. That compound inhibits the enzyme HDAC, which can sometimes cause DNA strands to coil too tightly, thus inhibiting their ability to transmit the genetic code and produce the proper proteins. Such genetic code errors are implicated in genetic-based diseases as well as cancer. Helquist is a synthetic chemist whose specialty is making new compounds, while Wiest’s expertise is in chemical computer modeling, which is invaluable in making novel compounds unseen in nature.
Recently, Helquist, Wiest, Wiech and their collaborators reported a significant breakthrough in the Journal of Medicinal Chemistry. They had discovered a formerly unknown binding site on the HDAC molecule that offers a new target for modified forms of Wiech’s compound, CG1521. This offers the hope of new therapies for such diseases as thalassemia, which is an inherited illness marked by anemia caused by faulty synthesis of hemoglobin.***
Faculty generally give the University an “A” for effort for the improved patent climate, but wish for even more technical support. “I think the University has improved, but it has been at the low end of the learning curve and has needed to get up to speed quickly,” the biologist Fraser says. “Part of the problem is that with only a two-man office there isn’t much of an infrastructure for pursuing patents, and because of that there is a tremendous amount of extra work for the researcher. For instance, on my last patent the lawyers said they needed a copy of every citation of this patent, so I had to spend hours pulling together all these articles. And that means I have to take valuable time out of my work to do that.”
High on the wish list of faculty researchers for the Office of Technology Transfer is an on-staff patent agent, someone with a science or engineering background who speaks the language of technology and who could help faculty with the technical preparation of their patent applications. “It’s unrealistic for a lawyer to write the patent,” Leighton says.
The patent process starts with the faculty member filing a disclosure form outlining the idea and the reasons why it might be valuable. Next the Office of Technology Transfer has the idea evaluated to determine how marketable it is. “After that we generally file a provisional patent for one year,” says Edwards. “It’s important to protect the idea before the faculty member presents any scientific papers on it. If an idea seems extraordinary, we may file for a full patent right away. After 12 months a decision must be made whether to file a full patent, otherwise the idea goes into public domain. In the meantime, with the help of the researcher we attempt to find a corporate sponsor or someone to absorb the cost of the full patent in exchange for a favorable license agreement.”
“The faculty member is intimately involved in the whole process,” Kantor says. “Especially since it is usually the researcher’s reputation and exposure that generates the licensing opportunities. This is not something where the faculty member merely files a disclosure statement and walks away.”
Notre Dame’s reliance on faculty to provide marketing leads for their technology is the norm for university technology transfer efforts, Jensen notes. Traditionally, licensing university-generated patents is a tough sell, the economist says, because the technology is so raw and basic that companies fear the cost of development might outweigh the projected profits.
“Our survey of 65 leading universities indicated that 45 percent of all inventions disclosed to technology transfer offices involved technologies with merely a proof of concept, and 37 percent involved technologies with only a lab-scale prototype. . . . Such inventions are so embryonic that respondents to our survey reported that 71 percent of all inventions disclosed to technology transfer offices required inventor involvement in further development for any chance of commercial success.”
“In an academic environment you tend to develop things to a certain level,” Leighton observes. “That’s where the primary intellectual content has been extracted. You figure out how things work, publish your paper and that’s that. Whereas companies developing a product must figure out all the issues to make it work reliably and produce it in an economical means. It’s another level of development. Polishing up an idea.”***
As Jensen points out, few University technology-transfer efforts are profitable, so there must be other reasons to engage in it. Kantor says, “The reasons we’re involved in technology-transfer efforts go beyond merely revenue generation. The key thing is that it allows what’s going on in our laboratories to have an impact on people’s lives.”
“Frankly, even if it is not a financial success for the University, it is a success,” the Center for Medical Diagnostics associate director David Leighton insists. "Technology transfer, giving useful ideas back to the community, is as much a part of the academic enterprise as is education.
“It would be very nice if one of these ideas hit it big and vast amounts of money come into the University’s coffers. But the probability of that happening is like winning the lottery. The probability of anybody getting rich is low, but the probability of everyone being enriched in an academic sense is very high.”
John Monczunski is an associate editor of this magazine.