Faculty members work with the Brown University Research Foundation to take their discoveries to the people who can use them
Edith Mathiowitz loves polymers. While playing with them, the professor of medical science and engineering and her lab members created a tiny plastic particle that could safely transport fragile drugs such as insulin or gene therapy through the harsh conditions in the intestinal tract.
Her bright idea, published in the journal Nature in 1997, may someday mean that people who require injections for diseases such as diabetes, cancer and AIDS might instead take drugs or gene therapy orally.
But how could she make sure that her discovery got from "eureka!" to the people who need it? She worked with the Brown University Research Foundation, a nonprofit corporation formed to hold and license patents and work with companies that could take inventions to market.
When faculty members make a discovery, they are obligated to disclose it to the University. Research foundation director William Jackson determines whether inventions and intellectual property such as software have commercial potential. If they do, the foundation applies for a patent from the federal government, a process that, with legal fees, commonly costs $25,000, Jackson said. Commercial potential is determined by whether the foundation can find interested businesses. It does this by regular contact with potential investors through the Brown Venture Forum.
The research foundation will grant a license to a company that wants the exclusive right to use the invention, in some cases before it has a patent, Jackson said. The company agrees to pay fees and royalties that are distributed to the University and the inventor or inventors according to the University's patent policy. Under the policy, the first $100,000 of net income is distributed equally between the inventor and the inventor's department. Net income in excess of $100,000 but less than $1 million is distributed 25 percent to the inventor and 75 percent to the University. Net income in excess of $1 million is distributed 20 percent to the inventor and 80 percent to the University.
The research foundation, which transfers the income to the University, earned $2 million in gross royalty income in the fiscal year ending June 30, 2000, double that of the previous year, Jackson said. The foundation receives 15 percent of gross royalties plus $100,000 annually from the University. Under the patent policy, the University's portion is split among the inventor's department, the inventor's lab, and University research, which is controlled by Peder Estrup, dean of the Graduate School and research .
Estrup said the money has been accumulating slowly over the years, so how to spend it hasn't been much of an issue. The University is looking for more streamlined ways of distributing the money and officials are talking about how best to use the money for research support, he said.
Roughly one in 10 Brown inventions make a profit, Jackson said. So far, that's about 40 license deals of 450 discoveries disclosed to the University since the research foundation began reviewing them in 1982.
Some faculty members believe that patents could become a bigger moneymaker for the University as it struggles to fund its priorities.
Engineering Professor Harvey Silverman said his work has resulted in two patents, one granted in 1995, and another in 1998, that quickly generated $1.2 million.
The research foundation "could be a large income producer," said Silverman. "The provost knows about it. She's been supportive. Budgets are tight. A case has to be made to the Corporation that we have an opportunity here. I don't believe the faculty is terribly serious about it; they don't consider it. They say, `We're academics, we're not here to work like a business.' That attitude needn't be here because it doesn't interfere with anyone's freedom, but it's a potential to make money for everybody concerned."
The research foundation would need to expand to handle more patents, faculty members say. The research foundation is a two-person operation that expects to add a third licensing professional.
"There are too many exciting discoveries at Brown," for the size of the foundation, said Elaine Bearer M.D., who discovered a cell line and antibody. "Science is moving fast and you cannot go slow on these things."
Jackson said the University would be able to reap more if it were able to sow differently.
"The venture investor makes money and we don't have the mechanism," Jackson said. "We are exploring ways in which Brown might be able to participate as an equity investor in faculty startups. We are exploring what are the appropriate ways to do that."
The University could invest in companies formed by faculty members who have created inventions outside of their work at Brown, for example, MTI, which creates image processing and machine vision algorithms for a variety of industries, owned by applied mathematics professors Stuart Geman and Donald McClure.
In Mathiowitz's case, Jackson helped Spherics to incorporate and receive a $75,000 grant and a $125,000 low-interest loan from the Slater Center for Biomedical Technology, which provides state seed money for moving ideas out of the lab and into start-up companies.
"This was the advantage of Brown," said Mathiowitz, who said she would have never started a company without the foundation's help.
The seed money attracted $4 million in venture capital. The work that Mathiowitz did at Brown is licensed to her company. The company has yet to make a profit.
"When you have something extremely innovative it takes some time to get into the market," Mathiowitz said.
Although Mathiowitz is the chairwoman of a business, she said it is important to her to remain an academic. "I am an academic because I like the teaching and the innovation of the research, which you cannot find in companies. They are very focused. In a university, you have the ability to try different avenues."