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Northern Arizona University Taps NACET to Revitalize Lackluster Tech-Transfer Program

Northern Arizona University said last week that it has hired local business-services provider Northern Arizona Center for Emerging Technologies to help the school develop and commercialize more of its faculty’s inventions.
NAU, which does not have its own tech-transfer office, hopes that NACET will provide the university with a more convenient and cost-efficient tech-transfer resource than the downstate Arizona Science and Technology Enterprises, which had previously provided NAU with tech-transfer services.
In addition, the partnership may help drive local economic development, particularly in the life sciences, by forming NAU spinout companies that could then be housed in a new incubator that NACET is opening in Flagstaff, where both organizations are located.
Together, NAU and NACET have formed an informal entity called NAU Ventures, which will handle most aspects of technology transfer for the university, Laura Huenneke, vice president of research for the university, told BTW this week.
NAU Ventures will initially assess any invention disclosure that comes from an NAU researcher, and will make a recommendation to the university as to whether the technology has commercial promise, Huenneke said.
For those inventions that are deemed marketable, NAU Ventures will try to connect the technology with appropriate industrial partners or investors. For those inventions that still need development, NAU Ventures will work with university researchers or other partners to help mature the technology.
Huenneke and an already-established intellectual property committee at NAU will still have final say over all decisions and will provide financial resources when appropriate. The committee is composed of various faculty members, administrators, and university counsel.
“It will still be a university decision as to whether we want to pay for a patent application, for instance, or pay for patent counsel,” Huenneke said. “Meanwhile, the NAU Venture staff will interact with faculty that might want to take their idea to the next step. This group can help them figure out where to get some private funding, which is something my office is not really good at.”
In exchange for its services, NACET will be compensated likely in the form of an undisclosed flat fee, percentage of revenues for licensing agreements, or some combination of each, Huenneke said.
Typically it is a research university that drives the development of a local incubator to accommodate university spinout companies or local firms wishing to collaborate with the school. But in this case it is the already-established local incubator that will serve as a resource for bolstering NAU’s tech-transfer activities.

“There was acknowledgment that we were the smallest campus, so you would expect the least amount of activity, but we could be doing better.”

NAU, based in Flagstaff, is the smallest of Arizona’s three research universities — the other two are the University of Arizona in Tucson and Arizona State University in Tempe — and it has never had its own tech-transfer office, Huenneke said.
In 2006, the school signed an agreement with Scottsdale-based Arizona Science and Technology Enterprises, or AzTE, to carry out NAU’s tech-transfer activities. AzTE is a limited-liability company that was established in 2003 to be the exclusive intellectual property management and technology-transfer organization for ASU.
“They’ve become a pretty large operation, but are very much focused on serving ASU and its growing research activities,” Huenneke said. “It became harder and harder for them to continue going up the road to Flagstaff and spending a lot of time on the kinds of support and mentoring activities that our campus inventors really need.”
Huenneke added that the contract with NACET would be similar to the agreement NAU had with AzTE.
Indeed, NAU has sorely needed tech-transfer support. Although the school was able to license a handful of its technologies and spin out a few companies in the 1990s, it has seen its tech-transfer activity nearly grind to a halt in the new century.
According to a performance audit report compiled by the school last year for the Arizona Board of Regents, over a five-year period spanning fiscal years 2002 through 2006, NAU’s faculty disclosed a total of 31 inventions, with no more than 11 in any year. Over that same period, the school applied for 18 US patents, was issued six new patents, and executed three licenses or options.
For comparison, according to the most recent survey data from the Association of University Technology Managers, in FY 2006 alone ASU reported 154 invention disclosures, applied for 49 US patents, was issued 23 new patents, and executed 19 licenses or options. UA, meantime, reported 90 invention disclosures, applied for 70 new patents, was issued 15 new patents, and executed 26 licenses or options.
To be fair, ASU received approximately $132 million and UA about $536 million in research funding in 2006, while NAU averages about $60 million a year in research funding from public and private sources, a figure it hopes to double by 2020.
“There was acknowledgment that we were the smallest campus, so you would expect the least amount of activity, but we could be doing better,” Huenneke said. “So we are very excited about NAU Ventures as a very concrete step toward exactly that.”
When NACET began adding more staffers and commercialization expertise over the past year, NAU realized that “it would be a perfect opportunity to partner with them,” Huenneke said.
“They are located right here in Flagstaff; they are able to become very well acquainted with our faculty and research efforts; and they are able to participate on a very frequent basis in, for example, entrepreneurship activities aimed at our students and faculty,” she added.
Furthermore, she said, if a technology is able to reach the stage where it can form the basis of a startup company, “then we are hand-in-hand with the local business incubator. All in all, it is light years ahead of the service that could realistically be provided to us by an out-of-town outfit like AzTE.”
NACET plans to open and operate a new 10,000-square-foot technology incubator in Flagstaff in October to support the startup of life science, software, and environmental technology companies, so NAU will have space to fill.
In fact, Huenneke said that the school doesn’t expect to reap large financial benefits from its overhauled tech-transfer operation. “For a university like ours, it’s not realistic to look toward these licensing revenues as some major financial salvation,” she said. Instead, it will be able to feed local economic development by exploiting its core biomedical and environmental research strengths.
“We are producing undergraduates and graduates that we expect to become part of the regional workforce,” Huenneke said. “If those students come out of their college experience with some understanding of the connections between research, basic discoveries, inventions, and innovation, and the health and activities of companies in the region, then they’ll be better prepared to function.
“We want a high level of innovation on campus to create entrepreneurial graduates as much as to produce products that have some immediate payoff to the university’s financial coffers,” she added.

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