For academia, patents mean BIG $$

Others see similar opportunities. The Larta Institute (Los Angeles), a nonprofit that tries to link academia and the private sector, is partnering with the Kauffman Foundation (Kansas City) to develop new ways universities can pool their intellectual property. "Within the next year we hope to have a template for an interuniversity IP-sharing agreement," said Victor Hwang, president of Larta.

Second-tier opportunities
"There's a huge [patent] opportunity outside the Stanfords and MITs. That's where the hunger is," he said. "The top universities are satisfied with where they are."

Plenty of innovative programs are already being implemented. ARM now sponsors 10 research assistants at an annual salary of $65,000 each at the University of Michigan. In exchange, ARM is listed as co-owner on the two or three annual patents each researcher files.

"I have gone from filing about one or two patents in 20 years to filing 12 patents in 12 months," said Trevor Mudge, a professor of electrical engineering who got the program going. Mudge helped develop ARM's Jazelle Java processor on a sabbatical six years ago and later had a student who became a research manager at ARM. Both formed ties that led to the current deal.

"This works for companies like ARM because they are fairly small and don't have a big research staff. We become an inexpensive way they can do innovative research," and it helps students with the rising costs of graduate school, said Mudge.

Every other month, UCSD professors present their research to a group of venture capitalists and electronics executives who provide feedback at a so-called Innovators Roundtable. A regular breakfast series has a similar format, and every year or so the university sponsors a startup boot camp where entrepreneurs share their experiences.

"It's very good to interact with industry," said UCSD's Paau. "We are not a Stanford so we have to stir the pot."

In addition, UCSD's Global Connect program has worked with corporations like Samsung and Sony to forge links in R&D. "We are trying to create interfaces that accelerate the movement of technology from universities to industry," said Greg Horowitt, who directs the program.

The programs are needed to maintain the flow of funds universities have come to expect from patents.

"It's become harder in the last six or seven years to get seed funding [for university spinouts]," said Jack Turner, associate director of licensing at MIT, which makes about $45 million from its intellectual property and takes equity in about a dozen startups a year.

"VC firms need to place so much money, they won't pay attention to small investments. They are becoming less and less likely to invest in small university startups," Turner added.

So a handful of colleges, the University of Illinois among them, have started their own venture seed funds. Others, like the University of Nevada, are building incubator centers to nurture startups.

"There are problems all up and down the chain of the [patent] system," said Michigan's Mudge. On one hand, many universities feel they don't have the big bucks to pursue an IP business. On the other hand, the larger industry is "getting into an IP bubble much like the dot-com bubble of a few years ago," he said.