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Bringing the Fruits of Academia to the Marketplace
by Kari Siegle
In a routine walk through a section of apple orchard, James Luby, a professor of horticultural science, found something unusual in an apple he bit into. It gave a resounding crisp unlike any he had heard before.
Intrigued by his first impression of the apple, Luby and his associate David Bedford checked old orchard records to determine the apple's type and then began developing it in 1982. As it turned out, the apple, a hybrid of two parents, had been created in the 1960s but was later neglected.
Luby decided to patent the apple in an effort to bring money into the University's horticulture program. He knew that it would take years to see a return on the money used for the patent because of the growing season of apples. "Fruit breeding is a long-term venture," said Luby, adding that it generally takes three to four years after a tree is planted for it to produce apples. Today the apple is patented with the name Honeycrisp and is licensed to about 20 nurseries.
Through the University's Office of Research and Technology Transfer Administration (ORTTA), about 150 invention disclosures are received each year and about 40 patent applications are filed each year. Even in areas such as horticulture, where a decade ago many researchers did not bother to put a patent on their discoveries, many like Luby are doing so today.
In return for royalty payments on resulting products, the 'U' pays to patent inventions and license them to companies. Perhaps one of the most influential criteria for issuing a patent is that the invention or discovery be something new, useful, and not an obvious improvement on something already in existence. Another of the main criteria for issuing a patent, according to Anton Potami, director of patents and technology, is that there be a market to license the product to. "The question becomes, 'Is there a commercial interest in the technology?'" said Anthony Strauss, director of mechanical, chemical, electrical, biological, and technical aspects of ORTTA. Without a market, a patent essentially functions only as recognition of an achievement. Another criterion for patenting is the ability to protect the technology. If something cannot be protected through a patent, then there is no effective way of licensing it. It can take one to three years for a patent to be issued or denied by the US Patent and Trademark Office. Then it can take up to five years for commercial sales to start.
The cherry-red Honeycrisp apple was a new type developed through a cross between a yellow Honeygold apple and a Macoun apple. Forming the Honeycrisp apple tree involved crossing the two trees of these apple types.
Starting with the pollination, a breathable net with small holes is put over the Honeygold's flowers to keep the bees from them. When the flowers open later, pollen from the Macoun is placed by hand on the flower's stigma. The pollen then germinates, enters the ovary of the flower and fertilizes it, enlarging the ovary and thus becoming the apple.
The apple's two parents were chosen for their complementary and contrasting features. Honeygold yields a compact tree and is highly resistant to a number of diseases. The Macoun has a nice flavor and is aromatic.
The Honeycrisp's most impressive feature is its crispness, which it retains for eight months under regular storage conditions. Using electron microscopy, Luby is currently trying to discover the Honeycrisp's secret. One link could be the apple's cell sizes, which are twice as big as the cells of most varieties of apples. Another possibility involves the way the flesh, or red outside skin, is broken. When the Honeycrisp's flesh is broken, the breaks extend through the cell walls. In other apples, the cell walls slide away from each other releasing less juice than the Honeycrisp and turning the inside of the apple soft because they offer no resistance.
With the Honeycrisp, the pectin holds the cells together more tightly than in other apples. When a bite is taken, the walls break, releasing a sensation of great crispness. Two possible reasons why the cells hold together so well, Luby said, are that a substance in the cell walls does not break down as fast as in other apples or certain enzymes are not being made. If Luby can find the answers to these questions, the results could be used in the genetic engineering of other apple varieties.
Aside from money, patents are becoming increasingly important to secure active, practical use of technology, Strauss said. While some people argue that everyone could use the information if it were made public instead of patented, usually no group or company undertakes the cost of commercializing the product, he explained. "It's not the be-all and end-all of University activity or University research activity, but it is an important tool when selectively used to secure benefits of some technical device," Strauss said.
Under the University's patent policy, if a professor creates something under University time or using University resources, the University has a stake in the technology. "Essentially they need to give the University the first right to file a patent on it," Strauss said. He said if a researcher begins working on a project somewhere else but then continues to work on it at the University, the University is entitled to some share of the profits. If the University decides not to file a patent on an invention, then those rights are waived back to the researcher.
Luby plans to routinely patent what he is able to produce, mainly because of the potential to make money from the licensing and put that into further research. He is currently in the process of applying a patent to a strawberry he helped develop that blooms later in the season than other varieties. Luby plans to name the strawberry Winona, a Dakota word often given to the daughter when she is the first-born child in the family. But, Luby said, unlike in apples, strawberries' names are not often remembered by consumers. Apples are like cars in that the name needs to be something "sexy and that would sell," Luby said, adding that people generally buy apples according to their names.
Disagreements about patents between the University and personnel working on projects occasionally arise. A recent court case determined whether the University was entitled to a share of money generated by the 1992 sale of waste treatment technology developed by Jozef Tylko, a visiting University professor. Three years after the University sued Tylko and Kenneth Reid, head of the now-closed Mineral Resources Research Center, a jury ruled that they don't have to give the University millions of dollars generated by the sale. The University charged that its patents rules and Tylko's contract entitled it to more than $3 million earned by the technology. In court documents, however, Tylko said he developed the technology before coming to the University and had patented it in England. A jury found that, in this case, Reid had the authority to decide when University patent policy applied to Tylko.
The University has over 260 license agreements with industry, 86 of which are with Minnesota companies. When no companies are interested in the technology, faculty members sometimes start companies to market it. Faculty members are free to start companies, provided conflict of interest and policy issues are dealt with.
Automated Transportation Systems, Inc., formed in 1984 with help from the University's Office of Patents and Licensing and now called Taxi 2000, has a worldwide license to commercialize personal rapid transit technology developed by former University mechanical engineering professor J. Edward Anderson. In return, the University receives equity in Taxi 2000 and royalties based on each vehicle built and each mile of guideway constructed by the company or sublicensees.
The University filed five patents for Anderson's transit system. Two were related to the guideway, two to the switch and one related to the network control system.
Personal rapid transit involves small, computer-controlled cars that ride on a network of elevated roadways supported by columns. Anderson designed the rapid transit system during the 23 years he worked at the University. In Anderson's rapid transit system, electric-powered vehicles carry up to four passengers, and the elevated roads power the cars as they ride onto charged rails. The vehicles can turn onto side ramps, which take them to station areas where people enter and exit the cars. While it may seem that small cars carrying from one to four people might not be able to move as many people as buses, the smooth traffic flow eliminates this problem. Controlled by an on-board switching mechanism and computers connected to the transit system, the vehicles can follow each other closely and travel a single route. The on-board switches would also allow the computer to anticipate bottlenecks and move the vehicles toward less crowded routes. Another job for the computers is to ensure that the vehicles only stop to let passengers off at their destinations, instead of stopping at many places like buses do.
"Once it was formed and we got the capital we could put meat on the bones of the idea," Anderson said. He said the NIH factor contributed to his wanting to form his own company with University help. NIH, or the "not-invented-here" syndrome, occurs when technology that is licensed before it is perfected can be harmed in the licensing process. Anderson said some people take certain technology ideas and change them without understanding the underlying principles.
While Taxi 2000 has undergone several changes over the years, especially in leadership, the personal rapid transit system that was developed has expanded. In August of 1995, a mock-up of a vehicle and station, based on Anderson's design, was unveiled in Rosemont, Ill., by the Illinois Regional Transportation Authority and Raytheon Electronic Systems. The Rosemont project is in a testing phase that will continue until 1997. Depending on reaction to the prototype, the Regional Transportation Authority will decide whether to build a 2.2-mile system in Rosemont.
Anderson said without the University's help he would have been unable to pay for the patents and start-up costs of the company. He also said he wouldn't have been able to develop the plethora of ideas he had if he were not working at a research university. "It's kind of a unique environment where a professor can follow his own leaning and have time to devote to research time that can lead to patentable ideas," Anderson said.
