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University Files Lawsuit Over Renewable Energy Research

February 9, 2009

Engineering professor Galen Suppes used to be widely praised by the University of Missouri for his innovative research into renewable energy, but now the school considers him a renegade scientist trying to keep the university from getting its fair share of profits from his inventions.

The University is suing the professor in federal court.

The lawsuit highlights the broader problems of “technology transfer,” the growing enterprise in which university labs help incubate discoveries that can speed lifesaving drugs and modern conveniences to market.

Innovations can line the pockets of scientists and their university employers with millions in royalties.

An example is the University of Florida, where 40 years ago the creation of Gatorade launched the sports drink industry while earning the school more than $80 million.

However, missteps or disputes like the one in Missouri are more typical.

Universities typically have unrealistic hopes about the money they can reap from technology transfer, Joshua Powers, an Indiana State University professor who studies the subject, told the Associated Press.

Powers notes that the top tier of universities such as Yale, Stanford and California-Berkeley account for 60 percent of all technology-driven profits earned on campuses nationwide.

He believes many other schools lose money vying for their share, because applying for patents and trying to license them for commercial use is complex, costly and time-consuming.

“Universities are under enormous pressure to demonstrate their worth in economic terms,” Powers said. “By definition, they are involved at the early stage of the research process. They often don’t know when a technology is going to be successful.”

Missouri says it does profit from technology transfer. In the most recent fiscal year, it spent $1.4 million marketing intellectual property while earning $6.2 million in licensing income.

Generating money with beneficial research was the goal of Suppes and his business partner, William “Rusty” Sutterlin, a former Missouri graduate student and postdoctoral fellow.

In 2003, the two created a company called Renewable Alternatives. Under this named they developed dozens of inventions related to fuel cell technology, nontoxic diesel fuel additives, and an eco-friendly antifreeze.

Suppes says the university failed to recognize and pursue the commercial prospects for his research. Plus, when he tried to reclaim his rights to those inventions that the university wouldn’t pursue, Suppes says, administrators stopped him with onerous rules.

They required him to take out $1 million to $2 million in liability insurance; Suppes claims that isn’t required of the private companies that sign deals with the university to license technology.

“The Missouri tech transfer program is totally broken and basically beyond repair,” he said.

The problem seems to have affected other professors.

In the past two years, two faculty committees have recommended changes in how the university commercializes research. One panel pointed to several peer institutions, including Alabama and Texas A&M that impose fewer restrictions on researchers.

Currently, there are no uniform standards on how universities should handle professors who want to reclaim their intellectual property when the schools won’t try to commercialize it.

Jon Soderstrom, managing director of Yale University’s Office of Cooperative Research and president of the Association of University Technology Managers, says it’s a good thing those standards are not in place.

However, Soderstrom acknowledged that Missouri’s lawsuit against Suppes “is extremely rare.”

In Missouri’s lawsuit against Suppes, the university says the professor won’t release the rights to more than 30 inventions and 11 potential patents it says were developed in his campus labs.

The lawsuit does not put a dollar amount on the royalty income the school says it has lost.

Rob Duncan, vice chancellor for research at the university’s flagship campus in Columbia, called the lawsuit “an absolute last resort” chosen only when negotiations failed.

Universities benefit from their scientists’ ideas, Duncan acknowledged. But he said without the schools’ labs, graduate students and ability to pull in research money, those ideas would never turn into products.

The lawsuit claims, Suppes changed the language in waivers and licensing documents before returning the forms to the university, to give him more flexibility. The university said it asked him to stop, but he didn’t.

“The concept of changing the regulations to meet one’s preference – I don’t know of any university that operates this way,” Duncan said.

Suppes said the problem is bigger than a single lawsuit between the university and a professor. The university has imposed a hiring freeze and is considering job cuts, and he suggests the flap is causing some colleagues to reassess their efforts to bring research to market.

“The only thing (Missouri) is interested in,” he said, “is going out to grab the easy money.”

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