Amid a growing chorus of complaints from top researchers and business executives, UCLA officials are vowing to overhaul the university’s much-maligned technology-transfer program through which research findings are developed into commercial products and services.

While several other universities around the country including Stanford, UC San Diego, Caltech and MIT have for years served as catalysts for their regions’ technology industries and helped faculty members become rich, UCLA has contributed little to L.A.’s tech community.

“We have been hearing the same type of criticism from people in the industry and from faculty members,” said Executive Vice Chancellor Rory Hume. “We’ve been told that the circumstances of the world are now such that UCLA should actively and energetically encourage linkages between the faculty and private enterprise.”

Hume has been spearheading the university’s efforts to reorganize the technology program for more than six months.

But one person who is unwilling to wait any longer is biotech mogul Alfred Mann, who two years ago announced his intention to donate $100 million to UCLA for a new biotech institute.

Mann, frustrated by the university’s technology-transfer program, recently secured an agreement in which the biotech institute he plans to fund will have its own, independent technology-transfer program.

“Let’s just say that my experiences with the university’s technology-transfer program have not been very encouraging,” said Mann. “Since the people at the institute will know their products and their markets better than anybody else, they should not rely on the university, and the institute will handle its own intellectual property and technology-transfer affairs.”

Leadership vacuum

Lack of leadership at UCLA’s technology program has been a source of recurring complaints. The vice chancellor of research, Kumar Patel, who was in charge of the technology-transfer program, resigned his position late last year.

“They are looking for a new person to head the program,” said Frank Wazzan, dean of the School of Engineering and Applied Science. “This is part of a major overhaul of the technology-transfer program, which is underway now because of the recognition that we could be doing much better than we were.”

UCLA officials say they are stepping up their outreach efforts to get more local business leaders involved in the technology-transfer process.

Wazzan acknowledged that the urgency to improve the school’s technology-transfer reputation is related to the drawn-out negotiations over Alfred Mann’s donation.

“I’ve personally been dissatisfied with the technology-transfer situation at UCLA for long time, but I never got involved because I felt it would be like banging my head against the wall,” he said. “When the Mann donation came up, it became very important to get this resolved, particularly since it involved my school.”

Wazzan hopes that with the technology-transfer issue settled, Mann’s donation will be finalized by the spring. Mann himself is more cautious and hopes to have it completed by the end of the summer.

Mann is not the only one who has been highly critical of the university’s unwillingness or inability to foster closer ties between its researchers and the business world. In fact, it’s the high level of dissatisfaction, both within and outside UCLA, that is prompting administrators to get serious about overhauling the program, informed sources said.

Mann’s institute at UCLA, as well as a similar one he funds at USC, is intended to bridge the gap between the academic world and the biomedical industry. As Mann pointed out at the time he announced his donation to USC, American universities are garnering most of the Nobel prizes for research, yet products developed from that research tend to come from Germany and Japan.

On the local level, the high-tech community sees very little, if any, benefit from its proximity to one of the highest-regarded research universities in the world.

‘Insular, self-contained’

“The culture at UCLA has not been very amiable to sharing technology with the private sector,” said Ross DeVol, director of regional studies at the Milken Institute in Santa Monica. “They don’t see this as part of their mission and, as a result, they tend to be insular and self-contained. This is unfortunate because it creates a vast under-utilization of brainpower at the university and it divorces the university from the local technology community.”

As part of the technology transfer procedure, a university typically patents faculty inventions that it deems to have commercial value. It will then market these inventions to companies that could further develop them into marketable products. Schools often license the rights to work with a patent to companies over a period of time. Beyond that, the company might pay royalties on any of the sales that result from the licensed invention.

The role of research universities in spawning regional industry clusters is most clearly demonstrated in the case of Stanford University, which played a huge role in the success of Silicon Valley. Also, UC San Diego has been instrumental in the development of the telecommunications industry in San Diego.

Besides promoting high tech in Los Angeles, a better technology-transfer record could help the university attract and retain the best faculty. UCLA, like most other universities, must provide its scientists with entrepreneurial incentives and opportunities, while making sure that they don’t forsake the university altogether for the lure of private enterprise.

Among local research universities, Caltech in Pasadena is often mentioned as a school that has taken the right approach in creating an entrepreneurial spirit in its faculty members while facilitating technology transfer with private industry.

“The mission of a university is to benefit society, and there are many ways to do this,” said Larry Gilbert, director of Caltech’s technology-transfer program. “Just publishing research is not sufficient, and licensing technology to a corporation is not always the best thing either, because they may or may not end up using this technology. In some cases, the best way is for faculty members to start up a company themselves, because they know their product best and, when they raise money for a startup, they are best positioned to develop it further for the commercial market.”

Growing success

So far, Caltech’s technology-transfer program has spawned more than 35 active startups over the last five years, half of which are in the Pasadena area. The program is now optioning one new startup a month. The university then gives those startups a year to get their financing arranged, after which the option converts into a license. The university typically takes a 5 percent equity stake in the startup, as a licensing fee.

By contrast, UCLA has launched just 19 startups over the same period, though officials there are quick to point out that being a public university, unlike Caltech, complicates matters.

“We could be phenomenally entrepreneurial,” said Hume. “But our biggest challenge as a public university is to ensure the legal and judiciary safety of the property of the California people. We cannot waste our resources and enter into risky endeavors.”

That UCLA is part of the large and unwieldy UC bureaucracy plays a role in making it harder for faculty members to set up ventures. But it is hardly the whole story.

“UC in general does not have a clearly articulated policy for the faculty when it comes to technology transfer,” said Leonard Kleinrock, professor at UCLA’s computer science department, who has been on the faculty since 1963. “But also at the department level, there has be no clear encouragement, and if a faculty member wants to start a company, they will end up doing it on their own, independently from the university.”

Faculty startups

Kleinrock launched his own Internet networking company, Nomadix Inc. in Westlake Village, a few years ago, using technology that was independently developed and not licensed from UCLA.

Likewise, Henry Samueli, an electrical engineering professor at UCLA, co-founded Irvine-based Broadcom Corp., independently from UCLA. Broadcom has since become a huge financial success, and Samueli recently donated $30 million to UCLA.

Critics argue that UCLA’s technology-transfer program is more interested in collecting money for licensing fees from big corporations than on trying to take financial risks with startups.

“They are very dismissive of the little guys,” said Edward Pope, president of Matech, a biotech company in Westlake Village. “The reason why there are so few spin-offs from UCLA is that they are prejudiced to licensing to the big companies, like Intel and Cisco, who have the deep pockets and who can pay the licensing fees and the patent costs up front.”

Emily Wadron, a senior technology-transfer officer at UCLA, defends the university’s policies, saying that her office licenses technology to plenty of small and medium-sized businesses.

“It’s in the nature of the biotech industry, where we do 75 percent of our licensing, that there are many smaller businesses,” she said. “And although we will not hold technology hostage to licensing fees, it is a very expensive process to patent and market an invention. The licensing that we ask for depends on a large number of factors, including the perceived value of the technology, the number of patents involved, and the size of the potential market, how far developed the technology is, among other factors.”

According to Wadron, there have only been half a dozen cases where the university has taken equity in exchange for up-front fees, and these cases require a much more substantial analysis and evaluation process.