Thursday, January 05, 2012

UT official resigns after questions raised about ties to startups

Published: 9:49 p.m. Thursday, Jan. 5, 2012

Richard Miller, the University of Texas' first chief commercialization officer, resigned his position last week after being told he must no longer have a financial interest in startup companies that might want to license technology from the school.

Miller, a veteran biotechnology researcher and entrepreneur in California, went to work for UT in September 2010 to help turn more of the school's research discoveries into new jobs, companies and licensing income. As part of his job, he oversaw the work of the Office of Technology Commercialization, which assists companies that are interested in using patented UT technology and negotiates licensing deals with them.

Miller resigned effective Dec. 31 after he was told by UT officials that he could not have a personal and financial involvement in companies that might want to license technology developed at UT.

UT generated $25.6 million in licensing revenue in the most recent fiscal year and completed 29 new licensing and options agreements, according to the commercialization office's website. The school also received 58 U.S. and foreign patents last year.

Juan Sanchez, UT's vice president of research, said there was no active conflict of interest with Miller's involvement with the companies because they had not yet licensed technology from UT. However, Miller "was setting up a scenario in which he would be negotiating with himself, and that would have been a conflict of interest, which we would not allow," Sanchez said.

"We couldn't move forward with his expectation of having a dual role" with the companies, Sanchez said. "It was clear that he would have to divest his interest. The resignation was his call. I would have liked him to remain as chief commercialization officer, but he chose not to."

Sanchez said he instructed Miller in December to divest his interests in three startup companies that he had co-founded with UT faculty members and graduate students. Miller did divest his holdings in the three companies — Wibole, Graphea Inc. and Ultimor — but resigned sometime after that discussion, Sanchez said.

Sanchez said he asked Miller to divest his interest in the Austin companies he co-founded as soon as he learned of Miller's involvement with them.

Sanchez said that, to the best of his knowledge, Miller received no financial gain when he divested his interest in the companies.

Miller could not be reached by the American-Statesman for comment Thursday.

"In his heart ... Dr. Miller is still an entrepreneur and wants to work directly with startup companies in Austin and elsewhere," Sanchez said in a letter announcing Miller's resignation within UT.

Miller arrived in Austin in 2010 with ambitious plans to accelerate the pace of turning technical discoveries into jobs, companies and licensing revenue at the school.

Miller is an experienced biotech entrepreneur in California, and also taught at Stanford University, considered one of the nation's leaders in commercializing technology advances. He was hired by UT at a salary of $310,000.

UT's Office of Technology Commercialization, which Miller oversaw, had been involved with introducing at least two of the companies that Miller co-founded at conferences in which companies seek new investors. The office reported on a Venture Labs Expo at UT in May , at which Miller spoke and where two of the companies, Wibole and Graphea, were given as examples of the kinds of young companies that the Office of Technology Commercialization was working with.

The report said Graphea "was commercializing a patented graphene-based chemistry for high-performance composites."

It also said that Wibole had developed "a technology to improve the performance of cellular networks" and added that "OTC helped Wibole patent its technology."

But Sanchez said this week that UT has no formal ties with any of the companies Miller co-founded because the school has not yet licensed any of its research discoveries to them.

Sanchez said after his conversation with Miller, he asked UT's legal affairs office to provide a detailed talk to employees at the commercialization office on which limitations apply to them in working with customers that seek to license the school's research.

"We needed to make sure that we properly educated people," Sanchez said of the meeting.

Sanchez has asked Dan Sharp, associate director of the commercialization office, to serve as the interim director until a permanent replacement for Miller is found.

On reflection, Sanchez said, UT had a positive relationship with Miller, who he said brought several innovations to the school's commercialization effort.

"I see this as a minor obstacle that we have to overcome, — to find another chief commercialization officer with the same level of experience and enthusiasm" as Miller, Sanchez said. "I am committed — and so is everyone here at UT — that OTC continue to succeed. We are enthusiastic that we will continue to be very proactive in commercializing research."

While he was at UT, Miller pushed for the creation of a so-called embedded fund that would pay for early-stage work for startup companies working to commercialize the school's research work.

He also said it would take time for his ideas of accelerating commercialization in Austin to bear fruit.

"In a year or two, we will know if we can do some big-time stuff," he told the American-Statesman in an interview published in September 2010. "You will be able to feel that you are getting some traction.

"I am expecting to work very hard. In fact, I am already working very hard. The attraction is the possibility of doing something really, really different that is fun to do and that can have a huge impact."

Over the past decade, UT has stepped up its efforts to generate more revenue from technology licensing. Part of the reason is faculty pressure and recruitment of top-level researchers. Both new recruits and existing research faculty have pressed the school's administration to take a more proactive role in tech commercialization.

Pike Powers, an Austin lawyer and veteran economic development activist, said Miller brought new ideas to UT but might not have understood the constraints of working for a public university.

"He was offering some new ideas and thoughts about ways that the University of Texas could be more competitive," Powers said. "I don't think he received as strong a reception as he wanted to receive, so it was frustrating for him. He met with numerous members of the business community, and we advised him to be very careful about what steps he took next and to make sure he had the full support of the business community and the UT administration. But I don't think he ever heard that message to the extent that he should have."

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