At Rutgers, a $1 Million “Disruptive Innovation Fund” to Commercialize Tech

Michael Pazaani

One of the problems with technology research at N.J. universities, many believe, is that not enough attention is paid to transferring the tech developed here to the private sector. To this end, Rutgers University has created a Disruptive Innovation Fund, financed with up to $1 million by IP Navigation Group of Dallas.

IP Navigation is headed by Erich Spangenberg, a somewhat controversial figure. The firm’s website states, “For his relentless pursuit of patent infringers, he has been labeled ‘the most feared man in Silicon Valley.’” The website also indicates that since its founding, IP Navigation has generated over $500 million for its clients, “using every conceivable patent monetization strategy.”

Rutgers vice president for research and economic development Michael Pazzani has worked with Spangenberg to set up the fund so that university faculty can tackle important market problems, Pazzani said. “We think this is pretty unique for a university, funding faculty to do research to meet a market need. This is something Rutgers is innovating,” he said.

In an email, Spangenberg said he had acquired patents for plant transformation from the university about seven months ago, with the goal of developing fundamental technology relevant to the plant and agriculture space with Rutgers professor Pal Maliga.  “When we spoke with Spangenberg it seemed as though he was excited by any research that addressed a problem with no existing solution,” Pazzani said. Discussions continued, and the Disruptive Technology Fund took shape as a way to replicate the funding of exciting ideas throughout the university, he added.

Spangenberg explained why IP Navigation Group was attracted to the school. “Our firm believes Rutgers is a leader in two important areas: talented faculty and students, and an approach by the university’s leadership that facilitates the ability of this talent to flourish.” Spangenberg pointed out that he is no stranger to working in higher education. His family foundation has made scholarships available at the London School of Economics and has endowed an intellectual property chair for a professor at Case Western University. According to Pazzani, Spangenberg hopes others will also put money into the Rutgers research.

The fund will be administered in the following way: an executive committee “with substantial experience in innovation and technology development, commercialization and monetization” will manage it. The panel will review proposals from faculty and students and award at least two grants of up to $500,000 each per year. In addition, an advisory committee is being formed, drawing from the region’s academic, business, investment and legal communities, and leaders connected to N.J. economic development will work with the fund.

“As with many contracts Rutgers maintains with outsiders, the entity that sponsors the research has the first right” to negotiate a contract to monetize that research, Pazzani told Should the fund-sponsored research result in an invention, Rutgers would pass that information on to IP Navigation, which would then decide whether it wanted to invest further by patenting the technology and hiring a CEO. If IP Navigation were to pass on commercializing the technology, the research would be up for grabs.

The fund will differ in one key aspect from other research usually conducted at the university, Pazzani added. Ordinarily a company comes to Rutgers with a narrow focus and a specific problem in mind, “and we address it. Here the problem is wide open: to do something no one has done before that addresses a market need.” Spangenberg praised Rutgers leadership and its willingness to fill in funding gaps in a different way, saying that Dr. Pazzani and DJ Nag, Executive Director, Office of Technology Commercialization, “deserve the credit” for this.

Pazzani is getting the word out to students, faculty and recruiting advisors about the executive committee. While Rutgers is seeking advisors within N.J., it is also looking to the national venture capital community. “We want people whose daily job is to understand the importance of problems and the promise of potential solutions.”

As for the research projects, the university will issue a call for proposals shortly, giving faculty and students about two months to think outside the box and write them, with the deadline set for after the holiday break. The committee will take about a month to review the proposals, and the projects should begin about March 1. Along with providing management support, the committee will work with the funded innovators to help them obtain financing from other sources.

When asked why he wished to work with a Dallas firm on technology commercialization, Pazzani said he would be happy to partner with anyone in New Jersey. “We’ve actually set up a new office at Rutgers, the Office of Research Alliances, headed by Dr. Tom Richardson, to make it easier for companies to partner with the university, whether to recruit students, perform joint R & D or in this case commercialize technology.” The fund is only “one example of what we are doing. We do partner with a large number of companies, including many within New Jersey,” Pazzani noted.

The university points out that not only was streptomycin, the cure for tuberculosis, discovered at the Rutgers, the search technology behind the website was invented there.

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