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Next year, he'll take this new cockroach bait to the pesticides market, an industry that is worth $30 billion in sales worldwide.

"We not only found a technology here at Virginia Tech, but also an atmosphere very conducive to starting a new business," Banegas says. "Their goal was in line with ours, which was to move the product out of the lab [and] into the commercial setting."

Technology transfer, the process of moving discoveries from university labs to commercial markets, is the foundation for Banegas' new career. And he's not the only one exploiting the explosion of ideas and patents in Virginia's university laboratories over the past two decades. That boom has changed the way schools handle their professors' intellectual properties, and the way universities interact with industry. Applied science is stealing the spotlight from basic science as universities position themselves to market their ideas, and to actively recruit businesses to invest in their research.

artwork by Andre Lucero

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It was an act of Congress that unleashed a technological revolution on the nation's college campuses. The Bayh-Dole Act, passed by Congress in 1980, lets universities retain the rights to inventions that result from federally funded research.

Uncle Sam surmised that creating this financial incentive for universities could hasten the transfer of technology from ivory towers to corporate powers. As the number of patent applications has risen since then, universities have had to change the way they handle their intellectual property.

"Most university licensing practices [before the Bayh-Dole Act] were pretty much modeled after what [the Mass-achusetts Institute of Technology] was doing," says Robert MacWright, executive director of the University of Virginia Patent Foundation. "As the field has matured, license transactions have become ... more customized at all institutions."

U.Va. revised its patent policy in July to cede more intellectual property money to the inventors, MacWright says. A faculty inventor now gets 50 percent of the first $100,000 in profit. These financial guidelines bring U.Va. more in line with other state universities.

MacWright came to U.Va. in 1997 after 13 years in patent licensing as both an attorney and on staff at Rutgers University in New Jersey. He doubled the staff, brought in new computers, new furniture, a new filing system and even changed the foundation's logo. Today, the office has a staff of five, all with backgrounds in science and business.

A university patenting professional must be able to sell to business and industry, while also catering to the interests of the university and faculty. A critical first step is educating the faculty, says Richard Franson, president of Virginia Commonwealth University's Intellectual Property Foundation.

During his first year at VCU in 1996, Franson met with every faculty group that would listen to explain the concept of intellectual property. "That's the real key, making the faculty understand the public benefit in patents," he says. Intellectual property "wouldn't have value if it was just put out in the public domain. No company will come along and spend the millions of dollars that is required to take it to market if they don't get some exclusivity. In a sense, it's capitalism that makes the whole process work."

Franson should know. As a biochemist at VCU in the 1980s, he patented inventions and forged his own agreements with businesses because VCU had no system to report inventions, much less handle patents and licensing. In 1994, the university established the Office of Technology Transfer. Two years later, Franson -- who wrote the job description and was on the first search committee for an executive -- moved into the position.

Since taking the VCU job, Franson has orchestrated a remarkable growth in technology transfer. Revenues from Franson's office topped $1 million last year, up from around $110,000 two years ago. Inventions over that same time frame jumped from 12 to 78.

"I think I have a good appreciation for what the faculty concerns are in the process," Franson says. "Education of the faculty is extraordinarily important because what people don't understand, they fear."

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One of the country's biggest nonprofit tissue banks got its start in Virginia Beach in the 1980s with help from Old Dominion University's Center for Biotechnology.

LifeNet -- which started out as the Eastern Virginia Tissue Bank -- now helps more than 50,000 patients a year and has six offices around the country. It processes 20 percent of all human tissue grafts in the country.

"I'd like to think they were the first company that the [center] incubated out," says Lloyd Wolfinbarger Jr., the center's director and a professor in the school's department of biological sciences.

Wolfinbarger himself helped LifeNet get started by working as an unpaid consultant, and that investment of time is paying off for the school. This year, LifeNet is expected to spend over $200,000 on research with the university. "That was the mission for the center when we set up, to promote industry and academic interaction, and to bring biotechnical industry into Virginia, and specifically into the Hampton Roads area," Wolfinbarger says.

The center's tie-in with LifeNet gives it leverage in the biotechnical research world, and helped it "incubate" other biomedical companies like BioEnhance, Carson BioSystems and the Williams-burg Bioprocessing Foundation. The annual budget for ODU's center has grown from $13,000 when it opened in 1985 to nearly $300,000 this year. "Nothing has come easy," says Wolfinbarger. "The center is and always has been 100 percent funded by private industry."

Wolfinbarger would like to see more biotech business and money funneled into Hampton Roads, and there are plans among localities there for a biomedical research park. More money means more research and, invariably, more technology transfer, which is an increasingly larger part of ODU's mission.

The school wants to be the "intermediary that is able to translate the technology into areas [where] it really can be commercialized," says Robert Ash, ODU's associate vice president for research, economic development and graduate studies.

Like many other business-friendly university services, ODU was helped by Virginia's Center for Innovative Tech-nology (CIT), a state agency that has helped establish and fund initiatives throughout the state. The Herndon-based CIT was created by the General Assembly in 1984 to enhance the research-and-development capabilities of the state's major research universities. In 1986, the state also empowered CIT to administer intellectual property from universities, state agencies and political subdivisions.

In its first 10 years, CIT co-funded research and innovative technology projects around the state and attracted over $155 million to Virginia universities. Over that span, Virginia rose from 18th to sixth in the nation in the number of patents issued.

By 1992, CIT had moved out of patenting and licensing to concentrate on creating and retaining jobs and companies statewide. That furthered the commitment on state campuses to develop individual intellectual property offices, and explore patenting and licensing.

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Virginia Tech's Corporate Research Center has made a name for itself. Last year, the National Council of Urban Economic Development analyzed re-search parks from Georgia to Pennsyl-vania, and named Virginia Tech's Corporate Research Center the best in the eight-state mid-Atlantic region.

In 1996 -- the most recent data available -- Tech was fourth in the number of patents issued among research universities without a medical school. It ranked 15th in royalty income, bringing in $1 million that year.

This growing evidence of progress at the Blacksburg school is what school leaders have been working toward. In 1985, Virginia Tech Intellectual Properties (VTIP) was founded as a separate not-for-profit corporation just off the Tech campus. At the same time, the for-profit corporate research center was established, giving Tech an edge in attracting new research-related businesses and projects, the life-blood of technology transfer.

"We want to make it easy for business to do business," says Mike Martin, executive vice president of VTIP. "The chance to help a business grow is exciting. It's the epitome of technology transfer."

Banegas' Dominion BioSciences is a prime example of Tech's philosophy in action. When Banegas heard about the insecticide research, he approached VTIP and said he would like to build a business around the new technology. Martin and Banegas negotiated a deal in which Banegas could avoid tying up his cash in licensing fees. VTIP accepted equity in the company, and Banegas' capital was used to fund additional research work in the Tech labs, and to fund the patenting to protect the technology.

"There were a lot of resources available to us at Virginia Tech," he says. "We're a virtual company in that we do not have our own scientists and staff, but there were people we could contract work back to at Virginia Tech."

Banegas found office space in Tech's Corporate Research Center that was equipped with fax machines, meeting rooms, secretarial service and even on-line Internet capability. As the business expanded, it was able to find more space in the research park, next to the Tech campus.

The research park has 12 buildings that house 85 tenants employing 1,200 people, says Joe Meredith, president of the Virginia Tech Corporate Research Center. A 13th building is under construction. Meredith estimates 20 percent of the businesses in the park trace their research roots to projects that originated at Tech.

"What we're all about is trying to find ways we can leverage companies to the university," Meredith says. "If we can make the connection between businesses in Virginia and Virginia Tech to solve problems in developing new products and new technologies, everybody wins."

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The emphasis on technology transfer on university campuses also has been fueled by the downsizing of many businesses over the past decade, says VTIP's Martin. Leaner and meaner industries are cutting back their research-and-development efforts, he says.

"They're trying to find new products," Martin says. "It has always been the case in life sciences and biotechnology, but more and more engineering and physical science firms, and even software development firms, are looking to universities."

State institutions are looking for ways to deal with the increasing demands. George Mason University administers its patenting and licensing through the office of sponsored programs -- a fairly common practice, since that office typically brings in the research money. George Mason earned its first patent in 1996 for developing a test to detect microbial activity.

The College of William & Mary has just begun developing a program to deal with technology transfer. Instead of hiring more staff, William & Mary plans to align itself with Research Corporation Technology of Tucson, Ariz., a technology commercialization service founded in 1987.

"They're set up to work with colleges or research institutions to conduct patent searches at no cost to you," says Anne Womack, W&M's director of sponsored programs. "We were really just beginning to look into how we should set up. We're very undergraduate oriented, but we have programs here that will generate more inventions."

According to Womack, Research Corporation Technology only really deals with 10 percent of the ideas that come across its desk, reflecting the emphasis on engaging only the most marketable projects. Banegas would smile and nod his head at that revelation. He has kissed a lot of frogs, too.

© DECEMBER 1998, VIRGINIA BUSINESS MAGAZINE