General Electric Co.'s
new venture with the University of Pittsburgh Medical Center highlights the tricky intellectual property issues that underpin many alliances. The two have formed a company called Omnyx LLC to develop and market what the partners call a "virtual microscope" that can scan and store images of human tissue in a digital format. (As we
report in the current issue of Corporate Dealmaker, digitization of health care has sparked a wave of industry consolidation.) GE and UPMC have each kicked in $20 million to get Omnyx off the ground, and GE Healthcare veteran Gene Cartwright will be chief executive.
It's not clear how long this deal has been in the works, but you can bet IP was at the heart of the negotiations. The partners likely had to determine, for instance, how researchers from both camps would collaborate, who would own what percentage of any technology that results, what access Omnyx researchers would have to UP Medical Center doctors and patients, and how the partners would benefit if Omnyx is eventually sold.
Even in a 50-50 JV like Omnyx, the figuring all this out isn't as simple as you might think, particularly when there's a public university partner. There can be state government rules regulating everything from the
amount of equity a university can own to its ability to share
intellectual property. Still the benefits usually outweigh the risks. In this case, GE's global research chief Mark Little told the
Wall Street Journal (subscription required) that Omnyx will allow his company to tailor its digital pathology technology to a working lab. And UPMC, gets the benefit of a global partner with the resources and reach to commercialize its research. -
Suzanne Stevens
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