StanfordUniversity’s Office of Technology Licensing is akin to a traffic control center for innovation and talented young entrepreneurs. Some of the biggest names in the tech industry have roots at Stanford, including Cisco, Google, Netscape, Symantec, and Yahoo. And Katherine Ku has had the good fortune to sit in the traffic control room, serving as director of the Office of Technology Licensing (OTL).

She helped two of Stanford’s most famous students of late—Google’s Larry Page and Sergey Brin—get their company off the ground. In 1996, the pair came to the OTL hoping to find a company that would license their technology and hire them to develop it. It didn’t happen, although several companies, including Novell, offered $500,000 for the license. Google turned down the offer with support from the OTL. Mr. Page and Mr. Brin found investors, and Stanford’s OTL won big with its share of Google stock when the company went public.

Red Herring spoke to Ms. Khu—a Cornell University graduate who holds two patents herself—to get her take on Stanford’s edge in licensing technology, and what sectors are seeing the most action right now.

Q: Stanford has been much more successful than others in capitalizing on the research that comes out its labs. What gives your office the edge over other universities in the country?

A: Part of the reason for the success is the culture of the University; part of it is the fact that we are in Silicon Valley. There is a whole infrastructure around us that encourages entrepreneurship. The University itself is neutral about it. We are not really trying to create entrepreneurs or startups here, but we are lucky to be in an area that does. There are plenty of role models around and there is no negative perception about being a startup or an entrepreneur.

Q: How many of Stanford’s technologies or inventions get licensed, and what percentage sits on the shelves?A: About 75 percent of our technology sits on the shelves. If we have about 100 inventions come in, I would say we patent about 50 percent. But overall, just 25 percent or maybe 20 percent gets licensed.

Q: What are the two big technology licensing areas for Stanford?

A: Physical sciences and life sciences. The difference between them is that the life sciences industry understands the long time cycles that their products have. But physical sciences products have a shorter life cycle. We have so many inventions, but they are seemingly not what the industry needs in the short term.Q: What do you see as the hot sectors right now?A: Biotech is always in demand. Nanotechnology is a hot area now but it is still in a very early stage. Most of our successfully licensed inventions are in the area of tools for nanotechnology. Very few nanotech licenses are for products that can be used. Most people think that because we are the Stanford OTL, there are lots of people banging down our doors—that’s not the case. Usually our technology is in a very early stage; sometimes it is too early and not proven enough to generate interest.

Q: Do you feel any pressure to get all of your technologies or inventions licensed?

A: I don’t feel like we are a sales organization. The pressure is there, of course, but we see it as part of our job. We can call people, email them, and let them know about what we have. Beyond that, we don’t do anything more.

Q: What are some of the conflicts that arise when the OTL wants to negotiate an agreement with a licensee?

A: Typically a company doesn’t want to pay much as much as we think the technology is worth. We end up having a good discussion.