University of Hawai'i royalty income fell 13 percent to $899,000 in fiscal 2006 and will likely fall further this year because the university has lost patent protection for a cancer detection antibody.

The state university system spends about $200 million on research annually. Only a fraction results in commercial opportunities and royalty revenues for the university. In the 12 months ended June 30, 2005, UH inventions brought in $1.04 million for the school and its researchers — the highest amount since the mid-1990s.

The $200 million spent annually funds research and supports jobs. However, UH and state officials agree that the university research could play a larger role in the growth and diversification of the state's economy. They see UH as becoming a hub of research activity that can spin off businesses, technologies and jobs. While UH has made progress in increasing licensing income, officials admit more needs to be done.

"It's certainly not where we want to be, but we're pleased in the level of licensing activity we're seeing," said Dick Cox, director of the UH Office of Technology Transfer.

In fiscal 2006, which ended June 30, UH entered into 11 agreements to license university research. That's on top of 17 such agreements in 2005 and 15 in 2004. Among the UH discoveries licensed in fiscal 2006 were a series of anti-cancer compounds, secure communications technology and wastewater treatment technology.

"It's a matter of generating critical mass and it's a matter of time," Cox said. "When you do enough licenses, eventually you'll generate the kind of revenues other universities generate."

UH ranked 115th in royalty revenue among 219 U.S. research institutions, according to a 2005 survey by the Association of University Technology Managers. The year before, UH ranked 134th.

New York University ranked No. 1 with $109.2 million in licensing revenues.

Dwindling university budgets have increased the need to generate money from research efforts. UH needs to earn $1 million from its inventions just to offset the patent and other administrative costs associated with technology transfer.

When UH discoveries aren't converted into real-world solutions the state misses out on opportunities to solve pressing social problems while creating jobs and income for residents.

"Universities really aren't in this to make money," Cox said. Royalty revenues "will fluctuate from year to year. Next year we expect a steep decline."

Reach Sean Hao at shao@honoluluadvertiser.com.