Founder Seligsohn

CEO Abramson

For the University, Equity

For the University, Equity

Cloistered No More

Corrections or additions?

This article by Phyllis Maguire was published in U.S. 1 Newspaper

on February 25, 1998. All rights reserved.

Bright Future for an Academic Partnership

The new offices of Universal Display Corporation at

234 Nassau Street are unassuming: a four-room walk-up leased last

month, "with no pictures on the wall yet, but our name on the

door," laughs president and chief operating officer Steven V.

Abramson. More important, this project office — UDC is

headquartered

in Bala Cynwyd, Pennsylvania — is situated in the commercial

backyard

of Princeton University.

Just up the street is the Engineering Quadrangle with the offices

of the POEM Center, a lyrical acronym for the Princeton Center for

Photonics and Optoelectronic Materials. In one more block, there’s

Bowen Hall, a whimsical burgundy building donated by Gordon Wu,

guarded

by two stone lionesses flanking an ornate wrought iron gate. Inside

Bowen Hall, in POEM’s "clean" room devoted to research on

OLEDs or Organic Light Emitting Diodes, university scientists —

UDC’s partners since 1995 — hope to change the way in which visual

information gets delivered through all sorts of electronic devices.

Princeton researchers, collaborating with a group from the University

of Southern California, now comprise one of the largest teams in the

country doing OLED research — which Princeton University has

licensed

to UDC for a stake in the company that could turn into a gold mine

(see sidebar, page 51). And if OLEDs can make a successful leap out

of the laboratory, they may become within a few years the technology

governing the display function of every electronic device you use.

They might force, in other words, cathode ray tubes (CRTs) and liquid

crystal displays (LCDs) into the same dustbin now crammed with

black-and-white

televisions and rotary phones.

Potential applications for OLED displays seem endless. "They range

from thumbnail-sized up to entire walls," says Janice Mahon, UDC’s

vice president of technology commercialization. "Many people today

think future displays will be very small, with optics expanding them

for direct view, and OLEDs will be terrific in miniature applications

or head-mounted displays. Or very large areas could become displays,

for entertainment purposes or for control-center applications in

industrial

or military contexts." But many of OLEDs’ future applications,

Mahon maintains, don’t yet exist. "LCD technology essentially

created the laptop," she says. "We’re expecting OLEDs to

create

applications that haven’t yet been invented."

The O in OLED is Organic: synthetic, non-biological, carbon-containing

compounds. The key to the OLED Project’s success, says Joe

Montemarano,

director of industrial liaison for the POEM Center and the Princeton

Materials Institute, has been the collaboration between electrical

engineers and organic chemists. "Mark Thompson, who was originally

with the Princeton chemistry department and is now at USC, has been

a very strong contributor," Montemarano says. "This is

something

neither an engineer nor a chemist could pull off alone."

Leading the OLED Project is Stephen Forrest, chairman of Princeton’s

electrical engineering department. Forrest went to the University

of California, Class of 1972, and received his Ph.D. in physics from

the University of Michigan in 1979. He spent seven years at Bell Labs

where he began research into light emission, work he continued as

a USC professor for six years before coming to Princeton in 1992.

The carbon-containing molecules Forrest and his team research and

create "are organic dyes," he says, "the type of compounds

that might appear as clothing dyes. They are `highly colored,’ which

is to say that they are colored in various parts of the visible

spectrum

— or in the invisible ultraviolet. The compounds we’ve selected

are luminescent in the visible. When you consider a colored compound

for a clothing dye, it’s basically its absorption that counts,"

says Forrest. In contrast, "when you look at these same dye

compounds

for OLEDs, it is how they give off light that becomes important."

The OLED is a solid-state semiconductor device that actually emits

light when stimulated by an electric current, whereas liquid crystals

only reflect light from a back-lit source. "We did not invent

organic light emission," says Forrest. "This class of

compounds

has been looked at for 50 years, and efficient organic light emission

really came out of Kodak in the mid-’80s. Our particular innovation

has been to make very functional layered devices using thin-film

technology

— and to get color out of them." That innovation breaks into

what Mahon calls "three technology platforms" known as TOLED,

SOLED, and FOLED.

TOLED, or Transparent OLED, is the cornerstone technology. Synthetic

organic molecules are layered in a microscopically-thin film —

1/10,000th of the thickness of a human hair — with transparent

electrodes. "This is the first transparent technology," claims

Mahon, "and it completely changes the display landscape. It means

you can make a window a display, or a windshield of an aircraft

cockpit.

You could use it for advertising or for emergency signaling in a car

— or you could have information coming in through your

sunglasses."

TOLED technology is a building block for SOLED, or Stacked OLED,

referring

to the vertically stacked architecture of colored pixels for full

color display. "In conventional displays" — like CRTs

— "the red, green, and blue pixels are arranged side by

side,"

says Mahon. "It is your eye that resolves the color you’re

supposed

to see. With our technology, colors are stacked on top of each other

within each pixel; what your eye now resolves from conventional

displays,

the pixel will do for you. Stacking colors uses one-third the area

to convey the same amount of visual information. The advantage is

getting true color with three times the amount of resolution. "

And then there is FOLED, with an F for Flexible. OLED film can be

mounted on flexible plastic substrates, unlike LCDs in which liquid

crystals flow between two pieces of glass. That flexibility, says

UDC, will greatly expand potential applications for flat panel

displays.

"Someday these FOLEDS will be laminated to any surface you

want,"

says Mahon. "The computer might be one thin panel display with

an equally thin computer behind it you can roll up and put in a

briefcase.

That is still several years out, but this is the first step. With

a flexible substrate, the applications are unlimited."

"Lighter weight, lower manufacturing costs, broader temperature

ranges, wider viewing angle." UDC’s Abramson can rattle off

FOLEDs’

advantages over LCDs. "Since OLEDs emit light, they need less

power; that will make devices more portable. And as a faster display,

OLEDs are much more compatible with full-motion video. Response time

for LCDs is just too slow."

Once it reaches the manufacturing phase, a major OLED advantage is

its roll-to-roll production, rather than LCD’s batch processing. Mahon

explains: "A large piece of rolled plastic will be run under a

set of deposition heads to build up the device. At the end of the

day, you have a product on a different roll with different materials

on it. As a production process, it is very high volume, with very

little labor and very economical."

The huge liquid crystal industry is not standing still.

"They’re trying to get faster, but they’re making incremental

advances at this point," Abramson says. UDC contends that other

emerging flat panel display technologies, like those that utilize

plasma, cannot compete with OLEDs’ color fidelity or cost efficiency.

And while UDC is certainly not the sole company developing organic

light emitting devices — "Every display company worth its

salt has an ongoing organic project," says Abramson — it is

running well ahead of the OLED pack.

"Our ace is the two patents" — the first issued in

December,

1997; the second in January of this year — "for the

transparent

display and the vertically stacked architecture," Abramson says.

"Another ace is our flexible display, and still another is the

fact that we have one of the largest research programs in the world

moving this technology forward." And forward is where UDC intends

to go.

Top Of Page
Founder Seligsohn

The corporation is the brainchild of founder, Sherwin Seligsohn.

"Sherwin

is a true visionary," says Abramson. "In the late ’70s, he

foresaw the advent of digital cellular radio and put together a

company

to develop cellular technology." Based in Pennsylvania, that

company

— then known as International Mobile Machines and now called

Interdigital

Corporation — eventually earned what Abramson estimates as $150

million in licensing revenues from cellular technology. That gave

Seligsohn the seed money he needed to go shopping for new

technologies.

"Sherwin thought the display industry was going to be even larger

than cellular," Abramson continues, "and after looking at

all the competing technologies, he thought the organic light emitting

diode looked the most promising. He then sought out the best OLED

team, funding a Princeton research project after he found Steve

Forrest

and Mark Thompson. Once the technology reached a certain point, he

downstreamed it into UDC and took the company public." Initial

private funding was approximately $2.5 million, while the public

offering

raised $6 million more. Common stock is traded on the Nasdaq SmallCap

Market (PANL) and the Philadelphia Exchange (PNL).

Top Of Page
CEO Abramson

Abramson, now 46, first worked with Seligsohn as a patent lawyer.

With a B.A. in international relations from Bucknell, an M.A. in

international

relations and the philosophy of science from Ohio State, and a law

degree from Temple, Abramson started working for IMM in the

early-’80s,

founding its Technology Licensing Division before leaving to serve

as general counsel for an environmental technology company. He signed

on as UDC president in 1996.

"Our job is to create a business from the research," he says.

"We raise the money and create the strategic relationships."

As reported in the Wall Street Journal, the display industry is now

a $35 billion business. An estimated $20 billion of that market is

spent on the very un-portable CRTs found in color televisions. The

high information flat panel display segment of the industry in

consumer

goods like desktop and laptop computers accounts for $12 billion,

while the remaining $3 billion consists of low information displays

for products like cell phones, microwaves, and watches.

It is also an industry, claims the Wall Street Journal, that the

investment

community largely ignores. "That’s principally because it’s

offshore,

located in Korea and Japan," Abramson says. "Wall Street wants

to invest in American companies, and there aren’t many display

companies

in America at this time. The top companies right now are Sharp,

Toshiba,

Sony, and Sanyo; they are all Japanese, and the display portion of

their business is only a small part. There are not many pure display

players in the United States, but that will change over the next few

years."

Furthering that industry re-location is the United States Display

Consortium, a cooperative effort — headquartered in San Jose —

between DARPA and 130 corporate members, including UDC. USDC’s mission

is to develop a North American infrastructure of developers,

manufacturers,

and suppliers to support the flat panel display industry.

Says Abramson: "We believe this will be a worldwide technology

and we want America to have a piece of it — unlike liquid crystal,

which was invented down the road at Sarnoff (Corporation) and is now

controlled overseas."

UDC’s commercialization strategy is to start simple and small.

"We’ll

begin with low-information content products like cell phones, pagers,

and audio equipment," says Abramson. "Those are principally

monochrome. Then we’ll move into small area, full color SOLED

displays."

With only a dozen people on staff and no profit yet in sight, UDC

still has a remarkably bright future, one in which the LCD technology

it intends to overtake has paved the way for OLED production as well

as development. "Making these devices will take advantage of

existing

industrial infrastructure," says Mahon, 40, a 1979 graduate of

Rensselaer Polytechnic Institute with a B.S. in chemical engineering.

Mahon did research for FMC in Princeton before earning an MBA from

Harvard in 1984. She worked with Chronar Corporation and SAGE

Electrochromics

and has been with UDC just over a year.

"OLED production can absolutely be integrated into existing

facilities,"

she continues, "without re-tooling factories or re-designing a

tremendous amount of new equipment. Ten years ago, before the flat

panel display industry got started, I couldn’t have made that

statement.

But a great deal of infrastructure has been redeveloped from

semiconductors

for flat panels over the past decade, and we can piggyback the

manufacture

of OLED technology on that experience and investment.

"Our timing," Mahon smiles, "is excellent."

Top Of Page
For the University, Equity

The two OLED technology patents recently issued to

Princeton

University and USC are the first of over 50 to be filed from the OLED

Project. According to Joseph Montemarano, director of industrial

liaison

who handles the licensing of technologies developed by scientists

with the POEM Center and the Princeton Materials Institute, his office

has filed another 50 patents that are not OLED-related. "That

translates to 10 or 15 companies and individual inventions," he

says.

POEM was established in 1989, "at the urging of the faculty,"

says Montemarano. "Active outreach was always the intention. We

wanted companies to know that POEM is a place to come for technical

assistance and, possibly, very valuable technology." While the

center itself has no specific academic appointments, it offers

facilities

and an administrative staff to help organize proposals, find

productive

partners, and manage grants and intellectual properties.

At Princeton’s Office of Technology and Trademark Licensing, John

Ritter is director of patents and licensing. Although the

POEM/Materials

Institute group is "our biggest source of invention

disclosures,"

Ritter says, "we license technology from many other departments,

including computer science, chemistry, molecular biology, and

mechanical

and chemical engineering." Ritter estimates that the number of

companies licensed to manufacture technology generated by Princeton

researchers "is well over 25."

While the Technology and Trademark Licensing office was organized

in the late ’80s, the agreement reached in October, 1997, for a

five-year

strategic partnership with UDC was unique: it gave Princeton equity

in a licensing transaction for the first time. Princeton and USC

together

own 4 percent of the stock and warrants, and Princeton’s share is

approximately 145,000 shares plus warrants. Since the stock is trading

at just under five, the university’s investment is now worth about

$750,000.

The seed for university licensing was planted in 1980 with the federal

Bayh-Dole Act. "Before that legislation," Ritter explains,

"if a researcher came up with an invention after receiving federal

funding — and most of them did — then the government owned

the invention. The act made it possible for universities to own

technologies,

even those developed with government funds. That’s when licensing

offices began to sprout up." Another factor driving the search

for corporate partners is reduced federal funding. Ritter’s role is

increasingly proactive, and while "companies recognize there is

important research being done here, we also pursue opportunities"

to market new technology.

"It was a first for us, but in terms of other institutions, it’s

not uncommon," Ritter says. While Ritter expects Princeton to

become a partner in other equity deals, "we make sure the research

fits the university’s criteria. We don’t do product development, and

universities must watch that fine line very carefully."

Top Of Page
For the University, Equity

The two OLED technology patents recently issued to

Princeton

University and USC are the first of over 50 to be filed from the OLED

Project. According to Joseph Montemarano, director of industrial

liaison

who handles the licensing of technologies developed by scientists

with the POEM Center and the Princeton Materials Institute, his office

has filed another 50 patents that are not OLED-related. "That

translates to 10 or 15 companies and individual inventions," he

says.

POEM was established in 1989, "at the urging of the faculty,"

says Montemarano. "Active outreach was always the intention. We

wanted companies to know that POEM is a place to come for technical

assistance and, possibly, very valuable technology." While the

center itself has no specific academic appointments, it offers

facilities

and an administrative staff to help organize proposals, find

productive

partners, and manage grants and intellectual properties.

At Princeton’s Office of Technology and Trademark Licensing, John

Ritter is director of patents and licensing. Although the

POEM/Materials

Institute group is "our biggest source of invention

disclosures,"

Ritter says, "we license technology from many other departments,

including computer science, chemistry, molecular biology, and

mechanical

and chemical engineering." Ritter estimates that the number of

companies licensed to manufacture technology generated by Princeton

researchers "is well over 25."

While the Technology and Trademark Licensing office was organized

in the late ’80s, the agreement reached in October, 1997, for a

five-year

strategic partnership with UDC was unique: it gave Princeton equity

in a licensing transaction for the first time. Princeton and USC

together

own 4 percent of the stock and warrants, and Princeton’s share is

approximately 145,000 shares plus warrants. Since the stock is trading

at just under five, the university’s investment is now worth about

$750,000.

The seed for university licensing was planted in 1980 with the federal

Bayh-Dole Act. "Before that legislation," Ritter explains,

"if a researcher came up with an invention after receiving federal

funding — and most of them did — then the government owned

the invention. The act made it possible for universities to own

technologies,

even those developed with government funds. That’s when licensing

offices began to sprout up." Another factor driving the search

for corporate partners is reduced federal funding. Ritter’s role is

increasingly proactive, and while "companies recognize there is

important research being done here, we also pursue opportunities"

to market new technology.

"It was a first for us, but in terms of other institutions, it’s

not uncommon," Ritter says. While Ritter expects Princeton to

become a partner in other equity deals, "we make sure the research

fits the university’s criteria. We don’t do product development, and

universities must watch that fine line very carefully."

Top Of Page
Cloistered No More

For UDC president Steve Abramson, the collaboration

between the academic and corporate spheres is a novel one.

"Typically,

you see people coming out of universities to start their own

businesses,"

he says. "Instead, we’re taking a core competency approach.

Professors

can maintain their focus on research and teaching; entrepreneurs can

turn that research into a viable product, and manufacturers can then

take it to the mass market."

For Professor Stephen Forrest, handing his research over to business

people is nothing new. "Several companies are working on different

technologies that have come out of my group," he says. "It’s

an area I’ve worked in for a long time."

For Forrest, staying in academia while others take his findings to

market is the best of both worlds. "One of the things I get at

the university is freedom. I can pursue an idea that may not have

immediate commercial impact, whereas in a company, I’d have to commit

myself to perfecting one product. It’s a very different set of skills

and missions, and I’m much more suited to the university side."

Adds Forrest: "My students are now working on problems with great

relevance. For them to know that their work will help develop

technology

is extremely important and motivating. Meeting performance criteria

focuses their learning and, for engineering students, that’s a

wonderful

experience."


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