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Page 97

Companies Based on Technologies Developed at U.S. National Laboratories

Alvin W.Trivelpiece
Oak Ridge National Laboratory (retired)

THE INTERNET PICTURES CORPORATION (IPIX)

In June 2000, at a meeting at the Russian Academy of Sciences, I described a small innovative company that had been started in Oak Ridge and that had grown in part out of technology that had been developed at the Oak Ridge National Laboratory.

The business is based on the idea of using wide-angle, fish-eye lenses (185 degrees) on a digital camera to obtain a hemispherical image. The image that is captured in the camera's memory can be transformed mathematically to eliminate the distortion caused by the lens. This image can then be stored in memory and displayed on a computer monitor screen in such a way that it can be viewed as if it were on the inner surface of a hemisphere.

Now imagine rotating the digital camera 180 degrees about a vertical axis through the lens plane so that a second hemispherical digital image is captured. By removing the distortion from this second image and numerically joining the two stored hemispherical images, it is possible to create a so-called 360-degree by 360-degree image. What one sees on the monitor of the computer screen can be thought of as the image you would see if you were at the center of a sphere and the image were on the inside surface of the sphere. As you would turn your head in any direction you would see what the camera recorded in that direction. This so-called bubble image (or 4Ï€ image) is a breakthrough in photography. It is a simple idea. However, by itself, it does not necessarily make a profitable business.



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Page 97 Companies Based on Technologies Developed at U.S. National Laboratories Alvin W.Trivelpiece Oak Ridge National Laboratory (retired) THE INTERNET PICTURES CORPORATION (IPIX) In June 2000, at a meeting at the Russian Academy of Sciences, I described a small innovative company that had been started in Oak Ridge and that had grown in part out of technology that had been developed at the Oak Ridge National Laboratory. The business is based on the idea of using wide-angle, fish-eye lenses (185 degrees) on a digital camera to obtain a hemispherical image. The image that is captured in the camera's memory can be transformed mathematically to eliminate the distortion caused by the lens. This image can then be stored in memory and displayed on a computer monitor screen in such a way that it can be viewed as if it were on the inner surface of a hemisphere. Now imagine rotating the digital camera 180 degrees about a vertical axis through the lens plane so that a second hemispherical digital image is captured. By removing the distortion from this second image and numerically joining the two stored hemispherical images, it is possible to create a so-called 360-degree by 360-degree image. What one sees on the monitor of the computer screen can be thought of as the image you would see if you were at the center of a sphere and the image were on the inside surface of the sphere. As you would turn your head in any direction you would see what the camera recorded in that direction. This so-called bubble image (or 4Ï€ image) is a breakthrough in photography. It is a simple idea. However, by itself, it does not necessarily make a profitable business.

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Page 98 When I reported on the growth and successes of the Internet Pictures Corporation (iPIX) in June 2000, there was every indication that this company was going to be an outstanding commercial success. The price of the stock was about three times greater than it had been for its Initial Public Offering (IPO), and there had been several mergers with other companies that gave good market growth. Unfortunately the stock markets in the United States started to decline shortly after June for some of the computer-based technology companies. On October 17, 2000, there was a sharp decline in technology stock prices. iPIX stock eventually sunk to a level of less than $1.00 per share from a high of $46.00. This forced iPIX to take measures to reduce its costs and sell off some of its assets. It has since undergone reorganization with a reverse stock split of 1 new share of stock for 10 shares of the original stock. This was part of the reorganization, which involved some new investors providing more than $20 million in additional capital. iPIX appears to be on the road to recovery, but that is not guaranteed. I brought several copies of a CD-ROM disk that has iPIX images of several cultural sites in Russia. There is only time to show a few. As you can see, it is possible to look in any direction at works of art and architecture. Copies of this disk are available in the lobby of the conference center. Take one and examine the images at your leisure. You can also gain information about iPIX from the Web; its address is: . http://www.ipix.com . My point is not to go over the technical details of the company or technology of how the iPIX imaging system works. Rather, I believe what happened to iPIX shows how problems can arise over which the inventors and investors have no control. These kinds of nontechnical problems can cause a company to nearly fail, as in this case, or go completely out of business, as happened to many others during the recent drop in the U.S. economy. A good idea and good backing are always necessary but almost never sufficient to ensure a successful business. Laboratories in the United States and in Russia are populated with scientists and engineers who believe that if they invent it, someone will want it. They would be better advised to find out what someone wants and then find a way to provide it. CTI For the participants of this workshop, it is not necessary to explain what a positron is or that it annihilates when it collides with an electron. This annihilation process results in the emission of a pair of gamma rays. It is possible to detect these gamma rays and determine the location where this annihilation took place. Fluorine 18 is a short half-life radioactive element that emits positrons. By binding fluorine 18 to glucose and injecting a small quantity into a

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Page 99 human subject, it is possible to measure the metabolic activity at a particular location in the body. The injected substance is fluorodeoxyglucose (FDG), which is utilized by malignant tissue at more than three times the rate of normal tissue. The emitted gamma rays determine where the highest levels of metabolic activity are. This creates a means of determining where diseased tissue is located. This process is called Positron Emission Tomography (PET). The company that has developed PET into a commercial product is called CTI. It is located in Knoxville, Tennessee. It is a privately held company, which is an alternative to seeking funding from shareholding investors through the stock markets. I have chosen to mention CTI at this workshop, since it illustrates that going from an excellent diagnostic tool such as PET to a practical device that can be manufactured and sold at a profit is usually a long, hard process. This company has many roots in activities that had origins at several Department of Energy national laboratories. One of its early experimental uses has been to study metabolic activity in the brain in an effort to understand the processes that lead to Alzheimer's disease. By comparing the metabolic activity in a normal brain and the abnormal metabolic activity in the brain of an individual suffering from dementia, it is possible to show that the disease causes some areas of the brain to have low metabolic activity. This does not explain the cause of dementia, but it does provide a tool that allows investigation that might lead to a cure. CTI has a unique heritage, starting with its founding in 1983 as a privately held corporation headquartered in Knoxville, Tennessee. In January 1984, CTI acquired the emission tomography (ECAT) scanner business from EG&G ORTEC and began operations. Later that year, CTI acquired leading cyclotron personnel and technology from the Cyclotron Corporation in Berkeley, California. CTI then received investment capital in 1985 to finance the development of a new PET scanner product line and a new RDS cyclotron. Through a reorganization in November 1986, CTI acquired the remainder of the Cyclotron Corporation (now known as CTI Cyclotron Systems). With its products successfully completed and introduced in 1986, CTI signed a distribution agreement with Siemens for the ECAT scanners, and during 1988, CTI and Siemens executed a joint venture agreement creating CTI PET Systems, Inc. Later, Mitsui Corporation, whose ACT subsidiary produces BGO detector material for the ECAT scanners, invested in CTI, Inc. This latter investment was made in part to form CTI Services, Inc. In the spring of 1996, CTI Services, Inc., entered into a joint venture to form P.E.T.Net Pharmaceutical Services, Inc., to accelerate the availability of PET radiopharmaceuticals for clinical diagnostic imaging. PET was selected as Time Magazine's Medical Invention of the Year. Why is PET better?

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Page 100 PET is more accurate than most conventional imaging tests. PET can replace many tests with a single examination. PET images the whole body in a single examination. PET often diagnoses illnesses much earlier than conventional diagnostic procedures because PET shows altered metabolism that occurs before anatomical changes. PET eliminates the need for ineffective or unnecessary surgeries or treatments. PET significantly reduces medical costs and often eliminates unnecessary patient discomfort. I have chosen CTI as an example of a commercial enterprise that has grown out of knowledge of science and technology, much of which was developed at national laboratories and universities. In that regard, it is the same knowledge that is well known to those of you working in Russia's nuclear cities. It was not just the knowledge of the science and technology of PET that has made CTI successful. Rather, it was the long, hard work making a device that someone would buy and use. This means gaining acceptance from the medical community, gaining approval of several federal agencies, and making a high-quality product at a low-enough cost. The next time a delegation from Obninsk visits its sister city of Oak Ridge, it might be useful to visit CTI, which is located nearby. SANDIA Sandia National Laboratories in Albuquerque, New Mexico, has had several projects that have led to successful businesses based on technologies developed at its facilities. One of these developments is the subject of a 2001 report entitled “Technology Transfer from Sandia National Laboratories and Technology Commercialization by MODE/Encore” (copies may be obtained from the U.S. Department of Commerce at http://www.ntis.gov/ordering.htm ). This Sandia report is an excellent case study that describes what happened with a particular project involving MicroOptical Devices (MODE). It describes how the project got started, the steps that had to be taken to move it from the laboratory to a commercial activity, and the problems that occurred along the way. I recommend this report as an excellent guide on some of the activities that must be done to give an innovative small business a chance of succeeding. I am sure that any of the authors would be pleased to receive questions regarding the project or the process of commercialization.