Universities in the UK are generating more income from intellectual property, filing more patents and spinning out more companies than ever before.

The annual Higher Education Business Interaction (HEBI) survey shows that during the 2001-02 academic year, turnover of spin-off companies increased from £212m to £289m, and the number of people employed by these companies increased from 10,500 to 12,000.

The University of Oxford's technology transfer office, Isis Innovations, has spun out 44 companies to date and files, on average, one patent per week. Isis is responsible for the formation of NaturalMotion, whose proprietary virtual stuntman software was used in the final Lord of the Rings film and will be seen again in April in Hollywood epic Troy.

Lord Sainsbury, said the government has made "large investments in knowledge transfer over the last few years and it is good to see it bearing fruit".

In Manchester, a company called Dmist was founded by researchers at the University of Manchester Institute of Science and Technology (UMIST). It has developed technology which can clean up live or recorded video images where the presence of fog, haze, rain or smoke has impaired the quality of the image. The technology has the potential to help a wide range of sectors including general security surveillance, traffic monitoring, defence and shipping. ®