COLUMBUS, Ohio — Ohio’s public universities could transfer more of their research discoveries to companies that can take them to market — creating new products and jobs — under an amendment that was part of the budget bill for this fiscal year.
House Bill 140, sponsored by Rep. Jay Goyal, a Mansfield Democrat, and Rep. Mark Schneider, a Democrat from Mentor, enables the state’s 14 public universities and colleges to accept stock or other ownership stakes in companies that are created to develop and commercialize their discoveries.
The universities also could “make or guarantee loans, borrow money, issue bonds and enter into other modes of indebtedness” to create so-called entrepreneurial projects, according to testimony by Goyal in his testimony to the Ohio House Ways and Means Committee.
Until now, the state’s universities were not allowed to accept stock or other equities from start-up companies to which they transferred their technologies for development. Instead, the often cash-strapped new companies were required to pay cash licensing fees for the university-generated technologies.
That was a barrier to technology transfer that could “unleash the powerful forces of entrepreneurialism and capitalism, and create new companies and new jobs,” Goyal said in his testimony.
The recent amendment removes that barrier and puts the state’s public universities on a more similar commercialization footing as its private universities, which did not fall under the prohibition against accepting stock in payment for technology, said Mark Coticchia, vice president for research and technology management at Case Western Reserve University in Cleveland.
Coticchia, who has been on loan for more than a year to the Ohio Board of Regents as a part-time executive, worked with Goyal to introduce the legislation. “The idea is to level the playing field,” Coticchia said. “Other universities in other states can do this and have done this for many, many years. We had our hands tied. Now that we’ve got this passed, this is huge for tech transfer people.”
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Why is it so huge? “Ohio research facilities generated $1.35 billion in research funding in 2007,” Coticchia said, citing the most recent numbers reported to the Association of University Technology Managers for its annual survey. Now, all that funding has a greater chance of resulting in technology that can create companies and jobs.
“Clearly, having a legal mechanism for Ohio institutions to do this, more research is going to be commercialized via start-ups versus licensing technologies to existing businesses, Coticchia said. “It also will allow universities to unleash many start-up opportunities that have been looking for a way to get into the marketplace.”
Not all public universities in Ohio faced the barrier to transferring their technologies in exchange for equities, said Wayne Watkins, associate vice president of research in the University of Akron’s technology transfer office. The Akron university created a research foundation in 2001 that was allowed to accept equities as payment for technology.
Since then, the University of Akron has created 24 start-up companies with technologies developed by its professors, staff or students, said Watkins, who applauded the law change even though it won’t have an effect on his university. “We want to be exceptionally encouraging of the state for fixing the innovation ecosystem with such a change,” he said.
[Front-page photo courtesy of Flickr user Elessar]
