Amendment would allow USU stock opportunities
A proposed amendment to the Utah Constitution could mean money for Utah State University.
Constitutional Amendment No. 2 would allow state or public institutions of higher education to own stock in business or technology developed at the institution, according to the amendment analysis.
The amendment passed unanimously in the Utah Senate and by majority in the House. Voters will make the final decision about the amendment Nov. 2.
“I’m very supportive of this amendment because it will give [us] the flexibility to work with companies that want to license USU technology and allow us to take an equity position, with a start-up company, for example, that at some future date could turn into a big company and help Utah State and the state,” Brent Miller, USU vice president of research, said.
Many other states have already passed such bills and universities are reaping the benefits.
For example, the search engine Google was developed by two doctoral students at Stanford University, Tim Vitale, assistant director for public relations and marketing, said. Stanford, therefore, was able to hold equity in www.google.com. The Wall Street Journal reported in August that Stanford’s holdings in Google are an estimated $179 million dollars. Stanford also holds equity in about 80 other companies.
Currently, Utah universities can only license technologies created at the university, but cannot own stock in the businesses or companies created from the technologies.
“This is serious money and our university has not benefited the way places like Stanford and MIT have,” USU President Kermit L. Hall said.
HyClone Industries and Campbell Scientific are just two of the companies started by USU faculty or students that the university has close ties to, but was unable to hold equity in, Miller said.
Amendment No. 2 would make a small exception to the previous rule preventing state institutions from purchasing stock.
Hall, who has spearheaded the effort to get Amendment No. on the ballot, said its passing is crucial to the research universities in the state.
Amendment No. 2 would also be good for the state, he said. The amendment would allow universities to do more research, create more jobs and would give the business community all the more reason to come do business in Utah, Hall said.
Hall was in Salt Lake City Wednesday to give a speech outlining his support of the bill. Hall spoke at the Horizons conference to many entrepreneurs and business people, as well as university faculty and other members of the community.
Hall began by speaking about the important role universities play in the economic growth of the state and the country. He quoted Richard Florida, an urban planner, as citing higher education, innovation, collaboration and transformation as the means of success in the new economy.
Hall also spoke about the Bayh-Dole Act passed by Congress in 1980, which allowed universities to retain the patent for inventions. This act helped universities immensely, and said he feels Amendment No. 2 can do the same.
If passed, it’s unclear how long it would take for USU to make money from stock, but eventually there is bound to be revenue, Miller said.
“It stands to, in the long run, provide revenues back to the university,” he said.
The Office of Technology Commercialization would make decisions on what equity USU would hold on a case-by-case basis, Miller said.
“It would probably be the exception rather than the rule,” Miller said.
Miller said the only concern that has been expressed about the amendment, which has been discussed in Utah for many years, is a possible conflict of interest.
He said he feels that this can be appropriately managed without a problem.
-hilaryi@cc.usu.edu