A state where thinking big was illegal

April 12, 2001

So you think it's hard turning your big ideas into big bucks? Then spare a thought for universities in Oklahoma, where until just three years ago it was unconstitutional. Robert Ebisch reports.

In 1907, when Oklahoma approved its state constitution, there was considerable suspicion of business. The constitution, one of the most comprehensive in the nation, included detailed prohibitions on what today would be called public-private partnerships. It forbade the university and its faculty from having ownership in a private company. And it said that taxes could be used only for public purposes, which prevented investment in start-ups based on university technology.

Five years ago, things began to change when the Oklahoma City Chamber of Commerce raised $10 million (£7 million) of private money for development programmes. It turned out that a lot of good university technology was not making it to the market. The turning point came when a 1996 study on the future of biomedical technology in Oklahoma City identified the constitution as a major obstacle.

"That study was really the first time that the need to look closely at the effect of the constitution on technology transfer was broadly understood by business leaders and those in the public sector," says Cheryl Choumbakos, director of technology development and marketing for the chamber of commerce.

The study prompted the chamber, legislators, the university and others to launch an effort for a state referendum on changing the constitution. Amendments would allow the investment of state money in technology commercialisation, giving the university and its employees the opportunity to profit.

"Once it was on the ballot, it became a matter of persuading people to vote for a constitutional change on a fairly esoteric topic," says Choumbakos. "You can imagine the difficulty of trying to explain why there should be a public-private collaboration and sharing of resources to produce technology that might ultimately benefit the state and its citizens - and also the difficulty of explaining why a professor working for a public institution should have the right to benefit personally from any commercialisation of his or her technology."

The campaign featured endorsements from the governor and others, and the amendments became law in 1998. But that was just the start. Over the next two years, the state had to put together legal and organisational infrastructures for technology transfer. Then the Oklahoma University Board of Regents established an Office of Technology Development to coordinate intellectual property and technology development efforts at the Health Science Center in Oklahoma City and at the Norman and Tulsa campuses. By autumn 2000, it had licensed ten technologies, six of which have inspired start-ups.

Legislation also allowed the Oklahoma Center for the Advancement of Science and Technology to start a technology-business financing programme. It contracted with a private company called the Oklahoma Technology Development Corporation to establish the Oklahoma Technology Commercialization Center, which has administered $1 million in funding for each of its first two years. Among other activities, it has organised a network of 44 private-investor groups, including more than 300 investors, with a net worth of $2 billion, to provide pre-seed, seed and early-stage capital. It is also developing, along with local sponsors, technology incubators for health technologies, in Oklahoma City; for information technologies, near the Oklahoma University campus in Tulsa; and for energy and materials, in Ponca City.

In 1999 there was further legislation to give the state's universities some confidentiality in their legal agreements with private companies. "Often in these deals, companies don't want their competitors knowing what they're doing," says John Hughey, assistant vice-president for technology development at Oklahoma University.

"The Open Records Act would have forced us to give a copy of the agreement to anybody who asked. We have agreements with major pharmaceuticals companies, and they could not do business with us if we had to announce the nature of the technology or the amount they were paying for it."

December 1999 saw the approval of official intellectual property policies at Oklahoma and Oklahoma State universities. And now Choumbakos has left the chamber of commerce to serve as president of a new $5 million fund designed to develop technology from the university.

The net result? This year, according to Hughey, Oklahoma University should go from virtually zero among universities in the nation to becoming the 12th highest royalty recipient - from the "low six figures to the mid-seven figures" in dollars.

A longer version of this article has appeared in University Business ( www.universitybusiness.com </a> ).

A match that is made in profit heaven

Surgeons have learnt to do amazing things in the realm of organ transplants. Yet the key to success in these operations rests not with the surgeon but with the body of the recipient.

If the recipient's immune system accepts the new organ, the procedure may well succeed. If not, the transplant will almost certainly fail. So medical tests to establish the match between donor and recipient tissue are big business, with 750,000 such tests performed in the United States annually, and the same again in the rest of the world.

Technology is so slow and expensive that a company with a superior way to perform these tests could reasonably hope to capture half of the world market. That is the estimate of a company called Pure Protein LLC - a joint venture created in 1999 by the University of Oklahoma and Emergent Technologies of Austin, Texas, that has developed just such an innovation.

Pure Protein's product is based on the major histocompatibility complex (MHC), a class of proteins that collects fragments of muscle, bacteria, viruses and tumours for inspection by the immune system. MHC proteins are useful in screening the blood of potential transplant recipients to ensure their defence mechanisms are compatible with donors'. MHC can also be used in the development of vaccines and in studies of disease resistance and susceptibilities. "To study how you mount an immune response, you like to have these proteins," says William Hildebrand, associate professor of microbiology and immunology at Oklahoma University's Health Sciences Center. But until recently, MHC was hard to obtain. Hildebrand created a bioreactor system to mass produce a particularly useful form of MHC. The technology is worth at least $500 million (£350 million) a year, says Rick Hodgins, a principal with Emergent in Austin.

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