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STC 383 Session 4 Technology Transfer Policies and Structures PL 96-480 Agenda for Session 4 Class Updates, Questions, Review In-Depth view of US Technology Policies Preliminary Survey of Other Country Policies and Regional Policies Brief Course: Politics 101 Remember from Session 1…

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stc 383 session 4

STC 383 Session 4

Technology Transfer Policies and Structures

PL 96-480

agenda for session 4
Agenda for Session 4
  • Class Updates, Questions, Review
  • In-Depth view of US Technology Policies
  • Preliminary Survey of Other Country Policies and Regional Policies
  • Brief Course: Politics 101
remember from session 1
Remember from Session 1…
  • The perpetualtension that Vannevar Bush warned of: “Basic research leads to new knowledge. It provides scientific capital. It creates the fund from which the practical applications of knowledge must be drawn…” But, perversely, “applied research invariably drives out the pure”. *
  • R&D trends: Billions in federal research & corporate research increasing in relation to government funding, but little corporate research is basic.



From Crow & Bozeman’s

Three Competing R&D Policy Models

federal r d commercialization
Federal R&D Commercialization
  • NASA the only early cry in the wilderness with “Technology Utilization”
  • Relevance and economic development demands awakened in mid-70’s
  • States began planning efforts and R&D support efforts (R&D parks, university centers of excellence, incubators)
  • International competition increased
  • Policy deficits became obvious
valley of death aka the gap
Valley of Death(AKA The Gap)

PositiveCash Flow

Passive Informal Investors($25-100K)

Active Informal Investors($100-1 M)

Institutional Venture Capitalists($2M+)

Family & Friends($0-25K)


Sweat Equity & Personal Savings

Seed Capital

Pre- Venture Capital





Product Introduction


Production Prototype

Engineering Prototype

the new paradigm federal technology partnerships
The New Paradigm:Federal Technology Partnerships

Industry as customer for government programs

Industry as partner in joint government-industry programs

Federal Government Technology Programs

Joint Government-Industry Technology Programs


  • Conformance with govern- ment specifications and reg-ulations
  • Serving agency missions
  • Development of commercial technology that also meets government needs
  • Innovation, commercialization, economic growth
  • Leadership, competitiveness, jobs

Source: Adapted from Council on Competitiveness, 1995

evolution of technology partnerships 1980 2002
Evolution of Technology Partnerships 1980-2002

Government as Consumer

Industry as Customer

Technology Reinvestment Program


Federal Lab ORTAS

Research Antitrust Modification

Advanced Technology Program


Federal R&D Contractor Patent Rights


SBIR Extended


Homeland Defense



Government as Partner

Mission Spin-Off









Source: Council on Competitiveness, 1995

wilson s policy cascade
Wilson’s Policy Cascade

Remove Disincentives

if not enough, then

Provide Incentives

if not enough, then

Provide Support Structures

if not enough, then

Provide Programs

In my ideal world…

remove disincentives
Remove Disincentives
  • Removal of disincentives is usually “easy” and inexpensive to implement. Some examples:
    • there is insufficient investment capital flowing to new business startups. Lower the capital gains tax rate.
    • Allow home equity loans (2nd mortgages).
provide incentives
Provide Incentives
  • Providing incentives is a more activist approach which still leaves the onus of action in the private sector. Examples:
    • R&D tax credits.
    • Positive scoring for competitive university research grants when they include industry partners in their projects.
provide support structures
Provide Support Structures
  • Providing Support Structures: necessary when the former two steps do not or cannot solve a problem that the government controls or can assist in. Examples:
    • Development of the National Technical Information Service and FedWorld – government information resource collections designed to be easy to use and geared to private sector use.
    • Creation of myriad gov’t web sites on their realm of responsibility-- readily available to the public. May include private sector information (e.g. EU web site describing e-commerce capabilities of companies throughout the trading area.)
provide programs
Provide Programs
  • Providing Programs is what governments should do only when they believe the prior three steps are insufficient to solve a perceived problem. Examples:
    • Small Business Innovation Research Program
    • Advanced Technology Research Program
    • EU 5 & 6th Framework Research Programs

From Crow & Bozeman’s

Three Competing R&D Policy Models

federal legislation
Federal Legislation

The Legislation passed in the ‘80’s-’90’s increases in complexity, sophistication, reality and capability in each succeeding year. MOST changes were in response to BUSINESS requests for process improvements

In each case, Policy and ProcessesWhat/Why and How

are extended

four foundation bills
Four Foundation Bills
  • Foundation for all of the US tech transfer legislation since 1984:
    • Bayh-Dole Bill (Patent and Trademark Amendments Act of 1980, a.k.a. the Uniform Federal Patent Policy Act of 1980)
    • Stevenson-Wydler Technology Innovation Act of 1980
    • Small Business Innovation Development Act of 1982 (SBIR)
    • National Cooperative Research Act – 1984 (NCRA)

Key Federal Technology Legislation

  • Federal Technology Transfer Act of 1986
  • Omnibus Trade Competitiveness Act of 1988
  • National Technical Information Act of 1988
  • National Competitiveness Technology Transfer Act of 1989
  • NIST Authorization Act for FY 1989
  • American Technology Preeminence Act of 1991
  • Morella Bill of 1995
  • 1999 Amendments to Tech Transfer Act

All build on Stevenson-Wydler

federal legislation con t
Federal Legislation (con’t)
  • Trademark Clarification Act of 1984

Added to Bayh-Dole

  • Defense Authorization Act of FY 1991
  • Small Business Technology Transfer Act of 1992

Built on the SBIR bill

  • National Cooperative Production Amendments of 1993

Amended NCRA


Bayh-Dole Bill

  • Policy
  • Gave small businesses and non-profits (including universities) (contractors) rights to own inventions developed under Federal Funding agreements
  • Protects private confidential info
  • Allows federal agencies and GOGO (Gov’t owned, Gov’t Operated) labs to grant exclusive licenses
  • Reserves government use rights to the technology (“nonexclusive, nontrans-ferable, irrevocable, paid-up license to practice or have practiced…”)
  • Confirms government “march-in” rights to ensure “utilization” of the IP if the contractor does not pursue application of the technology
  • Favors manufacturing “substantially in the United States”
  • Process/Implementation
  • New contract and grant terms – requires that contractors actively pursue IP protection if they choose to own the technology AND requires them to report to the Federal agency “the utilization or efforts at obtaining utilization…”
  • New license models and licenses – allows exclusive licenses to small businesses and field of use rights to a broader audience, requires a sharing of royalties between the contractor and the inventor, and requires that net royalties be used “for the support of scientific research or education”. Inventor may elect to own the IP if the contractor chooses not to.
  • FOIA (Freedom of Information Act) exemptions -- Ensures protection of confidential private business information and IP information
stevenson wydler

Admits there is no “comprehensive national policy” to “enhance technological innovation”

Formally promotes cooperation between sectors and assistance from Federal resources “Many new discoveries and advances in science occur in universities and Federal laboratories, while the application of this new knowledge to commercial and useful public purposes depends largely upon actions by business and labor. Cooperation…in such form as technology transfer, personnel exchange, joint research projects, and others should be renewed, expanded and strengthened”

“Small businesses have performed an important role in advancing industrial and technological innovation”


Creating centers to assist in R&D and tech transfer

Creating the National Industrial Technology Board

Establishing Off. of Research & Tech Agreements (ORTAs) at national labs “…laboratories shall make available not less than 0.5 percent of the agency’s research and development budget to support the technology transfer function…including support of the” ORTAs.

Planning grants


Precompetitive collaborative industrial research is in the national interest and should be supported


Public registration and publication of consortial and joint venture efforts

Anti-trust relief


Definition: Anti-trust relief does not exempt any consortium or its members from the US anti-trust laws. Rather, it offers them a remedy should they be accused of anti-trust activity. If the consortium ceases anti-trust activity within a specified time, there is no cause for suit. Should the consortium contest the accusation of anti-trust and lose, they could only be charged single damages, not treble damages. Anti-trust suits usually carry treble damages and thus you can see why the term relief is used!

trademark clarification act

Extended the policy of the federal government to “strive to transfer federally funded technology to the private sector”


Extended Bayh-Dole to allow contractors rights to patent royalties for use in R&D, awards or education

Allowed companies -- all sizes -- to obtain exclusive licenses

Extended rights to laboratories run by non-profits to retain IP title

Trademark Clarification Act
federal technology transfer act of 1986

Federal Labs provide developments useful to state & local government and private industry. so…

“There is a need to provide means of access and to give adequate personnel and funding support to these means”


Mandated that tech transfer is a responsibility of all labs

Authorizes and sets up the processes for Coop. Res. And Devel. Agreements (CRADAs) & licensing

Incentives: personnel recognition, cash awards to gov’t lab employees, management training, royalty sharing

Royalty support of tech transfer activities through each lab’s Office of Research and Technology Assistance (ORTAs)

Chartered the Federal Lab Consortium

Mandates that government technical information be provided to the National Technical Information Service for public access to the information. (See lesson 6 for more on NTIS)

Federal Technology Transfer Act of 1986
omnibus trade competitiveness act of 1988

Public/Private cooperation needed to ensure full use of federal R&D investment

Federal government should create model programs to promote that cooperation


Authorized Manufacturing Technology Centers and Industrial Extension Service (Implemented as MEPS)

National Bureau of Standards is reconfigured to become the National Institute of Standards and Technology (NIST) with broader tech transfer role (creates the Office of Technology Policy in Dept. of Commerce to work with NIST which is also in Commerce)

Incentive: Extends royalty payments to non-gov’t lab employees

Omnibus Trade Competitiveness Act of 1988
national cooperative research and production act of 1993

To improve the legal climate surrounding cooperative production activities

To facilitate innovative, efficient joint ventures for production


Provides for filing notice for US-based research and production ventures whose members must all (when foreign) operate under anti-trust laws equal to or stronger than US law.

Provides anti-trust relief – same as NCRA provisions

This relief allows R&D consortial partners to go beyond prototyping stages to actual pilot production for product yield testing, manufacturing methods improvements, and identifying cost, yield, energy, environmental & other factors that could be improved by other research

National Cooperative Research and Production Act of 1993
morella bill national technology transfer and advancement act of 1995

Expresses support for the Malcolm Baldridge Awards

To increase incentives for government commercialization efforts

The Federal government can help US businesses through CRADAs “but the commercialization of technology and industrial innovation...depends on actions by business”.


Clarifies CRADA ownership issues

Increases cash amounts lab inventors may get from royalties & licenses – the inventor(s) get the first $2000 in royalties and then 15% thereafter, up to $150,000

Allows lab inventors to obtain rights to their IP (increases possibility of inventor-based spin-offs)

Directs labs to use common technical standards

Morella Bill: National Technology Transfer and Advancement Act of 1995
evolution of legislation
Evolution of Legislation
  • Understanding increased incrementally
  • Tools were added and improved incrementally
  • Responsibility increased incrementally
  • Use of tools increased incrementally
federal policy outcomes direct programs
Federal Policy Outcomes/Direct Programs
  • SBIR/STTR Program
  • ATP -- Advanced Technology Program
  • TRP - Technology Reinvestment Program/DOD Dual Use Applications
  • Manufacturing Engineering Extension Program
  • Flexible Manufacturing Initiative
  • FedWorld – NIST’s electronic/web information service
  • Federal Lab CRADAs
sbir program preamble
SBIR Program Preamble
  • Small Businesses contribute to the Nation’s R&D
  • Conduct of Federal R&D would aid small businesses
  • Competitive disadvantages to small businesses in purchasing, contracting and competing for grants should be overcome through a set-aside R&D program
sbir requirements
SBIR Requirements
  • All federal agencies with extramural R&D in excess of $100 M are required to allocate a set % of their R&D funds (currently set at 2.5%) toward their own SBIR program. SBA collects data and assists in publicizing it and ensuring a level of consistency among agency programs.
  • The participating companies must be for-profit small businesses by federal definition (generally 500 employees, but each company must check its SIC code definition e.g. A small business in the telecom industry may have up to 2000 employees).
sbir differences
SBIR Differences
  • Each solicitation is run by the sponsoring agency who has latitude to craft the program to its needs. Differences include:
    • Annual or biennial schedule.
    • Amount and sequencing of payments
    • Grants or Contracts
    • Weights to commercialization and method of assessment
  • Information can be obtained from the SBA or from each individual agency.
small business innovation research program
Small Business Innovation Research Program
  • 2.5% of each agency’s R&D budget, channeled to its SBIR program: the small businesses are doing research that the agency needs but which may also benefit or use the expertise of the small business.
  • Designed to be business-friendly: Simple Paperwork – absolute page limit (including appendices)
  • Merit review of proposals
  • 3 Phases – first two funded, 3rd is reporting requirement
small business innovation research program phases
Small Business Innovation Research Program Phases
  • Phase I of the SBIR program is designed to show feasibility of the proposal/proof of concept.
  • normally runs 6 months and can be funded for up to $100,000. Only companies that have participated in phase I of a proposal may apply for phase II funding.
  • Phase II funding may go as high at $750,000 (with inflation adjustments every 5 years).
sbir commercialization
SBIR Commercialization
  • At NSF, Phase II proposals are judged
    • 50% technical merit
    • 50% quality of the commercialization plan
  • Former SBIR “mills” are having trouble getting new grants because they don’t have a track record of revenues to prove commercialization...
using sbir
Small Businesses:

Obviously for funding

For credibility with funders and other supporters

For leverage and access to other government funding


Large Businesses

For access to partners and licensable technology

Funding for testing or equipment use and possible research subcontracts

Competitive intelligence


Using SBIR
advanced technology program
Advanced Technology Program
  • Individual companies may receive up to $2 million for their R&D projects for up to 3 years and must cost share 60%
  • Joint ventures may receive an unlimited amount of funds (dictated by annual budgets) for up to 5 years and must cost share more than 50% of the yearly total.
  • NIST cautions against startups using ATP...
  • The proposal and selection criteria are clearly laid out for interested companies to use. For details: email isatp @ NIST.govand their website is
policy and implementation blind spots
Merit review



Regional competiton

Anti-competitive practice

Equity vs. Merit

Agencies’ Internal conflicts

Different Metrics

Policy and Implementation Blind Spots
blind spots
Blind Spots

A detailed review of the technology transfer outputs of federal labs in the mid-1990s indicated that while funding for these organizations was about $25 billion annually, the total number of new licensed technologies was only about 300 per year with very little economic return (less than $10 million annually) to the labs themselves…” (pg. 8, Crow & Bozemen)

Is this good or bad?

corporate welfare intersection between politics and policy
Corporate Welfare – Intersection between Politics and Policy
  • What is it?
  • Who benefits?
  • When is national security a valid rationale?
  • What elements of the Wilson Cascade are “Corporate Welfare”?
  • Market Tests – back to Blind Spots…
eu policies
EU Policies
  • “The job of the public sector, both at EU and at national levels, is to create the conditions in which …creativity can flourish, to strengthen the infrastructures necessary to promote and support it – especially among small and medium-sized enterprises – and to ensure that it addresses the priorities of society as a whole, rather than solely those of the business community.”
    • Clearinghouse for data, studies, benchmarking
    • Testbed/pilots to define and diffuse best practices
    • Information services for SMEs (incl. link to EU R&D)
eu 5 th framework
EU 5th Framework
  • Started in mid-1999: The 5th Framework Program is working through “thematic programmes”
  • Improving the quality of life and the management of living resources
  • Health, Food And Environmental Factors
  • Control Of Viral And Other Infectious Diseases
  • The "Cell Factory"
  • The Aging Population
  • Integrated Development Of Coastal And Rural Areas
eu 5 th framework con t
EU 5th Framework (con’t)

2. Creating a user-friendly Information Society:

  • Systems and services for the citizen
  • New methods of work and electronic commerce
  • Multimedia content and tools
  • Essential technologies and infrastructures
eu 5 th framework con t44
EU 5th Framework (con’t)

3. Promoting competitive and sustainable growth:

  • Products, processes, organization
  • Sustainable mobility and intermodality
  • New perspectives in aeronautics
  • Marine technologies
  • The city of tomorrow and cultural heritage
eu 5 th framework con t45
EU 5th Framework (con’t)

4. Preserving the ecosystem:

  • Management and quality of water
  • Global environmental change and climate
  • Promoting the sustainable use of energy
  • Development and supply of cleaner, more competitive and diversified energy
5 th framework con t
5th Framework (con’t)

5. Horizontal Programmes:

  • Confirming the international role of European research
  • "Innovation and participation of SMEs"
  • "Improving human potential“

6th Framework Program is under construction for launch in 2003

5 th framework challenges
5th Framework Challenges
  • RELAY system to help with commercialization (US definition)
  • 2000 first introduction of exclusive licensing ability…!
  • Merit vs equity policy tension


other policies
Other Policies…
  • The Irish miracle: excellent application of the basics (tax breaks, infrastructure, special skill training)
  • Brazil: financing and tax breaks for start-up software companies
  • Taiwan: an aggressive system of science parks, incubators, non-profit research and industrial subsidies.
  • Eager to see what you dig up for your assignment!

Useful Web Addresses to Start With

  • FedWorld
  • Federal Lab Consortium
  • National Tech Transfer Center
  • NASA Commerical Tech Net
  • US Business Advisor
  • U.S. Congress
more good info sources
More Good Info Sources
  • AAAS, R&D series--
  • US Dept. of Commerce Technology Admin.
  • US DOC ATP program:
  • Small Business Innovation Research Program --, and just search Google or any other engine for it.
  • PriceWaterhouseCoopers Surveys: (e.g.Venture Capital Survey, e-commerce in Europe, etc) --