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CHIPS Articles: NIST to Boost Commercialization of Federally Funded R&D

NIST to Boost Commercialization of Federally Funded R&D
By CHIPS Magazine - December 10, 2018
The United States has led the world in innovation, research and technology development since World War II, but that leadership is being challenged on a global scale. At risk is America’s leadership in industries of the future such as artificial intelligence, quantum computing and robotics. In combination with the rapid, foundational advances in technology, innovation has never been more critical to U.S. economic competitiveness and national security than it is today, according to the new NIST Draft Green Paper: Special Publication 1234.

The U.S. is being challenged globally on many fronts from near-peer competitors to rogue states, to hackers and cyber criminals motivated by political aims or industrial espionage for economic gain.

The good news is that the National Institute of Standards and Technology announced last week, that in 2017 alone, the Federal Government invested approximately $150 billion in R&D—about one-third at Federal Laboratories across the country and two-thirds at universities and private-sector R&D institutions. Federal R&D funding represents about one-third of all U.S. R&D spending.

Despite this stunning investment, many of the technologies discovered in this effort lack a clear path to transfer to the private sector to benefit businesses and citizens. Further, interested parties have long grumbled about the complex and clumsy process to obtain approval to commercialize these discoveries. But now, in line with the President’s Management Agenda, NIST released SP-1234 detailing steps to modernize the U.S. system of technology transfer and innovation for the 21st century. The actions outlined in the green paper are intended to maximize returns on American taxpayers’ investment in R&D and streamline the ways businesses and entrepreneurs can tap into this potential goldmine of federally funded R&D.

“Countless innovations crucial to our everyday lives, including life-saving vaccines, the internet and GPS, can trace their roots to federal laboratories and federally funded R&D,” said Secretary of Commerce Wilbur Ross. “The steps outlined in this new report are strong proposals to pave the way for the competition-driven technological advances that are the cornerstone of American success.”

To illustrate the economic potential, technology transfer in the U.S. from 1996 to 2015 yielded over $1 trillion in economic growth and millions of new jobs, NIST said. Removing impediments to effective technology transfer and collaboration will accelerate economic value creation.

“Implementing these actions would increase the impact of federal R&D investment through agile partnerships that can create tremendous value for our society and economy,” said Under Secretary of Commerce for Standards and Technology and NIST Director Walter G. Copan. “For example, granting reliable and predictable intellectual property rights for licensing and commercial development of federal research will also encourage innovation and more private sector investment in R&D.”

NIST said the draft was developed using broad inputs from the public in response to a Request for Information published in the Federal Register, as well as public meetings and multiple stakeholder engagement sessions—and extensive review of prior reports and studies related to federal R&D technology transfer. In addition, the paper incorporates contributions from key federal stakeholders, including the National Science and Technology Council’s (NSTC) Lab-to-Market Subcommittee.

The draft is a discussion document, not a policy commitment or decision by the federal government, NIST said. Implementation of actions that require specific policy, legislative or regulatory changes will be advanced through the appropriate formal process, including interagency review and public comment opportunities.

Modernizing the Technology Transfer System

NIST explained that key to success is modernizing the current model. Much of the legal architecture around technology transfer is based on two transformational pieces of legislation from the 1980s: the Stevenson-Wydler Technology Innovation Act and the Bayh-Dole Act. The legislation provides clarity of intellectual property ownership intended to incentivize commercial development of federal R&D. While this legislation served America well during those years, it does not allow the agility and fast-pace of innovation occurring around the world today.

The competitive environment for the U.S. has changed dramatically since implementation of the Bayh-Dole and Stevenson Wydler Acts and their amendments in subsequent technology transfer legislation. Technology transfer and its practices have advanced substantially as the pace of innovation continues to accelerate globally. Shorter product life cycles, disruptive new business models, new partnering strategies, and globalized R&D and supply chains are enabled by revolutionary advances in digital, communications, biological, materials and quantum technologies.

NIST’s green paper is an important step toward modernizing the technology transfer system to meet America’s economic and national security needs for the 21st century.

To ensure America stays on the leading-edge of technological development, this green paper lays out actions aligned with the five strategies outlined in the Lab-To-Market Cross Agency Priority (CAP) Goal of the President’s Management Agenda: (1) identifying regulatory impediments and administrative improvements; (2) increasing engagement with private sector experts and investors; (3) building a more entrepreneurial R&D workforce; (4) supporting innovative tools and services for technology transfer; and (5) improving understanding of global science and technology.

NIST summarized the activities to be taken under these objectives:

  1. Reducing Regulatory and Administrative Burdens – NIST outlined changes to “make it easier for industry to work with Federal Laboratories and access federally funded R&D.” The green paper highlights the importance of defining the scope of the “government use license” and “march-in rights,” which allow the federal government to use an invention for broadly defined purposes and to grant additional licenses if the original nonfederal inventor or licensee fails to develop the invention for public benefit, respectively. The report also outlines steps to clarify requirements for the domestic manufacture of products resulting from federal R&D.
  2. Increasing Private Sector Engagement – The draft identifies actions to make the technology transfer process easier to navigate by promoting the use of best practices and establishing government-wide consistency in the interpretation of legislation. To attract private investment and speed technology transfer, the paper outlines an action to authorize new and expanded mechanisms for creating partnership agreements and nonprofit foundations that support federal agencies. The paper also outlines a plan to allow the limited use of R&D funding for intellectual property protection.
  3. Entrepreneurship in R&D – To further instill the idea of entrepreneurship within the federal government, the green paper proposes establishing technology entrepreneurship programs at federal R&D agencies. The paper outlines strategies to clarify and update conflict of interest requirements to stimulate greater partnering between the private sector and researchers at federal laboratories and federally funded universities.
  4. New Tech Transfer Tools – The green paper outlines tactics to develop a modern, easy-to-use federal intellectual property data reporting system to more effectively track IP and streamline regulations. In lockstep with this effort, a new data portal would provide the public with easy access to the IP and other R&D assets, enabling greater private sector awareness of the universe of federally funded knowledge, capabilities and facilities.
  5. Measuring Effectiveness – Ensuring the best return on investment for federal research funds requires better measures of the outcomes and impacts from those R&D investments. The green paper highlights the need to complete an “authoritative analysis … of metrics for federally funded R&D that can be used to capture, assess, and improve R&D outcomes and impacts.”

The draft, Return on Investment Initiative for Unleashing American Innovation, received public comments in response to a request for information. Background information about the initiative are available on the NIST website. NIST will consider additional feedback on the green paper, if received by Jan. 9, 2019, via A final version is expected in early 2019.

NIST has responsibility for promoting federal technology transfer efforts, including governmentwide policy coordination and promulgation of regulations, co-leading the Lab-to-Market CAP Goal in the President’s Management Agenda with the White House Office of Science and Technology Policy, serving as host agency for the Federal Laboratory Consortium for Technology Transfer, leading NSTC’s Lab-to-Market Subcommittee and the Interagency Workgroup on Technology Transfer, and reporting annually to the president and Congress on technology transfer across federal agencies.

NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards and technology in ways that enhance economic security and improve our quality of life. NIST is a nonregulatory agency of the U.S. Department of Commerce. To learn more about NIST, visit

Cover illustration of Return on Investment Initiative for Unleashing American Innovation. Credit: N. Hanacek/NIST
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