[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                     BEST PRACTICES IN TRANSFORMING
                       RESEARCH INTO INNOVATION:
                       CREATIVE APPROACHES TO THE
                             BAYH-DOLE ACT

=======================================================================

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                         TUESDAY, JUNE 19, 2012

                               __________

                           Serial No. 112-89

                               __________

 Printed for the use of the Committee on Science, Space, and Technology





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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                    HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR.,         EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                LYNN C. WOOLSEY, California
DANA ROHRABACHER, California         ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         BRAD MILLER, North Carolina
FRANK D. LUCAS, Oklahoma             DANIEL LIPINSKI, Illinois
JUDY BIGGERT, Illinois               DONNA F. EDWARDS, Maryland
W. TODD AKIN, Missouri               BEN R. LUJAN, New Mexico
RANDY NEUGEBAUER, Texas              PAUL D. TONKO, New York
MICHAEL T. McCAUL, Texas             JERRY McNERNEY, California
PAUL C. BROUN, Georgia               TERRI A. SEWELL, Alabama
SANDY ADAMS, Florida                 FREDERICA S. WILSON, Florida
BENJAMIN QUAYLE, Arizona             HANSEN CLARKE, Michigan
CHARLES J. ``CHUCK'' FLEISCHMANN,    SUZANNE BONAMICI, Oregon
    Tennessee                        VACANCY
E. SCOTT RIGELL, Virginia            VACANCY
STEVEN M. PALAZZO, Mississippi       VACANCY
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
                                 ------                                

               Subcommittee on Technology and Innovation

                  HON. BENJAMIN QUAYLE, Arizona, Chair
LAMAR S. SMITH, Texas                DONNA F. EDWARDS, Maryland
JUDY BIGGERT, Illinois               FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              DANIEL LIPINSKI, Illinois
MICHAEL T. McCAUL, Texas             BEN R. LUJAN, New Mexico
CHARLES J. ``CHUCK'' FLEISCHMANN,    SUZANNE BONAMICI, Oregon
    Tennessee                        VACANCY
E. SCOTT RIGELL, Virginia                
RANDY HULTGREN, Illinois             EDDIE BERNICE JOHNSON, Texas
CHIP CRAVAACK, Minnesota
RALPH M. HALL, Texas





















                            C O N T E N T S

                         Tuesday, June 19, 2012

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Judy Biggert, Vice Chairman, 
  Subcommittee on Technology and Innovation, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..     7
    Written Statement............................................     8

Statement by Representative Donna F. Edwards, Ranking Minority 
  Member, Subcommittee on Technology and Innovation, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..     8
    Written Statement............................................    10

Prepared Statement by Representative Benjamin Quayle, Chair, 
  Subcommittee on Technology and Innovation, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    11

                               Witnesses:

Todd T. Sherer, President, the Association of University 
  Technology Managers
    Oral Statement...............................................    12
    Written Statement............................................    14

Catherine Innes, Director, Office of Technology Development, 
  University of North Carolina at Chapel Hill
    Oral Statement...............................................    24
    Written Statement............................................    26

Ken Nisbet, Executive Director; University of Michigan Technology 
  Transfer
    Oral Statement...............................................    31
    Written Statement............................................    33

Robert Rosenbaum, President and Executive Director, Maryland 
  Technology Development Corporation
    Oral Statement...............................................    39
    Written Statement............................................    41

Discussion.......................................................    49

             Appendix 1: Answers to Post-Hearing Questions

Dr. Todd T. Sherer, President, The Association of University 
  Technology Managers............................................    64

Ms. Catherine Innes, Director, Office of Technology Development, 
  University of North Carolina at Chapel Hill....................    67

Mr. Ken Nisbet, Executive Director; University of Michigan 
  Technology Transfer............................................    75

Mr. Robert Rosenbaum, President and Executive Director, Maryland 
  Technology Development Corporation.............................    79

 
                     BEST PRACTICES IN TRANSFORMING
                       RESEARCH INTO INNOVATION;
                       CREATIVE APPROACHES TO THE
                             BAYH-DOYLE ACT

                              ----------                              


                         TUESDAY, JUNE 19, 2012

                  House of Representatives,
         Subcommittee on Technology and Innovation,
               Committee on Science, Space, and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Judy 
Biggert [Vice Chairwoman of the Subcommittee] presiding.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mrs. Biggert. The Subcommittee on Technology and Innovation 
will come to order.
    Good morning, everyone. I would like to welcome everyone to 
today's hearing on the transfer of innovations that come from 
research funded by the Federal Government. The Federal 
Government invests more than $135 billion each year in research 
and development activities, and a portion of that funding 
supports the majority of basic research conducted by 
universities. The transfer of knowledge from universities into 
the marketplace can have profound economic and social impacts, 
so we are always looking for more ways to encourage this 
process. I am glad that our Chairman decided to hold this 
important hearing so that our Subcommittee can learn about the 
innovation--innovative approaches that institutions across the 
Nation are taking to accelerate the transfer of federally 
funded research.
    In fact, tech transfer has been a priority for me. To 
further this goal in the energy sphere, I drafted the Energy 
Technology Transfer Act, which was signed into law in 2008. 
This legislation created jobs by accelerating breakthrough 
energy technologies out of the national labs and into the 
marketplace. It was based on best practices developed by 
agricultural extension programs at the USDA.
    For American universities, however, tech transfer is 
governed by the Bayh-Dole Act. December 2010 marked the 30th 
anniversary of the enactment of the Bayh-Dole Act, which 
permitted universities to retain the intellectual property 
rights to inventions developed with federal funding.
    The Act was passed during bleak economic conditions, not 
too unlike those that we are facing now. The United States was 
enduring an economic recession, declining productivity, and 
competition from Germany and Japan. All of this sounds 
familiar. The purpose of Bayh-Dole was simple: facilitate and 
support universities and small businesses in the 
commercialization of their inventions, allowing society to 
benefit and increasing U.S. global competitiveness. Promoting 
university-based innovation and technology transfer was seen as 
a way to combat the forces then working against the United 
States. Thirty years later, Bayh-Dole still elevates these 
efforts.
    The collective efforts encouraged under the Bayh-Dole Act 
have brought about the commercialization of many new 
technological advances that impact the lives of millions of 
people across the Nation.
    Prior to the enactment of Bayh-Dole, less than five percent 
of U.S. Government patents were commercially licensed. In 1980, 
390 patents were awarded to universities; by 2009, the number 
increased to over 3,000. In my home State of Illinois, the 
University of Illinois at Urbana-Champaign holds nearly 400 
patents and has created 61 companies.
    I look forward to hearing from our witnesses about how 
university technology transfer has evolved since the passage of 
Bayh-Dole, and the innovative activities and partnerships 
institutions are trying today to get more results to the 
public. We thank each of you for being here and look forward to 
your testimony.
    Let me just say that, unfortunately, Chairman Quayle was 
unable to attend today's hearing, but I am glad to be here to 
hear about the innovative approaches to technology transfer you 
are all here to discuss.
    I now recognize the gentlelady from Maryland, Ms. Edwards, 
for her opening statement.
    [The prepared statement of Mrs. Biggert follows:]

    Prepared Statement of Subcommittee Vice Chairwoman Judy Biggert

    Good morning. I would like to welcome everyone to today's hearing 
on the transfer of innovations that come from research funded by the 
Federal Government. The Federal Government invests more than $135 
billion each year in research and development activities, and a portion 
of that funding supports the majority of basic research conducted by 
universities. The transfer of knowledge from universities into the 
marketplace can have profound economic and societal impacts, so we are 
always loooking for more ways to encourage this process. I am glad our 
Chair decided to hold this important hearing so that our Subcommittee 
can learn about the innovative approaches that institutions across the 
Nation are taking to accelerate the transfer of federally funded 
research.
    In fact, tech transfer has long been a personal priority for me. To 
further this goal in the energy sphere, I drafted the Energy Technology 
Transfer Act, which was signed into law in 2008. This legislation 
creates jobs by accelerating breakthrough energy technologies out of 
national labs and into the marketplace. It was based on best practices 
developed by agricultural extension programs at the USDA.
    For American universities, however, tech transfer is governed by 
the Bayh-Dole Act. December 2010 marked the 30th anniversary of the 
enactment of the Bayh-Dole Act, which permitted universities to retain 
the intellectual property rights to inventions developed with federal 
funding.
    The Act was passed during bleak economic conditions, not too unlike 
those we are facing now. The United States was enduring an economic 
recession, declining productivity, and competition from Germany and 
Japan--all of this sounds familiar. The purpose of Bayh-Dole was 
simple: facilitate and support universities and small businesses in the 
commercialization of their inventions, allowing society to benefit and 
increasing U.S. global competitiveness. Promoting university-based 
innovation and technology transfer was seen as a way to combat the 
forces then working against the U.S. Thirty years later, Bayh-Dole 
still elevates those efforts.
    The collaborative efforts encouraged under the Bayh-Dole Act have 
brought about the commercialization of many new technological advances 
that impact the lives of millions of people across the Nation.
    Prior to the enactment of Bayh-Dole, less than five percent of U.S. 
Government patents were commercially licensed, In 1980, 390 patents 
were awarded to universities; by 2009, the number increased to over 
3,000. In my home State of Illinois, the University of Illinois at 
Urbana-Champaign holds nearly 400 patents and has created 61 companies.
    I look forward to hearing from our witnesses about how university 
technology transfer has evolved since the passage of Bayh-Dole and the 
innovative activities and partnerships institutions are trying today to 
get more research results to the public. We thank each of you for being 
here and look forward to your testimony.

    Ms. Edwards. Thank you, Madam Chair. And thank you to the 
Chairman also for calling this hearing on university technology 
transfer. And I want to thank our witnesses for joining us here 
today to share your perspective on how we can get more 
promising research out of the university labs and right into 
the marketplace.
    I am pleased that we are taking a serious look at this 
issue. I am convinced there are a number of ways that we can 
strengthen and improve technology transfer in this country. 
There are far too many good ideas out there in our 
universities, good ideas that have been developed through tax--
federal taxpayer support, but they languish. And as we continue 
to look for ways to strengthen our economy and secure our 
global competitiveness, I think it would be wise to focus on 
technology transfer.
    I am excited to hear from our witnesses today about some 
innovative approaches to technology transfer and to discuss the 
ways that the Federal Government can facilitate these 
approaches. I am particularly interested in hearing Mr. 
Rosenbaum's testimony today about our experience in Maryland.
    The truth is there are various elements that contribute to 
efficient and effective technology transfer. First, you have to 
be able to identify research with commercial potential. This is 
not an easy task. It can be a significant challenge since 
researchers are not necessarily equipped to recognize 
commercial potential and industry has limited exposure to all 
the research coming out of universities.
    At the same time, research may have commercial relevance in 
a space not initially envisioned by the researcher or 
recognized by industry. Finding better ways to identify ideas 
with commercial potential is a challenge but one that is 
critical to the entire technology transfer process.
    Once you have identified an idea or concept with commercial 
potential, you have to demonstrate its technical feasibility. 
This is often accomplished through some sort of proof-of-
concept research and development of a prototype. Unfortunately, 
there are limited financial resources for this sort of research 
and development. I am pleased that the Economic Development 
Administration has started funding these sorts of activities 
through its i6 Challenges, which are generally focused on 
accelerating technology commercialization. And I am also 
pleased that EDA announced an i6 Challenge just last week 
specifically on the development or expansion of proof-of-
concept centers.
    Once the technical feasibility of an idea or concept is 
proven, we have to get that technology out of the lab and into 
the hands of a private sector entity that can commercialize it. 
In some cases, this is accomplished by the researcher leaving 
academia to start his or her own business, but it is often 
achieved by the university licensing that technology to an 
outside company or entrepreneur. Unfortunately, we frequently 
hear from industry that licensing university-developed 
technology is far from easy or straightforward and that often 
bureaucratic red tape and unnecessary time delays frustrate 
and, in some cases, deter industry altogether.
    Our economy can't afford to let good ideas die in 
university labs. We need to figure out a way to do this more 
seamlessly, and I am eager to hear from our witnesses today 
about innovative ways of speeding up this process and making it 
more efficient.
    And finally, once the technology makes its way out of the 
lab, it needs to be commercialized. This may include large-
scale demonstrations and the development of functional 
prototypes, putting together business plans and management 
teams, and carrying out market validation activities. 
Certainly, these are private sector functions. However, when it 
comes to technology that has been developed with federal 
taxpayer resources, I believe the Federal Government may have 
an important role to play in facilitating the commercialization 
of these technologies. Our responsibility should be to ensure 
that federal taxpayers get the biggest bang for our buck and 
that technologies developed with federal resources make it 
across the finish line and into the marketplace.
    There are, unfortunately, limited resources for 
commercialization assistance for federally funded technologies. 
I hope today we can discuss whether there are appropriate 
leverage points for the Federal Government when it comes to 
commercializing these sorts of technologies. I hope our 
witnesses will challenge us to think more broadly.
    Mr. Chairman, I want to--or Madam Chair, I want to thank 
you again for holding this hearing, and I look forward to 
hearing from our witnesses. And I hope we will be following up 
this hearing with a separate hearing focused on technology 
transfer from federal labs. I am pretty confident that there 
are a number of Members on both sides of the aisle that are 
interested in taking a critical look at these efforts and ways 
that they can be strengthened and improved. And with that, I 
yield the balance of my time.
    [The prepared statement of Ms. Edwards follows:]

   Prepared Statement of Subcommittee Ranking Member Donna F. Edwards

    Mr. Chairman, thank you for calling this hearing on university 
technology transfer. And thank you to our witnesses for joining us here 
today to share your perspective on how to get more promising research 
out of university labs and into the marketplace.
    I am very pleased that we are taking a serious look at this issue. 
I am convinced that there are a number of ways that we can strengthen 
and improve technology transfer in this country. There are far too many 
good ideas out there in our universities--good ideas that have been 
developed through federal taxpayer support--that languish. And, as we 
continue to look for ways to strengthen our economy and secure our 
global competitiveness, I think it would be wise to focus on technology 
transfer. I am excited to hear from our witnesses today about some 
innovative approaches to technology transfer and discuss ways that the 
Federal Government can help facilitate these approaches.
    The truth is that there are various elements that contribute to 
efficient and effective technology transfer.
    First, you have to be able to identify research with commercial 
potential. This can be a significant challenge since researchers are 
not necessarily equipped to recognize commercial potential, and 
industry has limited exposure to all of the research coming out of 
universities. At the same time, research may have commercial relevance 
in a space not initially envisioned by the researcher or recognized by 
industry. Finding better ways to identify ideas with commercial 
potential is certainly a challenge, but one that is critical to the 
entire technology transfer process.
    Once you've identified an idea or concept with commercial 
potential, you have to demonstrate its technical feasibility. This is 
often accomplished through some sort of proof of concept research and 
the development of a prototype. Unfortunately, there are limited 
financial resources for this sort of research and development. I am 
very pleased that the Economic Development Administration has started 
funding these sorts of activities through its i6 challenges, whic are 
generally focused on accelerating technology commercialization, and am 
particularly pleased that the EDA announced an i6 challenge just last 
week specifically on the development or expansion of proof of concept 
centers.
    Once the technical feasibility of an idea or concept is proven, we 
have to get that technology out of the lab and into the hands of a 
private sector entity that can commercialize it. In some cases, this is 
accomplished by the researcher leaving academia to start his or her own 
business. But it is also often acheived by the university licensing 
that technology to an outside company or entrepreneur. Unfortunately, 
we have frequently heard from industry that licensing university-
developed technology is far from easy or straightforward and that, 
often, bureaucratic red tape and unnecessary time delays frustrate 
and--in some cases--deter industry altogether. Our economy can't afford 
to let good ideas die in university labs. We need to figure out ways to 
do this more seamlessly, and I am eager to hear from some of our 
witnesses today about innovative ways of speeding up this process and 
making it more efficient.
    And, finally, once the technology makes its way out of the lab, it 
needs to be commercialized. This may include large-scale demonstrations 
and the development of functional prototypes, putting together business 
plans and management teams, and carrying out market validation 
activities. Certainly, these are private sector functions. However, 
when it comes to technologies that have been developed with federal 
taxpayer resources, I believe that the Federal Government may have an 
important role to play in facilitating the commercialization of those 
technologies.
    Our responsibility should be to ensure that federal taxpayers get 
the biggest bang for their buck and that technologies developed with 
federal resources make it across the finish line and into the 
marketplace. There are, unfortunately, limited resources for 
commercialization assistance for federally funded technologies. I hope 
today that we can discuss whether there are appropriate leverage points 
for the Federal Government when it comes to commercializing these sorts 
of technologies.
    Mr. Chairman, thank you again for holding this hearing. I look 
forward to hearing from our witnesses on this important topic. I also 
hope that we will be following up this hearing with a separate hearing 
focused on technology transfer from federal labs. I am fairly confident 
that there are a number of Members on both sides of the aisle that are 
very interested in taking a critical look at these efforts and ways 
that they can be strengthened and improved. I yield back the balance of 
my time.

    Mrs. Biggert. Thank you, Ms. Edwards.
    If there are Members who wish to submit additional opening 
statements, your statements will be added to the record.
    [The prepared statement of Mr. Quayle follows:]

      Prepared Statement of Subcommittee Chairman Benjamin Quayle

    Good morning. I would like to welcome eeryon to today's hearing.
    Today we have the opportunity to survey some of the activities that 
universities and other organizations are undertaking to improve the 
transfer of federally funded research. I know there are some innovative 
activities regions are taking across the country, and I am looking 
forward to hearing about what things that have been found to work well.
    Passed in 1980, the Bayh-Dole Act enabled universities and 
nonprofit organizations to retain title to their inventions that result 
from federally funded research programs. In 2002, the Economist 
Technology Quarterly stated that the 1980 Bayh-Dole Act was 
``[p]ossibly the most inspired piece of legislation to be enacted in 
America over the past half-century...More than anything, this single 
policy measure helped reverse America's precipitous slide into 
industrial irrelevance.'' Even after 30 years under Bayh-Dole, the 
process of technology transfer is evolving. That's why we are here 
today, to understand how our Nation's universities and nonprofits can 
more effectively transfer federally funded technology to better 
society.
    University research is generally long term and exploratory in 
nature. Even when a university works to patent a discovery, it may be 
many years before the intellectual property proves to be a marketable 
success. The are many reasons universities create new innovations, 
including profit, but I believe both the technology transfer process 
and incentives to commercialize are more complex than simply making 
money. Economic reward is just one of many metrics I suspect these 
institutions are driven by to accelerate technology transfer.I look 
forward to hearing from our witnesses about their experiences with 
technology transfer and its evolution. Thank you for your presence and 
willingness to testify before us today.

    Mrs. Biggert. At this time, I would like to introduce our 
witnesses, and then we will proceed to hear from each of them 
in order.
    Our first witness is Dr. Todd Sherer, President of the 
Association of University Technology Managers and an Associate 
Vice President of Research Administration at Emory University.
    Next, we will hear from Ms. Catherine Innes, who is the 
Director of the Office of Technology Development at the 
University of North Carolina at Chapel Hill.
    Our third witness is Mr. Ken Nisbet. Mr. Nisbet is the 
Executive Director of Technology Transfer at the University of 
Michigan.
    Our final witness is Mr. Robert Rosenbaum, the President 
and Executive Director of the Maryland Technology Development 
Corporation.
    Again, thank you for being our witnesses this morning. As I 
am sure our witnesses know, spoken testimony is limited to five 
minutes each. After all of the witnesses, Members of the 
Committee will have five minutes each to ask questions.
    And I now recognize our first witness, Dr. Sherer, for five 
minutes.

          STATEMENT OF DR. TODD T. SHERER, PRESIDENT,

       THE ASSOCIATION OF UNIVERSITY TECHNOLOGY MANAGERS

    Dr. Sherer. Madam Chairwoman and Honorable Members of this 
Subcommittee, thank you for the opportunity to testify before 
you today on the important topic of transferring university 
technology transfer from lab to the marketplace. My name is 
Todd Sherer, and I am the President of the Association of 
University Technology Managers known as AUTM. AUTM is an 
international organization with more than 3,000 members, 
primarily university technology transfer professionals who come 
from over 300 universities, research institutions, and teaching 
hospitals.
    I also head the Technology Transfer Office at Emory 
University, and my office is responsible for managing a 
portfolio of around 1,000 biomedical inventions made by Emory 
faculty. We work closely with our faculty inventors to evaluate 
early-stage technologies for commercial potential, determine 
the best intellectual property protection strategy, and market 
our technologies through a variety of channels in the hopes of 
finding a corporate partner. If we find an interested company, 
then we negotiate appropriate contractual partnerships to 
ensure that our inventors, our universities, and taxpayers 
benefit from the ultimate products. After licenses are signed, 
we maintain relationships throughout the life of the agreement, 
sometimes insisting upon return of our technology should our 
partners decide to abandon its development.
    As a result of Emory's passion and commitment to 
commercializing its technology, over 90 percent of HIV-infected 
patients in the United States and Europe on lifesaving 
antiviral therapy take a drug developed by our researchers.
    In the decades leading up to the 1980 Bayh-Dole Act, the 
Federal Government accumulated title to approximately 28,000 
patents, of which fewer than five percent were licensed to 
companies for commercialization. Unless an exception was 
granted, the ownership of inventions was kept centrally at the 
federal agencies from which they were funded. The passage of 
the Bayh-Dole Act boldly changed government patent policy, 
providing ownership and control to any invention made with 
federal funds to the very universities and small businesses 
that made them.
    Since its passage, the Bayh-Dole Act has proven 
instrumental in recognizing that federal patent policy is an 
integral part of U.S. competitiveness and it is the envy of 
nearly every country in the world, as evidenced by similar 
legislation in a wide variety of countries, including South 
Africa, India, China, Japan, South Korea, and Taiwan. Its 
beauty is that it aligns ownership and control of patent rights 
to create incentives for universities, researchers, and 
companies to develop and invest in patenting and licensing 
their new technologies. Without local pride of ownership and 
control created by the Act, many of these discoveries would 
still be languishing on the shelf and their revenues would be 
returned to fund even more research.
    According to an article published in the journal Nature, 
``an invention made by an academic in the United States has a 
better chance of going to market than it does in other 
nations.'' Since the Bayh-Dole Act was passed, more than 5,000 
new companies have formed around university research, the 
majority of which are located in close proximity to the 
university.
    In fiscal year 2010, university research helped create on 
average 1.7 new companies a day. University technology transfer 
creates billions of dollars of direct benefits to the U.S. 
economy every year. In fiscal year 2010, universities helped 
create 657 new products.
    According to the former President of NASDAQ, an estimated 
30 percent of its value is rooted in university-based federally 
funded research results.
    Technology transfer is not perfect. After all, we work at 
the riskiest of all stages in the innovation pathway where 
funding and resources are hardest to find. The odds of any 
particular technology making it to market are astronomical, so 
figuring out what works has not been easy and has taken time.
    Despite the challenges of working at the discovery phase, 
the academic community and federal agencies continue to find 
better ways to manage innovations. Technology transfer offices 
are constantly adapting to changes in the economy, learning the 
best practices from each other, and understanding the 
marketplace. Technology transfer offices have expanded their 
service to help faculty create new companies. They are creating 
accelerators, finding gap funding, encouraging entrepreneurship 
by faculty and students, and rewarding that entrepreneurship. 
While TTOs focus on negotiating licenses, that is just the 
means to an end. The end is to get technologies out the door 
and into the market for the benefit of the public.
    Not all technology transfer offices have the same level of 
experience but they have more resources to turn to than ever 
before. Universities from across the country are already 
working with smaller tech transfer offices to help them improve 
their technology transfer function.
    AUTM will continue its commitment to providing training and 
education for technology transfer professionals for years to 
come. We will provide networking events for our members to 
share best practices and technology transfer as we all expect 
new practices to continue to emerge just as they always have. 
Our members must continue to strive to find new ways to reduce 
the barriers to getting our technology from lab to market. We 
believe that continued support for research at NIH, NSF, and 
other agencies such as the newly formed NCATS is the best way 
that the Federal Government can encourage even more 
commercialization of American technologies.
    AUTM, as well as other organizations, believe that the U.S. 
technology transfer system will continue to be the catalyst for 
innovation in the U.S. economy for many decades to come.
    Thank you.
    [The prepared statement of Dr. Sherer follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mrs. Biggert. Thank you, Dr. Sherer.
    Ms. Innes, you are recognized for five minutes.

          STATEMENT OF MS. CATHERINE INNES, DIRECTOR,

               OFFICE OF TECHNOLOGY DEVELOPMENT,

          UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

    Ms. Innes. Thank you. Good morning, Chairwoman Biggert, 
Ranking Member Edwards, and Members of the Subcommittee. Thank 
you for the opportunity to appear before you today to provide 
testimony on the challenging, unpredictable, and oftentimes 
rewarding process of moving good ideas from university labs to 
the marketplace. My name is Catherine Innes, and I am the 
Director of the Office of Technology Development at the 
University of North Carolina at Chapel Hill. I am responsible 
for patenting and commercializing promising new inventions 
arising from our research endeavors. My testimony today focuses 
on the implementation and success of the Carolina Express 
License Agreement, which is a one-size-fits-all approach to 
licensing technologies to UNC startup companies.
    In early 2009, UNC began internal discussions among faculty 
and research administrators on what could be done to stimulate 
and increase the volume of new companies starting around UNC 
technologies and how the process could be streamlined. We 
wanted to start more companies and help them become 
sustainable. However, we were constrained by limited financial 
resources and unable to invest in these ventures. Instead, we 
focused on finding ways to make the license process faster, 
easier, and more transparent so that startups could more 
readily get up and running.
    UNC formed a committee comprised of serial entrepreneur 
faculty members, licensing staff, general counsel, and a local 
venture capitalist to consider what we might do. They reviewed 
the terms of previous startups and determined the historical 
range of financial terms and equity positions, both at the time 
of license and at the point of a liquidity event. Our data 
indicated that all of our past deals had been actually very 
similar and that by the time an equity was liquid, the 
university's share was less than one percent. The committee 
arrived, then, at a set of financial terms that the 
stakeholders agreed would be fair to all parties and would not 
need to be renegotiated for the company to attract financing. 
Minimizing the need to renegotiate was an important objective 
as the negotiation process can be both time-consuming and 
costly for all involved.
    A significant factor in the successful launch of this 
program was the buy-in from three local law firms that worked 
with the majority of our startup companies. They agreed to 
forfeit the fees they would normally receive to negotiate 
individual deals with the university and recommend their client 
sign the express license. While in part altruistic, the firms 
all expect their businesses will grow in the long run as we 
increase the rate at which we are starting new companies.
    Another key feature of the express license is that it is 
optional. If a company wants a different deal, they are free to 
negotiate that deal with the university as usual. To qualify 
for the express license, the company must have a UNC faculty, 
student, or staff member as one of the founders and the company 
must submit a business plan for review and approval by the 
university.
    The financial terms of the license agreement are modest 
but, we believe, fair for the stage of development of the 
technologies being licensed. One of the most unique features of 
the agreement is that in lieu of taking equity, the university 
receives a cash payout of .75 percent of the value of the 
company at a liquidity event. Typically, universities take 
equity in their startup companies, but we felt the cash payoff 
when the company goes public or is acquired is much less 
burdensome than dealing with a stock issuance and we end up at 
the same overall value point.
    The full text of the Carolina express license and related 
program documents can be found on my office's Website, and I 
have provided that URL in my written testimony.
    As with any new and different approach, there are 
supporters and critics. Our motto was unique when first 
implemented because it offered the same set of terms to all 
startups regardless of technology. Many licensing professionals 
felt that the financial terms should vary by technology or 
should offer a greater return to the university. These are 
relevant points and questions each institution should ask in 
considering the implementation of a standard licensing program.
    We have found the program to be very effective and it 
serves our objective of starting more companies. In the 2-1/2 
years since inception, UNC has launched 19 startup companies 
around intellectual property. All but three used the Carolina 
express license. We have more than doubled the number of new 
companies forming each year. At this time, all these companies 
are still in existence, although most are struggling with 
fundraising.
    We have learned through this process that most of our 
companies cannot repay the university for patent expenses on 
time, and thus we must carry these costs for them for much 
longer than anticipated. This is straining our internal 
resources, but we believe starting companies is important and 
we continue to explore new ways to support this effort. Many of 
our companies have gotten started by winning SBIR grants and we 
very much value this program.
    In summary, I strongly believe that a standard licensing 
program can work for universities, particularly for licenses to 
startups. For a one-size-fits-all program to be successful, the 
university must be willing to settle for a fair deal rather 
than the most lucrative deal. It is also important to establish 
criteria for when the standard agreements can be used, and 
perhaps more importantly, when they cannot.
    Finally, to implement a standard agreement that is intended 
to work for many deals, it is essential for the university to 
gain the support and buy-in of those negotiating on behalf of 
the other side of the deal because just floating a standard 
that one party thinks is workable will not likely get much 
traction.
    Thank you again, Madam Chairwoman and Subcommittee Members, 
for the opportunity to appear before you today. I stand ready 
to answer any questions you may have.
    [The prepared statement of Ms. Innes follows:]


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    Mrs. Biggert. Thank you, Ms. Innes.
    Mr. Nisbet, you are recognized for five minutes.

                  STATEMENT OF MR. KEN NISBET,

                      EXECUTIVE DIRECTOR,

           UNIVERSITY OF MICHIGAN TECHNOLOGY TRANSFER

    Mr. Nisbet. Thank you, Madam Chair, for the opportunity to 
speak to you today on the important topic of technology 
transfer and the importance to the American public. I am Ken 
Nisbet, Executive Director of Tech Transfer at the University 
of Michigan.
    The University of Michigan has a well-deserved reputation 
for excellence and the breadth and depth of its research of 
activities with over $1.2 billion of research expenditures 
annually. While having a robust pipeline of research 
discoveries is an ingredient for tech transfer success, it is 
only one component of many. A critical factor is support from 
university leadership to provide the resources and 
encouragement for tech transfer and entrepreneurship. Our 
President, Mary Sue Coleman, our Executive Officers, our Deans, 
and others regularly communicate the importance of our tech 
transfer activities with our faculty, our students, our staff, 
and alumni.
    Each year, our faculty report to our office over 300 new 
discoveries that form a diverse portfolio of technologies and 
market applications. We enter into over 100 different 
agreements with our industry partners and annually and spin out 
an average of one new start up every five weeks, most of which 
stay in Michigan. We also strive to measure what is even more 
important--the impact of our technologies and our activities on 
our communities, our people, and our Nation.
    There are a lot of good ideas to enhance tech transfer, but 
it is important to tailor these initiatives to account for the 
advantages and the challenges of a particular region. I want to 
highlight three particular efforts that we believe are making a 
big difference at the University of Michigan.
    The first involves changes in investments we have made 
within our office and our university to improve our operational 
effectiveness. The second is using early stage development 
funding to reduce the technical and market risk of our early 
stage innovations. The third is enhancing our access to talent 
to speed the deployment of our technologies and the formation 
of our startups.
    Over the last 10 years, we have revamped our office culture 
by attracting and training tech transfer professionals with 
technical and market skills and an appreciation for creativity, 
risk-taking, and customer service. We have simplified our work 
documents and processes to make working with others more rapid, 
effective, and friendly. We have standardized agreements for 
some situations--for example, software and research tool 
licensing--but we find it important given the wide diversity of 
technology opportunities and business models to be flexible and 
nimble for the value propositions required by our partners.
    We have established a full-service venture creation 
capability with our office called the Venture Center to more 
effectively form great startups for entrepreneurs and our 
investors and to make it easier to do business with the 
university. We have changed university policies and practices 
to motivate our faculty to engage with industry and to 
participate in commercialization activities.
    We have formed broader industry research agreements with 
innovation partners such as Procter & Gamble, Dow, and Ford, 
and we have addressed industry needs for predictability and 
flexibility with a new program, the Michigan Research 
Advantage, that provides up-front license terms for future 
inventions that may be derived from industry-sponsored 
research.
    We have expanded the funding resources available for our 
early stage technologies and new startup opportunities. Our 
university has several translational funds that allow technical 
validation for emerging discoveries. One example is the Coulter 
Translational Fund for promising biomedical innovations created 
via a matched endowment from the Coulter Foundation.
    Complementing our translational funds, the university is 
reinvesting our tech transfer revenues into an internal gap 
fund that is generously matched with funds from the State of 
Michigan to address market validation and commercial readiness 
issues. And recently, we established a program called MINTS--
Michigan Invests in New Technology Startups--in which the 
university, alongside a qualified venture firm, is investing 
endowment funds in promising U of M startups.
    Having access to high-quality talent is a key ingredient 
for success, and we focused our efforts to create several 
effective talent initiatives. We have recruited and trained 
graduate students and post-docs to provide technology 
assessments and market analysis to enable our licensing 
professionals to make quicker decisions and find more potential 
partners. We have also pioneered a program to embed within tech 
transfer a team of seasoned entrepreneurs, our Mentors-in-
Residence, to assist our efforts. The result has been improved 
venture creation capabilities and a stream of high-quality, 
sustainable startups that are creating jobs and providing 
superior investment returns.
    And seeing the positive impact of our U of M talent 
programs over the last five years, we recently proposed and 
received State funding for a Tech Transfer Talent Network. With 
six other Michigan universities, we are sharing and creating 
talent tools, resources, and activities tailored to their 
regions to accelerate tech transfer success for their 
institutions.
    In conclusion, at the University of Michigan, we are firmly 
committed to continual improvement of our tech transfer 
capability and sharing of our findings to maximize the impact 
of research discoveries on our economy and our quality of life. 
As U of M President Coleman has said, ``universities bring 
ideas to life but it is technology transfer that gives them 
wings and lets them fly.''
    Thank you for this opportunity. I am happy to answer any 
questions.
    [The prepared statement of Mr. Nisbet follows:]


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    Mrs. Biggert. Thank you, Mr. Nisbet.
    Mr. Rosenbaum, you are recognized for five minutes.

               STATEMENT OF MR. ROBERT ROSENBAUM,

               PRESIDENT AND EXECUTIVE DIRECTOR,

          MARYLAND TECHNOLOGY DEVELOPMENT CORPORATION

    Mr. Rosenbaum. Thank you, Madam Chairwoman, Members of the 
Committee, for the opportunity to speak with you today. We have 
heard today so far from three folks with primarily academic 
focus. I bring a little bit different focus, never been 
employed by a university, always been in the private sector, 
and now am with a quasi-public entity. I am Rob Rosenbaum, 
President of the Maryland Technology Development Corporation, 
proud to be representing the State that was recently named 
number one for entrepreneurship in the country by the U.S. 
Chamber of Commerce and the home for many billions of dollars 
of federal research money, both in our universities and federal 
labs.
    As an intermediary organization, we look at ourselves first 
and foremost as partners to the tech transfer offices. There 
are a lot of elements that go into getting a business or 
technology into a business. Tech transfer is one of the steps. 
Intermediaries provide many other skills and opportunities that 
don't exist within the university offices and often don't exist 
within the entrepreneurs that are trying to commercialize these 
technologies. So it is intermediaries; it is we folks that can 
get in there and help them and teach them and train them on the 
things that they need to do.
    The other important difference for intermediaries versus 
other constituents and stakeholders in the process is that we 
are specifically and directly incentivized to do tech transfer, 
to create jobs, to create economic development. We are not 
there to create income for the universities, we are not there 
to put our names on patents, and we are not there to take the 
fame for successful IPO. We are there to create jobs and that 
is our primary role.
    One of the things that we help do is deal with the 
difficulties of university culture. And I think it is fair to 
say that universities have a very distinct culture in and of 
themselves, and the researchers within those universities have 
a particular headset in and of themselves. Primarily speaking 
and historically speaking--although it is changing--researchers 
within universities are very risk-averse. They enjoy doing 
research, they enjoy the comforts of their labs, they enjoy 
creating basic knowledge, and they have been incentivized to do 
this over the years.
    Universities are slowly changing their culture and changing 
the incentives to get researchers to be a little bit more risk-
taking. Programs such as sabbaticals to take job creation and 
job company formation to reality, programs that include tenure 
as--include commercialization as part of tenure tracks are all 
important. Also, the university culture is one of fairly 
complex and byzantine rules and regulations. Intermediaries 
help the entrepreneurs who have never even known the existence 
of tech transfer offices to understand what is going on, to 
help them understand what an express license is versus trying 
to negotiate their own. So we play an important role in that 
respect.
    We incentivize behavior. We believe in incentivizing 
behavior and we believe that the federal policies can do such 
things. We believe that activities such as job credits for job 
creation and commercialization on the commercial side, on the 
private sector side, would leverage public dollars with private 
dollars in order to introduce and exaggerate the activity of 
private sector organizations. We believe that there is an 
opportunity for grant set-asides for commercial enterprises to 
do tech transfer. SBIR programs are there to promote commercial 
activities, but they are not targeted at tech transfer. They 
could be targeted at tech transfer.
    Some of the samples and examples of these successes in 
Maryland and one of the programs that I think is known to the 
Committee Members is the Maryland Innovation Initiative, which 
is a new program that aggregates five research universities 
with a unique process of mining technologies and utilizing an 
intermediary to bring those technologies to the public and to 
bring the entrepreneurs together with those technologies.
    We have also had experience in forming foundations that can 
be an aggregator for private sector dollars to be brought to 
universities or federal labs in order to promote private-sector 
involvement and commercialization of technologies. We have 
many, many more examples, and we have created hundreds of 
companies and thousands of jobs and would be happy to answer 
any further questions you have on our specific successes or any 
other subjects.
    Thank you.
    [The prepared statement of Mr. Rosenbaum follows:]


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    Mrs. Biggert. I thank the witnesses for their testimony and 
reminding Members that Committee rules limit questioning to 
five minutes.
    The Chair will at this point open the round of questions. 
And I recognize myself for five minutes.
    This is a question for, I guess, whoever wants to answer. I 
hope you all do. In considering inventions to accelerate 
technology transfer, what do you set as your target metric? New 
businesses, products, patents, profit, citations? And then 
depending on the metric, how does the metric influence the 
intervention? Dr. Sherer, do you have any comment on that?
    Dr. Sherer. Yeah, it is a great question. The way I view 
that and the way I articulate it to my staff in my offices that 
we are dealmakers, and so the important thing for us to do is 
to get a deal done, whether that is with a startup company or 
an established company because that is the beginning of how we 
transfer our technology. There is a lot that goes on in a 
relationship with a startup or an established company once the 
license is signed.
    Mrs. Biggert. Okay. Ms. Innes.
    Ms. Innes. Thank you. Yes, much like Dr. Sherer, we have 
the same philosophy. Our goal is to get technologies licensed 
because if we can't get a commercial partner, those good ideas 
are going to sit on our shelves. So our most important metric 
would be getting that deal done, whether it be to a university 
startup or to an existing firm. So we look for technologies 
that have a market opportunity and try to position them and 
find the partner. So those are our most important activities.
    Mrs. Biggert. And Mr. Nisbet, you have had a lot of, it 
sounds like, companies and--companies that are well entrenched 
already that you have dealt with.
    Mr. Nisbet. Right, and our approach is similar that we do 
look for having agreements and not just an agreement--but a 
good agreement--with either an existing company or a startup. I 
think our measure is both to have a quantity of agreements 
showing that transfer of technology but also trying to measure 
the impact that the agreement and our technology would play in 
the American public. And we feel that is far more important 
than the revenue. If you do a successful job, the revenues will 
follow.
    Mrs. Biggert. Thank you.
    Mr. Rosenbaum.
    Mr. Rosenbaum. Yes, substantially different from the 
universities, our incentive is measured by economic 
development. Are we creating jobs? Are we creating revenues? 
Are we creating tax base? And one of the things we look at is 
capital that is brought into our State as a result of our 
activities. And we bring $43 for every dollar we spend back 
into the State. So that is a huge measure for us and our 
primary goal.
    Mrs. Biggert. And certainly job creation is very important 
to us, and thank you for what you are all doing.
    But should technology transfer be a priority for every 
university? Is it likely to be a profitable business for any 
but the major research institutions? Mr. Nisbet, I think you 
could speak to that.
    Mr. Nisbet. Right. That is a great question because I think 
that the potential of tech transfer at a particular institution 
is dependent on a number of factors. Obviously, you have to 
have a stream of quality research and researchers that form the 
pipeline for those opportunities, but I think the ecosystem 
also that the institution resides in is very important. So we 
have worked with our sister universities in Michigan trying to 
adapt some of the practices we have found that have worked in 
the Ann Arbor area where we tried to figure out a way to kind 
of influence things and augment their resources to do a better 
job.
    In the end, it is a very patient business and trying to go 
after it just for money is, I think, shortsighted because it 
takes so long. But the long-term potential of job creation and 
economic opportunity is very vital.
    Mrs. Biggert. Are there any other reasons for technological 
transfer to be important to an institution?
    Mr. Nisbet. There are tremendous side benefits to tech 
transfer besides the engagement and the attraction and 
recruitment of key faculty. It also is a wonderful way for 
students who are finding it more and more important for them to 
engage in these activities. So it is a wonderful learning 
opportunity. It is a great attraction opportunity. It has 
wonderful opportunities for engagement with the industry and 
other partners. It is a great way to engage with industry, 
which brings also great learning. So there is a number of 
reasons besides the direct tech transfer activity itself that 
brings benefits back to the institution and the region.
    Mrs. Biggert. Thank you.
    You know, with the research--and I know sometimes that the 
labs that--you know, the funding runs out. What happens? And 
this--you have got a contract, whatever, and a license. What 
happens if--or that the research just doesn't go anywhere?
    Ms. Innes. Those are very real questions. Thank you.
    We do our best to help the companies. If they are small 
companies, we help them get on their feet. We give them payment 
plans. We do everything we can to keep them moving forward 
because, I think, as my colleagues have said, we are really 
trying to see these technologies advance because we want to see 
an impact from our research. But it is very difficult. We spend 
money on patents that we end up not being able to license or 
that companies can't pay us for and that, unfortunately, is 
just a cost of doing this business. We try to make more good 
decisions than bad and try to choose wisely and invest wisely, 
and I think to a large extent we do. But there are 
difficulties. And again as we hit them, we try to work through 
them. And so we are pretty flexible in our licensing terms. We 
want to work with a company if they have hit hard times or 
cannot pay to try to find a solution and maybe it is, again, a 
longer term to pay us back.
    Mrs. Biggert. Thank you. My time is up.
    Ms. Edwards, you are recognized for five minutes.
    Ms. Edwards. Thank you, Madam Chair, and thank you to the 
witnesses.
    I mean I think it has really been clear that all of us 
agree that the Bayh-Dole Act was really transformational in 
terms of university research and moving toward 
commercialization, but in recent years, a number of very 
provocative ideas have been thrown out about ways to modify 
Bayh-Dole. And some of those include allowing the Federal 
Government to recoup some of its investment if a federally 
funded technology is successfully commercialized. Others 
include allowing researchers to choose a third party or 
themselves to negotiate license agreements for 
commercialization or establishing regional technology transfer 
offices. And of course there are others and so I wonder if each 
of you would just briefly comment on some of these concepts or 
others that would challenge the status quo and discuss why they 
are or are not good ideas. Dr. Sherer.
    Dr. Sherer. Thank you, Ms. Edwards. I will speak first to 
the concept of potentially allowing researchers to control or 
make a decision about who would manage their intellectual 
property, a concept which is sometimes referred to as ``free 
agency.'' I think that is a bad concept and the reason that I 
think it is is because it adds additional negotiation time to 
an already pretty burdensome process, because by definition you 
have to add at least one more negotiation to whatever 
negotiations are going to follow. And that is a negotiation 
between the home institution and the party that is going to now 
manage that intellectual property.
    I think it is best to keep incentives aligned between the 
university and the faculty member at which the invention was 
created. And I also think that that kind of a system could 
potentially--we could see more of our innovation move out of 
state because you tend to engage the experts and the money and 
the people around you where you are putting the deal together. 
And if it is being managed out of state or across the country, 
I would argue that that would be where things would have a 
tendency to be concentrated.
    Ms. Edwards. Thank you.
    Ms. Innes.
    Ms. Innes. Yes, thank you. I think a number of initiatives 
that would be very helpful. In particular I wanted to talk 
about the regional tech transfer offices. I think in areas 
where you have a number of smaller universities who may not 
have a large research base and can't really sustain an office 
that could be very helpful. Those are some initiatives we have 
talked about in North Carolina for our large university base 
where we have tech transfer offices in place at 6 of the larger 
of the 16 institutions.
    I am not in favor of free agency. I just don't see that as 
workable. I know I would have no capacity to take on 
innovations from another university, from a free agency. Times 
are tough; finances are tight. I am going to use my resources 
to support the best and brightest coming out of my own 
institution. So I think that is just not a workable situation 
for us. And honestly, I think most faculty--but very few--would 
be skilled negotiators for themselves. I think we offer a very 
value-added service and we are helping protect their interest. 
We are helping them find a good deal and a favorable deal so I 
think we add value in that process.
    So I think there are ways to enhance this and those would 
be--my focus would be helping the regional offices get created.
    Ms. Edwards. Thank you.
    Mr. Nisbet.
    Mr. Nisbet. I will also address that regional question. I 
think it is a good one, because I think one size does not fit 
all in terms of how you do it. Sometimes it makes sense to have 
something centralized within a region, but often I find that 
the hub-and-spoke model of cooperation is better. We have 
recently had some experiences because our state government has 
provided some funds to encourage just that, that partnering 
among some of the neighboring Michigan schools and it has 
worked very well, in particular helping to fund--find the 
talent and fund the talent that helps with the evaluation of 
new opportunities, to help with the venture creation 
activities, finding and prospecting for new licensees, 
especially in the execution of those relationships.
    And I think it is important to note, though, that we have 
found that the strength of those regional centers, the pride in 
their ownership, the links to their own alumni are very 
important to maintain. So that is one reason why I am in favor 
of a hub-and-spoke model to try to have the best of both 
worlds.
    Ms. Edwards. Thank you.
    Mr. Rosenbaum.
    Mr. Rosenbaum. I guess, with my background, I am going to 
follow the money. You mentioned the Federal Government 
recovering some of their investment in the research and my 
concern with that is there are different motivations for every 
entity and institution and money is a huge driver. And when you 
redirect money, you are going to redirect incentives and you 
are going to redirect efforts. And while it may be beneficial 
to see some of that money come back to the federal labs that 
have done that research, I don't think in the grand scheme of 
things it is going to be a significant number of dollars on the 
federal side but I think there are going to be some significant 
changes in behavior on the research side, on the university 
side that could be adverse. So I would be very worried about 
making changes like that.
    Ms. Edwards. Thank you. My time is expired. Thank you.
    Mrs. Biggert. Thank you. The gentleman from Illinois, Mr. 
Hultgren, you are recognized for five minutes.
    Mr. Hultgren. Thank you, Chairwoman Biggert.
    Thank you all for being here today. A couple of questions, 
first, Dr. Sherer, wondered with the AUTM annual licensing 
survey, I wondered what the biggest surprise you have found 
from AUTM and just wondering if you are seeing any trends that 
encourage you or anything that disturbs you really from the 
findings from AUTM, the--I guess the Association of University 
Technology Mangers annual licensing survey. So I wondered if 
you could give me any thoughts on that.
    Dr. Sherer. I would be happy to. We just completed 20 years 
of holding and conducting the licensing survey and had a chance 
to look over some of the trends of that data for the last 20 
years. We don't have 20 years worth of data points for every 
question within the licensing survey. The one result that I 
found most surprising was that if you look at the--and it is in 
my--the attachment of my materials. If you look at the rate of 
federal research funding over the last 20 years, you can see 
there has been a very steep and steady increase in federal 
funding and what I found amazing was how closely the number of 
new invention disclosures and errors that occur. Again, it is 
on a different scale but the shape of those lines and the 
increase of those lines is very similar. We have always said 
that the amount of federal funding drives the amount of tech 
transfer that we expect to see at our universities, but I 
didn't expect the data to mirror each other that closely.
    The other interesting thing is that everything sort of 
follows from it. As we get more inventions disclosures, we 
found more patents. As we found more patents, we get more 
issued patents. As we negotiate more licenses, we see more 
products on the market and we have--we are actually awaiting 
some new job data that is going to be released tomorrow at the 
BIO International meeting in Boston with calculations of jobs 
created as a result of the licensing revenue.
    Mr. Hultgren. Great, thank you.
    Want to open this up to any of you that would have some 
thoughts on this but one of my passions is again encouraging 
young people to go into research and science and wonder just as 
we are considering ways to help faculty and students transfer 
more of the technology that they conduct research on wondered 
from your perspective are younger faculty more open to spending 
time on technology transfer? Have you seen that institutions 
have built technology transfer into their tenure award system? 
Or what approaches could we do to--and that have you seen, to 
catch future faculty at earlier stages in their careers to 
encourage them in this process of technology transfer?
    Mr. Nisbet. Yes, I think that is a great question because 
we are seeing efforts to try to engage both the younger faculty 
in particular, but also some of the students, the post-docs and 
the grad students who are engaged in these research activities. 
They are very much interested in engaging in these both for 
career opportunities but also for learning and for their own 
networking purposes.
    At the University of Michigan, we would make it a point to 
try to reach every new faculty and to make sure that they are 
acquainted with our office and the advantages. We have been 
surprised that sometimes in recruiting trips from faculty to 
Michigan they are actually looking for our capabilities and it 
is one of the factors in their decision. That is always great. 
We are looking for ways to try engage students in particular in 
this through internships. The fellows program that I mentioned 
is a great way to bring in grad students and post-docs and 
introduce them to new opportunities and the thought process, 
the decision process that shows their attraction in the 
marketplace.
    And we are now trying to experiment with an opportunity to 
take post-docs who often have challenging academic career 
decisions and if they are interested in following a 
commercialization path through a new company that we have 
licensed or into an existing company to provide some funding to 
give them that path to see if that might be a career decision 
they would like to make. So all of those things are very 
important for the culture of the university, for the vibrancy 
of the region, and for our activities in tech transfer.
    Ms. Innes. I would also like to comment that we have done a 
number of programs as well at the university. We do factor in 
participation in the patenting and invention disclosure process 
as part of promotion and tenure decisions. I think that is very 
important to get our faculty engaged. And we are seeing a lot 
of activity towards this coming out of the departments. They 
are very interested in innovation. They are very interested in 
seeing an impact from their research.
    We have also developed a program for an entrepreneurship 
minor for students in the College of Arts and Sciences, and it 
is our most popular minor to date. We also have a program where 
we are teaching how to start a company through our business 
school and that is accessible to all faculty, students, and 
staff. It is in the evening and it is free so we are really 
trying to promote this.
    As part of our new innovative Carolina fundraising 
campaign, we also intend to--some of the money is going towards 
innovation faculty so that we can really extend and consider 
this opportunity.
    Thank you.
    Mr. Hultgren. I am going to ask one more question real 
quick. My time is running down, but I would love to get some 
quick comments on one last thing.
    Many of you have talked about programs that allow business 
people to come alongside faculty and to assist in the 
commercialization process here. Wondered if you could just 
briefly talk about best practices that you have seen to help us 
do that.
    Dr. Sherer. One area of the best practices is to have an 
entrepreneurial residence type of program where you bring a 
skilled industry expert into the university and let them spend 
x period time, maybe six months, and you work with them to meet 
with faculty and potentially find an opportunity that they 
could spin out into a company.
    Ms. Innes. We also use entrepreneurs and local 
businesspeople to help us make tough decisions if we are 
deciding on whether or not a technology we should continue with 
that if the licensing is stagnant. We gather their expertise, 
help us redirect the technology, help us find some way to help 
the company if necessary, a very valuable resource.
    Mr. Nisbet. And quickly, we took the approach of a mentor-
in-residence. We changed it because rather than follow one 
technology, we wanted them to have a portfolio of technologies 
like staff. It has been great with assessment, it has been 
great for faculty consulting, and it has really enhanced our 
capabilities.
    Mr. Rosenbaum. And finally, real quickly, before we fund 
any project that is a tech transfer or otherwise, we engage 
outside industry experts to help evaluate the viability of it 
so we are making sure there is a commercial viability before we 
spend the dollars.
    Mr. Hultgren. Well, thank you again. Thanks for your speedy 
answers there but appreciate it so much. Appreciate your being 
here and I yield back.
    Thank you.
    Mrs. Biggert. Thank you.
    The gentlelady from Oregon, Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Madam Chair.
    I have the privilege of representing a district in Oregon 
that includes part of what is known as the ``Silicon Forest.'' 
We have trees and more rain. The important work that is 
conducted by our high tech sector there is really exciting. Of 
particular importance to the State is the Oregon Nanoscience 
and Microtechnologies Institute, which is affectionately known 
as ONAMI. It is a Signature Research Center that is an 
academic, business, and government collaboration that grows 
research volume and commercialization in the broad area of 
nano- and microscale science and engineering.
    Since its inception in 2003 and through last year, they 
have leveraged more than $185 million in federal and private, 
created 21 startups with $70 million in venture and capital 
funding. They employ 86 full-time people and support another 
1,700 jobs through research grants. They have created $290 
million in revenue and filed 211 invention disclosures and 
received 21 patents in nanoscience and microtechnology. So I 
can tell you from looking at this record that they have been a 
key player in our community.
    So I would like to ask our witnesses how do you work with 
any external partners like ONAMI to accelerate 
commercialization?
    Dr. Sherer. Well, I can't resist taking that question, 
because I hail from Oregon myself and ran the tech transfer 
program at the University of Oregon and Oregon Health Sciences 
University where I was born and raised before coming to Georgia 
in 2003. So I missed ONAMI and I know a number of great things 
have happened since I left the State.
    One of the things that we do in Georgia and do quite 
successfully--and it is similar to what you are describing--is 
we work with the Georgia Research Alliance, which is money that 
comes out of the State and helps provide valuable risk capital 
for early stage projects with the goal of creating new 
companies that are going to build a workforce in Oregon. In 
order to do that, we not only sit down with experts at the 
Georgia Research Alliance, but through that program, we engage 
some of the entrepreneurs I was talking about a moment ago. And 
we also work closely with sister institutions throughout the 
State because we all compete and participate in this Venture 
Lab program.
    Ms. Bonamici. Thank you.
    Anyone else.
    Ms. Innes. Similarly, we work very closely with the biotech 
sector in North Carolina. We have the North Carolina Biotech 
Center. They are helping us with technology transfer grants, 
with loans to startup companies, and a number of programming to 
foster the innovation coming out in the large bioscience sector 
in our region.
    Ms. Bonamici. Terrific.
    Mr. Nisbet. In a similar vein, we have an organization 
called Ann Arbor SPARK, which is a public-private entity that 
is a collaboration with the university and with government and 
industry that actually industry was formed as a result of a 
recommendation from my Tech Transfer National Advisory Board 
that were looking for ways to enhance our tech transfer 
performance. And we talked about some of the ecosystem 
advantages that we were lacking.
    We have a very close relationship. We serve on the board. 
They focus on things that we also focus on--business 
development and traction, business acceleration, talent and 
funding, and of course marketing of a region. So it is a very 
close collaboration. It also has an extension into our state 
government with our Michigan Economic Development Corporation. 
So very similar outcomes, slightly different format.
    Ms. Bonamici. Excellent.
    Mr. Rosenbaum. And I daresay TEDCO is one of those 
aggregators and accumulators of skills and technologies. We 
actually--because we are not aligned with a specific 
university, a specific corporation, or a specific interest or 
stakeholder, we can actually aggregate and do aggregate 
resources from around the State and are able to convene groups 
of folks that wouldn't otherwise be able to get together. We 
sit on the boards of every incubator in the State. We sit on 
the board of every tech council in the State. We are involved 
with every tech transfer office in the State both federal and 
university. And we very often and easily can bring a cross-
section of all those constituents to the table in order to 
collaborate in a very unthreatening manner.
    Ms. Bonamici. Terrific.
    And just as a follow-up to the earlier response about how 
do we inspire and involve especially the students--and know Dr. 
Sherer will be proud of this--the University of Oregon has a 
technology entrepreneurship program. It is a year-long program 
in which business, law, and science graduate students work 
together to evaluate new technologies for commercial potential 
and then they develop a business plan. It has led to the 
creation of several successful companies since its inception in 
2003. So that is a good partnership of bringing groups 
together.
    And I am almost out of time, but I wanted to ask Mr. 
Nisbet. You mentioned that the University of Michigan has 
changed policies and practices to motivate faculty to engage 
more with industry. Can you talk about the challenges that 
researchers face when engaging with industry and participating 
in commercialization activities?
    Mr. Nisbet. Yes. Often it is because of the nature of their 
research interests and the interest of the organization that is 
from industry. What we have found, actually, it wasn't so much 
the terms that were really important; it was the predictability 
and the timeliness as you mentioned. So that is why we formed 
this recent initiative called the Michigan Research Advantage 
and we--it is again optional and sometimes the industry does 
not want it. But what we try to do is to come up with a way of 
predetermining the license terms before the invention is even 
created, which of course is quite difficult. But we find that 
when we bound the opportunities and bound their cost, it would 
lead to a much richer relationship with industry, which leads 
to a lot of other advantages.
    Ms. Bonamici. Thank you very much.
    I will yield back.
    Mrs. Biggert. Okay. The gentleman from New Mexico, Mr. 
Lujan, is recognized for five minutes.
    Mr. Lujan. Thank you very much, Madam Chair, and appreciate 
you calling this hearing.
    Dr. Sherer, I very much appreciate you bringing to light 
the correlation behind the investment into tech transfer and 
the number of licenses that are being yielded. Sometimes we 
don't have to look far to see the importance of investment to 
tech transfer. And I think we all certainly agree, including 
most of us on this Committee, about the significance of what 
tech transfer can yield for the United States economy. Does 
everyone here--is there anyone that would disagree with the 
statement that the future of the economy in the United States 
can be strengthened through more robust investments and 
collaboration with the Federal Government, universities, and 
our national labs, and the private sector in developing tech 
transfer?
    I appreciate that because this is something that if the 
United States was serious about--and I will just note for the 
record that no one disagreed with that, Madam Chair--the 
seriousness behind this is what can we do to turn this up? 
Herein lies an opportunity where we have seen the loss of 
manufacturing in the United States or even on that assembly 
line, on the frontline the innovation yields that we reap that 
were highlighted in a book ``Make it in America'' by the former 
CEO of Dow Chemical--or the CEO from Dow Chemical talks about 
the need to be able to bring that back. But in the realm of 
tech transfer specifically, what are the right metrics to use 
in judging the success of technology transfer? Just looking at 
the number of patents and licenses is not anything sufficient 
to understand the effect on the economy. And also, wouldn't it 
be helpful to have longitudinal studies that would look over 
time at the impacts of technologies? Ask anyone. Mr. Rosenbaum.
    Mr. Rosenbaum. Yes. We actually measure our tech transfer 
programs, not by the number of licenses because every project 
we fund is a tech transfer license, but we track our companies 
longitudinally for job creation, total revenue tax base, and 
are proud to say that with the right support these young 
companies can beat the averages. We have 82 percent of our 
companies still in existence after five years, which is off the 
charts compared to most startup statistics in the country.
    Mr. Lujan. Mr. Nisbet.
    Mr. Nisbet. I think that is a very important point that we 
also try to--I think that quantity is important by the way. The 
number of agreements, number of startups does show that the 
number of shots on goal, but it is also important to measure 
the impact of what occurs. And I think part of it is going to 
be to follow on job opportunities and tax rates. That is a very 
long-term process though and it is very difficult to measure 
that when your technologies go into existing companies, which 
is common.
    Instead, what we try to do is to tell stories, show stories 
of the inventors, of the inventions, of the technologies, and 
the companies and try to show the impact on the American 
people. I think that is one great way to motivate people. And 
in the end what you are trying to do is to promote more 
engagement which what you want to do is have some very careful 
ways of marketing and reaching to all of your channels, 
including your alumni which are quite valuable to get them to 
work with the universities and to get your technologies out 
into the marketplace.
    Dr. Sherer. I would just add that I have always felt like 
new products on the market are the ultimate validation of any 
tech transfer program because that is really what it is all 
about and used to think that it didn't really matter whether it 
was a startup or an established company because it is just a 
means to an end and the end is to get--the end goal is to get 
products on the market. But in this jobless economy, talking 
about jobs has become much more important.
    We do know from an old BIO study that about 279,000 jobs 
were created between 1996 and 2007 as a result of licensing 
revenue and the products put on the market through universities 
and hospitals. And so I would still advocate that products are 
a very important metric that we track and that we need to get 
deals done so that our partners can get products on the market.
    Ms. Innes. I would emphasize that it is also--I agree with 
everything that we have said. It is here on the--with my 
colleagues. It is important to get the products on the market. 
Absolutely that is the number one. Licensing is a measure of 
how well you are reaching your contacts. But I think it is also 
important to recognize this is an extremely long-term process, 
especially if you are in early stage therapeutics and biotech. 
So the return on investment is likely to come 10, 15, even--
years later. So it is important to recognize it is a number of 
things that have to come together. It is not one metric or 
another.
    Mr. Lujan. Thank you. And I have some other questions I 
will be submitting to the record, but given the--we have heard 
a little bit about SBIR today. We don't talk much about STTR, a 
program that has been terribly neglected by the Federal 
Government when I would suggest the importance of what we could 
be doing with small businesses around small business technology 
transfer programs. Could STTR be reprogrammed to be able to 
better work with small businesses, universities, and encourage 
collaboration with our national labs to close that gap to have 
better yields associated with technology transfer? Anyone.
    Mr. Nisbet. I think absolutely it does and it is--and one 
is obviously because of the funding. As my colleague mentioned, 
you know, follow the funding and that does create incentives. 
But it is also I think that engagement. It has to be a 
carefully crafted opportunity that is not just finding funding 
for the discovery purpose itself but to try to have that 
partnership that whatever discoveries occur because of that 
have a place in the marketplace. So it has to have a market 
awareness and validation aspect to make sure that it is going 
to be successful. But I think it definitely could be a valuable 
part.
    Mr. Lujan. Anyone else? Dr. Sherer.
    Dr. Sherer. Yeah, I would just argue that we use the STTR a 
lot as in--sometimes we use SBIR just sort of loosely to meet 
those two programs. But we work very closely with our startup 
companies to help them submit SBIR as well as STTR 
applications.
    Mr. Lujan. Very good. Thank you very much.
    Thank you, Madam Chair--Mr. Chairman.
    Chairman Hall. [Presiding] Gentleman yields back, I 
presume?
    Mr. Lujan. Yes.
    Chairman Hall. Chair recognizes Mr. Lipinski, the gentleman 
from Illinois.
    Mr. Lipinski. Thank you, Mr. Chairman.
    I think that this is one of the most important hearings 
going on right now up here because everyone wants to know the 
answer to the question where are the jobs going to come from in 
our country? And there are great concerns over that and I 
certainly think that we need to be doing more to leverage the 
great research universities of our nation and also make sure we 
do what--all that we can to get the return on investment for 
all of the federal dollars that go into research in our Nation.
    So let me start out with--there are a lot of different 
questions because I think this is critically important. But I 
want to first talk about the National Science Foundation 
program called the Innovation Corps or I-Corps. And the purpose 
of the I-Corps--it is a new program at NSF. It is to take 
individuals who have received NSF funding for research before 
and to teach them how to be entrepreneurs, essentially how to 
commercially develop their ideas. Are any of you familiar with 
the I-Corps program? I just wanted to know--I see Mr. Nisbet 
nodding his head. Do you have any comments on the value of the 
program or suggestions to improve it? So let me start, Mr. 
Nisbet.
    Mr. Nisbet. In our case it is fairly new. We are 
establishing an I-Corps center in Ann Arbor for the Midwest to 
provide that training that is associated with the I-Corps 
program. The one thing I find most valuable is--it is twofold. 
The focus on market awareness and understanding the market 
needs before getting too far into the funding that typically 
occurs through NSF grants and others; and secondly is 
developing the entrepreneurial support and the mentorship to 
try to provide some early stage guidance to those projects. But 
I think it has the potential to--one, to attract more people 
into the whole area of trying to commercialize research but 
also to put it in a more focused path towards a real market 
need.
    Mr. Lipinski. Well, I was hoping Mr. Nisbet was familiar 
with it since July 16 is one of a--that starts at--another 
round that starts at Michigan. Thank you.
    Anyone else? Mr. Rosenbaum.
    Mr. Rosenbaum. Yes, I would just like to say that I-Corps 
as well as many other entrepreneurship programs around the 
country and most universities today are very important but they 
are just the first step of getting products to market. A 
business needs to mature and I find that a lot of the 
entrepreneurship programs teach folks how to start a business 
but don't necessarily teach them how to grow a business and 
manage a business. So I think that the I-Corps program is great 
but we are going to need some follow-on support behind it if we 
are going to have some long-term success. As we have said, 
these things don't happen in a year or two years. Sometimes 
they take ten years. And an entrepreneurship program talks 
about the first year of life.
    Mr. Lipinski. Anyone else.
    Move on to another issue Mr. Rosenbaum had mentioned that 
Maryland Innovation Initiative supports the use of funds for 
early stage proof-of-concept and prototyping work. I was able 
to get language into the SBIR reauthorization last year that 
grants authority to NIH for a proof-of-concept program. What--I 
am going to ask everyone on the panel. What are your thoughts 
on the early stage funding for proof-of-concept programs? Is it 
something that all federal agencies should be exploring? So I 
will start with Mr. Rosenbaum.
    Mr. Rosenbaum. Yes, proof-of-concept is important, but one 
of the unique elements of the Maryland Innovation Initiative 
and other programs that TEDCO has had is that we don't fund 
those proof-of-concept projects until we know there is a market 
availability and viability for the product. A challenge with 
federal lab in particular is they don't have resources to look 
outside at market needs. So you will need a third party to 
validate a market need and then absolutely fund that proof of 
concept for that research. But I would hate to see proof of 
concept funds going to a dead-end product.
    Mr. Nisbet. We have had some great experiences with the 
Coulter Translational Fund that we have operated at the 
University of Michigan for about five years. We have addressed 
that issue of the market validation by actually closely 
coupling the project management resources that were involved 
with shepherding the inventions and the work that was going on 
in the lab with work--with insider tech transfer office for 
doing the market awareness and assessing the market needs. They 
also used a board of directors, a council to help steer those 
projects on a quarterly basis so the results we saw was much 
accelerated projects with better decision-making and some real 
market successes. We think that that early stage funding, 
although not very large, can go a very long way in ensuring 
success.
    Ms. Innes. I think it is a tremendous idea to support the 
proof-of-concept center and proof-of-concept funding. This is 
an area that is really important, especially in these long-term 
development projects such as early stage therapeutics. We 
really need to get more information before you can tell if they 
will be able to address the market they are attempting to serve 
and this proof-of-concept center would be tremendous.
    Dr. Sherer. I would just add that the single most common 
feedback we get from potential licensees is the technology is 
too early. So proof-of-principle, proof-of-concept funding is 
the gating factor to getting more technology to a go-or-no-go 
decision point.
    The other thing I would add is that too often proof-of-
principle funds provide the same level of funding for life 
sciences and physical sciences type of inventions, and it takes 
a lot more money to get a life science invention to a proof-of-
concept stage.
    Mr. Lipinski. Thank you for your testimony. I yield back.
    Chairman Hall. The gentleman yields back.
    I don't see anyone else that needs to testify or wants to 
testify but I want to thank you for your time, and thank you 
for timely presenting your testimony to where we could be ready 
to ask you the proper questions. And thank you for the time it 
took to travel here and you have been very generous. And with 
that, I would ask you that we may ask you to respond to some of 
the things in writing we send you, to timely do that if you 
can. There will be others that aren't here. The other empty 
chairs indicate that they have got other hearings and things 
that are going on now but they are interested in your testimony 
and they are appreciative of your testimony and may have some 
other questions to ask you.
    Mr. Lujan. Mr. Chairman.
    Chairman Hall. Yes, sir.
    Mr. Lujan. Because there were not a lot of folks that came 
to the Committee hearing today, is it possible to get another 
round of questions?
    Chairman Hall. I don't think so. Do you have any other 
questions?
    Mr. Lujan. I do, Mr. Chairman.
    Chairman Hall. All right. I will recognize you for how many 
minutes?
    Mr. Lujan. You can give me two, Mr. Chairman.
    Chairman Hall. I will give you five minutes.
    Mr. Lujan. Appreciate that, sir.
    Chairman Hall. I will give anybody else time if they have 
questions they really want to ask.
    Mr. Lujan. I appreciate that, Chairman, and thank you for 
calling this hearing. As I said earlier, I hope that we are 
able to have a similar discussion when it comes to natural 
labs--national labs and the technology transfer associated with 
the relationships with our universities as well.
    There is a program that recently was granted to one of the 
universities of the United States where there is a 
collaboration around entrepreneurship training. I appreciate 
the recognition of what has been done to introduce 
entrepreneurship into undergraduate programs but also making 
sure that across disciplines--engineering, medical fields--that 
we are including entrepreneurial studies to see what we can do 
there.
    Mr. Chairman, we have encouraged the entity associated with 
the responsibilities with Epicenter that they invite Members of 
Congress to be able to put together an entrepreneurship 
training so that way we begin to be able to think outside of 
the box associated with policy as well.
    But specifically, Dr. Sherer, I am interested in the role 
of the Federal Government in funding transitional research 
beyond basic research to bridge the valley of death and help 
mature promising new technologies. There already exist a number 
of such federal programs with ARPA-E and with DARPA. Now, we 
begin to see the DHS S&T directorate as well beginning to take 
shape to spur innovation in particular sectors. However, there 
is not a lot of promising technologies--or there are a lot of 
promising technologies that don't necessarily fit into those 
programs necessarily from a top-down approach. What are your 
thoughts associated with the importance of strengthening the 
Nation's economic competitiveness from a bottom-up technology 
transfer approach?
    Dr. Sherer. There are a lot of different directions I could 
go with that question. One of the challenges I think with 
translational funding is--and I think it is what you were 
alluding to--is there are pockets of it and you can participate 
in this particular one if you happen to come out of a 
particular area and maybe this one over here--excuse me--if you 
are in engineering or something of that sort. So not every 
technology necessarily has a route or a path or the same path 
and access to translational research funding.
    But the other thing that I fear we are going to abandon in 
these times that we are in is just the need to continue to 
focus on the fundamentals and invest in the fundamentals. And 
we need to have properly staffed tech transfer offices and we 
need adequately sized patent budgets. The good news is is if--
again if you look at the amount of data, it hasn't started to 
really taper off. It is in a few categories. If federal funding 
goes down, it will be interesting to see if that disclosure 
rate goes down and then everything else falls--flows from 
there.
    So we don't yet--so the good news is is despite what is 
going on in the economy, tech transfer activity has been strong 
even over the last two or three years. I don't know what the 
next two or three will look like.
    Mr. Lujan. Appreciate that.
    Mr. Rosenbaum, I am very intrigued and supportive of the 
Maryland Innovation Initiative, so congratulations there, in 
part because there are some similarities in this area between 
Maryland and New Mexico and having a large number of 
researchers yet a relatively low degree of entrepreneurial 
activity that we are hoping to spur up. We have two national 
labs. We have the Air Force Research Labs, Air Force Nuclear 
Weapons Center, in conjunction with Kirtland Air Force Base 
where work was done with Sandia to the Satellite Operations 
Office, three bases from a military perspective that the energy 
directive programs, with Boeing, things of that nature, but yet 
we are not seeing the promise there.
    Over what time frame does the State of Maryland expect its 
innovation initiative start yielding a positive return on its 
$5 million investment? And what are the key factors in making 
it a success? And what is the role of the Federal Government to 
support that initiative?
    Mr. Rosenbaum. Thank you. The key factor is some of the 
uniqueness in the way it has been structured. There are five 
universities participating, and all five universities will have 
a modified version of an entrepreneur in residence. We are 
calling them site miners because there will be multiples from 
each university and they will be cross-discipline and they will 
be charged with collaborating amongst each other and going to 
each other's universities to see pieces that may be able to be 
put together to create a whole solution. Much of what goes on 
in medicine today, for instance, is as much involved in IT as 
it is involved in biology. So having cross pollination across 
the disciplines is a key success factor there.
    TEDCO's history with doing proof-of-concept projects is 
that we get about 25 percent of our projects to turn into 
companies. We get about 40 percent of them end up licensing 
technologies and about 25 percent turn into companies. So with 
our $5 to $6 million budget, once we are up and fully running, 
we expect to be funding between 40 and 45 projects a year so we 
expect to be spawning 10 to 15 new companies a year out of 
that. And we think that that will start in year two.
    Mr. Lujan. Mr. Chairman, I appreciate your graciousness in 
the recognition of more time. And with that I yield back.
    Chairman Hall. The name of Lujan in New Mexico is very dear 
to me, and that is why I give you 10 minutes and everybody else 
gets five. If there are no further questions, the witnesses are 
excused. And for any additional comments and statements that we 
need from Members, you can do it by writing to them.
    And at this time we are adjourned.
    [Whereupon, at 11:14 a.m., the Subcommittee was adjourned.]

                   Answers to Post-Hearing Questions




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                   Answers to Post-Hearing Questions
                   Responses from Dr. Todd T. Sherer


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