Intellectual Property: Federal Agency Efforts in Transferring and
Reporting New Technology (31-OCT-02, GAO-03-47).
The federal government is a primary sponsor of research conducted
in the United States, expending during fiscal year 2001 $19.4
billion for research performed by federal employees and $62.2
billion for research conducted under contracts and grants. Some
of this research leads to the development of technology that can
be patented, licensed, and made available to the public through
the introduction of new products and processes. In the past,
however, there have been concerns that new technologies developed
under federal research projects were not being properly
translated into practical use. In response, Congress has made
attempts through legislation over the past two decades to ensure
that federally sponsored inventions were being transferred to the
private sector where they could be commercialized. Federal
agencies are identifying, patenting, and licensing inventions
created in their own facilities through technology transfer
programs that vary in design, approach, and measurable output.
With respect to design, some agencies have centralized technology
transfer programs, while others have decentralized programs, and
still others have components of both. From an approach stand
point, the agencies differ on what they will patent and the types
of licensing arrangements they will enter. Perhaps the greatest
diversity among the agencies is in their output based on
statistics provided by the nine federal agencies with internal
research budgets of at least $500 million in fiscal year 2001. In
total, these agencies reported 3,676 new inventions, 1,585
patents issued, and $74.5 million in licensing revenues during
fiscal year 2001. Federal agencies did not fully comply with the
requirement of the Technology Transfer Commercialization Act of
2000 that they submit reports on their technology transfer
activities to the Office of Management and Budget and the
Department of Commerce as a part of their fiscal year 2003 budget
requests. Although four of five agencies reviewed for GAO's 1999
report have taken some steps to improve contractor and grantee
compliance with reporting requirements under the Bayh-Dole Act,
these efforts have not addressed underlying problems--such as
duplication in reporting requirements--GAO noted in that report.
Agency officials said that they had not been able to standardize,
improve, and streamline the reporting process itself because, as
GAO noted in the 1999 report, this would require congressional
action.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-47
ACCNO: A05443
TITLE: Intellectual Property: Federal Agency Efforts in
Transferring and Reporting New Technology
DATE: 10/31/2002
SUBJECT: Federal agencies
License agreements
Licenses
Patents
Reporting requirements
Research and development
Technology transfer
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-03-47
Report to Congressional Committees
United States General Accounting Office
GAO
October 2002 INTELLECTUAL PROPERTY
Federal Agency Efforts in Transferring and Reporting New Technology
GAO- 03- 47
Page i GAO- 03- 47 Transferring and Reporting Technology Letter 1
Results in Brief 3 Background 5 Federal Technology Transfer Programs Vary
in Design, Approach,
and Output 9 Agencies Did Not Fully Comply with the Reporting Requirements
of the Technology Transfer Commercialization Act of 2000 23 Agency Actions
to Improve Contractor and Grantee Reporting
under the Bayh- Dole Act Do Not Address Underlying Causes of Noncompliance
29 Conclusions 34 Recommendations for Executive Action 34 Agency Comments
and Our Evaluation 35
Appendix I Scope and Methodology 38
Appendix II Federal Obligations for Research and Development, Fiscal Year
2001, for Nine Selected Agencies 40
Appendix III Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies 41
Appendix IV Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001 65
Appendix V Summary of Guidelines for Agency Reporting under the Technology
Transfer Commercialization Act of 2000 76 Contents
Page ii GAO- 03- 47 Transferring and Reporting Technology Appendix VI
Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000 80
Appendix VII Differences in Statistics Provided under the TTCA of 2000 and
Statistics Provided to GAO by Nine Agencies 86
Appendix VIII Options to Improve Compliance with Reporting Requirements
under the Bayh- Dole Act 89
Appendix IX Comments from the Department of Commerce 93
Appendix X GAO Contacts and Staff Acknowledgments 96
Tables
Table 1: Invention, Patenting, and Licensing Statistics by Agency for
Fiscal Year 2001 65 Table 2: Invention, Patenting, and Licensing Activity
by the
Agricultural Research Service for Fiscal Years 1997- 2001 67 Table 3:
Invention, Patenting, and Licensing Activity by the
Department of the Air Force for Fiscal Years 1997- 2001 68 Table 4:
Invention, Patenting, and Licensing Activity by the
Department of the Army for Fiscal Years 1997- 2001 69 Table 5: Invention,
Patenting, and Licensing Activity by the
Department of Energy for Fiscal Years 1997- 2001 70 Table 6: Invention,
Patenting, and Licensing Activity by the
National Aeronautics and Space Administration for Fiscal Years 1997- 2001
71 Table 7: Invention, Patenting, and Licensing Activity by the
National Institutes of Health for Fiscal Years 1997- 2001 72 Table 8:
Invention, Patenting, and Licensing Activity by the
National Oceanic and Atmospheric Administration for Fiscal Years 1997-
2001 73
Page iii GAO- 03- 47 Transferring and Reporting Technology
Table 9: Invention, Patenting, and Licensing Activity by the Department of
the Navy for Fiscal Years 1997- 2001 74 Table 10: Invention, Patenting,
and Licensing Activity by the U. S.
Geological Survey for Fiscal Years 1997- 2001 75 Table 11: Summary of
Department of Commerce Guidelines for
Statistical Information to be Included in Agency TTCA Reports 76 Table 12:
Collaborative Relationship for Research, Development,
and Demonstration, Fiscal Year 2001 80 Table 13: Invention Disclosure and
Patenting, Fiscal Year 2001 80 Table 14: New, Active, and Terminated
Licenses during Fiscal
Year 2001 81 Table 15: Active Licenses That Had Royalty Income, by Type,
Fiscal Year 2001 81 Table 16: Income from Licenses by Source, Fiscal Year
2001 82 Table 17: Characteristics of Earned Royalty Income Received,
Fiscal Year 2001 83 Table 18: Disposition of License Income, Fiscal Year
2001 84 Table 19: Time Elapsed between Application and License
Agreement 85 Table 20: Differences in Statistics Provided to U. S.
Department of
Commerce and Statistics Provided to GAO for Invention Disclosures, Fiscal
Year 2001 86 Table 21: Differences in Statistics Provided to U. S.
Department of
Commerce and Statistics Provided to GAO for Patents Issued Fiscal Year
2001 86 Table 22: Differences in Statistics Provided to U. S. Department
of
Commerce and Statistics Provided to GAO for Newly Executed Licenses,
Fiscal Year 2001 87 Table 23: Differences in Statistics Provided to U. S.
Department of
Commerce and Statistics Provided to GAO for Licenses That Had Income,
Fiscal Year 2001 87 Table 24: Differences in Statistics Provided to U. S.
Department of
Commerce and Statistics Provided to GAO for Income from Licenses, Fiscal
Year 2001 88
Figures
Figure 1: Invention Disclosures, Patents Received, and Licenses Executed
by Nine Federal Agencies, Fiscal Years 1997 through 2001 13
Page iv GAO- 03- 47 Transferring and Reporting Technology
Figure 2: Total Royalty Income for Nine Federal Agencies, Fiscal Years
1997 through 2001 14 Figure 3: Invention Disclosures for Nine Federal
Agencies, Fiscal
Year 2001 15 Figure 4: Patent Applications for Nine Federal Agencies,
Fiscal
Year 2001 16 Figure 5: Patents Issued to Nine Federal Agencies, Fiscal
Year 2001 17 Figure 6: Patents in Force as of September 30, 2001, for Nine
Federal Agencies 18 Figure 7: Type of Licenses Executed by Nine Federal
Agencies,
Fiscal Year 2001 by Type of License 19 Figure 8: Licenses Executed by Nine
Federal Agencies in Fiscal
Year 2001 by Type of Property 20 Figure 9: Licenses in Force for Nine
Federal Agencies as of
September 30, 2001 21 Figure 10: Licensing Income for Nine Federal
Agencies, Fiscal Year
2001 22
Abbreviations
ARS Agricultural Research Service CRADA cooperative research and
development agreement DOD Department of Defense DOE Department of Energy
GAO General Accounting Office NASA National Aeronautics and Space
Administration NIH National Institutes of Health NOAA National Oceanic and
Atmospheric Administration NSF National Science Foundation OMB Office of
Management and Budget OTT Office of Technology Transfer TTCA Technology
Transfer Commercialization Act of 2000 USGS United States Geological
Survey USPTO United States Patent and Trademark Office
Page 1 GAO- 03- 47 Transferring and Reporting Technology
October 31, 2002 Congressional Committees The federal government is a
primary sponsor of research conducted in the United States, expending
during fiscal year 2001 $19. 4 billion for research performed by federal
employees and $62.2 billion for research conducted under contracts and
grants. Some of this research leads to the development of technology that
can be patented, licensed, and made available to the public through the
introduction of new products and processes. In the past, however, there
have been concerns that new technologies developed under federal research
projects were not being properly translated into practical use. In
response, the Congress has made attempts through legislation over the past
2 decades to ensure that federally sponsored inventions were being
transferred to the private sector where they could be commercialized.
In 1980, the Congress passed two landmark pieces of legislation* the
Stevenson- Wydler Technology Innovation Act of 1980 and the Bayh- Dole
Act* with the intent of promoting economic development, enhancing U. S.
competitiveness, and benefiting the public by encouraging the
commercialization of technologies developed with federal funding. These
acts generally have been considered a success, because the federal
agencies and their funding recipients now can profit from their inventions
and thus have a greater incentive to produce new technology. In addition,
the technology created is more likely to be made available to those who
can use it.
Although the acts have common objectives, the Stevenson- Wydler Act
focuses on inventions owned by the federal government, while the Bayh-
Dole Act focuses on inventions created under federal contracts, grants,
and cooperative research and development agreements. Under the Stevenson-
Wydler Act, inventions owned by the government remain the property of the
agencies that produced them. However, the act as amended sets out
guidelines and priorities that encourage commercialization of these
inventions through the licensing of technology to U. S. business. Under
the Bayh- Dole Act, inventions created under contracts and grants normally
become the property of the contractors and grantees, provided they follow
certain reporting and other requirements. Among these requirements are
notifying the funding agency that (1) the invention has been created, (2)
the contractor or grantee has elected to
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 47 Transferring and Reporting Technology
retain ownership, (3) a patent application has been submitted, and (4) the
government has a royalty- free right to use the invention.
More recently, the Congress passed the Technology Transfer
Commercialization Act of 2000 in an attempt to improve the ability of
federal agencies to license inventions created in federal facilities.
Among other things, the act requires federal agencies with laboratories
and technology transfer functions to provide the Office of Management and
Budget (OMB) with reports on their technology transfer programs. The act
also provides for the information to be submitted with the agencies*
annual budget requests, beginning with the budget for fiscal year 2003.
The agency reports would include information on operations and plans as
well as statistics on patenting and licensing activities. In addition, the
act requires the Department of Commerce to summarize these data into an
annual, government- wide report to the Congress and others. 1
As you know, both the Bayh- Dole Act and the Technology Transfer
Commercialization Act of 2000 contain requirements that GAO issue a report
on the implementation of the acts at least once every 5 years. As agreed
with your offices, the primary objective of our current report was to
provide information on how federal agencies had identified, patented, and
licensed inventions created in their own facilities during fiscal years
1997- 2001. We also agreed that we would determine (1) the extent to which
the agencies complied with the Technology Transfer Commercialization Act
of 2000 requirement to submit reports on their technology transfer
activities to OMB and the Department of Commerce at the time they submit
their fiscal year 2003 budget requests and (2) what the agencies have
done* since the issuance of our 1999 report on the issue* to improve
compliance with reporting requirements under the Bayh- Dole Act for
inventions created under contracts and grants.
To obtain information on federal technology transfer programs and to
determine the extent to which agencies complied with the reporting
requirement of the Technology Transfer Commercialization Act of 2000, we
analyzed the activities of the nine federal agencies that each had
estimated internal research budgets of at least $500 million in fiscal
year 2001. These agencies were the Agricultural Research Service (ARS)
within the Department of Agriculture; the Department of the Air Force
within the
1 While we refer to the consolidated report as being the responsibility of
the Department of Commerce, the act actually requires that the Secretary
of Commerce issue the report.
Page 3 GAO- 03- 47 Transferring and Reporting Technology
Department of Defense (DOD); the Department of the Army within DOD; the
Department of Energy (DOE); the National Aeronautics and Space
Administration (NASA); the National Oceanic and Atmospheric Administration
(NOAA) within the Department of Commerce; the National Institutes of
Health (NIH) within the Department of Health and Human Services; the
Department of the Navy within DOD; and the U. S. Geological Survey (USGS)
within the Department of the Interior. To determine what federal agencies
had done to improve compliance with reporting requirements under the Bayh-
Dole Act, we analyzed the activities of the five agencies that were
included in our 1999 report on this issue. That report noted that
contractors and grantees were not always complying with such provisions as
reporting new inventions, confirming that federal agencies had royalty-
free licenses to such inventions, or recording on patent applications that
the new technologies were the result of federal funding. 2 The agencies
included in this segment of our work were DOD, DOE, NASA, NIH, and the
National Science Foundation (NSF). Additional details on our scope and
methodology are included in appendix I. Other appendices provide detailed
information on the technology transfer activities of these nine agencies;
these appendices are an integral portion of this report.
Federal agencies are identifying, patenting, and licensing inventions
created in their own facilities through technology transfer programs that
vary in design, approach, and measurable output. With respect to design,
some agencies have centralized technology transfer programs, while others
have decentralized programs, and still others have components of both.
From an approach standpoint, the agencies differ on what they will patent
and the types of licensing arrangements they will enter. Perhaps the
greatest diversity among the agencies is in their output, based on
statistics provided to us by the nine federal agencies with internal
research budgets of at least $500 million in fiscal year 2001. In total,
these agencies reported 3,676 new inventions, 1, 585 patents issued, and
$74.5 million in licensing revenues during fiscal year 2001. Primarily
because of its contractoroperated national laboratories, DOE had the most
new inventions, patents applied for and received, and licenses executed,
but was second by a wide margin in licensing income to NIH, which received
$46. 1 million during the
2 U. S. General Accounting Office, Technology Transfer: Reporting
Requirements for Federally Sponsored Inventions Need Revision, GAO/ RCED-
99- 242 (Washington, D. C.: Aug. 12, 1999). Results in Brief
Page 4 GAO- 03- 47 Transferring and Reporting Technology
fiscal year. Agency officials cautioned against putting too much emphasis
on statistics. They believed that, while output is an important
measurement, it is not necessarily the best indicator of how successful an
agency has been in creating and transferring technology. Rather, in their
view output must be considered in the context of the agency*s mission, the
type of research it conducts, the commercial potential of the inventions
produced, and the best method for disseminating the products and research
to those who can use them.
Federal agencies did not fully comply with the requirement of the
Technology Transfer Commercialization Act of 2000 that they submit reports
on their technology transfer activities to the Office of Management and
Budget and the Department of Commerce as a part of their fiscal year 2003
budget requests. For its part, the Department of Commerce issued
guidelines that established a timeline and format for the agencies to
follow in developing their reports. However, only one of the nine agencies
we reviewed submitted its report on time and, while all the agencies
eventually submitted reports, the reports in some cases were incomplete,
contained statistics that were inconsistent or inaccurate, and differed in
the data elements used to compile certain statistics. Although submissions
by the agencies were too late to be considered for the President*s budget
for fiscal year 2003 submitted to the Congress in February 2002, at that
time the Office of Management and Budget did not have procedures to ensure
that agencies transmit the information for consideration in the budgeting
process. Furthermore, the Department of Commerce was delayed in preparing
its own report to the Congress on technology transfer activities
nationwide as required by the act. In general, the reporting problems
appear to be largely attributable to the confusion associated with the
first year of the act*s implementation and agency officials believe
reporting should improve in the future. To improve the consistency and
utilization of the reports, we are recommending that (1) the Department of
Commerce revise its guidelines to clarify the data elements that are to be
included in the agencies* reports and (2) the Office of Management and
Budget develop procedures for accumulating the information submitted by
the agencies under the Technology Transfer Commercialization Act of 2000
for consideration in the development of the budget.
While four of the five agencies reviewed for our 1999 report have taken
some steps to improve contractor and grantee compliance with reporting
requirements under the Bayh- Dole Act, these efforts have not addressed
underlying problems* such as duplication in reporting requirements* we
noted in that report. NIH said that it has made additional efforts to
educate its contractors and grantees on the importance and mechanics of
reporting
Page 5 GAO- 03- 47 Transferring and Reporting Technology
technology transfer activities and was redesigning its monitoring system.
DOD said it has not taken agencywide action but that various units have
taken such steps as adopting a new monitoring system and putting an
increased emphasis on reviewing documentation submitted at the end of
research projects to identify unreported inventions. DOE said it has
implemented a new centralized monitoring system that has reduced its
backlog in recording with the U. S. Patent and Trademark Office certain
invention notifications submitted to DOE by its contractors and grantees.
NASA said it has implemented a new invention reporting system and
integrated this system with an existing database and tracking system. NSF
said it has made no changes. Agency officials said that they had not been
able to standardize, improve, and streamline the reporting process itself
because, as we noted in the 1999 report, this would require congressional
action.
We provided a copy of our draft report to the Department of Commerce and
the Office of Management and Budget for review and comment. The Department
of Commerce, in written comments, stated that the draft report was
*useful* and provided a realistic analysis of the first cycle of the new
reporting process under the Technology Transfer Commercialization Act of
2000. The Department of Commerce also stated that our recommendations were
reasonable and that their adoption would improve reporting during the next
cycle. The Office of Management and Budget, in oral comments, said that
the overall thrust of our recommendation that the Office develop
procedures for accumulating and considering agency information, as part of
the annual budget process, was reasonable. The Office added that as a
result of the information presented in the draft report, it would consider
incorporating guidance on reporting on technology transfer activities into
Circular A- 11, which provides agencies with instructions on preparation
and submission of budget materials to the Office. Both agencies also
provided some technical clarifications that we incorporated as
appropriate.
Prior to 1980, federal agencies generally retained title to any inventions
created under federal research* whether it was conducted by contractors
and grantees or by the agencies in their own facilities* although specific
policies varied among the agencies. Increasingly, this situation was a
source of dissatisfaction, as there was a general belief that the results
of federally owned research were not being made available to those who
could use them. There were also concerns that technological advances
attributable to university- based research funded by the government were
not being utilized because the universities had little incentive to seek
uses Background
Page 6 GAO- 03- 47 Transferring and Reporting Technology
for inventions to which the government held title. Additionally, the
complexity of the rules and regulations and the lack of a uniform policy
for these inventions often frustrated those who did seek to use the
research.
In 1980, the Congress addressed these concerns with two landmark pieces of
legislation that changed the direction of federal technology transfer. 3
One was the Stevenson- Wydler Technology Innovation Act of 1980, which
addressed technology transfer of government- owned inventions primarily
created in federal laboratories. 4 The second was the Bayh- Dole Act,
which primarily addressed ownership of technology created under federal
contracts, grants, and cooperative agreements. 5
The Stevenson- Wydler Act articulated a broad role for government in
promoting commercial innovation and established the first major initiative
to proactively transfer technology from federal laboratories to industry.
The act made technology transfer an explicit mission of the federal
laboratories by, among other things, requiring the establishment of an
office in each laboratory to identify technologies with commercial
potential and to transfer that knowledge to U. S. industry. The Stevenson-
Wydler Act was amended by the Federal Technology Transfer Act of 1986,
which empowered the directors of government- owned laboratories to enter
into cooperative research and development agreements (CRADA) and to
negotiate licensing agreements for inventions created in the laboratories.
6 The scope of the act was affected as well by the Technology Transfer
Commercialization Act of 2000, as discussed below.
The primary purpose of the Bayh- Dole Act was to allow universities, not-
for- profit corporations, and small businesses to patent and commercialize
their federally funded inventions. While contractors and grantees would
retain title to their inventions, the government would
3 Technology transfer has been defined as *the sharing of technology or
technical knowledge across different organizations* and commonly refers to
that process where one party enters into a licensing arrangement with
another party to confer the right to exploit commercially a patented or
otherwise proprietary technology.
4 P. L. 96- 480, Oct. 21, 1980. 5 P. L. 96- 517, Dec. 12, 1980. 6 P. L.
99- 502, Oct. 20, 1986.
Page 7 GAO- 03- 47 Transferring and Reporting Technology
retain a nonexclusive, nontransferable, irrevocable, paid- up (royalty-
free) license to use it. The contractors and grantees would have to
conform to certain reporting requirements in the Bayh- Dole Act as well as
seek patent protection and attempt commercialization. Additionally, the
Bayh- Dole Act authorized federal agencies to obtain, protect, and license
the government*s interest in patents on federally owned inventions, thus
empowering the agencies to implement the policy defined in the Stevenson-
Wydler Act. In doing so, restrictions were imposed on how the government
could license its patents, thereby limiting the government*s options under
both acts. The Bayh- Dole Act also included a requirement that GAO study
and issue periodic reports on the implementation of the act. 7
The Bayh- Dole Act does not protect the patent interests of large, for-
profit businesses engaged in government research. In 1983, however,
President Reagan issued a memorandum to the heads of executive branch
agencies advising them that, to the extent permitted by law, it would be
the policy of his administration to apply the patent policy of the Bayh-
Dole Act to any invention made in the performance of federally funded
research and development contracts, grants, and cooperative agreements
without regard to the size of the recipient*s business or its nonprofit
status. On April 10, 1987, the President issued Executive Order 12591,
which, among other things, requires executive agencies to promote
commercialization in accordance with the 1983 memorandum. In meeting our
responsibility to study and issue reports under the Bayh- Dole Act, we
have included implementation of the executive order as well.
The Congress has passed additional legislation over the years to amend the
Stevenson- Wydler and Bayh- Dole Acts and to enhance technology transfer
by federal agencies. One such law was the Technology Transfer
Commercialization Act of 2000 (TTCA), which was an attempt to make the
technology transfer process for inventions created in federal laboratories
more *industry friendly* as well as to simplify technology licensing. 8 In
this regard, the Congress sought to remove existing procedural obstacles
and uncertainty, particularly in the licensing of federally patented
inventions
7 Originally, GAO was to issue annual reports. However, in 1991, the act
was amended to require a report at least every 5 years. Our last report in
response to this mandate was
Technology Transfer: Administration of the Bayh- Dole Act by Research
Universities,
GAO/ RCED- 98- 126 (Washington, D. C.: May 7, 1998). 8 P. L. 106- 404,
Nov. 1, 2000.
Page 8 GAO- 03- 47 Transferring and Reporting Technology
created in government- owned, government- operated research facilities.
The act accomplished this by authorizing the licensing of government owned
technology through CRADAs and by rewriting and streamlining the
restrictions imposed on the government*s licensing of government- owned
inventions. The act clarified a number of provisions related to the notice
required for exclusive and partially exclusive licenses, receipt and
distribution of royalties, co- ownership of inventions with nonfederal co-
inventors, and assignment of federal employee rights in inventions to the
government.
The TTCA also amended the Stevenson- Wydler Act to require federal
agencies to submit annual reports on their technology transfer activities
to OMB as a part of the budget process. The provision applies to any
agency that either (1) operates one or more federal laboratories or (2)
applies for, obtains, or maintains patents or licenses or otherwise
protects or transfers any technology in which the federal government has
any right, title, or interest. Commerce officials say that, in effect,
this requires reports by all agencies responsible for technology created
in government facilities, regardless of whether these facilities are
operated by the government or by contractors. Each agency is required to
submit its report to OMB as a part of the agency*s annual budget
submission as well as to Commerce for the development of a government-
wide report. 9
The TTCA requires an agency*s annual report to include the following:
An explanation of the agency*s technology transfer program for the
preceding fiscal year and the plans the agency has for conducting its
technology transfer function, including its plans *for securing
intellectual property rights in laboratory innovations with commercial
promise* and
*for managing its intellectual property so as to advance the agency*s
mission and benefit the competitiveness of United States industry **
Information on technology transfer activities for the preceding fiscal
year regarding:
The number of patent applications filed. 9 The act also requires the
agency to provide a copy of its report to the Attorney General; however,
Commerce is supposed to develop the summary report from these submissions,
with the Attorney General*s consultation.
Page 9 GAO- 03- 47 Transferring and Reporting Technology
The number of patents received.
The number of fully- executed licenses that received royalty income,
categorized by whether they were exclusive, partially exclusive, or
nonexclusive, and the time elapsed from the date on which the license was
requested by the licensee in writing to the date the license was executed.
The total earned royalty income including such statistical information
as the total earned royalty income, of the top 1 percent, 5 percent, and
20 percent of the licenses, the range of royalty income, and the median,
except where disclosure of such information would reveal the amount of
royalty income associated with an individual license or licensee.
Disposition of earned income.
The number of licenses terminated for cause.
Additional *parameters or discussion the agency deems relevant or unique
to its practice of technology transfer.*
The TTCA did not include instructions to OMB regarding how OMB was to
account for or report the data received from the agencies. However, the
act did require the Secretary of Commerce, in conjunction with the
Attorney General and the Commissioner of Patents and Trademarks, to issue
an annual report to the Congress, the President, and the United States
Trade Representative. Also, the act required GAO to study and report on
the implementation of the TTCA as a part of its reporting mandate under
the Bayh- Dole Act.
The nine federal agencies we reviewed have each established programs for
identifying, patenting, and licensing inventions created in their own
facilities. 10 However, these programs varied in design, approach, and
output. For example, DOE and its contractor- operated laboratories led all
agencies in the number of new inventions disclosed, patents applied for
and received, and licenses executed during fiscal year 2001. However, NIH
10 Intramural research is that research conducted in federal facilities by
federal employees and is contrasted with extramural research, which is
research conducted by federal contractors and grantees. Federal Technology
Transfer Programs Vary in Design, Approach, and Output
Page 10 GAO- 03- 47 Transferring and Reporting Technology
was by far the leader in licensing income. Agency officials cautioned
against putting too much emphasis on output. They said that, while output
is important, success must be considered in the context of an agency*s
mission, the type of research it conducts, the commercial potential of the
inventions produced, and the best method for disseminating the fruits of
its research to those who could use them.
No single federal agency is responsible for managing technology transfer
activities governmentwide. Rather, each federal agency involved in
technology transfer designs its own program and can tailor this program to
its specific mission and technology transfer objectives. In this regard,
the nine agencies that, as shown in appendix II, obligated at least $500
million for intramural research during fiscal year 2001 had established
programs that varied widely in their design, especially in size and the
manner in which they were administered. This variation is illustrated in
the following examples:
NIH has a technology transfer function with both centralized and
decentralized components. From a licensing standpoint, the activities are
centralized, with a single office responsible for negotiating and
administering all licenses. However, such activities as monitoring
invention disclosures and determining when to seek a patent are largely
decentralized, with the individual institutes and centers having their own
technology transfer offices for this purpose. NIH also has a centralized
reporting system for all of its technology transfer functions and can
provide statistics on disclosures, patents, and licenses from this system.
Each of the military services within DOD has its own technology transfer
program and each of these is decentralized. While there is some variation
among the services, patenting and licensing decisions are generally
concentrated at the command or research unit level, as is recordkeeping.
None of the services has a unified technology transfer database and, when
statistics are needed, the services must query the individual commands or
units for information.
DOE has few inventions produced by federal employees in its own
facilities. Instead, most DOE inventions come from national laboratories
operated by DOE contractors, with the inventions becoming the property of
the contractors and each contractor basically making its own decisions on
patenting and licensing. In most cases, DOE must query the individual
laboratories to obtain detailed statistics on technology transfer
activities, although there are some centralized data on inventions created
by DOE Agencies Have Designed
Programs Tailored to Their Individual Missions and Objectives
Page 11 GAO- 03- 47 Transferring and Reporting Technology
employees or acquired by DOE when the contractor elected not to take
title.
At NASA, the individual NASA centers and laboratories separately report
and account for the inventions created by their employees, but decisions
on patenting are centralized within the Office of Patent Counsel.
Similarly, licensing activities are centralized within the Office of
Aerospace Technology. NASA has a centralized reporting system that is
capable of providing statistical information on its technology transfer
activities. Like DOE, NASA also has a large contractor- operated
laboratory, the Jet Propulsion Laboratory. The contractor can retain title
to, patent, and license the inventions it creates in this facility. If
NASA needs to obtain statistical information, it must query the
contractor.
ARS is the principal research agency of USDA and has been delegated the
authority to administer technology transfer activities for the entire
department. All patenting and licensing activities are centralized within
ARS* technology transfer office.
USGS has a relatively small technology transfer function, befitting the
small number of inventions the agency owns. The technology transfer
program is in the midst of a major reorganization due in part to USGS*
adoption of a decentralized integrated science approach. According to an
agency official, patenting and licensing in the past have been handled by
a central Technology Transfer Office. Since April 2002, the Department of
Navy has been filing and prosecuting patent applications for USGS.
At NOAA, which had the least number of new inventions, patents, and
licenses among the nine agencies we queried, the technology transfer
function is carried out by one person on a part- time basis. There is no
formal tracking system for monitoring inventions, patents, and licenses.
As with the design of their programs, the federal agencies we reviewed
differ in the way they approach technology transfer in such areas as
deciding what inventions to patent, and when to enter into exclusive
licensing arrangements. In deciding whether to patent an invention, agency
officials said they must weigh such diverse factors as the commercial
potential of the product or process, the costs of obtaining a patent, and
the best method for getting the product or process to those that can
benefit from it. Agencies Differ in Their
Approaches to Patenting and Licensing Their Technologies
Page 12 GAO- 03- 47 Transferring and Reporting Technology
NIH officials, for example, say they are selective when applying for
patents because of the high costs of obtaining and maintaining them.
Patenting decisions are made at the institute or center level and the
institute or center will be expected to bear the associated costs. NIH
officials said that the decision on whether to pursue a patent can involve
many factors and that a patent is not always the best option. If the
product is a biological material and has only a short productive life, NIH
may license the product without obtaining patent protection. If the
product does not have commercial potential but has some other value
related to research or the public health, NIH may simply disseminate
information through publication.
The military services say they often patent inventions for *defensive*
purposes. In this regard, the primary concern is protecting their rights
in inventions that may have a military use at some future date. At the
same time, they acknowledge that many of their inventions have little
commercial appeal because there may be limited use for them in civilian
applications. Similarly, DOE officials say that they have relatively high
patent activity because their laboratory contractors tend to want to
retain title to their inventions and, to do so, must seek patents on them.
An ARS official said that, even though the technology they create may have
significant value to researchers and the agricultural community, it may
not have a broad commercial appeal that would make it attractive to
potential licensees. ARS resolves this situation in many cases by
publishing the information and disseminating it in such a way that it is
put into the hands of those who can use it.
In licensing their technologies, federal agencies have the option of
granting licenses that are exclusive, nonexclusive, or partially
exclusive. Agency officials noted that they may not always have the choice
of granting nonexclusive licenses because it is often difficult to find
even one potential licensee willing to take the risks and assume the high
costs of bringing a new product to market.
Because there is no central database on the technology transfer activities
of all federal agencies, we could not obtain statistics on measurable
output government- wide. Instead, we asked the nine agencies included in
our review to provide output statistics in specified categories for fiscal
years 1997 through 2001. These statistics are shown in appendix IV, with
table 1 providing a comparison of all nine agencies for fiscal year 2001
and Agency Output Varies in
Areas Such as New Inventions, Patents, Licensing, and Income
Page 13 GAO- 03- 47 Transferring and Reporting Technology
tables 2 through 10 providing summaries of the individual agencies*
statistics from fiscal year 1997 through fiscal year 2001.
As shown in figure 1, the nine agencies in total had relatively stable
output in terms of new inventions disclosed, patents received, and
licenses executed from fiscal year 1997 through fiscal year 2001. As shown
in figure 2, however, licensing income generally increased over this same
period. 11
Figure 1: Invention Disclosures, Patents Received, and Licenses Executed
by Nine Federal Agencies, Fiscal Years 1997 through 2001
Source: Statistics provided by ARS, Air Force, Army, DOE, NASA, NIH, NOAA,
Navy, and USGS.
11 The values shown on these and other figures and tables in this report
are actual and have not been adjusted for inflation.
Page 14 GAO- 03- 47 Transferring and Reporting Technology
Figure 2: Total Royalty Income for Nine Federal Agencies, Fiscal Years
1997 through 2001
Source: Statistics provided by ARS, Air Force, Army, DOE, NASA, NIH, NOAA,
Navy, and USGS.
For purposes of comparing output by individual agencies, the statistics
for fiscal year 2001 are the most recent and comprehensive available.
These statistics show that, while there are wide variations in individual
output categories, the bulk of activity was usually concentrated in a few
agencies. DOE was the leader in most of the categories for which we
obtained statistics, with the most new inventions, patent applications,
patents received, patents in force, licenses executed, licenses in force,
and licenses producing income in fiscal year 2001. NIH, however, was by
far the leader in licensing income. Similarly, NOAA and USGS, with small
technology transfer programs, had the least measurable output in most
categories.
Figure 3 compares inventions disclosed in fiscal year 2001 for all the
agencies included in our review. DOE and NASA were the leaders in
invention disclosures, with 1,479 and 696 respectively, or 59. 2 percent
of 3,676 disclosures by all nine agencies for the fiscal year. Invention
disclosures
Page 15 GAO- 03- 47 Transferring and Reporting Technology
Figure 3: Invention Disclosures for Nine Federal Agencies, Fiscal Year
2001
Source: Statistics provided by the agencies cited.
As shown in figure 4, DOE was also the leader in patent applications in
fiscal year 2001, with 1,126 applications. These represented 40.1 percent
of the total number of applications filed by the nine agencies. Patent
applications
Page 16 GAO- 03- 47 Transferring and Reporting Technology
Figure 4: Patent Applications for Nine Federal Agencies, Fiscal Year 2001
Source: Statistics provided by the agencies cited.
As with disclosures and patent applications, DOE was the leader in total
patents issued in fiscal year 2001, accounting for 586, or 37.0 percent,
of the 1,585 patents issued to the nine agencies. Six of the nine agencies
received foreign patents, with NIH receiving the most. Figure 5 compares
U. S., foreign, and total patents for the nine agencies during fiscal year
2001. Patents issued and in force
Page 17 GAO- 03- 47 Transferring and Reporting Technology
Figure 5: Patents Issued to Nine Federal Agencies, Fiscal Year 2001
Source: Statistics provided by the agencies cited.
As shown in figure 6, DOE was also the leader in terms of patents in force
at the end of fiscal year 2001. Patents in force represent those patents
that have been issued to the agency or contractor in the past, have not
expired, and presumably are available for licensing.
Page 18 GAO- 03- 47 Transferring and Reporting Technology
Figure 6: Patents in Force as of September 30, 2001, for Nine Federal
Agencies
Source: Statistics provided by the agencies cited.
DOE led the nine agencies in licenses executed, with 583 licenses executed
in fiscal year 2001, followed by NIH with 200. No other agency had more
than 46. Combined, DOE and NIH accounted for 85.1 percent of all licenses
executed during the fiscal year.
The agencies varied widely by type of license executed. As shown in figure
7, over 75 percent of the licenses executed by the nine agencies in fiscal
year 2001 were nonexclusive. However, this overall ratio was influenced
greatly by DOE, where nonexclusive licenses accounted for 85.2 percent of
the licenses it executed, and NIH, where nonexclusive licenses accounted
for 76.5 percent. Nonexclusive licenses accounted for only 39.4 percent of
all licenses executed by the remaining seven agencies. Licenses executed
Page 19 GAO- 03- 47 Transferring and Reporting Technology
Figure 7: Type of Licenses Executed by Nine Federal Agencies, Fiscal Year
2001 by Type of License
Source: Statistics provided by the agencies cited.
Over two- thirds of the licenses executed during fiscal year 2001 were
based on patented inventions and, in six agencies, patents were the only
source of licenses. NIH reported a total of 51 licenses that were based on
non- patented research materials, which could include biological
materials. In addition, DOE and NASA reported a total of 253 licenses that
were based on other types of properties* such as copyrights owned by
contractors operating government laboratories. Figure 8 compares licenses
executed in fiscal year 2001 by the type of property licensed.
Page 20 GAO- 03- 47 Transferring and Reporting Technology
Figure 8: Licenses Executed by Nine Federal Agencies in Fiscal Year 2001
by Type of Property
Source: Statistics provided by the agencies cited.
DOE and NIH had the most licenses in force at the end of fiscal year 2001,
together accounting for over 81.5 percent of all licenses and 96.0 percent
of licenses with foreign entities. Figure 9 compares the number of U. S.
and foreign licenses in force at the end of fiscal year 2001 for the nine
agencies we reviewed. Licenses in force
Page 21 GAO- 03- 47 Transferring and Reporting Technology
Figure 9: Licenses in Force for Nine Federal Agencies as of September 30,
2001
Source: Statistics provided by the agencies cited.
A license in force is one where the agreement between the agency or
contractor and the licensee has not expired or been terminated. It does
not necessarily mean the license is *active* in the sense of producing
income. To the contrary, not all licenses produce income. As shown in
appendix IV, table 1, DOE had 2,138 licenses in force at the end of fiscal
year 2001, but only 992 licenses produced income during the year. NIH had
1,357 licenses in force at the end of fiscal year 2001, with 697 producing
income during the fiscal year. In total, the nine agencies reported 4, 286
licenses in force, with 2,056 licenses earning income during the fiscal
year.
Despite DOE*s having the most invention disclosures, patents, and
licenses, figure 10 shows that NIH was by far the leader in licensing
Licensing income
Page 22 GAO- 03- 47 Transferring and Reporting Technology
income during fiscal year 2001. Of the nine agencies* licensing income of
$74.5 million, NIH accounted for $46.1, or 61.9 percent. DOE accounted for
$21.4 million, or 28.7 percent, and the other 7 agencies accounted for $7
million, or 9.4 percent, combined. Figure 10 compares licensing income for
the nine agencies.
Figure 10: Licensing Income for Nine Federal Agencies, Fiscal Year 2001
Source: Statistics provided by the agencies cited.
Agency officials cautioned against using output statistics as the sole
indicator of the success of their programs. They noted that the agencies
are not comparable in regard to such factors as the likelihood that
research will result in new technology, the degree to which the technology
will require further development before it can be brought to market, and
the commercial potential for the products eventually brought to market.
The agency officials noted that an agency*s technology transfer program is
successful if the results of the agency*s research are being disseminated
to those who can benefit.
A Commerce official agreed that comparing agencies with each other was
difficult and that, in some cases, it was even difficult to measure the
same agency against itself from year to year. He noted that conditions are
Page 23 GAO- 03- 47 Transferring and Reporting Technology
constantly changing as new technologies enter the marketplace, patents
expire, new licenses are executed, old licenses expire, etc.
Federal agencies did not fully comply with the requirement of the
Technology Transfer Commercialization Act of 2000 that they submit reports
on their technology transfer activities to OMB and Commerce as a part of
their fiscal year 2003 budget requests. While the Department of Commerce
issued guidelines that established a timeline and format for the agencies
to follow in developing their reports, these guidelines were not finalized
until December 2001. All nine agencies eventually submitted reports to OMB
and Commerce, but the reports in some cases were incomplete, contained
statistics that were inconsistent or inaccurate, and differed in the data
elements used to compile certain statistics. Because submissions by the
agencies were submitted in February through July 2002, the information
provided by the agencies was received too late to be considered by OMB in
the development of the President*s budget for fiscal year 2003, which was
submitted to the Congress in February 2002. At that time, however, OMB did
not have procedures to ensure that agencies transmit the information for
consideration in the budgeting process. Moreover, the Department of
Commerce was delayed in submitting its own report to the Congress on
technology transfer activities nationwide as required by the act.
The reporting problems appear to be largely attributable to the confusion
associated with the first year of the act*s implementation. Agency
officials believe reporting should improve in the future. A Commerce
official said that the guidelines may need to be refined to specify what
data elements are to be used in accumulating the statistics to be
reported.
To ensure some commonality and consistency in the reports the agencies
submit to OMB and Commerce, the Interagency Working Group on Technology
Transfer* a group of federal agency personnel involved in technology
transfer programs that holds periodic meetings at and coordinated by the
Department of Commerce* determined a method by which agencies could meet
the TTCA reporting mandate. Based on the discussions by the Working Group,
Commerce issued guidelines entitled
*Annual Reporting on Agency Tech Transfer in Response to the TTCA 2000*
Data Elements of the Agency Annual Reports.* In this document, which was
issued in final form on December 11, 2001, Commerce noted that the
guidelines *outline a common response framework for the new statutory
reporting process.* Commerce also noted that the guidelines, Agencies Did
Not
Fully Comply with the Reporting Requirements of the Technology Transfer
Commercialization Act of 2000
Department of Commerce Developed Guidelines for Agency Submissions
Page 24 GAO- 03- 47 Transferring and Reporting Technology
which are voluntary, were intended to consider and address (1) the annual
agency report to OMB required by the TTCA, (2) the materials needed by
Commerce to prepare its own report under the TTCA, (3) the types of data
the agencies had deemed appropriate in the past in preparing biennial
reports 12 on technology transfer required by the Stevenson- Wydler Act,
and (4) current policy concerns such as congressional interest in greater
information about the tangible downstream outcomes* such as commercialized
products or processes, strengthened laboratory capabilities, etc.*
resulting from federal technology transfer policies and programs.
The Commerce guidelines, which were sent to all the federal departments
and agencies known to have laboratories or technology transfer functions,
established an *annual cycle of events,* or timeline, for the agencies*
reports. In the fall of the year preceding the budget submission, each
agency would assemble data from the most recent fiscal year, document its
plans for both the current and upcoming fiscal year, and determine how
well it had met its plans for the previous fiscal year. In the following
January and early February, the agency would finalize its report and
submit this with its budget proposal for the upcoming fiscal year. From
January to early March, Commerce would review, organize, and compile all
the agency reports, tabulate the quantitative data into a consistent
format, and draft its own report. Commerce would then submit its report in
March or April. Thus, if the Commerce guidelines were followed, the first
annual reports by the agencies would have been due in February 2002 and
would have been based on the agencies* activities in fiscal year 2001.
The data elements in the Commerce guidelines* which are summarized in
appendix V* were organized into three main categories: (1) a description
of the agency*s present technology transfer programs and plans, (2) data
about the agency*s technology transfer activities and performance for the
recently closed fiscal year, and (3) illustrative case information about
the outcomes of the agency*s technology transfer programs and activities.
The information presented was to include all technology produced in
federal facilities, including technology produced in contractor- operated
facilities. Commerce emphasized that the guidelines were intended to be a
working
12 The Stevenson- Wydler Act was amended in 1986 to require the Department
of Commerce to develop biennial reports to the President and Congress on
federal laboratories* utilization of the technology transfer authorities
opened to them by federal law. The biennial report requirement was
superceded by the reporting requirement of the Technology Transfer
Commercialization Act of 2000.
Page 25 GAO- 03- 47 Transferring and Reporting Technology
outline for agency reporting and that each agency should adjust its
reporting and present additional performance measures in ways it expected
would best communicate its activities and achievements. Commerce also said
that it would not specify a particular format for each agency*s report nor
would it distribute a standard survey instrument for gathering data.
In some cases, the Commerce guidelines asked for more data than specified
in the TTCA. For example, the Commerce guidelines asked the agencies to
report invention disclosures, although this information was not required
by the TTCA. Also, the guidelines requested statistical data on
cooperative research and development agreements. For statistical data on
invention disclosures, patent applications, patent grants, and licenses,
the guidelines provided detailed instructions on what information was to
be provided and in some cases defined terms that were not specified or
defined in the TTCA. A Commerce official noted that the additional
information requested by the guidelines had been approved by the members
of the Interagency Working Group and was consistent with information the
agencies had been providing in the biennial reports previously required by
the Stevenson- Wydler Act.
To determine whether federal agencies complied with the TTCA reporting
requirements, we reviewed the reports submitted by the nine agencies that,
as discussed above, had intramural research budgets of at least $500
million in fiscal year 2001. We found that only ARS among the nine
agencies included in our review submitted its report by early February
2002 as suggested by the Commerce guidelines. DOE and NASA submitted their
reports in April 2002. Commerce, which included NOAA; DOD* which compiled
a consolidated report encompassing the Departments of Army, Navy, and Air
Force, and its other agencies; and NIH submitted their reports in June.
The Department of Interior, which included USGS, submitted its report in
July 2002. The agencies submitted copies of their reports to Commerce at
or about the same time they submitted them to OMB, although in some cases
they had provided Commerce with draft information while working on their
official submissions.
Commerce also sent the TTCA guidelines to three other agencies* the
Environmental Protection Agency, the Department of Veterans Affairs, and
the Department of Transportation* that were not among the agencies we
selected for our review. According to a Commerce official, the
Environmental Protection Agency and the Department of Veterans Affairs
submitted their reports in May and June 2002, respectively. At the time of
Agencies Were Late in
Submitting Data to the Office of Management and Budget
Page 26 GAO- 03- 47 Transferring and Reporting Technology
our review, the Department of Transportation had not yet submitted a
report.
OMB staff, while acknowledging that the agency did not have any special
procedures to ensure that agencies transmit technology transfer
information for consideration in the budgeting process, explained to us
that submissions received in February through July 2002 would have been
too late to consider in the development of the President*s fiscal year
2003 budget, which was released in early February 2002. However, they
noted that these submissions could be considered in formulation of the
President*s fiscal year 2004 budget. The staff also said that OMB is
examining the incorporation of guidance on reporting on technologytransfer
activities into Circular A- 11, which provides agencies with instructions
on preparation and submission of budget materials.
The Commerce guidelines requested that, in submitting the reports required
by the TTCA, the agencies include statistical data on their technology
transfer activities for fiscal year 2001. Specifically, the agencies were
asked to provide information on the number of CRADAs; number of inventions
disclosed, patents applied for and patents received; number of licenses
active and terminated; the number of active licenses that produced income;
amount of income by source; characteristics of earned royalty income
received; disposition of license income; and the time elapsed in obtaining
license agreements. Tables 12 through 19 of appendix VI summarize the
statistics each of the nine agencies provided in these categories.
We did not independently verify the statistics the nine agencies provided
to OMB. However, we did review the statistics for completeness and, where
possible, for consistency with data the same agencies had provided us on
their technology transfer activities. We found that, in some instances,
the TTCA reports were incomplete. For example, some agencies did not
provide statistics on the disposition of license income or the average
number of days elapsed between the time potential licensees applied for
licenses and the time the licenses were executed.
In five categories, the data requested by the Commerce guidelines appeared
to be identical to the information we had requested from the agencies and
included in appendix IV. These categories were invention disclosures,
patents issued, licenses executed, licenses earning income, and licensing
income received during fiscal year 2001. For each of these categories, we
compared the statistics the agencies provided to OMB and Agency Statistics
Provided
to OMB and Commerce in Some Cases Were Incomplete, Inaccurate or
Inconsistent, or Differed in the Data Elements Used to Compile Them
Page 27 GAO- 03- 47 Transferring and Reporting Technology
Commerce with the data they provided us. As shown in tables 20 through 24
of appendix VII, we found that the statistics sometimes were inconsistent,
and we asked the agencies reporting the statistics to explain the
differences. In some cases, we found that the information provided to OMB
and Commerce was inaccurate. For example:
DOD submitted a consolidated report but listed the services separately.
In comparing the statistics provided to OMB and Commerce with those
provided to us, we noted that the Navy*s statistics varied in all five of
the categories compared, the Army varied in four, and the Air Force varied
in three. DOD officials said the differences were the result of the
services* having accumulated the statistics for their consolidated report
to OMB and Commerce earlier in the year than those provided to us. They
said that the statistics provided to us were updated and more reliable.
DOE reported more than twice as many* 583 to 226* new licenses executed
during the fiscal year to us than in its TTCA report because, according to
DOE officials, the figures provided to OMB and Commerce did not include
licenses for copyrights and other non- patent types of intellectual
property. DOE also reported more invention disclosures, patents issued,
and licenses with income to OMB and Commerce than it did to us for reasons
that the agency was not able to determine.
We also found that the agencies were not always using the same data
elements in developing statistics for their TTCA reports. In compiling
statistics on patents issued, for example, some agencies may have included
foreign patents while others did not. Similarly, in reporting the number
of newly- executed licenses, some agencies reported licenses for
intellectual property other than patents while other agencies did not.
To some extent, the reporting problems may stem from a lack of specificity
in Commerce*s guidelines. For example, the Commerce guidelines specified
that statistics on patent applications should include both U. S. and
foreign applications. The guidelines were silent, however, on whether the
statistics on patents received should include foreign patents. A Commerce
official acknowledged that the guidelines may need some revision to ensure
that the agencies are basing their statistics on the same data elements.
Page 28 GAO- 03- 47 Transferring and Reporting Technology
Because the agencies did not submit their reports under the TTCA according
to the timeline set out in Commerce*s guidelines, Commerce was delayed in
developing its own consolidated report on federal technology transfer
activities as required by the TTCA. A Commerce official told us that, even
after receiving the agency reports, Commerce had to (1) collate and
summarize information that sometimes differed in form and detail, (2)
contact agencies to resolve or explain potentially inconsistent or missing
data, and (3) coordinate its work with the Attorney General and the U. S.
Patent and Trademark Office (USPTO) as required by the TTCA.
Commerce eventually developed its consolidated report entitled
Summary Report on Federal Laboratory Technology Transfer and placed it on
the Department of Commerce*s Web site on October 16, 2002. A Commerce
official said the agency anticipated having published versions of the
report available for submission to the President and to the Congress
shortly.
A Commerce official said that the problems in TTCA compliance were largely
due to the uncertainties and confusion associated with the first year of
reporting. One problem was that the guidelines had not been finalized
until less than 2 months before OMB was to present the overall federal
budget. Also, some agencies had difficulties in defining and accumulating
some of the data needed, particularly where their technology transfer
programs were decentralized. DOD, for example, does not have a centralized
data tracking system that allows the prompt accumulation of such data.
Thus, each of the military services had to query individual research units
to obtain data and then collate these into a summary report. Similarly,
DOE had to query its individual laboratories to obtain data in some cases,
even though it has a centralized tracking system.
Officials from Commerce and other agencies said that the TTCA compliance
problems should be reduced in future years because of the guidelines that
are now in place and the experience gained during the first year of
reporting under the TTCA. However, some officials were concerned about how
the information might be interpreted. They said that, as discussed
earlier, it was inappropriate to compare agencies by looking solely at
statistics. Rather, they believed each agency*s technology transfer
program must be evaluated in the context of that agency*s mission,
priorities, and potential. They were concerned that those wanting to use
the data would not be able to put these statistics into the proper context
Commerce Was Delayed in
Developing a Consolidated Report
Reporting Problems Appear Related to Uncertainties and Confusion During
the First Year of the Act*s Implementation
Page 29 GAO- 03- 47 Transferring and Reporting Technology
and might arrive at conclusions about an agency*s technology transfer
activities that were unfounded.
A Commerce official acknowledged that there had been some confusion in the
agencies* interpreting and applying the guidelines for preparing the
reports required by the TTCA, even though (1) the Interagency Working
Group had participated in their development and (2) much of the
information requested was similar to what the agencies had been reporting
under the biennial reports previously required by the Stevenson- Wydler
Act. He said that Commerce would probably revise the guidelines to make
them more specific and to emphasize the need for each agency to provide
complete data.
In an August 1999 report, we found that contractors and grantees were not
always complying with the reporting requirements of the Bayh- Dole Act
and, by extension, Executive Order 12591. 13 Since the issuance of that
report, four of the five agencies we reviewed have taken some steps to
improve compliance. However, these efforts have not addressed underlying
problems we reported, such as duplication in reporting requirements, that
make reporting difficult and cumbersome.
The attempts at improving compliance varied among the agencies. NIH said
that it has made additional efforts to educate its contractors and
grantees on the importance and mechanics of reporting technology transfer
activities and was redesigning its monitoring system. DOD said it has not
taken agency- wide action but that various units have taken such steps as
adopting a new monitoring system and putting an increased emphasis on
reviewing documentation submitted at the end of research projects to
identify unreported inventions. DOE said it has implemented a new
centralized monitoring system that has reduced its backlog in recording
with the USPTO certain invention notifications submitted to DOE by its
contractors and grantees. NASA said it has implemented a new invention
reporting system and integrated this system with an existing database and
tracking system. NSF said it has made no changes. Agency officials said
that they had not been able to standardize, improve, and
13 U. S. General Accounting Office, Technology Transfer: Reporting
Requirements for Federally Sponsored Inventions Need Revision, GAO/ RCED-
99- 242 (Washington, D. C.: Aug. 12, 1999). Agency Actions to
Improve Contractor and Grantee Reporting under the Bayh- Dole Act Do Not
Address Underlying Causes of Noncompliance
Page 30 GAO- 03- 47 Transferring and Reporting Technology
streamline the reporting process itself because, as we noted in the 1999
report, this would require congressional action.
Under the Bayh- Dole Act* and, by extension, Executive Order 12591*
contractors, grantees, and recipients of CRADAs can elect to retain title
to inventions they create under government research projects. However,
they are required to follow specific reporting requirements regarding the
disclosure, election to retain title, application for patent, licensing,
and commercialization of any invention subject to the act or executive
order. Some of the key reporting requirements include disclosing any new
invention within 60 days, electing to retain title within 2 years,
applying for a patent within 1 year of election, and providing
documentation (the
*confirmatory license*) specifying that the government has rights in the
invention.
We issued a report on Bayh- Dole Act compliance in August 1999. We noted
in this report that federal agencies and their contractors and grantees
were not complying with the requirements of the Bayh- Dole Act and
Executive Order 12591. We found that the databases for recording the
government*s interests in the inventions were inaccurate, incomplete, and
inconsistent and that some inventions were not being recorded at all. As a
result, the government was not always aware of the inventions to which it
had royalty- free rights. We also found that, to some extent, the problems
were systemic, as the contractors and grantees were being required to
submit duplicate reports, that the confirmatory licenses were filed in a
database at the USPTO that was largely inaccessible and unused, and that
the USPTO was not involved in oversight.
We noted that the Congress might wish to consider enhancing the data
available on federally sponsored inventions by standardizing, improving,
and streamlining the reporting process for inventions subject to the act
and executive order. Specifically, we noted that the Congress could (1)
require the Secretary of Commerce to develop standardized disclosure forms
and utilization reports for federally funded inventions, (2) make the
patent the primary control mechanism for reporting and documenting the
confirmatory license, and (3) requiring the USPTO to provide information
to the funding agencies to assist them in monitoring compliance. We also
included in the 1999 report some of the options we had discussed with
agency officials and others for improving compliance. These options are
shown again in appendix VIII of this report. GAO Documented
Compliance Problems in 1999 Report
Page 31 GAO- 03- 47 Transferring and Reporting Technology
The TTCA includes a requirement for utilization reports for inventions
created in federal facilities but does not address the reporting
compliance problems we raised in our 1999 report. Moreover, Commerce has
not addressed these issues through revised regulations. To determine
whether individual funding agencies have taken actions on their own to
address the compliance issues we had raised, we contacted the five funding
agencies that were included in our 1999 report: DOD, DOE, NASA, NIH, and
NSF. We found that all but one of the agencies had taken some action, but
that the actions varied in scope and application.
DOD has taken no agency- wide actions to improve compliance with the
reporting requirements of the Bayh- Dole Act, because the responsibility
for monitoring technology created through extramural research programs is
left to the individual services and agencies. Even at this level,
oversight of compliance is sometimes decentralized. Thus, we asked each of
the military services to outline any changes they have made to improve
compliance with reporting requirements. In this regard, the Air Force said
that it has started using NIH*s monitoring and tracking system for
grantrelated reporting at its Office of Scientific Research Division.
The Navy responded that it has done nothing agency- wide except work with
other federal agencies to establish uniform reporting requirements for
reporting inventions under Federal Assistance Agreements in response to
the Federal Financial Assistance Management Improvement Act of 1999. 14
One Navy official said he expected to have a Federal Register Notice
policy letter on this subject in the near future. Within the agency, the
Office of Naval Research had undertaken two initiatives. One was to
contract with two retired Navy patent attorneys to check the accuracy of
inventions reported on forms submitted by contractors and grantees at the
close of their research projects. This initiative has resulted in the
identification of several unreported inventions. The second initiative
concerns a study of ways to modify procurement procedures to improve the
probability of technology transitions, including the identification of
inventions.
The Army also has made no agency- wide changes in response to our 1999
report. However, the patent attorneys assigned to individual Army commands
and units reported changes they have made. Some of the changes include
revising filing systems to improve followup on invention
14 P. L. 106- 107, Nov. 20, 1999. Agencies Have Taken
Limited Actions to Improve Compliance
DOD
Page 32 GAO- 03- 47 Transferring and Reporting Technology
disclosure reports, making specific requests for contractors to complete
confirmatory licenses, submitting information to contractors related to
the rights they and the government have in inventions, instituting a new
database for recording confirmatory licenses, requiring contractors to
report through NIH*s *Interagency Edison* (iEdison) system, improving
training in inventions reporting, and establishing a Web site for
contractors that outlines reporting requirements.
DOE officials said they have reduced the backlog in their filing of
confirmatory licenses with the USPTO through the implementation of two
efforts to improve tracking. The first was the implementation of a
centralized DOE database, with data entry being done by the applicable
field office. This system includes codes showing when confirmatory
licenses are required, have been received, have been sent to headquarters
for filing, and have been sent to the USPTO for recording. The second
effort involved a change in the database to be able to verify that a
contractor or grantee has elected to retain title to an invention within
the required period and to show that the USPTO has recorded the
confirmatory license.
A NASA official said NASA has taken several steps to improve compliance
since our 1999 report was issued. First, NASA adopted a policy to clarify
within the agency that software created by or for NASA was a valuable
technology and was to be reported and administered as any other invention,
discovery, improvement, or innovation. Second, NASA implemented a Web-
based system* integrated into its tracking and monitoring system* that
contractors and grantees can voluntarily use to report inventions. Third,
NASA issued new policy guidance to formalize existing NASA policies on
reporting new technologies and innovations.
NIH noted that our report had not led to any formal changes to reporting
regulations but that, nonetheless, NIH has taken action by actively
engaging in outreach and contractor/ grantee education and by refining the
agency*s electronic monitoring and tracking system to reinforce the
importance of Bayh- Dole Act reporting. From an outreach standpoint, NIH
began, in fiscal year 2000, a series of proactive site visits *intended to
facilitate dialogue regarding NIH policies and statutory regulations in a
non- crisis, non- adversarial manner.* These site visits were also seen as
a
*means to enhance administrative oversight of sponsored research and
enhance compliance.*
Each NIH site visit consisted of interviews with key staff and a seminar
where specific reporting requirements and compliance topics were DOE
NASA NIH
Page 33 GAO- 03- 47 Transferring and Reporting Technology
discussed. NIH conducted 10 such visits in fiscal year 2000 and an
additional 8 visits in fiscal year 2001. The fiscal year 2001 visits were
expanded to include invitations to contractors and grantees within the
same geographic area. NIH also put together, on its Web site, a compendium
of observations and comments from the fiscal year 2000 site visits. In
addition, NIH expanded its outreach through presentations on reporting
compliance at NIH- sponsored conferences.
NIH also said that it has taken steps to improve compliance with reporting
requirements by redesigning its iEdison electronic invention tracking and
monitoring system. NIH unveiled Edison in 1995 and the system was regarded
as a success. However, concerns recently have been raised that it is using
old technology in some cases. Thus, in fiscal year 2001, NIH began a
substantial redesign of Edison, incorporating suggestions and refinements
offered by a working group of institutional administrators. The new system
is scheduled for deployment in the fall of 2002. NIH has also undertaken
efforts to encourage more federal agencies to employ iEdison as its own
monitoring and tracking system. NIH noted that an additional eight
agencies have joined iEdison since our 1999 report and said it was
obtaining input from these agencies as a part of the iEdison redesign
project.
NIH noted that its efforts to improve compliance have led to a substantial
increase in the number of inventions and patents being reported. By using
iEdison, the entire reporting process* with the exception of three
documents required by law to be in writing* is now electronic. Although
the increase in reporting under iEdison has created a backlog in NIH*s
acknowledgement of receipt of documents, NIH has added support staff to
address the problem.
NSF officials said they have made no changes in response to our 1999
report.
We did not attempt to determine whether the actions taken unilaterally by
the agencies have improved Bayh- Dole Act reporting compliance by
contractors and grantees. However, the actions have not addressed the
systemic problems* such as duplicate reporting* that we noted in our 1999
report.
Officials from the five funding agencies contacted told us that, while
they have taken and will continue to take actions to improve compliance by
contractors and grantees, they are not in a position to make some of the
NSF
Agency Officials Say Correcting Underlying Causes May Require
Congressional Action
Page 34 GAO- 03- 47 Transferring and Reporting Technology
changes suggested by our 1999 report, such as duplication in reporting
requirements, making the patent the sole instrument for documenting the
confirmatory license, and involving the USPTO in the oversight function.
Thus, while they generally believed the options we raised in our 1999
report had merit, they believed the options required congressional action
to implement. Department of Commerce officials agreed with this
assessment.
To be useful to the Congress, the annual reports the Technology Transfer
Commercialization Act of 2000 requires federal agencies to submit to OMB
and the Department of Commerce must be timely, complete, accurate,
consistent in the data elements that make up the statistics, and presented
in a meaningful way. In some cases, these characteristics were missing in
the first year of reporting under the act. The agencies were late in
reporting; the reports were sometimes incomplete, inconsistent, or
inaccurate; and the statistics reported were not always based on the same
data elements. Moreover, OMB did not have any special procedures in place
for accumulating the data so that such data could be considered in
developing the President*s annual budget submission to the Congress.
Officials from the Department of Commerce and the agencies submitting
reports under the act believe that the lessons learned in the first year
should improve future reporting. While this may be the case, we believe
that the Department of Commerce and OMB need to take additional steps to
ensure that the reports received are consistent in the data they contain
and that they are made a part of the annual budget process. In this
regard, the Department of Commerce needs to revise its guidelines to
clarify what data should be included in the reports and how the data
should be presented. In addition, OMB needs to develop procedures for
accumulating the information so that it can be considered in developing
the President*s budget.
We recommend that the Secretary of Commerce revise the guidelines issued
to agencies for use in preparing the annual reports to be submitted to OMB
and Commerce as required by the Technology Transfer Commercialization Act
of 2000. The guidelines should clarify the precise data elements to be
included in each of the statistical categories, thereby improving the
level of precision in and comparability of the agency reports.
We also recommend that the Director of the Office of Management and Budget
develop procedures for accumulating and considering, as a part of
Conclusions
Recommendations for Executive Action
Page 35 GAO- 03- 47 Transferring and Reporting Technology
the annual budget process, data submitted by federal agencies in the
annual reports on technology transfer required by the Technology Transfer
Commercialization Act of 2000.
We provided a copy of our draft report to the Department of Commerce and
the Office of Management and Budget for review and comment. Commerce made
favorable comments about the draft report, saying that it was *useful* and
provided a realistic analysis of the first cycle of the new reporting
process under the Technology Transfer Commercialization Act of 2000.
Commerce said that our recommendations were reasonable and that their
adoption would improve reporting during the next cycle.
Commerce noted that its own summary report mandated by the act would
discuss technology transfer activities governmentwide. Commerce was
concerned some persons might be confused if they tried to compare the
statistics in the Commerce report with those in our report, which
addressed the activities of a *selected subset* of nine agencies, and
recommended that we *note this discrepancy.* While we agree that the
reports have different statistical bases, we believe our report is clear
on this point; thus, we made no changes in this regard. Commerce also
noted that it had worked closely with federal agencies providing
statistics for its summary report, that it would be including information
in some categories where GAO said the statistics were *not provided,* and
that it would be pleased to provide us with its most current agency data.
We obtained the updated statistics and, where appropriate, revised our
report to include these as well as certain other minor clarifications
suggested by the Commerce official providing the data.
Commerce agreed with our recommendation dealing with the guidelines.
Commerce also noted that it had devoted substantial effort to preparing
the earlier guidelines but that the *detail of the data requested, the
importance of clear definitions, and the evolving state of the federal
labs* databases concerning their technology transfer activities emphasize
the importance of continuing review of data collection procedures.* In
this regard, Commerce said it had already included this topic on its
agenda for near- term discussion with the Interagency Working Group on
Technology Transfer so that the necessary changes could be made before the
next cycle of agency reporting gets underway.
Finally, Commerce agreed with our recommendation that OMB play a larger
role in developing procedures for accumulating, collating, and reporting
the data required by the Technology Transfer Commercialization Agency
Comments
and Our Evaluation
Page 36 GAO- 03- 47 Transferring and Reporting Technology
Act of 2000. Commerce noted that uncertainties about the submission
process were a contributing factor to agencies* being late in submitting
their reports during the first year of the act*s implementation and said
that, even though the agencies submitting reports to OMB and Commerce
should have some flexibility, specific guidance from OMB would clarify
what the reporting agencies are to do. The full text of the comments
provided by the Department of Commerce is included as appendix IX.
OMB, in oral comments, said that the overall thrust of our recommendation
that it develop procedures for accumulating and considering agency
information, as part of the annual budget process, was reasonable. OMB
added that as a result of the information presented in the draft report,
it would consider incorporating guidance on reporting on technology
transfer activities into Circular A- 11, which provides agencies with
instructions on preparation and submission of budget materials to OMB. OMB
also provided some technical clarifications that we incorporated as
appropriate.
We conducted our work from October 2001 through September 2002 in
accordance with generally accepted government auditing standards. Appendix
I contains the details of our scope and methodology.
We will send copies of this report to the appropriate House and Senate
committees; interested Members of Congress; the Secretary of Commerce; and
the Director, Office of Management and Budget. We will also make copies
available to others upon request. The report will also be available at no
charge on the GAO Web site at http:// www. gao. gov. If you have any
questions about this report, please call me at (202) 512- 6225. Key
contributors to this report are listed in appendix X.
John B. Stephenson Director, Natural Resources
and Environment
Page 37 GAO- 03- 47 Transferring and Reporting Technology
List of Committees The Honorable Patrick J. Leahy Chairman The Honorable
Orrin G. Hatch Ranking Minority Member Committee on the Judiciary United
States Senate
The Honorable Ron Wyden Chairman The Honorable George Allen Ranking
Minority Member Subcommittee on Science, Technology,
and Space Committee on Commerce, Science,
and Transportation United States Senate
The Honorable Howard Coble Chairman The Honorable Howard L. Berman Ranking
Minority Member Subcommittee on Courts, the Internet, and
Intellectual Property Committee on the Judiciary House of Representatives
The Honorable Vernon J. Ehlers Chairman The Honorable James A. Barcia
Ranking Minority Member Subcommittee on Environment, Technology,
and Standards Committee on Science House of Representatives
Appendix I: Scope and Methodology Page 38 GAO- 03- 47 Transferring and
Reporting Technology
As required by the Bayh- Dole Act and the Technology Transfer
Commercialization Act of 2000 (TTCA), we conducted our periodic review on
the implementation of both acts. In discussions with staff from the
appropriate committees, we agreed to provide information on how federal
agencies had identified, patented, and licensed inventions created in
their own facilities during fiscal years 1997- 2001. We agreed that we
would also determine (1) the extent to which the agencies complied with
the TTCA requirement to submit reports on their technology transfer
activities to the Office of Management and Budget and the Department of
Commerce at the time they submit their fiscal year 2003 budget requests
and (2) what the agencies have done* since the issuance of our 1999 report
on the issue* to improve compliance with reporting requirements under the
Bayh- Dole Act for inventions created under contracts and grants.
For our first objective, we reviewed reports on research funding prepared
by the National Science Foundation (NSF) showing estimated intramural and
extramural research obligations for each federal agency for fiscal year
2001. Using these reports, we selected nine agencies that had obligated at
least $500 million in intramural research funds during the fiscal year.
These agencies were the Agricultural Research Service (ARS) within the
Department of Agriculture; the Department of the Air Force within the
Department of Defense (DOD); the Department of the Army within DOD; the
Department of Energy (DOE); the National Aeronautics and Space
Administration (NASA); the National Oceanic and Atmospheric Administration
(NOAA) within the Department of Commerce; the National Institutes of
Health (NIH) within the Department of Health and Human Services; the
Department of the Navy within DOD; and the U. S. Geological Survey (USGS)
within the Department of the Interior. For each of these agencies, we
interviewed officials and reviewed documentation to obtain information on
the design and approach of their programs for transferring technology
created in the agencies* facilities by agency employees and contractors.
We also asked each agency to provide (1) statistics on its technology
transfer output or activities for fiscal years 1997 through 2001 to the
extent such statistics were available and (2) specific examples of the
types of technologies it had developed.
For our second objective, we obtained the guidelines developed by the
Department of Commerce, in conjunction with the Interagency Working Group
on Technology Transfer, to assist federal agencies in preparing annual
reports required by the TTCA. We then contacted each of the nine agencies
we had selected under our first objective to determine how those agencies
had complied with the TTCA reporting requirements. In this regard, we
obtained the agencies* reports where available, compared these Appendix I:
Scope and Methodology
Appendix I: Scope and Methodology Page 39 GAO- 03- 47 Transferring and
Reporting Technology
to the data we obtained from the agencies under the first objective,
attempted to resolve any anomalies in the data with the agency officials,
and met with officials to determine what problems they encountered in
complying with the TTCA requirements and the Commerce guidelines. We also
held discussions with Commerce and Office of Management and Budget (OMB)
officials regarding overall compliance and the use that these agencies
were making of the individual agency reports in fulfilling their own
requirements under the TTCA.
For our third objective, we analyzed the activities of the agencies that
were included in our 1999 report on the Bayh- Dole Act entitled Technology
Transfer: Reporting Requirements for Federally Sponsored Inventions Need
Revision (GAO/ RCED- 99- 242, Aug. 12, 1999). These agencies were DOD,
DOE, NASA, NIH, and NSF. We contacted each of these agencies and asked
them to provide information on what they had done to improve compliance by
contractors and grantees under the Bayh- Dole Act since the issuance of
our report
We did not independently verify the statistical information provided by
the agencies. However, we did ask for clarification in cases where the
statistics we obtained for our first objective appeared to conflict with
statistics that the same agencies provided to OMB and Commerce that we
reviewed as a part of our second objective.
We conducted our work from October 2001 through September 2002 in
accordance with generally accepted government auditing standards.
Appendix II: Federal Obligations for Research and Development, Fiscal Year
2001, for Nine Selected Agencies
Page 40 GAO- 03- 47 Transferring and Reporting Technology
Dollars in millions a
Research type Character of work Agency Total b Extramural Intramural Basic
Applied Development
Agricultural Research Service $968.7 $40.8 $927.9 $523.1 $358.4 $87.2 Air
Force 13,745.6 12,662.1 1, 083.5 206.9 590.9 12,947.8 Army 5,310.7 3,
238.3 2, 072.4 204.3 639.0 4, 467.4 Department of Energy 6,793.5 5, 922.4
871.0 2, 383.6 2, 140.0 2, 269.8 National Aeronautics and Space
Administration 9,602.4 7, 105.5 2, 496.9 1, 898.3 2, 802.7 4, 901.4
National Institutes of Health 17,870.4 14,789.8 3, 080.7 10,397.1 5, 115.5
2, 357.8 Navy 8,748.6 5, 402.6 3, 346.0 396.1 532.8 7, 819.7 National
Oceanic and Atmospheric Administration 591.2 86.0 505.2 5. 2 562.9 23.1
United States Geological Survey 553.8 36.8 517.0 55.4 463.8 34.6
Total for nine agencies b $64,184.9 $49,284.3 $14,900.6 $16,070.0
$13,206.0 $34,908.8 Total for all agencies b $81,526.2 $62,173.6 $19,352.4
$20,274.4 $18,413.7 $42,838.1
a Statistics are based on preliminary estimates. b Totals may vary because
of rounding.
Source: National Science Foundation.
Appendix II: Federal Obligations for Research and Development, Fiscal Year
2001, for Nine Selected Agencies
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 41 GAO- 03- 47 Transferring and Reporting Technology
There is no single agency overseeing technology transfer in the federal
government. Rather, each agency with laboratories or otherwise involved in
technology transfer establishes its own program tied to its mission,
objectives, and priorities. The following are brief descriptions of the
research and technology transfer programs of nine federal agencies with
intramural research obligations of at least $500 million in fiscal year
2001.
The Agricultural Research Service (ARS) is the principal in- house
research agency of the U. S. Department of Agriculture. ARS* mission is to
conduct research to develop and transfer solutions to agricultural
problems of high national priority; provide access to and disseminate
information to ensure safe food and other high- quality agricultural
products; assess the nutritional needs of Americans; sustain a competitive
agricultural economy; enhance the natural resource base and the
environment; and provide economic opportunities for rural citizens,
communities, and society as a whole.
ARS also works to ensure the timely transfer of new knowledge and
technologies to potential users. In this regard, ARS seeks to broaden
public understanding of the value of agriculture and agricultural research
to ensure the continued primacy of U. S. agriculture in the 21st century.
ARS conducts research at over 100 locations across the country and at four
overseas laboratories. ARS* research is organized into 22 national
programs. These programs are intended to bring coordination,
communication, and empowerment to the more than 1,200 research projects
carried out by ARS. The programs focus on the relevance, impact, and
quality of ARS research.
In fiscal year 2001, ARS obligated a total of $968.7 million for research
and development. Of this amount, $523.1 million, or 54 percent, went to
basic research; $358. 4 million, or 37 percent went to applied research;
and the remaining $87.2 million, or 9 percent, went to development. Most
of this funding was obligated for ARS* own laboratories, with $927.9
million, or 95.8 percent, for intramural research, and $40.8 million, or
4.2 percent, for extramural research.
The Secretary of Agriculture has delegated ARS the authority to administer
the technology transfer program department- wide. ARS has centralized its
technology transfer activities in its Office of Technology Appendix III:
Descriptions of Technology
Transfer Programs Established by Nine Selected Federal Agencies
Agricultural Research Service
Research Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 42 GAO- 03- 47 Transferring and Reporting Technology
Transfer (OTT), which is responsible for protecting intellectual property,
developing strategic partnerships with outside institutions, and
performing other appropriate functions to enhance the effective transfer
of ARS technologies to users.
OTT is organized into four sections:
The administrative/ headquarters section coordinates the development of
technology transfer policy and signs licenses and cooperative research and
development agreements (CRADA).
The patent section assists scientists in protecting intellectual
property, coordinates invention reports, prepares and prosecutes patent
applications, and oversees patent applications prepared by contract law
firms.
The licensing section conducts marketing for selected technologies and
negotiates licenses for intellectual property.
The marketing section conducts targeted marketing and distributes
information on technologies that are available for licensing or
cooperative partnerships and publicizes information about the commercial
successes of ARS research.
Technology Transfer Coordinators are located at field locations and are
responsible for facilitating the development and effective transfer of
technologies. They serve as liaison with the agency*s own scientists and
managers as well as universities and the private sector. They also have
the authority to negotiate CRADAs, licenses, and other technology transfer
agreements.
As shown in table 1 of appendix IV, ARS received $2.6 million from
licensing income during fiscal year 2001, ranking behind only National
Institutes of Health (NIH) and the Department of Energy (DOE) among the
nine agencies included in our review. However, an ARS official said that
generating income is not the primary objective of their technology
transfer program. He said that, while intellectual property protection may
be required to justify the cost of commercial development by a licensee,
many excellent original ideas are best transferred to those who need the
information by using scientific publications or other methods* such as
electronic media, field days, demonstration projects or public release*
that do not involve patenting. If protection is needed, it generally is
achieved through applying for a patent. In deciding whether to seek a
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 43 GAO- 03- 47 Transferring and Reporting Technology
patent, ARS* first consideration is to determine if protection would
enhance the likelihood that the technology will be transferred to the
private sector.
ARS generally grants exclusive or partially exclusive licenses. Of the 31
new licenses executed in fiscal year 2001, for example, 21 were exclusive
and 7 were partially exclusive. An ARS official said that most companies
would not spend the resources necessary to develop and market a product
unless they are granted a license with some degree of exclusivity. License
fees and royalties are negotiated on a case- by- case basis and depend
upon several factors, including the scope of rights granted, the size of
the potential market, and the time and financial investment required by
the licensee to bring a product to market. Negotiated royalty rates are
based upon the anticipated profit margins for the product to be marketed
by the licensee.
ARS license income is distributed in compliance with the Federal
Technology Transfer Act of 1986. Government inventors collectively divide,
as an incentive award, the first $2, 000 of income received by ARS from
each license and 25 percent of the income over $2,000 each year up to a
maximum of $150,000 per inventor each year.
ARS has had a number of successful technology transfer outcomes. For
example, ARS received royalties from three of its patented soybean
varieties, which have been licensed to three different companies. The
varieties are the first improved forage- type soybean cultivars bred for
animal feed and can be used for grazing, hay or silage over a wide
geographic area of the United States. ARS also made 46 plant germplasm
releases to U. S. farmers, nurseries, breeders, and researchers to help
speed transfer of those technologies to the public. 1 The releases
included a new citrus rootstock and new wheat, dry pea, potato, soybean,
chickpea, lentil, grape, raisin, blueberry, small dry bean, and plum
varieties as well as several new germplasm lines with enhancements or
improved qualities.
ARS is also working with another U. S. Department of Agriculture agency
and the Florida Department of Agriculture and Consumer Services on a 5-
year initiative to help U. S. southern states combat Red Imported Fire
1 Genes necessary for crop improvement are contained in a broad array of
plant materials that, when used in breeding or genetic research, are
termed *germplasm.*
Examples of Technologies Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 44 GAO- 03- 47 Transferring and Reporting Technology
Ants. Under the initiative, Florida*s Department of Agriculture and
Consumer Services will rear a special fly species that specifically
parasitizes fire ants. The flies will then be shipped to state- managed
field sites for release in southern states. ARS researchers brought the
fly to their U. S. facilities several years ago from Brazil, and have
since mastered biological control strategies using the fly to attack fire
ant populations.
The mission of the Department of Air Force is to defend the United States
and protect its interests through aerospace power. Achieving this mission
requires competencies in aerospace superiority, global attack, rapid
global mobility, precision engagement, information superiority, and agile
combat support.
The Air Force*s primary research arm is the Air Force Research Laboratory,
which itself is a component of the Air Force Materiel Command. The Air
Force Research Laboratory*s mission is to lead the discovery, development,
and integration of affordable war- fighting technologies for the aerospace
forces. The laboratory conducts and sponsors research and development
through nine technology directorates devoted to specific research areas
and located throughout the United States.
In fiscal year 2001, the Air Force obligated a total of $13.7 billion for
research and development, with $206.9 million, or 1.5 percent, for basic
research; $590. 9 million, or 4.3 percent, for applied research; and $12.9
billion, or 94.2 percent, for development. The majority of the research
and development budget went to contractors and grantees, with $12.6
billion, or 92.1 percent, spent on extramural projects and $1.1 billion,
or 7.9 percent, spent on intramural projects.
The Air Force Research Laboratory manages the Air Force*s technology
transfer program for intramural research. However, the program itself is
decentralized, with each directorate having its own technology transfer
focal point and intellectual property team. The technology transfer
program team*s primary objective is to enhance management of technology
transfer through streamlining the program execution and providing
guidance. Decisions on patenting and licensing are handled at the
directorate level. If the intellectual property team in a directorate
decides an invention should be patented, the Air Force Research Laboratory
pays for the costs of obtaining the patent as well as the first Department
of the Air
Force Research
Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 45 GAO- 03- 47 Transferring and Reporting Technology
maintenance fee. 2 Thereafter the directorates elect whether to pay the
second and third maintenance fees. Similarly, the individual teams in the
directorates are responsible for attempting commercialization and
executing licenses for the technologies.
According to an Air Force official, the Air Force seeks patent protection
on inventions that have significant military potential or commercial
value. In this regard, the Air Force is ensuring that the government*s
rights in federally funded technologies are protected for future use by
the Department of Defense (DOD). The official said that the Air Force
seeks to develop and exploit its inventions through CRADAs and patent
licenses, with one of its objectives being the potential cost savings to
DOD and the public that can be realized through higher volume production.
He also noted, however, that the Air Force has had limited success in
translating inventions developed primarily for military purposes into
commercial products.
The Air Force has no centralized database or monitoring system for Air
Force inventions. Rather, the inventions are tracked by the directorates
that created them. The Air Force is in the process of implementing an
information management system originally developed by the Navy. When
operational, this system will serve as a centralized database and tracking
system for intramural inventions Air Force- wide.
As one example of a commercially successful invention, Air Force officials
cited their creation of a less costly and more environmentally friendly
system for removing snow from airplanes. In the past, ethylene glycol and
propylene glycol were used to de- ice airplanes. However, after being
sprayed onto aircraft, these chemicals typically escape onto the pavement,
where they can contaminate streams and ground water. Consequently, the
Environmental Protection Agency established limits for these materials in
surface water, and airports must employ costly procedures to retain and
dispose of the glycol runoff. The snow removal system developed by the Air
Force uses compressed air to blow snow and unattached ice off airplane
wings. It then puts a thin film of heated glycol on the cleaned wing to
melt any residual ice. The new, forced- air technology often cleans a wing
in a single step without using any glycol and, even when glycol is
2 Fees for maintaining in force a patent based on an application filed on
or after December 12, 1980. Example of Technologies
Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 46 GAO- 03- 47 Transferring and Reporting Technology
required, the amount needed can be 70- 90 percent less than when heated
glycol alone is used. The Air Force estimates that its invention can save
$21,000-$ 27,000 per plane over the previous method.
The Department of the Army*s mission is to organize, train, and equip its
forces to fight and win the nation*s wars and achieve directed national
objectives. In this regard, the Army has a multi- billion dollar research
and development program that involves varied research efforts to improve
defensive and offensive capabilities. These efforts include developing new
materials, equipment, and systems to enhance the Army*s military
capabilities.
In fiscal year 2001, the Army obligated $5.3 billion for research and
development, with $204.3 million, or 3.8 percent, for basic research;
$639.0 million or 12.0 percent, for applied research; and $4.5 billion, or
84.1 percent, for development. The bulk of this funding went to
contractors and grantees, with $3.2 billion, or 60.9 percent, for
extramural projects and $2.1 billion, or 39.1 percent, for intramural
projects.
Army officials said that their technology transfer activities are intended
to work in synergy with U. S. industry to strengthen the military and the
nation*s economy. The Army recognized that a common military and private
sector production base increases military strength and bolsters the
private sector economy. Thus, the technology transfer program began with
transferring *spin- off* technology from military research to private
industry. It has evolved to include *dual- use* and *spin- on* technology
to transfer technology between the military and the private sector. Some
Army officials believe that licensing Army technology to private industry
results in economies of scale that will decrease the Army*s procurement
costs.
The Army*s technology transfer function is decentralized in that there is
no one group or office that oversees intellectual property. Rather, each
command is responsible for managing the property it has created. The
Domestic Technology Transfer Program Office, under the Deputy Assistant
Secretary of the Army for Research Technology, provides interpretation of
DOD technology transfer regulations and issues additional policy guidance
to the field as necessary. The Army has also designated an Intellectual
Property Counsel to provide supervision, guidance and assistance in
intellectual property matters. Department of the
Army Research Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 47 GAO- 03- 47 Transferring and Reporting Technology
The Army has established an Office of Research Technology Applications at
43 Army research facilities. Office of Research Technology Applications
personnel, in addition to other duties, market and commercialize Army
inventions. The Army also has patent counsels located at 13 facilities.
The patent counsels provide guidance on the patentability of inventions,
prepare and file patent applications, and provide legal assistance in
preparation of patent license agreements. Office of Research Technology
Applications personnel and the patent counsels can negotiate license
agreements. Each command or facility is responsible for monitoring and
tracking its own inventions, patents, and license agreements. There is no
centralized database at the service level. Thus, if the Army wishes to
develop statistics on technology transfer, it must query the individual
Office of Research Technology Applications and patent counsels.
Twelve Army research units reported technology transfer activities during
fiscal year 2001, but they differed significantly in the level of these
activities. Three units, for example, accounted for 81.8 percent of the
$845,472 in licensing income the Army received in fiscal year 2001. The
Corps of Engineers* Humphreys Engineer Center was by far the largest,
accounting for 47.2 percent of all licensing income, followed by the
Armament Research, Development and Engineering Center with 21.3 percent
and the Army Medical Research and Materiel Command with 13.4 percent.
Army officials pointed to several technologies they viewed as successful.
For example, researchers at the Engineer Research and Development Center
have developed a concrete armor unit that can reduce the cost of
breakwater construction by nearly half. This invention has been patented
and trademarked in the United States and foreign countries. The Army has
awarded multiple licenses for the technology, which is gaining acceptance
in the coastal engineering community.
The Army Research Laboratory developed a new ceramic material with both
military and commercial applications. This ferro- electric ceramic
material should increase communications capabilities and reduce cost. One
of the applications includes low- cost tunable scanning antennas for
communications satellites. The Army licensed the patents that are the
heart of this ceramic material technology to a private company. The
company has since grown from 4 to 90 employees and has developed the
technology for use in areas such as cell phones and direct satellite
communications systems. Army officials expect the technology to attract $8
million in private research and development funds in research areas of
Examples of Technologies
Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 48 GAO- 03- 47 Transferring and Reporting Technology
direct interest to the Army and also anticipate substantial royalty
income. They also believe that the licensing will lead to dual- use
production that will benefit the civilian and military sectors in the area
of broadband wireless communications.
Researchers at the Army*s Edgewood Chemical Biological Center invented,
developed, and patented a new method for detecting, measuring, and
identifying viruses and nanoparticles in near real time. Using this
technology, viruses can be counted and identified using only physical
properties without the use of complicated chemistry or reagents. The Army
expects the technology to be useful in developing new products such as
vaccines. In addition, the technology may help researchers develop a wide
range of materials such as paints, coatings, and transparent films. This
technology could benefit the computer industry by leading to more complex
devices with improved nanometer- sized separations and tolerances.
According to the Army, commercialization of this new technology may result
in $200 million in new instrumentation, enhance scientific advancement,
and increase our understanding of viruses.
The Department of Energy (DOE) manages the government*s energyrelated
research and development efforts and oversees a large portion of its
scientific and technological infrastructure. DOE*s five- fold mission is
to (1) foster a secure and reliable energy system that is environmentally
and economically sustainable; (2) be a responsible steward of the nation*s
nuclear weapons; (3) clean up DOE*s nuclear facilities; (4) lead in the
physical sciences and advance the biological, environmental, and
computational sciences; and (5) provide premier scientific instruments for
the nation*s research enterprise.
Research and development are at the heart of DOE*s mission. In fiscal year
2001, DOE obligated a total of $6.8 billion dollars for research and
development with $2.4 billion, or 35.1 percent, for basic research; $2.1
billion, or 31.5 percent, for applied research; and $2.3 billion, or 33.4
percent, for development. Extramural research* mostly conducted by DOE*s
government- owned, contractor- operated laboratories* accounted for $5.9
billion, or 87.2 percent, of the total research budget, while intramural
research accounted for $871.0 million, or 12.8 percent.
Recognizing that its scientific advances must be paired with effective
technology transfer mechanisms, DOE has authorized 24 of its facilities to
Department of Energy
Research Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 49 GAO- 03- 47 Transferring and Reporting Technology
engage in technology partnering activities such as licensing arrangements;
CRADAs; and the development, transfer, and exploitation of federally owned
or originated technology. In addition, DOE administers a number of
programs aimed at advancing science through accelerating and ensuring the
widespread use of new technologies. For example:
Within the Office of Environmental Management, the Office of Technology
Applications facilitates the application of new technologies, processes,
and knowledge to environmental management problems and develops
initiatives, policies, and procedures that unite end users, regulators,
stakeholders, technology vendors, and technology developers.
The Office of Energy Efficiency and Renewable Energy*s Office of
Industrial Technologies strives to deliver advanced energy technology
through partnerships with industry, government, and non- governmental
organizations.
The Office of Science*s Laboratory Technology Research program focuses
on establishing cost- shared partnerships with the private sector.
DOE offers a number of programs that promote small business*s role in
the development and commercialization of federally funded technologies.
As shown in table 1 of appendix IV, DOE had more invention disclosures,
patent applications, patents issued, patents in force, licenses executed,
licenses in force, and licenses earning income in fiscal year 2001 than
any of the eight other agencies included in our review. Also, DOE was
second only to NIH in licensing income, with $21.4 million received during
the fiscal year.
Most of the inventions produced from DOE funds are developed at DOE*s
contractor- operated facilities. In fiscal year 2001, for example,
contractor- operated facilities obtained patents for approximately 540
inventions and received about $21 million in licensing royalties.
According to a DOE official, some inventions developed at contractor-
operated facilities are exempt from patenting since they include
technologies* such as those involving nuclear reactors* that cannot be
made available to the public. For various reasons, DOE contractors on
occasion choose not to apply for patents on the technologies they have
created. When this happens, DOE can elect to retain title to the invention
and to apply for a patent. If DOE elects not to pursue a patent, it may be
possible for the inventor to file a patent application in his or her own
name. In any event, the technology is also frequently published in the
scientific literature.
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 50 GAO- 03- 47 Transferring and Reporting Technology
DOE officials said that they produce relatively few inventions in the
laboratories DOE itself operates. In addition, they said that the
inventions that are created in DOE laboratories involve technologies that
are not easily commercialized.
All DOE sites, regardless of their intramural or extramural status, submit
invention disclosure information to DOE through an automated data system.
The system tracks the status of each invention and has the capability of
providing a complete record of the invention*s status. Licensing
activities are concentrated in the individual laboratories, and the
contractors have the responsibility for attempting commercialization of
their DOE- funded inventions. DOE itself does not normally become involved
in the licensing negotiations nor does it maintain statistics on specific
licenses executed by the individual laboratories.
DOE*s licenses cover various types of property, with patents accounting
for 55.4 percent, copyrights accounting for 38. 4 percent, and other
properties, accounting for 6. 2 percent of licenses executed in fiscal
year 2001. Most licenses are nonexclusive, accounting for 85.2 percent of
the licenses executed in fiscal year 2001.
DOE facilities have produced and successfully transferred many inventions
DOE believes have technical significance, uniqueness, and promise of real-
world application. For example, one invention based on DOE- funded
research, the CombiSep MCE 2000, is poised to become a leading chemical
separation instrument. This invention employs multiplexed capillary
electrophoresis using absorption detection to rapidly separate samples of
complex chemical or biochemical mixture. 3 It has the ability to decipher
an individual*s entire genetic code faster, more accurately, and less
expensively than conventional instrumentation. The director of Ames
Laboratory*s Chemical and Biological Sciences Program developed the
multiplexed capillary electrophoresis technology and subsequently helped
establish a start- up company to turn his discoveries into a commercial
instrument. Within 9 months, the company had designed, tested, and sold
the first instrument.
3 Capillary electrophoresis involves the use of an electrical current that
causes the molecules in the sample under investigation to migrate at
different speeds, according to size and charge. Examples of Technologies
Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 51 GAO- 03- 47 Transferring and Reporting Technology
Technologies related to a new catalyst for fuel cell development have also
been transferred successfully. Developed at DOE*s Argonne National
Laboratory, the new fuel cell technology is the key component of a fuel
processor that efficiently converts methanol, ethanol, natural gas,
gasoline, and diesel into hydrogen that can be fed to a fuel cell to
produce electricity. This fuel flexibility, a shorter startup time, and
lower operating temperatures will help make fuel- cell- powered
automobiles practical and may accelerate bringing ultra- efficient,
environmentally friendly electric cars into the marketplace. The
technology will be manufactured and distributed under a licensing
agreement between the Argonne National Laboratory and a private company.
The National Aeronautics and Space Administration (NASA) was created to
undertake civilian research, development, and flight activities in
aeronautics and space to maintain the country*s preeminence in those
areas. NASA conducts its research through laboratories in headquarters,
nine field installations, and the Jet Propulsion Laboratory* the agency*s
only government- owned, contractor- operated facility* operated by the
California Institute of Technology.
In fiscal year 2001, NASA obligated $9.6 billion for research and
development, with $1.9 billion, or 19.8 percent, for basic research; $2.8
billion, or 29.2 percent, for applied research; and $4.9 billion, or 51
percent, for development. NASA obligated $7.1 billion, or 74 percent, for
extramural research and $2.5 billion, or 26 percent, for intramural
research.
NASA has both an intellectual property program and a commercial technology
program. NASA*s Office of General Counsel administers its intellectual
property program. The office develops policy and establishes operations
necessary to protect, maintain, license, use, and dispose of intellectual
property rights in inventions, discoveries, innovations, writings, etc.
that are created, acquired or used in the performance of NASA programs.
The program is intended to (1) stimulate the creation, identification, and
use of new technology in NASA programs; (2) foster the widest practical
and appropriate dissemination and commercial utilization of new technology
arising out of agency programs; (3) protect the government*s interests in
intellectual property; (4) respect private interests in intellectual
property; and (5) recognize and reward innovation. National Aeronautics
and Space Administration
Research Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 52 GAO- 03- 47 Transferring and Reporting Technology
NASA*s commercial technology program, which is a part of the Office of
Aerospace Technology, includes commercial programs, technology transfer
agents, and the Small Business Innovation Research Program. The purpose of
the commercial programs is to share the harvest of NASA*s technology
program with the U. S. industrial and scientific community. The technology
transfer agents facilitate the transfer of NASA and other federally
sponsored research and technology to the U. S. private sector for
commercial application, thereby enhancing U. S. industrial growth and
economic competitiveness. The goal of NASA*s Small Business Innovation
Research Program is to promote the widest possible award of NASA research
contracts to the small business community as well as to promote
commercialization of the results of this research by the small business
community.
NASA uses its TechTracS data system for monitoring and tracking intramural
inventions. Invention disclosures are sent to the Office of Patent
Counsel, where decisions are made about whether patent applications should
be filed. If a patent application is filed, commercial program personnel
are tasked with the marketing effort. Commercialization efforts are
varied. New technologies are featured on NASA*s website. On occasion, NASA
uses direct marketing through email. Also, inventors may provide leads to
technology transfer professionals who, in turn, contact industry
associates to inform them of new inventions.
Like other contractors working on federally sponsored research, the
California Institute of Technology has the first option to retain title to
inventions developed at the Jet Propulsion Laboratory and is entitled to
receive 100 percent of the royalties from patent licenses. However, NASA
is entitled to patent any inventions that the California Institute of
Technology declines and has assigned a patent counsel to its management
office at the Jet Propulsion Laboratory to handle these inventions.
Many of NASA*s licenses have some degree of exclusivity because of the
amount of money that is normally required to bring one of NASA*s
inventions to market. NASA officials said that venture capitalists often
require some exclusivity in order to loan money to the licensees. Normally
there is not a lot of competition in licensing. If more than one party
wants to license the same technology, NASA will usually try to license it
to both parties and divide it by the field of use. About 95 percent of
NASA*s licenses are issued to small businesses.
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 53 GAO- 03- 47 Transferring and Reporting Technology
NASA shares its licensing income with the inventors. In addition to an
award of $500 when a regular patent application is filed, an inventor
receives the first $5,000 of the royalties collected and 25 percent of the
balance accumulated each fiscal year under each license. However, no one
inventor can receive more than $150,000 per calendar year without
presidential approval. A slightly different formula is used if there is
more than one inventor.
In order to maintain awareness of successful transfer and application of
technology by industry and the public, NASA compiles *success stories*
showing examples of how its technology is utilized. In one such example,
NASA researchers at the Langley Research Center developed a method of
producing two distinct wavelengths from a single laser. The technology was
discovered and developed in support of one of the agency*s remote sensing
programs as a method of measuring the wind speed or the density of
atmospheric constituents. In the past, applications that demanded more
than one wavelength required building a system with multiple laser
cavities, which greatly increased the cost and complexity of a laser
device. When officials from a New Jersey start- up company learned of the
invention, they believed it could be used to develop a dental laser that
would break the price barrier that has kept painless laser dentistry out
of reach for most dentists and their patients. A company scientist will be
working to refine the inventions in the NASA Langley Research Center
Laboratory. The goal of this work is to produce the two specific
wavelengths that have been approved by the FDA for use in dentistry. One
of these wavelengths is effective on hard tissue, such as teeth, and will
replace the dentist*s drill. The other wavelength is effective on soft
tissue, such as gums, and will replace the scalpel for gum surgery.
As a second example, NASA scientists at the Marshall Space Flight Center
developed Video Image Stabilization and Registration, a system that
improves the clarity of video footage by correcting distortion caused by
adverse conditions. A video processing algorithm is used to co- align
video image fields by analyzing the picture pixel and removing the effects
of translation, magnification, and rotation. The system was successfully
used to assist the FBI in analyzing video footage of the deadly 1996
Olympic Summer Games bombing in Atlanta, Georgia. An Alabama company has
employed this technology to develop its trademark Video Analyst System,
which offers broadcast- quality analysis features on Intel- based
hardware. Several law enforcement organizations have purchased the system.
It also can be used in tollbooths, airports, and emergency vehicles. The
military can use this technology for intelligence, surveillance, and
reconnaissance. Examples of Technologies
Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 54 GAO- 03- 47 Transferring and Reporting Technology
The National Institutes of Health (NIH) cites its mission as *science in
pursuit of fundamental knowledge about the nature and behavior of living
systems and the application of that knowledge to extend healthy life and
reduce the burdens of illness and disability.* In this regard, NIH seeks
to (1) foster fundamental creative discoveries, innovative research
strategies, and their applications as a basis to advance significantly the
nation*s capacity to protect and improve health; (2) develop, maintain,
and renew scientific human and physical resources that will assure the
nation*s capability to prevent disease; (3) expand the knowledge base in
biomedical and associated sciences to enhance the nation*s economic well-
being and ensure a continued high return on the public investment in
research; and (4) exemplify and promote the highest level of scientific
integrity, public accountability, and social responsibility in the conduct
of science.
NIH conducts and supports research in the causes, diagnosis, prevention,
and cure of human diseases; in the processes of human growth and
development; in the biological effects of environmental contaminants; in
the understanding of mental, addictive and physical disorders; and in
directing programs for the collection, dissemination, and exchange of
information in medicine and health, including the development and support
of medical libraries and the training of medical librarians and other
health information specialists. In fiscal year 2001, NIH obligated $17.9
billion for research and development, with $10.4 billion, or 58.1 percent,
for basic research; $5.1 billion, or 28.6 percent, for applied research;
and $2. 4 billion, or 13.2 percent, for development. Most of the budget
went to contractors and grantees, with $14.8 billion, or 82.8 percent,
obligated for extramural research and $3.1 billion, or 17.2 percent,
obligated for intramural research. NIH conducts and sponsors its
intramural research through 27 institutes and centers devoted to diverse
areas of public health.
As both a sponsor of and participant in biomedical research, NIH is an
aggressive proponent of technology transfer, noting that it *has a dual
interest in accelerating scientific discovery and facilitating product
development.* NIH*s technology transfer program for intramural research
has both decentralized and centralized features. For example the agency
has centralized, within the OTT in the Office of the Director, the
coordination of all policies affecting technology transfer and
intellectual property matter, including the review of all proposed CRADAs.
The agency has decentralized activities regarding the development and The
National
Institutes of Health Research
Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 55 GAO- 03- 47 Transferring and Reporting Technology
implementation of CRADAs, Clinical Trial Agreements, and Material Transfer
Agreements, however, by assigning these to the institutes and centers. The
individual institutes and centers are responsible for advising their staff
on technology transfer issues and assisting them in determining when to
disclose new technology by filing Employee Invention Reports. The
institutes and centers also provide the OTT with their views on proposed
patenting and licensing strategies and the authorization of institute or
center funds to pursue patenting activities through the OTT. The OTT is
funded through a special budget review process and funds authorized are
provided on a formula basis from each institute and center that uses OTT
services.
OTT has developed its own automated tracking system for monitoring
technology transfer activities for NIH*s intramural research programs.
This system is separate from the iEdison system NIH uses for the reporting
of inventions under its extramural research programs. NIH officials said
that the intramural monitoring system is becoming outdated and that they
plan to replace it with NIH TechTracS, an invention tracking system
initially developed by NASA. After significant modification by NIH staff,
the new system will be the official NIH technology transfer data system
for fiscal year 2003 technology transfer activities.
NIH consistently leads all federal agencies in licensing income. As shown
in table 1 of appendix IV, NIH received $46.1 million in income during
fiscal year 2001, or 61.9 percent of the income received by all 9 agencies
we reviewed. NIH had more than twice the income received by DOE, the
second largest agency in terms of income, and more than 17 times the
income received by ARS, the third largest. Licensing income varied widely
among NIH*s 27 institutes and centers, with three institutes* the National
Cancer Institute, the National Institute for Allergy and Infectious
Diseases, and the National Heart, Lung, and Blood Institute* accounting
for the vast majority of revenues.
NIH receives licensing income from a variety of sources. The largest is
earned income based on the royalty schedules in the licensing agreements.
Other sources of income include *execution* fees charged licensees upon
entering the licensing agreements, *minimum annual* fees required of
licensees for remaining in their agreements with NIH, and reimbursements
by the licensees for NIH*s costs of obtaining patents.
NIH officials said that the agency has become more selective in the
inventions they choose to patent. In this regard, they follow the Public
Health Services Technology Transfer Policy Manual, which provides that
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 56 GAO- 03- 47 Transferring and Reporting Technology
patents on biomedical technologies should be sought only when a patent
would facilitate the availability of the technology to the public for
preventive, diagnostic, therapeutic, or research use or other commercial
use. Some institutes and centers have internal review groups that provide
opinions as to whether particular technologies should be patented. In
addition, the OTT conducts a detailed evaluation of each technology and
provides the information to the institute or center with a recommendation.
Ultimately, however, the decision on whether to spend an institute*s or
center*s funds to support the patenting of a particular technology is the
responsibility of the institute or center. Even if the decision is not to
patent, NIH may seek to transfer the technology through other mechanisms.
For example, if the invention would be informative to those engaged in
research or otherwise beneficial to the public health but probably would
not have a sufficient commercial appeal, NIH might simply give notice
through publication. If the invention was a biological material that had
commercial appeal that would last for a relatively short time, NIH might
license it without seeking a patent. Patenting would be reserved for
inventions that require further research and development to protect a
substantial investment to be made by the licensee. In fiscal year 2001,
149 of the 200 licenses NIH executed were based on patented inventions and
the other 51 were based on nonpatented biological materials.
NIH officials said that it is NIH*s policy to pursue nonexclusive or co-
exclusive licenses whenever possible. This allows more than one company to
develop products that use the same technology and may ultimately compete
with each other in the marketplace. They noted that this practice is
consistent with the agency*s objective of disseminating the results of its
research as widely as possible and fostering competition. For fiscal year
2001, NIH executed 153 nonexclusive, 44 exclusive, and 3 partially
exclusive licenses among the 200 licenses the agency executed in total.
The OTT has designated staff responsible for billing for royalties due and
reviewing income reports to ensure that licensees are paying the
appropriate amounts. When inconsistencies are found, the matter is
referred to OTT*s Audit and Infringement group for resolution. In
addition, the Audit and Infringement group* which currently consists of
two persons* reviews audit reports that are submitted to the OTT in
accordance with license requirements and requests audits when necessary to
resolve questions regarding the payments the licensees make to NIH. OTT
contracts for these audits with private firms, with the costs borne by the
institute or center that is a party to the license.
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 57 GAO- 03- 47 Transferring and Reporting Technology
NIH has numerous technologies that have been successful in the diagnosis
and treatment of diseases and other medical conditions. For example:
Magnetic Resonance Imaging is a very popular non- invasive technique in
the radiologist*s toolkit. However, it suffers from many limitations,
including insufficient resolution and the difficulty of obtaining real-
time pictures. Recent developments such as saturation transfer techniques,
which were developed at the NIH, have dramatically improved both the
spatial and temporal resolution of Magnetic Resonance Imaging pictures. In
saturation transfer, the exchange of protons between tissue molecules and
the water that surrounds them is examined. Such measurements provide a
wealth of information that can then be analyzed for many different
parameters including tissue structure, motion, and viability. A number of
major manufacturers have made magnetization transfer a standard feature on
Magnetic Resonance Imaging machines, thus providing the users with the
ability to push forward the diagnostic utility of this technology.
Licensed non- exclusively to a large number of companies, the
NIHdeveloped AIDS test kit can be credited with single- handedly
increasing the safety of the human blood supply and bringing about sharp
declines in AIDS cases due to blood transfusion. The original patent dealt
with the isolation, purification, characterization and scale- up of HIV,
the causative agent of AIDS. The potential of these discoveries were very
quickly realized with the rapid development of a blood test for AIDS. NIH
hopes that this patent, which describes the structure and properties of
HIV, will one day also lead to the development of effective vaccines that
can prevent the spread of this deadly scourge.
Hepatitis A is probably the most widespread of viral hepatitis diseases,
and is endemic among the children of underdeveloped countries. NIH
scientists were the first to develop a strain of this virus, HM- 175,
which could be grown in cell culture. This opened a totally new way to
understand and halt the spread of this disease. The technology itself has
been non- exclusively licensed to GlaxoSmithKline, which has successfully
developed and commercialized a vaccine for this disease.
The National Oceanic and Atmospheric Administration (NOAA) is an agency of
the Department of Commerce. Its mission is to describe and predict changes
in the Earth*s environment and conserve and manage the nation*s coastal
and marine resources. Examples of Technologies
Developed National Oceanic and Atmospheric Administration
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 58 GAO- 03- 47 Transferring and Reporting Technology
NOAA conducts research primarily through the Office of Oceanic and
Atmospheric Research, which focuses on enhancing our understanding of
environmental phenomena such as tornadoes, hurricanes, climate
variability, solar flares, changes in the ozone, El Nino/ La Nina events,
fisheries productivity, ocean currents, deep sea thermal vents, and
coastal ecosystem health. NOAA has about 50 laboratories nationwide, with
12 of these in the Office of Oceanic and Atmospheric Research*s network.
In fiscal year 2001, NOAA obligated a total of $591.2 million for research
and development, of which $5.2 million, or 0.9 percent, was for basic
research; $562. 9 million, or 95.2 percent, was for applied research; and
$23.1 million, or 3.9 percent, was for development. Most of this funding
went to NOAA*s own researchers, with $505.2 million, or 85.5 percent,
obligated for intramural research and $86.0 million, or 14.5 percent,
obligated for extramural research.
NOAA does not have a large technology transfer program, ranking ninth
among the nine agencies we surveyed in every category of measurable output
in fiscal year 2001. As shown in table 1 of appendix IV, NOAA disclosed 2
inventions, applied for 3 patents, was issued 1 patent, and had 10 patents
in force. None of these applications or patents was foreign. Similarly,
NOAA executed only one license and had only one license in force in fiscal
year 2001. That license was exclusive, was with a domestic licensee, and
was based on a patent. The patent on which the license is based will
expire in 3 years. Total licensing income was $1, 500 during the fiscal
year.
NOAA*s technology transfer office is the Office of Research and Technology
Applications within the Office of Oceanic and Atmospheric Research. One
NOAA official is assigned to the task of technology transfer on a part-
time basis, with the remainder of his time devoted to the Small Business
Innovation Research Program, a far larger program at NOAA. 4 NOAA
officials said that the agency*s technology does not easily lend itself to
marketable inventions and that this was the main reason they did not have
more licenses. They also acknowledged, however, that the agency needed to
be more aggressive in identifying technologies that could be developed and
licensed and is looking for ways to improve its technology transfer
program. They said that this would require a larger staff, more
4 NOAA is in the process of hiring a full time employee. Research
Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 59 GAO- 03- 47 Transferring and Reporting Technology
funds, more training, and a new commitment on the part of the
laboratories.
NOAA*s technology transfer policy is explained in an administrative order.
Among other things, the order contains the procedures for disclosing,
patenting, and licensing an invention. NOAA has also taken a number of
steps to educate and inform its scientists on technology transfer and
CRADAs.
When a NOAA employee creates new technology, the inventor is responsible
for preparing and forwarding an invention disclosure statement and a
completed questionnaire to the appropriate laboratory director. The NOAA
laboratory director forwards the invention disclosure statement and
questionnaire to the Department of Commerce Patent Counsel with (1) a
recommendation on whether the Department of Commerce should pursue a
patent and (2) a statement indicating whether the laboratory will
negotiate a license on the invention if a patent application is filed. The
Department of Commerce Patent Counsel initiates the filing of any patent
application and handles any licenses. The individual NOAA laboratories are
responsible for any costs associated with the patent application process
and fees for invention management services. The laboratories are also
responsible for marketing the inventions. NOAA inventors receive at least
30 percent of the royalties or other income from their inventions.
NOAA officials said that, in the past, the laboratories have varied in
deciding what to do with their inventions. Sometimes they published their
research and did not pursue a patent. In other cases, they simply provided
the information to those who needed it without bothering to get a patent
or a license. The officials said that there usually is little interest in
trying to market NOAA inventions because they seldom have commercial
appeal. They also said that NOAA laboratories cite the high cost of
obtaining patents as a major obstacle to patenting their technologies.
One of NOAA*s more successful inventions involved a method for producing
fishmeal from fish processing waste. Employees at one of NOAA*s
laboratories initiated the research project after a fishmeal producer
asked for assistance in modifying fishmeal to meet the minimum
specifications required by the animal feed industry. The researchers then
developed a new technique for producing high- quality fishmeal by adapting
equipment used to remove seeds from fruit and vegetables. Although this
technique was not patented, two companies have Examples of Technologies
Developed
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 60 GAO- 03- 47 Transferring and Reporting Technology
subsequently incorporated the new technology into their processes. The
technique is considered a success because it results in the production of
fishmeal that has a higher nutritive and economic value while at the same
time increasing the utilization of marine fisheries resources. Also, NOAA
officials said that the invention helped to reduce unemployment in two
villages.
NOAA*s only active license is for an acoustic scintillation liquid flow
measurement system. The technology can be used in dams, hydroelectric
plants, ports, harbors, and irrigation canals. NOAA licensed the invention
to the Canadian Ministry of Fisheries and Oceans, which, in turn, licensed
it to a Canadian company. The co- inventor works for the Ministry of
Fisheries and was instrumental in locating the company that licensed the
technology after no U. S. firms responded to NOAA*s notice in the Federal
Register that the technology was available for licensing.
The Department of the Navy*s mission is to maintain, train, and equip
combat- ready naval forces capable of winning wars, deterring aggression,
and maintaining freedom of the seas. To support its efforts, the Navy has
a multi- billion dollar research and development program aimed at
improving the defensive and offensive capabilities of air, surface, and
undersea weapons systems.
The Navy*s research efforts include developing new materials, equipment,
and systems to enhance the Navy*s military capabilities. The Navy also
conducts biomedical research to enhance the health, safety, performance
and readiness of military personnel. In fiscal year 2001, the Navy
obligated a total of $8.7 billion for research and development, with $396.
1 million, or 4.5 percent, for basic research; $532.8 million, or 6.1
percent, for applied research; and $7. 8 billion, or 89.4 percent, for
development. Of this funding, $5.4 billion, or 61.9 percent, was obligated
for extramural projects and $3.3 billion, or 38.2 percent, was obligated
for intramural projects.
The Navy*s technology transfer program for intramural research is, for the
most part, decentralized. The Navy*s Office of Naval Research is
responsible for the supervision, administration, and control of activities
related to patents, inventions, trademarks, copyrights, and royalty
payments. However, the Navy*s invention disclosure, patenting, and
licensing activities are decentralized within the local facilities or
commands performing these tasks. Aside from the Office of Naval Department
of the
Navy Research
Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 61 GAO- 03- 47 Transferring and Reporting Technology
Research, there are 17 Navy offices or facilities that have assigned
patent counsels. Each Navy facility monitors its own invention
disclosures, determines what technologies will be patented, and pays for
these activities with its own funds. Technology transfer personnel at the
facilities, assisted by local patent counsel, are responsible for
marketing the inventions, negotiating licenses, and executing the license
agreements. Royalty payments are centralized in that all license royalty
payments are sent to the Office of Naval Research*s Patent Counsel for
processing.
The Office of Naval Research has developed its own automated reporting and
tracking system for monitoring technology transfer activities for its
intramural research programs. This system is known as the Intellectual
Property Management Information System and includes such information as
the name of the reporting office, the inventor*s name, the title of the
invention, the invention abstract, the name of the assigned attorney, the
dates on which invention evaluations are due and dates they are completed,
authorization status of the invention, and information on patent filing
and prosecution. The Intellectual Property Management Information System
is evolving, and it may eventually have additional modules for reporting
patent grants and trademarks. The Navy plans to move the Intellectual
Property Management Information System data to a web- based mode and the
system may become a DOD- wide system. The Air Force has agreed to use the
Intellectual Property Management Information System and the Army has
indicated that it favors signing on to this system.
As shown in table 1 of appendix IV, the Navy collected $1.2 million in
royalties in fiscal year 2001. Three Navy sites accounted for 79.1 percent
of this income. The Naval Research Laboratory was by far the largest,
accounting for 56.2 percent of all licensing income, followed by the Naval
Medical Research Center with 12.6 percent, and one of the Naval Surface
Warfare Centers with 10.2 percent.
Navy officials said that decisions to patent often are defensive
decisions, rather than decisions based on the likelihood of
commercialization. In this regard, the Navy may obtain a patent merely to
ensure that it controls technology that could have a part in the nation*s
defense mission. Navy officials said that patenting and licensing
inventions also helps the Navy meet its mandate to facilitate technology
transfer and that commercialization of Navy inventions provides for
increased production for the civilian market and reduces the unit cost of
military procurement.
The decision on whether to obtain a patent on an invention is made at the
facility where the invention was created. In addition to the need to
patent
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 62 GAO- 03- 47 Transferring and Reporting Technology
to protect the technology for the Navy*s own possible use in the future,
Navy personnel consider such factors as the military and consumer market
for the invention, the amount of additional research that would be needed
to develop the invention, the invention*s likely cost and performance in
the marketplace compared to alternative products, the invention*s
technical merit, and the interest expressed by potential licensees.
The Navy has produced some successful inventions in its facilities. For
example, researchers at the Naval Undersea Warfare Center developed a
digital image enhancement technology to better identify small objects,
such as mines, in a cluttered underwater environment. Believing that this
technology also might be used to assist physicians looking for
microcalcifications in a mammogram, the Navy signed a license agreement
with a company to transfer the Navy undersea mine hunting technology to
the public medical arena. Navy officials believe the digital image
enhancement will increase success in detecting early- stage breast cancer
and save thousands of lives.
As another example, the Naval Research Laboratory developed an
environmentally safe anti- biofouling coating system for ship hulls and
pipeline applications. The coating system provides a surface to which
organisms such as barnacles, mussels, and algae find it hard to adhere.
This anti- fouling action is accomplished without using metals and other
chemicals that may be harmful to aquatic life and humans. The coating
system has been licensed and is marketed for use on commercial and
government- owned ship hulls and power plant water intake systems. The
Navy estimates that the electric power industry will save up to $5 billion
a year in reduced costs to clean water intake pipes. In addition, use by
the fishing industry will reduce the loss of line, nets and other
equipment due to biofouling.
The U. S. Geological Survey (USGS) is the major science agency for the
Department of the Interior. Its mission is to provide reliable scientific
information to describe and understand the earth; minimize loss of life
and property from natural disasters; manage water, biological, energy, and
mineral resources; and enhance and protect our quality of life.
In fiscal year 2001, USGS obligated a total of $553.8 million dollars for
research and development, of which $55.4 million, or 10 percent, was for
basic research; $463.8 million, or 83.7 percent, was for applied research;
Examples of Technologies
Developed U. S. Geological Survey
Research
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 63 GAO- 03- 47 Transferring and Reporting Technology
and $34.6 million, or 6.2 percent, was for development. The vast majority
of the total research funding was for in- house activities, with $517
million, or 93.4 percent, obligated for intramural research and $36.8
million, or 6.6 percent, obligated for extramural research.
USGS produces few inventions as a byproduct of its research. As shown in
table 1 of appendix IV, for example, USGS disclosed only four new
inventions, received four patents, and executed two licenses* both
nonexclusive* during fiscal year 2001. One of the licensees agreed to pay
a limited annual fee pending the company*s demonstrated ability to develop
the technology. Total licensing income for the fiscal year was $220,000,
ranking USGS seventh among the nine agencies included in our review. Of
this amount, $20,000 was directly attributable to current licenses and
$200,000 was received as final partial year payments on a recently expired
reverse osmosis patent.
USGS is in the process of reorganizing its technology transfer program.
The reorganization is part of a larger effort based on the agency*s
adoption of a decentralized integrated science approach.
Currently, USGS uses several products and separate systems to track
products and their budgets. In fiscal year 2003, it plans to adopt a
centralized web- based system for project planning and budgeting. In April
2002, USGS and the Navy signed a Memorandum of Understanding that provides
for Navy patent counsel to apply for patents on behalf of USGS. The
objective of the consolidation is to streamline USGS*s invention
disclosure and the patent application process and reduce duplicative
costs. USGS*s Technology Transfer Office handles licensing activities for
USGS and several sister agencies within the Department of the Interior.
Inventors are entitled to a minimum of 33 percent of the royalties from
their inventions. They receive the first $2, 000 in royalties and have a
maximum royalty cap of $150,000 per year. When the patent application is
filed, the inventor is awarded $500. The inventor receives an additional
$800 after the patent is issued.
Although its license agreements contain a provision allowing USGS to audit
a licensee*s records to ensure that the licensee is paying the proper
amount of royalties, the agency has no staff, funds, or formal process for
monitoring its licensees. On one occasion, USGS received an allegation
that one of its licensees was not reporting the proper amount of royalty
income. It turned the matter over to its Office of Inspector General,
which Technology Transfer
Appendix III: Descriptions of Technology Transfer Programs Established by
Nine Selected Federal Agencies
Page 64 GAO- 03- 47 Transferring and Reporting Technology
eventually asked the Department of Justice to intervene. The matter is
still in litigation.
USGS has developed several successful technologies. Under a cooperative
agreement with the National Stone and Gravel Association, USGS developed
software containing maps and other data. This software was used to rescue
nine people who were trapped in a mine in Pennsylvania in July 2002. The
product is being marketed by a collaborator, and USGS will receive a
portion of the income from the sales.
USGS is currently engaged in a series of field test demonstrations aimed
at improving the real- time water quality information available to coastal
community water departments. The USGS technology, termed *robo- well,* is
capable of continually monitoring the ground or surface water source for
predetermined contaminants. Furthermore, the technology can be
preprogrammed to send alert messages to a centralized location when
established contaminant parameters are exceeded. Although the current
Environmental Protection Agency standards for monitoring contaminants are
only periodic rather than continual, the USGS technology is developing a
niche in the drinking water community. The technology is on- line or being
installed in two Massachusetts water departments and has one commercial
licensee. Examples of Technologies
Developed
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 65 GAO- 03- 47 Transferring and Reporting Technology
Table 1: Invention, Patenting, and Licensing Statistics by Agency for
Fiscal Year 2001 Agency Activity ARS Air
Force Army DOE NASA NIH NOAA Navy USGS Total
Invention disclosures 118 139 270 1,479 696 379 2 589 4 3,676
Patent applications U. S. 96 118 272 933 285 174 3 394 16 2,291
Foreign 22 0 71 184 17 156 0 57 0 507 Total 118 118 343 1,126 a 302 330 3
451 16 2,807 a
Patents issued U. S. 64 114 161 545 152 99 1 327 4 1,467
Foreign 12 0 3 41 7 46 0 9 0 118 Total 76 114 164 586 159 145 1 336 4 1,
585
Patents in force b U. S. 619 2,344 c 1,130 4,769 1,302 1,383 10 2,295 42
13,894
Foreign d 0 10 450 66 641 0 29 0 1,196 Total 619 d 2,344 c 1,140 5,219
1,368 2,024 10 2,324 42 15,090
Licenses in force b U. S. e 63 89 1,866 e 1,152 f 1 9963,276 Foreign e 0
12 272 e 205 f 0 70496 Undetermined 245 0 0 0 269 0 0 0 0 514 Total 245 63
101 2,138 269 1,357 f 1 106 6 4, 286
Licenses executed by type of license Exclusive 21 8 8 48 12 44 1 6 0 148
Partially exclusive 7003243 0 6052 Nonexclusive 3 7 6 497 23 153 0 13 2
704
Other 020670 0 1016
Total 31 17 14 583 46 200 1 26 2 920
Licenses executed by type of property Patent 31 17 56 304 38 149 1 26 2
624
Research materials 0 0 0 0 0 51 0 0 0 51
Other 0 0 0 245 g 80 0 00253
Total 31 17 56 549 46 200 1 26 2 928
Licenses earning income during fiscal year 120 12 28 992 114 697 1 87 5
2,056
Licensing income (in thousands) $2,622.0 $99.0 $845.5 $21,387.5 $1,971.2
$46,100.0 $1.5 $1,245.6 $220.0 $74,492.3
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 66 GAO- 03- 47 Transferring and Reporting Technology
Legend ARS = Agricultural Research Service DOE = Department of Energy NASA
= National Aeronautics and Space Administration NIH = National Institutes
of Health NOAA = National Oceanic and Atmospheric Administration USGS =
United States Geological Survey a Agency did not explain why total
applications reported are greater than sum of U. S. and foreign
applications reported. b In force at the end of the fiscal year.
c The Air Force estimates that about 1,000 patents have fully paid- up
maintenance fees. d Foreign statistics were unavailable; total includes U.
S. patents only. e Data for U. S. and foreign licenses were not broken
out. f Estimate. g Other includes 211 copyrights.
Source: Statistics provided by agencies listed.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 67 GAO- 03- 47 Transferring and Reporting Technology
Table 2: Invention, Patenting, and Licensing Activity by the Agricultural
Research Service for Fiscal Years 1997- 2001 Fiscal year Activity 1997
1998 1999 2000 2001
Invention disclosures 130 104 122 109 118 Patent applications U. S. 56 64
113 107 96 Foreign a a a a 22
Total 56 64 113 107 118
Patents issued U. S. 35 57 74 64 64 Foreign a a a a 12
Total 35 57 74 64 76
Patents in force b U. S. a a a a 619 Foreign a a a ac
Total a a a a 619 c
Licenses in force b U. S. a a a ad Foreign a a a ad Undetermined 245 d
Total a a a a 245
Licenses executed by type of license Exclusive 21 23 29 2421 Partially
exclusive a a a a 7 Nonexclusive a a a a 3 Other a a a a 0
Total 21 23 29 24 31
Licenses executed by type of property Patent 21 23 29 24 31 Research
materials a a a a 0 Other a a a a 0
Total 21 23 29 24 31
Licenses earning income during fiscal year a a a a 120 Licensing income a
a a a $2,622,000
a Current database does not track these data for this year. b In force at
the end of the fiscal year. c Foreign statistics were unavailable; total
includes U. S. patents only. d Data for U. S. and foreign licenses were
not broken out.
Source: Agricultural Research Service.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 68 GAO- 03- 47 Transferring and Reporting Technology
Table 3: Invention, Patenting, and Licensing Activity by the Department of
the Air Force for Fiscal Years 1997- 2001 Fiscal year Activity 1997 1998
1999 2000 2001
Invention disclosures 124 a 125 a 122 174 139 Patent applications U. S.
114 164 116 108 118 Foreign 1 0 0 00
Total 115 164 116 108 118
Patents issued U. S. 85 88 85 80 114 Foreign 0 0 0 00
Total 85 88 85 80 114
Patents in force b U. S. 2,472 c 2,401 c 2,362 c 2,352 c 2,344 c Foreign 0
0 0 00
Total 2,472 c 2,401 c 2,362 c 2,352 c 2,344 c
Licenses in force b U. S. 28 38 43 48 63 Foreign 0 0 0 00
Total 28 38 43 48 63
Licenses executed by type of license Exclusive 2 3 3 38 Partially e
xclusive 0 0 0 00 Nonexclusive 4 7 3 37 Other 0 1 4 12
Total 6 11 10717
Licenses executed by type of property Patent 6 11 10 7 17 Research m
aterials 0 0 0 00 Other 0 0 0 00
Total 6 11 10717
Licenses earning income during fiscal year 14 11 13 15 12 Licensing income
$190,000 $197,800 $156,000 $80,616 $99,038
a Estimate. b In force at the end of the fiscal year. c The Air Force
estimates that about 1,000 patents have fully paid- up maintenance fees.
Source: U. S. Air Force.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 69 GAO- 03- 47 Transferring and Reporting Technology
Table 4: Invention, Patenting, and Licensing Activity by the Department of
the Army for Fiscal Years 1997- 2001 Fiscal year Activity 1997 1998 1999
2000 2001
Invention disclosures 290 263 293 233 270 Patent applications U. S. 241
221 266 288 272 Foreign 46 43 58 6471
Total 287 264 324 352 343
Patents issued U. S. 130 135 141 131 161 Foreign 0 1 4 43
Total 130 136 145 135 164
Patents in force a U. S. 1,032 1,089 1,094 1,115 1,130 Foreign 8 8 9 12 10
Total 1,040 1,097 1,103 1,127 1,140
Licenses in force a U. S. 68 73 75 82 89 Foreign 6 9 9 11 12
Total 74 82 84 93 101
Licenses executed by type of license Exclusive 7 7 6 88 Partially e
xclusive 6 2 1 10 Nonexclusive 9 6 6 86 Other 0 0 0 00
Total 22 15 13 17 14
Licenses executed by type of property Patent 51 48 47 52 56 Research m
aterials 3 3 3 40 Other 0 0 0 00
Total 54 51 50 56 56
Licenses earning income during fiscal year 21 23 20 24 28 Licensing income
$273,235 $239,185 $244,315 $550,640 $845,472
Note: Table does not include data from one command. a In force at the end
of the fiscal year.
Source: U. S. Army.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 70 GAO- 03- 47 Transferring and Reporting Technology
Table 5: Invention, Patenting, and Licensing Activity by the Department of
Energy for Fiscal Years 1997- 2001 Fiscal year Activity 1997 1998 1999
2000 2001
Invention disclosures 1, 311 1,382 1,519 1,483 1,479 Patent applications
U. S. 743 764 954 853 933 Foreign 234 244 229 228 184
Total 986 a 1,014 a 1,192 a 1,090 a 1,126 a
Patents issued U. S. 364 465 496 526 545 Foreign 45 57 62 5441
Total 413 a 533 a 568 a 583 a 586
Patents in force b U. S. 3,187 3,563 3,916 4,345 4,769 Foreign 209 264 306
417 450
Total 3,396 3,827 4,222 4,762 5,219
Licenses in force b U. S. 1,067 1,166 1,346 1,509 1,866 Foreign 73 87 92
110 272
Total 1,242 a 1,377 a 1,624 a 1,839 a 2,138
Licenses executed by type of license Exclusive 61 55 51 3448 Partially e
xclusive 21 17 25 1932 Nonexclusive 383 359 361 354 497 Other 7 1 1 26
Total 483 a 446 a 442 a 412 a 583
Licenses executed by type of property Patent 190 167 307 210 304 Research
m aterials 0 0 0 00 Other c 232 173 204 221 245
Total 422 340 511 431 549
Licenses earning income during fiscal year 646 711 763 855 992 Licensing
income $7,265,033 $9,972,023 $10,971,837 $14,592,452 $21,387,512
a Agency did not provide a break out for all patent applications, patents
issued, or licenses in the total figure. b In force at the end of the
fiscal year.
c Other includes copyrights. Source: Department of Energy.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 71 GAO- 03- 47 Transferring and Reporting Technology
Table 6: Invention, Patenting, and Licensing Activity by the National
Aeronautics and Space Administration for Fiscal Years 1997- 2001
Fiscal year Activity 1997 1998 1999 2000 2001
Invention disclosures 1, 144 1,201 1,389 1,318 696 Patent applications U.
S. 253 269 299 279 285 Foreign 12 13 21 2117
Total 265 282 320 300 302
Patents issued U. S. 111 137 125 150 152 Foreign 0 1 4177
Total 111 138 129 167 159
Patents in force a U. S. 1,267 1,237 1,227 1,236 1,302 Foreign b 1 c 28 c
22 c 66
Total 1,267 1,238 1,255 1,258 1,368
Licenses in force a U. S. d d d de Foreign d d d de
Total d d d d 269
Licenses executed by type of license Exclusive 21 24 20 1812 Partially e
xclusive 5 3 4 54 Nonexclusive 19 26 26 28 23 Other 1 6 5 14 7
Total 46 59 55 65 46
Licenses executed by type of property Patent 37 37 43 44 38 Research m
aterials 0 0 0 00 Other 9 24 12 218
Total 46 61 55 65 46
Licenses earning income during fiscal year 84 100 105 111 114 Licensing
income $1,106,331 $1,226,263 $1,359,310 $1,775,010 $1,971,218
a In force at the end of the fiscal year. b The number of foreign patents
in force was not available for fiscal year 1997. c Except for one
facility, the number of foreign patents in force was not available for
fiscal years 1998, 1999, and 2000. d Current database does not track this
data for this year.
e Data for U. S. and foreign were not broken out. Source: National
Aeronautics and Space Administration.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 72 GAO- 03- 47 Transferring and Reporting Technology
Table 7: Invention, Patenting, and Licensing Activity by the National
Institutes of Health for Fiscal Years 1997- 2001 Fiscal year Activity 1997
1998 1999 2000 2001
Invention disclosures 333 344 341 381 379 Patent applications U. S. 160
151 198 196 174 Foreign 156 167 104 165 156
Total 316 318 302 361 330
Patents issued U. S. 158 177 171 130 99 Foreign 96 90 97 9346
Total 254 267 268 223 145
Patents in force a U. S. b 1,140 1,236 1,365 1,383 Foreign b b b b 641
Total b b b b 2,024
Licenses in force a U. S. b b b b 1,152 c Foreign b b b b 205 c
Total b b b b 1,357 c
Licenses executed by type of license Exclusive 28 26 35 3144 Partially e
xclusive 1 1 2 03 Nonexclusive 182 184 170 157 153 Other 0 0 0 00
Total 211 211 207 188 200
Licenses executed by type of property Patent 164 147 157 147 149 Research
m aterials 47 64 50 4151 Other 0 0 0 00
Total 211 211 207 188 200
Licenses earning income during fiscal year 490 563 621 600 697 Licensing
income $35,700,000 $39,600,000 $44,600,000 $52,000,000 $46,100,000
a In force at the end of the fiscal year. b Agency did not provide data. c
Estimate.
Source: National Institutes of Health.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 73 GAO- 03- 47 Transferring and Reporting Technology
Table 8: Invention, Patenting, and Licensing Activity by the National
Oceanic and Atmospheric Administration for Fiscal Years 1997- 2001
Fiscal year Activity 1997 1998 1999 2000 2001
Invention d isclosures 4 3 3 22 Patent applications U. S. 3 2 2 23 Foreign
0 0 0 00
Total 3 2 2 23
Patents issued U. S. 4 1 2 31 Foreign 0 0 0 00
Total 4 1 2 31
Patents in force a U. S. 14 12 11 9 10 Foreign 0 0 0 00
Total 14 12 11 9 10
Licenses in force a U. S. b b b b 1 Foreign b b b b 0
Total b b b b 1
Licenses executed by type of license Exclusive b b b b 1 Partially
exclusive b b b b 0 Nonexclusive b b b b 0 Other b b b b 0
Total b b b b 1
Licenses executed by type of property Patent b b b b 1 Research materials
b b b b 0 Other b b b b 0
Total b b b b 1
Licenses earning income during fiscal year b b b b 1 Licensing income b b
b b $1,500
a In force at the end of the fiscal year. b Agency did not provide data.
Source: National Oceanic and Atmospheric Administration.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 74 GAO- 03- 47 Transferring and Reporting Technology
Table 9: Invention, Patenting, and Licensing Activity by the Department of
the Navy for Fiscal Years 1997- 2001 Fiscal year Activity 1997 1998 1999
2000 2001
Invention disclosures 666 748 715 670 589 Patent applications U. S. 449
419 389 424 394 Foreign 22 24 56 5257
Total 471 443 445 476 451
Patents issued U. S. 290 358 304 372 327 Foreign 0 3 9 89
Total 290 361 313 380 336
Patents in force a U. S. 2,184 2,245 2,158 2,241 2,295 Foreign 68 12 3029
Total 2,190 2,253 2,170 2,271 2,324
Licenses in force a U. S. 62 71 80 87 99 Foreign 2 2 4 57
Total 64 73 84 92 106
Licenses executed by type of license Exclusive 5 5 4 56 Partially e
xclusive 1 2 5 26 Nonexclusive 4 9 4 813 Other 4 1 0 01
Total 14 17 13 15 26
Licenses executed by type of property Patent 14 15 13 15 26 Research m
aterials 0 0 0 00 Other 0 0 0 00
Total 14 15 13 15 26
Licenses earning income during fiscal year 57 69 61 65 87 Licensing income
$477,970 $917,836 $676,555 $698,897 $1,245,629
a In force at the end of the fiscal year. Source: U. S. Navy.
Appendix IV: Invention Disclosure, Patenting, and Licensing Statistics for
Nine Selected Federal Agencies, Fiscal Years 1997- 2001
Page 75 GAO- 03- 47 Transferring and Reporting Technology
Table 10: Invention, Patenting, and Licensing Activity by the U. S.
Geological Survey for Fiscal Years 1997- 2001 Fiscal year Activity 1997
1998 1999 2000 2001
Invention d isclosures 4 4 5 94 Patent applications U. S. 2 0 4 416
Foreign 0 0 0 00
Total 2 0 4 416
Patents issued U. S. 1 2 1 24 Foreign 0 0 0 00
Total 1 2 1 24
Patents in force a U. S. 35 37 38 38 42 Foreign 10 10 1000
Total 45 47 48 38 42
Licenses in force a U. S. 10 11 4 4 6 Foreign 0 0 8 00
Total 10 11 12 4 6
Licenses executed by type of license Exclusive 2 0 2 20 Partially e
xclusive 0 0 0 00 Nonexclusive 8 11 8 2 2 Other 0 0 0 00
Total 10 11 10 4 2
Licenses executed by type of property Patent 8 11 1242 Research m aterials
0 0 0 00 Other 0 0 0 00
Total 8 11 1242
Licenses earning income during fiscal year 0 11 12 8 5 Licensing income 0
$2,500,000 $2,000,000 $850,000 $220,000
a In force at the end of the fiscal year. Source: U. S. Geological Survey.
Appendix V: Summary of Guidelines for Agency Reporting under the
Technology Transfer Commercialization Act of 2000
Page 76 GAO- 03- 47 Transferring and Reporting Technology
Among other things, the Technology Transfer Commercialization Act of 2000
(TTCA) requires agencies with laboratories or technology transfer
functions to report annually on their operations to the Office of
Management and Budget and the Department of Commerce. With the assistance
of the Interagency Working Group on Technology Transfer, the Department of
Commerce issued guidelines on December 11, 2001, for agencies to use in
developing and submitting these annual reports. Table 11 summarizes
certain statistical data requested by Commerce, with additional
information in some cases detailing the specific data elements to be used
in the development of the statistics.
Table 11: Summary of Department of Commerce Guidelines for Statistical
Information to be Included in Agency TTCA Reports Category Statistics to
be reported
Additional information provided by Commerce to clarify data elements to be
included in statistics
Collaborative relationships for research, development, and demonstration
Cooperative research and development agreements (CRADA) CRADAs active at
the end of the fiscal
year. *Active* means legally in force; comprehensive of all agreements
done under the authority of 15 USC 3710a. New CRADAs executed in fiscal
year. No additional information provided. Active *nontraditional* CRADAs
at the end of the fiscal year. A *nontraditional* CRADA is an agreement
done under the authority of sec. 3710a but used for special purpose.
Examples would be material transfer CRADAs, technical assistance that may
result in protected information, etc. New *nontraditional* CRADAs executed
in the fiscal year. No additional information provided. Other types of
collaborative research, development, and demonstration relationships
Nature and number of collaborative relationships. As is relevant for a
laboratory.
Intellectual property management Invention disclosure and patenting
Invention disclosures in the fiscal year. No additional information
provided.
Patent applications filed in the fiscal year. For inventions arising at a
federal laboratory. Includes non- provisional U. S. and foreign
applications in which the agency has a patent ownership position.
Excludes: (1) divisional and continuation applications and (2) duplicate
foreign and Patent Cooperation Treaty applications. Patents issued in the
fiscal year for laboratory inventions. TTCA uses term *patents received*
instead of *patents issued.* Licensing Invention licenses active in the
fiscal year. *Active* means legally in force whether or
not royalty bearing. Multiple inventions in a single license are counted
as one license. New invention licenses in the fiscal year No additional
information provided. Active licenses for *other* intellectual Relevant if
such properties are licensed by
Appendix V: Summary of Guidelines for Agency Reporting under the
Technology Transfer Commercialization Act of 2000
Appendix V: Summary of Guidelines for Agency Reporting under the
Technology Transfer Commercialization Act of 2000
Page 77 GAO- 03- 47 Transferring and Reporting Technology
Category Statistics to be reported Additional information provided by
Commerce to clarify data elements to be included in statistics
property in the fiscal year. the laboratory or agency. *Other*
intellectual property includes software, tangible research products such
as biological materials, and protected data. Active licenses for which the
laboratory or agency received royalty income in the fiscal year,
subdivided by exclusive, partially exclusive, and nonexclusive licenses.
*Royalties* include up- front fees, minimum annual payments, earned
royalties on sales. In- kind contributions and cost reimbursements are not
recognized as royalties. Licenses terminated for cause in the fiscal year.
Same information requested by TTCA;
see 15 USC 3710( f)( 2)( B)( vi). Elapsed time from date of (formal)
license application to date of license execution. Same information
requested by TTCA;
see 15 USC 3710( f)( 2)( B)( iii). Covers licenses granted in the fiscal
year being reported. Concerns initial license for a technology rather than
multiple licenses where the technology was expected to be licensed to
multiple parties. Date of license application is the date the laboratory
formally acknowledges a written request and agrees to enter into
negotiations. Because the number of licenses typically will be greater
than one, information about the distribution of elapsed times will be
needed. If so, providing the number of licenses with minimum, median, and
maximum elapsed time should suffice. If the distribution has little
central tendency and/ or is grossly skewed, greater detail on the
distribution may be needed. Income Total income:
Income for all licenses active in the fiscal year.
Total income includes license issue fees, minimum annual royalties, paid-
up license fees, earned royalties, and reimbursement for full- cost
recovery of goods and services provided by the lab to the licensee
including patent costs.
Income from *other* intellectual property licenses. Relevant if such
properties are licensed by
the laboratory or agency. *Other*
intellectual property includes software, tangible research products such
as biological materials, and protected data. Disposition of royalty income
or other payments from licensing. Such as to inventors, back to
laboratories,
etc. It is recognized that there is not a balance between income and
expenditures in any given fiscal year. It is also recognized that agencies
may not have full reporting from labs on the use of funds. The agency
should respond as best it can, based on the information available. Total
earned royalty income:
Range of values across all royalty *Earned royalty* means a royalty
based upon use of a licensed invention (usually,
Appendix V: Summary of Guidelines for Agency Reporting under the
Technology Transfer Commercialization Act of 2000
Page 78 GAO- 03- 47 Transferring and Reporting Technology
Category Statistics to be reported Additional information provided by
Commerce to clarify data elements to be included in statistics
bearing licenses in the fiscal year.
Median value.
Subtotal from top 1 percent of licenses.
Subtotal from top 5 percent of licenses.
Subtotal from top 20 percent of licenses. a percentage of sales or units
sold) rather
than a license issue fee or a minimum royalty.
These distribution statistics can be excluded if such information would
reveal the amount of royalty income associated with an individual license
or licensee.
Start with a list of all royalty- producing licenses at the lab, ranked by
the level of earned royalties received in the fiscal year. Then, report
the sum of revenue in the fiscal year from the top 1 percent on the list,
from the top 5 percent, and so on. Other measures of performance deemed
important Other activity Other relevant performance measures. Identify,
discuss relevant
activity/ performance data, such as performance goals established in the
agency*s Strategic and Annual Performance Plans under Government
Performance and Results Act. Information about technology transfer
outcomes Outcomes Did technology arising under a CRADA or
other collaborative relationship become commercially available?
(a) Yes/ no or number, if known. (b) Agency selected case histories.
Generally, these cases will have been years in maturation. Objective
success stories will likely be those based upon reports required in
licenses related to earned income. Subjective success stories may also be
useful, based on anecdotal knowledge of the transfer of knowhow/ know-
what that resulted in commercial applications. Did technology arising
under a CRADA or other collaborative relationship strengthen the
capabilities of the laboratory?
Same information elements as above. Often a laboratory*s technical staff
will advance their own competencies or make a breakthrough that will
significantly impact the ability of the laboratory to carry out its
mission activities. Did technology licensed by the laboratory become
commercially available? Same information elements as above.
Same comment as for first question above. Did a product or process
developed by a laboratory*s licensee strengthen the laboratory*s
capabilities?
Same information elements as above. Same comment as for second question
above.
Appendix V: Summary of Guidelines for Agency Reporting under the
Technology Transfer Commercialization Act of 2000
Page 79 GAO- 03- 47 Transferring and Reporting Technology
Category Statistics to be reported Additional information provided by
Commerce to clarify data elements to be included in statistics
Other kinds of outcomes (specify and describe). For example, expanded
know- how, knowwhat of laboratory scientists and
engineers. Such knowledge may be shared with others through technical
presentations or referred papers to advance the larger body of knowledge.
Source: U. S. Department of Commerce, Annual Reporting on Agency Tech
Transfer in response to the TTCA 2000* Data Elements of the Agency Annual
Reports (Dec. 11, 2001).
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 80 GAO- 03- 47 Transferring and Reporting Technology
Table 12: Collaborative Relationship for Research, Development, and
Demonstration, Fiscal Year 2001 Cooperative research and development
agreements
Total Non- traditional Other collaborative relationships
Agency Active a New b Active a New b Active a New b
Agricultural Research Service 219 49 0 0 Not provided 106 Air Force 320 49
14 5 213 81 c Army 998 235 0 000 Department of Energy 558 204 0 d 0 d Not
provided Not provided National Aeronautics and Space Administration 1 00
000 National Institutes of Health 420 120 209 76 0 0 National Oceanic and
Atmospheric Administration 8 30 000 Navy 317 167 72 46 0 0 U. S.
Geological Survey 42 14 7 7 Not provided Not provided
a Active as of the end of the fiscal year. b Executed during the fiscal
year. c For the Air Force 73 of 81 are Educational Partnership Agreements.
d DOE officials said that DOE does not enter into non- traditional
cooperative research and development agreements. Source: Agencies cited
and U. S. Department of Commerce.
Table 13: Invention Disclosure and Patenting, Fiscal Year 2001 Agency
Invention disclosures Patent applications Patents issued
Agricultural Research Service 118 83 64 Air Force 85 101 114 Army 292 262
156 Department of Energy 1,527 792 605 National Aeronautics and Space
Administration 696 151 159 National Institutes of Health 379 179 99
National Oceanic and Atmospheric Administration 1 3 1 Navy 573 421 320 U.
S. Geological Survey 4 16 4
Total 3,675 2,008 1,522
Source: Agencies cited and U. S. Department of Commerce.
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 81 GAO- 03- 47 Transferring and Reporting Technology
Table 14: New, Active, and Terminated Licenses during Fiscal Year 2001
Number of licenses
Agency Active licenses on inventions
Newly executed licenses on
inventions Licenses on other
intellectual property a
All licenses terminated for
cause
Agricultural Research Service 255 31 0 1 Air Force 62 15 0 0 Army 101 8 0
0 Department of Energy 1,162 226 843 60 National Aeronautics and Space
Administration 292 42 36 23 National Institutes of Health 977 200 355 9
National Oceanic and Atmospheric Administration 1 1 0 0 Navy 102 25 0 2 U.
S. Geological Survey 6 2 0 0
Total 2,958 550 1,234 95
a Other intellectual property includes software, tangible research
products (such as biological materials), and protected data. Source:
Agencies cited and U. S. Department of Commerce.
Table 15: Active Licenses That Had Royalty Income, by Type, Fiscal Year
2001 Type of license Agency Exclusive Non- exclusive Partially
exclusive Total
Agricultural Research Service 78 23 19 120
Air Force 8 3 0 11
Army 13 11 4 28
Department of Energy 174 726 112 1,012
National Aeronautics and Space Administration 57 44 13 114
National Institutes of Health 100 583 13 696
National Oceanic and Atmospheric Administration 1 0 0 1
Navy 15 34 17 66
U. S. Geological Survey 0 6 0 6 Total 446 1,430 178 2,054
Source: Agencies cited and U. S. Department of Commerce.
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 82 GAO- 03- 47 Transferring and Reporting Technology
Table 16: Income from Licenses by Source, Fiscal Year 2001 Income a Agency
Invention licenses active
during fiscal year Other intellectual property b Total
Agricultural Research Service c $2,622,000 0 $2,622,000
Air Force 99,038 0 99,038
Army 855,500 0 855,500
Department of Energy 18,921,843 $1,870,071 21,403,362 d
National Aeronautics and Space Administration 1,318,864 651,855 1,971,218
d
National Institutes of Health 40,700,000 5, 400,000 46,100,000
National Oceanic and Atmospheric Administration 1,600 0 1,600
Navy 1,240,630 0 1,240,630
U. S. Geological Survey e 220,000 0 220,000 Total $65,979,475 $7,921,926
$74,513,348
a Income includes all licensing income including license issue fees,
minimum annual royalties, paid- up license fees, earned royalties, etc. b
Other intellectual property includes software, tangible research products
(such as biological
materials), and protected data. c Does not include U. S. Forest Service.
d Totals provided by the agencies are greater than the sum of the columns.
e Agency received $200,000 in fiscal year 2001 as final partial- year
payments on expired patents.
Source: Agencies cited and U. S. Department of Commerce.
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 83 GAO- 03- 47 Transferring and Reporting Technology
Table 17: Characteristics of Earned Royalty Income Received, Fiscal Year
2001 Earned royalty income Range Distribution
Agency Total Minimum Maximum Median Top 1 percent Top 5
percent Top 20 percent
Agricultural Research Service $1,409,252 $78 $563,320 $5,723 Not provided
a $723,167 $1,109,051 Air Force Not provided 1,500 17,500 12,038 $17,500
17,500 17,500 Army Not provided 100 225,000 7, 800 229,000 346,000 580,000
Department of Energy 7,832,481 2 1, 584,922 3,889 2,699,134 5,271,631
7,162,951 National Aeronautics and Space Administration 521,164 71 232,159
21,735 Not provided Not provided 419,867 National Institutes of Health
35,990,362 8 11,000,000 2, 200 Not provided a 32,728,556 35,516,006
National Oceanic and Atmospheric Administration 1,600 b Not
applicable Not applicable Not
applicable Not applicable Not
applicable Not applicable Navy Not provided 75 76,085 1, 283 76,085 76,085
83,274 U. S. Geological Survey 220,000 2,000 20,000 Not provided Not
provided Not provided Not provided
a Not provided because the agency believed the information might reveal
income associated with an individual licensee. b Earned royalty income is
from one license; thus, there is no range.
Source: Agencies cited and U. S. Department of Commerce.
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 84 GAO- 03- 47 Transferring and Reporting Technology
Table 18: Disposition of License Income, Fiscal Year 2001 Agency Inventor
awards Salaries Patent fees Other Total
Agricultural Research Service $681,700 $1,075,000 $707,900 $157,300
$2,621,900
Air Force a a a aa Army a a a aa Department of Energy 5,942,497 Not
provided Not provided 10,413,555 16,356,052
National Aeronautics and Space Administration 615,558 Not provided Not
provided 835,431 b 1,450,989
National Institutes of Health c Not provided Not provided Not provided Not
provided Not provided
National Oceanic and Atmospheric Administration 1,600 0 0 01,600 Navy a a
a aa U. S. Geological Survey 11,000 Not provided Not provided 209,000
220,000 Total $7,252,355 $1,075,000 $707,900 $11,615,286 $20,650,541
Note: The Department of Commerce guidelines asked the agencies to provide
statistics on the disposition of royalty income but did not specify the
categories into which the statistics were to be subdivided. Four agencies*
the Air Force, the Army, the National Institutes of Health, and the Navy*
did not provide any data. The other five agencies varied in the
disposition categories listed. a According to a Department of Commerce
official, the Department of Defense did not provide
separate statistics for the individual military services. However, the
Department of Defense generally, provides 20 percent of license income to
the inventors and the remaining 80 percent is used for other awards and
additional research and development. b Figure includes $223,119 to
National Aeronautics and Space Administration Centers, $246,035 to
the U. S. Treasury and $366,277 to the California Institute of Technology.
c Income was distributed according to the law to inventors and was used to
support technology transfer operations and conduct further research.
Source: Agencies cited and U. S. Department of Commerce.
Appendix VI: Statistics Provided by Nine Selected Agencies to the
Department of Commerce under the TTCA of 2000
Page 85 GAO- 03- 47 Transferring and Reporting Technology
Table 19: Time Elapsed between Application and License Agreement Average
elapsed days Agency All licenses Exclusive
license Non- exclusive license Partially exclusive
license
Agricultural Research Service 106 88 a 65 a 166 a Air Force b Not provided
Not provided Not provided Not provided Army b Not provided Not provided
Not provided Not provided Department of Energy b Not provided Not provided
Not provided Not provided National Aeronautics and Space Administration
439 Not provided Not provided Not provided National Institutes of Health
Not provided 267 148 582 National Oceanic and Atmospheric Administration
240 c 240 c Not applicable Not applicable Navy b Not provided Not provided
Not provided Not provided U. S. Geological Survey 105 Not applicable 105 d
Not applicable
a Figure is for two licenses. b Data were not collected or readily
available; however, the agency plans to address this reporting requirement
in the future. c Figure is for one license. The elapsed time was given as
8 months from date of formal license
application to date of license execution. d Figure is for two licenses.
The elapsed time for one license was 3 months and elapsed time for the
other license was 4 months. Source: Agencies cited and U. S. Department of
Commerce.
Appendix VII: Differences in Statistics Provided under the TTCA of 2000
and Statistics Provided to GAO by Nine Agencies
Page 86 GAO- 03- 47 Transferring and Reporting Technology
Appendix IV of this report provides statistics on technology transfer
activities provided directly to us by nine agencies whose activities we
reviewed, while appendix VI summarizes the statistical information
provided to the U. S. Department of Commerce by these same nine agencies
under the Technology Transfer Commercialization Act of 2000. In some
cases, the statistics disagreed, even though the data requested were
seemingly the same. The tables below show the differences and the
agencies* explanations for why they occurred.
Table 20: Differences in Statistics Provided to U. S. Department of
Commerce and Statistics Provided to GAO for Invention Disclosures, Fiscal
Year 2001
Agency Statistics
provided to Commerce
Statistics provided to
GAO Difference Explanation
Air Force 85 139 -54 DOD had a February cut- off date for data to OMB/
Commerce.
The GAO data are updated data. Army 292 270 22 One command overstated
disclosures to Commerce. DOE 1,527 1,479 48 Not determined. NOAA
1 2- 1 Data provided to GAO are correct. The data provided to OMB/
Commerce are in error.
Navy 573 589 -16 DOD had a February cut- off date for data to OMB/
Commerce.
The GAO data is updated data. Source: Agency reports to the U. S.
Department of Commerce on agency technology transfer for fiscal year 2001
and statistics provided to GAO by the agencies cited.
Table 21: Differences in Statistics Provided to U. S. Department of
Commerce and Statistics Provided to GAO for Patents Issued Fiscal Year
2001
Agency Statistics
provided to Commerce
Statistics provided to
GAO Difference Explanation
ARS 64 76 -12 May not have included foreign patents in OMB/ Commerce
data. Army
156 164 -8 DOD had a February cut- off date for data to OMB/ Commerce. The
GAO data are updated data.
DOE 605 586 19 Not determined. NIH
99 145 -46 May not have included foreign patents in OMB/ Commerce data.
Navy 320 336 -16 DOD had a February cut- off date for data to OMB/
Commerce.
The GAO data is updated data. Source: Agency reports to the U. S.
Department of Commerce on agency technology transfer for fiscal year 2001
and statistics provided to GAO by the agencies cited.
Appendix VII: Differences in Statistics Provided under the TTCA of 2000
and Statistics Provided to GAO by Nine Agencies
Appendix VII: Differences in Statistics Provided under the TTCA of 2000
and Statistics Provided to GAO by Nine Agencies
Page 87 GAO- 03- 47 Transferring and Reporting Technology
Table 22: Differences in Statistics Provided to U. S. Department of
Commerce and Statistics Provided to GAO for Newly Executed Licenses,
Fiscal Year 2001
Agency Statistics
provided to Commerce
Statistics provided to
GAO Difference Explanation
Air Force 15 17 -2 DOD had a February cut- off date for data to
OMB/ Commerce. The GAO data are updated data. Army
8 14- 6 DOD had a February cut- off date for data to OMB/ Commerce. The
GAO data are updated data. DOE
226 583 -357 The figure provided to OMB/ Commerce did not include
licenses for copyrights and other non- patent types of intellectual
property. NASA 42 46 -4 OMB/ Commerce data included only patents. Navy
25 26 -1 DOD had a February cut- off date for data to OMB/ Commerce. The
GAO data are updated data. Source: Agency reports to the U. S. Department
of Commerce on agency technology transfer for fiscal year 2001 and
statistics provided to GAO by the agencies cited.
Table 23: Differences in Statistics Provided to U. S. Department of
Commerce and Statistics Provided to GAO for Licenses That Had Income,
Fiscal Year 2001
Agency Statistics
provided to Commerce
Statistics provided to
GAO Difference Explanation
Air Force 11 12 -1 DOD had a February cut- off date for data to
OMB/ Commerce. The GAO data are updated data. DOE 1,012 992 20 Not
determined. NIH 696 697 -1 Not determined. Navy
66 87 -21 DOD had a February cut- off date for data to OMB/ Commerce. The
GAO data are updated data. USGS
6 51 The OMB/ Commerce figure included one license with income other than
royalties. Source: Agency reports to the U. S. Department of Commerce on
agency technology transfer for fiscal year 2001 and statistics provided to
GAO by the agencies cited.
Appendix VII: Differences in Statistics Provided under the TTCA of 2000
and Statistics Provided to GAO by Nine Agencies
Page 88 GAO- 03- 47 Transferring and Reporting Technology
Table 24: Differences in Statistics Provided to U. S. Department of
Commerce and Statistics Provided to GAO for Income from Licenses, Fiscal
Year 2001
Agency Statistics
provided to Commerce
Statistics provided to
GAO Difference Explanation
Army $855,500 $845,472 $10,028
One laboratory reported to GAO the amount received by the laboratory, but
did not include the amount received by the inventors. DOE
21,403,362 21,387,512 15,850 May be due to confusion as to *earned income*
and *total
income.* NOAA
1,600 1,500 100 Data provided to GAO are correct. The data provided to
OMB/ Commerce are in error.
Navy 1,240,630 1,245,629 -4,999 DOD had a February cut- off date for data
to
OMB/ Commerce. The GAO data are updated data. Source: Agency reports to
the U. S. Department of Commerce on agency technology transfer for fiscal
year 2001 and statistics provided to GAO by the agencies cited.
Appendix VIII: Options to Improve Compliance with Reporting Requirements
under the Bayh- Dole Act
Page 89 GAO- 03- 47 Transferring and Reporting Technology
In August 1999, we issued a report entitled Technology Transfer: Reporting
Requirements for Federally Sponsored Inventions Need Revision. 1 Among
other things, we noted in that report that the Congress might wish to
consider standardizing, improving, and streamlining the reporting process
for inventions subject to the Bayh- Dole Act and Executive Order 12591. In
appendix IV of that report, we outlined some specific options available if
the Congress did consider such changes. Because we refer to these options
in our current report, we repeat them below.
In this report, we state that the Congress may wish to consider amending
the Bayh- Dole Act to standardize, improve, and streamline the reporting
process for inventions subject to both the act and Executive Order 12591.
Specifically, such changes could include (1) requiring the Secretary of
Commerce to develop standardized disclosure forms and utilization reports
for federally sponsored inventions, (2) making the patent the primary
control mechanism for reporting and documenting the government*s rights
and the only written instrument for confirming the government*s royalty-
free license, and (3) requiring the Patent and Trademark Office (PTO) to
provide information to the funding agencies to assist them in monitoring
compliance.
During our meetings with representatives from federal funding agencies,
contractors, and grantees, we discussed options for changes to the
reporting requirements. The officials generally agreed that the types of
changes suggested below could improve the quality of data available and
reduce the reporting burden. Officials from PTO told us that they did not
disagree with these suggestions. However, they pointed out that an
international treaty is being negotiated that would standardize patent
applications and could affect the types of information that could be
required on a patent application.
The options we discussed are as follows:
Eliminating the requirement that the contractor or grantee submit a
confirmatory license as a separate written instrument on each invention.
These instruments are not always submitted or used, and the license itself
can be more easily documented on and accessed from the patent itself. In
1 GAO/ RCED- 99- 242. Appendix VIII: Options to Improve
Compliance with Reporting Requirements under the Bayh- Dole Act
Options for Standardizing, Streamlining, and Improving Reporting
Requirements Under the Bayh- Dole Act and Executive Order 12591
Appendix VIII: Options to Improve Compliance with Reporting Requirements
under the Bayh- Dole Act
Page 90 GAO- 03- 47 Transferring and Reporting Technology
effect, this change would appear to eliminate the need for the Government
Register.
Requiring the Department of Commerce to develop, and by regulation
require the use of, a standardized invention disclosure form for all
federal agencies, contractors, and grantees. Under the current procedures,
each contractor or grantee generally has its own form. A standardized form
would make the procedure uniform and consistent among all the agencies,
contractors, and grantees.
Making the patent the only instrument for documenting the confirmatory
license. This would entail eliminating the current requirement that the
contractor or grantee file a separate election to retain title. Instead,
within 2 years of disclosure (or within 1 year if publication, sale, or
public use of the invention has initiated the 1- year statutory period in
which valid patent protection can be obtained in the United States),
require the contractor or grantee to file a patent application with PTO.
This would reduce a step in the process for both the applicant and the
agency and, in most cases, shorten the time between the date the
contractor or grantee realizes it has an invention and the date it applies
for a patent.
Requiring that the government interest statement on the patent
application include the name of each specific agency that funded the
research, the contract or grant number( s) under which the invention was
created, and a provision stipulating that the government has a
nonexclusive, paid- up, royalty- free right to the use of the invention.
Requiring that the contractor or grantee provide a copy of each patent
application* including divisionals, continuations, and continuations-
inpart* to the funding agency. 2 This would inform the funding agency that
the contractor or grantee has filed the application within the required
time and that the agency has a record of all patent applications related
to the original invention disclosure. Since patent applications are
standard for all
2 The original application for a particular patent is referred to as the
parent. Subsequent applications may relate back to the parent either as a
divisional, a continuation, or a continuation- in- part. A divisional is a
later application that is carved out of a pending application and
discloses or claims only subject matter disclosed in the earlier
application. A continuation is a second application for the same invention
claimed in a prior application that discloses and claims only subject
matter disclosed in prior applications and introduces into the case a new
set of claims. A continuation- in- part repeats some substantial portion
or all of the earlier application but adds matter not disclosed in the
earlier case.
Appendix VIII: Options to Improve Compliance with Reporting Requirements
under the Bayh- Dole Act
Page 91 GAO- 03- 47 Transferring and Reporting Technology
applicants, this also means that all funding agencies receive standardized
forms.
Requiring PTO to (1) inform each funding agency named in a government
interest statement that PTO has received a patent application on the
invention and (2) provide the serial number of the application to the
agency. This provides a cross- check for the funding agency to ensure it
has received the patent application. Also, the agency has the serial
number if it needs to interact with PTO.
Requiring PTO to inform the funding agency of major events* such as the
abandonment of an application* that would affect the government*s rights
during the applicant*s prosecution of the patent. This would allow the
funding agency to take timely action at any point its rights to the
invention are threatened.
Requiring PTO to show in its Patent Gazette* the official journal on
patents and trademarks* that the issued patent is subject to a government
interest. This would provide notice to the funding agency and the public
that the patent has been issued and that the government has rights to the
invention. Anyone wanting more information could then access the patent
from PTO*s Internet Web site or official patent files.
Permitting PTO to charge the applicant a fee for an application that
contains a government interest section. The fee should be commensurate
with PTO*s additional costs for its services under the revised
requirements. This is in keeping with PTO*s position of being
selfsufficient through fees. The fee would be paid by the applicant and
would be one additional factor the contractor or grantee would need to
consider in deciding whether to file a patent application. However, the
additional cost of the government interest fee should be offset to some
extent by the reduced costs of the lesser reporting burden on the
contractor or grantee.
Requiring the Department of Commerce to develop a uniform utilization
report whereby contractors and grantees holding title to federally
sponsored inventions must report annually on the utilization of each
invention. These utilization reports could be used to provide information
on the status of development, the date of first commercial sale or use,
and the gross royalties received by the contractor or grantee. The
regulations already allow* but do not mandate* agencies to require their
contractors and grantees to provide these types of data. Among other
things, a utilization report on every invention would help the funding
agency to determine whether the contractor or grantee is actively pursuing
Appendix VIII: Options to Improve Compliance with Reporting Requirements
under the Bayh- Dole Act
Page 92 GAO- 03- 47 Transferring and Reporting Technology
development and commercialization of the invention* one of the agency*s
oversight responsibilities for inventions subject to the Bayh- Dole Act
and Executive Order 12591.
Some of these changes could be made by the Department of Commerce through
revisions to the existing regulations. However, the Congress may need to
consider changes to the law because (1) the changes need to be made in
conjunction with each other and (2) such actions as eliminating the need
for the Government Register, establishing additional requirements for
inventions created under Executive Order 12591, and placing additional
requirements on PTO require congressional action. 3 Also, the Congress may
wish to consider the impact of any treaty* such as the one now being
negotiated* that would affect the types of information that could be
required on the patent application.
3 The Government Register is maintained by the USPTO for the purpose of
recording the
*confirmatory licenses* agencies receive from contractors and grantees
confirming that the government has rights in the inventions in question.
It is a separate record from the
*government interest* section on the patent itself, which also shows that
the invention was created with government support and that the government
may have rights in the invention.
Appendix IX: Comments from the Department of Commerce
Page 93 GAO- 03- 47 Transferring and Reporting Technology
Appendix IX: Comments from the Department of Commerce
Appendix IX: Comments from the Department of Commerce
Page 94 GAO- 03- 47 Transferring and Reporting Technology
Note: Page numbers in the draft report may differ from those in this
report.
Appendix IX: Comments from the Department of Commerce
Page 95 GAO- 03- 47 Transferring and Reporting Technology
Appendix X: GAO Contacts and Staff Acknowledgments
Page 96 GAO- 03- 47 Transferring and Reporting Technology
John P. Hunt, Jr. (404) 679- 1822 Frankie Fulton (404) 679- 1805
In addition to those named above, Gene Barnes, Bert Japikse, Deborah
Ortega, Paul Rhodes, and Lynne Schoenauer made key contributions to this
report. Appendix X: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments
(360144)
The General Accounting Office, the investigative arm of Congress, exists
to support Congress in meeting its constitutional responsibilities and to
help improve the performance and accountability of the federal government
for the American people. GAO examines the use of public funds; evaluates
federal programs and policies; and provides analyses, recommendations, and
other assistance to help Congress make informed oversight, policy, and
funding decisions. GAO*s commitment to good government is reflected in its
core values of accountability, integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail this list to you every afternoon, go to www. gao. gov
and select *Subscribe to daily E- mail alert for newly released products*
under the GAO Reports heading.
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:
U. S. General Accounting Office 441 G Street NW, Room LM Washington, D. C.
20548
To order by Phone: Voice: (202) 512- 6000 TDD: (202) 512- 2537 Fax: (202)
512- 6061
Contact: Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail:
fraudnet@ gao. gov Automated answering system: (800) 424- 5454 or (202)
512- 7470
Jeff Nelligan, managing director, NelliganJ@ gao. gov (202) 512- 4800 U.
S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D. C.
20548 GAO*s Mission
Obtaining Copies of GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs
Public Affairs
*** End of document. ***