Intellectual Assets Blog

Chapter 9 of my book on technology transfer or sales or what have you will be devoted to smiles.  I realize that the research here is deep, however my direct experience is related to gutting out that next reminder call.  In my business as an intermediary, I often find myself reminding one party or the other to complete a previously agreed upon task.  Most (read: all) of the time the task is not completed by the time my reminder call comes.  One of my secrets is to smile as I am dialing and right before I leave the voicemail.  In my purely qualitative study, I have found that my messages are upbeat and nearly all of my targets thank me for what I affectionately describe as a harassment phone call.

I just ran across a fascinating description of the impact of smiling on sports performance, success and even life expectancy.   I know that smiling make me feel better and that is likely good enough though.

CRADAs (Cooperative R&D Agreements) are flexible agreements that allow outside parties to use federal R&D assets.  I am often asked to explain why you should bother if no money flows out.  (There is a statutory requirement forbidding the government from using a CRADA as a funding vehicle.)

Here are my top 4 reasons

1) the science.  Usually you are trying to get an answer to some technical question.  Will my product work in a new environment?  How to I overcome this particular challenge?  etc.  A CRADA will help you get toward that answer.

2) the cost.  Typically CRADAs provide you access to expertise or facilities that is hard or impossible to come by.  In many cases, the absolute cost is nominal and it will reduce development time (yes, working with the government will SPEED your development).

3) credibility and validation.  Just by having an agreement with the government you have shown you have a reasonable amount of business acumen.  In particular, as a startup, it will get a moment of pause from investors. Enough time to show that you are resourceful in leveraging engineering dollars.

4) Nose in the tent.  In the case of the DoD (a procuring agency), getting your nose in the tent with the researchers who are tasked with solving a problem has always seemed like a good idea.  They are not in the procurement process, however if asked they can confirm that your solution works.   More importantly, if you are in the tent, you can effectively limit other occupants.

Like many interactions with the government, even free comes with a cost.  In most cases I find the benefits greatly exceed the costs.

A recent article picked up by the AP has highlighted some of great R&D being performed at The AF Research Lab (AFRL).  This article is about the micro drones being tested in the micro aviary.

This represents one small (pun intended) area of research at the Air Force, which is of course only part of the DoD, which is only one agency.

Of note is even in this area the amount of science necessary to get these projects off the ground (ditto) is tremendous.  This work combines material science, electronics, mechanics, energy storage, communications, artificial intelligence, etc.

The breadth of US government patenting is hard to get a handle on.  In truth it is rarely reported, so I was pleased to see Business Insider reference the great work that is done in the US laboratories.

Unfortunately they got it a little wrong.

They noted that IBM and GE combined represented 60x the amount of patent applications as the entire federal government.  I am not sure if the author meant patent grants, but lets assume so because it is easier to check the numbers (plus applications is a little spurious).

The total number of patents granted to GE and IBM on the following USPTO website is about 105,000 (or 106,000 if you add GE medical systems).  If the 60x number was true, this would mean the US labs were about #245 and ahead of 266,000 others, including Mattel, Ciba Geigy, and Exxon.  In my humble opinion, still a good showing.  However the news is considerably more positive.  The same website shows US Navy with 15,000, US Army 9000, Energy 6800, Agriculture 2500,  Health and Human services 2800 , and NASA 5400; for a total of over 41,382.  Admittedly this is still less than half of GE and IBM.  However it is MORE THAN GE!  In fact this places the government’s US patent portfolio as #2 all time.

While the US government will never catch up to IBM, it is worth noting that the numbers on the USPTO site do not include a host of other agencies and they use different numbers for the Department of Energy than the agency reports (I believe the difference lies in the way the contractors that run DoE labs).  To fix for this factor I would add another 8000 to the total.

The US government generates over 1200 patents a year.  Collectively this puts them as a top 15 assignee, but why bother?  Why not just put the technology into the public domain and let free market forces determine the winner?

There are two answers.

1) To add the fuel of interest to the fire of genius – Abraham Lincoln.

The major reasons a corporation patents

1. exclude others from a competitive area
2. publicize corporate prowess
3. increase valuation (mostly for start ups)

An exclusive right secured by the government can be licensed to a corporation, which in turn will allow the firm to obtain capital to produce the related product.  In the case of the Department of Defense, they have a defined need for the patented product and want to put it into operation to help the warfighter.  Other agencies have similar missions.  No exclusive right greatly reduces the interest to invest.

2) To be a good steward of taxpayer assets.

If the US gov were to put all of its Intellectual Property in the public domain, then it is likely that nothing productive will result.  Prior to Bayh-Dole, nearly all government sponsored inventions went into the public domain and very few ever saw the light of day.  Since then, the results have been dramatic with vast new industries being spawned from government research.

As I have advocated for working with the Federals labs, I am often asked about how this relates to procurement.   I have always believed that working with the labs provide validation and credibility to any effort (not to mention the scientific answers) and therefore was a solid indirect step to obtaining a government contract.

Having come back from the Federal Laboratory Consortium national meeting, I can say that at least the DoD are now starting to formalize the process. A working group has been established to flesh out a policy that makes sense and they are currently looking for case study of success.

Even without this formal mechanism in place CRADAs have their place in business development. I’ll cover that in a later post.