Sen. Tom Udall, D-N.M., is drafting legislation that could revitalize technology transfer at U.S. Department of Energy laboratories nationwide.
The bill, which Udall will introduce in the Senate this fall, would create two new federal funds with public and private financing to help businesses invest in technology commercialization, beginning with $50 million in government money – or $25 million per fund – to get them off the ground.
The bill would also centralize all DOE tech transfer-related programs and resources under a new, single office to improve efficiency. And it would create commercialization teams to help identify marketable technology at labs and mentor people involved in the process.
New Mexico’s top movers and shakers in technology commercialization – including investors, entrepreneurs, tech-transfer professionals and executives from Sandia National Laboratories and Los Alamos National Laboratory – came together last Monday in Santa Fe to discuss the challenges they face in pushing inventions out of the labs, and to provide input to Udall and his staff on the bill.
Udall said the legislation provides an opportunity “to take a whole new look” at the DOE’s tech-transfer efforts.
“We hope to have a piece of legislation that can make a real difference,” Udall told participants. “Technology transfer (of lab innovations) is a bridge to economic development for new industries.”
The DOE and many other federal entities have been working to improve and accelerate technology transfer since 2011, after President Barack Obama ordered all federal departments and agencies to work closer with the private sector to commercialize government-financed innovation. Since then, the DOE has created a number of new policy initiatives, such as cutting costs for companies to license technologies from the labs and providing online Web portals and guides to make it easier to find potentially marketable inventions and navigate licensing bureaucracy.
But entrepreneurs and investors say a lot more is needed, because tech transfer is often not a priority for lab leadership and staff, and cumbersome processes to review inventions and acquire commercialization rights frequently discourage investors, especially startup companies with limited resources.
That’s generated congressional efforts to smooth the process. Rep. Ben Luján, D-N.M., for example, has introduced a bill to create a dedicated fund to pay for the government’s share of Cooperative Research and Development Agreements, or CRADAS. Private companies sign those agreements with labs to work on new, emerging technologies using lab equipment and infrastructure in coordination with government engineers and scientists.
But most CRADAS are financed entirely by private businesses, making it prohibitively expensive for many small companies. In response, the Luján bill would authorize $20 million annually for five years to pay for the government’s share.
At the Santa Fe conference, lab leaders and others told Udall that firm direction from Congress to make technology transfer a fundamental part of what labs do would help build momentum.
“It needs to be seen as more of a central mission,” said LANL Chief Technology Officer Duncan McBranch. “It can’t be seen as peripheral.”
Sandia Director Paul Hommert said the DOE and Congress must foster a climate in the labs that makes staff feel tech-transfer efforts are “appreciated and valued.”
“We need official steps to say that this endeavor is important to Congress and the public,” Hommert said.
Fresh funding is also critical to help entrepreneurs traverse what industry calls the “valley of death.” That’s the gap between a great idea demonstrated in a lab and its development into a proven prototype that can attract larger investments and market interest to move it to the mainstream.
“A small amount of targeted, catalyst funds are needed to support these efforts,” Hommert said.
Udall said the funds in his bill would provide early stage venture-capital investments and private-equity financing. The government’s financial commitments would be aimed at attracting more capital from private sources.
“The amount we propose to commit sounds small, but government dollars can push out and leverage up to 10 or 20 times more from private sector investment,” Udall said.
David Blivin, managing partner of Cottonwood Technology Fund, said Udall’s bill is “hitting on some key things.”
“Capital is always a critical issue,” Blivin told the Journal. “With dedicated funds, we can work to mature early stage technology into investable deals to attract real capital interested in taking it to the next level.”