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FINDING TECHNOLOGY IN THE NIS
by Michael Guerin   

Teflon and the internet, radar and velcro.  All developed in U.S. military and space
programs, these technologies have been successfully commercialized by firms with
an eye for profitable applications in the civilian sector.   NIS technologies, often
equally  adaptable to commercial use, are already being sought after by U.S. firms.

The transition to a market economy and changes in NIS patent law now provide
important incentives for NIS scientists to commercialize their discoveries, but
interested U.S. firms should keep the following points in mind.

Transferrable NIS technologies are largely concentrated in Russia, which contained
the bulk of the Soviet military and industrial complex.  Other republics should not
be overlooked, however.  Belarus, for example, is a leader in advanced optics,
electronics, and nuclear engineering.  Most agree that the best prospects for
technology transfer lie in NIS materials research, fiber optics, medicine, and
spin-offs from the Soviet space program.  Even older NIS technologies and
products may incorporate design features and materials not found outside the
region.

Remember that acquiring a license to use NIS technology is often a long and
arduous process.   Fortunately, 11 NIS countries--all but Turkmenistan--agreed in
February 1994 to recognize patents filed with Russia's Rospatent.   Soviet patents
filed before passage of the 1992 Russian Law on Patents may be invalid, however,
unless they have been reregistered with Rospatent.  Check with Rospatent to
ensure that your Russian partner has the right to license their technology, and
require that your contract include indemnity against patent violations.  Russian
patent law allows for a patent duration of 20 years from filing for inventions, and
10 years for an industrial design.  Bear in mind that Russian patent law requires
that Russian discoveries be patented in Russia first.
 
Capitalize on NIS strengths while providing yourself with a back-up plan.  For
example, Aerojet, of Sacramento, California, sources jet engines in Russia.  It also
holds the license to manufacture the engines in the United States, in the event that
their Russian partner defaults.  Manning Ventures of Rochester, New York, also
tries to manufacture in the NIS, but leases technology when it is risky to purchase.

Beware of the divide between NIS design institutes and production facilities.  Some
cutting-edge technologies may transfer poorly from the drawing board to the
factory floor.  Older NIS technologies, proven through serial production, but still
unexploited outside the NIS, may be worth a second look. 

Experienced local representatives can help to facilitate your relationship with NIS
partners as well as identify viable technologies for sale here in the U.S.  In
addition, the BISNIS Search for Partners, published 12-15 times annually with
different regional and industry focuses, is a proven source for high-technology
contacts. 

Not to be overlooked, U.S. companies with experience in the NIS repeatedly
emphasize the importance of establishing a bond of trust with their local partners. 
Since the enforcement of commercial law is still quite weak in the NIS, a
company's reputation is crucial.   Long-term business relationships should be
structured so you and your Russian party both profit.   If not, U.S. executives
stress, it won t take long for your partner to realize that there is a problem.

Finally, before importing NIS technology that may have military potential, the U.S.
importer should contact the U.S. Department of the Treasury, Bureau of Alcohol,
Tobacco and Firearms (ATF) to ensure that they meet all U.S. licensing
requirements.  For more information on ATF requirements, contact: Carmen L.
Lewis, Chief of the Firearms and Explosives Imports Branch, ATF (202) 927-8320
(voice), or (202) 927-8601.  For more information on acquisition of NIS science
and technology, contact BISNIS at (202) 482-4655, and ask for a trade specialist.

Michael Guerin is a BISNIS trade specialist.
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