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

reports12 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 millionsa

Research type Character of work

Agency Totalb

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 agenciesb

$64,184.9 $49,284.3 $14,900.6 $16,070.0 $13,206.0 $34,908.8

Total for all agenciesb

$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
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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.
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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
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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

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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.
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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
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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
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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
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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.
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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
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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
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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
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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
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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 1,126a

302 330 3 451 16 2,807a

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 forceb

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 619d

2,344c1,140 5,219 1,368 2,024 10 2,324 42 15,090

Licenses in forceb

U.S. e

63 89 1,866 e1,152f1 99 6 3,276

Foreign e

0 12 272 e205f0 70 496

Undetermined 245 0 0 0 269 0 0 0 0 514

Total 245 63 101 2,138 269 1,357f

1 106 6 4,286

Licenses executed

by type of license

Exclusive 21 8 8 48 12 44 1 6 0 148

Partially exclusive 7 0 0 32 4 3 0 6 0 52

Nonexclusive 3 7 6 497 23 153 0 13 2 704

Other 020 6 7 0 0 10 16

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 245g 8 0 0 00 253

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 aaaa 22

Total 56 64 113 107 118

Patents issued

U.S. 35 57 74 64 64

Foreign aaaa 12

Total 35 57 74 64 76

Patents in forceb

U.S. aaaa 619

Foreign aaaac

Total aaaa 619c

Licenses in forceb

U.S. aaaad

Foreign aaaad

Undetermined 245d

Total aaaa 245

Licenses executed by type of license

Exclusive 21 23 29 24 21

Partially exclusive aaaa 7

Nonexclusive aaaa 3

Other aaaa 0

Total 21 23 29 24 31

Licenses executed by type of property

Patent 21 23 29 24 31

Research materials aaaa 0

Other aaaa 0

Total 21 23 29 24 31

Licenses earning income during fiscal year aaaa 120

Licensing income aaaa $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 124a125a122 174 139

Patent applications

U.S. 114 164 116 108 118

Foreign 1 0 0 0 0

Total 115 164 116 108 118

Patents issued

U.S. 85 88 85 80 114

Foreign 0 0 0 0 0

Total 85 88 85 80 114

Patents in forceb

U.S. 2,472c2,401c2,362c2,352c2,344c

Foreign 0 0 0 0 0

Total 2,472c2,401c2,362c2,352c2,344c

Licenses in forceb

U.S. 28 38 43 48 63

Foreign 0 0 0 0 0

Total 28 38 43 48 63

Licenses executed by type of license

Exclusive 2 3 3 3 8

Partially exclusive 0 0 0 0 0

Nonexclusive 47337

Other 0 1 4 1 2

Total 6 11 10 7 17

Licenses executed by type of property

Patent 6 11 10 7 17

Research materials 0 0 0 0 0

Other 0 0 0 0 0

Total 6 11 10 7 17

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 64 71

Total 287 264 324 352 343

Patents issued

U.S. 130 135 141 131 161

Foreign 0 1 4 4 3

Total 130 136 145 135 164

Patents in forcea

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 forcea

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 8 8

Partially exclusive 6 2 1 1 0

Nonexclusive 96686

Other 0 0 0 0 0

Total 22 15 13 17 14

Licenses executed by type of property

Patent 51 48 47 52 56

Research materials 3 3 3 4 0

Other 0 0 0 0 0

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 986a1,014a1,192a1,090a1,126a

Patents issued

U.S. 364 465 496 526 545

Foreign 45 57 62 54 41

Total 413a533a568a583a586

Patents in forceb

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 forceb

U.S. 1,067 1,166 1,346 1,509 1,866

Foreign 73 87 92 110 272

Total 1,242a1,377a1,624a1,839a2,138

Licenses executed by type of license

Exclusive 61 55 51 34 48

Partially exclusive 21 17 25 19 32

Nonexclusive 383 359 361 354 497

Other 7 1 1 2 6

Total 483a446a442a412a583

Licenses executed by type of property

Patent 190 167 307 210 304

Research materials 0 0 0 0 0

Otherc 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 21 17

Total 265 282 320 300 302

Patents issued

U.S. 111 137 125 150 152

Foreign 0 1 4 17 7

Total 111 138 129 167 159

Patents in forcea

U.S. 1,267 1,237 1,227 1,236 1,302

Foreign b1c28c22c66

Total 1,267 1,238 1,255 1,258 1,368

Licenses in forcea

U.S. dddde

Foreign dddde

Total dddd 269

Licenses executed by type of license

Exclusive 21 24 20 18 12

Partially exclusive 5 3 4 5 4

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 materials 0 0 0 0 0

Other 9 24 12 21 8

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 93 46

Total 254 267 268 223 145

Patents in forcea

U.S. b1,140 1,236 1,365 1,383

Foreign bbbb 641

Total bbbb 2,024

Licenses in forcea

U.S. bbbb 1,152c

Foreign bbbb 205c

Total bbbb 1,357c

Licenses executed by type of license

Exclusive 28 26 35 31 44

Partially exclusive 1 1 2 0 3

Nonexclusive 182 184 170 157 153

Other 0 0 0 0 0

Total 211 211 207 188 200

Licenses executed by type of property

Patent 164 147 157 147 149

Research materials 47 64 50 41 51

Other 0 0 0 0 0

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 disclosures 4 3 3 2 2

Patent applications

U.S. 3 2 2 2 3

Foreign 0 0 0 0 0

Total 3 2 2 2 3

Patents issued

U.S. 4 1 2 3 1

Foreign 0 0 0 0 0

Total 4 1 2 3 1

Patents in forcea

U.S. 14 12 11 9 10

Foreign 0 0 0 0 0

Total 14 12 11 9 10

Licenses in forcea

U.S. bbbb 1

Foreign bbbb 0

Total bbbb 1

Licenses executed by type of license

Exclusive bbbb 1

Partially exclusive bbbb 0

Nonexclusive bbbb 0

Other bbbb 0

Total bbbb 1

Licenses executed by type of property

Patent bbbb 1

Research materials bbbb 0

Other bbbb 0

Total bbbb 1

Licenses earning income during fiscal year bbbb 1

Licensing income bbbb $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 52 57

Total 471 443 445 476 451

Patents issued

U.S. 290 358 304 372 327

Foreign 0 3 9 8 9

Total 290 361 313 380 336

Patents in forcea

U.S. 2,184 2,245 2,158 2,241 2,295

Foreign 6 8 12 30 29

Total 2,190 2,253 2,170 2,271 2,324

Licenses in forcea

U.S. 62 71 80 87 99

Foreign 2 2 4 5 7

Total 64 73 84 92 106

Licenses executed by type of license

Exclusive 5 5 4 5 6

Partially exclusive 1 2 5 2 6

Nonexclusive 4 9 4 8 13

Other 4 1 0 0 1

Total 14 17 13 15 26

Licenses executed by type of property

Patent 14 15 13 15 26

Research materials 0 0 0 0 0

Other 0 0 0 0 0

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 disclosures 4 4 5 9 4

Patent applications

U.S. 2 0 4 4 16

Foreign 0 0 0 0 0

Total 2 0 4 4 16

Patents issued

U.S. 1 2 1 2 4

Foreign 0 0 0 0 0

Total 1 2 1 2 4

Patents in forcea

U.S. 35 37 38 38 42

Foreign 10 10 10 0 0

Total 45 47 48 38 42

Licenses in forcea

U.S. 10 11 4 4 6

Foreign 0 0 8 0 0

Total 10 11 12 4 6

Licenses executed by type of license

Exclusive 2 0 2 2 0

Partially exclusive 0 0 0 0 0

Nonexclusive 8 11 8 2 2

Other 0 0 0 0 0

Total 10 11 10 4 2

Licenses executed by type of property

Patent 8 11 12 4 2

Research materials 0 0 0 0 0

Other 0 0 0 0 0

Total 8 11 12 4 2

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 Activea

NewbActiveaNewbActiveaNewb

Agricultural Research

Service 219 49 0 0 Not provided 106

Air Force 320 49 14 5 213 81c

Army 998 235 0 0 00

Department of Energy 558 204 0d

0dNot provided Not provided

National Aeronautics

and Space

Administration 1 0 0 0 00

National Institutes of

Health 420 120 209 76 0 0

National Oceanic and

Atmospheric

Administration 8 3 0 0 00

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

propertya

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 1100

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

Incomea

Agency

Invention licenses active

during fiscal year

Other intellectual

propertyb Total

Agricultural Research Servicec$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 21,403,362d

National Aeronautics and Space

Administration 1,318,864 651,855 1,971,218d

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 Surveye220,000 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 provideda $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 provideda 32,728,556 35,516,006

National Oceanic

and Atmospheric

Administration 1,600b

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 aaaa a

Army aaaa a

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 835,431b 1,450,989

National Institutes of HealthcNot provided Not provided Not provided Not provided Not provided

National Oceanic and Atmospheric Administration 1,600000 1,600

Navy aaaa a

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 88a65a166a

Air ForcebNot provided Not provided Not provided Not provided

ArmybNot provided Not provided Not provided Not provided

Department of Energyb 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 240c

240cNot applicable Not applicable

Navyb

Not provided Not provided Not provided Not provided

U.S. Geological Survey 105 Not applicable 105d 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

651

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)
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