Presentation Overview

2. Presentation Overview • Barriers to Commercialisation • Background of U.S. government R&D Innovation and Commercialisation • Proactive vs. Reaction Commercialisation • Commercialisation at NASA-Johnson Space Center • Internal Education • Incentives and Disincentives • External Relationships • The Three Legged Stool: Technology / Management / Financing • The Innovation Process: The JSC Commercialization Pipeline model • NASA-Johnson Space Center Commercialisation Examples • Recommendations for R&D Organisations • Recommendations for Commercial Firms

3. Barriers to Commercialisation • Cultural Barriers - Technical and Business Knowledge, Skills, Interests and Experience • Lack of understanding in the technical community on what to do with new technologies and discoveries • Lack of understanding in the business community on how to find new innovations and how to gain access to them • Transaction Costs – Time and Money • Long lead times • Significant investments with no clear return on investment • Intellectual Property Protection Patent law is complex, expensive and difficult to enforce • Accountability Getting inventions to the marketplace is rarely in anyone’s job description • Disincentives Effort spent on commercialisation is time taken away from the “real” job • Regulatory and Security Restrictions Many organisations (particularly governmental) are barred from certain business activities

4. U.S. Government R&D and Innovation • Annual U.S Government Expenditure for R&D: $75 billion (£42 billion) • NASA is the 3rd largest government R&D organisation, spending about $5 billion annually • $1 billion annually is awarded for small business R&D, administered through Dept of Defense, National Institute of Health, and NASA • Acts of Congress • Technology Transfer Act – 1986 • Stevenson-Wydler Technology Innovation Act – 1992 • Executive Orders The Clinton Administration’s National Performance Review – Agenda for Change – 1994 • NASA Response Creation of Technology Transfer and Commercialization Offices at each of its 10 field centers -- coordinated by NASA Headquarters, Washington D.C. -- 1994

5. Proactive Commercialisation Industry/Gov't Cooperative R&D Patents & Licensing Proof of Concept Basic R&D NASA Hardware Prototype Government Development Commercial Development Commercial Product

6. NASA-JSC Office of Technology Transfer and Commercialization to . . . transfer and enable commercialization of NASA-JSC technologies to the private sector to create jobs, improve productivity and increase U.S. competitiveness. MISSION

7. NASA-JSC Office of Technology Transfer and Commercialization OVERVIEW • A small directorate level office was created in March 1994 to coordinate commercialisation activities at the NASA/Johnson Space Center • The office philosophy was to maintain a small core staff (14 people) of commercialisation officers and patent attorneys • The Office networks internally to the 17 technology divisions • The Office networks externally to commercialisation centers, other federal labs and commercial firms on a project-by-project basis

8. Internal Education • The philosophy of the Commercialisation Office is to facilitate JSC technology divisions in commercialising their own innovations • A number of meetings is held with each of the 17 technology divisions at JSC • At the first meeting, a presentation is given by the Commercialization Office to discuss what commercialization is, why it’s of interest, how it works, and what to do with new innovations • At the second meeting, the division presents its top-three innovations to a panel of commercialisation officers, patent attorneys, and business development experts. The panel gives its assessment of why these innovations are, or are not, of interest, and what happens next. • A series of discussions follow, focused on taking the most promising innovations through the commercialisation process

9. Incentives for NASA Inventors and JSC • Professional Prestige and Publicity for Receiving Patents • Monetary Awards • $500 upon patent application filing ($250 each for multiple inventors) • $500 ($250 each for multiple innovators) NASA Tech Briefs publication award for software innovations. • $150 NASA Tech Briefs publication award for all others. • Supplemental awards up to $100,000 • Royalties – Stevenson-Wydler & Technology Transfer Acts • NASA Inventor receives first $2000 of royalties + 25% thereafter • JSC receives remaining royalties (NOT Federal Treasury)

10. NASA Johnson Space Center Texas External Relationships Business Incubators (e.g., Univ. Houston) Texas Mid-Continent Technology Transfer Center Texas Research Triangle Institute North Carolina Other NASA Field Centers

11. The Three-Legged Stool • Technology • The Right Products at the Right Time: A complex balance of technical merit, patentability, and commercial product potential • Management • The most successful management team has the right technical and business skills, interests, experience, passion and attitudes – Not easy to find • Financing • The management team often find themselves on an endless pursuit of additional funding, instead of making the business and products a success

12. NASA-Johnson Space CenterCommercialization Pipeline Marketing Materials Preparation Marketing Strategy Development and Implementation Existing Patent Portfolio Prioritized via Marketing Quicklook Success Stories Contractor Reporting Requirements Marketing New Technology Reports Inventor Initiative Inventory & Evaluation Commercialization Invention Disclosures Patenting Division Top-3 Commercial Products Post-Licensing Activities Technical, Commercial, and Patent Evaluation Patentability Search Licensing Negotiations Business, Marketing, Product Development by licensee Assess IP Rights Patent Application Filing Technology Description / Marketing Quicklook Contractor can:  Retain ( govt stops)  Waive (govt cont’s)  Not respond (cont’s) Shaded boxes indicate marketing team functions

13. NASA-JSC Commercialization ExamplesBioreactor - Rotary Cell Culture System • Cells in space grow in three dimensions and are able to ‘self associate’ • The Bioreactor was invented by NASA to simulate the space environment • Invention was exclusively licensed to Synthecon, headed by a retired NASA engineer and co-inventor. Sales currently exceed $2 million. • In 2000, a Space Act Agreement was signed with StelSys, Inc., to develop commercial medical products based on bioreactor technology.

14. NASA-JSC Commercialization Examples DeBakey Ventricular Assist Device • NASA engineer, Dave Saucier, entered Baylor College of Medicine hospital with heart problems. Discussed with his surgeon, Michael DeBakey, the need for a new generation of heart assist devices for people with end-stage congestive heart failure. The device keeps the patient alive, prior to a heart transplant. • Saucier pioneered a relationship between NASA and Baylor, combining space shuttle turbine technology and NASA Shuttle re-entry hydrodynamic software with Baylor medical expertise • The resulting device weighs 4 ounces and is one tenth the size of other VAD’s • To date, Micromed, the license holder, has implanted the DeBakey VAD in 230 patients in clinical trials worldwide

15. NASA-JSC Commercialization ExamplesIntelligent Computer-Aided Training • Artificial intelligence shell programme to enable instruction, simulation, and behavior analysis of complex subject matter • Used to design astronaut and operator training programmes for several missions, including the Hubble repair and the Physics Tutor for high schools • Used by military to train tank crews • Possible use for training microchip designers, flight controllers, nurses, and other disciplines, particularly in conjunction with virtual reality simulators • Winner of the 1994 NASA Invention of the Year Award

16. Recommendations for R&D Organisations • An Innovation Process Establish an Assessment & Development Process, similar to the JSC Commercialization Pipeline • Clear Accountability and Incentives Inform all members of staff that they have responsibilities for getting innovations out of the lab and show how they can benefit from successful commercialisation • Internal Education Develop an process to educate staff on what commercialisation is, how it works, and their role • External Relationships Develop a network of relationships to assist with technical, commercial, and patent assessments and to provide management and financial know-how • Professional Innovation-Commercialisation Associations Become active in organisations promoting the professional development of staff and organisations

17. Recommendations for Commercial Firms • New Inventions and Discoveries Innovation is the lifeblood of your competitiveness. Identify the most likely sources of innovation in your industry, both internal and external. • External Relationships Develop relationships with the most promising sources. For example, create a Technologist Exchange Programme, trading technical staff on a rotating basis. • Process Establish innovation and commercialisation in your firm as a core competency. Assign high level staff to be Keepers of the Process, with clear accountability and incentives. •  Professional Innovation-Commercialisation Associations Become active in organisations promoting the professional development of staff and organisations to more effectively move inventions from the laboratory to the marketplace.