IMPLEMENTATION OF THE FEDERAL TECHNOLOGY TRANSFER ACT THURSDAY, JUNE 1, 1989 HOUSE OF REPRESENTATIVES, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, DC. The subcommittee met, pursuant to call, at 9:32 a.m., in Room 2318, Rayburn House Office Building, Hon. Doug Walgren, [chairman of the subcommittee] presiding. Mr. WALGREN. Let me call us to order and welcome you to our hearing today on technology transfer, and, without objection, any recordings, television or radio or sound, will be permitted in this hearing and, since I'm the only one here, there will be no objection. [Laughter.] Technological innovation is the force that drives economic growth and industrial productivity in today's world and here in the United States. Although we still set the pace in basic science, we all know that our competitors have become truly adept at transforming the results of that basic science, much of which is developed in the United States, into new products and services which then attract the consumers' attention and their dollars. This Committee has long taken an active role in encouraging American industry to increase its commitment to the difficult task of transforming an idea into a better product, and while we know that only private industry can do this job, we also realize that there are many things the Federal Government can do to make the private sector's role in that job more effective. One of the one of these is to increase the availability of the products of Federal research, a process commonly thought of as technology transfer. One-sixth of the scientists and engineers in this country work for the Federal Government in laboratories and in other capacities and they do a great deal of research that has tremendous potential for commercial application. For 10 years now, we have been promoting legislation to try to encourage the circumstances under which the best commercial ideas from what is over $60 billion per year in Federal efforts of research and development, to try to encourage the circumstances under which the fruits of that effect would transfer and be developed in the commercial marketplace. The Federal Technology Transfer Act of 1986 is the most recent statutory effort to promote that technology transfer. That Act calls for very real changes in the way ideas originating in Federal lab (1) oratories are evaluated for commercial potential and are encouraged and made available to U.S. companies in the private sector. In the two and a half years since the Act became law, the implementation of it has been a mixed story. The Federal Laboratory Consortium for Technology Transfer, which was given a formal charter and stable funding by that Act, has been visibly strengthened, and its membership has increased, and its services have been more broad-spread for its member laboratories. And since the Act provided the incentive of royalty-sharing to Federal inventors who work for commercialization of their inventions, licensing of federally developed inventions appears to be on the rise. Some laboratories routinely enter into Cooperative Research and Development Agreements with industry, as was envisioned under the Act, and yet, others have yet to receive specific authority from their headquarters and the levels of bureaucracy to which they report, even though the Act, as reinforced by the Executive Order implementing these directions, mandates that all laboratories be delegated such authority. There are several labs who have in system-have in place-systems to evaluate inventors' performance in technology transfer, but many have yet to establish the kind of evaluation system that is envisioned by that Act. Today, we'll have a representative of the General Accounting Office as the lead-off witness to give an assessment of the current state of technology transfer from the Federal laboratories and to assure more uniform implementation of the Act, this Committee asked the General Accounting Office to review the extent of laboratory and agency compliance with the Act. GAO was also asked to develop a series of questionnaires to enable us to understand how well that Act is working and why it is successful, where it is working. After the General Accounting Office, we will hear from several of the Federal laboratories to learn if their efforts have been successful within their own view and how they-those experiences might be applied to other laboratories that have not gone as far. Finally, we will hear from representatives of the Department of Defense to find out what can be done to increase the transfer of technology to American industry from the Defense Department, in view of the fact that the Defense Department funds almost onethird of the research and development that is conducted in the Country. We'll hold the record open at this point for opening statements which may be offered by other Members who are unable to be with us at the outset and we'll introduce for the record at this point an opening statement by Congressman Jerry Costello on the subject of these hearings. [The prepared opening statements of Hon. Doug Walgren, and Hon. Jerry Costello follow:] Opening Statement U.S. Representative Doug Walgren Hearing on Technology Transfer June 1, 1989 TECHNOLOGICAL INNOVATION IS THE FORCE THAT DRIVES THIS COMMITTEE HAS LONG TAKEN AN ACTIVE ROLE IN ENCOURAGING AMERICAN INDUSTRY TO INCREASE ITS COMMITMENT ΤΟ THE EXPENSIVE AND VERY RISKY PROCESS OF TRANSFORMING A BETTER IDEA INTO A BETTER PRODUCT. WHILE WE KNOW THAT ONLY PRIVATE INDUSTRY CAN DO THIS JOB, WE ALSO REALIZE THERE ARE MANY THINGS THE FEDERAL GOVERNMENT CAN DO TO MAKE THE PRIVATE SECTOR'S JOB EASIER. ONE OF THESE IS TO INCREASE THE AVAILABILITY OF THE FRUITS OF FEDERAL RESEARCH, A PROCESS TECHNOLOGY TRANSFER. COMMONLY CALLED ONE SIXTH OF THE SCIENTISTS AND ENGINEERS IN THIS COUNTRY WORK FOR THE FEDERAL LABORATORIES AND THEY DO A GREAT DEAL OF RESEARCH WITH POTENTIAL COMMERCIAL APPLICATION. FOR A DECADE NOW WE HAVE BEEN PROMOTING LEGISLATION TO MAKE SURE THE BEST COMMERCIAL IDEAS FROM THE OVER $60 BILLION PER YEAR IN FEDERAL RESEARCH AND DEVELOPMENT EXPENDITURES ENTER THE COMMERCIAL MARKETPLACE AS PRODUCTS WHICH ARE MADE IN AMERICA. THE FEDERAL TECHNOLOGY TRANSFER ACT OF 1986 IS OUR MOST RECENT STATUTORY EFFORT TO PROMOTE TECHNOLOGY TRANSFER. THIS ACT CALLS FOR FAR-REACHING CHANGES IN THE WAY IDEAS ORIGINATING IN FEDERAL LABS ARE LABS ARE EVALUATED FOR COMMERCIAL POTENTIAL, ARE NURTURED, AND ARE MADE AVAILABLE TO U.S. COMPANIES. IN THE TWO AND ONE-HALF YEARS SINCE THE ACT BECAME LAW, IMPLEMENTATION HAS BEEN MIXED. THE FEDERAL LABORATORY CONSORTIUM FOR TECHNOLOGY TRANSFER, WHICH WAS GIVEN A FORMAL CHARTER AND STABLE FUNDING BY THAT ACT, HAS BEEN VISIBLY STRENGTHENED. IT NOW HAS A BROADER MEMBERSHIP AND PERFORMS ADDITIONAL SERVICES FOR ITS MEMBER LABORATORIES. AND, SINCE THE ACT PROVIDED THE INCENTIVE OF ROYALTY SHARING TO FEDERAL INVENTORS |