Maximizing the Value of Intellectual Property

Andrew Quintero

Aerospace has a formal process to explore and develop ancillary applications for technology originally developed to support the national security space community.

Many of the innovations developed at Aerospace are the direct result of specific problem-solving efforts for the company's government customers, while others are the unexpected byproducts of independent research activities. Truly novel discoveries generally result in patents being filed by Aerospace. These patents are an important part of the research process, and serve to protect the government's investment in the work it has commissioned.

Aerospace and its government sponsors further benefit industry through technology transfer under appropriate circumstances. Technology licenses also provide a royalty stream that can be used to augment the existing research and development budget and help fund research requests that might otherwise be declined due to scarce funding. Aerospace gains valuable insight by interacting with commercial technology developers, who often have experience with processes and materials that a pure research scientist might not. In turn, Aerospace makes direct contributions to the high-tech economy, which serves the national interest by increasing U.S. competitiveness in the global marketplace.

The Licensing Process

The licensing process begins by capturing what is in the mind of the inventor. When an Aerospace researcher discovers a truly novel concept, the information is recorded, and the invention is listed in the intellectual property database. The invention is then presented to one of four patent review committees, depending on the subject matter. If the committee approves going forward with a patent application, an outside patent attorney, under the direction of the General Counsel's staff, will begin preparing it, and the Office of Intellectual Property Management will assist the inventor in preparing a one-page summary and 12-chart briefing. The invention disclosure and patent must be filed before any public disclosure of the invention, such as a professional paper or conference presentation, is made. Certain rights to the patent both domestically and abroad can be lost if a public disclosure is made prior to filing the patent with the United States Patent and Trademark Office.

After the patent application is filed, licensing opportunities can be explored. The government can take several years to actually issue a patent, but many technologies have a limited window of opportunity for commercial development. In these cases, a patent need not be issued for the technology to be licensed.

To identify prospective licensees, Aerospace presents "Technology Opportunity" briefings at industry events and to venture capital advisory boards, primarily in the San Francisco Bay area (because of its proximity to the high-tech activities of Silicon Valley). Most of these events are sponsored by a nonprofit spin-off of NASA Ames Research Center known as the Girvan Institute of Technology. A Los Angeles office of Girvan is expected to open soon.

Once a formal request to license the technology is received, a term sheet is drafted outlining the primary intent and conditions for the license to begin negotiations. When all terms are agreed upon, they are embodied in a formal licensing agreement. This agreement delineates the rights, restrictions, and conditions dictated by Aerospace's role managing a federally funded research and development center to ensure that it protects the government's interest in this technology. The agreement also details the financial terms, which generally include a license execution fee, recurring minimum royalties, and a performance driver in the form of a minimum fee due in certain years. Revenues are split three ways and distributed to the inventors, their departments, and the corporation's general funds.

Success Stories

Aerospace's licensing activities have significantly increased over the last three years. The licensees come in many forms—individual entrepreneurs, small startups, large firms—and each presents varying needs for single patents, bundled patents, and sometimes just know-how, without any patent at all. All agreements are tailored to provide reasonably easy access to the intellectual property in the hope that it will serve a useful purpose. Aerospace frequently provides some advice and assistance to help its licensees under the terms of the license agreement. More extensive assistance, if any, would be rendered through a formal contract for services.

For example, representatives of a large Australian defense contractor working on various homeland security projects with the U.S. Department of Energy and state homeland security agencies met with Aerospace at Girvan. They discussed whether some Aerospace technology could be used to collect and send information from within a cargo container as a way to monitor such containers entering major ports—a serious security concern. After considering the problem, Aerospace offered a solution using a patented technology employing acoustic waves to transmit power and data through a structure. Aerospace originally developed the technique as a means of monitoring launch vehicles during transport from a manufacturing site to the launch complex. Aerospace realized that although this technique was originally designed to detect unexpected shocks that would warrant investigation, it could be used to create an acoustic modem that would penetrate a shipping container wall, passing the data to a device on the exterior that could then complete the link to the rest of the communication system. The company, Tenix, has since licensed the rights to use the Aerospace patent for this application and has contracted with Aerospace to develop prototypes to further develop the concept.

Sometimes, Aerospace patents provide the basis for a new startup company. One such venture, formed in 2003, is OPL Systems (for Orientation, Pointing, and Leveling), which licensed a patent on a miniature GPS-based attitude determination technology developed at Aerospace. The technology arose through efforts to augment the inertial measurement units used for rocket navigation with a GPS-based unit. OPL Systems was created solely to generate products based on this patent.

Another company, Invenios of Santa Barbara, found that its current micromanufacturing technology was a great complement to a set of Aerospace techniques using ultraviolet lasers for fabricating 3-D structures in photosensitive glass. Aerospace developed these techniques to advance the concept of a miniature glass satellite, but clearly the technology had great potential for many other applications. In the two years since Invenios licensed the technology, the company has established four laser processing stations and has developed a variety of products that will begin shipment this year. Although most of their products will be geared toward creating microfluidic biological devices, one of their first products was a glass inkjet printer head for industrial grade printers.

In a similar vein, the pharmaceutical and biotechnology industries have spent millions of dollars on research and development of miniature "lab-on-a-chip" devices, which require microfluidic channels for moving small amounts of liquid samples. Although the channels can be manufactured simply enough, there are no simple ways for including miniature valves. Aerospace may have accidentally discovered the most attractive solution to this problem as a result of a failure investigation several years ago. An examination of a propulsion line revealed that it became plugged when the liquid inside froze. The cause was attributed to the so-called Peltier effect, the cooling effect that can occur when a large current passes through a junction point, in this case, cooling the liquid to its freezing point. Researchers realized that by intentionally placing a Peltier junction close to a small flow channel, the liquid in that channel could be cooled and warmed to generate a valving and pumping effect. Not much was done beyond filing for patents in the late 1990s, but in 2000, Aerospace became aware of the problem of controlling fluids in such medical diagnostic devices. With a small amount of funding, Aerospace built a prototype to assess whether the Peltier technique offered a viable approach. Feedback from industry experts suggests that Aerospace may have developed a unique, inexpensive, and attractive valving solution that will significantly advance the lab-on-a-chip industry. Discussions are taking place to explore the possibility of forming a new company to offer this technology on a broad scale.

Summary

Aerospace has established a formal approach to expanding the utility of its intellectual property and enhancing its overall value to the government and the commercial sectors. Using an active approach and leveraging the talents and resources from outside entities, Aerospace can enjoy the benefits of technology transfer and commercialization without disrupting core business missions and objectives. In the end, these efforts serve to strengthen the overall effectiveness and knowledge capacity required by Aerospace customers.

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