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Introduction

Federal laboratories play a unique role in the U.S. economy. They solve important problems in fundamental science, and they “design, build, and operate distinctive scientific instrumentation and facilities” that serve a variety of scientists and engineers from the government, academia, and industry (NIST, 2019a, p. 57). Although often referred to by the umbrella term “federal laboratories,” these entities are actually a heterogeneous group of organizations with differences in their types of operators; their missions; and their size, scale, and geography. Thus a federal laboratory is defined as “any laboratory, any federally funded research and development center (FFRDC), or any center that is owned, leased, or otherwise used by a Federal agency and funded by the Federal Government, whether operated by the Government or by a contractor” (15 U.S.C. § 3703). Operational structures include government-owned, government-operated (GOGO) and government-owned, contractor-operated (GOCO). Of the billions of dollars the federal government invests annually in research and development (R&D) (more than $115 billion in fiscal year 2016), more than one-third is invested in federal labs (NIST, 2019a).

The role of the federal labs has changed over time. Prior to World War II, “most of the federal funds for R&D supported mission-oriented research in agriculture, national defense, and natural resources carried out by government employees in small government laboratories and experimental stations” (IOM et al., 1995, p. 41). Responding to the increased need for R&D in wartime, the federal government made major investments in research labs and established new administrative mechanisms to manage R&D programs. In the early 1980s, increased competition from other countries, especially for new products based on advanced technological capabilities, together with a decline in corporate labs that participated in all stages of the R&D process, led Congress to pass legislation designed to spur the commercialization of industrially related R&D at universities and federal labs (IOM et al., 1995).

Recent renewed concern about the potential loss of U.S. technological leadership to emerging foreign competitors has refocused attention on federal lab innovation and stimulated greater attention to optimizing returns on federal investments. Indeed, improving the transfer of federally funded technologies through Lab-to-Market initiatives has been a priority of recent administrations. The Lab-to-Market Cross Agency Priority (CAP) goal aimed to “improve the transfer of technology from federally funded research and development to the private sector to promote U.S. economic growth and national security” (Executive Office of the President, 2018, p. 47).

The National Institute of Standards and Technology (NIST) has a leading role in coordinating technology transfer efforts across the federal government. The agency co-chairs the National Science and Technology Council’s Lab-to-Market subcommittee and, in conjunction with the Department of Energy and the White House Office of Science and Technology Policy (OSTP), oversees the subcommittee’s activities and the implementation of the Lab-to-Market CAP goal. NIST and other federal agencies, with the support of OSTP and the Office of Management and Budget (OMB), have determined that developing new strategies for improving the assessment and commercialization of digital products is a priority area for the Lab-to-Market CAP goal. This report examines a variety of legal and policy tools available to federal labs for disseminating and commercializing their digital products and related knowledge.

STUDY PURPOSE AND SCOPE

The purpose of this study of the National Academies of Sciences, Engineering, and Medicine was to identify and prioritize opportunities for adding economic value to U.S. industry, and thereby growing the U.S. economy and encouraging the development of products and services for the public’s benefit, through enhanced utilization of intellectual property associated with digital products created at federal laboratories. To carry out this study, the National Academies convened an ad hoc committee under the auspices of the Board on Science, Technology, and Economic Policy (STEP), Policy and Global Affairs. The committee was charged to (1) examine commercialization of digital products resulting from federally funded R&D at the federal labs, as well as extramural awardees; (2) consider issues concerning the ownership, use, and repurposing of data and the effect of data use restrictions on the use and analysis of multiple datasets from different sources; (3) examine the current state of and barriers to commercialization of digital products; (4) evaluate approaches that GOCO and GOGO federal labs can use to incentivize their researchers and the private sector to commercialize digital products; (5) review open-source versus protected proprietary control of digital products and the factors that lead to determining a pathway for commercialization; and (6) offer recommendations for improvements, especially with regard to increasing the commercialization and use

of these digital products in the private sector. The formal statement of task for this study is presented in Box 1-1.

In addition to reviewing the salient literature and holding closed-session discussions, the committee convened a series of public meetings and heard from a broad range of experts over the course of the study to ensure that the perspectives of practitioners in the public and private sectors and other experts would be taken into account. Experts addressing the committee ranged from agency management office representatives, to a broad range of representatives from federal labs, to individuals from industry and other private entities seeking to utilize federal lab outputs, to researchers studying the challenges and potential of commercializing digital products from federal labs. The evidence thus gathered served as the basis for the findings and recommendations presented in this report.

A central consideration in this report is the degree to which exclusive access is sometimes necessary for firms to commercialize digital products from federal labs, with the benefits of that commercialization accruing to the American economy in a manner consistent with the public interest. As described in detail in Chapter 3, in some cases, commercializing products from federal labs requires

substantial additional investment. Open access to these products may therefore, in these cases, discourage commercialization if firms are unwilling to make these additional investments in an environment in which other firms, both in the United States and abroad, have equal access to the output from the labs. This issue is expected to be particularly acute with respect to digital products—the subject of this report—which are unique in that they have nearly zero costs of reproduction, and multiple users can share them at no additional cost. In addition, as also described in the chapters that follow, there are important public welfare considerations that argue for exclusivity in certain instances.

DEFINITIONS OF TECHNOLOGY TRANSFER, COMMERCIALIZATION, AND DIGITAL PRODUCTS

As a baseline for its analysis, the committee adopted a set of definitions reflecting a broad view of digital products, technology transfer, and commercialization. For purposes of this report, “digital products” are defined as follows:

The term “technology transfer” is defined as follows:

Finally, “commercialization” of digital products is defined as follows:

ORGANIZATION OF THE REPORT

The remainder of this report reviews the available evidence relevant to the purpose of this study (as described above) and presents the committee’s findings and recommendations based on its analysis of that evidence. Chapter 2 describes the history and evolution of the federal laboratories; their involvement in science and innovation, including variations in their research mandates; and their organizational and administrative structures. Chapter 3 provides brief background on the economics of digital products, explaining why baseline rules and norms for regulating these products differ in important ways from those applied to technologies of the industrial era. Chapter 4 explores the federal patent and trade secrets regimes available to and utilized by the federal labs across a spectrum of digital products, including the implications of those regimes that bear on the subject of this study. Chapter 5 examines the copyright regime and its applicability to digital products, primarily software, produced by federal labs. Chapter 6 examines the various pathways for technology transfer of digital products from federal labs and the role of individual, organizational, and institutional factors in those pathways. Chapter 7 considers the effectiveness of methods for measuring the impact of technology transfer and of the commercialization of digital products. Following a compilation of references cited in the report, Appendix A includes agendas for the meetings held by the committee; Appendix B provides biographical information on the committee members; Appendix C contains definitions of digital products generated by the federal labs; and Appendix D presents a detailed listing of the federal labs, including the membership of the Federal Laboratory Consortium and the FFRDCs.

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