Summary

Federal laboratories play a unique role in the U.S. economy. Research and development (R&D) conducted at these labs has contributed to the advancement or improvement of such key general-purpose technologies as nuclear energy, computers, the Internet, genomics, satellite navigation, the Global Positioning System, artificial intelligence, and virtual reality. Federal labs also feature prominently in the nation’s response to national and international emergencies, including the COVID-19 pandemic. A key feature of these labs is that they are heterogeneous with respect to their mission, operator (i.e., contractor vs. government operated), size, scale, and scope.

The U.S. government made major investments in federal labs during World War II, most notably to support the Manhattan Project, as well as in the postwar period. For many years, federal labs stood alongside a range of well-established corporate labs that participated in all stages of R&D in the United States. In the late 1970s, however, increased global competition led Congress to enact legislation designed to spur the commercialization of research at universities and federal labs. Recently, renewed concern about the potential loss of technological leadership to foreign competitors has refocused attention on federal laboratory innovation and stimulated interest in determining how to maximize returns on federal investments in R&D, including by advancing commercialization of R&D performed at federal labs.

Recent administrations have articulated the goal of improving the transfer of federally funded technologies, including technologies created by the federal government, through Lab-to-Market initiatives. The National Institute of Standards and Technology (NIST) and other federal agencies, with the support of the Office of Science and Technology Policy (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 Cross-Agency Priority (CAP) goal.

STUDY PURPOSE AND SCOPE

Innovation has enabled capabilities in data collection, computation, simulation, and analysis unheard of even a decade ago, yet the technology transfer and commercialization of digital products are not well understood. Digital output from federal laboratories includes data, metadata, images, software, code, tools, databases, algorithms, and statistical models. Importantly, these digital products are nonrivalrous, meaning that unlike physical products, they can be copied at little or no cost and used by many without limit or additional cost.

In this context, the National Academies of Sciences, Engineering, and Medicine convened an ad hoc committee of experts to consider issues surrounding the use and ownership of government digital products. The committee examined the current state of commercialization of digital products developed at the federal labs and, to a limited extent, by extramural awardees, to help identify barriers to commercialization and technology transfer, taking into account differences between government-owned, contractor-operated (GOCO) and government-owned, government-operated (GOGO) federal labs. In this report, the committee presents the findings of its study and offers recommendations for improving the commercialization of digital products generated by federal labs. To reach its findings and formulate its recommendations, the committee reviewed the salient literature, and over the course of the study convened a series of public meetings and heard from a broad range of expert speakers, including federal agency technology transfer experts, representatives from industry, and researchers studying the challenges and potential of commercializing digital products from federal labs.

KEY FINDINGS

Through its analysis of and deliberations on the information gathered from the above sources, the committee developed 14 findings. All of these findings address notable aspects of technology transfer and commercialization for digital products from federal laboratories, but 5 of the 14 stood out to the committee as especially important. These 5 key findings are discussed below: 3 of the findings relate to trade-offs between open and exclusive access to data and software; 1 finding relates to the lack of copyright available to GOGO labs; and 1 finding relates to available metrics for assessing transfers of digital technologies created within the labs. All 14 findings are included in Box S-1 at the end of this summary.

Three overarching findings reflect the committee’s conviction that although much of what is produced by the federal labs should be openly and freely available without any control exercised by the government, the public interest may in some cases best be served by the government’s exercise of proprietary interests to facilitate opportunities for commercialization. Thus, the committee acknowledges the benefits of making government data freely available to facilitate commercialization of products stemming from the use of these data,

consistent with existing federal law and policies around government-produced information. Similarly, the committee concluded that federally produced digital products, such as software, should be freely available in most instances. At the same time, however, the committee recognized that there may be cases in which the granting of exclusive rights to a firm is necessary to promote additional investment in innovation to facilitate commercialization of products emanating from federal labs. Furthermore, small, minority-owned, and woman-owned firms can be systemically excluded from accessing or exploiting government works freely available in the public domain because they lack the tools or resources to identify and exploit the vast number of works dedicated to the public.

Federal labs are neither well suited nor chartered to directly commercialize their work products. Therefore, technology transfer from federal labs to the marketplace is possible only through participation of the private sector, often through formal or informal partnerships, highlighting the need for economic incentives to make such partnerships feasible. Most digital products created in federal labs may not be directly usable off the shelf and require substantial additional investments. In such cases, it may be that only an exclusive license would provide returns sufficient to incentivize a private firm to invest in a product’s further development. Acting in the public interest will require balancing a variety of factors to determine when government stewardship is best accomplished by allowing exclusive use by a firm, by the adoption of open-access licensing, or by dedication to the public domain (with or without a license) to advance scientific progress and innovation.

Issues surrounding the government’s ability to assert intellectual property rights in digital products, most notably software, are a key consideration in advancing their commercialization. Put differently, the ability of federal labs to

control disposition of their digital products has a significant impact on the range of dissemination pathways available to them. For example, without copyright, GOGO labs cannot make the same choices available to GOCO labs regarding the disposition of their software. Instead, GOGO labs may rely on trade secrets or intellectual property surrogates to exert downstream controls over the use of government-created software, which may have a chilling effect on innovation more broadly.

The committee’s fourth key finding stems from the heterogeneity of the federal labs, especially with regard to operational differences. Reflecting these differences, the application of intellectual property law to the federal labs has been inconsistent over the years, and lacks a single set of guiding principles. Section 105 of the Copyright Act excludes GOGO labs from being able to claim copyright in their digital products, thus limiting the channels available to them for disseminating and commercializing those products relative to GOCO labs, which are allowed to assert copyright in their digital products. This situation likely has arisen from a combination of historical accident, uncoordinated decision making across a range of agencies and legal domains, and the accumulation of special-purpose exceptions (some directed by Congress) that have persisted over the years. As a result, GOGO labs have developed different mechanisms for dealing with their inability to claim copyright for government works, limitations that in some cases may not enhance the public interest or be consistent with prevailing legal doctrines.

Finally, the committee recognizes that currently available data permit only a limited understanding of the commercialization of digital products generated by federal labs. Data on commercialized products, processes, and services—including digital products—produced from knowledge or inventions created in federal labs are extremely limited, and there are currently no metrics that can fully capture the longer-term economic impact of what the labs produce, particularly over the long run. Researchers and policy makers are generally confined to considering inputs into invention (e.g., R&D spending and knowledge transfer via publications), evidence for selected inventions (patents), and limited metrics for only two of the pathways (i.e., licenses and cooperative agreements) by which knowledge and technology are transferred out of the labs.

The limited data on technology transfer do not sufficiently advance understanding of the commercialization of digital products from federal labs. More specifically, the technology transfer data that are available (for example, from cooperative research partnerships, licenses, and patents) are not disaggregated by type of underlying invention (such as whether a patent or license

relates to software or another digital invention) or by individual lab. Most of the data is reported at the agency level, which is too high a level of aggregation to aid in understanding the commercialization process. The information that is collected also reflects formal mechanisms of traditional technology transfer, such as licenses and royalties, rather than informal mechanisms or newer routes of technology transfer used especially for digital products, such as the number of software or data downloads, conference presentations, or papers. Although the number of licenses is reported, that information does not include how many of the licenses are open-source software (OSS) versus exclusive or partially exclusive licenses. Moreover, no information is collected from individual scientists at the federal labs that could be used to determine what incentives and what barriers they face in transferring their technology out of the lab. Finally, there are no measures of actual commercialization on the part of firms—that is, market introduction of data, software, or other digital products originating from the labs.

KEY RECOMMENDATIONS

From its full set of 19 recommendations, the committee identified 8 key recommendations that warrant highlighting. These 8 recommendations fall into three categories: (1) the need for policy coherence in ownership of intellectual property rights related to digital products across all federal laboratories; (2) the need for uniform public interest requirements for exclusive licensing of digital products created in federal labs; and (3) the need for additional data collection and reporting on technology transfer and commercialization of digital products created at federal labs. The full set of 19 recommendations is presented in Box S-2 at the end of this summary.

The first key recommendation stems from the need for uniformity around intellectual property rights across federal labs, as noted in the discussion of Finding 5-2. Unlike GOCO labs, GOGO labs are not permitted to hold copyright in federally developed software, and the committee found evidence that this restriction may inhibit the ability of GOGO labs to issue both exclusive licenses, when needed, and OSS licenses, relative to GOCO labs, which have a broader range of tools at their disposal for commercializing their research outputs. Efforts by some GOGO labs to circumvent the lack of copyright protection for software through contractual, trade secret, or other mechanisms may result in suboptimal commercial and public interest outcomes. Thus, the committee recommends that

Congress consider allowing GOGO labs to hold copyright in their federally developed digital products.

Three of the committee’s key recommendations fall into the category of gaps in the public interest requirement in Section 209 of the Bayh-Dole Act. Section 209 allows agencies to grant exclusive licenses for government-produced inventions only if such licenses are necessary to encourage private-sector investment needed for commercialization or otherwise to promote an invention’s use by the public. No statutory public interest requirements are imposed on GOCO labs, although some federal agencies have issued directives to these labs following the concepts laid out in Section 209. Moreover, these requirements apply only to licenses for patented inventions and not copyright licenses. The committee believes that exclusive licensing by federal labs should be allowed only when it meets the public interest requirements laid out in Section 209, regardless of the type of federal lab or the type of intellectual property right associated with the digital product. This public interest requirement will ensure the broadest reach of publicly funded and government-created technologies and enable healthy competition among firms and other actors to receive and benefit from the public’s investment. With respect to software, because software development cycles are relatively short, agencies should limit the period of time allowed for exclusive licenses.

• the relevant work to the public domain, including what is needed to bring the software to practical application or to promote its utilization for the public benefit.
• A limit of 10 years’ duration or a shorter period of time sufficient to commercialize the relevant software. A waiver of this time limit could be considered if licensees provided sufficient justification.
• Announcement in the Federal Register of the proposed grant of exclusive rights, together with the justification for it, and consideration of public comments made in response to that announcement.

In addition, the committee notes that parties harmed by violations of Section 209 public interest requirements have little legal recourse, and recommends that such parties be given stronger means of recourse.

Finally, the committee recognizes the need for a substantial amount of additional data on technology transfer and commercialization of digital products from federal labs, while also recognizing the substantial costs associated with collecting these data. Accordingly, the committee recommends that new data be collected at the individual, lab, firm, and user levels, and that federal agencies allocate sufficient resources for these efforts. Especially important is collecting information about the outcomes of cooperative agreements between labs and external partners (firms, universities, and other nonprofit organizations). Cooperative ventures, and cooperative research and development agreements (CRADAs) in particular, are widely recognized as important mechanisms for technology transfer from federal labs to industry.

Implementation of the committee’s recommendations regarding new data collection and reporting would provide needed information on the use and dissemination of knowledge, data, and software emanating from the labs. The committee also recognizes the need for data on workplace/organizational practices relating to technology transfer, including individual and organizational factors that may inhibit or enhance the ability of lab researchers to engage in technology transfer and commercialization activities. These factors include pecuniary and nonpecuniary incentives, organizational justice (workplace fairness and equity), championing, leadership, work–life balance, and organizational culture. These data at the individual and organizational levels would help improve

understanding of the potential roadblocks faced by scientists at federal labs who wish to pursue commercialization of their research. To reduce the associated cost and time burden, the government could use public and commercially available data and new research tools, whenever possible, to supplement or replace efforts required for the proposed surveys and reduce costs. Burdensome requirements for additional data collection and failure to take advantage of automated data collection could provide disincentives to technology transfer and knowledge dissemination.

FINAL THOUGHTS

The approaches to technology transfer of the different federal laboratories show considerable variation. The labs have different missions and norms, and research and technology development efforts are often not coordinated across labs, even those within the same federal agency. The labs also differ in size, scale, and scope. Moreover, different types of digital products are not always amenable to the same dissemination and commercialization pathways. To serve the public interest, federal labs—regardless of whether they are GOGO or GOCO labs—should have access to all tools available for advancing innovation and commercializing federally funded research.

In accordance with their missions, federal labs are engaged in the creation of knowledge and the generation of inventions. Much of this activity, however, is not reflected in the annual technology transfer report. Rather, that report focuses on formal activities (patents, licenses, and CRADAs) that in most cases involve a transfer of money. No data are collected on software or data that are made freely available through open-source portals. The only information collected on intellectual property created by the labs relates to patents and their licensing. Nor is any information collected on copyright, even for GOCO labs, which are able to claim copyright for software and other works of authorship. Better tracking of these activities would not be without cost. Therefore, additional resources are needed to understand technology transfer and other activities that affect the commercialization of a lab’s R&D outputs, including those related to digital products. Federal labs must be given sufficient resources to collect this information as well as to properly maintain, store, and curate their data and software collections without impinging on their core missions or creating perverse incentives to restrict access in order to generate needed revenue.