CHIPS Articles: SSC Pacific signs largest ever DoD patent license agreement

Space and Naval Warfare Systems Center Pacific finalized a patent license agreement with Elemental Wireless LLC, a wireless and software product development firm headquartered in Delaware in September 2008. This innovative technology transfer agreement, which builds on guidance from the Deputy Under Secretary of Defense for Advanced Systems and Concepts, Office of Technology Transition, took more than two years to negotiate and contains more than 60 patents.

The agreement represents the combined work of more than 90 individual inventors at SSC Pacific, the Navy's premier laboratory for information technologies. The lab, which employs about 2,000 scientists and engineers, has a portfolio of about 300 already issued patents.

The new agreement includes a multimillion-dollar up-front payment, according to Dr. Stephen Lieberman, who is the director of SSC Pacific's Office of Research and Technology Applications.

"All told, this agreement contains the single largest up-front licensing fee ever negotiated by the U.S. Navy and the Department of Defense," Lieberman said. "The agreement will help facilitate the commercialization of an entire portfolio of Navy-developed technologies focused on computer software and hardware, advanced algorithms, artificial intelligence semiconductors, digital imaging, communication protocols, lasers and optics."

Patenting and patent licensing are two important mechanisms used in the Navy technology transfer program. Patents protect the Navy's research and development investment, and make inventions more valuable to private sector entities seeking to commercialize a technology.

Patent licensing supports economic development in the United States by leveraging the products of the Navy's research and development enterprise.

"This license agreement will provide a path for moving important technologies from the lab to the marketplace, as well as a vehicle for creating high-tech private sector jobs, while providing a significant financial return to the Navy," Lieberman said.

When scientists or engineers working in the SSC Pacific lab invent something that they believe is potentially patentable, they file a patent disclosure with SSC Pacific's patent office.

The in-house office attorneys perform an initial patent search and evaluation, if the idea passes screening, the attorneys will file a patent application with the U.S. Patent and Trademark Office, according to Lieberman.

The USPTO evaluates the patent application against other patents and published information to see if it is novel and worthy of patenting.

"The process for getting the patent could take up to several years. The initial step of disclosing the idea gets it into the pipeline. Then the patent office can take anywhere from weeks (that would be in the best case) to sometimes more than a year to file that patent application which goes to the USPTO. It depends on how many are in the pipeline," Lieberman said.

Additionally, and under the terms of the patent license negotiated with Elemental Wireless, the inventors will receive additional payments when their inventions are sublicensed to other companies.

"Inventors that assign their rights to the government are entitled to a share of the royalties from licensing the invention. Once patent applications are filed, my office tries to market those inventions to let industry know they are available for licensing," Lieberman explained. "The payment that the inventors would get is not from the patent; it is from the licensing of these government inventions to a commercial entity."

This tech transfer of innovations to industry through licensing agreements is critical for getting the technology to market and getting it into a form that can be reacquired by the Defense Department to support the warfighter, according to Lieberman.

"The Navy generally will not be the one to take the product into a robust, fully supportable form — or even to its most useful format. Often, it requires the commercial sector to do that. The biggest success for us is what we call 'spinning the technology out' or licensing it out of the government to a provider, so that provider can spin it back into the government as a product."

The big benefit to the Navy and DoD is the acceleration of technology into usable products that fulfill warfighter requirements.

"When Navy scientists and engineers invent things, it is usually cutting-edge innovation," Lieberman added.

Sometimes developed technologies have dual use in both DoD and the civilian community.

"We will see both cases. A lot of our inventions are focused on software, communications, and a number of broad categories and technologies. It is likely that there will be products that the DoD will be interested in, and there will also be commercial applications," Lieberman said.

"We have had several technologies in the past that we have licensed. One was a technology that offered an efficient way to test the toxicity of water. It was a technology developed here in the lab that uses bioluminescence. Dinoflagellates are marine organisms that produce a blue-green light like a firefly. The amount of light the organism produces decreases if it is exposed to toxicants. It is like the canary in a cage that coal miners used to detect poison gas," Lieberman continued.

"One of our scientists discovered that this luminescence decreased when exposed to toxicants. The Navy patented his discovery, and we licensed it to a company here in San Diego County that has now created a commercial product for rapid testing of toxicity in water. He is now marketing it internationally."

Lieberman said it has also brought benefits back to the DoD because the Navy is looking at it as an improved method for conducting some of the toxicity tests that it is required to do.

Lab personnel work closely with the Office of Naval Research and the Acting Director for the Office of Technology Transition, Ms. Cynthia Gonsalves, for guidance, according to Lieberman.

"All of the tech transfer guidance and oversight is done at the Office of Naval Research. That office provides us with basic guidelines and even the basic templates for Navy license agreements.

"We also report our activity on licensing up to the OSD level, to Cynthia. We had a meeting a couple of weeks ago, hosted by Cynthia. It is an annual tech transfer meeting where we all get together and share best practices and get updates on new legislation that affects tech transfer within the DoD," Lieberman said.

SSC Pacific was designated by the Department of Defense as the Center of Excellence for Command and Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) in the Maritime Domain and for Research, Development, Acquisition, Test and Evaluation (RDAT&E) and the Integrated RDAT&E Center for Maritime C4ISR for Information Technology.

SSC Pacific is the nation's only full spectrum C4ISR laboratory providing research, development, acquisition, test and evaluation and full life-cycle support across systems that integrate the military's sensors, networks, command and control, and weapons into a fully netted combat force with full spectrum dominance.

Dr. Lieberman and the lab team work hard to publicize the lab's work to maximize the up-front investment that has been made in developing technologies.

"We don't want to see our innovations sitting on a shelf. We want them to be exploited for commercial use. When I started heading our Technology Transfer Office, I would often find when networking with the entrepreneurial community that most of the community was not aware that the DoD or federal government was a great source of innovative technologies.

"They always are familiar with universities being a source of innovation, but we are not on their radar screen.

"We are looking ahead and trying to embrace some more novel and exciting ways to inform the public about the availability of our technologies," Lieberman said.

SSC Pacific's Technology Transfer Office is developing videos that highlight technologies that are available for licensing. The first marketing video has not only been successful at attracting industry interest to a particular technology, but Lieberman also sees it as a powerful recruiting tool for drawing young scientists and engineers into working in Navy labs.

Navy scientists and engineers work with groundbreaking technologies and also can benefit from licensing agreements with industry. At the same time, their work supports the warfighter.

"There is a trend with YouTube — all this video stuff is becoming so common. Young people pay attention to it. We want young people to see what we are doing. It's exciting," Lieberman said.