Energy crisis may benefit small R&D firms - C&EN Global Enterprise

Feb 4, 1974 - Energy crisis may benefit small R&D firms. Chem. Eng. News , 1974 ... Copyright © 1974 American Chemical Society. ACS Chem. Eng. News ...
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single federal agency, has made a practice for years of granting contractors rights to inventions and patents growing out of research it funds. However, a somewhat esoteric question on this practice has arisen as to whether the Pentagon is disposing of any real property since no property—at least in terms of a patent or invention—exists at the time the contract is signed. Even though the more liberalized patent licensing policy has been in effect since August 1971, few exclusive licenses have been granted under the program. One reason is that under the President's 1971 memorandum, agencies got authority to grant contractors ownership of or exclusive licenses to inventions when it was "deemed necessary to create an incentive for further development and marketing." Ownership of or exclusive licenses to such in-

ventions also could be granted to the contractor when the Government's financial contribution to the invention was small compared to that of the contractor. There were strings attached to getting an exclusive license, too. For instance, the Government would revoke the license if the contractor or other licensee did not meet the performance provisions of the agreement. Further, after a period of two or possibly three years the exclusive license would expire and the invention would be open to the public. In cases where the Government had funded the development of an invention most of the way to the market place, federal officials said that "in all probability" the Government would not grant an exclusive license but would maintain title and make the invention available to all comers.

Energy crisis may benefit small R&D firms The U.S. energy crisis may be just what the doctor ordered for small research and development companies that have been feeling the pinch in recent years of federal R&D funding cuts in key areas like defense and space. Representatives of small R&D firms got this message at the first annual meeting of the American Association of Small Research and Development Companies late last month in Washington, D.C. The association represents about 100 of what it estimates to be about 6000 small R&D firms in the U.S. (generally firms with less than 200 technical employees). The meeting was sponsored by the National Science Foundation to shed light on the problems facing small companies. Rep. Paul W. Cronin (R.-Mass.), a member of the House Science and Astronautics Committee, told attendees that he is sympathetic with their interests. In fact, he said, he had worked for a small R&D company before taking his seat in the House. He believes that the nation's energy problems represent "a whole new ball game" of opportunities for the small, independent R&D company. In energy areas, Rep. Cronin says, U.S. corporate giants are "irresponsible," and it's up to the independent R&D firm, which doesn't have a Cardon: funding has been big problem

vested interest in energy profits, to make the nation's energy programs work. More federal funds should go to private R&D entrepreneurs, Rep. Cronin believes. He urges small R&D companies to make themselves heard in regard to energy legislation pending before Congress. Further, he says, tax incentives should be provided to those companies willing to work in high-risk R&D areas. Rep. Cronin's district includes the Massachusetts Route 128 "disaster area"—a region heavily populated by small R&D firms hard hit by National Aeronautics and Space Administration and Defense Department spending cuts. According to conference chairman and association president Samuel Z. Cardon (secretary-treasurer of General Technical Services, Upper Darby, Pa.), the big problems for small R&D firms in the view of conference attendees include: • Securing capital funding for R&D projects. Banks and even the Small Business Administration are reluctant to support some of the small firms' projects because of their speculative nature. • Market identification of potential areas for product or service development. Small firms maintain that they don't have the market research capability to single out profitable areas of business. • The Federal Government's continued romance with universities and nonprofit research institutes in dispensing research contracts and grants. On this last point, NSF deputy director Raymond L. Bisplinghoff told the conferees that "NSF's track record has not been good in dealing with small R&D companies." However, Dr. Bisplinghoff says NSF is now attempting to "broaden its base," implying, perhaps, greater NSF funding for research by private companies.