Kyle Fairchild Fairchild Innovation Consulting kylefairchildfairchildinnovation com 1

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Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 1

Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 1

Presentation Overview • Barriers to Commercialisation • Background of U. S. government R&D Innovation

Presentation Overview • Barriers to Commercialisation • Background of U. S. government R&D Innovation and Commercialisation • Proactive vs. Reaction Commercialisation • Commercialisation at NASA-Johnson Space Center • Internal Education • Incentives and Disincentives • External Relationships • The Three Legged Stool: Technology / Management / Financing • The Innovation Process: The JSC Commercialization Pipeline model • NASA-Johnson Space Center Commercialisation Examples • Recommendations for R&D Organisations • Recommendations for Commercial Firms Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 2

Barriers to Commercialisation • Cultural Barriers - Technical and Business Knowledge, Skills, Interests and

Barriers to Commercialisation • Cultural Barriers - Technical and Business Knowledge, Skills, Interests and Experience • Lack of understanding in the technical community on what to do with new technologies and discoveries • Lack of understanding in the business community on how to find new innovations and how to gain access to them • Transaction Costs – Time and Money • Long lead times • Significant investments with no clear return on investment • Intellectual Property Protection Patent law is complex, expensive and difficult to enforce • Accountability Getting inventions to the marketplace is rarely in anyone’s job description • Disincentives Effort spent on commercialisation is time taken away from the “real” job • Regulatory and Security Restrictions Many organisations (particularly governmental) are barred from certain business activities 3 Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com

U. S. Government R&D and Innovation • Annual U. S Government Expenditure for R&D:

U. S. Government R&D and Innovation • Annual U. S Government Expenditure for R&D: $75 billion ( £ 42 billion) – NASA is the 3 rd largest government R&D organisation, spending about $5 billion annually – $1 billion annually is awarded for small business R&D, administered through Dept of Defense, National Institute of Health, and NASA • Acts of Congress – Technology Transfer Act – 1986 – Stevenson-Wydler Technology Innovation Act – 1992 • Executive Orders The Clinton Administration’s National Performance Review – Agenda for Change – 1994 • NASA Response Creation of Technology Transfer and Commercialization Offices at each of its 10 field centers -- coordinated by NASA Headquarters, Washington D. C. -- 1994 Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 4

Proactive Commercialisation Industry/Gov't Patents Cooperative & R&D Proof Licensing Basic of Prototype R&D Concept

Proactive Commercialisation Industry/Gov't Patents Cooperative & R&D Proof Licensing Basic of Prototype R&D Concept Government Development NASA Hardware Commercial Development Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com Commercial Product 5

NASA-JSC Office of Technology Transfer and Commercialization MISSION to. . . transfer and enable

NASA-JSC Office of Technology Transfer and Commercialization MISSION to. . . transfer and enable commercialization of NASA-JSC technologies to the private sector to create jobs, improve productivity and increase U. S. competitiveness. Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 6

NASA-JSC Office of Technology Transfer and Commercialization OVERVIEW • A small directorate level office

NASA-JSC Office of Technology Transfer and Commercialization OVERVIEW • A small directorate level office was created in March 1994 to coordinate commercialisation activities at the NASA/Johnson Space Center • The office philosophy was to maintain a small core staff (14 people) of commercialisation officers and patent attorneys • The Office networks internally to the 17 technology divisions • The Office networks externally to commercialisation centers, other federal labs and commercial firms on a project-by-project basis Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 7

Internal Education • The philosophy of the Commercialisation Office is to facilitate JSC technology

Internal Education • The philosophy of the Commercialisation Office is to facilitate JSC technology divisions in commercialising their own innovations • A number of meetings is held with each of the 17 technology divisions at JSC • At the first meeting, a presentation is given by the Commercialization Office to discuss what commercialization is, why it’s of interest, how it works, and what to do with new innovations • At the second meeting, the division presents its top-three innovations to a panel of commercialisation officers, patent attorneys, and business development experts. The panel gives its assessment of why these innovations are, or are not, of interest, and what happens next. • A series of discussions follow, focused on taking the most promising innovations through the commercialisation process Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 8

Incentives for NASA Inventors and JSC • Professional Prestige and Publicity for Receiving Patents

Incentives for NASA Inventors and JSC • Professional Prestige and Publicity for Receiving Patents • Monetary Awards • $500 upon patent application filing ($250 each for multiple inventors) • $500 ($250 each for multiple innovators) NASA Tech Briefs publication award for software innovations. • $150 NASA Tech Briefs publication award for all others. • Supplemental awards up to $100, 000 • Royalties – Stevenson-Wydler & Technology Transfer Acts • NASA Inventor receives first $2000 of royalties + 25% thereafter • JSC receives remaining royalties (NOT Federal Treasury) Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 9

External Relationships Mid-Continent Technology Transfer Center Texas Research Triangle Institute North Carolina Business Incubators

External Relationships Mid-Continent Technology Transfer Center Texas Research Triangle Institute North Carolina Business Incubators (e. g. , Univ. Houston) Texas NASA Johnson Space Center Texas Other NASA Field Centers Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 10

The Three-Legged Stool • Technology The Right Products at the Right Time: A complex

The Three-Legged Stool • Technology The Right Products at the Right Time: A complex balance of technical merit, patentability, and commercial product potential • Management The most successful management team has the right technical and business skills, interests, experience, passion and attitudes – Not easy to find • Financing The management team often find themselves on an endless pursuit of additional funding, instead of making the business and products a success Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 11

NASA-Johnson Space Center Commercialization Pipeline Marketing Materials Preparation Existing Patent Portfolio Contractor Reporting Requirements

NASA-Johnson Space Center Commercialization Pipeline Marketing Materials Preparation Existing Patent Portfolio Contractor Reporting Requirements Inventor Initiative Prioritized via Marketing Quicklook New Technology Reports Marketing Strategy Development and Implementation Marketing Inventory & Evaluation Invention Disclosures Success Stories Commercialization Patenting Division Top-3 Technical, Commercial, and Patent Evaluation Assess IP Rights Contractor can: Retain ( govt stops) Waive (govt cont’s) Not respond (cont’s) Post-Licensing Activities Patentability Search Technology Description / Marketing Quicklook Commercial Products Licensing Negotiations Patent Application Filing Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com Business, Marketing, Product Development by licensee Shaded boxes indicate marketing team functions 12

NASA-JSC Commercialization Examples Bioreactor - Rotary Cell Culture System • Cells in space grow

NASA-JSC Commercialization Examples Bioreactor - Rotary Cell Culture System • Cells in space grow in three dimensions and are able to ‘self associate’ • The Bioreactor was invented by NASA to simulate the space environment • Invention was exclusively licensed to Synthecon, headed by a retired NASA engineer and co-inventor. Sales currently exceed $2 million. • In 2000, a Space Act Agreement was signed with Stel. Sys, Inc. , to develop commercial medical products based on bioreactor technology. Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 13

NASA-JSC Commercialization Examples De. Bakey Ventricular Assist Device • The resulting device weighs 4

NASA-JSC Commercialization Examples De. Bakey Ventricular Assist Device • The resulting device weighs 4 ounces and is one tenth the size of other VAD’s • To date, Micromed, the license holder, has implanted the De. Bakey VAD in 230 patients in clinical trials worldwide 1. NASA engineer, Dave Saucier, entered Baylor College of Medicine hospital with heart problems. Discussed with his surgeon, Michael De. Bakey, the need for a new generation of heart assist devices for people with end-stage congestive heart failure. The device keeps the patient alive, prior to a heart transplant. 2. Saucier pioneered a relationship between NASA and Baylor, combining space shuttle turbine technology and NASA Shuttle re-entry hydrodynamic software with Baylor medical expertise Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 14

NASA-JSC Commercialization Examples Intelligent Computer-Aided Training • Winner of the 1994 NASA Invention of

NASA-JSC Commercialization Examples Intelligent Computer-Aided Training • Winner of the 1994 NASA Invention of the Year Award 1. Artificial intelligence shell programme to enable instruction, simulation, and behavior analysis of complex subject matter 2. Used to design astronaut and operator training programmes for several missions, including the Hubble repair and the Physics Tutor for high schools 3. Used by military to train tank crews 4. Possible use for training microchip designers, flight controllers, nurses, and other disciplines, particularly in conjunction with virtual reality simulators Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 15

Recommendations for R&D Organisations • An Innovation Process Establish an Assessment & Development Process,

Recommendations for R&D Organisations • An Innovation Process Establish an Assessment & Development Process, similar to the JSC Commercialization Pipeline • Clear Accountability and Incentives Inform all members of staff that they have responsibilities for getting innovations out of the lab and show they can benefit from successful commercialisation • Internal Education Develop an process to educate staff on what commercialisation is, how it works, and their role • External Relationships Develop a network of relationships to assist with technical, commercial, and patent assessments and to provide management and financial know-how • Professional Innovation-Commercialisation Associations Become active in organisations promoting the professional development of staff and organisations Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 16

Recommendations for Commercial Firms • New Inventions and Discoveries Innovation is the lifeblood of

Recommendations for Commercial Firms • New Inventions and Discoveries Innovation is the lifeblood of your competitiveness. Identify the most likely sources of innovation in your industry, both internal and external. • External Relationships Develop relationships with the most promising sources. For example, create a Technologist Exchange Programme, trading technical staff on a rotating basis. • Process Establish innovation and commercialisation in your firm as a core competency. Assign high level staff to be Keepers of the Process, with clear accountability and incentives. • Professional Innovation-Commercialisation Associations Become active in organisations promoting the professional development of staff and organisations to more effectively move inventions from the laboratory to the marketplace. Kyle Fairchild -- Fairchild Innovation Consulting -- kylefairchild@fairchildinnovation. com 17