probably as difficult to gain approval for a R&D project at Caterpillar as it is to obtain venture capital financing. He also said that he felt that the benefit of outside review of R&D proposals, as done in ATP, is enormous. Caterpillar would benefit, Mr. Wolff believed, from having roughly 30 percent of its R&D budget subject to external review.

Steve Isaac from IBC Advanced Technologies made an observation about intellectual property protection. From the perspective of a company that has received ATP grants as a single applicant, he said that strong intellectual property protection is an important incentive to participation in the program. Even with strong intellectual property rights, an ATP award is a "sparkplug to get his company motivated" to invest its own resources in a particular project. To apply, his company must have a clear commercial use in sight when undertaking a grant, which eventually places the technology in the commercial arena.

If a company does not commercialize, Mr. Isaac continued, there are a number of actions that can be taken that will move the technology eventually into the public domain. At one end of the spectrum, the government can exercise "march-in rights" on publicly funded technology that is not used by a company, and essentially seize it from the company. This is an extreme measure, which is rarely, if ever, used. Alternatively, if a technology is not commercialized because the company fails, that technology is bound to be sold in the process of dismantling the firm. Mr. Isaac also noted that the market will recognize a good technology, and it is likely to find it if it has commercial potential.

In response to Mr. Isaac's observations, Dr. Kelley said that a study that the ATP has under way looks at how firms across different sectors protect intellectual property. Patents may be important in some sectors, less so in others. Similarly, cooperation may promote spillovers in some sectors more so than in others. The ATP is working to understand these differences across sectors.

In summarizing, Dr. Cockburn said that there are circumstances under which publicly funded R&D is licensed on a nonexclusive basis, and that there is no shortage of venture capital firms seeking to license good ideas funded by public R&D programs. With respect to cooperation, Dr. Cockburn said that, at least today in the United States, there seems to be plenty of momentum to cooperate. And there is a well-developed infrastructure of lawyers and business consultants to put joint ventures together. The question of which joint ventures work and which do not remains open. On patent protection, Dr. Cockburn said that many companies have a "use it or lose it" provision in their patent laws; if, after five or seven years of patent protection, a company does not use the idea, it loses its patent.



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement