Guide to Accelerating New Technology Adoption through Directed Technology Transfer (2014)

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21 Tier 1: Foundational/ Organizational Components • Address Societal and Legal Issues • Have an Effective Champion • Engage Decision Makers • Develop a T2 Plan • Identify, Inform, and Engage Stakeholders • Identify and Secure Resources Societal and legal issues present a broad array of T2 challenges to transportation organi- zations. New technologies, particularly information-sharing technologies, tend to push the boundaries of legal interpretation with regard to individual privacy and corporate security issues. Intelligent transportation systems (ITS) applications, particularly those relying on monitoring transportation systems, should maintain a level of user privacy when involved in a guided T2 effort, as described below. Legal issues also include intellectual property topics such as industrial property, licensing, copyright, and patents. Another legal challenge may be “Buy America” regulations. Privacy and Security Privacy is a subjective concept—there is no scale or objective measure for privacy. It is a complex issue that can emerge in many contexts, some of which extend beyond the transporta- tion industry (Bolan et al., 2008). For example, tolerance of invasion of privacy can vary based on culture. One study on designing safe and secure transit systems found that transit users in Great Britain are more accepting of invasions of their privacy as long as it is for security pur- poses, but transit users in Spain are much more resistant to the same privacy invasions (Taylor et al., 2005). Since many ITS applications monitor, identify, and track people as well as personal and commercial vehicles, they have the potential to violate the general public’s expectation of privacy (Fries et al., 2012). In their work, Fries et al. outline current and changing privacy preservation practices within state DOTs (2012). Their survey and research focused on determining how state DOTs are C H A P T E R 2 Address Societal and Legal Issues 1. Are the privacy, security, intellectual property, and legal issues understood? If yes, proceed to the next question. If no or unsure, proceed to the component discussion. 2. Have the intellectual property rights to the innovation been identified? If yes, proceed to the next question. If no or unsure, proceed to the component discussion. 3. Has the innovation been protected? If yes, proceed to the next component. If no, proceed to component discussion.

22 Guide to Accelerating New Technology Adoption through Directed Technology Transfer meeting the privacy needs of the traveling public. The Fries et al. paper (2012) indicated that while privacy will continue to be a significant barrier to potential vehicle mile tolling and con- nected vehicle infrastructure technologies, DOTs currently favor • Aggregating and masking data for protecting privacy of motorists while collecting travel times and speeds using ITS applications such as tracking cell phones, toll tags, and so forth. • Abiding by legislation or agency policies when capturing video surveillance—broadcasting traffic cameras over the Internet, red-light-running enforcement, license plate data, and so forth. Unfortunately, there is no national legislation in the United States for the privacy protection of travelers related to ITS activities (Bolan et al., 2008). Limited guidance can be found in the Intelligent Transportation Systems American (ITSA) Fair Information and Privacy Principles (ITS America, n.d.) and the VII (Connected Vehicle) Privacy Policies Framework (The Institu- tional Issues Subcommittee of the National Vehicle Infrastructure Integration Coalition, 2007). Privacy and security issues can be clearly present and known to be a factor in T2 as early in project activities as when an agency finds an existing solution to a need or in the research and development phase. Addressing privacy/security issues may be appropriate before an innova- tion is ripe for advancing through the guided T2 stage, as defined in this guide. These issues should be considered in the research and development phase of the Innovation Adoption Pro- cess, before more specific T2 activities ensue. Intellectual Property The World Intellectual Property Organization (WIPO) broadly associates intellectual property with creations of the human mind (WIPO, n.d.). While the organization does not define intellec- tual property, it does list the subject matter, or intellectual property, that is protected by intellectual property rights. Zhang et al. (2012) divide WIPO’s list into two main categories: industrial property and copyright. Industrial property includes inventions, industrial designs, and trademarks. Copy- right includes literary and artistic works, as well as digital intellectual property. Of the two main categories, industrial property has traditionally been of primary interest to the transportation industry. WIPO defines an invention as a new solution to a technical problem, with an emphasis on new. New solutions are ideas and must be protected as such. A patent is a Privacy Concerns with California Smart Phone Application Privacy concerns became a significant issue while Caltrans was evaluating and testing a smart-phone-based transit application. In order to solicit volunteers, the project was advertised through several media avenues and a free iPhone was offered to those users-travelers who would be willing to participate in the field test. During the initial stage of the project, large numbers of users opted out of the preliminary testing phase because of concerns for their individual privacy. They believed the system lacked adequate safeguards to protect their privacy, particularly information that could be used to track their movements. These concerns were a setback for the research project and delayed implemen- tation (M. Y. AlKadri, personal communication, May 10, 2013). This illustrates the importance of addressing privacy concerns before moving toward full-scale deployment.

Address Societal and Legal Issues 23 right granted to an inventor by a state that “allows the inventor to exclude anyone else from com- mercially exploiting his invention for a limited period” (WIPO). Note that the patentee is not given a statutory right to exploit his own invention. A patentee is in a position to exclude others from using the invention or to allow others to use the invention by granting a license. Protection under patent law does not require that the invention be a physical object. WIPO distinguishes between product inventions and process inventions; product inventions may be protected by product patents, and process inventions may be protected by process patents. While WIPO uses the term “invention” to represent one category of industrial property, this guide may be better served with synonymous terminology. Schon (1967) uses the term tech- nology to describe, “any tool or technique, any product or process, any physical equipment or method of doing or making, by which human capability is extended.” This definition is similar to the WIPO definition of invention in that it asserts that an invention • Is a product of human creation • Is new, in that it extends human capability • Is an object or process While industrial property issues have traditionally been of primary interest to state trans- portation agencies, digital technology has emerged as an integral part of transportation agency processes and procedures. The protection of digital intellectual property is afforded by copyright law. As such, plans and drawings are copyrightable as “pictorial, graphic, [or] sculptural works” (Eales v. Environmental Lifestyles, Inc., as cited in Thomas, 2013). Original digital models and audio-visual works are also protected by copyright. In the United States, copyright protection is granted by the Constitution, whereby Congress is empowered to grant “Authors and Inventors the exclusive right to their respective Writings and Discoveries.” Under the laws of many states, state agencies have the right to copyright works produced by their employees. There are two main reasons for establishing laws to protect intellectual property. The first is to protect the rights of both the inventor and the public. The inventor has moral and eco- nomic rights inherent to the act of creation, and the public has a right to access that invention. According to WIPO, “In return for the exclusive right, the inventor must adequately disclose the patented invention to the public, so that others can gain the new knowledge and can further develop the technology.” The second reason for establishing laws protecting intellectual property is to encourage fair trade, contributing to social and economic development (WIPO). These reasons for protecting intellectual property apply to patents for industrial property as well as copyrights to protect literary, artistic, and digital intellectual property (Thomas, 2013). State DOTs should recognize that, unless prohibited by state law, they may seek intellectual property protection for new innovations or digital works developed by their staff. However, if an innovation is developed by an independent contractor, the innovation belongs to the con- tractor unless an agreement is in place that designates the work as “for hire” (Thomas, 2013). When developing contracts with researchers and others, DOTs should work with their legal counsel to include language specifying the intellectual property rights of any products resulting from the particular project. Language should be state specific and should note that the owner- ship of intellectual property generated during the course of a contract may be retained by the contractor or DOT by specifying ultimate ownership in the contract instrument. NCHRP Proj- ect 20-89, Intellectual Property Management Guide for State Departments of Transportation, focuses on intellectual property rights activities for state DOTs. It provides practical assistance to decision makers for determining strategies and business practices. Recognizing and managing intellectual property rights pervades the entire Innovation Adop- tion Process, from defining a need, through searching for a solution, to deploying a solution.

24 Guide to Accelerating New Technology Adoption through Directed Technology Transfer From the moment a solution to a need is identified, an innovator must be concerned with the ownership of that solution. If an identified solution already exists, its effective use depends to a great extent upon its legal availability. If a potential solution does not exist and must be invented, then the possibility exists for securing the rights to that new knowledge, product, or process. Any work done during the research and development phase of Innovation Adoption Process must include an awareness of the ownership rights of innovations found through literature searches, scans, and other surveys of extant knowledge. If an applicable solution is found, and rights to the innovation belong to others, licensing might be a possibility and discovering that possibility should be part of the research. If new knowledge is developed (intellectual property), an innovator’s research must also include the affirmation of “newness” and engaging intellec- tual property rights professionals to secure those rights if desired. As previously mentioned, many state DOT research programs are actually carried out by contracts or agreements with universities or other parties. Contractors may claim ownership of any and all intellectual property that results from research done in their labs, on their campuses, or by their researchers. This ownership right can present a challenge for a DOT, which has likely paid for that research with public funds. Because these situations exist, research managers need to look carefully at the conditions they set forth in accomplishing contract research, particularly as it relates to the eventual deployment of a technology. While knowledge gathering about intellectual property issues associated with an innovation will likely occur during the research and development phase of the Innovation Adoption Pro- cess, the real management of intellectual property will take place during the guided T2 phase. By the time an innovator reaches the guided T2 stage of the Innovation Adoption Process, it should be known whether licensing an innovation is appropriate or establishing intellectual property rights for new knowledge is a possibility. The appropriate T2 actions can then be taken. Virginia DOT Creates Intellectual Property Handbook to Help Employees Address Intellectual Property Issues The Virginia Department of Transportation (VDOT) has created a handbook that provides guidance to its employees about intellectual property. The hand- book indicates that “Because intellectual property is a dynamic field of law, this handbook is neither a comprehensive guide nor an accurate predictor of legal developments. This handbook is merely an effort by the Virginia Transportation Research Council to provide VDOT employees guidance in addressing the intel- lectual property issues they may face during the scope of their employment.” The handbook provides specific guidance to VDOT employees early in the develop- ment process if their invention or creation has any commercial value or may be of any interest to the Commonwealth. It also emphasizes that anything that is developed by an employee of the Commonwealth during working hours (work- ing within the scope of his or her employment or using state-owned or state- controlled facilities) that could qualify for a patent or copyright is the property of the Commonwealth. This handbook serves an important role, especially consider- ing VDOT’s commitment to innovation and the growing importance of intelligent transportation systems (ITS). VDOT has taken the position that a key factor in the implementation of ITS is the appropriate management and use of intellectual property (Virginia Transportation Research Council, 2006). The handbook can be accessed at http://www.virginiadot.org/vtrc/main/online_reports/pdf/07-r3.pdf.

Address Societal and Legal Issues 25 Intellectual Property Considerations What Actions Should Be Considered? Assess an available innovation • Does the innovation exist in the public domain? • Is there a current patent or copyright on the innovation or is a patent or copyright for the innovation being sought by others? • If patented or considered for patent, can the innovation be licensed? • Can the innovation be revised such that it no longer encroaches on existing patents or copyrights? • Is the innovation being considered available in the United States or available only outside the United States? Assess new knowledge • Is the new innovation truly new? • If new, should the innovation be patented or copyrighted? • If patented, should the innovation be licensed to facilitate deployment: – Are potential licensees requesting use of the innovation? – Does the innovation need to be marketed to attract potential licensees? Assess the organization’s intellectual property rights resources • Does the organization have the resources to pursue a patent or copyright? • Should the organization hire counsel to pursue a patent or copyright? • Was federal funding used in the development of the innovation? • Was the innovation developed under the work-for-hire provision of the Copyright Act? What Are Some of the Challenges to Managing Intellectual Property Rights Issues? A management structure that is not conducive to pursuing intellectual property rights issues • Lack of cultural propensity • Lack of knowledge • Lack of will Dysfunctional relationships among disparate organizations engaged with an innovation, such as a state DOT implementing university research • Disagreement about value of intellectual property • Disagreement about the ownership of intellectual property • The timing of publications in the intellectual property rights process Slow-moving organizational approval processes • Lack of a champion • Overwhelming bureaucracy Lack of product development experience, which is necessary for meeting patent registration requirements or effectively using a license • On the part of the innovator • On the part of the champion • On the part of the organization

26 Guide to Accelerating New Technology Adoption through Directed Technology Transfer Need for funding to support intellectual property rights activities • Hiring outside counsel • Managing licenses • Managing licensees • Developing manufacturing capacity What Are Some of the Tools or Strategies Available for Overcoming the Challenges to Managing Intellectual Property Rights Issues? Gaining support from top and middle management • Articulate the value of well-managed intellectual property rights – Patenting an innovation affords control over the use of the innovation by either limiting competition or selling licenses – Securing a patent limits the fear of theft when demonstrating an innovation to industry – Purchasing a license to use a patented innovation can reduce research and development and other development costs • Push for intellectual property rights activities to be included in the organization’s business plan Effective partnering • Consider partnerships carefully; effective partners have – Similar goals – Similar organizational values and ethics – Similar valuation of intellectual property • Balance the intellectual property rights of all partner organizations Organizational education about intellectual property rights issues • Every member of an organization should recognize the value of innovation • Define the roles of each level of responsibility within the organization with regard to intel- lectual property rights • Encourage a sense of responsibility and respect for the legal issues of intellectual property rights A sufficient budget for intellectual property rights activities • Budgeting for intellectual property rights activities depends largely upon the expectations of the organization’s management – Is innovation an occasional occurrence? Budget for outside counsel – Is the expectation of constant innovation part of the organization’s business plan? Budget for internal intellectual property rights management structure • Include intellectual property rights activities when developing long-range budgets The use of outside patent counsel is vital for those organizations with little intellectual prop- erty rights experience • Select counsel with familiarity with the Bayh-Dole Act if federal funds are used for develop- ing an innovation NCHRP Project 20-89, Intellectual Property Management Guide for State DOTs • The focus of this project is intellectual property rights activities for state DOTs • Guide will provide practical assistance to decision makers for determining strategies and business practices

Address Societal and Legal Issues 27 Other Legal Issues: Buy American, Buy America An issue that may need to be considered in a guided T2 effort is the Buy American Act, and the later Buy America provisions. The Buy American Act of 1933 (Act) was intended to encour- age domestic use of goods and materials manufactured in the United States. The Act applies to procurements larger than $3,000 and requires that substantially all goods purchased with federal dollars be mined, produced, or manufactured in the United States. “Substantially all” is determined by regulation, which interprets the intent of the Act as asserting that not more than 50% of the cost of all components may be of foreign origin. There are exceptions to the Act. The Act does not apply if its application is inconsistent with the public interest or if domestic material is of unreasonable cost. Further, the Act does not apply to those procurements for use outside the United States or if the required material is not commercially produced in the United States in reasonably available quantities (Luckey, 2012). The Act has been regularly amended, and these amendments have tended to focus on the interpretation of the definition of “substantially all” to require a lower percentage of foreign materials or goods or to better articulate restrictions and exceptions for trade agreements. There have been several other laws enacted to restrict procurements, and these, too, tend to focus on the domestic content requirements for non-direct purchases and direct purchases (Luckey, 2012). An example of a law stipulating the domestic content of direct purchases is the Berry Amend- ment, which focuses on direct purchases made by the U.S. Department of Defense (DoD). This amendment requires that 100% of certain textiles and specialty metals procured by the DoD are of domestic origin (Luckey, 2012). These procurements are considered direct procurements because the federal government, in this case the DoD, is making the purchases. Of more interest to the transportation industry is Buy America, which encourages the use of domestic materials procured through non-direct purchases, specifically the use of U.S. DOT funds that are passed on to non-federal public agencies for transportation projects. Buy Amer- ica requires that all steel, iron, and manufactured products used in projects funded with FHWA dollars be of domestic origin unless: 1. Their application would be inconsistent with the public interest; 2. Iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or 3. Inclusion of iron, steel, or manufactured goods produced in the United States will increase the cost of the overall project by more than 25%. Buy America law is found in Title 23 United States Code, Section 313—Buy America (23 USC §313), and in regulation in the Code of Federal Regulations Title 23—Highways, Section 635.410 Buy America Requirements. Similar provisions can be found for U.S. DOT administrations such as the FAA, the FRA, the National Railroad Passenger Corporation (AMTRAK), and the FTA; however, only the provisions for the FHWA are referred to as Buy America (FHWA, 2013). In 2009, the American Recovery and Reinvestment Act (ARRA) was enacted to include domestic content requirements called Buy American. The ARRA is an appropriation rider, which means it is a temporary law. Congress required that all ARRA funds be subject to the Buy American Act, including direct and non-direct procurements (Luckey, 2012). Specifically, the Buy American portions of ARRA (Section 1605) prohibit use of recovery funds for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. These provisions apply specifically to the use of ARRA funds and will become moot when all ARRA funds have been distributed and spent.

28 Guide to Accelerating New Technology Adoption through Directed Technology Transfer More recently, the Moving Ahead for Progress in the 21st Century Act (MAP-21) amended 23 USC §313 to broaden the application of that law to any contract eligible for FHWA fund- ing “carried out within the scope of the applicable funding, determination, or decision under the National Environmental Policy Act (NEPA), regardless of the funding source of such contract if at least one contract for the project is funded with federal-aid highway funds.” (Montague, 2013). A typical project described in a NEPA document might be funded by several sources, so this new amendment to Buy America expands the reach of Buy America provisions to work that is eligible for federal funding, even if federal funding is not used (Montague, 2013). Important to practitioners who are guiding T2 are the primary exceptions to Buy America noted above. Waivers to the provisions of Buy America are available if the head of the FHWA finds that 1. Their application would be inconsistent with the public interest; 2. Iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or 3. Inclusion of iron, steel, or manufactured goods produced in the United States will increase the cost of the overall project by more than 25%. If the technology considered for implementation, or parts thereof, is only manufactured outside of the United States, practitioners will need to work with FHWA to obtain necessary waivers to continue the advancement of an innovation through the guided T2 phase. Suggested Readings Bader, M., “Extending Legal Protection Strategies to the Service Innovations Area: Review and Analysis.” World Patent Information, Vol. 29 (2007) pp. 122–135. Bloomberg, C. A., “Developing an Intellectual Property Portfolio for the Academic or Not-for-Profit Institution.” Nature Biotechnology, Vol. 23, No. 1 (2005) pp. 119–121. Addressing Legal and Regulatory Requirements for Effective T2 in Iowa In early 2010, Iowa DOT was asked by the TRB Strategic Highway Research Program 2 (SHRP2) to participate in a demonstration project involving accelerated bridge construction (ABC). The U.S. 6 bridge over Keg Creek in Pottawattamie County was completely replaced using innovative methods: prefabricated off-site using ultra- high performance concrete (UHPC) and preassembled rolled steel girder units, among others. These innovative methods are also repeatable at other locations with other bridge replacements. Iowa DOT partnered with FHWA, SHRP2, HNTB Corporation, and Iowa State University, along with industry representatives for the demonstration. The Iowa DOT closed the roadway for only 2 weeks for the bridge replacement, while traditional construction methods would have required the par- tial or complete closure of the road for several months, resulting in substantial traf- fic disruption. Benefits of these partnerships came to the forefront in overcoming a barrier faced just before the project was let: Buy America requirements. The fibers used in the UHPC were made exclusively in Europe, and Buy America provisions are relevant to the steel fiber reinforcement used in UHPC. Iowa DOT’s FHWA partners locally and in Washington DC were critical in securing the necessary waiver for the Buy America requirements and allowed the project to move forward without delay. (Interview with Sandra Larson, Iowa DOT, on July 1, 2013)

Address Societal and Legal Issues 29 Bolan, R. S., T. A. Horan, K. J. Krizek, D. Levinson, L. W. Munnich, Jr., The Changing Landscape of Transportation and Technology, Final Summary Report of the STAR-TEA 21 Project. Intelligent Transportation Systems Institute, Minneapolis, MN (2008). Crespo, M., and H. Dridi, “Intensification of University-Industry Relationships and its Impact on Academic Research.” Higher Education, Vol. 54 (2007) pp. 61–84. Fries, R., M. Gahrooei, M. Chowdhury, and A. Conway, “Meeting Privacy Challenges While Advancing Intelligent Transportation Systems.” Transportation Research Part C: Emerging Technologies, Vol. 25, (2012) pp. 34–45. Harman, G., “Australian University Research Commercialization: Perceptions of Technology Transfer Specialists and Science and Technology Academics.” Journal of Higher Education Policy and Management, Vol. 32, No. 1 (2010) pp. 69–83. Schon, D., Technology and Change. Pergamon, London, (1967), as cited in Stock, G. N., and M. V. Tatikonda, “A Typology of Project-level Technology Transfer Processes.” Journal of Operations Management, Vol. 18 (2000) pp. 719–737. Stock, G. N., and M. V. Tatikonda, “A Typology of Project-level Technology Transfer Processes.” Journal of Opera- tions Management, Vol. 18 (2000) pp. 719–737. Thomas, L. W., NCHRP Legal Research Digest 58: Legal Issues Surrounding the Use of Digital Intellectual Property on Design and Construction Projects. Transportation Research Board of the National Academies, Washington, D.C. (2013). Accessed July 12, 2013. http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_lrd_58.pdf Virginia Transportation Research Council, Intellectual Property: A Handbook for Employees of the Virginia Department of Transportation, Fifth Edition. Commonwealth of Virginia (2006). Accessed July 23, 2013. http://www.virginiadot.org/vtrc/main/online_reports/pdf/07-r3.pdf World Intellectual Property Organization, Understanding Industrial Property. WIPO Publication No. 895(E) (n.d.). Accessed July 12, 2013. http://www.wipo.int/export/sites/www/freepublications/en/intproperty/895/ wipo_pub_895.pdf Zhang, X. M., Q. Liu, and H. Q. Wang, “Ontologies for Intellectual Property Rights Protection.” Expert Systems with Applications, Vol. 39 (2012) pp. 1388–400.