• Department of Energy Launches "America's Next Top Energy Innovator"
  • April 18, 2011
  • Law Firm: Krieg DeVault LLP - Indianapolis Office
  • As part of the Obama Administration's Startup America Initiative , U.S. Energy Secretary Steven Chu this week announced the "America's Next Top Energy Innovator" challenge, which will give start-up companies the opportunity to license groundbreaking technologies developed by the national laboratories for $1,000 and build successful businesses. As part of this effort, the Department is reducing both the cost and paperwork requirements for start-up companies to obtain an option agreement to license some of the 15,000 patents and patent applications held by our 17 national laboratories.

    Currently, only about 10% of federal patents have been licensed to be commercialized. This initiative aims to double the number of startup companies coming out of the national laboratories.

    Specifically, as part of "America's Next Top Energy Innovator:"

    1. On Monday, May 2, 2011, the Department will kick off the challenge by posting a streamlined template option agreement online for entrepreneurs to submit to laboratories. Entrepreneurs must identify the technology of interest and submit a business plan to be considered for the program. Participants will have until December 15 to make their submission to the laboratory.

    2. Any of the 15,000 unlicensed patents and patent applications held by the national laboratories will be available for licensing by startup companies.

    3. From May 2 to December 15, the Department will reduce the total upfront cost of licensing DOE patents in a specific technology to a $1,000 upfront fee for portfolios of up to three patents. This represents a savings of $10,000 to $50,000 on average in upfront fees.

    4. Other license terms, such as equity and royalties, will be negotiated on a case by case basis and will typically be due once the company grows and achieves wide scale commercial success. These fees help support the Department's continuing research activities to develop new technologies.

    5. The Department will simplify the licensing process and establish a standard set of terms for start-ups, who generally lack the resources, time, or expertise to negotiate individual licensing agreements. This will significantly reduce both the time and cost required to process the license, allowing faster access to the Department's patents and enabling the Department to process more licenses in a shorter amount of time.

    6. Entrepreneurs who complete the process and demonstrate progress toward executing their business plan and commercializing the technology will have the opportunity to be showcased at the 3rd Annual ARPA-E Energy Innovation Summit in 2012, which brings together leading technology startups and clean energy investors from around the country.

    In addition to these steps, the Department is making it easier for companies to use the world-leading facilities at our national laboratories to conduct collaborative research and development activities. Previously, companies had to make an upfront payment covering the first 90 days of research work-a requirement that was often difficult for start-ups to meet. Today, the Department is lowering the advance payment requirement to 60 days. This change will benefit all companies-not just start-ups-but could be valuable for those participating in the "America's Next Top Energy Innovator" challenge.