Introduction Non-Profit Participation in ATP Benefits of Non-Profit Participation in ATP Intellectual Property Rights Best Practices for Non -Profit/Industry Collaborative R&D Conclusions Appendix A

To view a recent presentation about non-profit and university participation in ATP, click here.

Almost 170 universities have collectively received about $192 million through ATP awards. This webpage focuses on non-profit participation in the ATP, highlights how ATP stimulates collaborative R&D, and reviews some of the best practices that ATP has seen in non-profit/industry partnerships. The term ‘non-profit’ includes universities, government laboratories and other non-profit research institutions. To view a recent presentation about non-profit and university participation in ATP, click here.

Non-Profit Participation in ATP

Although the ATP was designed to assist U.S. businesses specifically, its defining legislation also directs that it "aid industry-led U.S. joint R&D ventures, which may include universities and independent research organizations…". Since the ATP began in 1990, about 9.1% of the $2.1 billion in ATP funding has flowed to 168 different universities. In fact, universities have been involved in 56% of the 641 ATP projects that are either still active or that went to completion; and when non-profits are involved in an ATP project, more than one usually participates.

Non-profits can participate in ATP projects either as subcontractors or as partners in an ATP ‘joint venture’ (JV). Since a non-profit cannot be a JV partner unless the JV is led by two, or more, for-profit companies, universities have been subcontractors in almost 90% of the incidences in which they have participated in ATP awards. Any non-profit can serve as a catalyst to organize an ATP JV. And, a non-profit independent research organization (IRO) may submit a proposal and administer an ATP project provided that the following conditions are met:

• The JV must include at least two for-profit companies, both of which are substantially involved in the R&D and both are contributing toward the matching-fund requirement; and
• The industrial members of the JV must define the research agenda and the commercialization plans based on their needs and must have the leadership role in programmatically controlling the project.

Universities are not considered IROs and may not submit proposals or administer ATP projects.

As shown in Table 1, university participation in ATP varies from industry-to-industry.

Table 1
University Participation

Non-profits may also participate in ATP by creating spin-off companies. A for-profit company that is organized by a non-profit can be considered to be a qualified applicant for an ATP award as long as appropriate documentation of the company’s for-profit status is provided. Keep in mind, though, that non-profits are barred from being a subcontractor in any ATP award in which the non-profit has a ‘controlling’ interest in the awardee company. Also, ATP carefully questions the level of project and business commitment when it receives proposals from spin-off companies in which one or more of the key technical personnel in the for-profit participant are still employed at the non-profit parent (table of ATP awards involving university spinoffs).

A unique capability that non-profits bring, especially to small and medium-sized companies, is their tremendous expertise in government contracting. This value cannot be overstated, especially when the R&D triggers complex, government regulations, such as those concerning human and animal subjects. Non-profit involvement can also facilitate post-project equipment disposal to the non-profit.

Some of the strongest ATP proposals are ones in which the non-profit PI was significantly involved in its creation. This correlation is especially high when the non-profit plans to develop either key innovations required for the project’s success or technology that will lead to spillover applications. In addition, non-profits, by virtue of their broad contacts with industry, may be in the best position to bring together consortiums of companies that can apply for an ATP award.  Information about university involvement in ATP proposals was collected through a recent (June 2003) survey of  ATP applicants (survey results related to universities)..

Benefits of Non-Profit Participation in ATP

Table 2 lists the ten universities that have seen the most action in ATP projects. These non-profits have recognized that ATP can provide critical funding for state-of-the-art laboratory equipment and for the high-risk development of innovative technologies for commercial exploitation. An ATP JV is required to pay the majority of shared costs, both direct and indirect, on an ATP project. Although ATP does not require them to do so, the industry partners may cover a portion or all of the non-profit's share of the costs. By virtue of its role as the catalyst and cement that creates and binds non-profit/industry partnerships, the ATP provides non-profits with other, more intangible rewards, too. For instance, it exposes faculty and students to how industry does cutting-edge R&D. It also provides faculty with opportunities for external consulting and exposes students to potential career opportunities. It may also provide graduate students with part-time or temporary employment opportunities at an ATP awardee/company. Working in an advanced technology project frequently gives non-profit researchers valuable leads for future research. Probably most importantly, collaborating in an ATP award broadens and deepens the relationships that non-profits have with companies, which often leads to future gifts and sponsored projects.

Table 2
Most Involved Universities
(number of incidences of participation
in active or completed projects)

As shown in Figure 1, 86% of ATP industrial awardees admit that collaboration helped to achieve their project objectives; and of these, 69% attest that the ATP award was greatly responsible for their decision to collaborate. The data establishes the fact that an ATP award can provide an excellent framework for creating and strengthening R&D partnerships between companies and non-profits. In order to facilitate the use of such partnerships in ATP awards, non-profits can use the ATP Alliance Network (www.atp.nist.gov/alliance) to:

• educate their scientific staff about collaborative R&D (companies view partnership-saavy partners as more desirable partners);
• convince companies to collaborate in an R&D proposal;
• refer company partners to ATP regulations and forms;
• post available technology on the ATP Collaboration Bulleting Board (can be used anonymously).

Companies, too, benefit significantly when non-profits participate in their ATP projects. There are the obvious benefits of access both to creative and eminent scientists, and to other resources found only in world-class R&D institutions, such as state-of-the-art equipment and libraries. In addition, close interaction with uniquely knowledgeable and capable faculty gives industrial scientists timely, technical training, a recruiting tool for potential employees, and stimulates them to the kind of ‘out-of-the-box’ thinking that is needed in high-risk R&D. As shown in Figure 2, virtually all ATP awardees report that creative thinking was stimulated through the collaborative involvement of outside organizations. University R&D staff are uniquely capable of adding creativity, breadth, and depth to the scientific activities of industry.

Intellectual Property Rights

By statute, ownership of patent rights to innovations developed within ATP projects must reside with the for-profit awardee(s). This restriction does not apply to non-patentable, intellectual property (IP), such as copyrights. And outside of both this limitation and the typical government-use & march-in provisions, the parties involved in ATP projects are free to negotiate provisions for the handling of IP rights. These provisions can and do address issues such as compensation, royalty payments, non-disclosure (including students), material transfer, licensing of background IP, protecting researcher’s right-to-practice (e.g., back licensing for broad research/education), patent fees, compensation of inventors, enforcement obligations, publishing rights (including theses) and indemnification.

For several years, NIST has recommended that Congress amend the ATP statute so that parties involved in an ATP joint venture would be free to negotiate their own terms for intellectual property rights. In the past, the proposed amendment would have revised the ATP statue to read as follows:

Congress has not passed the proposed revision.

Best Practices for Non-Profit/Industry Collaborative R&D

Because ATP has seen almost 500 incidences of university participation in its projects, it is in a unique position to compile the best (and worst) practices across many different types of organizations, industries and geographies. As shown in Figure 3, half of the ATP awardees report that doing R&D in a collaborative fashion increases the project’s coordination and management costs. For non-profit/industry partnerships, it seems that the most critical factor is integrating the activities of these diverse organizations. For instance, close (geographical) proximity between the partners helps. To facilitate this integration, here are five actions that a non-profit can take:

1. Be an involved member of the team. The non-profit representatives should ask for and participate in opportunities for frequent and open communications with their counterparts. Further, experts should demonstrate their ability to teach their industrial colleagues, uncover core, technical issues, and inspire the team to understand the underlying science, rather than providing just the bare minimum requested.
2. Continuously work to understand industry’s expectations and communicate limitations. Make sure that the industrial counterpart gets a heads-up about things that will limit their access to the non-profit resources upon which they depend. Examples are the school calendar, faculty duties (teaching, papers, proposals), student duties (course & thesis work), and graduation. Beyond these limitations, work as much as possible to adapt to and merge with the pace and needs of the corporate sponsor. It certainly helps if both parties have previous experience with non-profit/industry partnerships and especially if the faculty member and industry PI have a preexisting relationship.
3. Have a liaison who will earn the respect and trust of both parties. Someone from either the non-profit or company needs to pick up responsibility for traveling frequently to the partner’s site and gathering/sharing information.
4. Negotiate agreements before the work begins. ATP has seen a number of instances when innovations happened sooner than expected!
5. Focus on the common goals that will deliver the win/win. A ‘meeting-of-the-minds’ needs to happen between the non-profit & industrial PIs about what each will get out of working together on an ATP award. Don't ask the non-profit to do work that the company can or should do better. And avoid situations where the capabilities provided by the non-profit compete with resources available within the industrial partner. In the final analysis, a creative, but sub-optimal deal is better than no deal at all.

Conclusions

The ATP’s focus on developing precompetitive technologies creates fertile ground for non-profit/industry collaborations; and for this reason, the involvement in ATP by non-profits, and especially universities, will likely grow with time. Appendix A lists the non-profits that have so far participated in ATP projects.

Go to Alliance Network—ATP Resources

Date created: October 1999
Last update: February 10, 2004