In some cases, however, the commercial orientation and potential of the inventions provided sufficient incentives to encourage industry, without exclusive patent rights, to complete the necessary development needed to commercially use inventions not fully developed by the agency. This appeared to be particularly true where the industry toward which the research was directed also had private research programs. Case 1 best illustrates this point, where a company picked up and improved upon a basic process developed by the Department of Agriculture, while depending upon Agriculture to continue to develop new uses for the resulting product. On the other hand, Cases 4, 7 and 20 illustrate the effect when these agencies do not completely develop inventions to the point of commercial application, and the particular industry involved has little research and development activity of its own. The The inventions in Cases 7 and 20 were machines which were developed to the pro to type stage, demonstrating their technical feasibility. The agencies did not, however, complete the follow-on development to work out the mechanical problems associated with a commercially usable machine. In both cases, the agencies attempted to interest industry in performing this follow-on work. Although so me attempts were made, industry was not willing to finance the development to the point where all of the mechanical problems were eliminated. Case 4 involved three inventions for reducing food products, and the agency proved the feasibility of the processes in the laboratory. The agency did not, however, develop machinery for performing the processes. Some attempt was made by industry to finance this development work, and the one company which has utilized the invention to some extent has incurred development costs of approximately $300,000. It appears that further development is necessary to commercially perfect these inventions, as the use to date has been small in comparison to what appears to be a quite large potential. The Department of Interior has encountered a different problem in their saline water conversion program. Under this program, the research involves a technology which has not reached the point of commercial feasibility, and consists of an advanced stage of applied research. Also, this program is in an area where a very large investment is required for additional development, and where there are several parallel technical approaches that are being considered at the same time. Cases 21 through 24 cover inventions in this area of technology. In Case 22, the technical feasibility of the concept has been proven in pilot plant operations, but a very large amount of risk capital is needed to prove the concept on a commercial scale. And in Cases 23 and 24, industry has obtained exclusive rights to the inventions involved, which still has not produced the needed stimulus to complete the inventions in this high risk area. 3. Patent Rights Exclusive patent rights did not appear to be a major factor in the commercial utilization of most of the publicoriented inventions studied. This was particularly true for inventions which represented high commercial potential and low financial risk as a result of agency promotion and development -- again, the TVA fertilizer cases and Agriculture's potato flakes case are examples. In fact, Harbridge House indicated that, in these situations, exclusive rights in one firm might have severely limited the utilization of these inventions. Again, lack of exclusive rights to the inventions developed On the other hand, exclusive rights may be useful in achieving a greater degree of commercial utilization than can be obtained through nonexclusive licensing, where the market for the invention is limited. In Case 2, Agriculture did not develop the machine past the prototype stage. Although several firms attempted to further develop the machine, only one firm has had any measure of success. In this particular case, it appears that the market for this machine was quite limited, and intense competition discouraged continuing work on the machine by some companies. 13/ There was also some degree of use of the inventions in Case 4, discussed above, but apparently not as much that would appear to be justified in view of the high anticipated potential for these inventions. Two of the cases studied are particularly interesting because, although the research was conducted by or through the publicoriented agencies, it was performed at the request of the Department of Defense for the purpose of developing items particularly designed for military uses. Case 6 involves five related patents pertaining to the preparation of material for use in flameproofing fabrics. Although these inventions have been utilized in achieving their particular military purpose, they have not been used commercially to any extent because the process involved is not only complex, but highly dangerous to perform. In Case 18, Interior sought to develop a process for synthetically producing mica. This research was undertaken at the request of DOD because mica was a strategic military item, and most of the natural mica used in the United States had to be imported. After the technical feasibility of this process was proven, Interior was successful in encouraging one firm to assist in the further commercial development of the process through a cooperative research agreement. Thereafter, the cooperating contractor continued the development of the invention with its private funds. This firm reported an investment of over $2 million in private development and has experienced approximately $600,000 in sales annually. The process is not extensively used, primarily due to the competition of the natural mica which is substantially cheaper. These two cases appear to illustrate the problems encountered in utilizing some DOD sponsored inventions. In Case 6, the process was too complicated and dangerous to stimulate commercial use factors which did not inhibit their intended military use. Case 18 is an example of an invention which does have commercial application, although it is not sufficiently competitive to stimulate substantial commercial use. 13/ - In such a situation, it could be possible that the market was small and competitive enough as to make it impractical for more than one company to aggressively promote the invention, and perhaps a greater degree of utilization could be obtained with exclusive rights. D. Case Studies Patent Activities of Educational and In-depth case studies were directed toward investigating the patent activities and promotional efforts of educational and nonprofit institutions. These institutions represented a significant source of inventions within the study sample, accounting for 415 patents developed by 67 institutions. Case studies were conducted on a cross section of 16 institutions, selected to cover a range of factors, including the public and private character of universities, their technical or liberal arts orientation, and their size, geographical location, and amount of government sponsorship of research and development. In addition, patent development firms and nonprofit research organizations were studied, and these included foundations created by industrial associations, single purpose research corporations investigating a specific field of technology, and charitable trusts. The interviews were conducted primarily with the individual within the institution in charge of patent policy or patent promotion, and was supplemented by interviews with government contract administrators, administrators of the institutions, and inventors. As a result of these case studies, Harbridge House reported that the inventions arising out of nonprofit institution research have a distinctly different character than those resulting from research by industry, primarily because of the type of research undertaken. In nonprofit research, the end product is often scientific findings as opposed to the usual "hardware" result from industrial research which takes the form of a product or process, at least in the prototype stage. The task of the nonprofit research is generally completed when the institution submits a research report, and not only are funds rarely available to reduce the se results to commercial application, the institution normally lacks the motivation and mission to conduct this type of follow-on development. Accordingly, these inventions are frequently at an early stage of development and more often require a larger investment for commercialization. Another characteristic of nonprofit institution inventions is that they most often stand alone. Their isolation can be a major obstacle to utilization since most inventions are not marketable products in themselves. In contrast, industry is in a position to support an invention with several additional patents and concepts, along with supporting technology and know-how that has been developed through their commercial production and marketing activities. 2. Patenting Versus Publication Another major factor which can affect the commercial utilization of these inventions, particularly by the academic institution, is the desire to publish research results as quickly as possible. Invariably, research results are fully disclosed through articles in scientific and technical journals, except where limited by the terms imposed by the sponsor of the grant or contract. Accordingly, patents have traditionally been assigned to a role of relative unimportance, and are often associated with commercial, rather than educational, motives. All but one of the educational institutions interviewed by Harbridge House, stated that publication of research results should not be delayed, even if failure to do so would endanger the patentability of resulting inventions. The desire for publication also has the effect of eliminating any possibility of developing proprietary data or trade secrets often found useful by industry in promoting commercial utilization. As the nonprofit institutions do not make or sell products or processes embodying their inventions, they must depend upon licensing of these inventions in order to achieve utilization. Harbridge House found that these institutions have evolved a variety of licensing techniques and used them in varying degrees to transfer the results of their research to the marketplace. Some colleges and universities have their own licensing programs under which special administrative units are responsible for obtaining sponsors to further develop and market inventions. Other educational institutions administer their patent programs through independent, but affiliated, foundations, and in these instances, inventions are assigned to the foundation by either the institution or by the inventor directly. And finally, a large percentage of academic institutions utilize patent development firms to administer their patent programs. The case studies indicated that, except for a few universities, there has been little activity within academic institutions toward active promotion of inventions. However, |