Department of Energy Launches Innovation Challenge to Commercialize Energy IP Developed at National Labs

U.S. Energy Secretary Stephen Chu recently announced the launch of a new federal program, America’s Next Top Energy Innovator, aimed at matching energy-related intellectual property generated by national laboratories such as the National Renewable Energy Laboratory (“NREL”), Argonne and Lawrence-Berkeley with start-up companies eager to license those technologies and drive them toward commercialization.

The program aims to cut upfront fees, reduce paperwork and make it easier for start-up companies to license energy technologies developed at national laboratories. At present, only 10% of federal patents have been licensed to be commercialized. The program aims to double the number of start-up companies coming out of national labs. To do so, the program will do the following:

• On May 2, 2011, the Department of Energy (“DOE”) will kick-off the challenge by posting online a new, streamlined Option Agreement template for entrepreneurs to submit to labs. The Option Agreement application must identify the patent(s) of interest and include a business plan for commercializing it/them.
• DOE is opening a database of the more than 15,000 available patents and hundreds of technology marketing summaries so that entrepreneurs have visibility into available technologies. The database is available online at DOE’s Energy Innovation Portal. The technologies are searchable and are organized by sub-sector (wind, solar, geothermal, energy storage, biomass, hydropower, etc).
• From May 2 to December 15, 2011, DOE will expedite its licensing process and reduce its license fees to a $1,000 upfront license fee on portfolios of up to three patents. DOE estimates that this will represent a savings of $10,000 to $50,000 on average in upfront fees. 
• Other licensing fees, including equity and royalties, will be negotiated on a case-by-case basis, but will likely be predicated on the start-up’s future commercialization success.
• To facilitate the use of national laboratories by start-up companies that want to conduct collaborative research and development activities, DOE will lower the required advanced payments for use of DOE facilities from 90 days to 60 days. This reduced payment will be available to start-up companies regardless of whether they are utilizing national lab-generated IP.
•  DOE will reward entrepreneurs who complete the licensing process and move forward with their business plans by giving them the opportunity to be showcased at the 3rd Annual ARPA-E Energy Innovation Summit in 2012.