Advancing Commercialization of Digital Products from Federal Laboratories (2021) / Chapter Skim
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3 Digital Products and Federal Policy for the Innovation Economy
3 Digital Products and Federal Policy for the Innovation Economy
Pages 29-38
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From page 29... ...
Given that digital products are produced by federal labs, are paid for with taxpayer dollars, and can generate large positive externalities, policies that foster their widespread use and rapid dissemination yield a large societal benefit. Society can often benefit most when technology is in the public domain freely, which in theory makes the assets freely available to all firms.
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From page 30... ...
.1 INTELLECTUAL PROPERTY POLICY AND INNOVATION IN THE FEDERAL LABORATORIES When examining the laws and policies that specifically govern the development of digital products from the federal laboratories, it is useful first to take a step back and consider the overall framework of innovations arising from the federal lab system. The interaction of two foundational premises -- the role of government in creating public resources and the role of intellectual property (IP)
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From page 31... ...
For example, Japan's Ministry of International Trade and Industry, which formulates Japanese industrial policy, directed significant resources to the successful development of such market sectors as consumer electronics and automobiles using technology initially developed in national labs.
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From page 32... ...
Federal laboratories are neither well suited nor chartered to commercialize their work products directly, being driven by the missions of the agencies with which they are associated rather than market forces. Therefore, technology transfer from federal labs to the commercial marketplace is possible only through partnerships with private actors and measures to meet the need for economic incentives that make such partnerships feasible.
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From page 33... ...
. However, not all products of federal labs can be translated directly, and without significant additional investment, into commercial products; some may require augmentation, adaptation, or modification to become commercially viable.
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Table 3-1 summarizes the analysis outlined in this section at a high level using paradigmatic examples of each technology type.3 When an unclassified federal technology is readily adaptable to commercial use without significant expenditure, as in the case of genomic data, that federal technology should achieve the broadest dissemination and yield the greatest welfare gains when it is treated as a public resource accessible to and usable by all. Likewise, when a federal technology is adaptable to commercial use with only modest expenditures, as in the case of a software program that was designed for use in a government setting but can be adapted to a commercial setting with modest programming modifications, treating the technology as a public resource (e.g., through OSS release or dedication to the public domain)
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From page 35... ...
digital products, as commercial firms do. Unlike firms, which generate revenue from digital products in order to survive, federal laboratories do not need to generate royalties and licensing revenue to fund their operations.4 As discussed above, most commercially relevant digital products generated by federal labs are by-products of the labs' mission-driven research activity.
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From page 36... ...
If multiple competitors have access to the same underlying federal technology and the ultimate product is readily imitable, none of them may be able to capture sufficient revenue when the product is sold to justify the initial expenditure required to develop and commercialize the technology. As a result, no private actor may have a sufficient economic incentive to commercialize the federal product, and it will remain uncommercialized, yielding no social benefits whatsoever.
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From page 37... ...
Finding 3-3: While placing digital products in the public domain may reduce obstacles to their use, reliance on the public domain alone will not enable the participation of small firms, minority-owned firms, woman-owned firms, and members of society that lack the market networks, resources, and tools to discover and exploit what is available in the public domain. Recommendation 3-1: Federal laboratory directors should ensure that data and associated metadata produced by their labs are freely and openly available for use by individuals, researchers, and firms to the fullest extent possible under existing statutes and policies.
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From page 38... ...
38 COMMERCIALIZATION OF DIGITAL PRODUCTS FROM FEDERAL LABS Recommendation 3-3: Federal laboratory directors should consider ways to identify and support small, minority-owned, and woman-owned firms and members of society that may not be in a position to identify freely available digital goods, may not know how to interface with the federal labs on such matters, and/or may not understand how the use of these digital products may be relevant to their interests. Federal lab directors should proactively address such disparities in access.
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