THE director of Livermore’s Industrial Partnerships Office (IPO) posted a brief notice one day last March for a series of lectures he planned to give in April on “Developing Business Models for Emerging Technologies.” Attendance was to be limited to 30 individuals. Forty people inquired within a day, and 60 scientists, engineers, and other employees from across the Laboratory came to listen and learn.
Stenehjem has only good things to say about the staff at IPO (formerly called Industrial Partnerships and Commercialization). Among the seven business development executives and the management team, six individuals have a Ph.D. in science or engineering, five are attorneys, three have experience in startup companies, and four are registered patent attorneys. Some staff members wear more than one of these hats. Over the last several years, the capable staff has successfully commercialized dozens of Livermore technologies for homeland security, health care, manufacturing, and more. “It’s a highly talented group,” says Stenehjem. “Last year, they returned more than $6 million in royalties to the Laboratory. Combined with the industry funding from cooperative agreements, that yielded almost $3 for every dollar spent by the office.”
Supercomputing is an excellent example of how collaborations with industry have served Livermore’s goals. To model the behavior of nuclear weapon materials and components in computer simulations, Livermore researchers have created a virtually insatiable demand for computing power. That demand drove the design of the first supercomputers and led to partnerships with IBM, Control Data Corporation, and Cray, among many others. Under the National Nuclear Security Administration’s Advanced Simulation and Computing Program, partnerships with IBM have led to the development of many breakthrough machines, including the Blue Gene line of supercomputers. BlueGene/L, the fastest and most capable computing machine in the world, is helping researchers perform both classified and unclassified research.
Collaborations with private industry have also been crucial in developing the Laboratory’s record-shattering lasers over the last four decades. For the National Ignition Facility, the world’s largest laser, Livermore scientists and dozens of private firms came together to develop new tools, materials, and manufacturing methods. Many of the components in the laser system represent significant advancements of current technologies, while other components are entirely new. Commissioning of the giant laser will be complete in 2009, and experiments to achieve fusion ignition will begin in 2010.
Meanwhile, dozens of Livermore innovations have moved to the private sector. One is a laser process to strengthen metal components, making them better able to resist fatigue and corrosion. Metal Improvement Company (MIC) of Paramus, New Jersey, a firm specializing in metal treatments, licensed this Laboratory invention and continues to refine the process. Robotic laser peening is now routinely used to strengthen and form critical components of aircraft engines for longer life. MIC recently received a contract to establish a laser-peening production cell inside Boeing Corporation’s Frederickson, Washington, facility. MIC’s innovations also improve fatigue lifetime for components of the Apache and Blackhawk helicopters, the M1A1 Abrams tank, the F-22 fighter jet, and the B-52 bomber.
For the Laboratory’s mission in homeland and global security, success depends on commercializing inventions and getting a usable product, such as a new radiation or biological-agent detector, into the hands of end users as quickly as possible. Transferring Livermore-developed technologies to the private sector makes these advances available to those who secure our borders and airports, monitor public places for biological or chemical attacks, and respond to emergencies. Working directly with private organizations helps speed the delivery of new inventions to users. IPO plays an important role in identifying and wooing industrial partners as well as in simplifying the process by which the Laboratory works with other entities. “We’re exploring ways to make the contracting process faster and easier,” says Stenehjem.
One technology important for homeland security is an ultrawideband (UWB) device that can monitor cargo containers and detect unauthorized entry. Every year, more than 200 million shipments transport 90 percent of the world’s cargo on trains, airplanes, ships, and trucks. Concern about a terrorist organization using a cargo container to deliver a weapon of mass destruction into the U.S. led to the development of an inexpensive, reliable, and reusable detection device called SecureBox.
The device uses UWB technology first developed at Livermore in the early 1990s with funding from the Laboratory Directed Research and Development (LDRD) Program. Modern UWB technology at Livermore uses coherent, broad-spectrum, low-power pulses, which allow devices to be highly sensitive to intrusions into a preset area of coverage while consuming considerably less power than a narrowband device with comparable sensitivity. The SecureBox UWB device can detect an intrusion through any of a container’s six walls, whether it be from a door opening or from a cut through a container wall. It can then send an alarm to authorized individuals.
The Secure Box Corporation of Santa Clara, California, licensed the technology and subsequently invested $500,000 in a Cooperative Research and Development Agreement (CRADA) with Livermore to customize the core technology for the cargo security application and to explore uses for the SecureBox device by the U.S. government. The device’s efficacy was demonstrated by the Laboratory during the 2006 Canada–U.S. Cargo Security Project, Phase 2. More recently, the technology has been tested in exercises in Europe and the San Francisco Bay Area and with the U.S. Coast Guard.
Innovation Breeds Success
Radiation from traditional x- and gamma-ray treatments often damages healthy tissue as it travels on its path to the target tumor. Protons, because of their positive charge and high mass, retain most of their energy until they reach the cancer site. Many doctors consider protons to be superior to x rays for treating certain kinds of cancers. However, current proton accelerators are expensive machines that weigh several hundred tons and are the size of a basketball court. Only about half a dozen cancer treatment centers in the U.S. have systems for proton therapy. When Livermore’s device is fully developed, it will be just 2 meters long and deliver the necessary beam energy at a fraction of the cost of current systems.
Researchers at the UC Davis Cancer Center acted as matchmaker for licensing the accelerator technology. UC Davis had purchased another type of radiation therapy machine from TomoTherapy, Inc., of Madison, Wisconsin, a firm specializing in radiation treatment for cancer. In 2005, UC Davis invited Livermore scientists to present their technology to TomoTherapy. In 2006, UC Davis signed a second partnership agreement with the Laboratory to further develop the accelerator for cancer therapy.
Crossing the Valley of Death
At Livermore, every IPO business development executive keeps tabs on competing patents and other intellectual property for a particular area of Laboratory research. He or she also follows relevant markets and private companies that might be interested in a new invention. In addition, Livermore-developed technologies are posted on the Federal Business Opportunities Web site. However, these efforts may not be enough to attract either venture capital or a company to license a technology, in which case the Valley of Death looms ahead.
Business Plans Are Win-Win
School-sponsored competitions for student-written business plans award as much as $250,000 to the winner. Students want to prepare a winning business plan, yet they often have to dream up a product or technology to write about. The increased prize money and popularity of the contests has led student teams to seek compelling high-tech products as subjects for their business plans. If a student writes a business plan for a Livermore technology, he or she may win the competition, and the Laboratory gets a business plan it can take to venture capitalists. Everyone wins.
Livermore has had some success in the past with student-written business plans. However, Stenehjem is being more aggressive with this tool, on the assumption that more business plans will translate into a higher number of technologies licensed by well-financed companies. Last year, Stenehjem tapped physicist Ralph Jacobs to establish an outreach program to area business schools. Jacobs has extensive laser science experience at the Laboratory and started a successful firm in California’s Silicon Valley, where he worked in the 1980s. The company was purchased in 2000 for what was then the largest takeover offer for a high-tech company.
Stenehjem, Jacobs, and others sifted through more than 900 Livermore patents to find ones that represented a “disruptive” or revolutionary technology, could be commercialized in about two years, and were unencumbered by other licenses or CRADAs. “Some patents involved only
an incremental change to an existing device or process,” says Jacobs, “while others were too futuristic.” Ultimately, the reviewers selected 17 standout technologies, including a residential solar thermal power plant, a method to generate electricity from waste heat, electromechanical batteries, nanolaminate capacitors, nanolaminate mirrors, and a water treatment process using carbon nanotubes.
The 17 technologies were advertised on IPO’s Web site (ipo.llnl.gov) and by Jacobs and Stenehjem during visits to entrepreneurship classes at nearby business schools. Several business schools signed on, including UC Davis, UC Berkeley, University of San Francisco, Golden Gate University, San Jose State University, and University of the Pacific. Jacobs says, “A student at Sloan School of Management at the Massachusetts Institute of Technology found us while surfing the Web. He also developed a plan.”
Students in masters of business administration programs completed business plans for 12 Livermore technologies, and many were entered in competitions. Three made it to the finals of various contests. The outlook for funding and commercializing these technologies indeed looks bright.
Funding is the magic word. Any new business requires four ingredients: technology, management, knowledge of the market, and money. “You need the right combination of all four pieces,” says Stenehjem. “The Laboratory has the technology, and some scientists and engineers make good managers. The students’ business plans provide the market knowledge. That leaves money.”
Livermore is developing a close relationship with venture capitalists and “angel investors,” which are consortia of wealthy individuals. For example, Laboratory technology transfer representatives have been invited to attend monthly meetings of Keiretsu Forum, the world’s largest angel investor network with 750 accredited investor members on three continents.
Having newly minted business plans in place will give Livermore a leg up with investors. “Venture capitalists judge business plan competitions,” says Stenehjem, “and they love cutting-edge technologies.”
Into the Future
He has broadened the responsibilities of IPO’s business development executives. Feedback from commercial partners indicates that they are often unaware of all the Laboratory has to offer. Partners work with a principal investigator and perhaps a few more scientists and engineers, but the rest of the Laboratory remains unknown to them. Business development executives can inform partner firms of other licensing and contracting opportunities at Livermore. Also, by serving as a central point of contact for partner firms, the IPO executives can address issues and concerns before they become problems.
Looking further into the future, Stenehjem envisions a technology research park outside the Laboratory’s gates where scientists and engineers could more easily engage with industrial partners and develop new commercial ventures. He also hopes to explore interest in an “accelerator” that would bring together venture capitalists; serial entrepreneurs, who start a business and move on to another; market analysts; and Livermore technologies. Stenehjem’s enthusiasm is palpable. When he says, “These are exciting times,” he means it.
Key Words: commercialization, Cooperative Research and Development Agreement (CRADA), industrial partnership, laser peening, proton accelerator, SecureBox, technology transfer.
For further information contact Erik Stenehjem (925) 423-9353 (email@example.com).
Lawrence Livermore National Laboratory
Privacy & Legal Notice | UCRL-TR-52000-08-7/8 | July 8, 2008