Yes, this is a real program, but it isn’t on television.

The U.S. Department of Energy has announced a series of steps designed to give energy entrepreneurs a leg up on licensing and marketing innovative energy technologies developed by our national laboratories.  The goal is to double the number of federal patents held by the national labs that are licensed to be commercialized.  According to Energy Secretary Steven Chu, these new steps will create green energy jobs while promoting America’s energy independence.

The program begins May 2, 2011, when the DOE posts a streamlined option agreement online for entrepreneurs to submit to laboratories.  Entrepreneurs have until December 15, 2011 to identify the technology of interest and submit a business plan. Currently, the national labs hold 15,000 unlicensed patents and patent applications, and all will be available for licensing by startup companies.

Between May 2 and December 15, the DOE will reduce the upfront cost of licensing DOE patents to a $1,000 fee for portfolios of up to three patents.  DOE estimates this will save entrepreneurs up to $50,000 on upfront fees.  Other license terms, such as equity and royalties, will be negotiated case-by-case, and will typically be due when the company grows and achieves commercial success. 

The DOE promises to simplify the licensing process and establish a standard set of terms for startups, to reduce the time and cost of negotiating individual licensing agreements. DOE also promises to make it easier for companies to use the facilities at national labs to conduct collaborative research and development.  Previously, companies had to pay for the first 90 days of research up front, a difficult requirement for startups to meet.  DOE has lowered the payment requirement to 60 days.

What are these promising energy technologies waiting to be snapped up by eager entrepreneurs?  A few examples cited by DOE include:

• A grid-friendly appliance controller developed by the Pacific Northwest National Laboratory that allows household appliances to sense peaks in energy demand and shut down for a few minutes or even a few seconds to help prevent grid destabilization and blackouts.
• High performance semiconductor materials developed by DOE’s National Renewable Energy Laboratory, including high efficiency solar cells, solid-state lighting and high-speed transistors.
• The Argonne national lab’s new DeNOx catalyst which removes 80-85% of nitrogen oxide emissions from diesel fuel combustion by converting NOx to nitrogen. Nitrogen oxides are precursors for ozone formation and acid rain.

There are precedents for the licensing of DOE technologies.  For example, the Ampulse Corporation and Oak Ridge national lab have signed a licensing agreement for crystalline-silicon thin film photovoltaic technology, which may substantially reduce the cost of producing solar power by improving solar cell efficiency.  General Motors and Argonne have signed a licensing deal to allow GM to use Argonne’s patented composite material to make advanced lithium-ion batteries that will last longer between charges. 

Will the DOE produce the next “American Idol” of green energy?  That remains to be seen.  While a less expensive and more streamlined licensing process will certainly help startups develop marketable products from government energy patents, the DOE may not be able to assist startups overcome other technical and financial hurdles.  Perhaps other existing grant programs may be tapped into by energy innovators.  The biggest impact of the Top Energy Innovator challenge may be DOE’s own marketing of the potential of the many new energy ideas developed and patented by the national labs. 

We’ll follow this story as it develops.  For more information on DOE’s energy innovator challenge, energy grants, and sustainability, please contact Larry Vanore or any member of Taft’s Environmental Practice Group.