“The [DOE] memo takes the nuclear energy program back to the pre-Bayh-Dole era, where the Department has long wanted to go.”
DOE opposed the law’s passage and tried to undermine the implementing regulations. When Bayh-Dole initially gave the agency discretion to include its university operated laboratories under its provisions, DOE refused, causing Senator Bob Dole (R-KS) to amend the statute mandating the change.
Flags of Convenience
Until recently, DOE’s passive/aggressive resistance was conducted below the surface. The center of resistance is the general counsel’s office and the nuclear energy program. Both found opportunities in the Biden Administration to come out into the open.
Seeing a chance when National Public Radio alleged that one of the department’s labs had given away an important technology to China (the lab wasn’t allowed to defend itself), DOE declared it was exempting its programs from Bayh-Dole’s domestic manufacturing requirement in order to impose a Washington-centric policy run by the general counsel.
Then, in the waning days of the defeated Biden-Harris Administration, the nuclear energy program took the opposite tack, announcing that the labs weren’t giving away enough technology, so Bayh-Dole would be overridden (see below).
Obviously, whatever flag of convenience is needed to re-establish Washington micromanagement will be hoisted at the appropriate time. Those in the laboratories and universities dependent on DOE funding know that political appointees come and go, but the bureaucracy is forever, so anyone objecting does so at considerable risk.
Office of Nuclear Energy Guidance
In an extraordinary memo that was not made publicly available outside the DOE national laboratories, and which was sent one month after the election, K. Michael Goff, Principal Deputy Assistant Secretary for Nuclear Energy issued the following policy guidance:
“The U.S. Department of Energy (DOE) Office of Nuclear Energy (NE) is issuing this guidance regarding the commercialization of NE-funded technologies. With this guidance, NE is establishing a policy preference for the dedication to the public of such technology, where it is made freely available to the public with few or no intellectual property restrictions, or the non-exclusive licensing of technology developed with NE funding. (emphasis added)
“Recognizing that the contractors who manage National Laboratories for DOE according to Management & Operating (M&O) contracts (DOE National Laboratory contractors) generally have rights under the Bayh-Dole Act, including the right to elect title to federally-funded inventions and license those inventions per the technology transfer mission clauses of M&O contracts this policy is intended to be a significant factor that the National Laboratory M&O contractors are expected to weigh when structuring and negotiating the licensing of NE-funded technologies, even when owned by the contractor. In the extraordinary circumstances in which a National Laboratory wants to exclusively license a NE funded technology, NE expects the National Laboratory M&O contractor to consult with NE leadership and the DOE Patent Counsel prior to entering into such an exclusive license. (emphasis added) The purpose of this consultation is to verify that all parties agree that the exclusive license is the best vehicle for advancing DOE’s mission and interests, including maximizing commercialization and broadly disseminating NE-funded technology.”
Under the Bayh-Dole Act, what kind of license to issue and how it’s structured is determined by those making the invention, not Washington. The memo takes the nuclear energy program back to the pre-Bayh-Dole era, where the Department has long wanted to go. In those days, government funded inventions were made freely available here and abroad. The result was that few were commercialized in the United States, as the necessary protections and incentives needed to take these discoveries out of the lab and into the marketplace were missing. While those policies drove domestic companies away, they were a bonanza for our foreign competitors.
What makes the policy announcement particularly ironic is that for the first time in decades, nuclear energy is getting a second look as a reliable energy source. According to the Department of Energy’s publication Restoring America’s Competitive Nuclear Energy Advantage:
“America has lost its competitive global position as the world leader in nuclear energy to state-owned enterprises, notably Russia and China, with other competitor nations also aggressively moving to surpass the United States (U.S.).”
Here’s their strategy:
“Next, the U.S. Government will leverage American technological innovation and advanced nuclear Research, Development, and Demonstration (RD&D) investments to accelerate technical advances and regain American nuclear energy leadership.
Finally, the U.S. Government will move into markets currently dominated by Russian and Chinese State Owned Enterprises (SOE) and recover our position as the world leader in exporting best-in-class nuclear energy technology, and with it, strong non-proliferation standards. We will restore American nuclear credibility and demonstrate American commitment to competing in contested markets and repositioning America as the responsible nuclear energy partner of choice. commitment to competing in contested markets and repositioning America as the responsible nuclear energy partner of choice.”
Note that DOE sees “the U.S. Government,” not entrepreneurs moving “into markets currently dominated by Russian and Chinese State Owned Enterprises.” Seems like we’re adopting the Chinese and Russian models, but with one key difference: they’re not giving away their technologies like DOE.
One of the most promising advances is the development of small modular reactors, “a key part of the Department’s goal to develop safe, clean affordable nuclear power options”.
Here’s an assessment of where things stand:
“The competitive landscape also includes several innovative startups and small companies that are pushing the boundaries of nuclear technology. These companies are developing new reactor designs, exploring novel applications, and driving technological advancements in the modular nuclear power market. Their agility and focus on innovation enable them to address specific market needs and contribute to the overall dynamism of the industry. As the market continues to evolve, the collaboration between established players and innovative startups is expected to drive further advancements and growth in the modular nuclear power sector.”
One of our potential advantages is teaming these companies with government sponsored research in our national laboratories and universities. Those should also be sources of spin out companies, which helped establish our lead in other emerging technologies.
We’ve Got to Be in the Race to Win
Like drug development, these new technologies are highly regulated, very expensive and risky, so small companies must raise large rounds of venture capital. And like in drug development, strong intellectual property protection is essential for them to succeed. But that won’t happen under the new DOE policy.
I don’t know about you, but I’m a lot more confident in our private sector winning this race against China and Russia than the Washington bureaucracy. But we have to give them a chance to run.
Image Source: Deposit Photos
Author: roxanabalint
Image ID: 101583724
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