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Licensing a Product Idea From the Government

You could uncover your next big product using tech transfer.

While doing a Special Forces documentary, filmmaker Christian D'Andrea ran into a soldier powering up on a military-issue energy bar. It was specially formulated for the demands of the battlefield by the Army's Combat Feeding Directorate in Natick, Massachusetts. But it wasn't available to civilians.

Smelling a business opportunity that was more than bite-size, Christian, 34, and his brother Mark, 31, realized they could license the science behind the snack. In 2004, they signed a deal to commercialize the product beyond guys in green. The Hooah! bar is now sold in thousands of outlets, from Albertsons grocery stores to Amazon.com, and earlier this year the brothers released an energy drink also based on a Natick formulation. By adopting government products, Los Angeles-based D'Andrea Brothers LLC expects to bring in sales of more than $1 million this year.

Yet the Hooah! bar isn't an anomaly. Every year, the government allocates billions to research projects, with a mandate to return that investment to We the People. Technology transfer-- the process whereby inventions developed on the taxpayer dime are spun out to the private sector--has gotten a big boost from legislative reforms since 1980. There are thousands of inventions waiting to become brand-new products or improve existing ones.

Today, hundreds of entities handle tech transfer, including private companies, universities and government agencies. The Robert C. Byrd National Technology Transfer Center in Wheeling, West Virginia, was chartered in 1989 to act as a clearinghouse for the world of available technologies. It's a good place to start for companies interested in pursuing tech transfer. Another good place to look is the Federal Laboratory Consortium for Technology Transfer.

In most cases, the originator of the research or invention foots the centers' bill, so there's no initial finder's fee incurred by tech transfer recipients, who usually pay annual royalties to license inventions. Tech transfer enables smaller companies to get the benefits of a huge R&D department without actually having one.

Lee Gimpel is a Virginia-based writer who covers business and technology. His articles have also appeared in The Washington Post and Worth.

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This article was originally published in the December 2006 print edition of Entrepreneur with the headline: Idea Mining.

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