Grants for Funding University Technology Transfer Introduced in Congress

by McDonnell Boehnen Hulbert & Berghoff LLP

[author: Kevin E. Noonan]

Washington - Capitol #5Companion bills were introduced in Congress on April 25th of this year with little fanfare (particularly in comparison to the Leahy-Smith American Invents Act) but they have the potential to provide significant funding for university-related start-up companies.  The bills, H.R. 4720 and S. 2369, are entitled the "America Innovates Act of 2012" and are sponsored by Reps. Rush Holt (D-NJ) and Timothy Bishop (D-NY) in the House of Representatives and Sens. Frank Lautenberg, Sherrod Brown (D-OH), and Kirsten Gillibrand (D-NY) in the Senate.  They have been referred to their respective committees (the House Sub-Committee on Technology and Innovation and the Senate Committee on Commerce, Science, and Transportation), but to be frank it is unlikely that they will receive positive action in this election year.

The bill provides for the U.S. to establish an American Innovation Bank as an "independent agency," (Sec. 101(a)) that will "promote the commercialization of science and engineering discoveries" (Sec. 102(a)) by "provid[ing] grants, loans, and other assistance to eligible entities and individuals to enable the entities and individuals to perform the necessary research and development to make research discoveries attractive for private investment that will lead to the development of new companies, products, and jobs." Sec. 102(b).  There are provisions for a Board (Sec. 101(b)(1)) and a Director, appointed by the President with the advice and consent of the Senate (Sec. 101(B)(2)); the Board will "advise the Director on new and emerging areas of research and industry that would benefit from investment from the Bank" (Sec. 101(b)(3)(A)) and "critically evaluate the success of the Bank's investments in helping to commercialize scientific discoveries and create new companies and jobs." (Sec. 101(B)(3)(B))  The bill also provides for annual Reports of its activities to Congress (Sec. 103(a)) that will include at a minimum the number of patents, products, new companies and jobs resulting from Bank investments (Sec. 103(b)).

Grants will be available to "eligible entities" (Sec. 104(a)) that will include "institutes of higher education" as defined by section 101 of the Higher Education Act of 1965 (20 USC 101), Sec. 104(B)(1) and "nonprofit research institution[s] that focus[] on science research" (Sec. 104(B)(2)).  The grants will be awarded "on a competitive basis" (Sec. 104(d)) in life sciences, medicine, computer sciences, communications, technology, physical sciences, engineering and "[o]ther research areas determined important for economic development by the Director" (Sec. 104(d)(1) – (4)) and using a priority system that awards institutions already receiving "a significant amount of Federal funding" from the National Institutes of Health (NIH), National Science Foundation (NSF), Department of Energy (DOE) or "other agencies" (Sec. 104(e)(1)), that "do not have a significant proof of concept fund already established at the entity" (Sec. 104(e)(2)), have "established relationships" with business and industry that can commercialize the technology and "may be" local industries (Sec. 104(e)(3)), that have "an institutional environment that is supportive of business development" (Sec. 104(e)(4)(A) & (B)) and "demonstrate the appropriate administrative capacity" to encourage patenting, companies, products or jobs from the grants (Sec. 104(e)(5)).  Decisions on grants will be made by an advisory panel of experts, both business leaders and scientists, who will make recommendations to the Director based on grant applications submitted by prospective awardees (Sec 104(c)).  Funds may be used to support the scientists performing the research as well as further research or data collection directed to making a discovery "more attractive" to corporations or venture capital firms (Sec. 104(f)(1)(A)), for facilities and business incubators (Sec. 104(f)(1)(C))  and to attract additional private investment (Sec. 104(f)(1)(D)).  The bill also contains additional provisions governing subgrants to individuals (Sec. 104(f)(2)) and for facilities construction (Sec. 104(f)(3)).  And of course there are provisions for Reports from grantees for each year during the grant period as well as for 5 years after the grant period ends (Sec. 104(g)).

In addition, the bill provides for direct grants to individuals (Sec. 105), governed by many of the same considerations and requirements for institutional grants (Sec. 105(a) – (c)), as well as grants to private companies in the form of loans "at competitive interest rates" (Sec. 106).  But when the government giveth it can also taketh away, under conditions where the grantees "do not use such grants or loans to make reasonable attempts to develop discoveries into new companies, products, or jobs" and can require repayment, as provided by Sec. 107.

Section 201 et seq. sets forth provisions for "improving science and technology" by amending Section 510 of the NSF Authorization Act of 2010 (42 USC 1869) to permit the NSF to award grants under the Integrative Graduate Education and Research Traineeship (IGERT) program to support students who perform "some or all of their graduate research in an industry setting." (Sec. 201).  In addition, the bill provides that NSF, NIH or any other Federally funded graduate student training program must provide students with training related to protecting intellectual property, commercializing inventions and developing scientific discoveries (Sec. 202(a)-(b)), exempting institutions of higher education that enroll fewer than 6 students (Sec. 202(c)).  The NSF Authorization Act is further amended to award grants for "professional science masters programs" (Sec. 301).

The Bank is intended, among other things, to help companies navigate the "valley of death" where university-related start-up companies go through initial funding monies before having sufficient experimental results to attract venture capital or large company investment or commercialize their products.  One of the bills' proponents, Senator Gillibrand, called the bill "common-sense legislation [that] will help develop scientific breakthroughs into cutting-edge businesses and new jobs."  That kind of promotion worked well for the AIA, and could be the ticket for accelerating consideration of the bills before November.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDonnell Boehnen Hulbert & Berghoff LLP | Attorney Advertising

Written by:

McDonnell Boehnen Hulbert & Berghoff LLP

McDonnell Boehnen Hulbert & Berghoff LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.