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Jeff Amerine, PMP Technology Licensing Officer Adjunct Instructor, Entrepreneurship University of Arkansas Advisor, Innovate Arkansas

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Presentation on theme: "Jeff Amerine, PMP Technology Licensing Officer Adjunct Instructor, Entrepreneurship University of Arkansas Advisor, Innovate Arkansas"— Presentation transcript:

1 Jeff Amerine, PMP Technology Licensing Officer Adjunct Instructor, Entrepreneurship University of Arkansas Advisor, Innovate Arkansas

2  Introductions  Technology Commercialization Overview  Export Control: Why it matters  Q&A

3  University of Arkansas Technology Licensing Office ◦ Access to 100+ technologies developed at the UA ◦ Team of business and intellectual property professionals ◦ Mission:  Commercialize world-class research to build a sustainable knowledge-based economy to benefit Arkansas and the world. ◦

4 Innovation Center 535 Research Center Blvd

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6 ◦ Patents ◦ Trademarks ◦ Copyrights ◦ Trade Secrets TM ©

7  “But they should not lose sight of innovation: managers know that the future of their businesses depend on it, and government leaders understand that the long-term growth prospects of cities and nations are tied to it. Even— perhaps especially—in times of economic turbulence, innovation remains the most important differentiator separating economic winners from also-rans.” André Andonian, Christoph Loos, and Luiz Pires Building an innovation nation, Mckinsey & Company

8 IdeationInnovationCommercialization Economic Growth Time ◦ Sustained Economic Growth = Continuous Innovation Cycle

9 Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires, Mckinsey & CompanyAndré Andonian, Christoph Loos, and Luiz Pires

10 Prerequisites ◦ Physical Infrastructure ◦ Rule of Law ◦ Government Stability ◦ Focus: World-class Technology Sector ◦ Innovation Culture Innovation Hot Spring Small, fast growing hub Reliant on a few firms Narrowly focused Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires, Mckinsey & CompanyAndré Andonian, Christoph Loos, and Luiz Pires

11 Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires, Mckinsey & CompanyAndré Andonian, Christoph Loos, and Luiz Pires Fayetteville, Arkansas Interactive “Innovation Heat Map” View:

12  Innovation-based economies will prosper  Pace of innovation accelerates and product lifecycles shorten even further  Capital and talent migrate toward innovative regions with high quality of life  Institutional unemployment occurs in stagnate regions  Government, business, and individuals compete globally based on their “innovation quotient (IQ)”*  Regional workforce education must be visionary, agile, and proactive in curriculum development, recruitment, and retention * Source: Mochari, I., (2002) The Innovation Factor: What's Your Innovation Quotient?, Inc. Magazine Online.

13  Innovation will be the key strategic global differentiator  McKinsey’s “Innovation Heat Map” shows challenges and opportunity for Arkansas  Green, sustainable technologies will drive the next economic boom  Economic growth requires early-stage funding to bridge the “Valleys of Death” in the innovation to commercialization process  Regional workforce education must be visionary, agile, and proactive in curriculum development, recruitment, and retention

14 14 Globalization, Innovation & The Export Control Dilemma

15 15 Export Control & Commercialization  U.S. government has stepped up enforcement  Universities are vulnerable ◦ Relatively easy target for the government ◦ Many schools don’t have the robust export control management of the private sector ◦ The Reece Roth case supports this increased activity, particularly since the appeals court has upheld the 4 year prison sentence

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17 17 What is an export?  An export is any oral, written, electronic or visual disclosure, shipment, transfer, or transmission of commodities, technology, information, technical data, assistance, or software codes to ◦ Anyone outside the U.S. including a U.S. citizen ◦ A “foreign national” whether in the U.S. (a “deemed” export) or abroad ◦ A foreign embassy or affiliate

18 18 What is a “deemed” export?  Export controls also cover transfer of goods and technology within the U.S. (transfer outside the U.S. is deemed to apply when a non- qualified foreign national receives the information in the U.S.) ◦ Applies to technology transfers under EAR ◦ Applies to technical data and defense services under ITAR ◦ Unless the fundamental research exclusion applies, a university’s transfer of controlled technology to a non-permanent resident foreign national in the U.S. may be controlled or prohibited (your students!)

19 19 What is a “deemed” export?  Situations that can trigger a deemed export problem include: ◦ Employees who are foreign nationals involved in specific research, development, and manufacturing activities subject to controls ◦ Foreign students or scholars conducting research ◦ Laboratory tours ◦ Face-to-face ◦ Telephone ◦ ◦ Fax ◦ Sharing of computer files ◦ Visual inspections

20 20 Who is a foreign national? A foreign national is any person who is NOT a:  U.S. citizen  U.S. lawful permanent resident (“a green card holder”)  Person granted asylum  Person granted refugee status

21 21 What types of projects raise export control concerns?  Projects that involve the actual export or “deemed” export of any goods, technology, or related technical data that is either: ◦ “Dual use” (commercial in nature with possible military applications) ◦ Inherently military in nature

22 22 What types of projects raise export control concerns?  Commercialization in the following areas frequently require export controls: ◦ engineering, space sciences, computer sciences, biomedical research (especially with lasers), research with encrypted software, research with controlled chemicals, biological agents, toxins  Tech transfer / licensing conducted with certain foreign countries or where “defense services” (e.g., “how to” activities) are provided

23 23 Scenarios that might require export licenses  Physical transfer of items of equipment outside the U.S.  Participation of foreign national faculty, students or staff in restricted research  Presentations of previously unpublished research at conferences with foreign national  Visits to your laboratory by foreign nationals  Non-disclosure agreements  Material transfer agreements

24 24 Export controls cover  U.S. Export controls (ITAR, EAR) ◦ Cover any item in U.S. trade (goods, technology, information) ◦ U.S. origin items, wherever located ◦ Exclude patents and patent applications, artistic or nontechnical publications ◦ Exclude technology in the public domain  Exports of most high technology and military items, as well as associated technologies and certain items of commercial importance require U.S. export authorization (either license or applicable exemption)

25 Potential Penalties for Noncompliance  Violations of EAR: -- Civil penalties per violation up to the greater of $250,000 or twice the amount of the transaction that is the basis of the violation -- Criminal fines of up to $1 million and/or 20 years imprisonment -- Denial of Export Privileges 25

26 Potential Penalties for Noncompliance  Violations of Arms Export Control Act (AECA) or ITAR: --Civil Penalties of Up to $500,000 per violation -- Criminal fines of up to $1 million and/or 20 years imprisonment -- AECA Debarment 26

27  Professor John Roth, University of Tennessee ◦ Sentenced to 48 months ◦ Violated the Arms Export Control Act ◦ Illegally exported technical information relating to UAVs. ◦ Roth gave ITAR technical data to a Chinese and an Iranian student ◦ His laptop and flash drive were confiscated  The university export control officer warned Roth  Interesting article; indictment, and trial brief: information-on-uavs/http://www.patentbaristas.com/archives/2009/09/17/professor-gets-4-years-in-prison-for-exporting-technical- information-on-uavs/

28 *The Violation: On January 14, 2003, Dr. Thomas Campbell Butler, M.D., a professor at Texas Tech University in Lubbock, Texas reported to the FBI that thirty vials of a potentially deadly plague bacteria,Yersinia pestis (the causative agent of human plague), were missing and presumed stolen from his research lab. The report sparked a bio-terrorism alert in west Texas. On January 15, 2003, Dr. Butler was arrested. Among the numerous charges of which Dr. Butler was found guilty at trial, two were export control related: making false, fraudulent and fictitious statements regarding the exports to federal agents and making an unauthorized export to Tanzania. Dr. Thomas Butler *”Don’t let this happen to you. Real Life Examples of Export Control and Anti-boycott Violations”, U.S. Dept. of Commerce, Bureau of Industry and Security Export Enforcement, April 2005

29 29 Exclusions/Exemptions from Export Controls  Fundamental Research  Public Domain  Educational Institution activities  Full-time employment (ITAR only)

30 30 The Fundamental Research Exclusion from Export Controls  Applies to: Unrestricted publicly available technology and software arising during or resulting from – or NSDD 189 says the “conduct” of – fundamental research undertaken in the U.S. at accredited academic institutions.  Where the resulting information is ordinarily published and shared broadly (EAR 734.3, ITAR ).  Protects most campus-based research at U.S. universities from export controls.

31 31 What does this mean for a university?  Allows U.S. universities to include foreign faculty, students, visitors in research involving creation of controlled information on campus in the U.S. without a license  Once created in fundamental research, the information may be transferred abroad without restriction once it is in the public domain  Fundamental research information is public in nature and is excluded (not just exempted) from controls

32 32  The University accepts any contract clause that:  Forbids the participation of foreign nationals;  Gives the sponsor/licensee a right to approve publications resulting from the research; or  Otherwise operates to restrict participation in research and/or access to and disclosure of research results.  “Side deals” between an inventor and a Licensee  Startups involving the inventor

33 Federal Websites  BIS - ◦ EAR database – Commerce Control List  ITAR -  OFAC -

34 34 The Bottom Line…  Intellectual property and technology are the jewels of the global economic arms race.  The US government is dead serious about protecting our assets.  When in doubt, ask for help.  Non-compliance due to ignorance is not a defense.

35 Technology Commercialization & Export Control Jeff Amerine, PMP Technology Licensing Officer Adjunct Instructor, Entrepreneurship University of Arkansas Advisor, Innovate Arkansas “Techpreneurship Blog”


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