GMU Intellectual Property Webinar, Nov 5 2020
Links: Video of the event. Listen to the audio on Acquisition Talk. Here’s a write-up.
Moderator: Jim Hasik (George Mason University, Center for Government Contracting)
Panelists: Shay Assad, Richard Gray, Kelly Kyes, Bill Elkington
Jim Hasik: [00:00:00] I think the history of it goes back, that is to say the question of whether or not government and military should own the, property rights to the intellectual property, that underpins the fairly complex systems often come with systems advice that goes back to, at least to the year 1900 when the US Navy and the world Navy were illustrated in [Katherine Epstein’s] book for a few years ago, we were struggling with the idea of, how much of the secret sauce behind the torpedoes totally new weapon system, they were trying to buy at the time — they should actually own.
Fortunately, we got two things to work with. We’ve got a great panel of people we’re gonna talk to. I am, I think, as you mentioned, senior fellow here in the center of no contract with, in the school of business at George Mason, how we’re going to be talking with, of course, first Richard Gray, who is the effectively, the IP czar for the defense department.
If that’s a good way to put it. and a member of the 813 panel, governance industry advisory panel on technical data rights. I’m just told that, if I’ve been looking for the report, I’m told just now that it’s available on the [00:01:00] NBI website, my rep that after the talk, Richard also teaches in the government contracting program, at another university named George Washington, in, I’ll call them our Crosstown rival across the river.
we have Shay Assad, the former director of defense pricing at the Pentagon who also ran, acquisition policy for the Pentagon, in the, former role of basically as the pricings are, whose wants described, like to say as the most hated man in Washington, Shay told me the other day.
I think that just meant that I was trying to get a good deal. I was trying to wield some of the better buying power than previous administration. had told me to go after and it seemed pretty reasonable. I know we’ve got Bill Elkington, was a former IP executive at Collins, aerospace.
I remember the one, three panels. And with Kelly Kyes from Boeing, who, runs IP, strategy for Boeing company. It’s a company with, with a lot of IPS, at least both on the commercial side of life. And on the government side hopes, you should be able to give some perspective about how things differ between, dealing with, [00:02:00] I’m an optimist, any given government, with respect to weapon system, certainly us, government’s a pretty big one, and dealing with commercial customers and we’re going to be suppliers. I want to talk about what prompted us to get this panel together.
Does it matter? Does it matter if government owns the intellectual property rights, to say weapon systems that it is, or even any system complex system that it procures over a long period of time? What can you do with those rights? Can you leverage it into better prices? And so if you had a chance to read the paper, the case that I looked at was something pretty, mundane trucks, military forces by trucks, U S army Marine Corps that buy trucks after the cold war.
And they decided that, they needed to replace their trucks, which they prosaically referred to as medium tactical vehicles. So the, us army decided, we were going to buy a whole family of medium tactical vehicles and we’re going to call it the family of medium tactical vehicles. And in the process of buying, these vehicles, they actually managed to [00:03:00] procure as well, the design rights, they had the rights based.
Most of the design behind the trucks they were buying, and in parallel the biggest Marine Corps, because it had somewhat different requirements, reasonably settled. They decided we need to replace our medium tactical vehicles. So we’re going to launch a program called the medium tactical vehicle replacement.
And. But this time we’re going to, when we buy them, we’re not really too concerned about buying, getting IP rights. So in one of those, programs, the FMTV, as they say, the we’ll see army trucks, the army truck program was recomputed. Which is to say, after buying five years of trucks, we went out and said, Hey, we’ve got the design rights because somebody else built before us and a contractor, as it turns out the Oshkosh corporation managed to take the contract away from the incumbent, the folks who had developed the vehicle and who’d sold the design rights to the army, and in the process, the government saved about 9% on each truck that is bought, but
Jim Hasik: when the Marine Corps bought his trucks and bought it again [00:04:00] from Oshkosh and they did not get the design rights. So they didn’t have an opportunity to recompete that program. They had to continue going back on sole-source contracts.
I’m going to come close this story by saying that the army eventually winds up buying, some of its trucks on a sole source contract and the Marine Corps winds up buying some of those trucks on a sole source contract. And so you might wonder, if you’ve got the IP rights, maybe you can leverage it for a better price if you’re going to hold the competition. But there’s a concept and economics called dynamic limit pricing where, maybe, somebody who has an effective monopoly on something will gradually reduce the price just to ensure that nobody tries to get into the market. Did this happen with trucks, well looking and divisive, fairly careful pairwise comparison of certain, lots of trucks for certain lots of trucks.
And what I found was that, The army paid, going from a competitive contract with sole source contract for the same stuff for [00:05:00] the very same vehicles paid on that sole source contract, 24% more two years later. In the Marine Corps where the government did not have the rights to do a competition, they won’t to pay for their trucks.
20% more. It’s a remarkable result to me. It’s to me, it was almost shocking that not only did the price go up by that much, but actually holding the design rights, at least in that one set of comparisons didn’t matter. Now maybe I should be shocked, captain Marino in Casablanca, but so I’ll ask, I’m going to go to our pricing zone.
I’m going to ask Shay, you ran pricing for the Pentagon. should I be surprised? Should I be shocked? Should or is this not an unusual result? And does it, or maybe doesn’t have too much to do with IPR?
Shay Assad: Yeah, I don’t think it should be shocked at all. the reality is that, I think, the initial price that was paid really was a function [00:06:00] of the company’s desires to win the competition and be very aggressive in their pricing.
and, both of them probably assumed irrespective of whether the government bought the data rights or not, that it wasn’t going to be competed, which meant that. they were able, they were going to be able to propose their costs and recover a reasonable profit on that. And that’s okay. sometimes we go into these competitions, even though the government.
They really don’t ask all what companies quote, unquote to buy in companies will. And there’s nothing illegal about it. Just the way it is. we’ve actually had some companies bid zero to supply a product in an initial competition because they wanted to get into a marketplace. the fact that the price went up, approximately the same, four points. [00:07:00] Isn’t a huge variation, was probably more a function of the companies trying to recover their cost and, and get a reasonable profit on that cost and, who you really have to look at is both the Navy and the army and say, were they competent?
Did they negotiate A fair price? and my guess is they probably did, thinking of a reasonable cost plus a reasonable amount of profit on top of that. they probably thought they were right. and what you’re measuring, what would be more interesting to know is you’re measuring a price index.
The real question would be what was the profitability based on the actual cost that it took. Either were the two vendors to build that product
Richard Gray: subsequently.
Jim Hasik: Yep. That is it’s hard for me to get. Definitely.
Shay Assad: Yeah, we had it, but you would. but the, I started to think about this [00:08:00] more and more.
And the challenge, as we go forward, the environment that you were looking at when you looked at the trucks, and I probably participated in somewhere between 15 and 20. Dual source competitions with missile systems and radars radios, you name it. I was involved in it, but my perspective was from an industry perspective, not involved as a government employee and, during those competitions, a good part of those products were being built by those companies, That were competing by the primes. That world has completely changed. and the reality is the primes manufactured very little, for the most part, they assemble, they don’t manufacture. And so what that means is we, as the government need to do a much better job of understanding who [00:09:00] actually owns the intellectual property.
Is it the prime or is it the subcontractors? And when I buy intellectual property from a prime. Am I getting the sufficient intellectual property from the subcontractors. And then a further complication of that is that we’ll looking as the government to expand our commercial opportunity space. We want more technology in our space.
What that likely means is that, you’re going to be dealing with a company who received no assistance whatsoever from the government, in terms of the generation of their intellectual property. Whereas a government contractor effectively recovers a hundred percent of their I R and D expenditures, and they do [00:10:00] it in a very short period of time.
now when we start to add on to that competing commercial companies with what I’ll call traditional defense contractors, you have a very uneven playing field. You have a defense contractor who’s been completely reimbursed, but their I R and D and sometimes reimbursed for the R and D directly.
Or the R and D directly. And you have a commercial company who took nothing, but a total and complete risk and used risk money to fund their I R and D totally different world. So as we move forward, a lot of our traditional thinking. About intellectual property is going to have to change because, we’re going if we’re successful.
And we being the government, I’m a retired employee now, but I’m not speaking for the government. But if I was in the government, I would be trying to make a thrush to get [00:11:00] more commercial participation, to get advanced technologies from commercial companies. That’s going to mean that we’re going to have to.
Radically change our view of how we acquire intellectual property and who has it. It’s going to be quite a challenge for both the companies , and . Take on top of that. How are you going to run the program? 15, 20, 25 years from now? How are you going to spirit?
Who’s going to supply the spares. Are you okay. In a commercial environment? And that takes an examination of the technology to say, is there going to be competitive pressures in the commercial marketplace that are going to control the price of their participation with the government?
Because the government is not going to be the driver. Of commercial pricing, right? It’s going to be the commercial marketplace, [00:12:00] if it’s truly a commercial item and then add on top of that, not to make it even more complex. Jim, this world of commercial of a type, which is really a defense item that people get to call commercial items.
And this is really a complex environment. And it’s going to be a challenge for you and other academia when they’re looking at history because, an important element of that is going to be to try to understand, what was the make by composition during these particular competitions?
we’re with a company supplying the product, and for example, in the eighties, The companies built their own printed circuit boards. They had their own fab shops. They did all of their fabrication internally. there were only situations where there was a very unique skill that didn’t [00:13:00] exist within the company.
For example, clash grinds [?] and things of that nature, where they would go outside the company to buy them. and, but the companies were motivated at least in that timeframe to keep things in house that’s turns out to check, right? you look at most products we buy the supply chain is really manufacturing the product and the prime contractor is assembling it. That’s what’s going on.
Jim Hasik: That’s a lot. That was great. Let’s see. Let me try to pull part of that out. And pivot over to Richard, cause I’d like to, folks currently in government, or our program, our fellows currently in government, a chance to put, to build on that, to respond to that. Richard, I use her, she was saying, it’s a 24% price increase depending on how badly they were doing before, how much money they were losing, that might not be a reasonable.
And it’s certainly not shocking. and indeed that’s procurement. Maybe you need to worry about is also [00:14:00] saying, is, when I buy a car, if I keep it for 10 years was keeping it a long time. the government, the army buys a truck and they keep it for 10 years and ditches then that’s would be very strange.
It tends to hold onto these things for a very long time. so sustainment and obsolescence is an issue. Can I ask what, so what is your office interested in. Maybe which side of that, which end of that time horizon. And, are we getting some reasonable results? And if so, where are we not?
Richard Gray: thank you. I think you, in some meaningful respect, you provided my answer in the first five seconds of your question, which is, the way we’re approaching this is I’m turning first regarding the detailed, financial analysis to people just like Shay, in fact, A couple of years ago, I would have turned literally over to Shay and asked for assistance in that portion of the detailed analysis.
Nowadays, we have other folks Shay successors that I would rely on it. And you mentioned at the [00:15:00] beginning that the intellectual property, the new intellectual property cadre office, that we’ve stood up within the acquisition and sustainment, division is, to be more clear about what that is. It really is a cross-functional team.
With expertise from, legal contracting engineering, fiscal sustainment, program management, you name it. we are trying to tap into all that expertise. So we’re really looking at full spectrum. Everything that you mentioned in your question, we’re looking at. I do think that one of the biggest challenges that we have , is recognizing that when we’ve been saying for years, we have to have IP strategies.
For our programs and we have to do them early, but we can, I need to find a much better way to have meaningful engagement with industry, to talk about business models, business plans, and be able to predict for the longterm. So we’re really are looking at not just this initial production and maybe the follow on production, but we’re really looking at the entire sustainment tail, for that [00:16:00] program.
and until we hear differently, competition, in appropriate ways and appropriate manners, with full understanding, and. Respect for privately developed intellectual property, while understanding that when we’re funding or co-funding the development of intellectual property, we have to be able to get our return on investment as well.
And one of the primary ways we do that is by having the ability to energize and insert competition in appropriate. components. I’m going to go ahead and relieve, Kelly of the obligation of saying it later. I’m just going to go ahead and say MOSA early on and get it out of the way. A modular open systems approaches is going to be one of the ways we are approaching this.
Complicated concept of whether the IP is generated by the prime at the subcontract level commercial noncommercial, DOD funding, no DOD funding. there is a, a great spectrum of different intellectual property, rights. Implications business models that are coming into any complex system changing [00:17:00] over time.
And one of the ways that we’re going to try to accommodate that is by taking a modular approach, try to engage with our industry partners so that the government’s intellectual property strategy and the private sectors intellectual property strategy for any given program are synchronized, if nothing else, at least not inconsistent, aware of each other and able to understand how they relate to each other.
And I hope that doesn’t sound too philosophical, but, that’s a big part of what we’re going to be doing. And we’re heading into, I think, an unprecedented area where we’re going to have, routine, more robust, more detailed discussions and engagement with industry to be able to discuss these issues early and have these hard discussions about how is your intellectual property strategy, allowing us to have appropriate competition downstream, where frankly, you might not want us to have competition, but we do.
Jim Hasik: let me pivot on that last thing you said, because, you said that, we’d like to have government [00:18:00] and industries IP strategies synchronized, or at least they shouldn’t be in conflict.
so if I think, I’m trying to rewind game theory here, but if you’ve got, that suggests we can devise perhaps a cooperative game rather than a purely competitive one where there’s some, we, when did he achieve, if we have, if we have opportunities to succeed together. Okay. Bye. Bye.
Deal with IP, on the same amount with the same mindset. Let me ask Kelly, how would perhaps, , where do you find those opportunities for synchronizing IP strategies?
can you think of a program where you’ve done that recently? Or can you think of a program where, Oh gosh, I really wish. We’ve been able to do that, or is this a bit of a pipe dream? is it really just, or maybe is it a zero sum game and, we are going to have difficulty finding those win-wins you tell us.
Kelly Kyes: So I definitely don’t think it’s a zero sum game. I think, that it, we can’t approach it in that way. I think what Richard described, about having early conversations earlier in the life [00:19:00] cycle, I think that’s absolutely necessary. having dialogue around, what. The government’s objectives are what their needs are as expressed in the life cycle, sustainment plan, industry wants and needs that information.
we’ll use that to adjust our business strategy, our proposal strategy. also , we might take that information into account in making future investment decisions. I think that dialogue is, Critical in that regard. at the same time, I think, there is definitely inherent tension, between the competing business models.
I will just describe it that way because that’s how the 813 panel described it. And one of its. early tension papers that, that you can find them in the paper if you’re interested in looking at it, but the paper does explore some of that tension between the government’s needs for competition and sustainment and industries specifically, OEMs needs to recoup their investment and generate a reasonable return on that investment.
and [00:20:00] so there’s, I think, healthy tension there. that I think we’re always going to have, right. We’re never going to completely see eye to eye. Don’t think. I think it’s definitely, possible and necessary to identify win-win solutions surely. and I think we can identify those solutions.
I will say, I do want to compliment the department because I have observed, and my colleagues have observed this emphasis on earlier dialogue. It is happening. we do have some programs where those discussions about, the IP strategy are occurring in the technical maturation and risk reduction phases, going into, development.
And I think that those are great conversations to have earlier. I know for a couple major programs, there were also, RFIs that were issued that were specifically. Focused on, data rights. how do you define certain terms? how would you define omit data? how would you define form fit and function data?
topics like that, I think are good to get on the table early and have that dialogue and then follow up on those discussions and industry days. And also, in responding to draft [00:21:00] RFPs.
Richard Gray: , would be happy to pile on that. One thing that, I think we also need to mention early, a mechanism that we are going to start seeing more and more frequently that will support and facilitate. This early discussion and long-term planning is, we will soon be looking at the implementation of a statutory preference to have specialty use specially negotiated license rights for both come non-commercial and commercial scenarios.
That essentially by definition is going to drive us to the table to sit down and discuss things and plan for, creative, philosophical, potentially complex, potentially changing over time forms of license, escrow arrangements. There’s going to be all sorts of things that we’re going to have to be discussing, to try to have tailored, agreements rather than relying on the more traditional approach of just sitting back and working within the default or standard license rights that the default specifies, which doesn’t do us any good.
When we’re talking to a commercial non-traditional defense contractor. [00:22:00] Sure. And so that’s going to be something we’re going to see, and that’s going to change the way we engage on intellectual property manners by trying to negotiate more specially tailored deals, as a routine matter, in fact, having a preference for it.
Jim Hasik: Richard, since you’re the law professor and I’m just on the business faculty, can you remind me where, where was that statutory preference passed?
Richard Gray: it’s codified in the main technical data statute, 10 USC, 23, 20.
Jim Hasik: Cool.
Richard Gray: it’s it’s paragraph F I believe off the top of my head.
Jim Hasik: Look up. Oh, go ahead. Sorry, Kelly.
Kelly Kyes: Just to follow on to what Richard said, it’s making its way through the rule-making process. So there was already an advanced notice of proposed rulemaking issued. Last year, there was a public meeting, which again, I’ll just. Again, take the opportunity to compliment the DAR council on utilizing advanced notices of proposed rule making and public meetings to enable the dialogue between industry and DOD, specifically on topics [00:23:00] like data rights, which is just inherently so technical.
I think it has really been. Value added to enable that dialogue and really enable the listening and the understanding of what the concerns are and the needs are.
Richard Gray: And Jim, the whole panel, everybody, that’s an issue. I appreciate Kelly’s saying that because setting up those public meetings, using this new approach for advanced notice of proposed rule making.
Public meetings and then followed up by the normal rulemaking scenario where we’re, again, having more public meetings is one of the ways that we have, or are demonstrating this commitment to have unprecedented levels of engagement with industry early on, not only in making individual business deals and thinking about program planning, but actually revising the entire regular implementation of the regulatory and statutory scheme.
And it’s, we are doing that approach for every single, DFARS data rights case that we have, and we have seven of them, I think, running in parallel right now. that’s just one of the examples,
Shay Assad: in terms of, if I could make a [00:24:00] comment in terms of the valuation of IP, and, how it’s treated in a competitive environment.
One of the things that the government’s also going to have to do is, change its view of, How it deals with commercial companies who are competing with defense companies. for example, I know that, in a number of competitions that we have held in the government, especially as it real related with the use of, some OTAs, where cost sharing was involved, basically, the way it was being treated was that the commercial company had to take money out of its pocket and actually cost share where the defense contractor could use. It’s reimbursed. I R and D as its cost share. and that’s about as unlevel playing field that you can have.
And so we really do need to step [00:25:00] back, as government and industry, because you know what we’re after. And I can only speak from my historical perspective, not only as a government employee, but as a major defense contractor, they want a level, everybody wants a level playing field and we need to rethink.
How we’re dealing with not just the intellectual property, but how the intellectual property came about and how companies are being treated, when they’re being expected to make core shifts, especially in an, in a research and development environment.
Jim Hasik: Yeah. Then I’m going to get funded by government to do something.
And I’m not risking my own money. I should say. I think you’re saying I should expect a certain return on that. Non-investment if you will, or lower investment. And if I’m, I think you were saying earlier, if I’m betting some serious coin, something that I have reason to expect completely different returns because the risk is adjusted.
Shay Assad: Yeah. [00:26:00] and if you’re expecting me to cost share, if not only do I have to bring my own independent research and development, but then I have to take more money out of my pocket to cost share. When I’m dealing with somebody who’s taking their I R and D that’s been government reimbursed, and they’re using that as the cost share.
That’s not quite level, right? That’s not a level playing field.
Kelly Kyes: I think from a defense contractor perspective, we would not agree that in all cases, that it isn’t a level playing field. I think you have to really assess what it is that you’re developing in the OTA, because if you’re developing a product or service, that’s intended.
Primarily for a defense application then I R and D is the color of money that you’re going to utilize to develop that technology. Because if there’s no commercial application for the technology, then if I develop that out of profit, which is what Shay was describing, then if I can’t make a commercial sale or a direct [00:27:00] commercial sale, then there’s no way for me to recoup that investment because the cost accounting standards don’t provide for that, recoupment vehicle other than through IR&D.
so to some extent, I, it is challenging when you’re looking at, commercial companies who are non-traditionals, who generally, work in the commercial space versus traditional defense contractors. I will say that, there are, A great deal or maybe not a great deal, but there are, some many prime contractors and middle tier contractors playing in both spaces, right?
So Boeing is not the only company that has both a commercial and a defense, division, as part of our portfolio and other defense contractors are the same. And I will say that the investment decision-making is different in commercial and defense. But also the profit right. Is different as well.
So in the commercial space, you don’t have the, the, duty profit policy. You don’t have a, a FAR or DFARS regulations that you are complying with. and the defense. [00:28:00] World. Yes. As Shay has alluded to, there’s much better cashflow, right? but I think that the risk proposition associated with that commercial and that defense investment is reflected in the profit margins across commercial and defense.
Shay Assad: But I think you would find surprisingly so that the profit margins of many commercial companies are in fact lower than defense companies. So it doesn’t necessarily hold true. That just because I’m a commercial company, I, because of the competitive market, it, the marketplace, ideally, if I’m a, if I’m a commercial company in a sole source environment, I’m able to do some things, perhaps that really increases my profit margins.
But if I’m in a competitive environment and I’m talking about the industrial sector, I’m not talking about. Apple and Facebook and all that stuff. I’m talking about people who build things, or [00:29:00] manufacture things. It’s a very different profit margin scenario. It really is.
Jim Hasik: Let me ask bill, I want to go to bill because, telling me saying, Hey, it’s not just us.
There are a lot of, middle tier companies that sell the government and also sell the us, I think maybe Collins, aerospace, where he used to work. Is one of those, is it different? if you’re in the middle of the supply chain and you’re not actually making jet aircraft, but you’re making stuff that goes on, say jet aircraft and also selling to the government through the subsystems. BIll?
Bill Elkington: So I guess the business model, this came up on the 813 panel on a number of occasions. Is really fundamental to, understanding what’s going to work for companies and, for the government. And often you’ll have a business model where people will put huge quantities of profits into the [00:30:00] development of some new or modified system or subsystem.
For commercial sales and then, and then want to provide the benefit of that to the government, through sales of a modified version of that system or subsystem, to DOD. the issue arises when, one of the issues that arises in the discussion is. At least in the past. my experience that the DOD program office will insist on or will try very hard to get government purpose rights to the intellectual capital in that commercial system that, is being modified and often the modifications, can be quite.
trivial from an investment point [00:31:00] of view. So I recall one system that, one of my former employers I’ve worked in aerospace and defense for all my career and worked for GE and [?] before Collins aerospace. And to some extent, this is true of them as well, that, in one particular case, I, we had, an investment program that ran to about a billion and a half dollars for a product line and some of its variants.
and the government was gonna pay us something in the neighborhood of a hundred million. To do modifications and testing. And about half of that money was really for testing. and so the attitude of the program office was that they should get ownership, like rights GPR to all of that commercial investment, along with the investment that [00:32:00] they were going to be making, of about 50 million.
So this seems, back to Richards, we’ve had these conversations for years that the sense of the equities here just doesn’t add up, and you say, the government can’t really make use of, if it gets GPR to the stuffs that it. payed for it. Can’t really make use of it because if it can’t get a GPR and everything else, the system, then it’s dead in the water.
And the answer is, that’s the way it works on the commercial side of the companies. you have, we have customers that want variants and the variant would only be for them. And it isn’t saleable to other people. And so you have this business model that really is.
Tailored to modifying something, a product or a set of product that have been developed for [00:33:00] a lot of money. and the idea is to modify that product suite. To meet the specific needs of each of the customers that comes along. And if you don’t see a benefit generally to that modification, you will often say to that commercial customer, we’re happy to do it for you, but you’re going to have to pay for it.
And then they want all kinds of rights. and inevitably you end up saying, no, you can’t have all kinds of rights. Because our business model would go South.
I did want to mention that. I do think having at the table in those early discussions, experts in valuation of IP rights is critical because in order to assess. the very question that Jim raises in his paper, how much good [00:34:00] is it really going to do us to get these rights? You want someone there to be able to do the financial analysis?
And I’ve dealt with people that are in finance departments, for many years, And they just don’t know how to do this generally. that’s my personal experience. I’m not saying nobody in a finance department anywhere. I’m just saying my personal experience is that people in finance are not
there. They’re certainly educatable. But yeah, they don’t necessarily know how to do an assessment. A fair-minded objective assessment of the value of intellectual property rights,
Jim Hasik: They’re not often IP valuation experts.
Shay Assad: I think to amplify what bill is saying, one of the other things we have to place a value on, it’s very complex.
What we’re talking about is really [00:35:00] complex, but you got to place a value on the time benefit. Of having a company coming forward with a product that’s ready, made. I don’t have to go through a development. and so not only am I not spending the money for the development, I’m not taking the three years or the four years or the six years or however many years it would have taken to develop and qualify that subsystem.
yes, it will have to go through some degree of qualification, commercial, not got that, but we have to now start to expand our view of the value of intellectual property from the benefit of the time value of the product itself. And how quickly can I get it to the field? what is it doing to help me?
provide additional capability to the war fighter quicker, at the end of the [00:36:00] day, if I’m still going to get it to them 10 years from now, then, it’s not going to have as much value to me, but if I’m under the gun to get something into the field right away, then you know, the value of that, providing that commercial product in its end state or near the near end state. Becomes really important
in essence, what we’re trying to do, Is we’re trying to buy commercial products that have already been developed. and have a logistical supply chain in place already.
So that we don’t have to make those investments. as Richard and his team steps back from this, they’re going to have to evaluate well, what’s it actually costs to develop this. That’s one thing, if we decide to do [00:37:00] it ourselves, secondly, am I really getting a benefit by having the product right now?
Versus what, what are the pluses and minuses of? If I just go develop it myself versus get a commercial product, if the answer is well, you’re getting a unique technology that no other company presently has. And that’s it. that puts you in a very different environment than one that says, there are quite a few companies that could probably develop something like
Richard Gray: That point is critical, who else is out there and what are the other options that are available in this hopefully competitive environment? And so one of the other things that we’re about to see, and I don’t think I mentioned it yet, but we are just now kicking off a multi-year, pilot program. To study intellectual property evaluation and major programs that by statute requires us to incorporate, commercially available, IP [00:38:00] valuation techniques, the maximum extent practicable to evaluate those and to engage with industry as we’re doing so.
So for the next four years, we’re going to be doing reports on this and in doing studies on this. And so having these discussions and being able to understand. What products are available. Who’s got what. The relative merits of this company’s approach versus that. Who is more mature. Who’s where’s the risk.
I think it builds scenario. There was a hundred million dollars of testing to occur for that particular scenario. That’s something we’d like to think about as well. but just being able to have those discussions in a candid manner . And for us, let’s be honest in a competitive environment is where we want to have that discussion.
but being able to talk about those business models and rec and talking about investment return on investment and how that all plays in, simply having opening that dialogue and being able to have hard discussions and the competitive environment is one of the things that we’re going to be seeing a lot.
Kelly Kyes: I’m curious if the, is the pilot program focusing on just contracts, are you looking across, [00:39:00] contracting vehicles to include OTAs and, the like.
Richard Gray: It’s focused, primarily it’s on programs. so we’re looking at where we’re identifying programs that will be, for lack of a better way to say it participating as named programs where we’re going to look at what’s been happening, look at evaluation activities that are occurring, do some testing on, innovative techniques, but we’re also going to be it’s as part of this pilot be doing a more across the board review of what the department is doing across its programs and looking at all sorts of instruments of waste that occurred because the concept, one of the first questions for this pilot is what do you actually mean by IP evaluation? You don’t just mean in a competitive source selection, right? there’s tons of other scenarios in which evaluation occurs. Sole source negotiations is an obvious second, second listing, for example, and it’s not just procurement contracts, right? it’s OTA is it’s any other instrument we might use in developing feeder technologies, inserting tech to prototype projects, it’s starting technologies downstream, et [00:40:00] cetera.
Bill Elkington: yeah, and I would mention, and I’m pretty familiar with, Bunch of specialty companies that do this kind of thing. and, they are, generally not familiar with the DOD procurement environment, the language. And the meaning and even how to think about valuation, that context. I have high regard for these companies.
and I know principals in between a half, a dozen and a dozen of them, and they’re very good at, what they do, but what they do isn’t valuation of intellectual capital rights in a DOD context. so when we are talking about this, we do need to have, people who actually know how to do this stuff have experienced doing it, [00:41:00] understand the language of DOD contract and what the rights are, what the meaning of the rights.
Richard Gray: bill, I couldn’t be happier to have you make that a point that it’s not just grabbing a commercial valuation technique that’s designed for a purely commercial to commercial transaction, and then saying DOD, you should use that approach. It’s gotta be adapted. It’s gotta be, evaluated. And that’s really is one of the core elements of this pilot has, because this was one of the recommendations of the 813 panel.
Kelly Kyes: going back to what bill said earlier about the fact that you typically don’t have people in, on, in, on your finance team, if you’re a defense contractor who are evaluation experts, and I just wanted to make the point that the primary reason for that is that historically.
Defense contractors are using their own IP to provide products and services. So generally speaking unless, the government is asking for broader rights than they would otherwise be entitled to under the law and applicable regulations. you would just essentially be asserting whatever rights category lines up with the [00:42:00] funding test.
If it’s non-commercial technology. I do think that initiatives like MOSA — do you place emphasis on valuation? Because now there are opportunities to now take like a software product that one company might have that might be, the best. Whatever, software solution, that’s out there right now and then say, okay, maybe there’s an opportunity to, make a sale of this software to get it on somebody else’s platform.
I think those are the types of scenarios, which are really more analogous to the commercial market, where you now have an opportunity to develop a business model on a product that you’re no longer just going to embed in the system you’re offering to the government, but rather. Essentially possibly licensed it to the government so that they can provide it to others or to license it to your competitors that are out in that space.
I also wanted to go back to something Shay said about, the state speed, and, flexibility. if you, you have somebody who has this cutting edge commercial technology that nobody else has. that’s really why the other [00:43:00] transaction authority is available. it’s force-feed it’s to enable that flexibility.
and to enable the parties to take those considerations into place when negotiating IP, at the same time, I, going back to Shay’s comment about leveling the playing field, I do think that Congress took that in consideration when establishing the prototype authority for OTAs, because.
If you’re a non traditional contractor or you’re a small business, you actually don’t have to provide a cost match, for prototype OTAs. but if you are a traditional defense contractor, you do have to provide a cost match. And I think that was one of the ways that Congress leveled that playing field by saying traditional defense contractors.
You can participate in OTs as well, but you are going to have to bring some funding to the table in order to do
Jim Hasik: I’ve got, two questions from the audience that I wanted to work in. one comes in specifically for Shay and, the question goes back to the bit about, loss-leading contracts. And, so the question we’ve got is that it seems like Shay is saying that it makes sense [00:44:00] for companies to bid unrealistic money, losing prices, to win contracts, assuming that their IP rights will hold and provide them extemporizing here — provide them a bit of a monopoly monopolistic advantage to a certain extent in fall on contracts.
but then the actual price discovery doesn’t occur until, and that leads to a material and perhaps even expected increase in costs, but he wants to know the question or wants to know. does that make sense? you should price discovery ideally occur earlier and does it make sense for the government to get the good deal up front?
Does it make sense for going to companies to buy in. this is legal, of course. as I recall, it has stood up to, the challenges in indeed, even in the FMTV program, to GAO challenges. what do you think Shay is this? Yeah,
Shay Assad: I think somebody may have misunderstood what I said. The government, at least my [00:45:00] experience with the government never encouraged a company to buy in.
And I can tell you, in the 20 years of industrial experience I had, and I wish in a multitude of, all the major stuff I was involved in and not watch that the company quote unquote buy in. And it depends on the company, right? There are some companies who believe that is a.
Successful strategy for them. It is not the preferred strategy of the government, right? The government really isn’t interested in creating, environments where companies have put themselves at financial risk upfront and eventually, end up in extremis. Where the government has to deal with that environment in a number of instances.
What I’m saying is that, it is a strategy. Some companies use it. I don’t endorse it. [00:46:00] I think that there’s a lot of different ways to make money, but buying in is one of them. Cause you don’t stay in business long if you are not successful with that strategy. And I must have been, if I misspoke or was misunderstood, I want to make it very clear.
I don’t support buying in. I don’t think it’s a wise strategy. And I know when I was in government, we, I don’t recollect ever, participating in a program where people were, pleased with the fact that a particular company had decided they were going to buy in. the discussion always was, we can’t prevent companies from, doing what they do.
And, so maybe that’s a little clearer.
Jim Hasik: No, I think that is, let me pitch another one here. And we’ve gotten from, your shift. I want to ask specifically, I think it was a good one for bill because of your experience at columns, your career Collins, but also to Richard, because, you’re the guy in government who thinks about this question we’ve [00:47:00] got, and I’ve heard this assertion before.
I’ve heard this assertion before the company has many companies are actually more concerned about the government releasing their IP to a competitor than by any internal use of that IP by the government itself. And, and this is actually reference to OMIT data and somebody Oh, MIT. And I think somebody can actually maybe help me with that acronym because I’m not familiar, but, here’s the following question, the question is how might intended use be better to find an early discussion, similar to commercial practice to license for well specified field of use.
That’s the question either Richard or Bill.
Bill Elkington: Okay. yes, he got a word that is the major concern because we don’t expect most agencies, the federal government, for example, to make. Avionics products in [00:48:00] competition with Collins, aerospace.
so yes, in a word that is the concern and it’s very difficult. we talk among ourselves, defense contractors and, commercial aerospace companies. And so on. little companies and big companies and so forth. And there are a lot of horror stories out there about people’s intellectual capital falling into the hands of competitors or falling into the hands of a different P and L center within a company.
I saw I’m talking about commercial now. And that other P and L center feeling like it has leave to compete, use that IP in ways that it wasn’t licensed to be used and so forth. so yes, that is it in a nutshell, that is the concern and it’s like our future, the future of the company and [00:49:00] in a particular product line and so forth.
Richard Gray: Yeah. I agree with all that, by the way, omit operation maintenance, installation, and training. And generally speaking top level data, although we can’t talk about this for very long, without talking about that, the notion is that OMIT data, that default license for that is unlimited rights.
However, that unlimited rights does not cover omit data. That is also another acronym. DMPD. Standing for detailed manufacturing or process data. so this is a long discussion that for example, was probably about one year of the two and a half years of the 813 panel, discussions. But, and there’s at least two answers, I think to the original question.
One of them is that the default rights scheme. Even as it is if you didn’t negotiate something special is designed to be sensitive to that. That is the nature of the DMPD carve out, for example, of OMIT. That is the [00:50:00] notion that if it is propriety, the question I think, presumes that it refers to proprietary IP.
presuming if we mean it’s developed entirely private expense than the standard license the government would get would not allow that information to go to a competitors except in very specific. Essentially statutorily carved out, scenarios like emergency repair and overhaul. Although there are ones now that are, more interesting to the vendors, that the government’s allowed to provide to support contractors for certain scenarios.
And when we’re talking about, even when we’re talking about. This, then the next one of the next things that’s going to come up is the government has an interest in ensuring it meets its statutory requirements for corridor, logistics, capabilities, and things like that. And even when we are doing things in-house, we frequently not infrequently, also do have onsite support contractors.
And that’s when we start getting into the notion of let’s describe in more detail, how the government is intending to support, sustain, this item and figure [00:51:00] out whether that leads itself into a specially negotiated license discussion. and at the risk of sounding like a professor before, I’d be quiet here.
Using an interest based negotiations, approach rather than a position based approach. Like I need GPR because that’s the only standard license that gives me competition rights, is how we’re, we’re looking at this as let’s talk about what we want to do first and then talk about how we can tailor a license to make that happen.
Kelly Kyes: If I could follow on to Richard, I think that Richard mentioned that the DOD has other statutory obligations. And I think that relationship and sometimes tension between the data rights statute and the logistic statutes, like the 50-50 rule depot level maintenance. I think that’s where this preference for specially negotiated licenses become so important because as Richard said, if it’s.
If OMIT is top level data, and it excludes detailed manufacturing and process data, which it does by statute and the regs. then, what happens if there is other [00:52:00] types of data or software that the government might need for its own organic maintenance purposes or for its own organic Deppa level maintenance purposes, which gets down to a lower level, then what do you do in those cases?
and I think oftentimes, there’s this sort of, tension around the definition of OMIT and this tendency on the part of the government to try to, define all data that might be necessary for any level of maintenance into this category of OMIT data. What I think instead is Richard said, if he focused on that interest based assessment and identify well, what are the government’s organic maintenance needs and what are their, their competition desires as far as.
Licensing to third parties. If you focus on that interest based approach, then you can talk about, can we craft a special negotiate license here that will give you the data that you need to do, what you need to do. But at the same time, from a contractor’s perspective, enable them to protect what they really need to do.
And as the person who asked the question intimated, [00:53:00] oftentimes it’s really not that much of a concern about the government’s own organic use and enabling right. That low-level maintenance. And as much as it’s the concern about that data falling into the hands of competitors who are operating, on the sustainment side, who haven’t made those same investments, to the extent you’re talking about, products that have been developed exclusively, a private expense,
Richard Gray: one more tiny thing that I think we have to mention, that is not brought up naturally by this discussion is additive manufacturing, 3d printing, and additive manufacturing is a new wrinkle. In the idea of the, as bill mentioned, traditionally, you wouldn’t anticipate the government being a supplier of particular products or things like that. And clearly for an avionics package, that’s a little that’s different, but for something that is additive manufacturerable, 3d printable.
there’s a whole new, practical, consideration that is arising now. And a lot of folks on the government side are, there are some tough discussions happening to let them know that, [00:54:00] even though you’ve thought for years, that the idea of limited rights, means in-house use only. And you just want to go ahead and manufacture it in house with it.
With a 3d printer, but you didn’t realize that there was a limitation on the government not being able to manufacturer additional quantities that’s been built in there for years, that didn’t really matter before, because we didn’t have a manufacturing capability that we do now. That’s going to be a big point of discussion in the future.
and it’s not really a change in the law. It’s just a change in the technology that’s available that would permit spare parts, local 3d printing is something that as a business model and as a. As a capability that didn’t exist before, it’s going to be a discussion. We’re going to be having a lot in the future as well.
Kelly Kyes: because, as Richard said, the definition of limited rights, specifically prohibits manufacturing, but if a company is developing an additive manufacturing approach to a particular product, those are the opportunities for that dialogue with, between the contractor and the government to determine, who’s ultimately going to print the part, [00:55:00] right?
and you have to take that in consideration and scoping that license because you can’t. provide the data with the expectation that the government’s going to print the part and then not especially negotiate the license rights so that they can actually print the part. so I think that’s really important.
I also think, I know that DOD is in the process of finalizing its, DOD, additive manufacturing strategy. And I know that at least, I think AIA in NDIA did respond and provide some comments. I think one of the policy, level, topics that industry raised in those responses is what is the role of the government as a manufacturer?
because we typically have thought about, thought as the government, as a maintainer of systems. So what is the role? I think that’s an interesting topic to explore from a policy perspective.
Jim Hasik: Okay, let me ask, I want to ask about prevalence because I wanna ask first you, specifically in Boeing, but I also want to ask, bill, his experience at Collins, before, your company at one point was considering bidding for the, ground-based strategic deterrent program.
You [00:56:00] dropped out for some understandable reasons. Before that I remember, when you’re tough people was quoted in the press is saying. we had this problem with our, she was asked about some IP leaking from going over to, to Northrop Grumman. You said fall into the zone. it sounded like you were talking about the Russians, but I think actually we’re talking about another contractor.
she said she asked about it. I said, yeah, because the vector was through the government. It was actually through the air force. And she has the question, is that alarming? And she said, this isn’t the first time that has happened. Is it we expect that our programs happens to a certain extent.
We just try to keep it to a minimum. is it really, that is it, is that alarming? Is it not a warning? Are there things we can do to make that better? Or is that just a cost of doing business with the test
Kelly Kyes: department? I can’t speak to the specific, I haven’t seen a specific, Article, my response is going to be general nature, not specific to any one program.
my comment earlier about your, your data being passed on to your, to a competitor in that situation, I should clarify, I met through like [00:57:00] legal means, right? So my point was that if the government desires the license rights, Oh, that are broad enough to enable them to share your data with a competitor that’s where the rub is going to be for the OEM, because you have to understand from an OEM perspective, w how that’s going to impact your business.
So if I’m going to. Especially negotiate a license and I’ve got a product that I, or portions of a product that I’ve developed at private expense. Then I’m going to be concerned about what business opportunities are going to be enabled by providing the data with the license rights necessary so the government can provide it to another party to compete against me. So that’s what I was describing as far as is it just the nature of doing business with the government, the regulations do provide, solutions. if a supplier is concerned about, providing, like secret sauce, that it has to be a deliverable.
I think first and foremost, the suppliers may try not to deliver it in the first place. but the regulations do provide a path to. Provide that data [00:58:00] directly to the government. So you don’t always have to go through the prime contractor, for example, in delivering data. I think sometimes that might be complicated by the fact that the prime contractor is integrating various piece parts of the system together.
So sometimes for practical perspective, that might not be a path forward, but I think whether you’re in the defense industry or commercial industry, it’s not really industry specific. from an IP perspective, all companies and all OEMs are concerned about the transfer of know-how.
and it’s a really hard thing to protect against. So if I, if I’m working with you and I may not be providing my detailed procedures, but if you’re a contractor working with me in my facility. and you watch how it use something over and over again, or I teach you how to do something, then you are learning, for me.
And it’s really hard to protect against that. Know-how transfer. and I, that’s also, it’s the nature. It’s always a risk across industries, right? It’s not really defense specific.
[00:59:00] Bill Elkington: Yeah. I, there are, There are studies, of this, I think John M Huntsman, former governor of Idaho and ambassador to China did a study and updated it, I think in 2017, about theft of us, intellectual capital. And I think his estimate was certainly in the hundreds of billions of dollars a year, if not, maybe it was 350 to 500 billion dollars a year, something like that. And a lot of that is actually exposed through supply chains.
so it’s not just bad actors in a company or cyber attacks on an enterprise’s information network. It’s also when you provide proprietary information to your business partners, whether they’re suppliers or customers, or we’re a co-development partners of one kind or [01:00:00] another, you supply that to them because they need it in order to do their part of whatever the complex system is.
And it tends to walk out the door, one way or another. so yeah, there’s a real risk across all industries of losing, not only as Kelly said, know-how through teaching others, but also proprietary information that’s related to business process, that’s related to technology that’s related to product design, and so on.
So it’s not the U S government that is uniquely risky. It’s just that it is very risky to hand over important revenue. You’re depending on this to differentiate you in the marketplace, you hand it to somebody else, and there’s a real risk that your differentiation is going to go away and you won’t [01:01:00] necessarily know that it got stolen.
Companies don’t generally put a lot of money into monitoring the marketplace for, stolen proprietary information, and for misuse of their licensed technology.
Jim Hasik: So it’s going back about bill, I want to ask it’s going back about 12 years for me, but I made a book, lots about defense contracting and clients management.
And one of the things I looked at was the issue about leakiness of knowledge. And I often got the pitch from people that, the certain amount of leakiness, a certain amount of preparation of your intellectual capital, the natural intellectual property. And does that make that distinction, I think is a big distinction that you have to decide a certain amount of that leakiness is necessary just to prove fault for having an efficient supply chain that has multiple companies, but when does it get. When do you start to get stressed out about it? what’s the flag that says, hold on. Went too far.
Bill Elkington: Yeah, [01:02:00] it’s different in different circumstances, but I guess the way I think about it is that you have people in often in your enterprise.
Who actually, because they want to be good people and because they want to have good personal relationships with other people in other organizations. And because they’re asked for certain information, they end up wanting to give it when in fact it’s really not in the company’s best interest to give that information.
So one of the issues, that I’ve seen is, inadequate briefing and monitoring of, these, development teams. And there’s no program by program policy often that’s put in place and monitored and reinforced and taught and so forth for the members of the team that, and let’s take our mundane example. I have a document on my desk. It’s a 300 page [01:03:00] document and it has in it about 10 pages of information that is needed by the other party in a particular development program. So am I going to take the time to redact or to take out from that document? That was 10 pages.
I’m an engineer and I’m under pressure to produce. And so on. Generally, if I’m left to my own devices, I just send the 300 page document.
Jim Hasik: Some of it’s some of it’s behavioral.
Yeah.
Let me ask, again, another question from the audience and, is Shay it’s a, follow-up on the by hand thing.
I’m going to summarize it because a long one, from George it says, basically, okay. Yeah, so we don’t like, we’re not recommending buy-in, but w was there. There was there a period of time, like maybe around 2000 and thereafter where we seem to signal, Hey, we’re not going [01:04:00] to mess with your data rights as long as you bring us good prices.
And has this been a sort of a, you think there’s been a profound policy change since then say since maybe the first Bush administration or maybe even going back to the current administration?
Shay Assad: Yeah. I was on the industry side during that time. And I didn’t see that. if someone, if some company heard that, uh, sorry.
the company I was with, didn’t experience it, at least not to my knowledge. So I really can’t, make comment about someone saying, give me a good price. I won’t screw around with your intellectual property . The reality of life is that,
Richard Gray: there
Shay Assad: is so much, in terms of, training and education that needs to take place.
within the acquisition community, the government acquisition community, and understand it’s a hard, [01:05:00] this is a subject where when you start to talk about it internally, at least my experience in gaming, people, eyes roll over and frankly, so do company’s eyes rollover for most people, right? It’s a very arcane, but important, extremely important, topic.
And, the reality is that, I didn’t experience, on the industrial side, during that timeframe, situations where companies were, trying to Shanghai or tell us that they wouldn’t take our intellectual property. in fact, I found very few instances where we couldn’t figure out a way to give the government what they needed and still protect.
Our intellectual property. it wasn’t this major, massive problem, at least in the procurements that were, we somehow figured it out the government. Now the reason for that is on most of the major programs [01:06:00] in the nineties, especially right. Raytheon was on the, the receiving side.
Of getting intellectual property from other companies because they were competing in a second source environment or a leader-follower environment. So it wasn’t, and the government was encouraging companies to participate in that environment, That is to compete and to make the investments that were necessary so that they could become, competitive sources.
And I think I mentioned to you before that, what was discovered, during many of those competitions was that, and the examination of that intellectual property was that, the company decided to do things very differently then the actual original manufacturer, because we felt we being on the company side of side at that time that we could [01:07:00] produce the product much more efficiently and much cheaper if we used a totally different process than we did.
I
Jim Hasik: don’t want you to write feet.
Shay Assad: That’s right. That’s fundamentally what went on. And I think one of the things that this whole environment that Richard and his team needs to think about too, is when you want competition, how do you want that competition to take place? Is it two companies that are participating in the early development of the overall product? In that environment, the sharing of intellectual property between the two companies is completely different.
Then, if you’re saying no, what we’re going to do is have one prime contractor, build this product and design it and build it. And then we want you to come in afterwards and either build it to print or build the same product form fit and function. Very different [01:08:00] intellectual property discussions between the two companies, when that happens.
Jim Hasik: I’ve got two more questions. They’re both, about education and training. and I think that, th they’re probably very important for Richard.
So maybe if you want to lead on the response here, and they get to 813 questions, You think that bill, you were stressing the importance and Richard, you had noted that, our contracting people or finance people that need, whether it’s decided of government or an industry with certain government, question goes, they need to understand IP valuation.
And, in our technology transfer. People might be part of this, but they need to go to scan, contracting their acquisition. People need to understand all of this. And they also need some training, on the question of, of IP protection, how, at what point is, I was saying to bill, at what point, is showing a little bit too much, how do you keep.
the IP segregated in ways that you, you shouldn’t and when can you hint at things in a negotiation? [01:09:00] so what are you doing? Richard, because, one of the email question I got said, man, I’m slammed here doing what I’m doing. I don’t know how much more I can learn, or certainly some of our people.
Richard Gray: yeah, training the acquisition workforce is a gigantic part of the approach to trying to get a better handle on our IP that we’re doing now. And that’s part of the reason why we have the notion of the IP cadre, which is designed to be a much smaller group of more expert, individuals.
Cross-functional again, all disciplines that are relevant to acquisition and development, et cetera. but then have at the same time as we are, being smarter learning lessons, developing best practices is being able to make sure we can share that back out with the world, the acquisition workforce.
And so DAU is a, hand in glove partner with all of these activities. They now have two people on staff full-time whose job is to teach IP. We’re doing a top-down and bottom-up [01:10:00] review of the curriculum that exists to make sure that we can integrate intellectual property into the training that the career fields are getting when they’re already doing the rest of their training.
It’s not just that IP is some standalone thing that you either might take a course or might not it’s if it’s part of your job at each to be part of your core training. we also have a brand new, just released, right at the, in September. There’s a brand new intellectual property credential that is available.
We’re calling it the foundational intellectual property credential. It’s more like a sort of apprentice level, expertise for that. Anybody in the acquisition workforce can get by taking certain courses. One of which, by the way, is a brand new, continuous learning learning module on IP valuation that DAU, prepared in and close, effort with industry.
and so there’s and the DAU overall is revamping the way it’s doing its training, moving away from a certification approach to a just in time, Expertise, sort of training [01:11:00] insertion. If you will, education insertion for folks who get, who can get things in real time, When they need it to do their job on whatever topic makes sense.
And so the entire DAU is becoming more efficient at that. And IP has a much stronger place at the table than it ever has in the past. it’s going to take time of course, to ramp up all of that, all that content. but that’s part of the reason why, We have this office and why we have the notion of the DOD IP cadre that it’s really DOD wide tapping into all those cross-functional expertise
there.
Jim Hasik: Richard, I, I, we, I should mention that we have here at George Mason, we have a great partnership with DAU. they sponsor our annual conference. and I do know that you were at George Washington, but you’re still doing an advertisement for another university here in the middle of my — no, it’s okay.
Richard Gray: I express no preferential treatment for any, non-governmental entity. That’s my official statement.
Jim Hasik: Very good relationship with you’re doing, very good.
I think that’s very fine. Thank you.
If anybody’s got two, three [01:12:00] sentences of go ahead and left while we’ve got some talking to folks, I have learned my, I wrote the paper and I’ve learned an enormous amount. Just listening, but Shay, bill, Richard Kelly, what, any final thoughts?
Shay Assad: Yeah. my thought is, we have some terrific people in government and, Richard, I mean he can hit it out of the park with anybody who wants to step up to the plate on the other side of the table.
when we enter into these dialogues, I think there needs to be, patience and understanding on both sides of the table, because both sides need to articulate, their views in a very complex environment. Okay. And we’ve been talking a little bit about that complex environment, but, the fact that the government, and it was really Congress, the fact that Congress, stood up or total the department to stand up this [01:13:00] capability, it was a great thing.
And, we certainly have the right guy at the helm and we have outstanding people who are we being, again, my view of the government, they have outstanding people participating in it. So I think it’s going to be, I think we’re going to make great strides in this world with government and industry, because there’s a recognition that this isn’t an all or nothing world, There has to be understanding, compromise, and from the government perspective, only buying what we need and not asking folks to reach beyond what we need and having a sensitivity to what it means to a particular company, both financially and strategically, when they’re asked to give up their data rights.
Richard Gray: I’ll just say real quickly, a thank you to George Mason for [01:14:00] setting up this webinar. and I think in a nutshell, being able to have discussions like this on a more routine basis all the time and recognizing that sometimes it’s going to be hard. A lot of people know, I have a certain marriage counselor, a metaphor that I like to use about discussing IP rights in this scenario.
I’ll save that for the next webinar. but, I’m looking forward to having those discussions and I really appreciate you, setting up this webinar. Thank you.
Jim Hasik: no, thank you.
Bill Elkington: so I’d just say Jim, the paper I thought was excellent and, let’s have more of these. And one of my thoughts was, Richard on these pathfinder programs.
What do you, what would you think about, enabling GMU or others to write business cases? not necessarily publishing while these past practice finder programs are going on, but publishing something on each of them at the end.
Richard Gray: Oh, I, for the first thing, I would say [01:15:00] Army’s doing great, great work on setting up these Pathfinders and trying to identify best practices and learn lessons from that.
And one of our challenges overall is figuring out how to take lessons learned and being able to propagate those throughout the, not only the DOD community, but industry so that we have a common framework, And frankly, one of the challenges I know we’re going to be facing as we go forward is that if we get into some really creative business arrangements, then just that creative business arrangement is something that actually might be considered at some point, if we’re still going to have some challenges in how we discuss that.
but yeah, I’m open to anything. for specifically on the Pathfinder programs, I would reach out to our army, points of contact. they have a whole group that’s working on this and explore what makes sense for them.
Jim Hasik: We would love to work on that. I’d love to talk. I’ve had a couple of conversations with secretary jetties people about it, and I’d love to pursue that further.
Kelly Kyes: I also wanted to thank George Mason university for hosting the event today. This dialogue is always so great to have, especially in an COVID environment where we can’t meet face to face. I think having [01:16:00] these web-based, sessions is really great.
I did want to put a plug for the aerospace industries, association and India, because I know that they’re both always interested in working with, the department and, certainly I’m sure they’d be interested in working with GMU to bring other industry voices to the table as well for these types of events.
Jim, I just wanted to let you know that I chair the AIA IP committee, right now. So if you wanted me to facilitate that dialogue. Yeah,
Jim Hasik: that would be terrific. Thank you very much though.
Shay Assad: Thank you, Jim. Thank you, Jerry, for, setting this up. I think it’s been great.
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