NanoScience Exchange

Facilitating action between six key groups - start-ups, corporations, investors, universities, labs and government.

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    Meeting of the NanoScience Exchange™ (NSE)


    Tuesday, August 6th in Palo Alto.



Speakers:
Meyya Meyyappan, NASA Ames
Neil Jacobstein, Institute for Molecular Manufacturing
Matthew Bostick, Congressman Mike Honda's office
Gap Kim, Congresswoman Anna Eshoo's office
Larry Dubois, Small-X Program, SRI
Mike McElfresh, Lawrence Livermore National Labs

Jim Hurd, NanoScience Exchange™
John Lee, Silicon Valley Bank
Bo Varga, NanoSig
Vic Kley, General Nanotechnology
Melody Haller, Antenna Group
Charles Ostman, NanoSig

Some of the topics covered include:
- The need for funding of long-term nanotech research by the U.S. government.
- The U.S. does not have a compelling lead in nanotech research, which could have national security implications down the road.
- The large number of filed patents that overlap, resulting in litigation which could slow growth dramatically.
- The difficulty that U.S. companies are having in getting their patents issued in Japan
- Proposed major patent fee increases for the U.S. Patent Office currently
- Media coverage of nanotech, including a recent article in the NY Times

The second meeting of the NanoScience Exchange™ was held Tuesday evening, August 6th at Silicon Valley Bank's Cafe in Santa Clara, CA.

Founder Jim Hurd opened the meeting with a quick update on recent visits he had made to Boston University and one of its spin-off companies, Boston MicroMachines. Jim had also visited Hughes Research Labs in Malibu, CA the day before attending the Larta Nanotech Conference at UCLA. Hughes Research had demonstrated their "smart pheromone robots" and a new voice recognition technology for car mapping systems. In addition, Jim reported on recent conversations at a conference in New York City where he had talked with the Mayor of Baltimore, Martin O'Malley, who is building a new biotech center just north of the Harborplace in Baltimore, and with Senator John Edwards, D-NC, who is active in sponsoring legislation in the Senate. Jim commented on the growth of interest in the public policy side of nanotech - and of the interest by US Senators and Congressmen in getting to know nanotech leaders and their concerns. Many key people are aware that it is now time to make real things happen, and build a strong foundation for the future of nanotech.

John Lee, of Silicon Valley Bank, who is a sponsor of the NanoScience Exchange, talked briefly about the kinds of services that the Bank has provided as it has worked with leading start-ups and technology companies over the last 20 years. About 60% of all venture capital backed start-ups in the U.S. bank with SVB.

Bo Varga, the founder of NanoSig, talked about new developments with the organization, which is focusing quite successfully on assisting in the commercialization of early-stage nanotechnology companies with their monthly events. Bo talked about upcoming NanoSig (www.NanoSig.org) meetings, including the two day conference at Nasa Ames October 18 and 19. He also described several of the upcoming SIG's that are being spun out of NanoSig - including the NanoBioSIG and the NanoMaterials SIG.

Meyya Meyyappan, Director for the Center of Nanotechnology at NASA, talked about the status of nanotechnology in the United States. He talked about the formation of the NNI (www.nano.gov) and how levels of funding by other countries have gone up dramatically in response to NNI's funding. Japan and Europe in particular have major funding for nanotech - Japan's funding may exceed U.S. levels currently.

Meyya told a story that relates directly to nanotechnology today. In the 1950's an influential group of Congressmen went to NASA to understand the needs of the U.S. space program. They asked what makes the rockets soar. One scientist went into arcane detail. Wernher von Braun, the legendary scientist, interrupted and said, "Its none of that, Congressmen. What makes the rocket go up is the funding!"

Meyya explained that nanotechnology is the first major technology since WWII where the U.S. does not have a clear lead over other countries. He strongly stressed the need to focus on long-term issues - to build nanotech not just for the two to five year time frame, but for ten to twenty years. He said, "We can't act like kids in the back seat of a car on a vacation saying, 'Mom are we there yet' every ten minutes. We, the scientists, the universities, the investors, the media and particularly the elected officials in state capitols and Washington need to have patience." D'Arcy Lorimer, of the law firm Oppenheimer, Wolff, Donnelly added that we are reaping the rewards today of research done at Bell Labs, Darpa, Xerox Parc and other research labs fifteen to twenty years ago.

Meyya also talked about the current situation in the U.S. regarding patents. Saying that Edison would not make it in today's patent environment, he talked about the need for the U.S. patent office to allocate enough resources so that patent examiners truly understand the patents they are approving. A large number of patents have been filed and approved by large corporations, universities, and start-ups, both venture backed and privately funded. There is concern by a number of experts in the nanotech industfy that many of the patents may overlap. When these markets begin to mature with significant revenues, the patent litigation could dramatically slow down the growth of the industry. (Editor's note: since this meeting, one idea put forth, from a nanotechnology expert within IBM, is that the nanotechnology industry needs to put together a small conference with the U.S. Patent Office, in Washington DC to review some of the more difficult issues relating to nanotechnology patents. With every new technology that has come along over the last one hundred years, the Patent Office has held meetings to understand the key issues involved.)

Next, Larry Dubois, who is head of the Physical Sciences Division at SRI International, talked about the formation of the NNI (National Nanotechnology Initiative) and that much of the funding that was approved was already approved under other programs and was moved into the NNI to fit under the umbrella of "nanotech". While this is good in certain ways, in order for the NNI to reach critical mass, it is also somewhat misleading, in that the amount of NEW money being put into critically important nanotech research is a fraction of the funding that the NNI has.

In SRI's work with Darpa, which started about fifteen years ago, they focused first in the microelectronics area, and then with carbon nanotubes and buckeyballs. Larry said, "A large amount of our efforts more recently has gone into studying molecular electronics - not just in building the transistors, but how you do the interconnects between the transistors, how do you do the IO, so we take it out of the lab and find practical uses."

The audience talked about national security issues relating to the use of nanotech in the military. A few of these technologies have had an impact today - in cutting down the weight of equipment, such as batteries, that soldiers need to carry in the field, enabling them to carry dramatically more equipment in the same pack.

The next speaker, Neil Jacobstein, Chairman of the Institute for Molecular Manufacturing, said, "Venture capitalists fund nanotech companies with 3-5 year time frames. That is appropriate for their return on investment needs. Nanotechnology refers to a broad family of enabling technologies, each with its own gestation times, risks, and rewards. There is a critical need to address long-term molecular nanotechnology research that will have its primary impact in 10 to 20 years. It is appropriate to expect the government to fund this kind of high-risk, high-reward research.

To the best of my knowledge, molecular manufacturing using assemblers is theoretically feasible, and it will eventually happen. The feasibility issues boil down to time frames when we will overcome the engineering challenges, rather than if, it will work. Nature's long-term R&D program produced a limited kind of molecular manufacturing via photosynthesis - millions of tons of trees are produced annually utilizing just carbon dioxide, water, and soil as inputs, and the process is powered by solar energy.

The risk issue is complex. All technologies are double-edged swords with benefits and risks. Examples include knives, fire, planes, automobiles, gasoline, and biotechnology. The Institute for Molecular Manufacturing and the Foresight Institute have worked for years on Guidelines for the responsible development of molecular nanotechnology. The primary risk is not misuse via accident, but abuse via terrorism. The risks of terrorism are reasons to master this technology as soon as possible, rather than avoid development. We are safer knowing more, not less. It is critical that members of Congress understand this.

The primary rationale for US government sponsorship of long-term molecular manufacturing research is that, who develops this technology first, and what safeguards they embed, has profound economic, security, military, and environmental significance. Agencies including NASA, DOD, NSF, and others have put out documents on these potential impacts. They need to be reviewed, and we need to focus on assessing the risks and rewards of molecular nanotech. What is needed now is enlightened sponsorship. Thanks."

Charles Ostman, of NanoSig and Institute for Global Futures pointed out, "The significance of the establishment of the NNI was that it established the policy of cooperation - that all the national labs must cooperate, along with universitites, to create a common platform. It facilitated private investment and public domain IP to be much more accessible. So that more funding, in the future, could find a solid footing. In this context, the NNI was a great start."

Mike McElfresh, Lawrence Livermore National Labs, talked about developments at the Lab, including the laser program, where the largest laser in the world is being built - with 192 laser beams. He also talked briefly about projects at other nanotech programs, including the building of an $85 million molecular foundry at Lawrence Berkeley National Labs and an $85 million project between Los Alamos and Sandia in Albuquerque, NM.

Matthew Bostick, of Congressman Mike Honda's office, said, "It's my sense that more and more Congressmen are learning about nanotech and it is appearing on their radar. While Homeland Security technologies are the primary focus these days, we recognize the importance of this issue. This is, as Meyya Meyyappan was saying, one of the grand challenges, like putting a man on the moon or finding a cure for cancer." Matt talked about a discussion draft of proposed nanotech legislation that Congressman Honda is developing and asked for input from the audience.

Jim Hurd pointed out that the life sciences have traditionally been much stronger at dramatizing their story - while the physical sciences have not got anywhere near the funding that the life sciences have.

Drew Wahl, CEO of Optiva, brought up the important issue of lack of approval of US patents in Japan - Drew said, "We have twenty patents issued and twelve patents pending, they are approved in ten countries, and we do not have one patent issued in Japan. In my last company we had five patents and not one was issued in Japan. Greg King, VP of Operations for Optiva, said "One third of our initial market is in Japan and funnily enough we can't get a patent issued there." Drew Wahl continued, "The U.S. needs to have a policy - if other countries don't give fair reciprocity to our patents, they are not going to get their patents issued in the United States."

David Anthony of Unus Ventures underscored this from the investors point of view. Many Japanese patents are approved in the U.S., but for venture backed start-ups in the U.S., they are finding it very difficult getting their critical patents approved in Japan.

D'Arcy Lorimer brought up the third issue relating to patents - the proposed dramatic increases to the filing fees of patents. (Editor's note: I talked about these issues recently with Congresswoman Zoe Lofgren recently, who sits on the House Intellectual Property Subcommittee.)

Drew Wahl talked about the state of manufacturing in the U.S - when he said, "Optiva has been able to get funding, in this country, for a company that has taken Russian technology, manufactured in South Carolina by the Swiss, and in Alabama by the Japanese, and we are shipping it to a company in Italy because there is no vendors in the U.S. that manufacture cell phone screens. We don't have customers to sell it to in the U.S. And we've got ten percent unemployment. There is no country that develops faster and better and more economically. And we are running out of manufacturers."

Meyya Meyyappan said, "It is not only the manufacturing that is going overseas, even the U.S. Patent Office, in some instances, is driving jobs overseas. There is one Silicon Valley company, I won't mention it's name, that makes gene chips, that has managed to get over 400 patents in this area. Other companies have designed much higher density chips, but they can't sell them in the U.S. because of the patents approved by the one big company. Meanwhile, these fantastic gene chip machines are being sold in Japan and the China overseas, but they can't sell in the U.S., even to universities so our students can study the best technology on the market today."

Drew Wahl said, Government and industry have to work together in the U.S. The national labs of countries like China, Japan and Taiwan are coming in to talk with us, to try to reverse engineer our technologies, and take these technologies back to their countries. Government and industry are working together very closely there. The U.S. government is not working with industry, its working against it."

Greg King said, "I am hearing a consensus here tonight. We need to regain the lead on technology and we have to make sure the government is helping us to get there."

Gap Kim, of Congresswoman Anna Eshoo's office, talked about the recent paper put out by Silicon Valley Joint Venture, which brought up the importance of nanotech, along with biotech and infotech. Gap said, "Other than that, we have had no requests in the last two and a half years, relating to nanotech. So it is still early on on this issue. And given that Rep. Eshoo sits on the House Energy and Commerce Comittee, we are quite interested in the potential of nanotech and the effects of patent issues."

Melody Haller of the Antenna Group, a leading public relations firm with a strong focus in nanotech, talked about how the subject is written up in the national press. Her firm represents Nanomuscles and Small Times Magazine, a major nanotech publication. The recent article on the front page of the Business section of the New York Times on Nanomuscles took a year, approximately, to develop. She talked about how her firm worked in the early '90's with some of the icons of the Internet, and crafted simple, compelling human stories that educated the public about the potential of Internet companies. Questions like, "What does it matter to an individual, what does it matter to government, and how can individuals make use of it." These are the questions that drive major media coverage. (Editor's note: we had heard at the first meeting of the NanoScience Exchange of the work early on that Draper Fisher Jurvetson had done in meeting with major journalists and educating them on the potential of nantech a year or so before they began to hear about and report on nanotech issues.)

Vic Kley, of General Nanotechnology, talked about the fact that work was done at the 100 nanometer level as much as one hundred years ago. The patent issue is critical - not just to nanotech - but to all start-ups. Vic said, "I've been filing patents since I was about sixteen. The patent barriers have been building and building over the last twenty years to small inventors. It is extremely difficult for a small company to get a good patent portfolio. You have to use provisionals. Foreign filings are almost something you don't do, if at all possible. The costs are outrageous. They shouldn't be. In this world of expanding borders and global companies, what happened to the concept of the global patent. Why isn't that a reasonably priced affair. Why should it be structured so that only the biggest companies can afford to aggressively patent. Patents are produced by individuals in small company settings. We truly need the help of our Congressmen and Senators to protect the small inventor and small company - to protect innovation in the U.S."

Charles Ostman talked about the importance of realizing that nanotech is going to be a fundamentally enabling industrial infrastructure out of which we could become energy independent. We can solve a variety of environmental problems, changing the way that toxic manufacturing processes are done. We can use nanotech to repurpose aging manufacturing processes, including microlithography."

Brock Hinzmann, of SRI Consulting Business Intelligence, said, "I have been meeting with a number of companies that are trying to figure out, 'If we are moving from a carbon economy to a hydrogen economy, how do we make the transition.' Nanotech is on the minds of many, if not most, of these companies."

Sam Perry, of Ascendance Ventures, said, "These issues are important, yet they are just the tip of the iceberg. It is not just one area that can be focused on. When you are dealing with the government and with public understanding, it is a challenge, and it's also a huge opportunity. Perhaps the best way to move forward is to take one or two of these issues and really get the point across in a focused way."

Norm Wu, of Alameda Venture Partners, said, "It's an interesting perspective that I have, because we at Alameda Partners are in the process of raising a fund currently, and we've been talking with potential limited partners all over the world, and we're seeing tremendous amount of interest all over Asia, and I think in large part because there are alot of manufacturing based economies which see this as the next wave and therefore it is really strategic for the governments, which are spending alot of money and encouraging the private industry to get involved. The U.S. really needs to get government and industry working together to stay competitive."

Jim Hurd thanked all for participating and said that the next meeting of the NanoScience Exchange™ would be planned for the end of September. With that, the group adjourned.

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Email address:
jim@NanoScienceExchange.org