PROOF OF CONCEPT COMMERCIALIZATION PILOT PROGRAM.

SEC. 1603. PROOF OF CONCEPT COMMERCIALIZATION PILOT PROGRAM.(a) Pilot Program.—The Secretary of Defense, acting through the Assistant Secretary of Defense for Research and Engineering, may establish and implement a pilot program, to be known as the “Proof of Concept Commercialization Pilot Program”, in accordance with this section.(b) Purpose.—The purpose of the pilot program is to accelerate the commercialization of basic research innovations from qualifying institutions.(c) Awards.—(1) In general.—Under the pilot program, the Secretary shall make financial awards to qualifying institutions in accordance with this subsection.(2) Competitive, merit-based process.—An award under the pilot program shall be made using a competitive, merit-based process.(3) Eligibility.—A qualifying institution shall be eligible for an award under the pilot program if the institution agrees to—127 STAT. 945(A) use funds from the award for the uses specified in paragraph (5); and(B) oversee the use of the funds through—(i) a rigorous, diverse review board comprised of experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;(ii) technology validation milestones focused on market feasibility;(iii) simple reporting on program progress; and(iv) a process to reallocate funding from poor performing projects to those with more potential.(4) Criteria.—An award may be made under the pilot program to a qualifying institution in accordance with the following criteria:(A) The extent to which a qualifying institution—(i) has an established and proven technology transfer or commercialization office and has a plan for engaging that office in the program’s implementation or has outlined an innovative approach to technology transfer that has the potential to increase or accelerate technology transfer outcomes and can be adopted by other qualifying institutions;(ii) can assemble a project management board comprised of industry, start-up, venture capital, technical, financial, and business experts;(iii) has an intellectual property rights strategy or office; and(iv) demonstrates a plan for sustainability beyond the duration of the funding from the award.(B) Such other criteria as the Secretary determines necessary.(5) Use of award.—(A) In general.—Subject to subparagraph (B), the funds from an award may be used to evaluate the commercial potential of existing discoveries, including activities that contribute to determining a project’s commercialization path, including technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities.(B) Limitations.—(i) The amount of an award may not exceed $500,000 a year.(ii) Funds from an award may not be used for basic research, or to fund the acquisition of research equipment or supplies unrelated to commercialization activities.(d) Report.—Not later than one year after the establishment of the pilot program, the Secretary shall submit to the congressional defense committees and to the Committee on Science, Space, and Technology of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate a report evaluating the effectiveness of the activities of the pilot program. The report shall include—(1) a detailed description of the pilot program, including incentives and activities undertaken by review board experts;127 STAT. 946(2) an accounting of the funds used in the pilot program;(3) a detailed description of the institutional selection process;(4) a detailed compilation of results achieved by the pilot program; and(5) an analysis of the program’s effectiveness, with data supporting the analysis.(e) Qualifying Institution Defined.—In this section, the term “qualifying institution” means a nonprofit institution, as defined in section 4(3) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3703(3)), or a Federal laboratory, as defined in section 4(4) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3703(4)).(f) Limitation.—Not more than $5,000,000 may be obligated or expended to conduct the pilot program under this section.(g) Termination.—The pilot program conducted under this section shall terminate on September 30, 2018.