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`Photographs by Sara Jorde
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`Carl Caspers
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`Page1
`Exhibit 2005
`Otto Bock
`FALL 2005 I MINNESOTA TECHNOLOGY 25
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`By Anne Rawland Gabriel
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`Otto Bock Exhibit 2005 Page 1
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`What istechnology
`traflSfer? Nothing lessthana
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`way to plug your
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`business into the
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`vast knowledge
`and skills of federal
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`and university
`resources.
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`_
`'
`
`I
`
`1 Here’s how to do it right.
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`_
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`f
`l
`I
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`By the time Carl Caspers turned to St. Cloud
`State University (SCSU) for help with exploring vacuum tech-
`nology in the late 1990s, he was already a renowned pros-
`thetics industry pioneer. Caspers, who lost his lower left leg
`in 1959 at age 18, had spent four decades mostly innovating by
`himself. In the mid—19805, the Sartell resident had discovered
`that urethane’s properties made it a superior liner for pros—
`thetic devices. Through his own research, he also had deter— I
`;
`! mined that the pressure of a prosthesis could cause signifi—
`I
`cant fluid volume loss in the residual limb. That pressure I
`helped the friction and shear forces of everyday activities cre—
`ate chronic sores for lower—limb amputees. Many individu—
`315 required regular surgical intervention, and reamputation
`was sometimes necessary.
`Caspers began fashioning custom urethane liners for clients
`and founded a liner manufacturing company, TEC Interface
`Systems, in St. Cloud. But Caspers wanted more. To move
`forward, he needed scientific limb volume-loss benchmarks
`and liner material~effieacy tests. “Nobody in our industry
`had done that type of research, before,” he explains, adding that
`SCSU biomechanics professor Glenn Street and his students
`helped do the groundbreaking work.
`Caspers then turned to Street with an idea he’d had for
`
`using vacuum pump technology to maintain asnug fit between
`stump and socket. Again with the assistance of Street and his
`SCSU students, Caspers developed the system and found suc—
`cess. By using the vacuum—assisted interface, study subjects’
`fluid volume loss plummeted from around 10 percent to less
`than 1 percent. Wound reduction was so pronounced that
`some patients scheduled for reamputation became totally
`healed. A couple years,25 patents, and numerous awards later,
`the company’s vacuum—pump system, dubbed the Harmony,
`is a rousing success, In 2003, Minneapolis-based Otto Bock
`HealthCare purchased TEC Interface Systems from Caspers.
`In short, it was an Overnight success story that took decades
`to accomplish—and which also involved a heavy dose of tech-
`nolog’y transfer. “The Harmony system came into existence—
`and flourished —hecause of technology transfer,” says Brad
`Ruhl, vice president of sales for technical orthopedics at Otto
`Bock. “Ongoing work with organizations such as SCSU con-
`tinues to be vital for the success of our products.”
`What is tech transfer? In a nutshell, the term refers to any
`occurrence in which technology, expertise, knowledge, or
`facilities are used for a purpose not originally intended to ere— i
`are a commercializable product or a process. As in Caspers’
`case, it can involve a multiparty collaboration between auni—
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`26 Minnesota recaunLocv | rnLL 2005
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`“What’s important is getting
`
`companies that make the call.”
`
`started.The winners will be the
`
`versity and a private company. Or it can happen between, say,
`a national security lab, research lab, technical college, and a
`business. The technology gets transferred from one organi-
`zation to another.
`
`It can even happen between businesses, says Philip Gold—
`man, an intellectual property attorney specializing in tech
`transfer. “Perhaps there’s a coating company making some—
`thing that can be adapted to advance your widget,” says Gold—
`man, a shareholder with Fredrikson & Byron P.A. “There’s
`no one ‘right’ method of tech transfer.”
`Arguably, tech transfer has occurred since humans first
`began creating tools. But the 1986 Federal Technology Trans-
`fer Act, which permitted RSCD partnerships between feder-
`al labs and U.S. companies, created a ripple effect through—
`out the research community that’s made resources affordable
`for small— and mid—sized businesses.
`
`LAYING THE FOUNDATION
`
`To maximize the effect of your tech transfer initiative, begin
`with an internal examination. “Discuss where you want to be
`in five years,” says Betsy Lulfs, a tech transfer program direc—
`tor with the Minnesota Department of Employment and Eco-
`nomic Development (DEED).
`At this phase, the sky’s the limit. For example, any exist—
`ing product or service could have medical potential, says Susan
`Stoddard of Mayo Medical Ventures, a division of the
`Rochester—based Mayo Foundation for Medical Education
`and Research. “For example, there are remote monitoring
`companies exploring ways for diabetes patients to automat-
`ically transmit home blood glucose checks,” says Stoddard, a
`technology licensing manager in Mayo Medical Ventures’
`Office of Technology Commercialization.
`Next, assemble a dedicated tech transfer team. “When
`
`you’re focused on building and running a business, you often
`don’t have the time—or the culture—to develop concepts into
`a workable product,” says Tom Nelson, general manager of
`Shield Technologies in St. Paul.
`That’s Why Nelson recommends working with a special-
`ized RSCD firm that develops ideas into products, but leaves
`commercialization to others. In Shield Technologies’ case,
`this approach helped it produce a sophisticated cover that
`blankets military devices in a corrosion—fighting microenvi—
`ronment. Originally conceived in response to a U.S. Navy
`request, Shield Technologies intends to produce civilian cov—
`ers, too.
`
`Another effective way to create a tech transfer team is by
`combining company talent with assistance from a business
`development organization. An example: When Tower—based
`touchless car and truck wash manufacturer Powerain needed
`
`product design assistance, MTI helped it work with the U.S.
`Department of Energy (DOE). “We were struggling with
`
`redesigning a gantry frame,” says Powerain CEO and Presi-
`dent Steve Kern. “We didn’t have the tools for a full—up engi—
`neering lab.”
`With MTI’s assistance, Powerain obtained a grant for struc—
`tural analysis from the DOE’s Sandia National Laboratory.
`Charged with developing technologies that support nation-
`al security, Sandia put its sophisticated instruments to work
`analyzing Powerain’s frame. Using Sandia’s analysis to design
`improvements, Powerain not only cut its frame costs by
`10 to 15 percent but also brought the products into safety
`compliance. “MTI was well plugged in and knew which tech—
`nologies were being pushed for commercialization,” says
`Kerr. “It had the knowledge of what was available and how to
`put us in touch with it.”
`Of course your team can also be completely in—house. The
`point is to separate the tech transfer project from day—to-day
`operations so your business stays afloat.
`
`(IN CASH AND CONTRACTS
`
`Regardless of where you’re headed or who’s guiding you
`SBIR/STTR
`
`Two Acronyms to Know
`The SBIR and STTR programs can be a huge
`help for companies looking to get in on
`tech transfer action.
`
`With about $2 billion per year for exploring technology potential,
`the Small Business Innovation Research (SBIR) and the Small
`Business Technology Transfer (STTR) grant programs assist small
`businesses with conducting federal research. “The programs allow
`companies to expand or improve their product lines, increase
`revenue, and become nationally recognized,” says Betsy Lulfs,
`program director for the SBIR/STTR Assistance Program with
`the Minnesota Department of Trade and Economic Development
`(DE ED). “As a result, many companies play on an enlarged field
`nationally and even internationally.”
`
`Functionally, the programs fund research for products or processes
`that also directly address a federal agency need. More than half of all
`annual recipients have no prior SBIR/STTR experience, and a single
`project may receive up to $850,000 in SBIR/STTR funds. During the
`programs’ 20-year lifespan, Minnesota companies have attracted
`more than $250 million in SBIR/STTR funds.
`
`All funded projects are divided into three phases, which must be
`completed in consecutive order:
`
`' Phase 1— Proof of Concept. Funding: Up to $100,000.
`Involves researching the feasibility of an idea or technology.
`
`- Phase II—Prototype Development. Funding: Up to $750,000.
`Involves developing a prototype that results in a
`commercializable product.
`° Phase III—Commercialization Phase. No SBIR/STTR funds.
`Federal agencies may award non—SBIR follow—on funding.
`
`D E E D provides free support through its 8 Bl R/STTR Assistance
`Program.“The application process is competitive and detailed,” says
`Lulfs.“We recommend businesses come in for a private consultation
`as early as possible. Also, companies often come in seeking a short—
`term fix.These programs are not a Band—Aid.They are designed to be
`a part of a company’s strategic growth plan.”
`
`To find out more, call 651—282—6714 or go to
`www.deed.state.mn.us/sbin
`
`HA.R.G.
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`Page 3
`Exhibit 2005
`Otto Bock
`FALL 2005 | MINNESOTA TECHNOLOGY 27
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`Otto Bock Exhibit 2005 Page 3
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`
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`Glen Street
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`there, you’ll need capital and legal counsel. Working with the
`federal government can include funding, as can collaborating
`with major universities. But don’t assume that only size mat—
`ters. “There’s a role for both large and small institutions,”
`says SCSU’s Street. “Smaller institutions can be very low
`stress, flexible, and cost effective for small businesses.”
`
`As for protecting the product of your project, it can pay to
`hire an IP attorney familiar with your area of interest. He or
`she can work in partnership with your regular counsel to
`ensure your company’s long—term goals are met. “It’s com-
`mon for companies to feel they need to own rights to intel-
`lectual property,” says Fredrikson 8t Byron’s Goldman. “But
`licensing is often better because there are various liabilities to
`ownership, as well.”
`However, licensing can also go awry. “It’s important to
`sort out whether the investigator or the institution owns a
`property,” says Goldman. “A red flag is someone who seems
`interested in working with you, but isn’t including their
`employer, or even their colleagues, in negotiations.”
`On the flip side, you want to receive what’s rightfully
`yours. “For example, can the coating developed for your widg—
`et be used on a competitor’s widget?” asks Goldman. “This
`might be handled by a rights swap—you retain certain rights
`in return for your partner retaining other rights.”
`Naturally, contracts can be extremely detailed. Who pays
`for patenting? How many licensees will there be to the east
`of the Mississippi and to the west? How about in Europe or
`Asia? What if your business expands or contracts? “Nailing
`
`it all down ahead of time limits expensive surprises later on,”
`Goldman says.
`Note: To search for IP lawyers by various criteria, check
`out the American Bar Association’s Lawyer Locator:
`www.abanet.org/lawyerlocator/searchaop.html.
`
`T0 T H E DA N C E
`
`Once you’re ready, it’s time to consider who can tango. The
`most obvious choice also has the most partners to choose
`from: the US. government. “Federal laboratories are good
`partners because they’re not going to be competitors in the
`marketplace,” says Mark Rohrbaugh, director of the Office of
`Technology Transfer at the National Institutes of Health.
`“Plus, the federal government prefers licensing to small US.
`companies.”
`Regardless of your industry, never assume the most glam-
`orous agencies, such as NASA, are the only ones with some—
`thing relevant to offer. For instance, the U.S. Department of
`Transportation conducts technology transfer activities that
`include research coordinated through its Minnesota divisional
`offices. Keep in mind, however, that there’s a downside to
`working with the federal government: decentralization. Agen—
`cies oversee their own tech transfer initiatives, maintaining
`separate Web sites, licensing processes, and partnering crite—
`ria. Two national organizations offer a place to start, the Fed—
`eral Laboratory Consortium (wwwfederallabsorg) and the
`National Technology Transfer Center (www.nttc.edu).
`Another pitfall is timing. “Building partnerships up front
`is crucial,” says Sam Gould, an MTI business services con—
`sultant. “If you wait until an RFP from a government agency
`is posted, it’s already too late.”
`Through their ongoing relationships with federal officials,
`tech transfer—savvy business consultants can be a significant
`help. “We keep track of developments behind the scenes,”
`says Gould. “And we help companies assemble the required
`proposal elements so they’re ready to respond when a solic-
`itation comes out. We keep all the details required for feder—
`al projects on track.”
`
`ONE THE LOCAL SCENE
`Local resources abound. “There’s real wealth within institu—
`
`tions across the state; even many of the tech schools are for—
`ward thinking,” Gould says, pointing out the nationally rec—
`ognized Automation and Motion Control program at
`Alexandria Technical College and Dakota County Technical
`College’s nanoscience initiative. Other options include:
`
`0 DEED. For federal project funding, look to the
`SBIR/STTR Assistance Program for resources and
`guidance. (For more information on the programs,
`check out “Two Acronyms to Know,” on page 37).
`
`0 The Minnesota Trade Office (MTO). MTO initiatives
`with tech transfer component include a recent project
`with Sri Lanka and Governor Tim Pawlenty’s Novem—
`ber trade mission to China, where one significant goal
`was establishing relationships for the future.
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`28 MINNESOTA TECHNOLOGY | FALL 2005
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`—deralaseStudy:NIH I. - i I
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`0 Mayo Medical Ventures, Office of Technology Com-
`mercialization. With facilities in Rochester, Arizona,
`
`and Florida, the Mayo Clinic is busy churning out new
`instruments and processes as well as primary and sec—
`ondary research. To keep up, Mayo Medical Ventures’
`licensing staff has tripled over the past five years. “We
`strive to work at the pace of our business partners and
`we structure every agreement to fit the situation,” says
`Stoddard. “There’s nothing cookie-cutter here.”
`
`0 The Minnesota State Colleges 8C Universities
`system (MnSCU). MnSCU’s 32 institutions offer
`decentralized resources sometimes overshadowed by
`their larger universities. “You’ll find incredible talent
`at smaller institutions,” says SCSU’s Street, Who adds
`that his department alone has teamed up with the likes
`of Gatorade, Guidant, and Rollerblade, to name a few.
`
`0 University of Minnesota. Through its Office of Busi—
`ness Development (GED) and Patents 8c Technology
`Marketing (PTM), the U of M fields requests ranging
`from equipment loans to multi—party collaborations.
`Formed in 2004, the OED serves as the “front door”
`for businesses and strives for a 24—hour turn around
`
`to any request, according to Assistant Director Dick
`Sommerstad. “In addition to in—house resources, we
`
`maintain a network of more than 15,000 organizations,
`which allows us to tap into literally millions of
`resources,” he says, adding that OBD will launch an
`expansion initiative around Jan. 1, 2006, that will
`include an innovation fund and new business devel—
`
`opment managers, along with a new Web portal.
`
`Over at PTM, the focus is on negotiating intellectual
`property agreements. PTM actively markets available
`technologies and generally keeps a finger on the
`research pulse. “Contacting us to say, ‘We’re interest-
`ed in XYZ technologies,’ puts you on our radar screen,”
`says Tony Strauss, acting assistant vice president. “Even
`if there’s nothing currently appropriate, we may know
`key researchers your company should meet with.”
`
`The most important tip for working with the U of M?
`“Don’t be reluctant,” says Strauss “Just pick up the
`phone and give us a call.”
`
`M A K E T H E C A L L
`
`Indeed, Strauss’ advice applies universally. The United States
`spends billions on research each year. By some estimates fed—
`eral labs alone conduct $100 billion in research and develop—
`ment annually. Tech transfer can help companies tap into that
`vast warehouse of ideas. “What’s important is getting start—
`ed,” stresses Gould. “The winners will be the companies that
`make the call.”
`
`
`Elsewhere in this issue, Anne Rawland Gabriel wrote about
`international contracts.
`
`
`
`H ealthy Starts
`GETTINGTHE MOST FROM THE NATIONAL
`INSTITUTES OF HEALTH.
`
`For a glimpse at working with federal research labs we asked
`Mark Rohrbaugh, director of the Office of Technology Transfer at
`the National Institutes of Health (NIH), a few questions about
`partnering with his organization.
`
`I want to explore NIH opportunities.Where should I begin?
`
`The Web is an excellent place to start. For collaborative research
`with NIH, go directly to the Web site of the relevant institute. 0r
`conduct keyword searches at our main site—www.nih.gov—and
`drill down from there.
`
`Also, consider technologies under exploration intramurally and
`extramurally—projects in—house and those funded by the NIH but
`conducted at universities, hospitals, and other research institutions—
`as well as possible collaborative opportunities at crisp.cit.nih.gov.
`Regardless, remember that related technologies may be under
`exploration at more than one N I H institute. And don’t overlook the
`smaller institutes—they’ve produced some successful products.
`
`Similarly, look for biomedical technologies within other departments,
`such as the U .S. Department of Defense and NASA, because a
`multidiscipline approach can lead to important breakthroughs. An
`efficient way to explore interests across agencies is to search clinical
`trials, government—wide, at http://c|inica|trials.gov. From there, click
`over to the National Library of Medicine for other databases with
`citations dating back to the 19505.
`
`Are there financial resources available for conducting
`research with your agency?
`
`Yes. Options include grants, contracts, and partnering
`opportunities. Special initiatives are announced in the NIH Guide
`to Grants and Contracts at this Web site:
`http://grants.nih.gov/grants/guide/index.html.
`
`To sell your goods or services that result from research,
`government—wide procurement opportunities over $25,000 can be
`found at www.fedbizopps.gov.
`
`What if I'm interested in licensing an existing technology?
`
`Licensing available technologies is handled centrally by our office.
`A listing is available at ott.nih.gov, where you’re also welcome to
`register for our bimonthly e—mail licensing announcements.
`
`What are the most important things a business should know
`about working with your agency?
`
`1) Our driving factor is improving public health.
`
`2) We’re flexible. We find ways to work with all types and sizes of
`business.
`
`3) We structure licenses to meet every need because the federal
`government prefers nonexclusive licenses with small U.S.
`companies.
`
`4) Government scientists may discuss scientific issues or
`collaboration options as part of their official duties. But
`limitations apply to outside consulting.
`
`5) Contacting our office for assistance immediately, and
`regularly throughout the process, improves experiences by
`reducing misunderstandings and delays.
`
`Finally, we welcome you to start wherever you are right now. The
`NIH works with the entire spectrum of businesses, from emerging
`to established. Our primary interest is good science/engineering
`with the potential to address an otherwise unmet public health
`need, whether via a product, service, or research technology.
`—A.R.G.
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`Page5
`Exhibit 2005
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`Otto Bock Exhibit 2005 Page 5
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