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Press Release | Feb. 12, 2001

NSA Employees Receive First-Ever Royalty Checks

On 14 February 2001, the Director of the National Security Agency (NSA), Lt Gen Michael Hayden, will present the first-ever royalty checks to two NSA employees for their invention of software source code that NSA licensed to Raytheon Company, which then developed a commercial product that it has sold to other Department of Defense agencies and commercial entities. This is the first time that a commercial product was developed and sold to other commercial entities as a result of a transfer of technology from NSA. Although NSA has licensed other technologies, and other products may have been developed, this is the first time that the Agency has benefited from a company's revenue stream through continuing royalty payments.

Media is invited to attend the presentation ceremony, which will take place at the National Cryptologic Museum on 14 February 2001, from 1400 to 1500. Please contact the NSA Public and Media Affairs Office to R.S.V.P. and for directions to the Museum. Details follow.

In 1994, the National Security Agency (NSA) established a formal technology transfer mechanism for openly sharing technologies. NSA scientists and engineers, along with academic and research partners, have developed cutting-edge technologies that not only have satisfied mission requirements, but also have served to improve the global technological leadership of the United States. In addition, these technical advances have contributed to the creation and improvement of many commercial products in the U.S.

NSA has identified several advanced technologies in the core areas of signals processing, computing, communications, networking, microelectronics and advanced mathematics as potential transferable technologies. Through these technologies, NSA has emerged as a technical partner and a testbed for innovative corporations. By sharing releasable advanced technologies, NSA assists in sustaining U.S. industry's commercial leadership, enhancing international competitiveness and promoting a healthier domestic economy.

Through its Domestic Technology Transfer Program, NSA has the authority to license Agency technologies to various companies throughout the United States. The benefits of this program include improved relationships with industry, Commercial-Off-The-Shelf (COTS) products, leveraged NSA R&D investments, and a modest revenue stream back to the Agency and its inventors.

Additional information about technology transfer at NSA is available by clicking on the Domestic Technology Transfer button on the NSA Home Page ( Phone numbers and details about specific technology available for licensing are included.

The Technology Transfer Program was mandated by Congress through the 1986 Federal Technology Transfer Act. This legislation stipulates that federal agencies with 500 or more employees performing research and development activities must transfer a percentage of their research information to the private sector. NSA has a responsibility under that Act and the Technology Commercialization Act of 2000 to license releasable technologies to the private sector for potential commercialization. The purpose of the first Act was to encourage the federal laboratories to release technologies created to the private sector for commercial purposes, thereby granting U.S. businesses a potential competitive advantage in the global marketplace. The second bill simplifies the process of licensing government-owned inventions to the private sector.

A Department of Defense (DoD) regulation permits inventors to receive 20 percent of the licensing fees and subsequent royalties for the sale of products. The inventor has the potential to earn up to $150,000 per annum.

This cost-effective development alternative has already created a strong base relationship with certain areas of industry. Today, as the political composition of the world changes and a defense-driven economy is no longer the main emphasis, there is an increased focus toward transferring applicable defense technologies into national industry. U.S. industry will continue to benefit from advanced technologies, and in turn, the partnership between industry and NSA will continue to expand. NSA's active participation in the High Performance Computing and Communication (HPCC) initiative is a prime example of tapping NSA expertise in an area of serious interest and technical challenge.

In the future, the technical health of U.S. industry will become even more important to the success of the National Security Agency. For that reason, efforts will continue toward technology transfers that will be beneficial to industry and academia.

License Agreements with industry have netted the Agency over $250,000 in licensing fees over the past 5 years. Some of the licensees include IBM, Lockheed Martin, Marconi (formerly Fore Systems), Allied Signal, and Annapolis Micro Systems.

The Invention/Patent:
In 1999, NSA's Office of Research and Technology Application, in conjunction with the General Counsel for Technology, licensed software source code to Raytheon Systems. As a direct result of this technology transfer, Raytheon has developed a product called "Silent Runner," which they have sold to other DoD agencies and commercial entities and have used internally at their company. The "Silent Runner" product has also been sold back to NSA for use in the Information Assurance Directorate and the Army intelligence branch. Commercial purchasers of "Silent Runner" include financial institutions, financial security institutions, and pharmaceutical corporations. This product is a passive, multi-functional network Discovery, Visualization and Analysis (DVA) System that provides real-time auditing and monitoring. The Analytical Engine replicates network activity and produces a wide variety of two- and three-dimensional views to enhance the user's understanding of complex networks.