Licensing from government labs (CSIR, DRDO, ISRO; US CRADAs)

1. Core idea and who it's for#

Government labs hold some of the most commercially under-used technology in the world. In India these include CSIR's 37 labs, DRDO, ISRO, the DBT and ICMR institutes, and BARC. In the US there are the national labs of DOE, NIH, NASA, DoD, NIST and others. The UK has national labs and research council institutes.

Unlike universities, these labs are not mainly in the business of spinouts. Their licensing systems were built to transfer production know-how to established manufacturers . A startup can still license their technology, and increasingly on startup-friendly terms, but the process, the fee structure and the restrictions are different , and you have to fit them.

There are three main differences from university licensing:

1. The licence is usually non-exclusive. Many labs license the same technology to several manufacturers. India's DRDO and ISRO transfers are mostly non-exclusive, and CSIR often is too. If you need exclusivity to raise venture money, you have to argue for it, often for a narrow field or region.
2. You get know-how, not just patents. The transfer package is often drawings, process documents and training ("handholding"), priced as an upfront technology fee plus a running royalty. This suits manufacturing, but leaves a startup with weaker IP to show investors.
3. Rules from the public sector come with it: national-security screening, domesticmanufacturing preferences, export controls, publication notices and, in the US, government-use rights and march-in rights.

Who this is for: founders who want to build on technology from a government lab, whether as a former scientist there or as an outside entrepreneur who found it in a catalogue. It also covers founders planning a CRADA, a joint-development agreement with a federal lab, rather than a straight licence.

2. Evidence: how each lab system licenses#

India: CSIR#

CSIR labs license both patents and know-how. Many use NRDC (the National Research Development Corporation) as their licensing agent. The usual structure is an upfront "premium" plus a running royalty on sales, and many licences are non-exclusive and timelimited. CMERI's public licence list shows non-exclusive, five-year licences, and its technology catalogue lists fixed transfer fees of about ₹5–8 lakh plus GST for packages at TRL 6–7 (CSIR-CMERI licensees). CSIR also does larger deals. A 2019 CSIR presentation describes a deal with ₹4.5 crore in premia and a 5% royalty (CSIR/APCTT). The government told Parliament in July 2026 that CSIR had facilitated 148 startups over three years (PIB summary). Many CSIR labs now run their own innovation hubs and incubators for startups.

India: DRDO#

DRDO revised its ToT policy in February 2025 and issued updated procedures, which include a section on support for SMEs and startups (DRDO ToT Procedures 2025). Under the new policy:

• The 20% ToT fee previously charged is waived for development-cum-production partners, development partners and production agencies (Hitavada).
• MSMEs and startups can license "feeder" technologies at 50% of the standard fee (Indian Masterminds).

At its VIMARSH industry meet in September 2026, DRDO launched a framework for sharing software source code with licensees, and measures to simplify compliance and speed up licensing. It also said more than 2,300 technologies had been transferred (KNN India). DRDO licences are generally non-exclusive and limited to Indian companies, with security and export-control conditions.

India: ISRO#

Transfers go through NSIL, with IN-SPACe evaluating applicants. The process is:

1. a request through the IN-SPACe portal;
2. IN-SPACe evaluates the company's capability;
3. a three-way agreement is signed by NSIL, IN-SPACe and the company;
4. the fee is paid to NSIL;
5. ISRO provides handholding during the transfer (NSIL).

Under IN-SPACe's differential pricing policy, startups, MSMEs and academic institutions get a 30% concession on transfer fees (TechObserver). As of August 2026, NSIL had signed 118 transfer agreements covering 83 ISRO technologies (PIB via GlobalSecurity).

US: federal labs#

Federal labs license under 35 U.S.C. 209 and 37 CFR part 404. An exclusive licence needs a public notice in the Federal Register, usually with a 15-day objection period, during which others may object or apply for a competing licence (NCI TTC). NIH offers start-up exclusive licences to reduce the time and cash needed at the start. Their features include:

• the statutory minimum notice period of 15 days;
• a set sublicensing royalty rate of 15%;
• the option to negotiate anti-stacking terms (NIH OTT).

The original programme deferred the upfront fee until a liquidity event or first sale. It was aimed at companies under 5 years old, with less than $5M raised and fewer than 50 employees (NIH archive).

A CRADA (cooperative research and development agreement) is the federal equivalent of an SRA. The lab can contribute staff and facilities but not cash. The company can contribute both. The collaborator gets an option to an exclusive licence for inventions made under the CRADA, and NCI waives the Federal Register notice for a CRADA collaborator who applies in time (NCI TTC).

3. Method: find, approach, negotiate#

Step 1. Find the technology. Search the catalogues:

• CSIR lab technology pages and NRDC's listings;
• DRDO's ToT catalogue;
• the NSIL and IN-SPACe portals for ISRO;
• the Federal Lab Consortium's FLC Business search, which covers the US labs;
• the NIH and NCI technology listings, and DOE lab licensing pages.

Note the TRL and the patent status, and whether the listing is already non-exclusively licensed to others.

Step 2. Talk to the inventor before the licensing office. As at a university, the scientist decides whether the transfer actually works. Find out:

• what is in the know-how package;
• what the patents don't cover;
• whether the lab will keep developing the technology;
• whether the scientist can consult for you. Government-scientist conduct rules often restrict this, so check.

Step 3. Decide what you need: exclusivity, field and territory. VCs will ask how you can defend against the next licensee. Options include:

• an exclusive licence in a narrow field, for example one application or one sector;
• a time-limited head start, such as 2–3 years of exclusivity before the lab licenses others;
• exclusivity only for the export market;
• relying on your own improvements and patents filed on top of the licensed base, which is often the real moat.

Step 4. Negotiate the money in a startup-friendly way.

• Ask for the startup or MSME concession: 50% off for DRDO feeder technologies, 30% off at IN-SPACe, and deferred upfront fees under NIH start-up licences.
• Ask to pay the upfront premium in instalments tied to milestones.
• Ask for a royalty holiday until first sales, and a lower royalty on products that combine the licensed technology with your own.
• Clarify the handholding charges and how many days of scientists' time they include.

Step 5. Check the public-sector conditions. Typical ones are:

• Indian ownership or control requirements;
• export-control and end-use restrictions, which are especially strict for DRDO and ISRO;
• government-use rights;
• reporting obligations;
• US domestic-manufacturing preferences for products sold in the US;
• march-in rights;
• termination if you don't commercialise within a set period.

Ask counsel whether any of these would block a foreign investor, an acquisition by a foreign company or a move overseas. That is the investor's biggest question.

Step 6. Plan your own IP on top. File your improvements in the company's name, and check the licence's grant-back clause. Some labs want a non-exclusive grant-back of improvements, and you should resist anything broader.

Worked example (illustrative)#

A founder finds a CSIR lab's ceramic membrane technology for water treatment. It is at TRL 6, with one Indian patent, and the lab has already licensed it non-exclusively to two manufacturers of municipal systems.

• Positioning. The founder doesn't compete in the municipal market. She asks for an exclusive licence in a different field: industrial wastewater for textile dyeing, in India and export markets, for 5 years.
• Terms. The lab offers a ₹15 lakh premium and a 3% royalty. She negotiates:
  • ₹5 lakh on signing and ₹10 lakh at the first commercial installation;
  • a 3% royalty on membrane modules only, not on whole systems;
  • 20 days of handholding from the scientists in year 1;
• a non-exclusive grant-back of improvements, limited to the lab's research use.
• Moat. In year 1, the company files two patents of its own, on module design and an anti-fouling coating. By the seed round, investors are valuing those patents and the field exclusivity, not the licensed base patent.
• Diligence check. The licence has no restriction on foreign investment, only on transferring the licence to a foreign party without consent. Investors accept that as standard.

4. India / US / UK at a glance#

India in practice. Founders who are former lab scientists should check the lab's rules on leave, consultancy and equity for scientists. CSIR, DRDO and ISRO each have their own. Read DRDO's 2025 procedures and the IN-SPACe and NSIL portals first, because they are now well documented.

US in practice. Start-up licence programmes are fastest at NIH and NCI. DOE labs have their own entrepreneurial-leave and startup-licensing schemes. For deeptech, a CRADA plus an SBIR or STTR is a common way to fund joint work (13.08).

UK in practice. Expect commercial negotiations similar to a university's, but with nationalsecurity screening of investors in sensitive sectors under the National Security and Investment Act.

5. Scripts, mistakes, related playbooks and sources#

Scripts

Asking for field exclusivity:

"We're not competing with your existing municipal licensees. We want to take this into textile effluent, which nobody is serving. To raise the capital to do that, we need exclusivity in that field for five years. In return we'll commit to milestones: a pilot within 12 months and a commercial installation within 24. If we miss them, exclusivity ends."

Asking for startup pricing:

"We're a DPIIT-recognised startup. Does the startup or MSME concession apply? Could the premium be split, with part on signing and the rest at first commercial sale?"

US, with an NIH or federal lab:

"We'd like to apply for a start-up exclusive evaluation option, leading to a start-up patent licence. We qualify on age, capital raised and headcount. What field of use would you consider, and can we discuss anti-stacking now?"

Common mistakes#

1. Raising on a non-exclusive licence without explaining your moat. Investors assume the next licensee will copy you.
2. Treating the know-how package as complete. Insist on handholding days, and test the transfer early.
3. Missing restrictions on investment or transfer. Rules on foreign investment, export or assignment in the licence block a later round or an exit.
4. Weak terms on improvements. A broad grant-back hands your own improvements to the lab, or through the lab to other licensees.
5. Ignoring the Federal Register notice in the US. A competitor can object or apply for a competing licence during the notice period, so be ready for that.
6. Former lab scientists leaving without clearance on IP, leave and conduct rules. That creates ownership disputes later.

Related playbooks#

• 2.01 Who owns your invention
• 2.07 Licence terms
• 2.08 Royalties and anti-stacking
• 2.09 Sublicensing and change of control
• 2.14 University labs and SRAs
• 13.08 US SBIR/STTR
• 17.15 Research-security rules

Sources#

• DRDO Procedures for Transfer of Technology 2025, DRDO
• DRDO's 2025 ToT policy, Indian Masterminds
• DRDO passed on 2,200 technologies, The Hitavada
• DRDO unveils initiatives for MSMEs and deep-tech startups, KNN India
• Technology transfer, NSIL
• ISRO expands technology transfer to domestic industry, TechObserver
• Parliament question: space startups, PIB (August 2026)
• Technology licences, CSIR-CMERI
• CSIR technology licensing initiatives, CSIR presentation
• Commercialisation of government-developed technologies, PIB summary (July 2026)
• NIH Start-Up Exclusive License Agreements, NIH OTT
• Exclusive licensing agreements, NCI Technology Transfer Center

The worked example is illustrative, and its fees and terms are assumptions. Lab policies change often, especially in India's defence and space sectors, so confirm the current terms with the licensing office. Last checked November 2026.