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U of Waterloo sues one of its own start-ups over rights to a battery technology

By Jesse Schwartz
Published: October 3rd, 2018

The University of Waterloo (UW) is suing one of its own start-ups for the rights to a rechargeable battery that is cheaper and more environmentally friendly to produce than standard lithium-ion batteries.

According to UW officials, Salient Energy wrongly misappropriated the university’s IP, which forms the basis of the start-up’s battery technology. School policy dictates that on-campus researchers cannot retain full rights to their IP if outside organizations fund the research, and UW says the U.S. Department of Energy’s Joint Center for Energy Research (JCESR) provided funding for the project. The university now wishes to license the technology to the DOE’s Argonne National Lab. 

While JCESR provided $1.1 million to the lab of Linda Nazar, who co-developed Salient’s technology, the start-up – founded by PhD students and postdocs working in Nazar’s lab — argues that none of the funding went towards its particular technology. In addition, Salient points to UW’s own policy stating that researchers who perform sponsored work have to provide informed consent to give up their IP rights to the university.

Making the situation more complicated, Salient’s co-founders at a certain point couldn’t agree on sharing ownership of the company, and Nazar was left out. Salient then filed a patent application for the technology but didn’t name Nazar as an inventor, claiming that her contributions weren’t sufficient to be included.

Soon afterward, UW filed its own rival patent application that did include Nazar as an inventor, claiming that she contributed invaluable guidance and direction to the project. The university’s law firm then demanded that Salient co-owner Brian Adams sign over his IP rights to UW. He refused, and the university filed its lawsuit in June asking for $600,000 in damages.

“We recognize this is not a good situation for a university of our reputation to walk into, but this is a complex dispute and one that we have not faced before,” says UW spokesman Nick Manning. “We need to be quite careful not to conflate this unique dispute to a takeaway about what this university stands for. We want to create an innovation ecosystem that benefits Canada and the world.” In fact, UW has been a leader in faculty-friendly IP policies, generally allowing researchers to retain IP ownership and choose whether they wish to have university assistance in commercialization – a major exception being research with outside funding.

Salient has replied in a court filing that the lawsuit is baseless. According to CEO Ryan Brown, UW’s actions are “beyond the pale,” as it previously encouraged the start-up to commercialize the same technology it is now suing to obtain for itself.

“It is obviously disappointing that UW has made the decision to reverse its position,” Brown says, “and demand an amount of money that would bankrupt most young start-ups.”

Meanwhile, the start-up continues to operate out of UW’s Velocity Garage incubator, and Manning says the school has no plans to oust them from the space and would still prefer to reach a settlement with Salient.

Source: Canada Live News

Posted under: Tech Transfer e-News

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