The Bayh-Dole Coalition, an evidence-free lobbying organization in support of not enforcing Bayh-Dole’s public protections, tweeted today a “success” story:
The link provided is to a story in AUTM’s “Better World Project” publication from 2011, “From Tamales to Skateboards: A Green Idea Harvested from the Corn Belt.”
There’s a lot going on in this simple tweet. Let’s contest a few things:
*the invention did not come from “research”
*the invention wasn’t Bayh-Dole
*the invention has not been “commercialized”
But still, there may be a success here somewhere, even (especially) if Bayh-Dole is not involved.
Here’s a synopsis of what has happened. In the mid 1990s, three faculty members at the University of Illinois meet for lunch and come up with an idea for a “local” invention–a flake board made from corn husks. They take the idea to the university’s IP office, which sees an invention and accepts university ownership, files a patent application. That’s 1995. Patent issues in 1998 as US Patent 5,834,105, “Corn-based Structural Composites.”
Seven years after the patent issues, in 2005, (and 10 years into the patent’s term), Illinois licenses the invention exclusively to a company. The company holds the license for 4 years, but then “disappears.” Investors who have lost their money ask an entrepreneur in Texas to look into the assets of the failed company and he identifies the Illinois invention and exclusive license.
But the investors don’t pay the guy so later he goes to the Illinois IP office and gets them to terminate the license with the failed company and license to his new company, Cornboard Manufacturing, deal done in 2009. Well, he holds the exclusive license for another 7 years until the patent expires, but doesn’t get beyond producing a very nice company web site, some prototypes, and getting pulled on a cornboard skateboard at a world record speed.
In 2016, just as the Illinois patent expires, our entrepreneur files a patent application for a specialized shipping pallet, with one of the dependent claims specifying the use of “biomass” as a primary material, and with a specification that teaches the use of corn husks as an instance of that material. Three patents issue, in 2018, 2020 (a continuation), and 2022 (another continuation). Company announces in 2020 that it will build a new $15M factory in Iowa to make cornboard pallets, but here it is nearly 2023 and it appears that nothing has been built.
That’s the story. Now for the claims.
According to the story, three “colleagues” met weekly for lunch and brainstormed and got the idea “to turn corn waste into a plywood-like building material.” The “colleagues” were faculty members at the University of Illinois. They thought up an idea. The idea came first–that they were “researchers” as well misses the point. In this case, they weren’t researchers but rather just faculty people for the purposes of this story. The basic thing is–cornfield waste + flake board.
Their idea became the basis for a patent obtained by the University of Illinois–5,834,105–“Corn-based Structural Composites” application filed in December 1995 and issued in 1998.
The first claim lays it all out:
1. Amended a structural polymeric composite consisting essentially of a polymer matrix and intact corn husks.
That’s it. Dependent claims add details–types of polymer and the alignments of the corn fibers in the corn husk layer. It’s a very simple invention, really–there’s no research involved to invent, though there may have been work to figure out what polymers work best, and how to prepare those corn husks. Any of that work might have involved additional inventions, but Illinois didn’t file any further patent applications, though White and Sottos went on to collaborate on over 30 additional joint inventions at Illinois. (There is a story there, certainly.)
The AUTM story continues:
They got a grant from the United States Department of Agriculture, which they used to perfect their material. The next step was to bring it to market by licensing the technology.
The invention was made before the federal grant, and unless the University of Illinois screwed up and failed to include a federal funding statement in its patent application, the invention was not a subject invention–which indicates that the first actual reduction to practice took place before the grant. According to the AUTM account, they used the grant funding to “perfect their material.” Just what does that mean? Clearly, whatever they did did not involve further inventive work, since no further patent applications were filed. So what does it mean to “perfect” a material after filing a patent application on the material?
The patent application was filed 12/29/1995, and provides two examples of usage, describing in technical detail how cornboard was made. The examples report the results of both making and testing cornboard–clearly, actual reduction to practice took place before the patent application was filed, and apparently as well before the Department of Agriculture grant began. Here’s an excerpt:
(19) Two types of husk laminates were made. Both types used an epoxy resin as the matrix. . . .
(20) Both types of laminates were manufactured by hot pressing using a Tetrahedron MTP-14 laboratory hot press. A rectangular aluminum mold (203 mm.times.203 mm) was fabricated with a matching upper caul plate.
There’s a practice tip–if you anticipate federal funding, do the initial prototype build and testing and get a patent application filed before starting a federal grant. There may be further work to do to select or prepare corn husks or to figure out how to mass produce with quality control, but the core invention doesn’t come within the scope of Bayh-Dole. And here is an interesting thing–Bayh-Dole focuses on patentable inventions, but not on the full set of information that might be useful to practicing those inventions. Cornboard is “invented”–use corn husks in flake board. But the federal grant allows the invention to be “perfected.” Not “completed” or “made” or “actually reduced to practice” but stuff after the inventing and initial testing. For this later stuff, so long as there’s nothing new that’s patentable, Bayh-Dole takes no interest. Isn’t that weird?
As it is, the cornboard patent would have been easy to design around. Just don’t use corn. Any other “biomass” is fair game, like, say, peavines. Or, just don’t use intact corn husks. But there is another way to get around a patent–wait it out. And there’s a fundamental industry response to universities that take out patents and refuse to license non-exclusively on FRAND terms–if not royalty-free.
AUTM continues its story:
Several years later, in 2005, the office signed an agreement with a company to develop the product. Then nothing happened. The licensee essentially disappeared . . .
“Several”–like half way through the life of the patent! Having “perfected” the product, now Illinois exclusively licenses the invention to a company to “develop” the product. What does “develop” mean here? Does it mean that cornboard wasn’t developed before? That the patent failed to teach the invention in a usable form? Or does “develop” mean more like “create a demand for” cornboard? Or is it that cornboard is just a material in search of products, and the job of the company was to pick at least one product, any product, and make and sell it using cornboard? It’s difficult to say without a look at the licensing agreement. In a sense, AUTM’s story here merely recites the standard narrative–that of invention, patent, and product development–and substitutes that narrative for whatever it was that was supposed to happen. Rather than provide the details just when that would be helpful, AUTM obscures the details and replaces them with an abstract narrative. We are left wondering–why did Illinois grant an exclusive license to a company that was able then to “disappear”? Who was communicating with the company as part of the transfer of the technology? After a couple of years of no progress, why did Illinois leave the license in place? Why wait four years?
Here is another practice tip–if you are going to grant an exclusive license (likely the easy way out, but generally foolish for a university), then stay on that license–every month, if not every week. There’s no way that anyone should grant an exclusive license and then wink out about it for four years, especially for something like cornboard, which was already developed as a material. All you had to do was make product and start selling–and there’s the disjunction between inventing and selling. It is not about “developing” the invention to the point that it can be used–it is about breaking into an existing market with something that uses cornboard rather than any other material. Unless cornboard can do something those other materials cannot, then you are up against incumbents with nothing distinctive except a different material among hundreds of possible materials. Steven Blank in The Four Steps to the Epiphany says a startup needs to outspend incumbents 7 to 1 to make a dent in their market share. It’s not about “developing” anything other than a market presence, preferably with something that gives the startup’s product something distinctive that customers will prefer.
Meanwhile, Lane Segerstrom, an entrepreneur, meets up with some investors from the disappeared company, and the investors, having lost money, want to get some back, so they ask Segerstrom to look at the assets of their disappeared company (apparently, they didn’t want to put in the money to keep the company going–how much was that?) and Segerstrom finds the Illinois patent license. By 2009, the patent has only six years left.
According to AUTM’s story, Segerstrom asked for an exclusive license to the Illinois invention:
He called the OTM and asked if he could get a new exclusive license to the technology. They agreed, and by 2009 were able to void the original license and grant Segerstrom his own, a process that is highly unusual, Wille says.
“Void” is an interesting word here. I would expect “terminate.” If a company is bankrupt, terminating a license can be challenging, though it really is not all that unusual. In this case, however, it is possible that the company just wound down its activity and didn’t owe anyone anything–perhaps it never had much in the way of operations. Perhaps what Wille, the Illinois tech manager, meant is that it is highly unusual for Illinois to terminate a license where the licensee breaches the agreement by failing to develop the promised products. But if Illinois fails to terminate failed licenses, wouldn’t that be a rather big problem for technology transfer? So perhaps Wille meant something else altogether, though you got me what that might be.
Looking to revive the cornboard patent, Segerstrom looked for products, which is a good move. It’s not like just producing cornboard in vast piles would result in people racing to place orders for the stuff.
“What can we put CornBoard in that’s a sexy product, a wow product?” Segerstrom wondered at the time. The answer: skateboards.
A skateboard made of cornboard? Why does that mostly totally appear to be something that could not possibly matter. Lawn furniture? Same deal. Nothing shouts out gotta have. It’s not that the invention requires further development–it’s that for some things, even patented things, the problem has nothing to do with what’s invented. It has to do with having the capabilities to produce a product that can’t be produced with any other material, or to produce a product that will compete with other similar products, regardless of the material.
Consider, for instance, Santa Cruz Skateboards. Here’s a look at a selection of their decks:
In one you can almost see wood grain. Mostly, however, the material is, well, immaterial other than that it provides a foundation for wheels, a topcoat with graphics, and a rider. To break into this market, one would have to have a better argument for cornboard than that it saves farmers from bother, or that it is “green” (despite all that resin). Nah. Doesn’t work. Cornboard is not sexy, even if skateboards might be, at times.
“If we can deliver to the consumer at the same price a product that is better designed and better quality, then somebody is going to buy green over not green,” he says.
Doesn’t make much sense to try to break into the skateboard business because you have cornboard. That is, start from scratch in skateboard making because you have a composite material made out of corn waste. Put this way, the idea is super twisted.
If you have a better skateboard at the same price, then people who think the “better” matters might buy it. If cornboard makes a better skateboard, as in better performing, then if that “better” is a whole lot better, maybe, if you show you are truly there for skateboarders. But there’s a lot packed into that “better.” If all that cornboard has going for it is that it is made of corn waste and therefore somehow “green,” then the “better” that would matter to most skateboard buyers has nothing to do with cornboard. You’d have to set up to make a better skateboard than, say, Santa Cruz Skateboards. And that’s a whole different thing for which cornboard’s greenness is a non-starter. If cornboard made a superior skateboard, then the obvious deal is to set up to sell cornboard to Santa Cruz Skateboards. Those folks might even like the idea that cornboard is “green.”
Here is some web advice about what makes a good skateboard:
A good skateboard is constructed of 7-ply Canadian Rock Maple. It is that simple. If you are looking at a skateboard and it is made of something else, or the seller cannot tell you what it is made out of, STEER CLEAR. Some really cheap boards can be made of lower quality materials such as plastic, balsa wood, and pine.
Oh, but how about corn husk laminate? Yeah, you see, it just doesn’t work. And it hasn’t worked out for Corn Board, either.
The second part of this study is here.