Cornboard, Part 2

Despite various announcements about possible products and manufacturing, Cornboard Manufacturing appears not to have manufactured much of anything by the time the Illinois patent expired in 2016. Although the company did not “disappear” like Illinois’s first exclusive licensee, it did manage to not make product for six years.

But other things were cooking. In 2015, Segerstrom filed a design patent application for a “Maintainable pallet.” A few months later, he files a provisional patent application for a utility patent version of the same pallet. Interesting–a shipping pallet design. Then, as the cornboard patent expired, Segerstrom converts the provisional application into a utility patent application–“Maintainable Pallet,” which issued in 2018 as US Patent 10,1118,732, to be followed by two continuations, issuing in 2018 and 2020. Another design patents–for a pallet “corner,” a continuation of the initial design patent application (issued 2019). In the ‘732 patent, we find claim 8 is:

8. The maintainable pallet of claim 1, wherein the at least two side supports, the central support, the plurality of top transverse supports, and the at least two bottom transverse supports all comprise composites made from biomass material embedded in a polymer matrix.

And that’s our old friend, the cornboard invention, now showing up as a dependent claim on an actual inventive product, a “maintainable” pallet. In the specification, Segerstrom teaches the use of corn husks:

(15) In some embodiments, the two side supports 102, the central support 106, the plurality of top transverse supports 123125, and 127, and the two bottom transverse supports 140 comprise composites made from biomass material embedded in a polymer matrix. For example, the composites may be corn-based structural composites that include a fibrous component of corn. In some embodiments, the composites include a structural polymeric composite having a polymer matrix and intact corn husks. The corn husks may be laminated using a polymer matrix of epoxy resin, phenol-formaldehyde, or a polyester, or using any other suitable binder.

(16) The corn husks may have elongate fibers aligned with a first line along the length of each husk, and the corn husks are disposed in a corn husk layer such that the first lines of the corn husks are aligned in the corn husk layer. In some other embodiments, the corn husks may further have elongate fibers aligned with a first line along the length of each husk, and the corn husks are disposed in a corn husk layer such that the first lines of the corn husks are randomly oriented in the corn husk layer. The composites may have an aligned direction same as an length direction of the two side supports 102, the central support 106, the plurality of top transverse supports 123125, and 127, and the two bottom transverse supports 140.

Basically, these paragraphs teach the patented Illinois invention, which is fine–that patent had been published long before, and by the time Segerstrom files his utility application, the Illinois patent is expiring.

Now a shipping pallet is a long way from sexy, as well as a long way from a skate board, but there’s a lesson here, that sexy is not always a good first move in the startup world–maybe something that runs below notice, that will never make it to Wired or Fast Company, might be a more workable first product. After all, two billion pallets are made in the United States each year. Maybe there is something here. Still, there are incumbents–many of them!, and Steven Blank’s argument is still in play–gotta be prepared to outspend them by a significant margin to gain any market share. And that’s even if there is any material advantage, so to speak, to using cornboard–performance, price, something. Looks is not going to be a big selling point for pallets.

Consider, for instance, Integrated Composite Products. ICP is based in Minnesota, and was started in 1985. According to Crunchbase, the company is focused on delivering “advanced technology solutions” using “long- and short-fiber composites.” A 2016 article in CompositesWorld reports on a new ICP composite-based pallet. ICP has obtained 11 US utility patents and 1 design patent on various aspects of its new pallet. Patent work began in 2015. In addition, ICP has raised $1.9M in new investment funding in the past three years.

This new pallet was distinctive in having selective reinforcement at just those places in a pallet where there might be extra stress on the materials. The article quotes the lead designer/inventor, Ron Hawley (AFR = advanced fiber reinforcement):

The sheer number of design factors/combinations with AFRs — types, sizes, formulations, etc. — base resin matrices — percentage glass, melt flows, formulations, etc. — and the interdependent impact of part designs — rib depths, rib heights, wall thickness, etc. — for each board and block as well as the entire pallet system was staggering!

In Hawley’s account one can see the marked contrast between a patent right–claims describing the outer boundaries of an invention–and the many issues that have to be addressed to settle on a product design tuned to an effective way to scale production of product. Here’s where one hits “development.” It’s not “development of an invention” but rather development of a product, where the inventive bits are just that, bits added to an overall complicated, multiplex design space, like raisins in fruit cake.

It’s not enough, by far, to have invented a new flake board made of corn leavings. And it’s not even enough to invent a new pallet with replaceable parts and sensors, even one made with structural elements composed of biomass embedded in a plastic matrix. Put in the context of ICP’s work, Corn Board’s patents exclude ICP from making a pallet that can be disassembled in a particularly clever way if part of it is damaged, but that does not clear any way for Corn Board to gain market share, or even market presence, if no one particularly cares that they use pallets made of corn leavings.

But what then might be the selling points for pallets? Here’s one look at pallets, by Kelvin at Max Frieghts. Kelvin works through softwood pallets, hardwood pallets, plastic pallets, cardboard. Yeah, it’s just an overview, but that’s a good starting point. Plastic pallets have a lot going for them, but Kelvin points to three reasons why they are not broadly used–disposability, cost, and environmental concerns. As Kelvin points out, the shipper obtains pallets, but the recipient has to deal with getting rid of them. That works if the recipient is doing about as much shipping as receiving. Otherwise, disposability would appear to be an important issue. Kelvin estimates that wood pallets last for 1.5 trips–about half, then, make a second trip. Plastic pallets, by comparison, average 110 trips, but then again, plastic pallets may cost 5 to 10 times as much and there’s disinfecting the pallets to bother with.

Weight is another issue, and so is meeting various standards for strength and  cleanliness. A pallet made of injection molded HDPE might weigh 12 to 18 pounds, depending on the design. Wood pallets, by contrast, might weigh 40 pounds or so. But a polymer composite pallet, such as this one using Trex, weighs 141 pounds. That 10x weight difference can make a huge bump in shipping costs. Corn Board does not appear to have published any specs with regard to its proposed new pallet product, but if it’s made of polymer composite materials, it is bound to weigh more than either a wood pallet or a plastic pallet. A polymer composite pallet may last for many more trips, but it has to be in circumstances where whoever is receiving the shipment can reuse the pallet for its own outgoing stuff, or someone will have to come and retrieve, and recondition, the pallet. Those costs to retrieve and recondition a polymer composite pallet are not trivial.

Even though ICP appears way better positioned than Corn Board to take on polymer composite pallets, the prospect for the success of polymer composite pallets does not look all that great. What’s needed, and what polymer composite pallets don’t appear to offer, is an application that wood pallets cannot serve, and that application renders wood pallet shipping in general obsolete. Think like a vacuum tube hearing about transistors for hearing aids. Damn. Adding corn husks to the pallet mix is clever, but it is a long way from what’s needed to make a polymer composite pallet broadly desired.

The fact that the corn board pallet is patentable has next to nothing to do with its utility value to society. No amount of money invested in “development” can save the invention. There’s nothing meaningful for a university to promote as technology transfer, trying to foist something on the world by putting it behind a patent barrier in the hope of attracting investors with enough money to magically create a market for cornboard where there just isn’t any. There may be other uses for corn husks, and there even may be cornboard uses, but the patent does not mean anything, and has not meant anything, other than two companies have spent time and money trying to turn the idea into a business.

We might say that folks started at the wrong end of the value chain. They started with an idea for a material–corn husks in resin–and then went looking for applications, which is fine. But they haven’t found that application. Not skateboards, not lawn furniture, not even shipping pallets. There may be a few thousand other applications to try, but the prospects aren’t good. You can see that this is an invention that may have as well sat on the shelf as it were. A patent did not get it off the shelf, but rather induced folks to waste money on patenting, on licensing, on trying to do something with the inducement of exclusive rights without any actual market or even manufacturing capability in place. Maybe if Illinois has licensed to ICP (and to anyone else interested) there was a chance that cornboard could make it into production and be an actual product option. “I’d like 1,000 regular polymer composite pallets, and yeah, throw in 200 cornboard ones as well.” Might have happened. As it happens, the patent hasn’t done any much good, and the invention of cornboard, while clever, isn’t something that meets a need at the work interface, that is, for shipping stuff or riding a skateboard or sitting the backyard with a drink and a book.

Cornboard is about tone, about exploiting waste–and that’s a good first step in Cradle to Cradle style thinking. But the way this stuff happens is that someone close to the work goes out looking for a solution to a problem, or happens on something that presents an opportunity, and that person drags the idea or the technology or the goofy product back to the work interface and adapts things for its use. Yes, a technology transfer officer might go out looking for just this person who has a problem, knows it, and isn’t satisfied with the proposed solutions, but the odds are very, very, very small. No, there really aren’t any odds. The odds are about as good as finding a sardine can on a beach in Argentina and knowing exactly where someone is hiding in Sardinia in Monty Python’s world hide and seek competition.

While cornboard is an interesting, clever idea, it’s just hard to say that it has been anything of a “success” story, and certainly has nothing to do with the Bayh-Dole Act, and certainly the whole university ownership for patenting and exclusive licensing premise of Bayh-Dole has not served cornboard well at all. The cornboard patent is easy to design around–use anything other than corn, or use other than essentially intact corn husks, or mix the corn husks with any other biomassy stuff, and it’s outside the scope of the Illinois patent claims. Not that it matters. There’s no market for cornboard as cornboard. Cornboard has to be something else, patent or no. And cornboard has to be in the hands of someone with all the infrastructure already in place for making and using whatever that something else is. Otherwise, one is asking “investors” to break into an established market (skateboards, yard furniture, shipping pallets) with nothing, absolutely nothing to start with. That’s a tall ask–that’s an unreasonable ask, really.

In 2016, the University of Illinois dropped Corn Board Manufacturing from its on-line list of startup companies.

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