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Salient Energy chief executive Ryan Brown, left, University of Waterloo post-doctoral student Dipan Kundu and chemistry professor Linda Nazar were all smiles in July, 2016, as they accepted $35,000 and entry for their startup into the university’s Velocity Garage incubator.

The University of Waterloo has settled a messy patent dispute with a cleantech startup located on its premises, freeing the firm, Salient Energy, to take the battery technology at issue to market.

The parties said in a joint statement on Friday that Salient had assigned its patent rights to UW, which already owned a claim to the rechargeable, water-based, zinc-ion battery technology developed in the lab of chemistry professor Linda Nazar in early 2015. In exchange, UW granted Salient a worldwide licence to use the technology, which the inventors maintained stores power longer and more safely and is less expensive to make than standard lithium-ion batteries.

“We are extremely pleased with the outcome of this dispute and, more importantly, with being able to now focus 100-per-cent on developing the zinc-ion battery technology,” Salient chief executive Ryan Brown said. He added that 2019 will “be a big year for us, and settling this lawsuit ensures that we don’t have any unnecessary barriers to growth.”

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UW sued Salient, based at its Velocity Garage incubator, in June, claiming it showed “reckless disregard for UW’s rights” and asked the Ontario Superior Court to declare the institution the sole owner of the patent. Salient replied that the suit was “baseless.”

The dispute related to an invention by Salient co-founder Brian Adams when he was a doctoral student in Dr. Nazar’s lab along with postdoctoral student Dipan Kundu. In her 2015 invention disclosure to UW, the professor identified herself as a co-inventor and said it was part-funded by the U.S. Department of Energy’s Joint Center for Energy Storage Research. Dr. Adams, Dr. Kundu and Mr. Brown, then Dr. Nazar’s lab assistant, created Salient with the professor to take the technology to market and won a UW entrepreneurship competition in July, 2016.

But while UW policy gives on-campus researchers full rights to their intellectual property, that is not the case when outside organizations underwrite the research. UW asserted the invention belonged to the school and that the U.S. government retained licensing rights. The Salient team disagreed, determining from payment records that neither of the two students had received outside funding during their invention period, contrary to their professor’s disclosure. When the team pressed to correct the error, the school’s director of research partnerships replied that making that case could damage UW’s reputation.

Relations among the founder group deteriorated as they couldn’t agree to terms, and only Mr. Brown and Dr. Adams became Salient owners and employees. Dr. Adams assigned his patent rights to Salient, Dr. Kundu assigned his to UW – and when Salient applied for a patent in March, 2017, it named only Dr. Adams and Dr. Kundu as inventors, not Dr. Nazar, asserting her contributions didn’t merit her being considered an inventor.

UW filed its own rival application a week later and demanded Dr. Adams assign his intellectual-property rights to UW. The dispute dragged on and UW filed its lawsuit in June, 2018, and petitioned the U.S. Patent Trial and Appeal Board to invalidate the patent granted on Salient’s application, alleging it incorrectly omitted Dr. Nazar as a named inventor.

With its licence in hand, Salient is targeting the electricity market, figuring the batteries are ideal for producers of intermittent solar and wind power to store energy so they can more steadily feed it into the electricity grid.

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