$200K Question: Who Really Deserves MIT's Big Energy Prize?

Photograph by Dino Vournas

Jeffrey Koplow with a prototype of his "Sandia cooler," which can keep electronic components from overheating. A start-up company won a $200,000 prize from MIT with a very similar device.
August 28, 2011

In May, a company started by three MIT graduate students won the university's prestigious clean-energy prize, which comes with a $200,000 check in addition to the $15,000 awarded for being a finalist. It's a hefty chunk of change for any start-up, but the publicity may be even more valuable. Articles followed in The Boston Globe, The Wall Street Journal, and on CNN Money.

But the developer of the device used in the winning entry says it was used without permission in the contest and without attribution in a public presentation.

The promising technology, which is intended to cool electronics more quietly and efficiently, was created by a researcher at Sandia National Laboratories. Sandia officials say they found out what the company, CoolChip Technologies, was doing only after the contest was over.

Officials of the Massachusetts Institute of Technology have countered that CoolChip didn't need Sandia's permission, and that the contest's rules suggesting otherwise have been misinterpreted. One MIT official also argued that the contest, which is open to students nationwide, should be viewed solely as an "academic exercise."

The controversy raises questions about what liberties can be taken with someone else's intellectual work, and about the line between promoting an idea and taking credit for it.

The mission of the MIT Clean Energy Prize, which is sponsored in part by the U.S. Department of Energy, is "to develop a new generation of energy entrepreneurs and great new companies." Some former participants have, in fact, gone on to success with the companies they started. This is the first year that MIT students themselves have won since the contest began, in 2008.

The device is called an air-bearing heat exchanger or, to use its less intimidating name, a Sandia cooler. Its developer, Jeffrey Koplow, a Sandia researcher, believes it could potentially cut energy use in the United States by 7 percent. If he's right, and if the Sandia cooler is adopted on a large scale, the technology would be nothing short of revolutionary.

Mr. Koplow says he was contacted in February by William Sanchez, an MIT graduate student and chief executive of CoolChip Technologies, a company started as part of an MIT course. He was interested in using the Sandia cooler for his company's submission to the contest. Mr. Koplow told Mr. Sanchez that he couldn't make any agreements and suggested that the graduate student call Sandia's technology-transfer department.

"It would be preposterous to give away something I worked so hard on—nor would I have the authority to do so," says Mr. Koplow, who got the idea for the cooler in 2007, spent two years getting financing, and has been working on the device since 2009.

According to Michael Janes, a spokesman for Sandia, Mr. Sanchez had "no substantial communication with anybody" other than Mr. Koplow before the contest. Mr. Janes says Sandia did not make a deal of any sort with CoolChip or give the company permission to feature its technology. The device was not open for licensing, and there was no process at the time for even pursuing a license. "It's fair to say that they received the same general response," Mr. Janes says. "I'm not aware of any miscommunication."

Mr. Koplow next heard from the CoolChip team when Mr. Sanchez and another member, Steven Stoddard, visited Sandia's laboratory in Livermore, Calif. In the course of a chat with Mr. Sanchez, it emerged that the company had $200,000 in start-up funds. When asked how it got that money, according to Mr. Koplow, Mr. Sanchez said it had won the MIT Clean Energy Prize using the Sandia cooler. "I was literally speechless when they told us," Mr. Koplow says.

He became even more distressed after watching a YouTube video in which Mr. Sanchez explains CoolChip's vision. The video was from the MIT $100K Business Plan Contest, which CoolChip qualified for by winning the clean-energy contest. As uncredited illustrations—taken from a report that Mr. Koplow wrote—flash on a giant screen, Mr. Sanchez speaks of "our unique patented design." Sandia is not mentioned during the four-minute presentation. The video ends with enthusiastic applause from a packed auditorium.

Subsequent articles written about CoolChip reinforced the notion that the device was the company's own technology. The Wall Street Journal reported that CoolChip "has created a small and cost-effective cooling device that can reduce heat generated by computers while improving the energy efficiency in data centers." A brief article in The Boston Globe said CoolChip had won the prize for "developing a technology that reduces data-center cooling needs."

But CoolChip hadn't created or developed the Sandia cooler. Moreover, it had no permission from Sandia to promote the technology it was trumpeting. Perhaps the news reports could be chalked up to hazy journalism, but it certainly didn't seem as if Mr. Sanchez was doing much to clear up misconceptions.

"We were among the ideas that are trying to save the world," he told the Journal. "It was humbling."

Mr. Sanchez shrugs off questions about the presentation CoolChip made as part of the $100K competition. The use of Sandia's images without attribution was, he concedes, "misleading." But the presentation was meant to be lighthearted, he says. "When you look at that video, you see us doing something for fun. It was not a pitch. It's been misconstrued."

He also says Sandia officials informed him that CoolChip could not use Sandia's name publicly, and so he couldn't give the laboratory proper credit.

"That doesn't sound right to me," says Mr. Janes, the Sandia spokesman. In fact, he says, Sandia insists that its images be properly credited.

'Huge Red Flag'?

The more serious issue is that Sandia says the MIT team had no permission to use the laboratory's technology in the contest. A statement signed by all participants says that all nonoriginal "work and intellectual-property rights" presented must have the "appropriate authorization of the rightful owners." The wording seems straightforward.

To get an outside perspective, The Chronicle asked R. Polk Wagner, a professor of law at the University of Pennsylvania who specializes in intellectual-property law and policy, to review the rules of the prize. He says that while the students did not have to obtain a license for intellectual property before the contest, they were required to have "some sort of authorization."

That's something CoolChip did not have, say both Mr. Janes, the Sandia spokesman, and Mr. Koplow, the Sandia researcher. Mr. Janes calls CoolChip's written assertion in its contest entry that it was "in the process of acquiring the rights" to Sandia's technology "nonsensical."

Since the contest, the licensing process has been opened, and a number of companies, including CoolChip, have put in applications. "We're working very hard to commercialize that technology and get it into the marketplace," Mr. Janes says.

CoolChip's Mr. Sanchez insists that the whole thing is a result of a miscommunication and, in an e-mail to The Chronicle, wrote that he was "looking back at some stuff that might be useful." He did not provide further information. His two teammates, Mr. Stoddard and Daniel Vannoni, directed all questions to Mr. Sanchez.

If it's true that CoolChip did not have permission from Sandia to use its technology, might that have made a difference in the outcome of the contest?

Two of the judges contacted by The Chronicle say they were surprised to learn that CoolChip did not have any authorization from Sandia. One of those judges, Dennis R. Costello, managing partner at Braemar Energy Ventures, says that if CoolChip presented the technology without the knowledge or permission of Sandia, "it would have been a negative for sure."

Another judge, Michael J. Pomianek, echoes that view, saying it would have been "a huge red flag." Mr. Pomianek, an intellectual-property lawyer in Boston, says he made it a point to ask the teams about intellectual-property rights. His impression from CoolChip was that it was "dotting the i's and crossing the t's" with Sandia. Learning otherwise, he says, would be "surprising and disturbing."

Like Mr. Wagner, Mr. Pomianek at first says he believed that the rules required participants to obtain permission to present someone else's work. "It's just a matter of intellectual honesty. "It's certainly the way I've always interpreted the rules as I understand them."

Later, after speaking with an MIT official, Mr. Pomianek called back to clarify that he didn't think CoolChip necessarily needed Sandia's permission to use the device, because the Sandia cooler hasn't been patented (the application is pending) and the information the team had used was publicly available. He still insisted, though, that if CoolChip participants overstated their relationship with Sandia, "then they broke the rules."

CoolChip had acquired an option to license another technology, one that is being developed by MIT's Device Research Laboratory. But Mr. Pomianek says the CoolChip team's entry was focused on the Sandia cooler, with the MIT technology presented as an afterthought. "The MIT stuff was a very light gloss, and it was clear that it was second-generation," he says.

A third judge, Henry Kelly, acting U.S. assistant secretary of energy efficiency and renewable energy, agreed through a spokeswoman to answer questions about the contest via e-mail. In response to a question about whether he would have voted differently if he had known that CoolChip had no agreement with or permission from Sandia, he said: "We will not engage in speculation as to how the outcome might have changed based on hypothetical facts."

An 'Academic Exercise'

MIT officials have defended CoolChip in multiple exchanges with The Chronicle. Though the clean-energy prize is student-run, Bill Aulet, managing director of the MIT Entrepreneurship Center, serves as the contest's chairman and helped create it. He also taught the class from which CoolChip emerged and even gave the company its name, according to Mr. Sanchez. (Mr. Aulet says he does not remember naming it.)

Mr. Aulet emphasizes that it is important to understand the intent behind the rules. The contest, he says, centers on writing a business plan, not on the underlying technology. The rules "could have been better written," he says, calling them "something some damn lawyer wrote." The real purpose of the contest, in Mr. Aulet's words, is to "teach students how to fish, not catch a fish." He also repeatedly referred to it as an "academic exercise."

That's not how Mr. Pomianek, the intellectual-property lawyer, views it. "None of the other judges approached this as a class exercise," he says. "It wasn't just about a business plan, though that's part of it. It's about how viable is this company, what relationships have they actually developed with potential customers, with potential suppliers, with potential business partners."

Other MIT officials also pointed to the wording of the rules as the problem. In an e-mail message, JoAnne Yates, deputy dean of MIT's Sloan School of Management, wrote that "CoolChip was forthcoming in its submission about where the IP [intellectual property] was from." However, she wrote that "there may be a bit of a disconnect between the written rules and the way the prize has always been practiced. MIT will look into that in order to clear up any possible confusion."

The written rules also state that any violation will result in "forfeiture of any prizes awarded to the team."

Mr. Sanchez has said that the Sandia cooler and the technology from MIT's Device Research Lab are complementary. Both Sandia's Mr. Koplow and Evelyn Wang, principal investigator at the lab, reject that assertion. They say the devices are very different in approach, design, and purpose. In addition, Ms. Wang says she was "alarmed" at the way CoolChip's Web site portrayed the technology from her lab.

It turns out that CoolChip had "jumped the gun a bit on what we allow our licensees and optionees to say about their arrangements with MIT," Christopher Noble, a technology-licensing officer at the university, wrote in an e-mail. That, however, did not dim his admiration. "I am very enthusiastic about the company and supportive of their efforts to commercialize this technology," he wrote.

In a photograph on the MIT Clean Energy Prize's Web site, Mr. Sanchez can be seen holding a device that appears identical to Mr. Koplow's. When asked about this, Mr. Sanchez says the team had had the device manufactured but denies copying Mr. Koplow's design, saying that there is overlap between the Sandia cooler and the technology from the MIT lab: In other words, the device was from MIT's lab, not Sandia's.

After being shown the photograph, however, Ms. Wang says it is not similar to the MIT technology. "It's definitely not our device," she says.

MIT has declined to grant The Chronicle permission to reprint that photograph, although it has been reprinted elsewhere. Among those pictured is Mr. Kelly, the Energy Department official; Susan Hockfield, MIT's president; and the members of the CoolChip team, two of whom are holding a giant check for $200,000.

Chronicle of Higher Education

The Sandia cooler, or "air-bearing heat exchanger," transfers warm air to rotating fins, which dissipate the heat from electronics. Its developer believes the device could cut U.S. energy use by as much as 7 percent. If successful, the technology would be nothing short of revolutionary.

Diagram courtesy of Jeff Koplow