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U Of Regina Suing Over Unpaid Technology Royalties

The University of Regina is suing two private companies alleging the firms have unjustly claimed exclusive rights to carbon capture technology developed at the institution and are refusing to pay royalties.

According to documents filed in court in Saskatchewan, in 2005 the university signed an agreement with Regina-based HTC Purenergy, providing the company with the non-exclusive right to commercialize the university’s carbon capture technology. HTC went on to sub-license that technology to another company, Doosan, which is based in South Korea.

In its statement of claim, filed in November, the university notes HTC was just one of several companies with which it had similar agreements and none of them were given exclusive rights.

The lawsuit says HTC and Doosan improperly claimed exclusive and irrevocable rights to the technology and that has made it impossible for the university to make other commercialization deals.

None of the allegations contained in the statement of claim have been proven in court.

According to the U of R, the two companies named in its lawsuit acted “with highhanded and callous disregard for the rights of the university” and the school suffered “irreparable harm”.

“HTC misuses and misappropriates … confidential information and trade secrets, contrary to the HTC license agreement,” the university said in its claim.

The lawsuit suggests the defendants used CO2 technology developed at the university to generate millions of dollars in revenue but neither HTC nor Doosan reported their sales to the university and did not pay expected royalties.

The university did not specify how much money it wants, but the magnitude could be in the millions of dollars.

Carbon capture a major U of R project
The lawsuit is a significant matter for the university, which describes itself as a world leader in the research and development of technologies used to capture the emission of carbon dioxide from industrial sources.

That work has been done at the International Test Centre for CO2 Capture, located on the university’s campus.

It was established in 2003 with $6 million from the federal government in partnership with a number of other agencies including the government of Saskatchewan, the provincial Crown corporation SaskPower and the United States Department of Energy.

Carbon capture and storage research is also an oft-mentioned part of Saskatchewan Premier Brad Wall’s environmental strategy. He talks about it in speeches and regularly references it when interviewed about energy issues.

The university, in its statement of claim, says the moves by the defendant firms have taken the technology out of public hands and placed it under the control of private corporations.

HTC denies all wrongdoing
In its statement of defense, filed in February, HTC insists it has done nothing wrong.

The publicly-traded corporation said its agreement with the university “grants exclusive rights to intellectual property developed by the inventors at the Process Systems Engineering Laboratory, Faculty of Engineering, at the university.”

The corporation addressed the issue of royalties by noting that no projects have been built using the university’s technology.

HTC also launched a counterclaim against the university for an unspecified amount of money, alleging the university harmed HTC because the U of R “engaged in a relentless course of actions designed to fundamentally alter the terms of the license agreement”. HTC claims the U of R is trying to terminate their deal.

The assertions and claims from HTC have also not been tested in court.

In its court filings, HTC alleges the university’s actions led to the company losing out on an opportunity for a $100 million investment from the U.S. Department of Energy. The company also claims the U of R refused to renew a lease for space HTC was using on campus and that led to a loss of money and researchers.

Doosan claims mistreatment by U of R
The South Korean company, Doosan, has also filed statements with the court.

In its materials, filed at the beginning of March, Doosan says it has abided by its contract and has done nothing wrong.

Doosan said a sub-license agreement with HTC, dated Sept. 3, 2008, allows it to use and commercialize the technology development at the university.

The company adds it has documentation, from a University of Regina official, which confirms Doosan enjoys exclusivity on the technology.

The company also points out that, based on the agreement, it spent “tens of millions of dollars in research and administrative expenses involved in efforts to commercialize the CO2 capture technology.”

Doosan says despite all that investment it has yet to make a sale. There have been no royalties, the company says, because the technology “is not yet commercially viable in the form of a project or licensed product”.

Doosan also used strong language in its documents to describe the university’s actions, claiming the U of R was trying to cancel its deal and was engaged in “underhanded, outrageous and unlawful conduct” and “shows a wanton disregard for Doosan’s rights”.

Doosan has also filed a counterclaim against the university seeking an unspecified amount of money in damages.

And, just as with the other parties in the case, none of its allegations have been proven in court.

The legal proceedings are in the early stages and the litigation could go on for a considerable time.