University of Waterloo is suing its grid battery manufacturing spinout Salient Energy, which it claims must sign back IP rights due to a misapplication of its tech transfer policy.

University of Waterloo is suing its Canada-based grid battery manufacturing spinout Salient Energy over allegations the company showed “reckless disregard” for the university’s intellectual property rights, Canada Live News has reported.

The university now wants to relicense the technology in question to research centre Argonne National Laboratory, run by the US Department of Energy, which it claims sponsored Salient’s founding research.

Waterloo will also demand C$600,000 ($460,000) in damages for the alleged infringements.

Founded in 2016, Salient Energy produces water-based zinc-ion batteries for electricity grids that are described as cheaper, safer and longer-lasting than competing products.

The batteries are based on research by former Waterloo PhD student Brian Adams and postdoctoral fellow Dipan Kundu conducted in the laboratory of Linda Nazar, a professor in the university’s Department of Chemistry.

Much of the dispute hinges on the role of Argonne, run by the US Department of Energy, which Nazar disclosed as having provided funding for the invention.

Under Waterloo’s innovation policy, inventors retain full IP rights for technologies except where they have received external funding, in which case an agreement is hammered out between the sponsor and the university.

The US Department of Energy had reportedly provided Nazar’s lab with $1.1m in grant funding since 2013 through its Joint Center for Energy Storage Research initiative.

Nazar is thus purported to have named the department as a sponsor on the innovation disclosure leading to Salient’s founding, though the company claims neither Kundu or Adams received money from the grant.

To overcome the issue, Salient was offered the opportunity to license the rights back to the university, however its legal team will argue Waterloo failed to give its team enough information to make the decision with “informed consent,” a prerequisite under the institution’s tech transfer policy.

The case will also adjudge whether Salient’s original patent application, which apparently omitted Nazar as an inventor following a dispute within the founding team, can stand given that Waterloo later filed its own patent application which did name Nazar.

Nick Manning, spokesperson for University of Waterloo, said: “We recognise this is not a good situation for a university of our reputation to walk into, but this is a complex dispute and one that we have not faced before.

“We are obligated to protect our stakeholders including professors, students and research partners. We must also adhere to any legally-binding contract or agreement we have entered into.”