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Questions raised over startup’s integrity

Clean energy prize winner CoolChip faces scrutiny, MIT will ‘review the facts’

Winning the Grand Prize in MIT’s $200K Clean Energy Prize contest in May was only the beginning of an MIT startup’s success. CoolChip Technologies, which develops cooling systems for electronics, was automatically entered as a finalist in the MIT $100K Business Plan Contest as a result of winning the CEP. CoolChip has also been covered by CNN Money, the Wall Street Journal, the Boston Globe, and Electronic Engineering Times since their CEP win. At the end of August, however, an article in the Chronicle of Higher Education cast a shadow over the success of the young company.

The Chronicle pointed out that CoolChip’s prizewinning cooling technology was actually Sandia National Laboratories’ own device, designed by researcher Jeffrey Koplow. According to the article, CoolChip CEO William R. Sanchez ’05 approached Koplow in February asking to use the unpatented Sandia cooler for CoolChip’s CEP submission. Koplow told Sanchez he did not have the authority to make that decision and directed him to Sandia’s technology-transfer department. According to a Sandia spokesman, that was the last “substantial communication” Sanchez had with Sandia — no deals were made and no permissions were granted to CoolChip to use Sandia’s cooling technology. The technology was also not open for licensing at the time.

In a presentation as part of the MIT $100K Business Plan Contest, Sanchez did not refer to Sandia while he used Koplow’s illustrations to explain the technology. Sanchez said the presentation was meant to be lighthearted and “something for fun,” according to the Chronicle.

Sanchez also said that Sandia officials told him CoolChip could not use Sandia’s name publicly, preventing him from giving them proper credit. But Sandia spokesman Michael Janes told the Chronicle that Sandia insists its images be credited properly.

Also at issue is the philosophy behind the CEP. When interviewed by the Chronicle, CEP chairman and Sloan professor William Aulet referred to the contest as an “academic exercise,” more about creating a business plan than the underlying technology. However, Michael J. Pomianek, one of the CEP judges and an intellectual-property lawyer, told the Chronicle that judges did not approach the competition as a “class exercise,” — they considered the participants’ viability and relationships with customers and clients in addition to their business plan.

CoolChip Technologies was founded by a team consisting of MIT graduate students: Sanchez, currently an EECS doctoral candidate; Steven J. Stoddard ’06 of the Leaders for Global Operations (LGO) program jointly run by Sloan and the School of Engineering; and Sloan MBA student Daniel A. Vannoni. The team grew out of the energy ventures class taught by Aulet.

Sanchez, Stoddard, and Vannoni did not respond to requests for comment.

MIT’s response

“When we became aware of the circumstances with CoolChip, we alerted both the Department of Energy and MIT of the situation,” wrote Janes in an email to The Tech. “[MIT] will conduct any follow up that they deem appropriate regarding the Clean Energy Prize, as this is clearly an academic issue best handled by MIT.”

Chancellor Eric Grimson PhD ’80 said he will be working with the leadership of the Clean Energy Prize to review what happened.

“I want to emphasize that this is not an investigation,” said Grimson. “Allegations have been made, and we want to review the facts to see what really happened.”

He also said the community should keep in mind that “everything might not be as described.”

The rules for the Clean Energy Prize refer to the MIT’s academic integrity policies and to the Institute Regulations on Intellectual Property Rights. The CEP rules state, “it is the responsibility of the entrant to ensure that no third party […] has any rights on the contents, which may prevent its exploitation.”

According to Janes, Sandia has “informed [CoolChip] how to easily reference Sandia work in the future without implying our endorsement for their work.”

After communicating with MIT and CoolChip, Sandia deemed the attribution issue closed. The cooling technology in question is now patent-pending and open for licensing, and according to Janes, they have had “dozens of inquiries and more than twenty companies indicating their interest in the technology.”

CoolChip will “have the same opportunity to license this technology as other companies,” wrote Janes. “They will be evaluated on their own merits, i.e. their business plan and ability to successfully manufacture the technology and get it into the marketplace.”

As for the future of the CEP, “we will be working to decide on and clarify the goals of the competition and help the organizers capture those in the rules,” said Grimson. “There are always ways in which we can improve, specifically for the Clean Energy Prize and for other student-run competitions.”

Students weigh in

Members of the community who have read the Chronicle article have drawn analogies between the Sandia-CoolChip situation and regular term papers at MIT. Term papers are also considered “academic exercises,” and any plagiarism in that context would, according to the MIT academic integrity website, lead to “failing the assignment, failing the course, and/or being suspended from the Institute or expelled.”

MIT students who knew of the situation by reading the Chronicle expressed some confusion.

“From a moral standpoint, it’s unclear,” said Ravi M. Charan ’13. “We should allow the possibility that there was some misunderstanding on the part of CoolChip as to what was acceptable.”

Some said that monetary rewards change the nature of what would ordinarily be just an “academic exercise.”

“Sanchez’s team may or may not have realized that they were essentially poaching someone’s work, but the cash prize for the competition makes this much more than an ‘academic exercise,’” said Katie Allsop ’13.

“It’s fairly mind-boggling to me that a high stakes, very visible competition could be viewed as only an ‘academic exercise,’” added Tejas A. Navaratna ’13.

Still, some felt there was room for discussion.

“I would like to hear CoolChip’s side of the story from CoolChip instead of just from the Technology Licensing Office (TLO), Sloan, and other MIT institutions before I’d be willing to indict them,” said Charan.

8 Comments
1
Anonymous over 6 years ago

Sandia "deemed the matter closed" because they are bound by regulation not to show any preference (or disfavor) to anyone applying to use their IP, including CoolChip. If they make any statements in the media that are critical of CoolChip, CoolChip could sue them for discriminating against their effort to license the IP. The conclusion Sandia drew was that as long as CoolChip was only plagiarizing their ideas to win competitions, and not actually offering the product for sale, MIT could run any crooked competition it wanted to.

The reason CoolChip was "confused" by Sandia's insistence that "CoolChip could not use Sandia's name publicly, preventing him from giving them proper credit" was because, at a meeting at Sandia, A) CoolChip disclosed they'd won the MIT Clean Energy Prize using filched Sandia IP, and B) Sandia personnel discovered CoolChip was using their images to offer Sandia IP for sale on their website. Sandia demanded CoolChip take down Sandia images and not use Sandia's name in reference to any of their work. CoolChip interpreted this to mean they were free to steal Sandia IP, provided they didn't mention where they got it!

CoolChip worked for months to get permission, or the appearance of permission, from Koplow or Sandia, including asking Koplow to sit on an "advisory panel" (again, against DOE fairness regulations) to give the appearance of approval. (Does MIT prof. Evelyn Wang still sit on this panel? Just asking...) CoolChip knew what they were doing. To claim otherwise implies that they are so dim as not to be able to sign the check, let alone manage a startup. But this is all in keeping with Bill Aulet's philosophy of "expediting" technology transfer whenever (and apparently however) possible.

Finally, as to the "academic" nature of the contest: I'll enter next year based on using Google's search algorithms. And so long as we're just engaging in an "academic exercise" it doesn't matter that it involves IP that I have no actual right to use, right?

Sorry, other entrants: you thought you needed a viable business plan. You were actually entering America's best-compensated fiction competition. Next year: Transporter beams! You can't lose!

If MIT/Sloan had a stitch of integrity, it would run Aulet and these "winners" out of town, sue for their prize money back, and prosecute CoolChip for fraud. But what really matters at MIT is professing integrity while not rocking the boat. Nice CEP sweep, MIT!

2
Anonymous over 6 years ago

The CEP Compliance Statement includes (Term 3):

"Originality. Each Participant warrants that all work and submissions by the Participant, and by the Participants team, is original to the Participant or team. To the extent that any work or submissions are not original to the Participant or the Participants team, the Participant warrants that the work and intellectual property rights have been acquired and used by the Participant or the team subject to appropriate authorization of the rightful owners."

Assuming CoolChip signed the Compliance Statement, they committed fraud. By not acknowledging and punishing fraud and plagiarism, MIT becomes complicit in scientific misconduct. Alternatively, if the public record is incorrect, MIT needs to correct it. What are students supposed to learn from this "academic exercise"?

3
Socialist Worker over 6 years ago

What you learn at MIT is that money talks and bullshit walks. Those academics who think they can live out side of normal capitalist relations are either fools, liars or both. Being someone who left the Military Institute of Technology forty years ago I would say both.

4
Anonymous over 6 years ago

As a design instructor in an engineering college, I am concerned about how this case will affect our efforts to teach engineering students about professional ethics, and that it is important to avoid even the appearance of misbehavior. I strongly encourage the Institute to seriously address this issue. Otherwise, as an MIT alum, I will be very disappointed in the Institute.

5
Anonymous over 6 years ago

After reading the Tech article (Questions raised over startups integrity, September 16, 2011) and the Chronicle of Higher Education article ($200K Question: Who Really Deserves MIT's Big Energy Prize? August 28, 2011) heres what I see. A Sandia Labs researcher, Dr. Jeff Koplow, works for several years to conceive, analyze, develop, and reduce to practice a novel means of reducing the heat transfer film coefficient between a solid surface and a gas stream by a factor of 20 or more and that has many real-world applications (See Sandia Report, SAND2009-135192, A Fundamentally New Approach to Air-cooled Heat Exchangers, by Jeffrey P. Koplow, Printed September 2009).

Then along comes a team of MIT graduate student would-be entrepreneurs, aka CoolChip Technologies, who simply appropriate without permission Dr. Koplows patent-applied-for technology as their entry in one of MITs most prestigious student competitions. As a result of the publicity that follows CoolChips winning the MIT Clean Energy Prize (CEP), including a widely circulated photograph of President Hockfield standing with the CoolChip team at the CEP award ceremony, it subsequently becomes apparent that CoolChip, at minimum, violated the contest rules and represented Sandias intellectual property as their own.

Pressed to explain the actions of CoolChip, its CEO, William Sanchez, has fobbed off questions by claiming that CoolChips use of Sandias intellectual property was misconstrued or at worst, misleading and failing to address the evident violation of CEP contest rules. More startling yet is Prof. Bill Aulets implied sanctioning of CoolChips misrepresentations and contest rules violations by characterizing the CEP competition as merely an academic exercise. He may be teach[ing] students how to fish as he claims, but there are legal ways to fish and illegal ways to fish.

It should not take Chancellor Grimson long to discern the facts of this matter and act on his findings. It is important to clear the name of MIT and provide a positive outcome to this episode for all the other parties who might be harmed, embarrassed, or inconvenienced by their unsolicited association with these MIT persons of questionable character. Worthwhile technical innovation is difficult enough as is. We dont need poseurs and usurpers from our best institutions of higher learning making off with the intellectual property of others.

6
Anonymous over 6 years ago

Hey, lets not forget that it was the amazing novelty of the idea of the air bearing heat exchanger that caught everyones attention and allowed CoolChip to win the prize. Rescinding the prize from CoolChip must be difficult for Aulet, because it is the first time an MIT team won the prize. So I am not surprised that he is still defending his untenable position regarding award of the prize. But mistakes happen. As the article in the Chronicle of Higher Education article describes, the judges did not know all the facts at the time of the prize award. Prizes are sometimes rescinded for irregularities discovered after an award has been made. Think of a Gold Medal being rescinded from an Olympic athlete due to a drug-enhanced performance. CoolChip is not much different: their performance was enhanced by the quality of the idea they misleadingly paraded as their own invention. Why cant the Clean Energy Prize recognize a real winner? Rescinding the $200k prize protects the prize sponsors, and judges, and the integrity of the sponsoring organization (MIT). That is why rules of this contest state that the prize can be rescinded...but only by Aulet! Why doesnt Aulet rescind the prize? I guess he is hoping that the fuss about this indiscretion will go away. But it wont. Sorry Bill.

7
Anonymous over 6 years ago

Peeps, I heartily endorse Prof. Bill Aulets reported comment to the Chronicle of Higher Ed that the MIT Clean Energy Prize is more about creating a business plan than the underlying technology. So true! Its simple to come up with a great new piece of technology, right? Its the biz plan thats the hard work.

Just last night as I was nodding off to sleep I came up with a fabulous, brand new technology that will be worth millions. Combine a smart phone with a dog whistle. Sweet, right? You heard it here first. With this awesome tool, an iphone app any monkey could write, and a big bag of doggie treats, you could teach your dog a whole vocabulary of standardized commands. Used globally, it could sort out smart dogs from their lesser peers. Hey, the right business plan could monetize that. My dog responds to fifty-three Smart Dog Whistle Commands (patent pending). Oh, yeah? Well, my dog knows seventy-five. Wanna bet?

So, Bill, can you help me? Perhaps youll recommend a team of your most entrepreneurial graduate students to write a business plan for me. I can see the money rolling in already.

Jane Q. Inventor (patent pending)

8
Anonymous over 6 years ago

There is ample reason to question the credibility of William Sanchez, CEO of CoolChip Technologies, the winner of MITs 2011 Clean Energy Prize (CEP) competition, who has consistently conflated MIT and Sandia cooling technologies in presentation, interviews, and apparently in CoolChips CEP entry, in an attempt to obscure the fact that CoolChip misappropriated Sandia technology. The Tech cites the Chronicle of Higher Education (http://chronicle.com/article/Who-Deserves-MITs-200000/128810) stating that CoolChips prizewinning cooling technology was actually Sandia National Laboratories own device [the Sandia Cooler], designed by researcher Jeffrey Koplow.

According to an article The Accidental Entrepreneur (http://entrepreneur.mit.edu/article/accidental-entrepreneur) Sanchez and Stoddard originally called their enterprise Wang Technologies, in honor of the MIT primary investigator [Dr. Evelyn Wang] behind the original heat sink technology used by the team. The article goes on, The duo explored a heat sink technology available through the MIT Technology Licensing Office (TLO) before converging on a hybrid technology combination from a national laboratory and MIT. While this description of CoolChips technology is perhaps intentionally opaque, the only national laboratory identified as being involved with CoolChips CEP entry is Sandia Labs and the only MIT technology similarly identified is Dr. Wangs MIT Device Research Laboratory (DRL) work.

As the Chronicle makes clear, at no time did CoolChip have permission to use or even cite the Sandia cooling technology in its presentations or public statements. Furthermore, CoolChips use of Sandias technology in the CEP competition without permission was an obvious violation of the contest rules.

As for Dr. Wangs cooling technology, a graphic can be found on the DRL web page (http://drl.mit.edu/research.cgi?pthermal). It bears no resemblance to the graphics of the Sandia Cooler used by CoolChip in several presentations. This observation, according to the Chronicle, was confirmed succinctly by Dr. Wang: Its definitely not our device. Referring to Dr. Wangs DRL work, the Chronicle reported that CoolChip had acquired an option to license another technology being developed by the DRL. But, one of the CEP judges, Michael J. Pomianek, stated that "CoolChips entry was focused on the Sandia cooler, with the MIT technology presented as an afterthought."

Hardly a "hybrid", more like a stolen vehicle.