With Help from the Innovation Law Center, Off-Roaders Blue-Sky an Environmentally Friendly ATV

By Julia Scaglione ’20

Environmental sustainability is a hot topic. From waste reduction to minimizing carbon footprints, keeping the planet clean and green is a shared responsibility requiring deep innovation in every sector of the economy, and especially transportation. One company taking steps to address sustainability in transportation’s $3.9 billion all-terrain vehicle (ATV) market comes from New York State’s own Grand Island, between Buffalo and Niagara Falls: DVIN Industries.

The DVIN founders are no strangers to alternative vehicles. Specializing in all things land and water, the company is innovating an amphibious, electric ATV that can traverse any surface. Michael McManaman and Alexander Dzadur have a background in ATVing and sailing, respectively, as well as in owning businesses, tinkering, and living and playing on Grand Island. This combination brought the two together over a common issue.

“Every islander is aware that only a few bridges connect us to the mainland,” explain the McManaman and Dzadur, noting the significance of amphibious vehicles to island residents. “One day we thought of electrifying the ATV market and making a step forward with an an amphibious, electric all-terrain vehicle. Whiteboards and scrap paper tell the rest of the story.”

After a process of envisioning, sketching, and problem-solving, DVIN was born and with it an unprecedented amphibious vehicle that is designed with the enjoyment of driving in mind, as well as environmental conscientiousness. As it approaches the market, McManaman and Dzadur say there’s nothing quite like it out there—and that’s exactly its point.

“A change in the way we transport ourselves is coming,” say McManaman and Dzadur. “It is not a matter of if, it is a matter of when.” And DVIN working to put that “when” on the calendar.

The company operates not only to innovate the ATV market, but to minimize harm to the environment. Its founders recognize that the current pollution from ATVs and other amphibious vehicles is not being addressed, and that drives the them on their DVIN journey. “What are we leaving for our children? For the next generation?” McManaman and Dzadur ask, hoping that their vehicles will be pathfinders toward a healthier planet.

Currently, McManaman and Dzadur are the sole employees of DVIN—the two operate and run the company themselves, learning what they need to and gaining new skills along the way. The company, which formed a little over a year ago, is currently focused on legal matters, design refinements, scoping metal suppliers, and otherwise building the company.

In spring 2020, DVIN had the opportunity to work with the Syracuse Universyt College of Law’s Innovation Law Center (ILC)—and the New York State Science and Technology Law Center, which is housed in ILC—to provide research on patents and products, as well as Environmental Protection Agency, Department of Transportation, and Department of Motor Vehicles regulations relevant to the vehicle.

“We are absolutely in awe of the quality of work done by students and faculty at the Innovation Law Center,” say McManaman and Dzadur. “The scope and depth of its research gave us a new business perspective and a better understanding of patents.”

When asked about the students’ work, McManaman and Dzadur laugh. “Students? They might be students, but as competent as fully fledged professionals! The transparency of the process was wonderful. We are grateful for all their hard work and patience.”

The future looks bright for DVIN. The product has virtually no competition, as no one else is producing an electric, solar-powered, amphibious all-terrain vehicle like theirs. Yet they will continue to dial in on product innovation, brand recognition, quality, and manufacturing costs because the founders know at some point their market segment will attract competition.

With the ILC’s findings under their belt, McManaman and Dzadur plan on finalizing the technical design, prototyping, and filing utility patents.

At the end of the day, McManaman and Dzadur say their work to minimize amphibious ATV damage to the planet is exactly the kind of innovation the world needs. “Don’t be afraid of disruption—be one,” they say, and with the DVIN vehicle on the horizon, disrupt is exactly what they will do.

Innovation Law Center Zooms Forward with Virtual Presentations

By: Julia Scaglione

The Innovation Law Center (ILC) students and professors have wrapped up a semester’s work on a dozen research projects for a variety of clients. The impact of COVID-19 left the ILC facing uncharted territory, as the research had to be presented in a virtual environment. Nevertheless, the students, professors and clients were able to came together virtually to finish the semester strong.

Adapting to new standards, the clients received their final presentations via video conferencing platforms such as Zoom or Collaborate. While it was non-traditional, the students stayed positive throughout the process. “Although it was somewhat sudden to shift from preparing for in-person presentations to virtual presentations, the experience was a good one,” says student Sohela Suri. “In practice, we will likely be utilizing technology to communicate with colleagues and clients regularly, so it is very unique to have been able to experience and conduct a presentation via Zoom with a real client.”

In addition to the benefit of experience, some students preferred the virtual presentation format. “Presenting in this format is better for helping show clients specific references online quickly and easily,” says Rickson Galvez.
The virtual format also provided clients the opportunity to extend the presentations to additional members of their teams. “COVID-19 has unexpectedly increased the audience size for our presentations. Instead of presenting to one or two people, my group has been able to include up to six people from the client’s team that were interested in our research,” states Senior Research Associate (SRA) Alison Burrows.

Transitioning to online presentations had its challenges, of course. Student Sehseh Sanan says that she had to be ultra-aware of her surroundings, while Dwij Patel reflects on the lack of physical presence. “One challenge that was presented to me was engaging with the audience. I know that I am still able to see the clients and my peers in Zoom, but aside from facial expressions, there is almost no way to see other forms of body language to show how the audience is engaging with me.”

While presenting remotely was an adjustment, the presentations were strong and seamless. “To no surprise, our student research associates Kaitlyn Crobar, Viviana Bro, and Dwij Patel rose to the occasion without issue in providing high-quality presentations to this semester’s clients. Despite not being able to meet in person, the students maintained a collaborative team effort, and they impressed our team leaders with how well they transitioned, as well as our clients who were excited to hear that the work on their projects would not be stopped during the pandemic,” states SRA Kristian Stefanides.

Overall, the virtual presentations benefited all parties and were new, beneficial experiences for the ILC. “Our clients sent us a nice thank you email right after our presentation, and they seemed to enjoy it,” says Sohela Suri.
Moving forward, there are a lot of unknowns as the pandemic and lockdown procedures continue. Nonetheless, the ILC is enthusiastic about operating in this new normal. “When we started working online, I was a little apprehensive,” says professor Dominick Danna. “But once I got my technical bugs worked out, the classes went very smoothly. Seeing all the faces on the screen at one time and everyone speaking in-turn made the classes very effective.”

“Cool” Relief for Migraine Sufferers: Innovation Law Center Helps Bring Wearable Tech to Market

By Julia Scaglione

Imagine having a migraine and reaching for an ice pack for relief. Sure, the cooling numbs the pain for a while—but 20 minutes later the relief ends as the ice pack reaches room temperature. But now the tedious process of returning the pack to the freezer and waiting for it to re-freeze—while the pain returns—has an alternative solution: Prolivio. It’s an ice pack whose temperature can be controlled and customized to meet exact needs.

Prolivio is a migraine-relief cooling headband designed to reduce the longevity and severity of headaches. A “digital icepack” of sorts, the simple device provides a customizable level of cooling per customer preference through its adjustable temperature and time settings. Not only does Prolivio provide better relief, it enables cooling to happen on-the-go.

Plus, the device is connected to an app that collects data, allowing its users to better understand how often they experience migraines and the effect of contributing influences. Thus, by collecting data on the user’s migraines, Prolivio works to not only provide immediate relief through its cooling tech, it aids the management of migraines in the long run.

The company was founded by Benjamin Zombek and Robert Juncosa in 2019 and now operates with a small team preparing for commercial launch. Zombek, the Industrial Designer of the team, is no stranger to migraines, so the issue hits close to home for him. “As a kid, my mother suffered horrible migraines,” he explains. “She experienced awful side effects and was often non-functioning due to heavy medication.” The personal impact of migraines does not stop there: Zombek’s wife and daughter experience them as well.

The fact that three significant people in Zombek’s life all experience migraines is not as unusual as it may seem. The condition is a lot more prevalent than meets the eye. The Migraine Research Foundation reports that nearly 1 in 4 US households include someone with migraine and that 12% of the population—including children—suffers from migraine. According to Zombek, one billion people suffer from migraines worldwide.

Not only does this chronic condition create huge out-of-pocket medical costs for sufferers but it also results in a loss of income due to time lost at work. According to industry statistics provided by Zombek, the annual economic loss resulting from time lost at work due to migraines in the United States alone is $31 billion, and 157 million people miss work hours each year. So prevalent is the condition that a “migraine industry” has developed, with sufferers spending $41 billion to treat their range of symptoms—not just headache, but nausea, light sensitivity, and more. Prolivio plans to enter this industry with a product that can provide immediate relief as sufferers continue to wait for a cure.

Estimated to be 14 to 16 months from its product launch, the Prolivio team is working to build beta units of its product, conduct market research through customer discovery, pitch in business plan competitions, and build relationships with strategic partners.

In addition to their preparatory work at the Prolivio headquarters, Zombek and the team have been working with the Syracuse University College of Law’s Innovation Law Center (ILC) to understand the product’s intellectual property landscape, the application of various regulations, and how to optimize the product’s path to market.

Specifically, Zombek and the ILC students are compiling research to help solidify the parameters of the Prolivio patent protection strategy, as well as what obstacles there may be to market entry and whether the company can anticipate any freedom to operate issues. “So far, the students have given us reassurance that there are no red flags and that the patent looks very strong,” Zombek reports. “Those are two huge wins in taking the product to market, so working with the ILC has been great.”

Looking forward, Zombek hopes to launch Prolivio in mid-2021. The company will spend the upcoming months going through the final rounds of engineering and prototyping to build and scale the product, in addition to securing funding and partners to launch.

Outside of Prolivio, Zombek hopes to develop further health and wellness products for a variety of conditions through his company, BZD Ventures. The inventor says he aims to launch more enabling technology for the disabled community, as well as other therapeutic technologies. At the end of the day, Zombek’s goal with Prolivio and all of his inventions is simple: “I want to help people in pain. And overall, simple tech makes a difference.”

With the Innovation Law Center’s Help, a SUNY-ESF Professor “Ticks Away” at a Growing Bug Problem

By Julia Scaglione

The world measures 510 million square kilometers in surface area. Think about how small you are on that scale. Now, think about something—an arachnid—even smaller, around 10 millimeters at biggest. One would assume that such a small speck couldn’t possibly have an impact on our massive planet. Unfortunately, that isn’t the case, as those specks are wreaking havoc around the globe. That 10-millimeter creature is a tick, and as of 2019, the threat of ticks spreading diseases to humans is rapidly increasing.

However, one scientist is working to uncover technology that will stop the threat and change the way ticks impact humanity. Meet Brian Leydet.

Leydet began researching tick-borne diseases as a master of public health student at the University of North Florida. He continued his advanced studies as a doctoral student at Louisiana State University’s (LSU) School of Veterinary Medicine. Upon completing the doctoral  degree, he continued to study at both the Trudeau Institute in Saranac Lake, NY, and Southern Research in Birmingham, AL. Now, Leydet teaches and runs his own lab at SUNY College of Environmental Science and Forestry (SUNY-ESF), collaborating with fellow researchers, students, and faculty to develop his tick technology—a necessary project as the threat of diseased ticks spreads.

According to the Centers for Disease Control and Prevention (CDC), the total number of tick-borne disease cases in the United States has nearly tripled since 2004, an unsurprising trend as climate change allows for ticks to thrive in new environments. Ticks spread both familiar and emerging bacterial, viral, and protozoan diseases—such as typhus, Lyme disease, Q fever, and Rocky Mountain Spotted Fever—and, in the case of the lone star tick, they can even cause an allergy to red meat, called alpha-gal syndrome.

Upon first glance, one may think that ticks can be taken out using pesticides or repellents; however, those treatments are often not effective. Allison Burrows, a student at Syracuse University College of Law’s Innovation Law Center, working with Leydet, explains that “we have products that kill and repel ticks, but they don’t do a very good job at it and many are poisonous to the environment.” Leydet adds that, “the ones that kill ticks create genetic resistance, rendering them unusable in the future.”

The combination of a growing problem and lack of a solution led Leydet to his current research: developing technology to standardize the testing and identification of new chemicals to create effective types of tick repellants. Leydet believes that the technology will enable him to identify behavior-modifying chemicals that will not kill the ticks or create genetic resistance, but rather keep them off of humans. “Not only will this technology combat the increasing diseases in humans, but it will also protect ecosystems from harmful sprays and toxins,” says Leydet.

As there has been no advances in combating ticks in the past few decades, Leydet’s work is the first of its kind, and thus he is collaborating with faculty and students at the New York State Science and Technology Law Center—housed in the Innovation Law Center—to patent his work. The students are currently working on a variety of projects for Leydet, including developing IP and market landscapes and identifying regulatory implications. Additionally, the students are helping Leydet explore patentability for both his innovative tick repellant technology and the theory behind it. The overall work will help identify whether the technology is marketable, which in turn will determine what path the researcher will take in the future.

Looking forward, Leydet believes that his work has the potential to effect change and save lives. In the meantime, he’ll continue to gather ticks in the coming months to conduct the essential tests for the technology. “Theoretically and logically, the technology should work,” Leydet states. “But science can always throw you a curve ball,” he adds with a laugh.

Overall, Leydet says he wants to better our world by helping people and the environment. With the path he’s on now, there’s no doubt that he’ll do just that. So, keep an eye on those CDC reports of tick-borne illnesses, as in the coming years—if things go right for Leydet and his new technology—a great decrease is expected.

Power on the Go: ILC Assists HopLite Power with Commercializing Novel Smartphone Charging Technology

Hoplite PowerIt’s a frustration many can relate to. You’re on the go with your smartphone, juggling business and personal calls and texts, when you suddenly realize you’re low on power. No worries. Just dip into a friendly café with your charger and power up while you are getting coffee’d up. So you reach into your bag for the charging cable …

Enter Hoplite Power, a startup company that has created a remarkable and convenient solution for those inevitable times when you leave home without your charger or when there are no power outlets nearby.

A client of the New York State Science and Technology Law Center (NYSSTLC), part of the Syracuse University College of Law’s Innovation Law Center (ILC), Hoplite Power has developed a smartphone “charge-sharing” system. “Any customer who is low on battery can go to one of our kiosks in network and rent a portable battery pack to charge their phone on the go,” says Co-Founder and Chief Technology Officer Nikolas Schreiber, adding that the kiosks operate in a similar way to a RedBox DVD dispenser or CitiBike bike rental kiosk.

Each kiosk—called a Hoplite Hub—stores, dispenses, re-accepts, and automatically recharges Hoplites, which are small, ergonomically designed, universal battery packs for smartphones. These packs can be rented from and returned to any Hoplite Hub in the network.

“This means the customer can then charge when and where they need it, not having to remember to bring a battery or be tied down to an outlet. This system is perfect for high density and high value areas such as sports stadiums, live venues, and convention centers,” notes Schreiber.

Schreiber recently took time to answer some questions about how NYSSTLC—and specifically second-year law student Viviana Bro and Adjunct Professor Dom Danna—have assisted Hoplite Power as it commercializes its novel technology.

Hoplite PowerHow did you discover the NYSSTLC/Innovation Law Center and the services it provides businesses and entrepreneurs?

We are working with NYDesigns Incubator, Futureworks, FuzeHub, the Industry Trade Advisory Committee (ITAC), the Medical Technology Enterprise Consortium (MTEC), the Manufacturing and Technology Resource Consortium (MTRC), and finally the Clean Energy Business Incubator Program (CEBIP). It was CEBIP that made the direct introduction to the Innovation Law Center and NYSSTLC.

What type of assistance has NYSSTLC provided Hoplite Power?

We were able to consult with NYSSTLC on a full intellectual property (IP) strategy, including prior art, freedom to operate, and patentability.

How useful has the NYSSTLC research and proprietary report been for your commercialization process?

The report and work done was quite good. While there were no amazing “aha” moments, it was incredibly assuring to look through some patents and understand that we did have freedom to operate where before we had some concerns.

Not just that. We were encouraged that there might be specific aspects of our technology—especially given a number of unique mechanisms—that could be patented, where, again, we had had our doubts.

Now that you have engaged NYSSTLC, what are the next steps for Hoplite Power?

We have been in the Design for Manufacturability (DFM) process for a year now, and ideally—in late summer 2019—we are just a few weeks away from our version 2 pilot launch. Following this launch and its success, we plan on to follow up by filing additional IP protections, including both design and utility patents. A strong IP and a functioning pilot will allow us to ideally raise capital by the end of the year.

What advice do you have for an entrepreneur looking to commercialize a new technology, based on your experiences so far?

There are so many ways to go with this, but I think one thing that gets lost is proving the product market fit. Your new technology might be cool, but if it does not serve a market need, then it is not a company.

Being able to get into the market quickly and iterating through versions of the product is a very important aspect when building a successful company, regardless of the level of readiness. I know that we have taken too long to perfect things. Getting some test units in the market quickly—even in hardware, where it is very difficult—nevertheless is a driving force to building a sustainable company.

Solar Cell Manufacturer’s “Flexible” Approach Brings Renewable Energy to Unprecedented Places

Pvilion Team
The Pvilion executive team with samples of their groundbreaking flexible solar technology.

By Julia Scaglione

It’s 2019, and the world continues its rapid transformation. The physical earth itself changing in a time defined by environmental disruption, while exponential advancements in high tech are happening throughout the world. As the planet and technology undergo these developments, businesses—especially in the clean tech sector—must rapidly adapt to stay relevant or risk becoming extinct.

One clean tech company, however, has been designed specifically to embrace change and stay abreast of these constant transformations. Meet Pvilion, a client of the New York State Science and Technology Law Center (NYSSTLC), part of the Syracuse University College of Law’s Innovation Law Center.

Pvilion can be viewed as a change-expert. Its business model is built quite literally upon the concept of “flexibility”. The company specializes in solar products, but these are not your typical rigid rooftop panels. Pvilion designs and manufactures a flexible solar-powered fabric that can be used on any surface. Want a solar-powered backpack or jacket? Pvilion can make it. Or perhaps you’re thinking bigger—flexible solar panels on a boat cover, tent, or even stadium roof? That can be done at the hands of the Pvilion team.

Currently headquartered in Brooklyn, NY, Pvilion is not your standard DUMBO Brooklyn Community Laboratory startup. The company was born out of FTL, a business with nearly 25 years’ experience in advanced technology innovation. Specifically, FTL Solar—a subdivision of FTL—created the flexible solar cell technology that is the core of Pvilion’s business. Pvilion now operates as a small business led by co-founders CEO Colin Touhey, President Todd Dalland, and Vice President Robert Lerner. Although small in size, Pvilion’s operations—and its ambitions—are not miniscule in the slightest.

Pvilion Jacket
Pvilion’s flexible solar panels can be integrated into clothing, as shown with this prototype jacket.

Pvilion works daily with subcontractors and industry experts to innovate its solar cell technology in new and creative ways. One such partner may seem an unusual fit for a solar energy company: fashion giant Tommy Hilfiger. Pvilion has collaborated with the famous brand to create jackets and bags with USB charging capabilities. The unique partnership demonstrates Pvilion’s opportunity to work across a spectrum of markets due to its one-of-a-kind, adaptable technology.

“Take a product like an umbrella,” Touhey says. “Solar cell manufacturers are trying to integrate their technology into the product, and umbrella companies are trying to add value to their product through working with cheap solar cell manufacturers.” In this and other cases, its novel technology places Pvilion in a rare market position, between companies scrapping at both ends of the value chain. Its custom fabric can enter as the happy medium between two ends of this economic spectrum. “Pvilion is in a unique position to be agnostic,” says Touhey, enjoying his position as a protagonist without many antagonists in the solar cell fabric game.

Looking toward the future, Pvilion aims to infiltrate new markets in addition to those they currently operate in. In order to optimize its penetration, the company has been working with the Innovation Law Center as a client of NYSSTLC. On behalf of NYSSTLC, faculty and students provide companies with assessments of their intellectual property, as well as market and regulatory landscapes, to promote the commercialization of new technologies.

Specifically, the students are helping Pvilion determine where to penetrate by providing—as part of its proprietary report—a comprehensive summary of different markets for their technology. The students are enabling Pvilion to make smart market decisions by using strategic, data-powered evaluation and streamlined quantitative analysis.

Backed by the student research, Pvilion hopes not only to find industry partners in new markets, thus expanding its current reach but also to optimize its current partnerships and grow its business in the markets it currently participates in. Discovering its full potential is the aim.

Touhey speaks on behalf of the Pvilion team when he says that they have a “grand vision for what the future of solar could be.” He adds, “We are thrilled about the new strategic market partnerships to come.”

So, as the physical and technological worlds continue to evolve and companies attempt to adapt, keep an eye out for Pvilion—perhaps on a new jacket, bag, or tent—the “flexible disruptors” of the renewable energy industry.

Julia Scaglione is Communications Assistant for the New York State Science and Technology Law Center and a B.S. in Public Relations candidate (2020) in the S.I. Newhouse School of Public Communications at Syracuse University.

Innovation Law Center Students Help Allied Microbiota Commercialize a Clean Tech Breakthrough

One of the many impressive tasks that Innovation Law Center (ILC) research associates perform when writing proprietary reports for clients of the New York State Science and Technology Law Center (NYSSTLC) is getting up to speed very quickly with novel and often complex technologies. Becoming competent with groundbreaking biotechnology was certainly necessary for the report presented to Allied Microbiota, a New York City-based company that is developing a microbial product to remediate difficult-to-treat organic pollutants.

It helped to have a couple of College of Law students with biology backgrounds working on the report.

“My undergraduate degree is in biology,” explains Senior Research Associate Gabrielle Sherwood, a third-year law student. “This project was a nice refresher on what I learned in my biology classes, although describing this complex technology was a challenge.” However, adds Sherwood, another member of her team—2L Christina Brule—holds a Ph.D. in biochemistry. “Her knowledge came in very useful for the technology description and the intellectual property section.”

Sherwood and Brule, along with 3L Trevor McDaniel and 2L Kristian Stefanides, formally presented their report to Allied Microbiota in March 2019. Allied Microbiota CEO Frana James and CSO Dr. Ray Sambrotto describe the students’ work—which analyzes her company’s intellectual property claims, the potential market for its technology, and the regulatory landscape for bioremediation—as “really insightful”. “They offered us a new perspective about regulatory hurdles, prospects, and certifications we probably need to get,” adds James.

James says she discovered the Innovation Law Center through her connection to FuzeHub, a New York State manufacturing extension program supported by Empire State Development’s Division of Science, Technology & Innovation (NYSTAR). Through FuzeHub, James met NYSSTLC Associate Director Molly Zimmermann and ILC Adjunct Professor Dom Danna ’71. Eventually, Allied Microbiota joined 14 other start-up technology companies that ILC students have been assisting, on behalf of NYSSTLC, during the spring 2019 semester. 

A Columbia University-trained engineer with an MBA from the India Institute of Management, James founded Allied Microbiota three years ago with Sambrotto, a Research Professor at Columbia University’s Lamont-Doherty Earth Observatory. James and Sambrotto became interested in the commercial potential of biological soil remediation products that were being developed in the lab.

Despite some commercialization setbacks—as James says, “laboratory technologies can be difficult to scale up, and we certainly ran into our share of challenges”—yet fueled by funding and assistance from the National Science Foundation, PowerBridgeNY, SUNY-Stony Brook, NYSERDA, and others, Allied Microbiota is now in the large-scale testing phase for its PacBac product.

PacBac uses naturally occurring, non-pathogenic thermophilic bacteria to naturally destroy soil contaminants that are difficult and expensive to clean up using current remediation technology. These recalcitrant contaminants include a rogues’ gallery of dangerous chemicals—dioxins, polychlorinated biphenyls, polycyclic aromatic hydrocarbons, benzene, toluene, and xylene—that are often deposited in soil by industrial processes, creating dangerously polluted brownfield sites.

“These are pretty toxic soil contaminants that resist decomposition,” observes Sambrotto. “Current treatment methods include dredging the soil and disposing of it in a landfill or thermal destruction. These methods are expensive, use a lot of energy, and are not sustainable. PacBac is both an effective and cost-effective biological solution that uses a bacterium and enzymes. It degrades contaminants very fast.”

Supervised by Professor Danna, the student research team made observations and recommendations in three areas that will help Allied Microbiota bring PacBac to market. “We created a patent landscape and researched the chances of Allied Microbiota obtaining a patent. We also completed a freedom-to-operate analysis, to see what patents are out there and to determine if Allied Microbiota may infringe any of them,” explains Sherwood. “The regulatory section was a challenge because it’s a heavily regulated sector. We identified permits required, which are often concerned not with the remediation itself but with moving contaminated soils.”

According to Sherwood, the market analysis section of the report proved very fruitful. “We identified competitors and potential customers. The market for bioremediation is potentially huge, with companies under order to clean up sites and consumers demanding more environmentally friendly methods of removing contamination.”

“The remediation market is huge,” agrees James. According to the US Environmental Protection Agency, there are more than 450,000 brownfield sites in the US and more than 1,300 “superfund” priority list sites known to be releasing extremely hazardous substances. James says the remediation market potentially could be worth $65B by 2025.

Allied Microbiota is currently testing PacBac in collaboration with Clean Earth, a specialty waste management company. James says that small-scale field tests have been positive, and now the companies are working together to expand the testing with the goal of eventually decontaminating commercial grade sites. “We know the product works well, and we know how to implement it. Now we need to scale it up and offer it at a commercially viable price.”

Questions Raised about License of Nonprofit’s Data to Insider Startup

Should Board Members be Prohibited from Investing in or Holding Board Positions in Companies Originating from Academic Medical Centers?

Memorial Sloan Kettering Cancer Center confronts controversy for the exclusive licensing of the hospital’s pathology archive

Academic medical centers commercialize inventions, collaborate with industry, and contribute to improvements in health care. Revenue from technology licensing represents an important source of support for academic institutions in the United States. These activities also enhance economic development and elevate the reputation of the institution. In theory, spinning out the latest advances in technology sounds good – the devil is in the details.

Memorial Sloan Kettering Cancer Center (MSKCC) is the largest nonprofit cancer medical center in the world and has academic affiliations with Rockefeller University and Weill Cornell Medicine. As a cancer center, pathology is its cornerstone of diagnosis. Tissue biopsies are prepared on slides, reviewed under microscope and digitally scanned to detect presence of cancer in an often time-consuming and error-prone process that relies heavily on the doctor’s expertise. This work generates a wealth of diagnostic information about tumors. This information is valuable for training computational pathology systems to learn to diagnose tumors. The more slides the system can review, the better it can detect tumors.

In the past few years, computational pathology has gained momentum, enabling the use of computer algorithms to help spot and identify cancer, mostly as an add-on to manual detection. Crunchbase lists more than 50 firms worldwide who are working in this area, and reports predict the digital pathology market to expand in the near future. Google and Microsoft, are among the growing number of companies exploring ways to use artificial intelligence (AI) to improve healthcare.

Paige.AI – Pathology Artificial Intelligence Guidance Engine – is a computational pathology startup that applies machine-learning algorithms to libraries of oncological pathology slides to improve clinical diagnosis and decision-making. Three MSKCC insiders founded Paige.AI: Norman Selby, a member of MSKCC’s board of trustees; David Klimstra, chair of the hospital’s pathology department; and Thomas Fuchs, the head of a computational pathology research laboratory at MSKCC. Three other hospital board members became investors. Across the US, there are several computational pathology efforts underway similar to Paige.AI that have emerged from academic medical centers and have faculty founders, such as PathAI and SpIntellx.

Paige.AI closed $25 million in Series A funding from Breyer Capital in February 2018, one year after being founded. According to the PitchBook profile, MSKCC is a second investor in the startup. Is this an example of an economic development success? ProPublica and the New York Times (NYT) raised many questions about the deal, which MSKCC responded to in a press release. This article discusses some of the issues raised by the arrangement.

  • Was it appropriate for MSKCC to grant exclusive rights to Paige.AI, a company founded by MSKCC insiders?

MSKCC granted an 8-year license agreement to Paige.AI for exclusive access to its library of 25 million pathology slides. The MSKCC library is one of the world’s largest tumor pathology archives. In exchange, MSKCC received 9 percent ownership. Each of the three MSKCC insiders who are founders of the company also held an equity stake.

The MSKCC is a not-for-profit company. As such, and pursuant to NYS Not for Profit law, its board members must exercise duties of care, loyalty and obedience to the nonprofit. Directors have a duty to act in the interest of the not-for-profit corporation. This duty of loyalty requires disclosure of any conflict of interest, real or perceived, to the conflict of interest committee. The disclosure takes place in advance of joining a board, as well as when conflicts arise while serving on the Board. In this way, all members are aware of – and can avoid – transactions in which the interests of MSKCC are not primary.

Some research institutions bar employees from accepting personal compensation when they represent their institution on corporate boards. MSKCC did not have such prohibition. After a review of the Paige.AI license, MSKCC announced that it would restrict some interactions with for-profit companies. It said it was imposing a moratorium on board members investing in or holding board positions in startups that originated from the Cancer Center. The statement said, “we have determined that when profits emerge through the monetization of our research, financial payments to MSK-designated board members should be used for the benefit of the institution.”

The ProPublica/NYT article noted that the MSKCC board believed it acted properly in approving the deal with Paige.AI, maintaining that the venture could commercialize a valuable and important technology, thereby making the AI diagnostic capability widely available and potentially changing the future of cancer diagnosis.

  • How was the value of the exclusive license to Paige.AI determined? What obligation did MSKCC have to obtain a valuation before proceeding with the license terms?

Charitable institutions must show that they do not provide assets to insiders for less than the fair market value. In addition, while federal law does not specifically require seeking bids from competitors or independent appraisals of the assets in such a transaction, nonprofit groups that make deals with companies associated with board members or employees must demonstrate that they have taken steps to ensure that insiders do not get preferential treatment. The intent of a 26 US Code 501(c) (3) organization is to ensure it serves a public interest, not a private one. Its activities should not serve the private interest, or private benefit, of any individual or organization (other than the 501(c)(3) organization) more than insubstantially. In addition, hospitals must be able to demonstrate the fair market value of incentives to physicians. Anti-Kickback laws prohibit the exchange of remuneration – which the statute defines broadly as anything of value – as an inducement for patient referrals for services that are payable by a federal program.

The value of the competitive advantage Paige.AI gained by obtaining license to five years of digitized pathology slides and the ability to digitize millions of additional archived slides was recognized by Thomas Fuchs, Paige.AI’s Chief Scientific Officer. Fuchs acknowledged that access to MSKCC’s library of slides and its world-class pathologists’ work gives Paige.AI a leg up on the competition.

Officials said the hospital relied on investors to set a value for licensing the slides, with guidance from hedge fund leaders on its board. They admitted that they did not seek an independent valuation of the archive, nor did they put the proposal out for competitive bidding.

  • Were there any issues with licensing the de-identified information that originally came from MSKCC patients? What are the requirements for notice or consent – if any – with regard to the use of de-identified data? Does the Common Rule governing human subject research apply to the license of de-identified data?

In a statement posted on their website, MSKCC President and CEO Craig Thompson and COO Kathryn Martin disputed the “mischaracterizations” in the ProPublica/NYT article. They noted that “no patient tissue, patient slides or protected health information has been or will be shared with Paige.AI” and that “only digital images and diagnostic data […] stripped of patient identifiers are shared.” The de-identification means that the Federal Policy for the Protection of Human Subjects 45 CFR part 46, revised 2018, known as the “Common Rule,” does not apply.

The Department of Health and Human Services’ Office of Human Research Protections (OHRP) issued a publication on Informed Consent for Use of Biospecimens and Data. The document states at (I) (4) that OHRP does not consider research involving fully de-identified or fully anonymized information to involve human subjects. It provides the following FAQ (#19) and response:

A tissue biopsy was obtained for clinical diagnostic purposes, which have now been satisfied. The hospital pathology department is willing to provide a portion of the remaining biopsy specimen to an investigator, who will perform research assays with no clinical relevance. If the specimen is coded and identifying information is removed so that the identity of the patient cannot be readily ascertained by the investigator before it is provided to them (so that it is de-identified for the purposes of HIPAA), is the investigator conducting human subjects research under the purview of an IRB?

Response – HHS Common Rule Issues.  No, this is not research involving human subjects, because the recipient investigator will not be able to readily ascertain the identity of patients from whom specimens were obtained.

Nevertheless, some advocates argue that patients who knowingly gave permission to MSKCC to use residual tissue samples in research may not have imagined that their donation could be licensed to a commercial entity. Steven Petrow, a columnist for USA Today and former patient at MSKCC whose family has also been treated at that hospital, published an opinion article expressing these concerns: “Are the slides of my cancer among them? My mom’s? My sister’s? I’m uneasy wondering whether they are being commercialized without our consent, or even without our being notified.” MSKCC has not publicly released its informed consent document for donors. This case may call into question the so-called “broad consent” that healthcare institutions use for patient release of samples and health data. “Broad consent” becomes fraudulent when it is so broad that people who provided samples for research are shocked either to learn that they did so, or to learn how their donated resources are actually used. Exclusive deals that commercially monopolize biodata may generate the same public distrust that fueled anti-trust regulations in other areas of economic life.

The decision to license images of the patients’ tissue slides to a for-profit company highlights the broader debate over the use of personal medical data for commercial purposes, from genetic information to images of a person’s cells.

  • What obligation, if any, did MSKCC have to the pathologists that diagnosed the tumors?

Following the investigative report from ProPublica/NYT, MSKCC heard from patients, pathologists and other staff members with concerns about ethics, exclusivity, and profiting from data generated by physicians but owned by MSKCC.

Pathologists at the hospital objected to the deal, saying it is unfair that the founders received equity stakes in a company that relies on the pathologists’ expertise and work amassed over 60 years. Some pathologists said that they felt they were not sufficiently credited with their intellectual input in the venture, but were not seeking financial compensation . At a public meeting in September of 2018, some pathologists said they only learned about the deal after it was announced online.

MSKCC has taken several steps in the last months to control the damage. One was the moratorium on board members investing in or holding board positions in startups that originate from the Center. Also, they will adopt a standard policy that any potential equity attained by employees appointed as MSKCC-designees to outside boards will be returned to the institution and dedicated to research. The proposed policies do not apply to researchers whose discoveries lead to new drugs, and the moratorium on board investments only applies to new deals, and so it will not affect the Paige.AI deal.

Hospital officials said the hospital has set up plans to manage conflicts for the three company founders and for the hospital members who are investors. All these individuals with an interest in the formation of Paige.AI will have to recuse themselves from any MSKCC decisions involving the company. After NYT/ProPublica began asking questions about the arrangement, one of the founders said he would divest his ownership stake and another has pledged to donate some of his profits to the hospital. Details for distributing any profits or proceeds from Paige.AI have not been worked out, officials said. In the MSKCC memo about the relationship of the institution with the startup, they specify that “any revenue generated based on MSK’s ownership in the company will be reinvested back into research at MSK, with special consideration given to the Department of Pathology.”