MERGER WILL MAKE NANOTUBE POWERHOUSE

By Senior Associate Editor Samuel K. Moore



Carbon Nanotechnologies Inc. and Unidym to merge in nano blockbuster—patents key to deal.


Samuel K. Moore


Carbon Nanotechnologies Inc. (CNI), the carbon nanotube supplier founded by the late Nobel Laureate Richard Smalley, has agreed to merge with Unidym, a company developing a technology that uses carbon nanotubes as the transparent electrodes in solar cells, touch screens, and displays. The resulting company will be the first "vertically integrated" carbon nanotube electronics company, both manufacturing the material and using it in an electronics application.

"We believe this deal is transformational for the industry and will enable more rapid commercialization of products incorporating nanotubes, since so much of the intellectual property can now be licensed from one company," says R. Bruce Stewart, chairman of Arrowhead Research, the majority owner of Unidym. The deal is expected to close in April. The combined company will retain the Unidym name.

Unidym is developing a technology to replace indium tin-oxide (ITO) as the transparent conductor that forms the wires in flat panel displays and solar cells. ITO is an entrenched material, but it does have a few drawbacks. Though it has some flexibility, it tends to crack when bent repeatedly, as would be needed in a roll-up or flexible display. And it's not ideal for touch-screens, because the pressure of a stylus can also crack it. Also, the price of indium, which is only about as abundant as silver, rose tenfold to US $900 per kilogram between 2002 and 2005 because of increased flat-panel display manufacturing and reduced supply. (It is now closer to $700 per kg.) The overall market for the material is thought to be worth $1 billion per year.

Unidym's solution is a mesh of randomly oriented conductive carbon nanotubes. According to the company, the nanotube mesh is more flexible, more transparent, easier to apply, and more conductive than ITO. Unidym also plans to construct nanotube-based electrodes for fuel cells. The company, whose work is based largely on the research of University of California, Los Angeles, physicist George Grÿner, is also developing nanotube-based thin-film transistors, which would compete with organic semiconductors to form the pixel control elements in future flexible displays.

CNI, a Houston-based firm spun out of Rice University, is the largest manufacturer of carbon nanotubes in the world. But its patent portfolio, comprising about 100 patents, goes beyond manufacturing nanotubes to include methods for making nanotube ropes and fibers, as well as supercapacitors.

According to Arrowhead, the combined company would help Unidym get its first products to market faster, because it gives the company access to CNI's carbon nanotube chemistry. But the real advantage will be in the prodigious package of patents it will have.

Nanotechnology observers have occasionally bemoaned the state of carbon nanotube intellectual property (IP), saying that if a company wanted to make a product it would have to obtain licenses from too many separate entities, each of which would be trying to extract as large a slice of the royalties as possible. "It's almost impossible to have the freedom to operate in the carbon nanotube space," Arrowhead vice president for business development John C. Miller told me when I met him last summer. According to Lux Research, carbon nanotubes have the most fractious patent landscape of the major nanotechnologies, with many patent holders and a good deal of overlap in patent claims.

Under Miller's direction, Arrowhead aggregated IP from a number of universities in the hopes of making a "toolbox" of carbon nanotube patents to use at Unidym and to license to others. With the CNI merger, that toolbox is much bigger. According to an Arrowhead document describing the merger, Unidym will begin a program to license packages of patents as soon as the two companies join. The CNI patents should allow Unidym to move into new businesses, such as thermal management and memory devices, more quickly, according to the document. Even if Unidym does not have the needed patents to make such a product, its enhanced patent portfolio might let it acquire them through cross-licensing.

Even after the merger, though, Unidym will be one of a few big IP holders, including IBM, NEC, Intel, and Stanford University. Some analysts have suggested that the nanotube heavyweights form the equivalent of a patent pool similar to the MPEG Licensing Authority, in Denver, Colo., a one-stop shop where consumer electronics companies can buy packages of digital coding licenses if they want to make, for example, a DVD player. However, in the December 2006 issue of Nanotechnology Law and Business, Arrowhead's Miller argues that such a pool is unlikely to form for several reasons, including: there is no standards-based product in existence, as in the example of the DVD player; and without a standard, a pool might trigger antitrust actions by the U.S. Department of Justice.

Instead, Miller and his coauthor Drew Harris, an attorney with Graves, Dougherty, Hearon & Moody in Austin, Texas, suggest a forum where major patent holders, universities, seekers of licenses, and the Justice Department could examine the nanotube patent problem and perhaps work out a solution.

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