KiOR: The inside true story of a company gone wrong. Part 3, “You’ve Cooked the Books”

Problems erupt with KiOR’s intellectual property portfolio

By May, the troubles at KiOR expanded to include the handling of processing of patent applications and the securing of the company’s intellectual property.

On May 15th, Dennis Stamires fired off a letter to CEO Cannon, notifying him that he would handle certain high value patent Applications directly with Jennifer Camacho, separately and outside Hacskaylo’s IP team.

One issue? As Stamires recalled for The Digest, “Hacskaylo’s name appeared, as a co-inventor, on patent applications on which he had not made any intellectual contribution.”

From the point of view of the KiOR shareholder, this represented a potential disaster of the first magnitude. The inclusion of a co-inventor on a patent, who has made no intellectual contribution to the invention, is serious business in the world of patents. The practice represents grounds, in and of itself, to invalidate a patent.

Putting some of KiOR’s intellectual property, potentially, right into the public domain. Damaging to the other co-inventors — and ultimately for the company to whom the patent rights are routinely assigned.

The Loan Guarantee withdrawal

Meanwhile, the company’s efforts to obtain a loan guarantee were failing, as became clear to financier Vinod Khosla after a telephone discussion on May 6th with Jonathan Silver, Executive Director of the DOE’s loan guarantee program.

The primary issue? Data to support the assertion that the company’s yields were commercially feasible.

The State of Mississippi stated:

Ditsch’s concerns about KiOR’s ability to prove the commercial viability of its technology to the DOE loomed large over the Company’s decision to press forward with its loan guarantee program application. KiOR’s executive leadership team and Khosla chose to withdraw the Company’s application, but not before Khosla considered pressuring Ray Mabus to call Jonathan Silver and/or the United States Secretary of Energy, Steven Chu.