Fuel-cell company Ztek Corp. has accused startup competitor Bloom Energy of patent infringement, according to a California government document.

The document is part of written materials accompanying an Oct. 4 meeting agenda for Santa Clara County's Finance & Government Operations Committee.

According to the record, Ztek made the allegations in an appeal to the county after county staff recommended awarding Bloom Energy the contract for a $2.76-million project instead of Ztek.

"Ztek's letter alleged patent infringement and concern with Bloom Energy's ability to meet the DOE … requirements," according to the document.

For more than two years, the county has been working with the U.S. Department of Energy on a project to test a fuel cell in a 911 call center.

After the DOE and Santa Clara County each agreed to supply half the money for the project, the county staff solicited proposals and got responses from two companies, Bloom Energy and Ztek.

Why only two? The project stemmed from a DOE initiative to advance the development of solid-oxide fuel cells, which use ceramic plates and high temperatures to convert fuel (in this case, hydrogen derived from natural gas) into electricity. Unlike the more common proton-exchange fuel cells, solid oxides don't require expensive platinum catalysts.

But not many companies are working on those specific types of cells so far, said Siva Darbhamulla, chief of design services for Santa Clara County's facilities and fleet department.

Darbhamulla said the county staff picked Bloom Energy's proposal over Ztek's because it claimed more reliability, based on previous installations and preliminary conversations.

"The technologies were so close that Ztek did come to us saying, 'Hey, there might be some patent-infringement issues here,'" Darbhamulla said. "'It's all trade secrets, so we don't know the details, but there might be some portions [that infringe],'" the company told county officials.

Bloom Won't Comment

Buzz around the stealthy Bloom Energy took off last year when the startup raised more than $100 million and then when CEO K.R. Srindhar appeared on PBS' Charlie Rose Show in December.

Bloom declined to comment on Ztek's allegations, saying it isn't doing any interviews right now.

While Ztek doesn't have access to Bloom's proposal or other information about its competitor's technology, Ztek President Michael Hsu said the company strongly suspects Bloom is using the same technology that Ztek already patented.

"Certain claims are parallel," he said. "We're not saying they are definitely infringing, but the chance they are not infringing is very, very low."

Three of Bloom's patent-application claims appear very similar to patents Ztek already holds, Hsu said.

Ztek, founded in 1983, developed its technology over more than 15 years while working with the DOE and the Electropower Research Institute, he said.

While a number of labs have demonstrated 5-kilowatt projects, integrating larger projects has proven more difficult and even larger companies like General Electric and Siemens have been unable to do it, Hsu said.

"Nobody else has been able to announce they can do the same thing Ztek is doing, other than Bloom Energy," he said, adding that Bloom claims to be able to integrate 50 kilowatts-worth of fuel-cell stacks.

So when young Bloom Energy claimed to be able to integrate larger projects, Ztek "certainly took notice," he said.

And when the company saw that Bloom referred to a hybrid system that also used radiation, Hsu said, "that was a tip-off immediately, because that's what we're doing." Hsu said the company is "very serious" about its patent-infringement suspicions and is "definitely going to pursue" them.

No Problem?

In the meantime, all the company could do is ask Santa Clara County to assess the situation - and the proposals - in an unbiased way, he said.

After receiving the letter from Ztek, the county sent it to the DOE for a legal review and asked for a response from Bloom, which said its technology was different from Ztek's and that there were no patent issues, he said.

Based on Bloom's response, the DOE gave the contract the go-ahead in spite of the patent-infringement allegations. Bloom also indemnified the county for some patent issues, Darbhamulla said.

He added this type of kerfuffle isn't uncommon in such closely guarded new technologies. "Being a brand-new technology, there is going to be that type of competition and thinking that somebody else is stealing their technology," Darbhamulla said.

Ztek's allegations delayed the project about three months, according to the county document.

The project design is scheduled to be completed by the end of October, with installation completed in January and a year of testing starting at the end of February, Darbhamulla said.

The project will first use natural gas, converting it into hydrogen, and then - in a second phase - also will try using ethanol instead of natural gas for a month.