Alabama Patent of the Month – February 2026

Strategic Analysis Report: Alabama Patent of the Month (February 2026) – US Patent Publication No. 2026/0015297

Subject: Comprehensive Technical, Commercial, and Fiscal Analysis of US Patent Publication No. 2026/0015297 (“Black Soldier Fly Larvae Frass Formulations”)

Assignee: Chonex, Inc. (Vandiver, Alabama)

Award Designation: Alabama Patent of the Month (February 2026)

Prepared By: Strategic Investment & R&D Tax Compliance Committee

Date: February 17, 2026

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Strategic Overview

The global agricultural sector stands at a precarious crossroads, grappling with the dual crises of degrading soil health and the extreme volatility of synthetic fertilizer markets. The traditional models of fertilization—reliant on mined phosphates and energy-intensive nitrogen fixation—are increasingly viewed as unsustainable, both economically and ecologically. Into this breach steps US Patent Publication No. 2026/0015297, titled “Black Soldier Fly (Hermetia illucens) Larvae Frass Formulations, Combinations and Methods of Production.” Published on January 15, 2026, and assigned to the Alabama-based innovator Chonex, Inc., this intellectual property represents a paradigmatic shift in bio-fertilizer technology.

This report serves as the definitive analysis of this invention, which has been distinguished as the Alabama Patent of the Month for February 2026 by Swanson Reed. Selected via a rigorous AI-driven evaluation of over 1,000 patent filings within the jurisdiction, this award recognizes not merely theoretical novelty, but immediate industrial utility and economic potential. The selection highlights a critical evolution in how intellectual property is valued: moving beyond abstract innovation to prioritize tangible solutions for systemic industrial bottlenecks.

The patent describes a proprietary methodology for converting poultry manure—a problematic and voluminous waste stream in Alabama’s massive poultry industry—into a high-performance, Water Dispersible Granule (WDG) bio-fertilizer. Unlike raw insect frass, which suffers from inconsistent nutrient profiles, handling difficulties, and potential pathogenic risks, Chonex’s formulation utilizes the Black Soldier Fly Larvae (BSFL) as a biological engine to sanitize waste. The process extracts chitin and beneficial microbes, which are then stabilized in a dry, shelf-stable granule through a novel “cold grind” mechanism. This “just-in-time” activation mechanism solves the historical logistic bottlenecks of biological agricultural inputs, allowing for seamless integration into modern precision irrigation systems.

Beyond its technical merits, the development of this technology serves as a textbook case study for the Research & Development (R&D) Tax Credit (IRC Section 41). This report includes a detailed forensic analysis of the project’s eligibility under the IRS “Four-Part Test.” With the assistance of Swanson Reed’s specialized methodology, we demonstrate how the elimination of technical uncertainty regarding granulation physics and microbial survivability substantiates a robust tax credit claim, providing a roadmap for similar ag-tech innovators.

Our analysis suggests that US20260015297 is not just a patent; it is a foundational asset for a new class of regenerative inputs. It offers a scalable solution to the “Phosphorus Peak” and nitrogen runoff issues, positioning Chonex as a critical player in the transition to sustainable intensification. The invention transforms a liability—bio-hazardous waste—into a strategic asset, embodying the principles of the circular economy while delivering quantifiable improvements in crop yield and soil resilience.

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The Alabama Patent of the Month: Selection Methodology and Significance

The Swanson Reed Recognition Program

The designation of “Alabama Patent of the Month” is not an arbitrary accolade distributed for marketing purposes. It is the result of a sophisticated, data-driven filtering process designed by Swanson Reed, one of the largest specialist R&D tax advisory firms in the United States. The program aims to identify high-value intellectual property from the noise of routine filings, highlighting inventions that demonstrate exceptional technical advancement and potential market influence.

The selection process is distinct from traditional awards which often rely on subjective peer review or committee voting. Instead, Swanson Reed employs TaxTrex, a proprietary Artificial Intelligence platform originally designed for R&D tax compliance. This system scans the entirety of patent publications within the USPTO database for the target month, analyzing the claims, specifications, and background sections of thousands of documents.

The AI-Driven Evaluation Criteria

For the February 2026 cycle, the AI algorithm evaluated over 1,000 potential patents granted or published within the Alabama jurisdiction. The selection algorithm scores candidates based on three weighted vectors, ensuring a holistic assessment of the invention’s value:

• Technological Novelty (40% Weighting): The system analyzes the “Prior Art” citations to determine the magnitude of the leap over existing technology. In the case of US20260015297, the shift from raw, unprocessed insect frass to a formulated, engineered Water Dispersible Granule (WDG) scored in the top percentile for formulation chemistry. The algorithm recognized that while using insects for waste processing is known, the specific method of creating a shelf-stable, water-soluble granule without thermal sterilization represented a significant non-obvious advancement.
• Economic Utility (30% Weighting): The system assesses the potential industrial application and market size. The alignment of this patent with Alabama’s $15 billion poultry industry provided a near-perfect “Product-Market Fit” score. The invention addresses a massive, expensive waste disposal problem for poultry integrators while simultaneously providing a solution to rising fertilizer costs for row crop farmers.
• Substantiation Quality (30% Weighting): Crucial for R&D tax purposes, the system evaluates the patent specification for evidence of a “process of experimentation.” The detailed embodiments regarding binder ratios, drying temperatures, and milling mesh sizes served as strong indicators that the development involved significant technical uncertainty and systematic testing. A patent that describes how a problem was solved through iteration scores higher than one that simply claims a theoretical result.

Contextualizing the Win: The Alabama Innovation Corridor

While the January 2026 award went to Composite Technologies International for their marine resin systems, highlighting the state’s advanced manufacturing capabilities , the February award shifts focus to the burgeoning AgTech corridor in North Alabama. Chonex, operating out of Vandiver and Florence, AL, represents the intersection of Alabama’s traditional agricultural strength and its emerging biotech sector.

The selection of Chonex underscores a broader trend in the region: the application of advanced engineering and biological principles to traditional industries. The algorithm flagged this patent because it transforms a liability (poultry litter, which is often over-applied to land, causing phosphorus runoff and regulatory headaches) into an asset (a high-value biological input). This “alchemical” value proposition—creating economic value from waste—is the hallmark of the Patent of the Month program and reflects the rigorous criteria applied by Swanson Reed’s analysts.

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Detailed Technical Analysis of US20260015297

The Biological Engine: Hermetia illucens

The patent centers on the Black Soldier Fly (BSF), a non-pest insect native to the Neotropics but now ubiquitous globally. Unlike the common housefly, the adult BSF does not possess mouthparts and therefore does not feed, bite, or transmit disease. Its sole purpose is reproduction. The larvae (BSFL), however, are voracious consumers of organic matter, capable of consuming twice their body weight in waste every day.

The “prior art” in this field largely focused on the larvae as a protein source for aquaculture (fishmeal replacement) and pet food. In these conventional systems, the “frass” (a mixture of larval excrement, exoskeletons, and uneaten substrate) was often treated as a secondary byproduct, discarded, or sold as a low-value, bulk soil amendment similar to raw compost. The core innovation of US20260015297 is the elevation of frass from a waste byproduct to a primary, engineered product. The patent details specific rearing protocols that optimize the frass quality rather than just larval weight, creating a substrate rich in specific microbial communities.

The Core Innovation: Water Dispersible Granules (WDG)

The patent describes a method to formulate this frass into a Water Dispersible Granule (WDG). This represents a significant technical leap in agricultural chemistry for several critical reasons, solving problems that have plagued the biologicals industry for decades.

The Microbial Viability Paradox

Traditional granulation processes in the fertilizer industry involve high heat and high pressure. Urea prills, for instance, are formed in towers at temperatures exceeding 130°C. Similarly, pelletizing compost usually involves steam conditioning to kill pathogens and bind the material. However, the primary agronomic value of insect frass lies in its living microbiome—the beneficial bacteria, fungi, and protozoa that cycle nutrients in the soil. High heat sterilizes the product, destroying this value.

The patent outlines a proprietary “cold grind” and extrusion methodology. This process utilizes specific binders—likely starch or lignin-based—that allow for the creation of a durable granule without the application of sterilization-level heat. This technical achievement allows the product to remain “dormant” and shelf-stable for months, only reactivating when exposed to moisture in the soil. This eliminates the “short shelf life” issue that plagues liquid biologicals.

Suspension Physics and Application

Raw insect frass is organic matter; it does not naturally dissolve in water. If a farmer were to mix raw frass into a tank and attempt to spray it, the organic particulates would immediately clog the standard 100-mesh filters found in agricultural spray nozzles. This incompatibility with modern farming equipment has been a major barrier to adoption.

The patent describes a milling process that reduces the particle size of the frass to pass through a 325 mesh screen. This is significantly finer than standard agricultural requirements. When combined with specific dispersants described in the patent, the organic matter forms a colloidal suspension rather than a solution. This allows the product to flow like a liquid through drip tape and pivot irrigation systems, enabling “fertigation”—the application of fertilizer through water. This technical specification is crucial for adoption in large-scale row crop operations where spreading bulk solid fertilizer is inefficient.

Chitin-Based Bio-Stimulation

The formulation retains high levels of chitin, a biopolymer found in the exoskeletons of the larvae. Most traditional composting processes degrade chitin over time. The Chonex process preserves it. When applied to soil, chitin triggers a plant immune response known as Systemic Acquired Resistance (SAR). Plants detect chitin as a sign of insect presence and preemptively strengthen their cell walls and produce defensive compounds. This “vaccinates” the crop against future pest and fungal attacks without the use of chemical pesticides.

The “StrongSoil” Composition

According to the patent and associated technical documents, the resulting product (marketed as StrongSoil) possesses a unique profile that differentiates it from both synthetic fertilizers and traditional composts.

Table 1: Comparative Analysis of Soil Amendments

Metric	Traditional Compost	Raw Insect Frass	Chonex StrongSoil WDG
Physical Form	Bulk Solid / Sludge	Wet/Dry Powder	Engineered Granule
Application Method	Spreading (Heavy Equipment)	Broadcasting	Standard Liquid Spray
Microbial Status	Variable / Active (unstable)	Variable	Dormant & Stabilized
Activation Time	Days to Weeks	Hours	30 Minutes
Pathogen Risk	Moderate (if not cured)	Low	Zero (Pathogen Free)
Consistency	Low (Batch variance)	Medium	High (Industrial Process)
Particle Size	> 2mm	Variable	< 44 microns (325 Mesh)

The table highlights the distinct advantage of the WDG formulation. While traditional compost requires heavy spreading equipment and has variable nutrient release, StrongSoil offers the precision of a chemical fertilizer with the biological benefits of compost. The “30-minute activation time” mentioned in the snippets refers to the speed at which the granule disperses in water and the microbes begin metabolic activity, a rapid response compared to the slow mineralization of bulk compost.

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Scientific Mechanisms of Action

To fully appreciate the “Technological in Nature” aspect of the R&D tax credit claim, one must understand the complex biological and chemical mechanisms leveraged by the patent.

Microbial Inoculation and Nutrient Cycling

The efficacy of the StrongSoil product relies on a curated community of microorganisms. The patent suggests that the gut of the Black Soldier Fly functions as a bioreactor, selecting for bacteria that are efficient at breaking down cellulose and diverse organic compounds. Key genera often associated with BSFL frass include Bacillus, Trichoderma, and various nitrogen-fixing bacteria.

When the WDG dissolves in the soil, these microbes are released. They produce enzymes (such as chitinase, cellulase, and protease) that break down organic matter already present in the soil, unlocking nutrients that were previously unavailable to the plant. This process is known as mineralization. Unlike synthetic fertilizers that directly feed the plant (often resulting in nutrient leaching), this approach “feeds the soil,” creating a sustained nutrient release profile that matches the plant’s growth cycle.

Glomalin and Soil Structure

A critical, often overlooked benefit described in the broader literature regarding fungal-rich amendments is the production of glomalin. This glycoprotein is produced by arbuscular mycorrhizal fungi, which are supported by the microbial community in the frass. Glomalin acts as a “soil glue,” binding soil particles into stable aggregates.

These aggregates are essential for:

• Water Infiltration: Creating pore space for water to penetrate rather than run off.
• Aeration: Allowing oxygen to reach plant roots.
• Carbon Sequestration: Protecting organic carbon inside the aggregate from rapid oxidation. This mechanism positions the technology not just as a fertilizer, but as a tool for regenerative agriculture and soil carbon sequestration.

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Comparative Competitive Landscape

The “Blue Ocean” of Insect Agriculture

The global insect protein market is rapidly expanding, dominated by major players like Protix (Netherlands), InnovaFeed (France), and EnviroFlight (USA). However, a detailed analysis reveals that these entities primarily focus on the protein side of the equation—producing insect meal for aquaculture and pet food. The frass is a secondary revenue stream, often treated as a waste disposal issue rather than a core product.

The analysis indicates that Chonex has carved out a distinct niche by prioritizing the frass. While competitors sell frass as a secondary commodity in bulk, Chonex’s patent suggests they are an agronomy-first company. By securing IP around the formulation of the frass (the WDG technology), they create a strategic “moat.” Even if a competitor can produce raw frass more cheaply, they cannot easily replicate the high-performance WDG product without infringing on the patent’s claims regarding binder ratios and milling processes.

Direct Competitor Analysis

AgriProtein / Insect Technology Group (UK/South Africa):

• Focus: Large-scale protein production for aquaculture.
• Frass Strategy: Generally marketed as a bulk soil amendment called “MagSoil.”
• Comparison: AgriProtein’s product is effectively a high-quality compost. It is bulky and expensive to transport over long distances. Chonex’s WDG is concentrated and lightweight, significantly reducing logistics costs and enabling a national distribution model rather than a regional one.

Protix (Netherlands):

• Focus: Highly automated, high-tech breeding. They hold patents on “Insect Fat” and “Protein Hydrolysates”.
• Comparison: Protix is the technological leader in breeding efficiency and genetics. However, their IP portfolio is less focused on the post-processing of fertilizer. Chonex’s patent focuses on the downstream formulation. These are complementary but distinct technological areas. Chonex effectively beats Protix in the specific niche of “precision agriculture compatibility.”

Indirect Competitor Analysis: The Synthetic Giants

The true competition for Chonex is not other insect farms, but the massive synthetic fertilizer industry (e.g., Yara, Mosaic, CF Industries).

• The Advantage of Synthetics: Precision, low cost (historically), and high N-P-K concentration. Farmers know exactly what they are getting.
• The Chonex Disruptor: The patent describes a mechanism where the microbial payload helps “mineralize” nutrients already locked in the soil. Field trials across 50 locations in 10 states demonstrated that the WDG formulation allows farmers to reduce synthetic fertilizer use by up to 50% while maintaining or increasing yield.
• Market Dynamics: With the volatility of urea and phosphate prices due to geopolitical instability (2022-2026), farmers are desperate to reduce their exposure to global commodity markets. Chonex offers a domestically produced, price-stable alternative.

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Real-World Economic & Environmental Impact

Displacing Synthetic Fertilizers

The geopolitical instability of the mid-2020s has caused extreme volatility in urea and phosphate prices, which are derived largely from natural gas and mined rock. This volatility destroys farmer margins.

• The Efficiency Gap: Synthetic fertilizers are notorious for the “Law of Diminishing Returns.” Up to 50% of applied nitrogen is lost to runoff or volatilization before the plant can use it.
• The Economic Model: By allowing a 50% reduction in synthetic inputs, Chonex changes the farm’s P&L (Profit and Loss) statement. Even if StrongSoil is more expensive per pound than urea, the total fertility program cost decreases because the biology makes the remaining synthetic fertilizer more efficient.

The “Phosphorus Paradox” Solution

One of the most profound impacts of this invention is its potential to solve the Phosphorus Paradox. Phosphorus is a finite resource (“peak phosphorus” is a looming threat), yet humanity wastes massive amounts of it. In the poultry industry, birds excrete phosphorus-rich manure. When this is over-applied to land (as is common in Alabama), it saturates the soil and runs off into waterways, causing algal blooms and dead zones.

By creating a high-value market for poultry litter (converting it to StrongSoil), Chonex incentivizes the capture, processing, and redistribution of phosphorus. Instead of dumping it on local fields, it is processed into WDG and shipped to phosphorus-deficient regions (like the Corn Belt). This closes the nutrient loop, reducing reliance on mined phosphate from geopolitical hotspots like Morocco or Russia, and mitigating local environmental damage.

Carbon Sequestration and Climate Goals

The patent emphasizes the role of the soil microbiome in carbon cycling. Fungal networks (promoted by the Chonex formulation) are the primary drivers of glomalin production, which stabilizes soil carbon. If adopted at scale, the technology described in US20260015297 could turn millions of acres of farmland into active carbon sinks. This aligns with emerging “Climate-Smart Commodity” markets, potentially allowing farmers to sell Carbon Credits in addition to their crops—a double revenue stream enabled by this Alabama innovation.

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R&D Tax Credit Analysis: The Swanson Reed Framework

Introduction to the Analysis

The development of US Patent 2026/0015297 represents a substantial investment in applied science and engineering. Under IRC Section 41, these expenditures—wages, supplies, and contract research—are eligible for the Research and Development Tax Credit, provided they satisfy the statutory Four-Part Test.

Swanson Reed, a specialist R&D tax advisory firm, emphasizes a “substantiation-first” approach. Using their methodology, we dissect the development of the StrongSoil WDG patent to demonstrate its compliance. This analysis serves as a template for how AgTech firms should document their innovation to withstand IRS scrutiny.

Test 1: Permitted Purpose

The Requirement: The activity must relate to a new or improved “business component” (product, process, formula, software, or technique) held for sale, lease, or license. The goal must be to improve functionality, performance, reliability, or quality.

Application to US20260015297:

• Business Component: The StrongSoil Water Dispersible Granule (WDG) and the specific manufacturing process used to create it.
• Improvement: The project clearly aimed to improve the solubility of frass (from non-soluble to 325-mesh dispersible) and the shelf-life of the microbial content (from days to months).
• Conclusion: The project meets the Permitted Purpose test as it creates a new, high-performance product for the agricultural market. The “Permitted Purpose” is not just to make a new product, but to make one that solves the specific functional issue of spray nozzle clogging.

Test 2: Technological in Nature

The Requirement: The research must fundamentally rely on the principles of the “hard sciences” (physical, biological, engineering, or computer sciences). It cannot be based on soft sciences like economics or consumer preference.

Application to US20260015297:

• Biological Science: The project relied heavily on entomology (understanding BSFL life cycles and digestion) and microbiology (selecting for specific bacterial and fungal strains like Trichoderma and Bacillus).
• Chemical Engineering: The development of the WDG formulation involved complex study of colloidal chemistry, binder efficacy, and hygroscopic properties of the granule. The patent describes specific ratios of binders and dispersants, which required chemical engineering knowledge to perfect.
• Conclusion: The innovation is deeply rooted in biology and chemical engineering, satisfying the requirement.

Test 3: Elimination of Uncertainty

The Requirement: At the outset of the project, there must be uncertainty regarding the capability (can we do it?), the method (how do we do it?), or the appropriate design of the business component.

Application to US20260015297:

• The Core Uncertainty: “Can we create a dry granule that disperses in water without killing the microbes during the drying process?”
• Technical Hurdles: Standard spray-drying operates at temperatures (>150°C) that sterilize the product. Finding a “cold grind” or low-temperature extrusion method that yielded a durable granule (one that doesn’t turn to dust in the bag) was not a known certainty at the project’s start.
• Swanson Reed Insight: The mere existence of the patent application is strong evidence of this uncertainty. If the method were known or obvious, it would not be patentable. The “uncertainty” here is not “will it sell?” (business risk), but “can we physically make it?” (technical risk).

Test 4: Process of Experimentation

The Requirement: Substantially all (at least 80%) of the activities must constitute a process of experimentation. This involves the systematic evaluation of alternatives—simulation, modeling, or trial and error—to resolve the uncertainty.

Application to US20260015297:

• Iterative Design: The research snippets indicate Chonex conducted 50 field trials across 10 states. This represents a massive systematic evaluation of the product’s efficacy under different soil conditions (variables).
• Formulation Testing: The development of the WDG likely involved testing various binders (starch vs. lignin vs. clay) and milling sizes (100 mesh vs. 200 mesh vs. 325 mesh) to find the optimal dissolution rate. The patent likely documents failures—binders that were too weak, granules that didn’t dissolve—which are critical proofs of experimentation.
• Conclusion: The project was not a linear “build-to-spec” job; it was a scientific inquiry involving hypothesis (Binder A will work), testing (clogged nozzles), and refinement (switch to Binder B).

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Substantiation Strategy and Audit Defense

The Risk of “Hindsight Bias”

A critical insight from Swanson Reed’s methodology is the danger of hindsight bias. When a patent is granted and the product is successful (like StrongSoil), IRS auditors often argue that the result was “obvious” and therefore not valid R&D. They may claim that “making granules is a standard industry practice.”

To defend against this, Chonex must leverage the TaxTrex system mentioned in the research material. This involves:

• Contemporaneous Documentation: Capturing emails and lab notes during the failure phases (e.g., when the granules were crumbling or clogging nozzles). Proving that the team struggled is the best way to prove uncertainty.
• The “Six-Eye Review”: Swanson Reed’s protocol requires every claim to be reviewed by a Scientist (to validate the biology), a Tax Attorney (to validate the law), and a CPA (to validate the numbers). This multi-disciplinary defense is essential for high-value claims like this one, ensuring that the “science” translates correctly into “tax law.”

The “Internal Use Software” Trap (Avoided)

It is worth noting that while the patent involves “Methods of Production,” it does not appear to rely heavily on “Internal Use Software” (IUS) for its core novelty. Many R&D claims fail because they are essentially software projects that fall under the stricter 3-part test for IUS. The innovation here is hardware and chemistry (tangible property), which generally faces a lower burden of proof than software-only claims. This makes the claim more defensible in an audit scenario.

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Future Outlook & Strategic Recommendations

Scaling Challenges

While the patent secures the technology, scaling biological production is notoriously difficult. Unlike a chemical plant, a bug farm is a biological system subject to disease (colony collapse) and environmental fluctuation. Chonex will need to demonstrate that their “process of production” (the patent’s claims) is robust enough to handle the variability of feedstock (manure quality changes) without compromising the final WDG specifications.

Regulatory Hurdles

The regulatory landscape for “frass” is still evolving. The Association of American Feed Control Officials (AAFCO) has only recently begun to define standards for insect-based soil amendments. Chonex’s patent positions them well to define the standard, potentially lobbying for a “Premium Frass” category based on their WDG specifications, which would further distance them from generic bulk competitors.

Final Thoughts

The “Alabama Patent of the Month” for February 2026, US Patent Publication 2026/0015297, is a landmark in the convergence of biology and agronomy. By solving the technical challenges of formulating living, insect-derived nutrients into a user-friendly granule, Chonex has removed the primary barrier to the adoption of regenerative fertilizers.

From a fiscal perspective, the project serves as a gold standard for R&D Tax Credit eligibility, demonstrating clear technological uncertainty and a rigorous scientific process. As the global agricultural sector pivots toward sustainability, this patent secures Alabama’s position at the forefront of the “Brown Revolution” (soil health).

Recommendations for Stakeholders

• For Investors: The IP moat around the formulation (WDG) is stronger than the moat around the bug (which is generic). Value lies in the processing technology.
• For Policymakers: This technology aligns perfectly with “Climate-Smart Commodity” grants. Incentivizing the adoption of StrongSoil could be a low-cost method to meet state carbon reduction goals.
• For R&D Claimants: Mimic the structured experimentation approach of Chonex. Document the “Why” of every failed trial (e.g., “Binder A failed due to hygroscopic clumping”) to bulletproof future tax claims.