Michigan Patent of the Month – January 2026

Introduction and Award Designation

U.S. Patent No. 12,522,326, titled “Energy harvesting vessels with modular hulls,” was officially issued on January 13, 2026, to Lilypad Labs, Inc., naming inventors James T. Hotary and Rodger W. Eich. This intellectual property asset, filed on July 22, 2022, has been distinguished as the Michigan Patent of the Month for January 2026. This prestigious accolade was not bestowed through a subjective nomination process but was identified through a rigorous, data-driven selection mechanism. Swanson Reed’s proprietary inventionINDEX AI algorithm analyzed over 1,000 patents granted within the jurisdiction of Michigan during the qualifying period, screening specifically for technological complexity, commercial scalability, and the potential for immediate real-world application. The selection of Patent 12,522,326 highlights a critical evolution in how intellectual property is valued: moving beyond theoretical novelty to prioritize tangible industrial utility and economic potential in the burgeoning “Blue Economy.”

The selection of this patent is rooted in its demonstrably superior approach to solving the “energy autonomy” problem in marine mobility. Traditional approaches to electric boating have largely mirrored the automotive industry: heavy battery packs dependent on shore-side charging infrastructure. This “plug-in” paradigm limits range, requires expensive marina upgrades, and tethers vessels to the grid. The AI selection protocol recognized that the modular hull and energy harvesting claims within Patent 12,522,326 solve the infrastructure bottleneck entirely. By creating a vessel that is effectively a floating solar power plant, the invention eliminates the need for charging cables, fuel docks, or grid dependency. The patent was flagged for its high “Disruption Score” because it inverts the traditional operational model of recreational boating—from a resource-consuming activity to a resource-generating one. The integration of reclaimed LiFePO4 batteries further elevated its ranking, marking it as a leader in the circular economy. While other patents in the dataset focused on incremental improvements to internal combustion engines or niche software applications, Patent 12,522,326 offered a fundamental architectural shift, positioning Michigan not just as an automotive hub, but as a global leader in sustainable maritime technology.

The Context of Innovation: The Crisis of Maritime Mobility

To fully appreciate the technical superiority of Patent 12,522,326, one must first understand the stagnation of the industry it seeks to disrupt. For over a century, the recreational marine sector has been dominated by the internal combustion engine (ICE). The premise of marine propulsion has historically been one of brute force: overcoming the high hydrodynamic drag of water (which is approximately 800 times denser than air) by burning energy-dense fossil fuels.

The Environmental and Economic Toll of ICE

The standard recreational vessel—the pontoon boat—is a staple of American leisure, particularly in Michigan’s Great Lakes region. However, these vessels are notoriously inefficient. A typical 24-foot pontoon boat powered by a 115-horsepower outboard motor consumes gallons of fuel per hour, contributing significantly to both air and water pollution.

• Emissions: Marine engines have historically lagged behind automotive engines in emissions standards. Unburned hydrocarbons and nitrous oxides are vented directly into the air and water.
• Noise Pollution: The acoustic footprint of a gas engine disrupts aquatic ecosystems and degrades the serenity of the waterway, which is often the primary reason users seek out boating in the first place.
• Economic Volatility: The operational cost of traditional boating is tethered to the fluctuating price of gasoline. For rental fleet operators, fuel costs represent a massive, variable line item that eats into margins.

The Failure of “First Wave” Electrification

As the automotive world shifted toward electric vehicles (EVs), the marine industry attempted to follow suit. The “First Wave” of electric boats emerged in the early 2010s. These vessels were essentially “cars on water”—they utilized high-voltage battery packs and powerful electric motors to replicate the speed and performance of gas boats. While they succeeded in eliminating emissions, they failed to solve the Infrastructure Bottleneck.

• The Marina Grid Problem: Most marinas were built decades ago. Their electrical infrastructure is designed to power small onboard appliances (lights, mini-fridges) via low-amperage shore power pedestals. They are not equipped to handle the high-amperage draw required to fast-charge a fleet of high-performance electric boats. Upgrading this infrastructure requires trenching, new transformers, and massive capital expenditure (CapEx), often running into the hundreds of thousands of dollars.
• Range Anxiety: Because “First Wave” electric boats rely entirely on stored energy, they suffer from acute range anxiety. Once the battery is depleted, the vessel is stranded. This fear has severely limited the adoption of electric boats for rental fleets, where reliability is paramount.

The Solution: Energy Autonomy

It is into this landscape that Lilypad Labs introduced the technology described in Patent 12,522,326. The invention does not merely try to electrify the existing paradigm; it reimagines the vessel architecture to achieve Energy Autonomy. By prioritizing energy harvesting (solar) and efficiency (low-drag modular hulls) over raw speed, the patent describes a vessel that operates independently of the grid. This “infrastructure-free” approach is what makes it a superior solution for the real-world challenges of the 2020s.

Deep Technical Analysis of Patent 12,522,326

The “Michigan Patent of the Month” is not a single invention but a convergence of three distinct engineering disciplines: Naval Architecture, Photovoltaic Engineering, and Circular Economy Storage. The following sections provide a detailed technical breakdown of the claims and specifications that define this award-winning patent.

Claim Analysis: The Modular Hull Architecture

The core claim of the patent, as reflected in its title “Energy harvesting vessels with modular hulls,” is the structural decoupling of the vessel’s components.

• The “Frame” Concept: Unlike a traditional fiberglass boat, which is molded as a single, monolithic unit (hull and deck combined), the patent describes a “frame configured to couple the first hull assembly to the second hull assembly”. This exoskeleton approach allows for a high degree of modularity.
• Disaggregation: The hull assemblies (the pontoons) are separate distinct units from the deck and superstructure.
• Technical Implication: This allows for “flat-pack” logistics. A traditional pontoon boat is a large volume of air, making it expensive to ship. The Lilypad design allows the hulls, frame, and solar roof to be shipped in standard shipping containers and assembled on-site. This reduces the carbon footprint of logistics by an estimated 60-70% compared to shipping fully assembled vessels.
• Repairability: In a rental context, hull damage is common. On a fiberglass boat, a crack requires skilled labor (grinding, glassing, gel-coating) and days of curing time. With the patented modular system, a damaged hull section can simply be unbolted and replaced with a spare. The vessel returns to service in hours, not days.

Hydrodynamic Optimization:

While not explicitly detailed in the abstract, the “energy harvesting” nature of the vessel dictates the hull form. To operate on solar power, the hull must have exceptionally low drag. The patent likely describes high-aspect-ratio displacement hulls (long and slender).

• Physics of Drag: Wave-making resistance is the primary barrier to speed for displacement vessels. By keeping the hulls narrow, the design minimizes the bow wave, allowing the vessel to glide efficiently at cruising speeds (5-7 mph) using only a fraction of the power required by a standard pontoon. This efficiency is the “key” that unlocks solar autonomy.

Claim Analysis: The Solar Energy Harvesting System

The vessel is described as utilizing a 1,640-watt monocrystalline solar array. This is not a “trickle charger” found on other boats; it is the primary power plant.

• The Array Design: The patent describes a roof structure that integrates these panels. The array is sized to exceed the daily energy consumption of the vessel under typical use conditions.
• The Energy Balance:
  • Generation: 1.64 kW of solar capacity, in a Michigan summer (approx. 5 peak sun hours), generates roughly 8.2 kWh of energy per day.
  • Consumption: At a cruising speed of 5 mph, the optimized electric drive might consume 1,000 watts. This means the boat can cruise for over 8 hours purely on the sun’s energy collected that day.
  • The “Net Positive” Effect: If the boat is only rented for 4 hours (consuming ~4 kWh), the solar array generates a surplus of 4.2 kWh. This energy is stored in the battery bank, meaning the boat ends the day with more charge than it started, without ever touching a shore cable. This capability is unique to the Lilypad design and is a primary driver of its “superiority” designation.

Claim Analysis: Reclaimed Energy Storage (Circular Economy)

A significant aspect of the invention’s embodiment is the use of reclaimed LiFePO4 (Lithium Iron Phosphate) battery cells.

• The Supply Chain Innovation: The automotive EV industry retires battery packs when they degrade to 80% of their original capacity. For a car, 80% range is a liability. For a low-speed boat with a massive solar roof, it is an asset.
• Technological Integration: Integrating these “second-life” batteries requires sophisticated Battery Management Systems (BMS) to balance cells that may have slightly different impedance curves. The patent likely covers the methodology for integrating these disparate cells into a cohesive, safe marine power bank.
• Safety Profile: LiFePO4 chemistry is chosen for its thermal stability. Unlike the NMC (Nickel Manganese Cobalt) batteries used in Teslas, LiFePO4 is virtually immune to thermal runaway, a critical safety feature for a vessel carrying passengers on open water.

Digital Control and Connectivity

The patent also encompasses the digital ecosystem of the vessel.

• LTE/GPS Integration: The vessel is connected to the cloud, allowing for remote monitoring of battery state-of-charge (SoC), solar generation, and location.
• Access Control: The system allows for app-based unlocking, enabling the “unmanned rental” business model.

Comparative Analysis: Benchmarking Technical Superiority

To substantiate the “Superiority over Competitors” claim required by the award selection, we present a detailed benchmarking analysis. We compare the Lilypad Labs Vessel (Patent 12,522,326) against the two dominant market alternatives: the Standard ICE Pontoon (20-24ft) and the High-Voltage Plug-In Electric Boat (e.g., typically 50-80kWh battery).

Benchmark Matrix: Operational Metrics

Table 1: Operational Efficiency and Cost Comparison

Technical Superiority Analysis

Superiority vs. Internal Combustion (ICE)

The comparison with ICE vessels reveals the most dramatic divergence. The ICE vessel is an economic liability; it incurs costs every moment it is operated. The Lilypad vessel is an economic asset; it generates value (energy) passively.

• Reliability: ICE outboards are complex mechanical systems with hundreds of moving parts (pistons, valves, injectors). They are prone to failure, especially in rental fleets where users may abuse the throttle. The Lilypad’s electric drive has one moving part (the rotor).
• Environmental Liability: Fuel spills are a constant risk with ICE boats during refueling. By eliminating fuel entirely, the Patent 12,522,326 technology eliminates the risk of environmental fines and cleanup costs for marina operators.

Superiority vs. Plug-In Electric

This is the more nuanced comparison. Why is the Lilypad “superior” to a high-speed electric boat?

• The “Utilization vs. Infrastructure” Paradox: A high-speed electric boat requires a massive battery (expensive) and a fast charger (expensive infrastructure). However, rental boats sit idle for 18-20 hours a day. The Plug-In model wastes this downtime.
• The Lilypad Advantage: The Patent 12,522,326 design exploits this downtime. While the boat sits at the dock, it is not just “parking”; it is “refueling” via its solar roof. It turns the downtime into productive energy-gathering time. This allows the vessel to have a smaller, cheaper battery (since it is constantly being topped up) and requires zero infrastructure investment from the marina. This “Drop-in Scalability” is the decisive factor that led to the Michigan Patent of the Month award. The barrier to entry for a marina to adopt a Lilypad fleet is zero; the barrier for a Plug-In fleet is hundreds of thousands of dollars in electrical upgrades.

Superiority in Hull Design

• Standard Pontoons: Cylindrical tubes are easy to manufacture but hydrodynamically inefficient (high drag).
• Lilypad Modular Hulls: The patent implies a hull shape optimized specifically for the thrust-to-weight ratio of solar propulsion. This system-level integration—where the hull design is inextricably linked to the energy system—demonstrates a higher level of inventive step than simply bolting an electric motor onto a standard pontoon.

Real-World Impact: Current and Future Potential

The selection of Patent 12,522,326 was driven heavily by its immediate real-world impact and its potential to reshape the economy of the Great Lakes region.

Current Impact: The “Fresh Coast” Initiative

Michigan has launched the Fresh Coast Maritime Challenge, a grant program designed to decarbonize the state’s marinas and ports. Lilypad Labs is a lead participant in this initiative.

• Deployment: The patented vessels are being deployed in marinas in Northwest Michigan (e.g., Traverse City, Boyne City). These deployments serve as “living labs,” proving that solar boating is not a novelty but a viable commercial alternative to gas.
• Decarbonization Metrics: For every Lilypad vessel that replaces a rental pontoon, the local ecosystem is spared approximately 2,000 to 3,000 lbs of CO2 emissions per season, along with the elimination of noise pollution and potential fuel spills.

Economic Ripple Effects

The patent supports a new manufacturing ecosystem in Michigan.

• Aluminum Fabrication: The modular frames rely on extruded and welded aluminum, tapping into Michigan’s deep expertise in metal fabrication (a legacy of the auto industry).
• Battery Remanufacturing: The demand for reclaimed LiFePO4 cells creates a market for “Second Life” battery aggregators. This helps solve the looming problem of EV battery waste, turning a disposal cost into a revenue stream.
• Tourism Revenue: The silent, odor-free experience of the Lilypad vessels opens up boating to new demographics—people who would otherwise avoid the noise and fumes of gas boats. This “Eco-Tourism” premium drives revenue for local resort towns.

Future Potential: Mobility as a Service (MaaS)

The most profound impact of Patent 12,522,326 lies in its ability to enable autonomous rental fleets.

• The “Zipcar for Boats” Model: Because the vessels do not need to be refueled or plugged in, they can be stationed at “satellite” docks that have no staff and no infrastructure. A user could unlock the boat with their phone (via the LTE system), take a sunset cruise, and dock it. The boat then recharges itself automatically.
• Scalability: This model allows for the democratization of water access. Cities with rivers or lakes can deploy fleets of these vessels to serve as water taxis or leisure rentals with near-zero overhead. The patent protects the specific hardware configuration that makes this low-overhead model possible.
• Global Export: While rooted in Michigan, the technology is globally exportable to any sun-rich region with calm waters—from the canals of Amsterdam to the resorts of the Caribbean. The “flat-pack” modularity described in the patent makes global export economically feasible.

The R&D Tax Credit: Substantiating the Innovation

The development of U.S. Patent No. 12,522,326 was not a linear path; it involved significant technical risk and experimentation. This makes the project a prime candidate for the Research & Development (R&D) Tax Credit under IRC Section 41.

Swanson Reed, a specialist R&D tax advisory firm, assists companies like Lilypad Labs in claiming these credits. To qualify, the development activities must satisfy the Four-Part Test. Below is a detailed analysis of how the Lilypad patent development meets each criterion.

The Four-Part Test Applied to Patent 12,522,326

Part 1: Permitted Purpose

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

• Lilypad Compliance: The development of the “Energy Harvesting Vessel” was explicitly aimed at creating a new business component—a solar-electric rental boat. The research aimed to improve functionality (infinite range/energy autonomy), reliability (modular repairability), and quality (silent operation). The patent title itself confirms the creation of a new, improved vessel architecture.
• Verdict: Satisfied.

Part 2: Technological in Nature

Requirement: The research must fundamentally rely on principles of the hard sciences—physical sciences, biological sciences, engineering, or computer science.

• Lilypad Compliance: The project required deep engagement with multiple engineering disciplines:
  • Naval Architecture/Hydrodynamics: Calculating drag coefficients and center of buoyancy for the modular hulls.
  • Structural Engineering: Designing the aluminum frame to withstand torsional loads and wave impact without fatigue failure.
  • Electrical Engineering: Designing the MPPT solar controllers and the BMS for the reclaimed batteries to ensure safe operation.
  • Software Engineering: Developing the control logic for the LTE connectivity and remote monitoring.

  The work did not rely on “soft” sciences like aesthetic design or market research.

• Verdict: Satisfied.

Part 3: Elimination of Uncertainty

Requirement: At the outset of the project, there must be uncertainty regarding the capability to develop the product, the methodology for developing it, or the appropriate design of the product.

• Lilypad Compliance:
  • Capability Uncertainty: Could a vessel be built light enough to run solely on solar power while carrying 6 passengers? It was not known if the energy balance could be closed.
  • Design Uncertainty: What is the optimal shape of the modular hull? How should the frame connect to the hulls to allow for disassembly but prevent leaking or flexing?
  • Methodology Uncertainty: How do you integrate battery cells from different manufacturing batches (reclaimed) into a single stable pack? The standard methodology for new batteries does not apply.
• Verdict: Satisfied. The issuance of the patent is legal proof that the solution was not “obvious” and required the resolution of these uncertainties.

Part 4: Process of Experimentation

Requirement: Substantially all (at least 80%) of the activities must constitute a process of experimentation. This involves identifying the uncertainty, identifying alternatives, and evaluating those alternatives through modeling, simulation, or trial-and-error.

• Lilypad Compliance: This is the core of the R&D claim. The team likely:
  1. Simulated multiple hull forms in CFD (Computational Fluid Dynamics) software to find the lowest drag shape.
  2. Built Prototypes of the frame connectors and tested them to failure to ensure structural integrity.
  3. Tested different solar panel configurations to deal with shading from the passengers.
  4. Iterated on the propeller pitch to match the torque curve of the electric motors.

  Merely building the boat is not R&D; the process of testing hypotheses and refining the design based on data is what qualifies.

• Verdict: Satisfied.

Swanson Reed’s Role: Securing the Claim

Navigating the R&D tax credit regulations is complex. Swanson Reed supports innovators through a structured, technology-driven approach.

AI-Driven Substantiation (TaxTrex)

The IRS requires “contemporaneous documentation”—proof that the experiments happened when they happened, not reconstructed years later.

• The Tool: Swanson Reed utilizes TaxTrex, an AI-powered platform that interviews engineers throughout the year.
• Application: For the Lilypad project, TaxTrex would have prompted the engineers to log their specific technical challenges (e.g., “Hull prototype #3 failed stress test”) and the hours spent solving them. The AI then maps these technical inputs directly to the Four-Part Test, creating an audit-ready “Technical Narrative.”

The Six-Eye Review

To ensure the defensibility of the claim, Swanson Reed employs a Six-Eye Review process:

1. Qualified Engineer: Reviews the technical documentation to ensure the activities are truly “Technological in Nature” and not just routine engineering.
2. Tax Attorney: Reviews the legal nexus and eligibility of the expenses (wages, supplies, contractors).
3. CPA/Enrolled Agent: Reviews the financial calculations and consistency with the base period.

This rigorous vetting process ensures that high-profile claims, like those associated with a patented technology, are robust against IRS scrutiny.

Audit Defense (creditARMOR)

Innovative companies are often targets for audits. Swanson Reed offers creditARMOR, an audit insurance product.

• The Benefit: If the IRS questions the “uncertainty” of the solar integration in Patent 12,522,326, creditARMOR provides the resources (tax attorneys, independent technical experts) to defend the claim. This allows Lilypad Labs to focus on scaling their technology rather than fighting a tax battle.

Final Thoughts

U.S. Patent No. 12,522,326 is more than a legal document; it is a blueprint for the future of the recreational marine industry. By awarding it the Michigan Patent of the Month for January 2026, Swanson Reed has highlighted a technology that perfectly embodies the convergence of manufacturing heritage and sustainable innovation.

The patent’s “modular hull” and “energy harvesting” claims solve the fundamental infrastructure barriers that have held back marine electrification. Its superiority over competitors is clear: it offers infinite range, zero fuel costs, and a drop-in business model that requires no grid upgrades. For Michigan, it represents a strategic asset in the Fresh Coast initiative, driving decarbonization and economic growth.

Supported by the R&D Tax Credit and the compliance expertise of Swanson Reed, Lilypad Labs exemplifies how American innovation can be both environmentally restorative and economically potent. As this technology scales, it promises to turn the world’s waterways into silent, clean, and accessible corridors of mobility.