Energous: No Path To Regulatory Approval

| About: Energous Corp. (WATT)
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Summary

Energous admits in an informal petition filed with the FCC that the company has no path to regulatory approval.

Energous' technology, as described in the petition, does not charge – it shuts down if a receiving smartphone is near a human or near a couch or on a desk.

Some of the technical data in Energous' filing for a temporary experimental license contradict the petition.

There are few benefits, if any, of the technology, and Apple won't be interested.

Energous' response to my previous piece, in the form of an open letter, misled the shareholders.

Energous admits that it has no path to regulatory approval

In a petition filed with the Federal Communications Commission, or FCC, in June, Energous (WATT) admits that it is unable to obtain FCC approval. The company asks the FCC's Office of Engineering and Technology, or OET, to reverse its long-standing guidance and consider any Wireless Power Transfer technology operating At A Distance, or WPT AAD, compliant with Part 18 of Title 47 of the Code of Federal Regulations, or CFR, if such technology focuses energy on a receiver and ensures that humans are never exposed to harmful radiation. Specifically, Energous makes the following statements:

This requested interpretation will enable developers of compliant WPT AAD technology to obtain equipment authorizations… To enable deployment of Energous WPT AAD devices… Energous respectfully requests OET to timely act on this Petition. (Executive Summary)

Prompt action by OET is necessary to unleash the substantial public benefits … that will result from the commercial deployment of WPT AAD technology. Until OET provides a way for companies like Energous to obtain equipment authorizations for conforming WPT AAD devices, U.S. consumers will be deprived of the benefits of this important innovation. (Page 3)

It is critical to have a near-term path that allows authorization of conforming devices… it is critical that OET act promptly to enable U.S. companies to retain their leadership in this emerging market. (Page 8)

Energous respectfully requests OET to interpret its [Part 18, or Industrial, Scientific, and Medical, or ISM, equipment] rules to enable WPT AAD conforming devices that satisfy the criteria specified in this Petition to qualify as Part 18 ISM devices… Energous' requested determination will unleash the public interest benefits that can be obtained from WPT AAD. (Page 16)

In other words, Energous is unable to obtain FCC approval without a change in FCC rules, contrary to the statement made by Energous CEO that the company has "a path to approval under the existing regulatory rules and [is] executing on it." (May 10, 2016 quarterly call)

More than six months have passed and the OET has so far firmly ignored Energous' pleas and the FCC has published no new guidance and made no declaratory judgment or rule change since the petition was filed, nor has the FCC initiated any related public proceedings. The reason is very simple - FCC regulations explicitly state that any equipment under Part 18 has to "generate and use locally RF energy" (47 CFR 18.107c ). The keyword here is "locally." Energous' technology, as described in Section II of the petition, is radiative, that is, uses waves that propagate, operates in the far field, and is uncontained, that is, the energy is not enclosed in a Faraday cage. Therefore, equipment utilizing Energous' technology does not generate and use locally RF energy, and therefore cannot be considered under Part 18.

(Energous' technology from the 2015 10-K filing, Page 4, contrasted with a microwave oven, which wirelessly transmits over 1,000W of 2.4GHz radiative power to an iPhone 6 setting it on fire, and a miraDry diathermy gun cooking human sweat glands at 5.8GHz; my annotation)Energous technology as depicted in the 2015 10K, page 4, contrasted with a microwave oven, which wirelessly transmits over 1000W of 2.4GHz radiative power to an iPhone 6, setting it on fire, and a MiraDry diathermy gun cooking human sweat glands at 5.8GHz; my annotations

The OET has been rather explicit and consistent in its guidance and interpretation of Part 18, as Energous shows in the petition on Page 2. For example, in October 2012, the same month Energous was incorporated, the OET made a presentation on "Wireless Charging for Consumer Devices" that stated:

Proximity of the transmit and client device(s) must satisfy Part 18 requirement that the RF energy is locally generated and used (Slide 3)

Energous does not mention that presentation in the petition, but notes a more recent one, from October last year, where the OET reiterates its guidance:

Uncontained far-field radiative wireless power transfer at distance is not considered to generate and use locally RF energy (Page 2)

It appears that Energous does not, or pretends not to, understand the meaning of "uncontained." In April, the OET explicitly defined that term in a response to a Knowledge Database, or KDB, inquiry filed by me:

Uncontained applies to devices which generate and use RF energy outside of an electromagnetic enclosure, such as a Faraday cage (i.e. energy is not limited to local use)

It does not mean unfocused, omnidirectional energy, as Energous is trying to argue in the petition - it simply means energy not enclosed in a Faraday cage. That is, a large microwave oven with a closed door falls under Part 18 and could be approved. Same for a 5.8GHz diathermy device directly applied to the skin. However, a household microwave oven hacked to operate with the door open does not fall under Part 18.

It should have been obvious to Energous that focused radiative energy is not local - the waves carry energy across far-field distances and so the energy is not "local." The "flow" is from the transmitter to the receiver and then onwards or in other directions, as the receiver never absorbs all the energy, even if the focus were ideal. And in Energous' case, the focus is far from narrow due to Energous' use of a frequency in the 5.8GHz band with a corresponding wavelength of about 2 inches - basic optics says that the focus "waist" is in excess of 5 inches at 5 feet, even with an ideal large 2-foot-wide transmitter.

(Schematic on Page 12 supposed to show "the locally contained small area of energy around the receiver," but actually showing uncontained radiation; my annotation in red)

Schematic on page 12 supposed to show

Energous' wireless charging technology does not charge

A careful reading of the petition reveals that in its eagerness to convince the OET that the technology is safe, Energous effectively declares, inadvertently, that it will not charge a smartphone if that smartphone is near any object, either living or inanimate. That is, while preventing harm to humans, the Energous system is never able to transmit at high power, and, therefore, never able to charge the smartphone.

According to the description of the technology (Section II), the wireless charging systems under current development by Energous will assure that humans are never exposed to harmful radiation by utilizing a Sensor System to identify a Perimeter Zone, a "virtual buffer region." As the RF power level necessary to charge a smartphone using Energous technology is unsafe, the Sensor System will prevent RF transmissions if a human is within the Perimeter Zone.

Surprisingly, the Sensor System is also triggered by inanimate objects. If the receiver is "sufficiently close to" such an object, a couch for example, and the Perimeter Zone envelops a portion of that object, the Sensor System will disable transmission:

"In case 3, the Receiving Device is sufficiently close to the couch that the couch may be within the Perimeter Zone. Consequently, the Sensor System will determine the distance between the Receiver Circuit and the couch and then determine whether the Perimeter Zone envelops a portion of the couch. The Sensor System may permit the Power Router to commence energy transmission at reduced power if it determined that the couch is outside of the Perimeter Zone, and it will monitor the scenario on a continual basis to adjust or disable the Power Router's energy transmission as required." (Page 14)

In other words, while the magic "dynamic" Sensor System may in theory provide a "failsafe means of ensuring that the Energous technology never exposes a human" to harmful radiation, it does so by actually preventing charging, if the receiver needs more than a trivial amount power and is near an object, whether that object is "reflective, opaque or transparent" (Page 13), or "RF-opaque or not" (Page 14).

(Diagram on Page 14; my annotation in color)Diagram on Page 14; my annotations in color

Revisiting the schematic on Page 12, the "small area of energy surrounding" the receiver, a smartphone, in the corner of the desk would intersect with the desk, triggering the Sensor System and preventing the power transmission. So the area of energy is never created, and the smartphone is never charged. In fact, depending on the actual shape of the Perimeter Zone, the keyboard, which does not appear to be equipped with a receiver, will probably also trigger the Sensor System and prevent charging.

(Schematic on Page 12; my annotation in red)

Schematic on Page 12, my annotations in color

Since the receiver, such as a smartphone, is always near a human or near or on a table, a desk, a couch, or even on the floor, the Sensor System will always prevent charging, based on the description in the petition. Only a smartphone that hovers in the air far from any object would not trigger the Sensor System and, therefore, can receive a meaningful charge using Energous technology, as described.

The petition contradicts the filing for an experimental license

The company filed for a 15-day temporary experimental license with the FCC after it filed the petition so that it could demonstrate at the FCC headquarters the operation of devices employing Energous technology (Exhibit A). Energous requested confidential treatment of the technical information in that filing, arguing that public disclosure "would cause significant commercial, economic, and competitive harm to Energous" (Exhibit C). Some of that technical information contradicts statements made in the petition, so Energous had a good reason to hide it, and the FCC was wise to reject the confidentiality request.

For example, Energous falsely claims that its technology...

complies with all existing Commission rules and limits applicable to both its use of RF energy and its communications channel, including all Part 15 and Part 18 rules. (Page 15)

If it complied with Part 18 rules, there would have been no need for the petition. The technology does not meet Part 15 requirements either. In the 5.8GHz band, Part 15 limits conducted power to 1W and equivalent isotropic radiative power, or EIRP, to 4W, or 4x "gain" (47 CFR 15.247 or 15.407). The transmitter for which Energous obtained the experimental license has 20W conducted power and 56W effective radiated power, or ERP, which translates to 91W EIRP, exceeding the limits in Part 15 by over 20x. In fact, because that device emits a continuous wave rather than a spread-spectrum transmission, such as WiFi, it falls under Section 15.249, with an actual limit of 50mV/m at 3 meters, or just 0.75mW EIRP!

Energous also claims in the petition that its technology focuses energy, that is, its antenna array has a very high gain. However, the experimental license shows a very small gain in the far field, just 4.5x vs. an isotropic radiator - even a basic 13 inch x 13 inch directional antenna has a 200x gain ( 23dBi ).

Energous also insists that the risk of interference by its devices is minimal (Page 16). However, the high-power continuous wave transmission blocks the frequency and does not allow communication devices to co-exist and share the spectrum. Energous simply steals a sliver of the unlicensed spectrum - described as "narrow occupied bandwidth" in the petition - that is supposed to be shared, and it is doing it by beaming a signal that is at least 20x as strong as that from the most powerful WiFi router allowed - clearly not something that the OET can approve.

The petition also claims that in the 5.8 GHz band, the transmitter will only occupy the 5.850-5.875 GHz frequencies (Page 9), which are currently outside the WiFi channels, but the experimental license was obtained only for operating frequency of 5.750GHz, which is inside WiFi Channel 149 (5.735-5.755 GHz), rendering it unusable for everybody else. Seeking Alpha's contributor Stock Puzzle has further explained why a high-power signal will also jam the other nearby channels in the 5GHz band in most WiFi devices.

(Source: Page 9, Action Frequency in experimental license, and a presentation on the 5.9GHz band)Source: petition and a presentation on the 5.9GHz band

Few benefits, if any, of the technology

Energous devotes pages in the petition extolling the supposed benefits of the technology. However, the petition also makes it clear that no significant power transfer can occur in the Energous' "systems under current development," if a human is near a receiver. Moreover, the Smart Sensor system effectively prevents significant power transfer to any receiver, whether near a human or not. Therefore, those supposed benefits cannot be realized.

For example, the video currently running in the background on Energous' webpage is misleading, as neither the smartphone held by the man nor the tablet held by the woman can be charging.

no charging possible with humans nearby

Similarly, no charging can occur, if the tablet is on the table, as the receiver (the tablet) is immediately close to an object (the table) and triggers the Smart Sensor system which shuts down the power transfer.

no charging when receiver on the table

Clearly, the Sensor System will also prevent charging in any mobile scenario, "such as a user holding their mobile device as they walk around a room" or "such as a mobile phone in a user's pocket," contrary to the respective statements in Energous' 2015 10-K filing, Page 4, and 2014 10-K filing, Page 3.

Even if the Smart System were disabled or eliminated, the transmitter for which Energous received the temporary experimental license is actually too weak to charge a smartphone at a meaningful distance. Since the transmitter's EIRP is known - 91W - it is a simple calculation to derive the maximum power density at any given distance in the far field, and then to estimate the maximum power that a smartphone-sized receiver can obtain with optimal orientation. For example, at a distance of just 3 feet, the maximum power density comes to 9W/m2, or 0.9mW/cm2. That power density, incidentally, is just below the 1mW/cm2 maximum permissible exposure, or MPE, limit set by the FCC (47 CFR 1.1310).

To estimate the maximum power that could be captured by the receiver, all that is needed now is to multiply the power density by an estimate of the best effective aperture of the receiver antenna or antenna array at optimal orientation. A single dipole antenna has effective aperture of about 4 cm2, or about a half of inch squared, at the transmitter's frequency, and a smartphone-sized receiver can have a number of those. A parabolic dish with a diameter of 10 cm, or about 4 inches, has an effective aperture of about 40 cm2, or about 6 square inches. So, the effective aperture of a smartphone-sized receiver is significantly less than a generous 100 cm2, or 16 square inch, at this frequency. Then the maximum RF power hitting a smartphone-sized receiver at a 3-foot distance from the transmitter and with optimal orientation is less than 90mW [ 0.9mW/cm2 x 100 cm2 ], not even enough to trigger the charging mode in a smartphone. Inefficiencies in the receiver and conversion losses to direct current useful for charging reduce the useful power further, by at least a half.

Clearly, no original equipment manufacturer, or OEM, of mobile devices such as smartphones, least of all Apple (NASDAQ:AAPL), would be interested in either the technology described in the petition or the transmitter specified in the experimental license. The former simply cannot charge a smartphone, as virtually any charging scenario triggers the Smart Sensor system and shuts charging down. The latter emits harmful radiation nearby but cannot even charge a smartphone at 3 feet.

Apple and the other Tier-1 OEMs appear to be interested in low-frequency non-radiative wireless charging technologies, such as inductive and resonant, that operate in the near field, rather than radiative technologies such as Energous' that operate in the far field. The main reason is that there is an actual path to regulatory approval for those technologies. Humans tolerate significantly higher RF power levels from non-radiative technologies at lower frequencies, the power transfer efficiency is higher, and the near field can still be practical since it extends to many feet at those frequencies. For example, the wavelength corresponding to an ISM frequency of 6.78MHz is over 140 feet, compared to Energous' 2 inches, so a non-radiative system operating at that frequency at 3 feet could indeed be local, in the near field.

Apple Watch uses inductive wireless charging, all Apple's wireless charging patent filings cover non-radiative technologies, and Apple is a member of the group working on the draft of a new ANSI C63.30 standard, which covers procedures for compliance testing of Wireless Power Transfer products, but only up to 30MHz. Products using the microwave bands, such as Energous', are excluded because they are already covered in other existing standards, as I learned during a recent meeting of the group.

Energous' response to my previous piece

Energous CEO told Bloomberg's Adam Cataldo that my previous Seeking Alpha article was "absolutely and categorically wrong," the technology was "now commercially viable… shipping late this year or early 2017," and that the company had "plans to demonstrate power-transmitting technology [in the] summer in NYC, Los Angeles and San Francisco" (Bloomberg, March 23, 2016, 08:31:40 am, subscription required). However, by Energous' own admission in the petition, there is no path to regulatory approval, and so the technology cannot be commercialized and shipped to consumers.

The CEO also misled the shareholders about the test by Underwriters Laboratories, Inc., or UL, the commercial viability of Energous' technology, and the fake demo at Yahoo's offices in an "open letter" he authored in response to my article.

He claimed that the UL test, performed in October and completed and announced publicly in November last year, proved "conclusively" that the technology "meets or exceeds every published specification," and that the test results were "certified" and available on UL's website. UL, in personal communication to me, has denied that the tests proved anything, that the results were certified, and that they were available on UL website:

UL does not publish test reports for its verification testing service on ul.com. For this service offering, UL conducts tests in accordance with test protocols provided by our client. The test results would only apply to the actual samples tested and without any conclusion or determination from UL. The issuance of a test report in no way implies UL Certification, Verification or Validation and does not authorize the use of any UL Certification Marks or any other reference to UL on the product or system.

Note that the test protocol provided by Energous to UL was never disclosed publicly. Moreover, Energous CEO did not explain why the company submitted for testing a supposedly outdated "first generation" technology that was not commercially viable, when the company had already received in the September quarter its third generation chips which, according to the CEO, were "of sufficient quality, efficiency, size and cost to meet the requirements for commercial integration" (November 10, 2015 quarterly call). Finally, the transmitter tested by UL did not even use Energous' technology as described in the petition, because no meaningful power transmission should have occurred to a receiver on a stand - the stand would have intersected the Perimeter Zone and the Sensor System should have shut down the transmitter.

Energous CEO also never modified the text in the SEC filings about charging multiple devices. Charging multiple devices at a commercially acceptable level is still impossible, even in the lab, according to the latest 10-Q filing which references the same disclosure as in the annual report (2015 10-K filing, Page 12):

you should carefully consider the factors discussed under "Risk Factors" in our annual report on Form 10-K as filed with the Securities and Exchange Commission on March 15, 2016. (2016 Q3 filing, Page 31)

Energous CEO also falsely claimed that the demo at the Yahoo studios in New York last year was not "a fraud." According to the open letter, the reason for the zero power, or 0mW, reading on the receiving smartphone in a battery case was that the "cloud access was not set up." Yet the CEO is heard on the video saying that he is using the cloud to turn on charging:

What I am going to do now is to instruct or to identify the smartphone here. Takes a minute to go through the cloud. As you can see, it is now charging, currently charging. (1:37 into the video)

If cloud access were not set up, his instructions would not have gone through, and no charging would have occurred, assuming he told the truth about the cloud and what was actually happening during the "demo."

Moreover, FCC regulations prohibit the operation, outside a lab or without an experimental license, of devices that cannot be approved (47 CFR 2.805). Energous' transmitters cannot be approved, so the demo at Yahoo's offices, if not a hoax, would have violated FCC regulations, and therefore would have been illegal under The Communications Act of 1934, as amended (47 USC). And, according to the petition, if this were a demo of Energous' technology as described in the petition, no charging would have ever occurred. The Sensor System would have prevented power transfer because a living being, David Pogue, was holding the receiver. Then the 0mW reading would have been correct, but the text "CURRENTLY CHARGING," incorrect.

In fact, all demonstrations purporting to charge a smartphone with equipment utilizing Energous technology, outside a lab or FCC headquarters, are either illegal or fake. Those include all the demos during the Consumer Electronics Show, CES, in Las Vegas in 2015 and 2016, or any demos in NYC, Los Angeles, or San Francisco, or any demos that are supposed to occur at the CES in January. There are at least two reasons why they are either illegal, or fake, or both: 1) the technology has no path to regulatory approval and FCC regulations prohibit the operation of such equipment, and 2) Energous' technology can never charge a smartphone due to the Smart Sensor system.

No comment by Energous

Seeking Alpha's standard policy requires that the author of an "allegational" article contacts the company, seeks comments and answers regarding the claims in the article, and then integrates the company's response, if any, into the article prior to publication.

On November 4, I asked Energous to comment on the issues raised in this report and a number of other issues to be addressed in future reports. More recently, on December 15, I also urged Energous to immediately make a public disclosure about what transpired in June, including the circumstances surrounding the filing of the petition with the FCC, the need for an experimental license, and the "demonstration" at the FCC offices, and to explain why this information has been kept from investors. Finally, since the company has no path to regulatory approval, I suggested that Energous notify its investors that any demo that purports to charge at a distance a smartphone, or deliver at least 1W of useful power sustained for 30 minutes or more in the 5.8GHz band, during the CES, in a hotel suite or on the show floor, is either illegal or fake, as Energous does not have an experimental license. There has been no response from the company.

Disclosure: I am/we are short WATT.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.