Friday, March 04, 2011

Eric Lane on Gevo

Eric Lane at GreenTechMedia had some comments on the patent infringement suit by Butamax against Gevo over US 7,851,188:

As far as I know, this is the first instance of biofuel patent litigation involving a major oil company. With the oil majors increasingly involved in biofuels startups via research funding, buyouts, and JVs like Butamax, it won’t be the last.


The downsides? Gevo feeds its genetically enhanced microbes sugar to produce the desired chemicals via fermentation. Sugars fluctuate in price although it may in the future be able to take advantage of cellulosic sugars from forest and farming waste. Also, biological processes can cost more than traditional thermochemical processes.

More importantly, Gevo isn't growing because of the strength of its microbes. Revenue jumped from $660,000 in 2009 to over $32.7 million in 2010, but that's because it acquired Agri-Energy, a traditional ethanol producer, and began to buy and sell ethanol. The vast bulk of its 2010 revenue -- $31.5 million -- came from selling corn ethanol, while its cost of goods sold that year came to $28.9 million. In other words, most of the revenue got absorbed in wash-like transactions.

In fact, Gevo only gets $138,000 from technology licensing, far less than the $1.2 million it gets from grants. One could even argue that Gevo is really an old-time ethanol company with an intriguing science project that could bear fruit someday.

IPBiz notes as to "ethanol from sugars," see DuPont's US 7,897,396, issued on March 1, 2011, with first claim:

A process for producing ethanol from a mixed-sugars medium comprising xylose, comprising: (a) providing a recombinant Zymomonas strain capable of utilizing xylose to produce ethanol, said strain comprising at least one genetic modification which reduces expression of integration host factor alpha subunit protein (HimA); and (b) culturing the strain of (a) in a medium comprising xylose, whereby xylose is used by said strain as a carbon source for producing ethanol.

As to lawsuits involving oil companies and synfuels, LBE remembers a famous case involving Exxon and the US government, wherein former Corporate Research scientist Rocco Fiato testified. Former Exxon employee Al Vannice was involved too. Of greatest interest was the amount of damages. See LBE's piece in Intellectual Property Today.

Of the link between Fischer-Tropsch and biofuels, see for example: US 20080311640

Dry biomass is used for thermal conversion processes that require minimal water content such as green electricity generation (via combustion or gasification) or the production of renewable diesel fuel through gasification, followed by Fischer-Tropsch synthesis.

Also, contemplate Coskata.

***Of the Exxon case-->

In Johnson & Johnston: Disclosed, Never Claimed, Public Domain, (IPT, p. 44 (May 2002)), LBE wrote

On April 11, [2002] the Associated Press reported that the federal
government has admitted infringing an Exxon Mobil Corp. petroleum patent and agreed to pay the oil company $ 2,583. The AP report noted that Justice Department spokesman Charles Miller said Exxon Mobil had claimed that the patent was worth hundreds of millions of dollars and quoted Miller that the settlement amount, which was disclosed by the government but not by Exxon Mobil, "speaks for itself." The litigation was reported at 54 USPQ2d 1519 (Ct. Cl. 2000), reversed by the Federal Circuit at 265 F.3d 1371, 60 USPQ2d 1272 (CAFC 2001). n7

In the Exxon case, one notes BOTH the disparity between settlement value and litigation costs AND the disparity between settlement value ($2,583) and asserted value (hundreds of millions).

See for example Rationality in patent litigation? Probably not...


What have non-technically trained lawyers contributed to IP law?

***Of some other lawsuits in the biofuels area, from Biofuels Digest :

In South Dakota, the Chicago Trib is reporting that Sioux Falls-based POET has filed a a lawsuit against Jodi Heath, a former commodities manager for the Poet’s corn ethanol plant in North Manchester, Indiana. The suit alleges that Heath transmitted trade secrets regarding production vosts at POET, and used the information to calculate the highest prices that POET would pay for corn, and used this informition in working for a competitor, despite a non-compete agreement.

Meanwhile, In Illinois, INEOS Bio has filed suit in state circuit court against Coskata and Rahul Basu, a Coskata technical director. The suit alleges that Dr. Basu and Coskata have “disclosed, used, and unlawfully profited from INEOS’ confidential, proprietary and trade secret information concerning the design and operation” of processes and equipment used in gasification, fermentation and distillation of biomass into ethanol, specifically related to “suspended cell bioreactors.” Coskata responds that it has been working on suspended cell bioreactors prior to Dr. Basu joining the company in 2007 and that the operation and control of suspended cell biorectors is a broad, generic description of a well-known technical field.

***Separately, of other patent litigations (bullfax).
Teva Appeals $500 Million Verdict Over Nightmarish Clinic Practices


Blogger Gena said...

As evidenced by the Gevo/Butamax suit, the biofuels industry looks to be the next "hot" area in patent litigation. The good news is that, at least, major oil companies are starting to fight over the right to profit from "green" technology. I guess you can call that progress.

4:48 PM  

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