E&E News: Supreme Court's patent ruling seen boosting renewable-fuel startup

Dr. Patrick Gruber, CEO of GEVO

Dr. Patrick Gruber, CEO of GEVO

Amanda Peterka | E&E News


A Supreme Court ruling today in a pharmaceutical-industry patent dispute could help a renewable fuels startup embroiled in its own patent fight.

In a 7-2 ruling, the justices found that an appeals court used the wrong review standard in Teva Pharmaceuticals USA Inc. v. Sandoz Inc. and should have deferred to a federal district court judge's findings.

In the biofuel dispute, Gevo Inc., which produces isobutanol in Minnesota, had asked the high court to review its dispute with Butamax, a joint venture of BP PLC and DuPont Co., which is also interested in producing isobutanol. Gevo said the issue in its appeal is largely the same as that in the Teva case decided today.

"Now that we have this favorable decision in Teva, where the Supreme Court did exactly what we asked them to do ... we expect to get the same decision in our case," Gevo Chief legal officer Brett Lund said.

Isobutanol is a promising advanced biofuel because it can be used in higher volumes in petroleum fuel without the worries about engine corrosion that come from using ethanol. Gevo and Butamax have both developed technology to produce isobutanol from retrofitted conventional ethanol plants.

For more than four years, the companies have been sparring in the courts over patents to their respective technology. Both companies' technology involves a fermentation process similar to that used by ethanol producers.

The patents in question in Gevo's Supreme Court bid cover Butamax's broad technological pathway for making isobutanol. The BP-DuPont venture first sued Gevo in 2011 in the U.S. District Court of Delaware for allegedly infringing the patents.

Butamax has twice appealed rulings by the lower court in favor of Gevo and last February won an appeal in the U.S. Court of Appeals for the 3rd Circuit. Using the same reasoning as was applied in the Teva pharmaceutical case, the appeals court modified what the district court judge had determined the patent claims meant.

Lund said Gevo expects the Supreme Court to issue a similar ruling in its dispute early next week; the high court had placed the Gevo-Butamax case on hold, pending a ruling in Teva.

"Obviously, this is a huge win for us because there's no higher court than the U.S. Supreme Court. There's no mechanism to further challenge this at a higher court," Lund said.

"What this does," he added, "is make it clear that we're not utilizing any of this technology in their patents."

Butamax, which BP and DuPont formed in 2009 to commercialize isobutanol, did not respond to a request for comment on the ruling. It had hailed last year's appeals court decision and expressed confidence in succeeding in its infringement suit against Gevo. Butamax has yet to open its first isobutanol retrofit.

Gevo owns and operates a completed retrofit ethanol plant in Luverne, Minn., that is producing both isobutanol and conventional ethanol. The company is in talks to license its technology out to ethanol producers and hopes to have one licensing agreement in place by the end of the year.

Gevo today also announced it would take steps to improve its cash flow that include reducing headquarters staff from 56 to 33. Patrick Gruber, GEVO's chief executive, has also volunteered to take 25 percent of his base salary in the form of stock through a deferred compensation program.

Reporter Jeremy Jacobs contributed.