Greenshift claims patent infringement

By Luke Geiver | February 09, 2010
Posted Feb. 18, 2010

GreenShift Clean Tech Corp. is getting serious about protecting its corn oil extraction technology, filing two suits in the same week that it gained a third patent. GS Clean Tech issued a complaint to United States District Court, Southern District of Indiana on Feb. 12, suing Cardinal Ethanol LLC for infringing on GreenShift's U.S. patent regarding corn oil technology. Four days later, GS Clean Tech issued a complaint to the United States District Court, Northern District of Illinois, against Big River LLC suing, again, for infringing on GreenShift's corn oil technology.

Both complaints stem from U.S. Patent No.7,601,858 titled "Method of Processing Ethanol Byproducts and Related Subsystems." The 858' patent details processes for recovering corn oil by evaporating thin stillage, and was created and submitted by GreenShift in May 2009. "There was no market for corn oil extraction from dry mill ethanol plants before we invented our now-patented technology in 2004," said Kevin Kreisler, GreenShift's chairman and CEO. "We estimate that more than about 20 percent of the ethanol industry has begun to use our technology without a license. While we are eager to earn the business of each last producer, we expect to have the opportunity to do so by helping each to realize additional value."

ICM Inc., the manufacturer and installer of the oil extraction technology for both Cardinal Ethanol and Big River, will defend both companies according to Chris Mitchell, vice president of marketing for ICM:

"ICM will defend its customers as a companion matter to ICM's own litigation against GS Clean Tech and its affiliate, GreenShift Corporation, which we filed in Kansas in October 2009. ICM believes that GS Clean Tech's alleged patent claims will be proved to be invalid. In the Kansas litigation, we have asserted that GS Clean Tech/GreenShift misrepresented the liability of ICM's customers for operating the ICM system, and that various actions of GS Clean Tech/GreenShift constitute unfair competition and wrongful interference with ICM's existing and prospective business and contractual relationships. Our customers continue to operate their oil recovery systems acquired from ICM, and we continue to see strong interest from prospective customers for further orders for ICM's equipment."

According to GS, they have sufficient evidence to prove that Cardinal is infringing GS patented corn oil extraction technology and this infringement has caused and will continue to cause irreparable harm. "We innovated corn oil extraction technology, created the corn oil extraction market, and subsidized disruptive value creation for the U.S. corn ethanol industry; we have earned our patents and we deserve the full measure of the first mover competitive advantage. This, and any other, continued infringement is causing GreenShift irreparable and immediate harm and it must stop."

Even with both complaints now issued and the cases pending, GreenShift released more patent news on Feb. 16. A Notice of Allowance was issued by the U.S. Patent and Trademark Office for GreenShift's third patent on its corn oil extraction technologies. David Winsness, GreenShift's chief technology officer, said that "we are excited to be receiving this third patent as it further strengthens our first mover technology position. While we have many additional applications pending, our issued patents are generally directed to mechanical extraction of oil from concentrated stillage."

Winsness also added, "Licensed facilities based on our technologies can earn a payback for ethanol producers in less than 18 months at current market prices. We are eager to help ethanol producers realize the compelling benefits of our patented and patent-pending corn oil extraction technologies while we earn a return on our investment and build value for our shareholders."