Companies file patent infringement suits

By Holly Jessen | June 10, 2010
Two companies serving the ethanol industry have filed lawsuits, claiming patent infringement. Novozymes A/S filed a lawsuit against Danisco A/S; and GS CleanTech Corp. is suing ICM Inc. and GEA Westfalia Separator Inc. as well as 15 ethanol plants.

Novozymes alleges patent infringement by Danisco over an enzyme used in biofuel production. The case, filed in Wisconsin in early May, claims Danisco's use of the enzyme alpha-amylases violates Novozymes U.S. patent for the enzyme. "Novozymes believes that Danisco's alpha-amylase products GC358 and Clearflow AA for the biofuel and starch industries infringe Novozymes' U.S. patent 7,713,723," according to a Novozymes statement. "As part of the complaint, Novozymes has also filed a permanent injunction. Novozymes will now await the court's decision and cannot comment further on the case at this time."

Also in early May, GS CleanTech Corp., a wholly owned subsidiary of GreenShift Corp., added additional ethanol producers to the list of those it is suing. In all, 15 ethanol plants are now named for allegedly infringing on Greenshift's patented corn oil extraction technology. The ethanol plants are located in Indiana, Illinois, Iowa, Minnesota, North Dakota and Wisconsin. Also being sued by GreenShift are ICM Inc. of Colwich, Kan., and GEA Westfalia Separator Inc. of Northvale, N.J. Those companies, GreenShift said, sold equipment that infringed on the company's patent. In addition, the company filed a motion to transfer and consolidate all pending suits to one federal court.

The subject of all the complaints is GreenShift's patent for recovering corn oil by evaporating whole stillage. The company created and submitted U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems," 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.

ICM, which manufactured and installed the oil extraction technology for Lincolnland Agri-Energy LLC, Cardinal Ethanol LLC, Big River Resources Galva LLC and Big River Resources West Burlington LLC, has announced it will defend those ethanol producers. Those four plants all purchased and utilize ICM's Tricanter Oil Separation System, ICM told EPM. There are other facilities on the list of 15 ethanol plants that were designed and built by ICM but that don't utilize ICM oil extraction technology.

In addition, ICM pointed out that it filed its own litigation in Kansas against GS Clean Tech and GreenShift Corp. in October 2009. "We have asserted that GS Clean Tech/GreenShift misrepresented the liability of ICM's customers for operating the ICM system," said Chris Mitchell, vice president of marketing for ICM, "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."

GreenShift, on the other hand, has said that ICM previously argued that GreenShift's inventions were unpatentable and failed. That argument was raised by ICM before the U.S. Patent and Trademark Office granted GreenShift's first two patents. The company also warns that it has a right to royalties for the corn oil extracted with GreenShift technology as far back as 2006, when the company got its first patent. "We have many millions of dollars and years of hard work invested into our patented corn oil extraction technologies and we are prepared to prosecute our rights for as long as may be needed," said David Winsness, GreenShift's chief technology officer. "That said, we would prefer not to litigate and we would much rather focus on win-win solutionswe have demonstrated that producers can make more money by working with us than without us."

According to GreenShift, a dry ethanol plant will convert 56 pound bushels of corn into 18 pounds of ethanol, 18 pounds of C02 and 18 pounds of distillers grains. With each kernel of corn having a 3.6 percent fat content that adds up to about 3.4 million tons of fat in the 9 billion gallons of ethanol in 2008. "This is a lot of fat ... and all of it passed through the U.S. ethanol industry untouched for 24 years before our team completed feasibility testing with an early-stage corn oil extraction prototype in 2004 and demonstrated, for the first time, that consistent extraction of as much as 80 percent of the fat trapped in DDGS in the form of corn oil was economically feasible," the company said. By extracting corn oil using GreenShift technologies, ethanol producers can save energy and greenhouse gas intensity, increase yields by 7 percent and incur other benefits.

In related news, less than two weeks after GreenShift announced it was suing additional ethanol producers, Marquis Energy LLC signed an agreement with the company. The 100 MMgy ethanol plant in Hennepin, Ill., is licensed to use GreenShift's corn oil extraction technology and GreenShift will provide technical support, yield optimization and corn oil marketing services. "The financial structure provides natural incentives for both Marquis Energy and GreenShift as we each gain from increased performance, yield and product value," said Mark Marquis, president and general manager of Marquis Energy. "In only a few weeks, GreenShift was able to review our currently installed equipment and implement a technical plan that included a series of adjustments to systematically improve the reliability and production of our existing extraction system. Current results indicate that GreenShift has more than doubled our oil yields."