The Biobased Montagues and Capulets now starring in The Battle for Biobutanol: latest round to Butamax

July 30, 2013 |

montaguesThink the Hatfields and McCoys, Cain and Abel, the Montagues and the Capulets, Alabama and Auburn, Army and Navy are among the the fiercest rivalries in history?

Mere wannabees, mere pretenders. Just warm up acts for our friends at Gevo and Butamax.

In Delaware, Butamax announced that Judge Sue Robinson granted Butamax’s summary judgment motions for non-infringement of Gevo 8,017,375 (‘375) and 8,017,376 (‘376) patents.

This decision, issued last Friday, closely follows the Court’s dismissal of all claims against Butamax relating to Gevo’s ‘808 “GIFT” patent. In a further ruling, the Court also granted Butamax’s summary judgment motion for invalidity of the ‘375 patent stating that “Butamax has met its clear and convincing burden, sufficient to invalidate the patent for lack of enablement…”. The Court stated that there are still “issues of material fact” related to the validity of the ‘376 patent thereby precluding an entry of summary judgment.

The background

The ‘375 and ‘376 patent lawsuit was the first suit brought against Butamax by Gevo. In September 2011, before these patents were even granted, Butamax wrote to Gevo informing them that Butamax did not use the technologies claimed, in those patents, and offered Gevo the opportunity to verify this through independent experts. However, instead of responding to Butamax’s offer, Gevo filed suit precipitating nearly two years of avoidable litigation activity.

Why isobutanol matters

As Gevo puts it: “We will sell the isobutanol we produce, using it for market development in the specialty chemicals market, in specialty oxygenated fuel blendstocks markets, and as a building block to make fuel products such as jet fuel and chemical products such as paraxylene for polyester used in the production of bottles and fibers.”

Butanol is a four-carbon molecule — as opposed to ethanol’s two — made from the same feedstocks as ethanol. As a fuel, it can be transported in existing infrastructure and does not require flex-fuel vehicle pipes and hoses. It has about 4 percent less energy density than gasoline, but that’s hard to notice compared to ethanol’s 27 percent drop compared to gas.

Its real beauty is in the fuel blending. Biobutanol, today, is approved for 16 percent blends (compared to ethanol’s 10 percent limit). If ethanol were approved for 15 percent blends by the EPA, biobutanol would be approved for 24 percent blends. Combined with the improved energy density, in a standard 13-gallon sedan tank you can carry up to 109,000 BTUs of E10 ethanol or 228,000 BTUs of biobutanol – a little more than double.

However, there are fewer blend wall issues. Right now, with E10 the US is right at the “blend wall” where farmers and processors will have to look for alternative, lower-margin foreign markets to market their ethanol. With biobutanol, the same amount of corn that results in 13 billion gallons of ethanol and hits the blend wall, produces 10.4 billion gallons of biobutanol. Plus, the 16 percent biobutanol blend wall is encountered not at 13 billion gallons, but at 20.8 billion gallons.

One trouble spot? Octane – biobutanol is low-octane. But of course, you can top off with ethanol if needed as an octane booster.

Commentary from Butamax

“With this decision, Butamax has prevailed on the first three of Gevo’s cases against Butamax with the patents being found unpatentable, invalid or not-infringed. We expect a similar outcome from their remaining suits,” added Paul Beckwith, Butamax’s CEO. “Meanwhile, Butamax’s appeal relating to our foundational ‘188 and ‘889 patents is progressing, with the Federal Circuit hearing likely to take place before the end of the year.” If successful, these two cases will return to the District Court, as well as six other patent cases that Butamax is asserting against Gevo, which are variously scheduled for trial during the summers of 2014 and 2015.

“The patents covered in the most recent ruling only apply to individual modifications to the pathway,” commented Brett Lund, Gevo’s executive vice president and general counsel, “and are just 2 of the 480 patents and patent applications in our portfolio.

Gevo responds

“Gevo’s previous victory over Butamax applied to the entire isobutanol pathway.  Butamax has announced that it will not begin building a plant until 2014, with commercialization expected in 2015.  We remain confident in our strong Intellectual Property portfolio, which includes patents to a suite of microorganisms containing distinct genetic modifications that boost isobutanol production. Our technology has enabled us achieve commercial isobutanol production where others have failed.”

The impact

Well, it continues to be early days for the Montagues and the Capulets — as Butamax notes, there are material proceedings that will stretch out to at least 2015.

But this is a big win for Butamax in the interim, giving the company more confidence that it will have freedom to operate down the line without a licensing deal to utilize Gevo’s technology.

Bigger win for customers and partners, however, if the ultimate outcome is that both companies clear a clean path to commercialization of isobutanol and there is robust competition for production capacity and for downstream customers.

The Digest’s Take

Whatever team you have bought season tickets for and are lustily cheering from the sidelines — consider this: the amount of money being racked up by both companies in legal fees is proof positive of the value of the technology. No one spends good money defending worthless technology and worthless patents.

The furious pace of the litigation, and the bad blood between the rivals, is about the best evidence you can imagine that biobased isobutanol is a big deal — a treasure worth defending against all comers.

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