This past Monday, a four-year-long patent war between Wilmington-based isobutanol manufacturer Butamax and Englewood, Colo.-based company Gevo was finally resolved.
What is isobutanol, and why is it so coveted?
Isobutanol is an organic compound that results either naturally or synthetically from the fermentation and/or decay of products like corn, sugarcane and wood. While it’s present in your favorite scotches, its most common use is as a fossil fuel substitute or supplement — and a potentially efficient one, at that.
Tracing the legal saga of a DuPont spinout.
Butamax, which spun out of DuPont’s partnership with BP in 2009, will now produce isobutanol exclusively for vehicles, while Gevo, founded in 2005, will produce the compound solely for jets.
While the two entities have been suing each other endlessly since 2011 over patents, the resolution prompted some friendly-ish sentiments from Gevo CEO Pat Gruber earlier this week.
“That is the strange thing about this and the world of business — they are now our friends,” Gruber told Minnesota’s Star Tribune. “We wish them success. Go, Butamax, go, and develop the marketplace. That makes more markets for us.”
Here’s how it all went down.
- Jan. 14, 2011: Butamax sues Gevo, claiming it has the rights to particular host cells that produce isobutanol, as well as the methods for the production of the compound. This is the first of several lawsuits filed between the two entities over isobutanol.
- Aug. 26, 2011: Butamax files a second patent infringement lawsuit against Gevo, alleging that a patent on low-cost foundational production methods granted to Butamax was being infringed upon by Gevo.
- March 13, 2012: Butamax sues Gevo once again, with three more lawsuits still up in the air from September 2011. This particular suit is over a patented process for expediting the production of isobutanol.
- June 19, 2012: A Delaware federal judge denies Butamax’s request to block Gevo’s production and sale of isobutanol on the grounds of patent infringement. Three additional lawsuits have been filed since March.
- July 6, 2012: A temporary order is issued against Gevo by the United States District Court that forbids the company from distributing any bio-based isobutanol produced at its Agri-Energy Facility as long as it was for automotive fuel.
- July 31, 2012: Gevo’s sales are hurting. The company sues Butamax and DuPont for damages. On the same day, both Butamax and DuPont slam Gevo with a lawsuit.
- Jan. 18, 2013: With six more courtroom battles in the mix since July, the lawsuit filed against Gevo on July 31 is closed by mutual agreement. Baby steps.
- April 11, 2013: Gevo wins a lawsuit when a Wilmington judge found that the claims of one Butamax patent were not valid. Butamax also admitted that Gevo did not in fact infringe upon another of their patents in question.
- July 26, 2013: Score one for Butamax.
- Aug. 26, 2014: Fast forward 13 months. At this point, there are at least nine lawsuits pending between the two companies.
- Aug. 24, 2015: Butamax and Gevo come to a final agreement.
Gruber told the Star Tribune that at one point, more than 10 lawsuits were underway. As for litigation expenses? He said courtroom fees accounted for 30 percent to 40 percent of Gevo’s monthly expenses — not including trials.
Maybe more importantly, the four-year battle was a cause of concern for Gevo investors. This past June, the company had already lost 99 percent of its value since going public in 2011.
What was the primary cause of the lawsuit for Gevo?
“It seems like Gevo’s problems result mostly from issues scaling their technology rather than not having a market to sell their products,” Alejandro Zamorano, an analyst with Bloomberg New Energy Finance, told Bloomberg Business this week. “Once they solve their tech issues and start producing butanol at commercial scale levels, then markets into which to sell to become relevant.”
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