IP Law Daily Invalidity finding of clean technology company’s ethanol technology patents due to fraud before the USPTO upheld
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Monday, March 2, 2020

Invalidity finding of clean technology company’s ethanol technology patents due to fraud before the USPTO upheld

By Linda O’Brien, J.D., LL.M.

A determination that a clean technology company’s ethanol technology patents were invalid and unenforceable based on the inequitable conduct of the named inventors and prosecuting attorneys before the USPTO was upheld.

The district court did not abuse its discretion in determining that GS CleanTech Corporation’s patents asserted against several ethanol industry companies were invalid and unenforceable based on inequitable conduct before the U.S. Patent and Trademark Office (USPTO), the U.S. Court of Appeals for the Federal Circuit has ruled. There was undisputed evidence that the named inventors and prosecuting attorneys misrepresented the date that the patented invention was reduced to practice and offered for sale. Thus, the district court’s determination was affirmed (GS CleanTech Corp. v. Adkins Energy LLC, March 2, 2020, Wallach, E.).

Greenshift Corporation and its subsidiary, GS CleanTech Corporation, develop and commercialize technologies that promote the more efficient use of natural resources. CleanTech is the owner of U.S. Patent Nos. 7,601,858 ("the '858 patent"), 8,008,516 ("the '516 patent"), 8,008,517 ("the '517 patent"), and 8,283,484 ("the '484 patent"), the patents-in-suit, which relate to methods for recovering oil from the concentrated thin stillage (or syrup) produced by a dry mill ethanol plant. The methods involve running the syrup through a mechanical process, such as a centrifuge, to recover the oil.

Beginning in 2009, CleanTech filed lawsuits against numerous companies, which included ethanol plants and manufacturers of ethanol production equipment, for infringement of the patents-in-suit. In September 2016, the district court determined that the patents-in-suit were unenforceable because of the application of the on-sale bar (which requires that the claimed invention is not sold or offered for sale more than one year before the application filing date). CleanTech appealed.

To prevail on a claim of inequitable conduct, the accused infringer must prove by clear and convincing evidence that the patentee: (1) knew of the reference or prior commercial sale; (2) knew that it was material; and (3) made a deliberate decision to deceive.

The district court did not abuse its discretion in finding that the claimed invention was the subject of an offer for commercial sale and was ready for patenting more than one year before the application filing date, according to the appellate court. The provisional patent applications for the patents-in-suit were filed by on August 17, 2004. The named inventors’ no-risk trial proposal sent to dry mill ethanol plant operator Agri-Energy in July 2003 was a sale on approval that was made before the critical date for the on-sale bar at August 17, 2003. The proposal was an offer for sale as it provided all items necessary to recover oil as well as the price and the inventors understood the offer was a first sale that would lead to additional sales.

The district court also did not abuse its discretion in determining that the claimed invention was ready for patenting in June or July 2003. The evidence showed that the ethanol syrup was tested in June 2003 within the claimed ranges recited in the patents-in-suit, the inventors stated in correspondence with Agri-Energy in July 2003 that the claimed invention was reduced to practice, and the inventors directed the preparation of an ethanol oil recovery system diagram to be used for sales purposes in July 2003, the appellate court noted.

Finally, there was clear and convincing evidence that CleanTech and its attorneys made a deliberate decision to withhold material information from the USPTO. The inventors sought information from the USPTO in February 2004 about the on-sale bar and misrepresented to the USPTO that the July 2003 proposal was immaterial by filing a false declaration from one of the named inventors. The attorneys possessed the ethanol oil recovery system diagram and June/July 2003 testing reports and did not provide the information to the USPTO during the prosecution of the patents-in-suit. Moreover, the inventors and attorneys used threats to coerce Agri-Energy into supporting CleanTech’s contention that the July 2003 proposal was an offer for testing instead of a sale. The failure by the inventors and attorneys to correct the false declaration and misinformation was strong evidence of intentional deceit, the appellate court found.

The cases are Nos. 2016-2231 and 2017-1838.

Attorneys: Steven B. Pokotilow (Stroock & Stroock & Lavan LLP) for GS CleanTech Corp. Keith David Parr (Locke Lord LLP) for Adkins Energy LLC.

Companies: GS CleanTech Corp.; Adkins Energy LLC

MainStory: TopStory Patent FedCirNews

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