Companies settle long-running dispute

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, August 26, 2015

Two feuding biofuel companies today announced a settlement agreement that will end a long-running patent dispute.

Under the agreement, Butamax Advanced Biofuels LLC and Gevo Inc. will cross-license their technologies with the aim of developing isobutanol, a renewable fuel, for commercial use.

Butamax, a joint venture between BP PLC and DuPont Industrial Biosciences, will lead the development of isobutanol as a renewable fuel for on-road vehicles. Technology startup Gevo will take the lead in developing isobutanol as a replacement for jet fuel in airplanes.

“The aim of these agreements is to accelerate development of markets for bio-based isobutanol,” Butamax CEO Paul Beckwith said in a statement. “This will create exciting opportunities for ethanol producers to expand their businesses by becoming isobutanol producers, at the same time enabling the most competitive isobutanol supply for customers.”

Isobutanol, also known as biobutanol, is considered an advanced biofuel that can be used in higher volumes in petroleum fuel than conventional ethanol. Because it contains less oxygen than ethanol, isobutanol can also be used in marine engines without worries about corrosion.

Butamax and Gevo have been sparring in court over patents for isobutanol technology for more than four years. Both companies have developed technology that converts plant materials into isobutanol using fermentation.

The Supreme Court earlier this year decided for Gevo in a case involving patents that cover Butamax’s broad technological pathway for making isobutanol, sending the lawsuit back to a lower court (Greenwire, Jan. 26).

Gevo has converted a conventional ethanol plant in Minnesota to produce isobutanol, while Butamax has yet to open its first facility.

According to the agreement announced today, Gevo will pay Butamax royalties for technology use in the areas of on-road gasoline and certain petrochemical substitutes. Butamax will pay royalties for jet and marine applications.

Each company can sell up to 30 million gallons royalty-free a year for any application of the fuel. Both Gevo and Butamax will remain free to license their technology to outside parties.

“We are very pleased to have reached this amicable and fair settlement. Setting up the marketing relationships, as we have done, brings to bear the capabilities of each of the companies,” Patrick Gruber, Gevo’s CEO, said in a statement. “We very much look forward to developing a very large, growing and profitable isobutanol market in conjunction with Butamax.”