ALPHARETTA, GEORGIA, September 15, 2016 – GreenShift Corporation (OTCQB: GERS) provided an update regarding the ongoing patent infringement action involving GreenShift's subsidiary, GS CleanTech Corporation ("CleanTech"), and its corn oil extraction patents.
In October 2014, the District Court for the Southern District of Indiana ruled in favor of the defendants in CleanTech's pending patent infringement matter on their motions for summary judgment alleging, among other things, that certain of our corn oil extraction patents were invalid (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" and, collectively, the "Patents in Suit")). The court ruled last week that the Patents in Suit were additionally unenforceable because of inferences that our inventors and attorneys engaged in inequitable conduct by knowingly withholding material information with an intent to deceive the U.S. Patent and Trademark Office ("USPTO").
Both rulings are appealable. We disagree with the court's conclusions in each ruling, and believe that each decision relied heavily on an erroneous determination that the inventions were reduced to practice in 2003 as a result of limited, small-scale bench testing.
Significance of 2003 Bench Testing
In rendering its summary judgment decision, and without having conducted a trial or holding a hearing on the merits, the district court agreed with the defendants that the information surrounding the 2003 bench test provided sufficient evidence that the processes claimed in the Patents in Suit were "reduced to practice" as a matter of law.
That finding in turn provided the further basis for the court's determination that an invalidating "offer for sale" took place more than a year before the inventors filed a patent application, when the inventors sought to conduct a full-scale feasibility test in an operating ethanol plant shortly after the 2003 bench test. That full-scale feasibility test occurred in May 2004. The inventors filed their first patent application shortly thereafter.
In its latest ruling, the court agreed with the defendants' assertions regarding inequitable conduct, concluding after a limited bench trial that since it had previously determined that the invention had been "reduced to practice" and "offered for sale" in 2003, the only reasonable inference that could be drawn was that the inventors and attorneys knowingly withheld material information with the intent to deceive the USPTO about the timing of the "reduction to practice" (i.e., that the invention was ready for patenting after the 2003 bench test as alleged by the defendants, instead of 2004 as our inventors and attorneys believed).
We're disappointed with the court's ruling, and continue to firmly believe that neither the inventors nor our attorneys knowingly withheld any material information from the USPTO, let alone with intent to deceive.
Significance of 2003 Information
We're also surprised by the result because, in connection with ongoing patent filings, the USPTO was provided with the court's opinion invalidating the Patents in Suit, including the documents upon which the court relied for its ruling, and a detailed discussion of the court's basis for invalidating the patents based on the 2003 bench test report, conceptual drawings, and other communications. The USPTO was also provided with the Defendants' summary judgment arguments. Nevertheless, the USPTO allowed CleanTech's patents after considering the very information that the court found to have been withheld from the USPTO, and upon which the bulk of the court's recent ruling was based.
In short, all of the information alleged to have been withheld from the USPTO by our inventors and attorneys was provided to and considered by the USPTO, including by the same examiner that reviewed and allowed the '858 patent, prior to issuance of several additional patents (U.S. Patent Nos. 9,212,334 (the "'334 patent"); 9,108,140 (the "'140 patent"); 9,320,990 (the "'990 patent"); and 9,012,668 (the "'668 patent" and, collectively, the "New Patents"). Significantly, the '334 patent is part of the same family of patents as the '858 patent.
We believe the USPTO's allowance of these New Patents after reviewing the court's summary judgment decision and other information further objectively supports our position that the allegedly "withheld" information was not material to patentability, and thus should not have been the basis for a finding of inequitable conduct.
We believe the court's failure to consider the allowance of the '334 patent despite the examiner's consideration of the court's summary judgment ruling and other information is reversible error.
We are eager to finally mount our appeal. We believe that the court erred in finding, among other things, that the invention was "reduced to practice" as a matter of law based on the limited, small scale conceptual testing that occurred in 2003; and that an invalidating "offer for sale" occurred incident to the inventors' subsequent efforts to conduct full-scale feasibility testing in an operating ethanol plant in 2003.We further believe that the court's October 2014 summary judgment ruling was issued in error, in part due to genuine issues of material fact regarding the defendants' allegations that should have resulted in the right to a jury trial on those facts. Critically, no trial or hearing was ever held in respect of those and other factual determinations supporting the court's ruling, including the material factual issues involving the 2003 and 2004 testing, whether or not an "offer for sale" was made at all, and whether or not the testing fell within the experimental use exception to the "on sale bar."
We also believe that the court's latest ruling on inequitable conduct was issued in error, in part because the evidence does not establish an intent to deceive, and because documentation relating to the 2003 testing was not material to the patentability of the Patents in Suit.
We believe that each ruling was based on a misunderstanding of patent law that will be reversed. The United States Court of Appeals for the Federal Circuit ("the Federal Circuit") is the appeals court for all patent cases, and it is uniquely qualified to address the nuances of patent law that are the subject of this case. CleanTech and its attorneys continue to believe strongly in our case, and we look forward to vindication on appeal.
About GreenShift Corporation
GreenShift Corporation (OTCQB: GERS) develops and commercializes clean technologies that facilitate the more efficient use of natural resources. GreenShift is focused on doing so today in the U.S. ethanol industry, where GreenShift innovates and offers technologies that improve the profitability of licensed ethanol producers. Additional information on GreenShift and its technologies is available online at www.greenshift.com.
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