May 10 CEOCAST NewsLetter + + +

CEO CAST NewsLetter

GreenShift Corporation (OTCBB: GERS) announced that its wholly-owned subsidiary, GS CleanTech Corporation (“GreenShift”), has commenced legal action against eleven additional ethanol producers for infringing on GreenShift’s U.S. patent covering corn oil extraction technology. The new complaints allege that the named producers are infringing GreenShift’s U.S. Patent No. 7,601,858, titled “Method of Processing Ethanol Byproducts and Related Subsystems” (the ‘858 Patent), which covers processes for recovering corn oil from whole stillage, a precursor to the distillers grain co-product of corn ethanol production. On May 6, GreenShift submitted a “Motion to Transfer Pursuant to 28 U.S.C. § 1407 for Consolidated Pretrial Proceedings” to the United States Judicial Panel on Multidistrict Litigation (the “Panel”) located in Washington, D.C. In this motion, GreenShift has moved the Panel to transfer and consolidate all pending suits involving infringement of GreenShift’s patents to one federal court for orderly and efficient review of all pre-trial matters. Shares of GERS remained unchanged for the week, and the year, at $0.0002
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JUDICIAL PANEL ON MULTIDISTRICT LITIGATION

SkunK Pre-Summary
The MDL Panel consists of seven sitting federal judges, who are appointed to serve on the Panel by the Chief Justice of the United States. The multidistrict litigation statute provides that no two Panel members may be from the same federal judicial circuit. They meet for arguments every two months.  The next meeting is 27 May in Chicago.  Since the schedule was made April 22, 2010, the GreenShift case will not be expected to be included in Chicago.  The next meeting will be July 29, 2010 - in Boise, Idaho.  I expect to read the GreenShift case in the published schedule by the end of June.

Within twenty twenty-one days after filing of a motion, all other parties shall file a response thereto.p9  No extensions are granted for filing a notice of opposition.  Failure of a party to respond to a motion shall be treated as that party's acquiescence to the action requested in the motion. The motion and brief to vacate the CTO are due 14 days after the notice of opposition is filed with the Panel. Failure to file your motion and brief timely will be treated as a withdrawal of opposition. The movant may, within seven days after the lapse of the time period for filing responsive briefs, file a single brief in reply to any opposition.

The way the SkunK see it:
So everyone has 21 days from 6May to say if they are against it (27May?) - otherwise they are for it.  Then they got 14 more days (10June?) to make a motion and brief it on paper.  GreenShift then has seven days to answer the opposition. (18June?). Then it gets scheduled - hopefully by end of June for July 29th. A notice of hearing is sent out to counsel approximately 45 days prior to the hearing date. (14 June?) It may be oral brief or just paper depending on the judges wishes.  Two weeks or so after that we know whats up and where the cases are headed for pretrial.  Under current case law, centralization is available for pretrial purposes only.  So if approved - the pretrial portion likely gets sent to a single location and all the motions are made and witnesses statements are taken.  It then would be sent back to the original court for trial.  I figure that by now in the scenario one might see where one is headed and that's why most of these patent cases are settled before it goes to a jury.  
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1.  The SkunK would assume that independent Ethanol Plants that are handling their own defense have the most to gain - and least to lose by a peal-off early settlement.  If stakeholders can see that others have doubled their production for a 20% royalty - how do you argue for the risk and expense of a federal court decision with accruing royalties against multiple issued patents? 

2.  The SkunK figures that the Ethanol Plants that have signed on to a joint defense by a parts supplier are in a tighter situation.  If they gave up the right to run their defense they might not have the ability to settle on their own.  Even if they could they might have hindered their ability to recover damages from the parts supplier who they might believe put them in the infringement situation in the first place.   

I understand situations have developed where the infringer who had settled from under the cloak of an indemnity have had to later take the indemnity provider to court and basically prove that 1.They themselves were infringing.  This to force the indemnity provider to pay up.  They basically have to prove themselves guilty - a strange situation. (thanks to a reader for the link) 

3.  The last entity that wants a settlement is the parts supplier.  They will lose much if any settlement takes place.  They will lose business.  This expanding COES business may be a huge percentage of the Ethanol construction business in the years ahead.  It is doubtful that we see the new plant building we have seen in the last five years again soon.  They also may be liable for lawsuits from every plant who claims to be damaged by being enticed to buy a non-patented product.  This seems to the SkunK to be a slippery downhill road.  The further it is traveled (or one traveling along with indemnity) - the harder it becomes to reverse course.
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Here is some Quotes mostly off their Web Site:
 Thus, in most circumstances, when pretrial proceedings have been completed in the transferee court, the Panel—typically acting upon a formal suggestion issued by the assigned transferee judge—remands any remaining pending actions to their
transferor courts.


Selecting the “right” transferee judge is critically important, because the success of an MDL largely turns on the work of that judge and the parties. Typically, the Panel seeks a judge with some existing knowledge of the involved cases or the issues presented. Ultimately, however, the willingness and motivation of a judge to undertake the often substantial additional responsibilities of an MDL are the most important attributes.

Although we cannot offer a definitive date, the Panel generally holds hearing sessions every two months. Hearings are traditionally held during the months of January, March, May, July, September and November. Shortly after a hearing session has concluded, the next hearing session is scheduled. A notice of hearing
is sent out to counsel approximately 45 days prior to the hearing date. The notice of hearing is also available as a PDF document on the Panel website. The Panel rules quickly, usually issuing all of its orders within two weeks of the hearing session.

SkunK