PreTrial Conference

We got a document recording the pre-trial Conference that was held on Monday. 

HERE it is

Besides a roll of those attorneys on the distribution list, we have this:

"The parties appeared for an initial pre-trial conference. The parties discussed case management issues. The Court will issue a case management plan under separate order."

SkunK

The Whole Story

In an article about GPRE HERE, Ethanol Producer Magazine covers the large corn oil extraction build out:

"In addition to increased capacity and marketing capabilities, Becker said GPRE’s plans to expand its corn oil extraction operations will also contribute to the company’s future bottom line. In July, GPRE contracted ICM Inc. to install corn oil extraction technology at all of its six existing ethanol plants. Corn oil extraction operations began at the 115 MMgy Obion, Tenn., facility earlier this month and it is expected that similar operations will begin at two of its other plants by the end of the year. Installation of the extraction technology will be complete at all six plants within six months, according to Becker. “This project, we believe, will have positive financial impact, generating operating income in the range of $15 million to $19 million annually, based on the production of 75 to 90 million pounds of corn oil,” he said. The total cost of installing corn oil extraction capabilities at GPRE’s five plants is estimated to be $18 million. Corn oil extraction technology is already installed at the newly acquired Riga and Lakota facilities."

The article fails to mention that the entire GPRE corn oil extraction build out and the "already installed" corn oil extraction systems at the Global Ethanol plants - are licensed by GreenShift.  Of course, they could get that information by reading previous editions of their own magazine:  Here and Here - as well as many other sources around the industry.


SkunK

GPRE 3Q Earnings Call Transcript

GPRE, the largest COES customer of GreenShift, recently commented on their 3Q release.  Yes, we recently covered what the release said HERE.   Now here are some excerpts from the transcript of comments and Q&A about that SEC filing.  The excerpts are about the GreenShift patented COES build out and the (at the time) upcoming Global Ethanol acquisition.

Todd Becker, Green Plains CEO
As we noted in the earnings release, corn oil extraction has begun at our Obion, Tennessee ethanol plant. We are working to install the remaining five plants over the coming 5 to 6 months. This project we believe will have positive financial impact, generating operating income in the range $15 million to $19 million annually based on the production of 75 million to 90 million pounds of corn oil.

The corn oil market remains very strong as well. The recent strength in soy and heating oil has been the main driver behind this. We recently announced the acquisition of Global Ethanol, LLC. Global has two plants with annual capacity of approximately 157 million gallons. We are paying $0.94 on a per gallon basis for the production assets plus working capital. This demonstrates our ability to make acquisitions at attractive valuations utilizing a combination of our strong balance sheet and our stock. That position allows us to meet the objectives of ethanol plant owners, some who want to have a continued ownership interest in the industry and those who want immediate liquidity.

Jerry Peters, GreenPlains CFO
Our liquidity position remains strong with $177 million in total cash and $18 million available under committed loan agreements, bringing our total available liquidity to approximately $195 million at the end of the quarter. We are pleased to have substantial liquidity available to us as we have seen increased commodity prices, higher volumes in each of our businesses, and acquisition opportunities.


Currently we are utilizing some of this liquidity for investments in the corn oil extraction project, which should total about $18 million, as well as the global acquisition, where we will invest about $32 million of our cash for the assets we are acquiring, as well as the working capital.

Here is the full transcript

SkunK

Thanks to 'slashnuts' for the link.

GPRE Completes Acquisition of Global Ethanol

Remember when GPRE announced they would be moving to aquire one of our early COES customers Global Ethanol?  GPRE 28Sept PR HERE.  They planned to finalize in the 4Q.  They certainly did that.

New PR SEE HERE

ALSO Businessweek coverage HERE

SkunK

Thanks to 'Slashnuts' for the heads up on this one.

Green Plains Reports 3Q - Corn Oil Update

"In the past few months, ethanol industry operating margins expanded as ethanol prices increased more than the recent increases in corn prices. As a result, we expect an even stronger fourth quarter. We believe improved ethanol margins combined with a solid harvest quarter from our expanded agribusiness segment and a modest contribution from corn oil extraction should drive a solid finish to 2010," added Becker.
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In October 2010, Green Plains began producing corn oil at one of its ethanol plants and expects to begin corn oil production at two other plants later in the fourth quarter. It is anticipated that implementation at all of its ethanol plants will cost approximately $18.0 million in total and will be completed by the end of the second quarter of 2011.

SEE ALL HERE

SkunK
BONUS  Here is a GreenShift article in Ethanol Producer Magazine November 2010 edition

Pre Pretrial Briefs

The Pretrial Briefs were due on the 20th .  They were all asked to address 6 questions and keep the beef on three pages.  Here we go:

GreenShift

Al-Corn

Amaizing Energy

Blue Flint

Westfalia/ACE

ICM/Cardinal/BigRiver

Iroquois

Lincolnway Energy

Bushmills/ChippewaValley

United Wisconsin

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Happy reading!

SkunK

New GERS Mention in BioFuels Journal HERE

On the way to a Billion Gallons

COES under new Licensed Contract and estimated Method I COES just this year:

100-110 Global Ethanol
100-110 Marquis Energy
50 United Ethanol
480-520 GreenPlains Mega Deal
50 Center Ethanol
50-60 Corn, LP

This is a total of 830-900mmgy of Ethanol production under contract. (Depending if you count actual production or nameplate - higher number is actual estimate based on recent plant published production numbers) Well on our way to the goal of a billion new gallons for 2010.  A billion gallons of additional ethanol capacity is key since it should provide more than enough revenues to provide profitability for GreenShift.
***************
SkunK

PS _Here is another newsletter mention HERE
Also HERE 

GreenShift and Corn LP Enter into License Agreement

GreenShift Corporation (OTC Bulletin Board: GERS) announced today its execution of a license agreement with Corn, LP for use of GreenShift’s patented corn oil extraction technologies at Corn, LP’s 50 million gallon ethanol plant in Goldfield, Iowa.

Brad Davis, General Manager of Corn, LP said that “We have set a number of new performance records at Corn, LP within the past year, with record levels of ethanol and DDGS production from our plant as well as improved operating efficiencies. We are confident that the addition of GreenShift’s patented corn oil extraction processes to our facility will help us build on our successes with additional improvements in efficiency and profitability.”

SEE ALL HERE

And HERE
If you read their recent (August 2010) Newsletter you come away with two things:  They suffered, survived and thrived through some terrible summer flooding; and they run a tight ship.
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"When you consider the fact that CORN, LP had been operating at a rate equivalent to an annual production rate of well over 60 million gallons this calendar year, and then remember we have an operating permit with the IDNR that prevents us from exceeding 62 million gallons per year, AND then consider a tax credit is lost if we exceed the small producer cap of 60 million gallons per year (worth $1.5 million), we are doing all right.
Brad and I will have to figure out the correct strategy to ensure we are at 59,999,999.9 gallons on December 31st! "
NEWSLETTER HERE
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CORN, LP Homesite
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SkunK

Welcome aboard Corn, LP!
Thanks for the flood of Emails and Posts on this one - I am finding out the best way for good news to develop is for the SkunK to sleep in or to drive the buggy into Hooterville.  :~)

A Pretty Girl and GERS in a Video

At 1:45 into the video GreenShift gets a mention - for the large percentage drop today.  Of course, nothing about being up off the low or the massive high volume.  Anyway I though you might be interested since its a different way to get a penny stock newsletters out, and my bet is the future will look something like this.

The 19 Oct @ 1:45-2:10 in the video:  See Here

SkunK

I want to acknowledge 'keithslawinski' on Yahoo for the link.

GreenShift Complaint against Flottweg

Here is a ten page complaint (PDF) filed in the infringement Flottweg suit.

SEE HERE

SkunK

Top Volume Gainers at OTC from PSL are CMGR, LFBG, ARTS and GERS

GREENSHIFT CORP NEW (OTC: GERS) experienced no change for the day on overall traded volume of 25.36 million shares for the day. The day high was at $0.0004 and shares of GERS closed the day at $0.0004. GreenShift Corporation, together with its subsidiaries, develops and commercializes clean technologies that facilitate the use of natural resources in the United States. It owns four corn oil extraction facilities in Oshkosh, Wisconsin; Medina, New York; Marion, Indiana; and Riga, Michigan.


SEE HERE

SkunK

More NEWS on the way

When it rains it pours.  No news for a while and then we get all kinds of leads . . .

It looks like we will get an independent update on the Green Plains COES construction.  This Friday at 10am the 3Q GPRE conference call goes - and you can count on a high profile corn oil extraction project to get some press time.  Maybe even a question or two.  

SEE HERE

SkunK

Thanks to a reader for the heads up.

GreenShift Featured in Ethanol Today

Huge Multi-page Article

"One of the most significant trends in today's dry grind ethanol industry is corn oil extraction."

"University of Illinois economist Steffen Mueller found that 23 plants out of the 75 that responded to the survey (30.7 percent of the plants), had added a corn oil extraction process – typically at the back end, taking the stillage from the fermentor, concentrating it, and applying centrifugal force to separate corn oil from the distillers grains." 
**********
(SkunK thought for what its worth:  That's about a third of those who responded - and who do you think didn't respond?  Based on these rough figures however, with about 195 corn ethanol facilities as of the first of the month - (195 x .307) That would mean we now have about 60 potential infringers - 50% more than the last GreenShift estimate in the 2Q of 40!)  That is not even factoring the likely even higher percentage of infringers that did not respond to the survey!
**********
“GreenShift installed the high speed separator… We own the equipment at this point. We were the first plant it went into; it was experimental at that point and it’s worked out well. We have been looking and exploring options, and we’ve been considering the idea of adding (a separator for the production from) the other half of the plant in Watertown, and also installing the technology at our plant in Mina, which is also about 110 million gallons per year.”

"It is worth noting that this oil derived from the back end of an ethanol plant contains 100-times the concentration of these health-giving compounds compared to ordinary corn oil, . . "  (Carotenoids:  Lutein and Zeaxanthin)******
(SkunK thought:  THIS Last sentence [below] of the article SAYS IT ALL!!!  EVERY!!!
******
"With this changed way of thinking gaining currency among the most competitive players in the industry, it seems a certainty that every successful ethanol operation will enter into the corn oil business."
SEE HERE
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SkunK

If you enjoy irony, check out the Flottweg Ad for "corn oil separation" on page 10 of the article featuring GreenShift!
Thanks to a reader for the original link!  Thanks to another reader for pointing out the potential new business with Glacial Lakes!
******

Greenshift Corp. is in the StockGuru Spotlight for October 18, 2010

On Friday, the company put out news announcing that its wholly-owned subsidiary, GS CleanTech Corporation ("GreenShift"), has commenced legal action in the United States District Court, District of Connecticut, against Flottweg AG and Flottweg Separation Technologies, Inc. (collectively, "Flottweg") for inducing infringement of GreenShift's U.S. patent covering corn oil extraction technology.

See Here
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The Friday Pressor is now in the GERS Press Room
See Here

SkunK

Inside the Public Patent Porthole to find the Flottweg Rejection

Here is one of the rejection letters from the patent office:
Page 1
Page2
Page3
Page4
Page5
Page6
Page7
Page8

This is where the patent office cites references (GreenShift's Chief Technology Officer Dave Winsness) in the Flottweg case.  SEE HERE

Here is where Flottweg appears to try to get the patent office to "reconsider" SEE HERE

SkunK
Want to go through the "Patent Porthole?"

1. Go to this site and type in the words shown HERE
2. Once your in, type in the "application number" 11/604,435
3. You may have to type in two words again
4. Use the tabs above to look and find the references above under "image file wrapper"

Good Luck, I got a feeling it could be an interesting week.

Resources for Flottweg Litigation

LAWSUIT
************************
Order on Pretrial Deadlines:
Motions to Dismiss due on 01/14/2011.
Amended Pleadings due by 12/13/2010;
Discovery due by 4/15/2011;
Dispositive Motions due by 5/15/2011.
See Here

PATENT
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Here are 17 Flottweg Patents being applied for.

Here is the 11/604,435 application filed by Flottweg on 27 November 2007.
Filed  27 November 2007.  This is the one that was REJECTED due to prior art and being obvious.

Here is Flottweg's stable of 30 patents going back almost 35 years.  Only the top four were awarded within the last 5 years.
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SkunK
This is a big deal. The reason this is important is we have the combined pretrial coming up a week from Monday. Is this the crutch being kicked out from the infringers defense? I would think that all Flottweg customers may have quite a weekend reassessing their position. I have heard numbers that there may be as many as 40 infringers, yet we have less than half of that under litigation. Are some of those direct Flottweg customers? If they thought this rejected patent would protect them from an infringing lawsuit, I guess they need to reassess. This may open the floodgates to go after the Flottweg customers who have been infringing - since until this patent was rejected the issue would have been clouded by a pending patent. NO LONGER. People have been asking me: "Whats going on with the pps?" Is this the reason? No idea, but the timing is self-evident. I do expect that between the upcoming pretrial and the throwing out of this basic Flottweg patent - it has definitely escalated the pressure on infringers to settle.

Suit against Flottweg! - Flottweg Patent Ruled Obvious

If you get a chance take a look at the timeline on the Right Column of this blog.  You can see here that GERS published their patent for Corn Oil Extraction on 23 Feb 2006*.  They make you publish your patent at a certain point - not so others can copy your idea - on the contrary - it is supposed to let others know what is patent pending so you DO NOT waste everyone's time trying to file on the same thing and/or to let you know if you are infringing on a future patent. 

Apparently in November of 2006 Flottweg decided to submit a patent for Corn Oil Extraction.  This is some 10 months after GreenShift published the process for Corn Oil Extraction.  The Patent Office has rejected this Flottweg patent due to it being obvious - (seemingly after you read the published GreenShift patent - Corn Oil Extraction becomes obvious.)  Remember that Flottweg (and their rejected patent) is the outfit that supplied the three phase decanter to ICM.  ICM took that 'piece of equipment' and tried to convince others in the Ethanol Industry that it protected them against a GreenShift 'process' patent. (IMHO: Infringing Ethanol Plants will eventually have to admit ICM achieved "A regrettable degree of success")  But also remember ICM is the one that says that corn oil extraction is unpatentable at the very time Flottweg - their supplier - was attempting to get a patent. 

The SkunK is a self-proclaimed biased observer.  As an investor here I am pulling for the GreenShift Team and my investment.  Yet I cannot think how someone - even on the other side of this equation - is not drawing the same conclusion:  GreenShift's position here is strong, and has just been made even stronger.

*(Provisional patent 17Aug2004; Non-Provisional Patent 5May2005; 23Feb2006 Patent Published; 6May2009 Patent Allowance announced; 13Oct2009 1st Patent Issued; 27Oct2009 2nd Patent Issued)

Today's Partial Presser Below:
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The PTO has rejected the pending claims in the Flottweg Application on the basis that GreenShift’s pre-existing patent application directed to its corn oil extraction process, in combination with other prior art, renders Flottweg’s claims obvious. In an office action rejecting all of Flottweg’s pending claims, the PTO underscored the distinction between GreenShift’s corn oil extraction process itself and the equipment used in GreenShift’s corn oil extraction process, and the PTO stated the following in connection with the cited pre-existing GreenShift patent application:

“The means or device for recovering oil [taught by GreenShift in its patent application] … may comprise any suitable device for separating oil from a mixture, such as a gravity separator (which advantageously requires no additional energy input to effect separation and, thus, further enhances efficiency), a centrifuge, a disk-stack centrifuge, a centrifugal decanter, or an evaporator. … Moreover, in addition to a self-cleaning bowl type centrifuge as the means for recovering oil from the thin stillage, a nozzle bowl disk stack centrifuge would work, as could a horizontal centrifugal three phase decanter.”

“Any claim that use of Flottweg’s horizontal decanters or ICM’s repackaged ‘corn oil Tricanter system’ will avoid liability for infringing our patents is false,” said Kevin Kreisler, GreenShift’s Chief Executive Officer. “Flottweg and any other equipment suppliers, service providers or other parties that knowingly subsidize, contribute to or induce infringement of our patents will be held accountable.”

Hindsight is 20/20, and Completely Irrelevant

David Winsness, GreenShift’s Chief Technology Officer, added: “ICM and others have stated their view that our corn oil extraction patents were issued in error and should be declared invalid as obvious and unpatentable. It is significant that Flottweg’s Application and correspondence with the PTO demonstrates that Flottweg and its former CEO clearly disagree with ICM’s view and believe instead that corn oil extraction from stillage is a novel and patentable process.”

Kreisler continued: “ICM designed and/or built about 105 ethanol facilities, each without the ability to extract corn oil from stillage at start-up. The entire industry produced ethanol at reduced efficiency and sacrificed billions in lost profits by not recovering the 40 billion pounds of corn oil that passed through the fleet without extraction between 1980 and 2004, the year our patents were filed. There is a common sense reason for Flottweg’s November 2006 ‘awakening’ and the total absence of backend corn oil production prior to 2004: extracting corn oil from stillage was not obvious to those skilled in the art at the time of filing of our patent application in 2004.”

“Thousands of skilled engineers, operators, plant managers, and owners designed, built and operated billions of gallons of ethanol production facilities without backend corn oil extraction for decades before GreenShift showed up. The fundamental process steps we developed to extract corn oil from stillage may be clear to many in hindsight, but any argument that our patents should be declared invalid because corn oil extraction is obvious today is a distortion of the law and can only fail.”

SEE HERE
and
SEE HERE
SkunK

Thanks to a reader for the first link at 1:46 today.  I missed it, we were off to get our flu shots and the Casino for the early Fish Fry - noooothing ever happens on a Friday afternoon - lol

15%! - UPDATE

UPDATE!
It is Official

see all here


The U.S. EPA issued what Assistant Administrator Gina McCarthy said is a step toward increasing U.S. renewable fuel use when it announced Oct. 13 that it has approved the use of E15 in vehicle models 2007 and newer. The agency denied the use of E15 in older vehicles as well as motorcycles, heavy-duty trucks and off-road vehicles and will issue a decision on model years 2001-’06 following the completion of U.S. DOE testing in November. The partial waiver approval came after nearly two years of extensive fuel testing following a petition for widespread E15 approval filed with the EPA by Growth Energy and a coalition of ethanol producers.


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IT not official yet - but its the Wall Street Journal - so it is as close to official as you can get. 

"As early as Wednesday, the Environmental Protection Agency plans to announce it will allow ethanol levels in gasoline blends to be as high as 15% for vehicles made since 2007, up from 10% currently, according to two people familiar with the matter.

For cars made between 2001 and 2006, the agency will say it is awaiting the outcome of additional research and not ready to announce a decision."
SEE HERE

Looks like the announcement will be made at 1:30pm EST during an EPA conference call to the press:
SEE HERE

SkunK
Thanks to a reader for the current WSJ link.

Top Volume Gainers at OTC

GREENSHIFT CORP NEW (OTC: GERS) surged 50.00% on overall traded volume of 63.58 million shares for the day. The day high was at $0.0003 and shares of GERS closed the day at $0.0003.

SEE HERE


SkunK

Lincolnway Energy Reports

Lincolway Energy recently sent out a report to their stakeholders:

SEE HERE

Check out the last sentence of page 2.  Corn oil and corn syrup sales were up to $1.1 million for the quarter - up over the $.9m for the same period last year.

Pretty newsletter.

SkunK

From GreenShift Investor Relations:

The following was just received by the SkunK in response to a question from an investor:

From GreenShift Investor Relations:


"We have been grateful for the opportunity to work with Center Ethanol, our new licensee, and each of it's team members. Few teams have embraced our patented corn oil extraction technologies and process expertise to the degree that Center's team has. The deep experience and simultaneous commitment to discipline, excellence and innovation of each of Center's team members is remarkable.

Further, Center Ethanol should be applauded for it's demonstration of integrity and leadership by becoming a GreenShift licensee in the face of the unlawful use and blatant infringement of our patents by more than a third of the industry.

Comments from our shareholders that speculate on the reasons for innocent employment decisions, or that otherwise unfairly target individuals or entities without factual support are inappropriate. We request that our shareholders exercise enhanced responsibility and restraint in the future.

Thank you and we look forward to providing additional updates shortly.


Regards,
GreenShift Corporation
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SkunK

Center Ethanol Looking for New Plant Manager

If you go to the Center Ethanol web site you see only one open position: Process Operator.  However for a few days now I have been getting indications they are searching for a New Plant Manager. 

See Here  and HERE

From their web site we still have this, last updated on 09/22/09 : 

"Tony Newton - Plant Manager  
Tony comes to Center Ethanol Company from ACE Ethanol in Chippewa Falls, WI where he was employed as plant manager and was instrumental in driving higher production output and improved efficiencies."

Well since they already have/had a plant manager and they are looking for another - my guess is Mr. Newton will be leaving or has already left.  The SkunK thinks this is an interesting story since Tony Newton came from ACE, one of the plants that is operating a non-patented COES, what might be called an "improved efficiency"   He came to Center Ethanol and they decided to license their COES equipment in August 2010.  Tony Newton had been with Center Ethanol since about August of 2007

Is this all related?  There are a thousand reasons for a job becoming vacant, and the SkunK can only point out the "dots" of facts above.  How you connect those dots - if at all - is up to you.

SkunK

Pretrial Conference

This case is assigned for an initial pretrial conference on October 25, 2010, at 1:30p.m. (Eastern) before Senior District Court Judge Larry J. McKinney, in Room 272, Birch Bayh Federal Building and United States Courthouse, 46 East Ohio Street, Indianapolis, Indiana.
 
The primary purposes of the conference are as follows: (1) to permit counsel to meet with the judicial officers assigned to this case and to raise for discussion any matters requiring immediate attention by the court; (2) for counsel to address the court’s questions regarding the specific claims and defenses in each case; and (3) to address the organization and pretrial phases of this litigation, including “core” discovery common to the cases and the claim construction, Markman, and summary judgment phases of the case.

On or before October 20, 2010, counsel in each individual case transferred to this court shall electronically file a brief (not to exceed three pages) summary of the case.

SEE HERE

SkunK

PS *Markman Hearing

Market Consensus is that the EPA will Approve E15

A strong ethanol price with an expanding market means more money available to finance additional revenue streams - including corn oil extraction.

"EPA decision on E15 expected within the next two weeks --

The market consensus is that the EPA within the next two weeks will approve E15 for vehicle model years of 2007 and newer, which would be a significant bullish long-term factor for ethanol prices. The DOE is not expected to finish testing model years 2001-06 until the end of November."

See source HERE

See comment HERE

SkunK