ICM Dismissed with "sparse" Wit and Prejudice

IV. CONCLUSION

The Court concludes that ICM Inc.’s claims in Count I under Kansas state law should be dismissed with prejudice; however, its claim under the Lanham Act may proceed. Further, ICM Inc.’s declaratory judgment claims in Count II are properly pled and the transferor court will retain jurisdiction over them on remand; however, it is in the interests of justice to transfer this proceeding to the Southern District of New York after the Multidistrict Litigation proceedings. GS CleanTech Corporation’s and GreenShift Corporation’s Motion to Dismiss is hereby 

GRANTED in part and DENIED in part as

set forth herein.

IT IS SO ORDERED this 27th day of February, 2013.

See Here

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After a quick read this looks like a GREAT victory. 

A little history:  This story is about Corn Oil Extraction (COES) Patents.  The first one in the industry was issued to GERS back on October 13, 2009.  On that same day ICM filed its original Complaint for Declaratory Judgment against GERS.  ICM filed the first lawsuit to try to steal the tactical advantage by striking the first blow and moving the game to its home turf.  But with patent now in hand - GreenShift sued producers and ICM and others for patent infringement.  GreenShift successfully moved all the cases to Federal MDL (Multi-District Litigation) for the pre-trial motions and the all important Claim Construction.  As things have moved along GreenShift has won major battles.  I consider these to be the two major claim constructions and the court's rejection of a key leg of defense:  Prevost. 

GreenShift now has four major COES patents listed on their site.  GERS' lists eight industry related patents on the Patent Office site.

The additional patents are one reason original complaints have been amended so many times.  ICM's original complaint was amended five times.  Each time before the Judge could rule on the previous complaint.

Fast Forward to today.  GreenShift finally got an answer to its motion to dismiss ICM's original complaint.  Now called "ICM’s Fifth Amended Complaint".  GreenShift's motion to dismiss was GRANTED in part and DENIED in part. 

The whole Kansas state law thing is dismissed with prejudice.  Done.  Over.

"Under this circumstance, the Court must agree with Plaintiffs that ICM has failed to state a claim of unfair competition under Kansas common law."

 

"Like with its Lanham Act claim, ICM’s claim that Plaintiffs tortuously interfered with its business and contractual relationships . . . is sparse

on connections between facts and the legal standards"

Wow.  Again, I am not a lawyer.  " . . .sparse on connections between facts and legal standards"  That's not an ICM lawyer atta-boy by the court - is it?    Yep, I got that zinger without a penny of law school tuition.

 

"ICM’s conclusory allegations fail to put Plaintiffs on notice of exactly how the GreenShift letters interfered with ICM’s contractual or prospective business relationships; therefore, those claims should be dismissed."

 

Also, remember the ICM filing using the Kansas Consumer Protection Act (“KCPA”)??  (You know, the family of laws that protect housewives from heavy thumbed butchers?)  After further review ICM just plain left that out of the last filing.  The court says ". . there is no claim under the KCPA in the 5th Am. Compl. since it appears ICM withdrew that claim in March 2010."

 

In other areas the court admits it is handcuffed.  It has to act as if the allegations by ICM are true.  "On a motion to dismiss, however, the Court must take the allegations in the complaint as true." 

The Cantrell one year offer prior to 17 August 2004 challenge can proceed:  "The contradictory statements by the patentees provided to the PTO are enough to infer the scienter element under the Federal Circuit standard enunciated in

Exergen".

On another "sparse" court comment:  "The Court concludes that, while sparse, Count 1 of ICM’s 5th Am. Compl. states a claim under the Lanham Act."
 

Another explanation from the court on it having to allow part of ICM's motion to proceed:  "The Court declines (GERS) Plaintiffs’ invitation to address the factual disputes raised in their motion, which is improper on a motion to dismiss where all allegations in the complaint are taken as true and draw all reasonable inferences in ICM’s favor."

It seems that the things that move forward by ICM are moved primarily on procedure - not necessarily merit - AND what is left is going to end up in New York - not Kansas as argued by ICM for the past 3+ years. 

 

Overall, I would be very surprised if ICM sees anything here that they will wish to draw attention to.  On the other hand, I would not be surprised if GreenShift included information in this court order in their next public release. 

 

****************************

****************************

****************************

Joint Reply of Defendants

****************************

Under Seal

****************************

GERS Markman

SkunK

State of the Industry

HOMELAND ENERGY SOLUTIONS LLC

As of February 5, 2013, the Renewable Fuels Association estimates that there are 211 ethanol production facilities in the United States with capacity to produce approximately 14.7 billion gallons of ethanol per year. According to RFA estimates, approximately 13% of the ethanol production capacity in the United States was not operating as of February 5, 2013. The largest ethanol producers include Archer Daniels Midland, Green Plains Renewable Energy, POET, and Valero Renewable Fuels, each of which are capable of producing significantly more ethanol than we produce.

See Here

SkunK

I can't recall . . .

Old Adkins Agreement here.

Always remember your wife's birthday?  OK showoff . . . your Mother-in-law's birthday?  How about what you had for breakfast?  Yeah, me too.  How about who you sell corn oil to?

SkunK

What is Under Seal?

Adkins Under Seal?

Approved Today

Certified

SkunK

Adkins

It cannot be disputed that any CleanTech did not breach any agreement with Adkins because (1) Adkins did not complete a condition precedent to the Agreement between the parties, (2) CleanTech had no obligation to complete performance before Adkins terminated the Agreement, (3) Adkins was not damaged by any act or omission of CleanTech associated with the Agreement and (4) CleanTech never entered into any subsequent agreement “not to sue” Adkins. Furthermore, CleanTech states that the undisputed facts demonstrate that Defendant does not have a license to CleanTech’s patents-in-suit.

See Here
***********************
Memo of Law

Despite its claims otherwise, Adkins has never operated its corn oil extraction system under a license provided by CleanTech. There is no material fact in dispute that the Agreement itself does not provide Adkins with a license to use its infringing system. Also, Adkins's contention that there was some sort of agreement by CleanTech at the time that Adkins terminated the Agreement granting Adkins rights to CleanTech's intellectual property is simply not true. This position taken by Adkins defies both logic and the clear facts, including but not limited to Adkins's own actions in 2010 (two years after the termination of the Agreement) attempting to negotiate with CleanTech a license to the very same patent rights that it now claims it had obtained two years before.

There are no material facts in dispute that CleanTech did not breach the Agreement. There are also no material facts in dispute that CleanTech never granted to Adkins the right to use CleanTech's ntellectual property rights upon the termination of the Agreement. As such, CleanTech is entitled to summary judgment on Count I of Adkin's Counterclaims claiming breach of the Agreement (as well as the related affirmative defenses).

 

32 Page Memo of Law Here

 

SkunK

For you number crunchers - we have the price of a COES:  $1,950,000.00

Under the “Purchase Option” of the Corn Oil Agreement the initial l$1,950,000.00 price would have decreased by $160,000.00 on each anniversary of the installation of the corn oil extraction system.

We also have the charge for Annual Maintenace:  $55,000.00 

A numbers Bonanza.

Independent Litigation Coverage

see here

SkunK

Thanks to anon 5:49 AM for the link.
Want more GERS litigation overage?  Reward this blogger for his coverage by visiting his blog a few times by using the link above.  If he sees a spike in visits - he'll get the idea . . .

Fagen Litigation Update

This is a side case - not part of the major litigation.

See Here

And Here
SkunK

A Customer's Newsletter

". . . corn oil did show margin improvement."

"Through Dec. 31, United Ethanol . . . extracted 10,073,661 pounds of corn oil."

“We’re in the process of performing trials with a product that may allow us to increase our corn-oil production.”

See Here

SkunK
PS Thanks to anon 5:48 for the last quote.  The hyphen clotheslined my bot . . .

GERS '037

On January 25, 2013, the parties exchanged their proposed construction of the certain claim (l)imitations in the claims of the '037 patent.

 

CleanTech contends that the claim terms of the ‘037 patent should be construed consistently with their plain and ordinary meaning.

 

Defendants on the other hand proposed claim constructions that are needlessly confusing and read numerous unstated limitations into claim language.

See HERE

SkunK

Defendant's '037

See Here

SkunK

ICM, AOS and Abengoa

ICM Inc. has announced that it signed a contract with Abengoa Bioenergy for the Advanced Oil Separation System (AOS) to be deployed at the company’s Madison, Ill., and Mt. Vernon, Ind., facilities.
See Here

SkunK

NEC is ON!

This updated list shows GreenShift with three Reps at the NEC - which is happening now.  What a great time for the judge to come out with his supplemental Markman ruling.  This should maximize  buzz in the industry.

See Here

A Quick Look at the those on the Proposed GERS' Infringer List

“We have looked at the so-called advanced oil, oil plus, COSS and such other attempts to work around our patents. We are highly confident, and even more so with this latest ruling, that all such attempts plainly infringe our patents.”

Advanced Oil:  A system by ICM here.  Also note the Tricanter System is no longer the lead by the ICM sales team - however it is still available in a PDF file on the bottom of this page.  Yes, the Advance Oil system is patented on paper, but that does not mean the systems in the field do not infringe the family of GreenShift patents.

Major "Advanced Oil" Customer:  Valero and "Advanced Oil" HERE

Oil Plus:  EdeniQ will immediately start marketing the Primafuel’s technology to ethanol producers under the brand name Oil Plus™  SEE HERE

COSS:  A system by SRS Here  (Corn Oil Separation System)

SkunK

Put a link in the notes if you have something that ties a customer to one of the Corn Oil Extraction Systems listed by Dave Winsness above.  I'll post it above and generate a short list of possible future litigants.

Site Update

Very recent update to the GERS home page.  Please note on the home page the link to the PR - and lower on the right side - the link to the ruling.  

SkunK

Major Ruling - GERS PR

The Court disagreed with the defendants’ arguments, and issued a Supplemental Claim Construction Order clarifying that the patents do not require recovery of any particular percentage of oil present in the syrup feed stream.

Significantly, the Court ruled that most of GreenShift’s patent claims cover mechanical processing to recover a product that is largely or mostly oil, and that they are not limited by the amount of oil that is not recovered from the concentrated thin stillage stream.

“We are very pleased with the Court’s ruling,” said David Winsness, GreenShift’s Chief Technology Officer and co-inventor of its patented corn oil extraction technologies. “We have looked at the so-called advanced oil, oil plus, COSS and such other attempts to work around our patents. We are highly confident, and even more so with this latest ruling, that all such attempts plainly infringe our patents.”

Winsness continued: “Ethanol managers, board members, owners, lenders and other stakeholders that have adopted ‘wait-and-see’ infringement strategies are encouraged to pay careful attention to these events. Licensed producers receive a significant competitive advantage that we have pledged to vigorously defend. We will continue to do so and now look forward to expanding our efforts in the coming months.”

See Here

SkunK

Strategic Victory . . . In My Opinion . . .

In my humble opinion the court's ruling found in the previous blog - methodically chews up and spits out the defendant's best arguments.  As was the case of the first claim construction, it is was difficult to find even the occasional crumb that fell in the direction of the defendants. 

As a long time investor, I have always worn my über-GreenShift bias on my sleeve.  However, I would be interested in which argument (left standing) that any defendant can imagine any court using to eventually rule in their behalf at trial?  (The Boards of Directors of the litigants owe it to their stakeholders to simply read the last ruling and then ask that question of their lawyers.)

The patent claims are now constructed in a very broad and inclusive manner.  The limitations that the defendants argued for, that would have made infringement difficult to prove, have been swept aside by this court as a matter of law.  Although the actual performance numbers of the defendant's plants have been blacked out of the filings, all claimed innocence by way of arguments now failed. 

It appears difficult to continue to claim non-infringement with a straight face. Their re-filings for summary judgement will be telling.  Will they just go through the motions and ignore the obvious?  Will they simply try to re argue the decision the court has already made?  I suggest that course will not amuse the court and will signal the beginning of the end.  With this claim constructions they are left with little defense.  Rather than a defense of infringement, their best option seems to be to create a diversionary cloud of dust around the facts by an attack on the court's rulings, the patent office's findings or the inventors' integrity.  Wait - they already did each!  No dry powder left? . . .  In any case their next move should prove telling.

If this is the case, in order to win non-infringement, the defendants need for this court's claim construction to be thrown out on appeal.  I do not see an argument by the defense that the court has not already dismantled that could form the core of an appeal.  Sure, anything can be appealed, but an appeal is based on the evidence already presented.  You cannot on appeal, pull a rabbit out of your hat - unless that rabbit had already been formally introduced.   Yes, an appeal will cause a delay to the inevitable.  And if delay is the goal then an appeal is the deal. 

Just to review the course ahead as I understand it:  The federal court here does claim construction and discovery and summary judgement.  If things go past the summary judgement phase (and with the tone of this last decision it is not entirely clear that it will) the cases are then sent back to the original jurisdictions for trial based on the common claim construction and discovery.  The individual trials then basically decide if that particular defendant - based on information about the defendant's actions - compared to the claim construction - constitute infringement.  If all defendants violated (or did not violate) the patents as the claims are now constructed -  then the courts should all decide the same way. 

SkunK

As observers have noted, court victories do not dictate or even (necessarily) affect short term stock price.  It should go without saying that I do believe that the results of this case will eventually have a huge effect on the PPS (one way or the other).