GS Cleantech Corp. v. Adkins Energy LLC
| Decision Date | 02 March 2020 |
| Docket Number | 2017-1832,2017-1838,2016-2231 |
| Citation | 951 F.3d 1310 |
| Parties | GS CLEANTECH CORPORATION, Plaintiff-Appellant v. ADKINS ENERGY LLC, Defendant-Cross-Appellant GS Cleantech Corporation, Greenshift Corporation, Plaintiffs-Appellants Cantor Colburn LLP Interested Party v. Big River Resources Galva, LLC, Big River Resources West Burlington, LLC, Lincolnland Agri-Energy, LLC, Iroquois Bio-Energy Company, LLC, Cardinal Ethanol, LLC, Lincolnway Energy, LLC, ICM, INC., Bushmills Ethanol, Inc., AL-Corn Clean Fuel, LLC, Chippewa Valley Ethanol Company, LLP, Heartland Corn Products, GEA Mechanical Equipmentus, INC., as Successor-In-Interest To GEA Westfalia Separator, Inc. Pursuant to the Notice of Merger Filed on 4/28/2011, Ace Ethanol, LLC, Blue Flint Ethanol LLC, UNITED Wisconsin Grain Producers, LLC, Flottweg Separation Technology, Inc., Adkins Energy LLC, Aemetis, Inc., Aemetis Advanced Fuels Keyes, Inc., Little Sioux Corn Processors, LLLP, Guardian Energy, LLC, Western New York Energy, LLC, Southwest Iowa Renewable Energy, LLC, Pacific Ethanol Magic Valley LLC, Pacific Ethanol Stockton, Homeland Energy Solutions, LLC, Pacific Ethanol, Inc., David J. Vander Griend, Defendants-Appellees |
| Court | U.S. Court of Appeals — Federal Circuit |
Steven B. Pokotilow, Stroock & Stroock & Lavan LLP, New York, NY, argued for plaintiffs-appellants. Also represented by Binni N. Shah.
John M. Weyrauch, Dicke, Billig & Czaja, PLLC, Minneapolis, MN, argued for defendants-appellees Big River Resources Galva, LLC, Big River Resources West Burlington, LLC, Lincolnland Agri-Energy, LLC, Cardinal Ethanol, LLC, Lincolnway Energy, LLC, ICM, Inc., Flottweg Separation Technology, Inc., Blue Flint Ethanol, LLC, David J. Vander Griend. Defendants-appellees Big River Resources Galva, LLC, Big River Resources West Burlington, LLC, Lincolnland Agri-Energy, LLC, Cardinal Ethanol, LLC, ICM, Inc., Flottweg Separation Technology, Inc., Little Sioux Corn Processors, LLLP, Guardian Energy, LLC, Western New York Energy, LLC, Southwest Iowa Renewable Energy, LLC, Pacific Ethanol Magic Valley LLC, David J. Vander Griend also represented by Peter R. Forrest.
Michael Buchanan, Patterson Belknap Webb & Tyler LLP, New York, NY, argued for defendants-appellees ACE Ethanol, LLC, Aemetis Advanced Fuels Keyes, Inc., Aemetis, Inc., Al-Corn Clean Fuel, LLC, Big River Resources Galva, LLC, Big River Resources West Burlington, LLC, Blue Flint Ethanol LLC, Bushmills Ethanol, Inc., Cardinal Ethanol, LLC, Chippewa Valley Ethanol Company, LLP, Flottweg Separation Technology, Inc., GEA Mechanical Equipment US, Inc., Guardian Energy, LLC, Heartland Corn Products, Homeland Energy Solutions, LLC, ICM, Inc., Iroquois Bio-Energy Company, LLC, Lincolnland Agri-Energy, LLC, Lincolnway Energy, LLC, Little Sioux Corn Processors, LLLP, Pacific Ethanol Magic Valley LLC, Pacific Ethanol Stockton, Pacific Ethanol, Inc., Southwest Iowa Renewable Energy, LLC, United Wisconsin Grain Producers, LLC, David J. Vander Griend, Western New York Energy, LLC, Adkins Energy LLC.
Keith David Parr, Locke Lord LLP, Chicago, IL, for defendant-cross-appellant. Also represented by Hugh S. Balsam, Wasim K. Bleibel, James Thomas Peterka.
Spiro Bereveskos, Woodard Emhardt Henry Reeves & Wagner, LLP, Indianapolis, IN, for defendant-appellee Iroquois Bio-Energy Company, LLC. Also represented by Daniel James Lueders, Lisa A. Hiday.
Glenn Johnson, McKee, Voorhees & Sease, P.L.C., Des Moines, IA, for defendant-appellee Lincolnway Energy, LLC.
John Donald Best, Michael Best & Friedrich, LLP, Madison, WI, for defendants-appellees Bushmills Ethanol, Inc., Chippewa Valley Ethanol Company, LLP, Heartland Corn Products, United Wisconsin Grain Producers, LLC. Also represented by Kenneth M. Albridge, III, John C. Scheller.
Marc Andre AL, Stoel Rives LLP, Minneapolis, MN, for defendant-appellee Al-Corn Clean Fuel, LLC.
Ruth Rivard, Stinson LLP, Minneapolis, MN, for defendant-appellee Blue Flint Ethanol LLC.
Camille L. Urban, Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, PLC, Des Moines, IA, for defendants-appellees Aemetis, Inc., Aemetis Advanced Fuels Keyes, Inc., Pacific Ethanol Stockton, Homeland Energy Solutions, LLC, Pacific Ethanol, Inc. Also represented by Michael A. Dee.
Before Reyna, Wallach, and Hughes, Circuit Judges.
The U.S. District Court for the Southern District of Indiana ("District Court") found Appellants GS CleanTech Corporation and Greenshift Corporation's (together, "CleanTech") 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") (together, "the Patents-in-Suit") unenforceable due to inequitable conduct. Corrected Memorandum Opinion & Order after Bench Trial, In re: Method of Processing Ethanol Byproducts & Related Subsystems ( '858 ) Patent Litig. , No. 1:10-ml-02181-LJM-DML (S.D. Ind. Sept. 15, 2016), ECF No. 1653 (J.A. 236–313) (Opinion and Order); see J.A. 314–15 (Judgment).
CleanTech appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2012). We affirm.
The Patents-in-Suit are directed to the recovery of oil from a dry mill ethanol plant's byproduct, called thin stillage. '858 patent, Abstract.2 The Patents-in-Suit disclose a method of "successful" "recover[y] [of] the valuable oil from th[e] [thin stillage] byproduct," id. col. 1 ll. 52–53, by, for example, "evaporating the thin stillage to form a concentrate," id. col. 2 ll. 23–25, or syrup, and then "separating the oil from the concentrate using a disk stack centrifuge," id. col. 2 ll. 25–27.
Independent claim 8 of the '858 patent recites:
A method of recovering oil from thin stillage, comprising, in sequence: evaporating the thin stillage to create a concentrate having a moisture content of greater than 30% by weight and less than about 90% by weight; and centrifuging the concentrate to recover oil.
Id. col. 6 ll. 26–30.3 Independent claims 1, 10, and 16 include a separate post-evaporation heating step. Id. col. 5 l. 65–col. 6 l. 7 (Independent Claim 1), col. 6 ll. 34–42 (Independent Claim 10), col. 6 ll. 59–64 (Independent Claim 16). All dependent claims recite various combinations of temperature, pH, or moisture content ranges for the syrup or the use of the centrifuge. Id. col. 6 ll. 8–33, 43–58. Independent claim 30 of the '484 patent similarly recites a "method of recovering oil from thin stillage[,]" except it is by "mechanically processing the thin stillage concentrate" instead of centrifugation. '484 patent col. 8 ll. 29–37.
Independent claim 1 of the '516 patent provides the additional step of "evaporating water from the thin stillage to form a thin stillage concentrate." '516 patent col. 6 ll. 11–19. Independent claim 7 includes the additional step of "separating distiller wet grains and thin stillage from the whole stillage" and using a disk stack centrifuge to separate the "oil from the thin stillage concentrate." Id. col. 6 ll. 34–42. Independent claim 1 of the '517 patent also recites the creation of the thin stillage concentrate, within a broader moisture content range. '517 patent col. 6 ll. 32–37.
In 2000, David Cantrell founded Vortex Dehydration Technology ("VDT"), J.A. 117, with the purpose of selling products and methods of processing factory waste for resale, J.A. 118. In 2002, David Winsness joined VDT as its Chief Technology Officer. J.A. 117. Later in 2002, Messrs. Cantrell and Winsness (collectively, "the Inventors") met Greg Barlage, a "market unit manager for equipment sales" at the company Alfa Laval AB, which sold animal and vegetable oil processing equipment. J.A. 117, 118. Mr. Barlage approached the Inventors with the proposal that VDT use Alfa Laval oil processing equipment—such as evaporators and centrifuges—in its processes. J.A. 119. Soon, the Inventors began developing an oil recovery product specifically designed for animal processing waste products, using centrifuges provided by Alfa Laval. J.A. 119.
Relevant here, VDT maintained a business relationship with Agri-Energy LLC ("Agri-Energy"), J.A. 121, which operated a dry-mill ethanol plant in Minnesota, J.A. 120.5 Starting sometime before June 2003, Mr. Cantrell shifted his focus from meat and fish byproduct processing to the creation of an ethanol oil recovery system and hired employees from Alfa Laval and Agri-Energy, as well as a marketing team. J.A. 122. In June 2003, Mr. Cantrell sent an email to two Agri-Energy employees, including one named George Winter, that included information about how VDT's oil recovery system for processed animal waste might be applicable in an ethanol plant, as well as an image of an oil recovery system with a centrifuge and an operational cost spreadsheet. J.A. 123.
Subsequently, Mr. Cantrell informed Mr. Barlage that Agri-Energy would send Mr. Barlage a sample of its "thin stillage and syrup" for oil recovery testing using a centrifuge. J.A. 124.6
In June 2003, Mr. Barlage performed oil recovery tests on the Agri-Energy samples by heating each sample to a temperature of 176 ºF and running them through an Alfa Laval centrifuge. J.A. 125. The syrup had a pH of "approximately 4" and a "moisture content between 70% and 80%." J.A. 125. Based on the tests, Mr. Barlage concluded that it was easier to divest oil from syrup than from thin stillage. J.A. 125. In his report ("June 2003 Report"), Mr. Barlage concluded that "[s]omething in the evaporation process allows for the product to breakdown to a level where the oil can be taken out easily[,]" and recommended additional testing at a plant. J.A. 110092.
In early July 2003, Mr. Barlage traveled to Agri-Energy and tested VDT's oil recovery system, including a centrifuge, with Agri-Energy's ethanol syrup ("July 2003 Test"). J.A. 128–29. Again, the test included a syrup with a pH of around 4, with a moisture content between 70% and 80%, and the test was...
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Case Comments
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