Another Neste Biodiesel Patent Suit is Stayed Pending Reexam

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Previous posts (e.g., here and here) have discussed Neste Oil’s patent infringement suits against competitor Dynamic Fuels involving biodiesel fuels and production processes.

Dynamic Fuels is a joint venture of Syntroleum and Tyson Foods that operates refineries capable of producing allegedly infringing synthetic renewable diesel fuels.

One of the suits has been stayed pending reexamination by the USPTO of Neste’s U.S. Patent No. 8,187,344 (’344 Patent), entitled “Fuel composition for a diesel engine” and directed to diesel fuels made from animal, plant, or fish fatty acids.

In a second lawsuit, the Delaware district court again granted the defendants’ motion to stay litigation pending reexam. The patent-in-suit is U.S. Patent No. 8,212,094 (’094 Patent).

The ’094 Patent is entitled “Process for the manufacture of diesel range hydrocarbons.” The patent relates to a process for the manufacture of diesel range hydrocarbons from a biological feedstock where the feed is hydrotreated and isomerized.

The court found that reexamination was likely to simplify the issues in the litigation and would advance judicial efficiency, particularly in this case where no scheduling conference or discovery has taken place.

The court spent some time analyzing whether granting the motion for a stay would prejudice Neste and answered that question in the negative.

One key issue was whether Neste and Dynamic Fuels are direct competitors, and if so, how large is the market in which they compete. While Neste argued that they are the only two companies operating in the U.S. market for ”paraffinic renewable diesel fuel,” the court disagreed and defined the market much more broadly:

Having considered the parties’ arguments on this point, the court believes that they are merely indirect competitors in the large, subsidy-driven market for biomass-based diesel.

The court also noted that Neste did not request a preliminary injunction in the case, which would have suggested that the parties do directly compete and a stay would cause Neste real prejudice. Thus, the relationship of the parties weighed in favor of a stay:

Here, Neste has failed to seek a preliminary injunction against any of the defendants. In light of this failure and the above determination that the relevant market is actually quite broad, the court does not believe the parties are “direct competitors” such that this sub-factor should weigh against a stay.

Eric Lane is a patent attorney at McKenna Long & Aldridge LLP in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at elane@mckennalong.com

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Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.