Gevo acquires Butamax patent estate

It has been 6 years since Butamax and Gevo settled their bio-isobutanol patent war and both companies have gone on to their separate ways as the companies have licensed all of their respective patents to each other, with rights to sub-license their respective technologies.

Since then, Butamax Advanced Biofuels, formerly a joint venture between BP and DuPont, has been quiet in its bio-isobutanol activities as the company went through reorganization following DuPont’s merger with Dow.  Butamax is now a subsidiary of BP and Corteva Agriscience, formerly the ag unit of DowDuPont which was spun off as an independent public company. However, back in 2017, Butamax acquired Nesika Energy LLC and its ethanol facility in Scandia, Kansas, with plans to add a bio-isobutanol capability to the site. While it was believed that the Scandia plant has the capacity to produce bio-isobutanol, the facility did not produce any relevant commercial production as far as the blog knows although we’ve been hearing that it could start production anytime if the economics for producing bio-isobutanol makes sense to the company.

With the recent announcement on Gevo’s patent acquisition from Butamax last week, the blog wonders if Butamax will ever produce any bio-isobutanol via the Nesika facility or maybe the Nesika facility will be sold to Gevo. Gevo announced that it will acquire certain patents from Butamax and its affiliate Danisco US Inc., leaving Gevo as the only entity with full rights to sub-license the entire Gevo/Butamax isobutanol and isobutanol derivatives patent estate in the fields of fuels, isooctane, industrial chemicals, isobutylene, oligomerised isobutylene, and paraxylene (remember the Gevo bio-PX project with Toray?). By the way, if you’re wondering why Danisco is included here, Butamax has been using the enzyme technologies of the former DuPont Danisco Cellulosic Ethanol (DDCE) business which became part of the DuPont Biofuel Solutions business when DuPont acquired Danisco in 2011.

Back to the asset purchase agreement by Gevo, the company said this will provide direct ownership and management over the entire known isobutanol patent portfolio of Butamax.  The company said this will eliminate the complexity for out-licensing that existed under the 2015 patent cross-license agreement (see graphic below) and gives Gevo more flexibility in adding to the combined patent estate.

Gevo/Butamax 2015 Cross-license patent agreement

Gevo said it has commissioned Peak Value IP LLC last year to complete a valuation of its worldwide IP that could be licensed and monetized by the company. This valuation included the Butamax-owned patents available for Gevo to use and the Gevo-owned patents, patent applications, trade secrets and know-how.  The analysis reportedly yielded an investment valuation of $412 million for the full scope of the Gevo IP portfolio. The Butamax patent estate acquisition is expected to increase Gevo’s IP property value now that the company owns the Butamax patents.

Just yesterday, Gevo also announced that it has received a patent (11,078,433) from the US Patent and Trademark Office (PTO) for a process that encompasses upgrading ethanol and bio-based alcohols into drop-in, bio-based diesel and jet fuel products. Entitled, “Conversion of Mixtures of C2-C8 olefins to jet fuel and/or diesel in high yield from bio-based alcohols.” The patented process reportedly establishes a new technology and route to hydrocarbons in a simple catalytic process that did not previously exist which the company says creates an opportunity for Gevo to diversify ethanol production to help meet the increasing demand for renewable diesel and jet fuel.