Butamax™ Advanced Biofuels, LLC a joint venture between BP and DuPont headquartered in Wilmington, Del., U.S.A., and Gevo, Inc. based in Englewood, Colo., U.S.A., have agreed to end a multi-year patent dispute relating to technologies for the production of bio-based isobutanol.

The settlement that was announced on Aug. 24 ends all of the lawsuits between the two companies and creates a new relationship between them through a worldwide patent cross-license scheme. Both companies have been suing each other, mostly in the U.S. District Court of Delaware, since early 2011.

The cross-license agreement grants both parties patent licenses to all fields for isobutanol and is structured to develop robust and sustainable isobutanol markets. The license will be royalty bearing for Butamax in certain fields and royalty bearing for Gevo in other fields. There are also a number of fields that are royalty-free for both companies. Both parties can sell up to 30 million gallons per year royalty-free into any field.

Butamax will take the lead role in developing the market for isobutanol as an on-road gasoline blendstock. This will include progressing on-going programs to gain required U.S. Environmental Protection Agency (EPA) approvals for mainstream use of 16% isobutanol as a gasoline blend component.

Butamax has also conducted joint research with Underwriters Laboratories (UL), which has demonstrated that these blends can be used safely in fuel storage and dispensing equipment meeting current UL standards. It is expected that UL’s guidance will clear the way for state government agencies to consider and approve the dispensing of biobutanol gasoline fuel blends in the U.S.

In parallel, Gevo will lead the development of the jet fuel market. Gevo has been producing and selling alcohol-to-jet fuel (ATJ) derived from isobutanol since 2011. To date, Gevo’s ATJ has been produced at its demo biorefinery in Silsbee, Texas, using isobutanol produced at its Luverne, Minn., fermentation facility. The company has successfully flown tests flights with the U.S. Air Force, U.S. Army, and U.S. Navy and now expects to secure the MILSPEC certification (JP8 and JP5), enabling bids on future RFPs for renewable jet fuel by the U.S. Defense Logistics Agency. Gevo also intends to begin test flights with the commercial aviation industry, including Alaska Airlines, following receipt of ASTM International certification, which is expected before the end of 2015.

While Butamax and Gevo have cross-licensed all of their patents for making and using isobutanol, both parties will have their own biocatalyst and process technologies. Both Butamax and Gevo are free to license their respective technology packages to third parties. A third-party licensee would be granted a sublicense, and would be subject to terms and conditions that are consistent with the cross-license agreement between Butamax and Gevo.

“We are very pleased to have reached this amicable and fair settlement. Setting up the marketing relationships, as we have done, brings to bear the capabilities of each of the companies,” said Patrick Gruber, Gevo CEO. “We very much look forward to developing a very large, growing and profitable isobutanol market in conjunction with Butamax.”

“The aim of these agreements is to accelerate development of markets for bio-based isobutanol,” said Butamax CEO Paul Beckwith. “This will create exciting opportunities for ethanol producers to expand their businesses by becoming isobutanol producers, at the same time enabling the most competitive isobutanol supply for customers.”