Previous posts (e.g., here, here, here, and here) have covered a rash of fraudulent biofuels credits schemes in which companies falsely claim to produce biofuels and sell fake credits on the Renewable Identification Numbers (RINs) market.

A RIN is a numeric code generated by a renewable fuel producer or importer that represents a gallon of renewable fuel, and certain “obligated parties” in the fuel industry and related businesses can acquire RINs as a way to comply with the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard Program.

There have been a number of such schemes exposed over the last few years, and some of the individuals perpetrating them prosecuted and punished.

According to a spokesman for a biodiesel trade group quoted in this StarTribune article, the RIN scams have hurt the biofuels industry by making obligated parties more wary of purchasing the credits from biodiesel producers.

The EPA has been taking steps to mitigate this problem, including in 2014 promulgating additional regulations to ensure oversight of RIN generation and improve the RIN market (see the story here on Biofuels Digest).

Now the EPA is teaming with the Commodities Futures Trading Commission (CFTC) in an attempt to improve regulation and enforcement of RINs and renewable fuels markets.  The two agencies recently entered into a Memorandum of Understanding (MOU) to share information and provide inter-agency advice.

In particular, the EPA will share its information on RINs and renewable fuels markets while the CFTC will advise the EPA on oversight and enforcement to reduce fraud:

The Parties intend to coordinate, cooperate and share information . . . in the possession of the EPA with regard to the RIN and renewable fuels markets in connection with the respective regulatory and enforcement responsibilities of the Parties. . . .The CFTC . . . will use the information to advise EPA on techniques that could be employed to minimize fraud, market abuses or other violations, and to conduct appropriate oversight in RIN and renewable fuel markets to aid EPA in successfully fulfilling the EPA’s statutory functions under [the] Clean Air Act . . .”

Let’s hope this inter-agency cooperation will succeed in reducing biofuels credits greenwashing.

A Green Patent Complaint Update from fall 2014 discussed one of the patent lawsuits between Cree and Harvatek in which Cree asserted several patents relating to white light LED technology.

One of those patents – U.S. Patent No. 6,600,175, entitled “Solid state white light emitter and display using same” (‘175 Patent) – was the subject of an ex parte reexamination proceeding in the U.S. Patent and Trademark Office (USPTO).

During the reexam, Cree added six claims to the patent.  The new claims  at issue are directed to the production of white light through “down-conversion” of blue light from LEDs.  Down conversion means absorbing high energy (shorter wavelength) light and re-emitting it as lower energy (longer wavelength) light to produce light of a desired wavelength, i.e., color.

The patent examiner rejected those claims as obvious over multiple combinations of prior art references including three particular patent references, and the USPTO’s Patent Trial and Appeal Board (PTAB) affirmed the examiner’s reasoning and conclusion.

In a recent decision, the U.S. Court of Appeals for the Federal Circuit, showing much deference to both the examiner and the PTAB, rejected all of Cree’s arguments on appeal and affirmed the PTAB’s obviousness holding.

The claims of the ‘175 Patent at issue recited an LED having a “down-converting luminophoric medium for down-converting the radiation emitted by the light-emitting diode to a polychromatic white light…”  In lighting applications, luminophoric materials are commonly called phosphors.

The primary prior art references were the Pinnow patent, which discloses a display system that creates black and white images using a blue laser and appropriate phosphors and explains how to make white light by down conversion; the Stevenson patent, which discloses LED light that may be converted to lower frequencies with good conversion efficiency using organic and inorganic phosphors; and the Nakamura patent, which discloses a gallium nitride (GaN) LED that emits a blue light that was brighter than similar, previously developed LEDs.

In the reexam, the examiner found it would have been obvious to substitute the LED of Stevenson with either the known UV light emitting or blue light emitting GaN-based LED in Nakamura, and this would be a simple substitution of one known element for another to gain the predictable result of brighter emission by the phosphors.

The PTAB agreed with the examiner’s reasoning and conclusion that the combination of Stevenson, Pinnow, and Nakamura rendered the ‘175 Patent claims obvious:

[T]he combined teachings of Stevenson, Pinnow, and Nakamura would have suggested to an artisan of ordinary skill to use a blue LED on a single die to create white light via “down-conversion” because Nakamura’s blue LED is more powerful than Stevenson’s older, less-efficient LED in terms of power and brightness and, as such, is more suitable with a “down-conversion” process to product white light…

According to the PTAB, the invention of the ‘175 Patent is “nothing more than a new application of a high-power, high-brightness blue LED developed by Dr. Nakamura in late 1993.”

The Federal Circuit opinion does not add much analysis to that of the patent examiner and the PTAB.  Rather, it is essentially a series of refutations of Cree’s arguments on appeal.  Throughout, the appeals court consistently defers to the PTAB’s conclusions.

In response to Cree’s contention that the Board erred by by assuming that it was disclosed in a single prior art reference (Pinnow) to make white light from a monochromatic LED through down conversion, the court said Pinnow provided, according to the Board, a general disclosure of down conversion for creating white light, which was “a perfectly reasonable conclusion.”

Cree also argued that the Board misread the declarations of Cree’s experts.  Again, the Federal Circuit found the conclusion the Board drew from the expert testimony that down conversion was a known solution for generating white light from a blue LED was “reasonable” and “supported by substantial evidence.”

Cree further argued that neither the examiner nor the Board articulated a rational motivation to combine the teachings of Pinnow, Stevenson, and Nakamura.  The court again disagreed, finding the Board “provided a sufficient, non-hindsight reason to combine the references.”

Perhaps one lesson here, though not really news, is to make sure to present all of your best arguments and evidence in the lower tribunals and not count on the appellate process to bail you out.

Previous posts (here and here) discussed the Volkswagen emissions scandal in which the German automaker intentionally programmed a number of its diesel vehicles to activate emissions controls only during testing.

The vehicles’ software allowed the nitrogen oxide (NOx) output to satisfy U.S. emissions standards during testing while producing much higher emissions during actual driving conditions.

A few months ago, the U.S. Department of Justice (DOJ) filed a civil complaint against Volkswagen seeking injunctive relief and monetary penalties for the German automaker’s actions.  That lawsuit was filed at the request of the U.S. Environmental Protection Agency (EPA) and focused on the deception around the government testing.

Recently, the Federal Trade Commission (FTC), the U.S. government’s consumer protection and competition watchdog, sued Volkswagen on behalf of American consumers for false advertising in connection with the emissions scandal.  According to the complaint, the FTC brought this action:

…in connection with Defendant’s false advertising that its “Clean Diesel” vehicles had low emissions, complied with state and federal emissions standards, were environmentally friendly, and retained a high resale value.

The complaint details VW’s extensive advertising campaign directed at “progressive and “environmentally-conscious” consumers touting “diesel’s environmental and economic advantages.”  This advertising including a Super Bowl ad and other nationally-televised spots, a social media campaign, print advertising,and other marketing statements such as:

• print advertising including the slogan “Diesel – It’s No Longer A Dirty Word”
• a 2009 promotional mailer claiming the Jetta TDI Clean Diesel engine is “designed to reduce emissions”
• a press release for the 2014 Touareg stating that the “deNOx diesel converter . . . helps reduce NOx emissions by up to 90 per cent”

The FTC alleges that VW’s marketing strategy materials indicated that one of the “key messages” it intended to convey through the word “clean” was that its “Clean Diesel” vehicles produce “NOx emissions [that are] reduced by 95 percent[.]”

Furthermore, according to the complaint, VW’s advertisements and marketing materials also falsely claimed that its vehicles complied with state and federal emissions standards.  Some of those materials included statements such as “Clean Diesel” vehicles “meet the strictest EPA standards in the U.S.”

Additional advertising claims at issue included statements that the vehicles are “environmentally-conscious,” “eco-conscious,” or “green” and that the “Clean Diesel” vehicles would have a higher resale value than comparable gasoline vehicles.

Among other causes of action, the FTC alleges that these and other advertising and marketing statements constitute unfair or deceptive practices in violation of Section 5(a) of the FTC Act that have caused substantial injury to consumers, who have “spent billions purchasing or leasing” VW vehicles.

The FTC is requesting that the court enter a permanent injunction to prevent future violations and other equitable relief to refund the monies paid by consumers for the vehicles at issue.

In addition to the feds, the states are starting to get involved as well.  The attorney general of Kentucky filed a similar false advertising lawsuit against VW, alleging violations of the state’s Consumer Protection Act (see story here).

Bucking the recent trend of donating patents relating to electric vehicle technology, EV startup Whisker Electric announced that it would maintain its patents as private intellectual property.

In a statement made today, the company’s CEO, Waylon Tusk, had this to say:

Whisker is totally committed to protecting, defending, and enforcing its intellectual property.  Accordingly, we will not donate any of our patents.  We are very paranoid about big car companies copying our technology.  So we’re going to sue anyone who tries to use our technology in good faith, bad faith, or any other faith.  We don’t care what this may mean for the development of the electric vehicle industry.

“You can’t have our patents!  You can’t even license them!  I don’t care how much you want them or how much you’re willing to pay!” added CTO and Co-founder Norm Bradelson in a surprisingly testy conference call with reporters today.

The news from Whisker is in sharp contrast to a recent string of announcements by EV maker Tesla and two major automobile manufacturers either completely opening their EV and related patent portfolios or opening them for no fee licensing or paid licensing.

However, the reaction has been swift and positive, with the company receiving multiple unsolicited offers of major funding rounds from respected VC firms within minutes of Whisker’s announcement.

In addition, Whisker’s VP of Business Development, Austin Milbarge, told Green Patent Blog that over 10,000 new pre-orders have been made today for the company’s latest model EV.

The company has also received a flood of job applications from young engineers, including some current and former Tesla employees, particular those that were named inventors on Tesla’s patents.

The news even made it into the American presidential campaign when a reporter asked Donald Trump, the front runner for the Republican nomination, his view of Whisker’s announcement.  Trump responded, “I like these guys.  This is my kind of selfish, short-sighted capitalism.  Though personally I prefer to drive a Hummer.”