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Aemetis, Inc. Message Board

  • prince_ashargin prince_ashargin Sep 9, 2013 7:41 PM Flag

    Lawsuit Fright Night

    GERS is asking for a jury trial in its lawsuit against AMTX. Given that jury trials, with appeals and everything, sometime take years, this GERS lawsuit thing is only of interest now to stockholders of AMTX should the judge in the case grant the GERS request for a preliminary injunction. If this were another business or if Aemetis wasn't in the midst of plant production, the possibility of a preliminary injunction might well be a matter of major concern. However, judges have much discretion in such cases, and must take into consideration who would be more harmed by an injunction, the plaintiff or the defendant. In particular, if a preliminary injunction would idle a major manufacturing plant and put scores or hundreds of employees out of work, the judge may well decide to maintain the status quo and determine liability only after a full trial, thus avoiding the idling of the plant and workers. Clearly the Keyes plant falls into that category where it would be better to go to a full trial, considering the hardship to all the families that would be involved.

    The second reason that a preliminary injunction may be unlikely has to do with the bond that GERS would have to put up if the injunction were granted. GERS would have to convince some insurance company or bondsman to pay the potentially millions of dollars in sales that a plant shutdown would cost Aemetis should something be found wrong with the GERS patent case. This potentially prohibitive cost should be kept in mind, especially since GERS is in such dire financial shape, and has a stock closing at $0.0006 today.

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    • Well stated Prince - onward and upward.

    • 100% Wrong!
      #1 The lawsuit against patent infringing AMTX has just been transferred as a tag along to the Southern District of Indiana MDL case joining the 21 ethanol plants under suit.

      This is not good for patent infringing AMTX considering the Indiana case has been ongoing since 2009. The judge has already rejected the "defense" of prior art. The judge rejected the defense of "95%." Which means infringers tried to say since they're unable to extract 95% of the oil like GERS' licensee's, they claimed they weren't infringing.

      In fact, AMTX is now a tag along to a case where the judge has ruled against every single defense the other infringers could come up with. The USPTO also rejected the supposed "sale bar" letter. The USPTO issued GERS another patent even after consideration of the last remaining defense. The USPTO ruled GERS was within their rights of testing.

      The case AMTX has been transferred to has already been going on for years and the good judge interpreted the claims of the patent in GERS' favor.

      #2 An injunction wouldn't force AMTX to stop making ethanol, rather to stop extracting oil. Since oil extraction is key to making a profit, an injunction would cut off their profitability.

      Lastly, the judge is considering a motion for Summary Judgment against the infringing producers now and a trial may not be needed. Also, in the overall scheme of things, an injunction would shut down only infringing oil systems, not the countless systems under license.

      GERS has $3.8M in cash, an injunction bond is 10%. So they could cover $38M. AMTX's liability stands at $3.2M. The financial shape of GERS vs AMTX is enough to prove the balance of interest in GERS' favor.

      Sentiment: Strong Sell

      • 1 Reply to slashnuts
      • Thanks. Do you have a link to somewhere where it says that the AMTX lawsuit has been melded into another case involving these 29 companies? I assume that preliminary injunctions were sought against these 29 other companies in the other cases. Is that true? Against how many of the other companies did the judge grant the injunction? I'd be interested in that. I assume that all 29 are still in business.

        Last year the Keyes plant shut down because the high price of corn made producing ethanol unprofitable. Of course, there was nothing stopping the company from continuing to make ethanol just because the price of corn was high. It merely made it unprofitable to do so. You say that oil extraction is the key to making a profit, and an injunction "would cut off their profitability." If those elements of your argument are really true, couldn't AMTX argue that an injunction would cut off the plant's profitability, forcing the company to close the plant and lay off its workers?

        It's nice that GERS has $3.8M in cash, and doesn't need it for such mundane things as running a company, or for anything else at all, but can devote all $3.8M to the purchase of bail bonds. In these 29 other instances, did GERS ever put up any bonds? Do you have figures?

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