Dispute over biofuels tech leads to a third round of litigation

A long-simmering dispute over biofuels technology has resulted in a Massachusetts company suing Iowa’s Clean Fuels Alliance America for allegedly disclosing confidential company information now being used by an Ames company.

It’s the third round of litigation involving Hull Partners, a Massachusetts company that is involved in the research for biodiesel fuels, and Clean Fuels Alliance America, an Iowa nonprofit formerly known as the National Biodiesel Board.

Court records indicate that in 2016 Hull was approached by the alliance, which included Renewable Energy Group, or REG, a company based in Ames. The alliance was hoping to collaborate on the development of a biodiesel fuel additive that would meet California’s strict standards.

The alliance and Hull eventually developed what they called a Cooperative Research and Development Agreement and then signed a nondisclosure agreement pertaining to Hull’s “know how, testing and research” of biodiesel fuel mixtures. Hull and the alliance also signed a contract that, in Hull’s view, assigned intellectual property rights, including patent rights, to Hull.

In 2019, the partnership between Hull and the alliance – then still known as the National Biodiesel Board — splintered. The alliance sued Hull along with its president and majority shareholder, Pat McDuff. The alliance alleged McDuff had disclosed confidential information on fuel-testing strategies and that McDuff’s efforts were directly contrary to the mission of increasing the use of domestically produced biodiesel fuel.

McDuff’s work, the alliance argued, was “a direct attack on biodiesel” and would harm the viability of the biodiesel industry in California. Within three months, however, the lawsuit was tossed out of court after a judge ruled the alliance had filed suit without first exhausting the dispute-resolution procedures to which it had agreed.

In February 2022, Hull sued the alliance, seeking a declaratory judgment as to its rights under the contract for patents and intellectual property rights. The alliance argued the contract was merely a licensing agreement that didn’t grant all patents and intellectual property to Hull.

Court documents indicate Hull eventually dropped its challenge to the alliance’s claim of ownership and control over the patents, and the lawsuit between the parties was dismissed earlier this month, with both sides agreeing to pay their own legal expenses.

Now, however, Hull has filed a new lawsuit in U.S. District Court for the Southern District of Iowa, arguing that after it disclosed to the alliance confidential corporate information pertaining to biodiesel fuel mixtures, the alliance allegedly breached the nondisclosure agreement and REG used Hull’s information to further its own research and testing.

Hull alleges that REG now produces and sells biodiesel fuel mixtures that were produced using Hull’s information.

Hull is seeking to have the courts rescind the agreement pertaining to patents and intellectual property rights, and award Hull damages on either of two theories: Either the alliance fraudulently induced Hull into signing what the alliance knew was a licensing agreement, or both parties were in error in believing the deal was an assignment of rights to Hull and not merely a licensing agreement.

The alliance and REG have yet to file a response to the lawsuit.