Ingevity to challenge U.S. court ruling on emission control patent & expects limited impact on commercial operations or finan...
November 18 2020 - 5:45AM
Business Wire
Ingevity Corporation (NYSE:NGVT) today announced that it intends
to challenge the decision of the U.S. District Court for the
District of Delaware, as it relates to Ingevity’s patent covering
canister systems used in the control of automotive gasoline vapor
emissions (U.S. Patent No. RE38,844). The district court’s summary
judgment decision came yesterday in advance of a scheduled January
trial on a patent infringement complaint brought by Ingevity
against BASF Corp., Florham Park, New Jersey. Ingevity’s suit
against BASF, alleges that BASF infringed Ingevity’s patent through
testing canister systems using a BASF-developed product that would
presumably compete with Ingevity’s “honeycomb” technology.
“As we said during our webinar on Ingevity’s Performance
Materials business held on June 25, 2020, we continue to believe in
the strength of our intellectual property and the merits of our
case against BASF,” said Ed Woodcock, executive vice president and
president, Performance Materials, for Ingevity. “As a result, we
intend to pursue our remedies to overturn this decision, including
an appeal to the Court of Appeals for the Federal Circuit, if
necessary. Ingevity is the established technology leader in
providing world-leading products for use in automotive evaporative
emissions control systems. Our leadership and expertise in this
application are unique and it is incumbent upon us to defend our
innovations against infringement – including premature development
activity – for the benefit of our customers and shareholders.”
Ingevity’s ‘844 patent covers certain canister systems designed
to achieve gasoline vapor emission levels that comply with the most
stringent U. S. Environmental Protection Agency (EPA) Tier 3 and
California LEV III regulations. Ingevity’s patent rights preclude
third parties – including competitors, suppliers, testing
facilities and automotive original equipment manufacturers (OEMs) –
from engaging in development activities, such as prototype
creation, testing, marketing and qualifying, that fall within any
of the patent’s claims during the life of the ‘844 patent which is
set to expire in March 2022.
The district court’s decision relies on and reaches the same
conclusion as a previous decision by an administrative law judge
with the U. S. International Trade Commission in an action brought
against MAHLE Filter Systems, Inc. and others that Ingevity has
already appealed to the Court of Appeals for the Federal Circuit.
The company believes that both of these decisions are based on an
inaccurate interpretation of intellectual property law. “The patent
has twice been upheld by the U.S. Patent and Trademark Office, and,
put simply,” said Woodcock, “we want our day in court.”
Woodcock also stated that Ingevity expects limited impact on its
commercial operations or financial results through patent
expiration in March 2022 specifically as a result of yesterday’s
decision. “We’ve always said that we expect competition for our
‘honeycomb’ scrubbers once the ‘844 patent expires,” he said.
“Given that it typically takes automotive OEMs several years to
redesign and introduce automotive platforms, any new entrant into
the ‘scrubber’ market would most likely occur after the ‘844
patent’s expected natural expiry anyway.”
Ingevity also stated that the U.S. District Court decision has
no bearing on the company’s ‘649 patent family in the area of
canisters designed to reduce emissions in new, emerging “low purge”
engines. “We believe that our ‘649 patent currently applies to
systems that are on 15% to 20% of U.S. and Canadian vehicles and
could apply to anywhere from 30% to 70% of future near-zero fuel
system designs,” said Woodcock. This intellectual property is
currently protected by patents not only in the United States, but
in China and Europe as well.
“Our activated carbon products are optimally manufactured to
both capture gasoline emissions and return them to the engine for
their intended use and do so in a way that provides the OEM with
the greatest flexibility, minimal canister design, quality and
reliability. This is where Ingevity is differentiated among other
players, and this is the fundamental basis of our competitive
advantage,” said Woodcock.
The automotive gasoline vapor emission control products are part
of Ingevity’s Performance Materials segment which has manufacturing
facilities in Covington, Virginia; Wickliffe, Kentucky; Waynesboro,
Georgia; Changshu, China; and Zhuhai, China. Ingevity estimates
that globally approximately 8 million gallons of gasoline are
captured and recovered by the company’s activated carbon products
every day.
Cautionary Statements About Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. Such
statements generally include the words “will,” “plans,” “intends,”
“targets,” “expects,” “outlook,” or similar expressions.
Forward-looking statements may include, without limitation,
expected financial positions, results of operations and cash flows;
financing plans; business strategies and expectations; operating
plans; impact of COVID-19; synergies and the potential benefits of
the acquisition of Perstorp Holding AB’s Capa® caprolactone
business (the “acquisition”); capital and other expenditures;
competitive positions; growth opportunities for existing products;
benefits from new technology and cost-reduction initiatives, plans
and objectives; markets for securities and expected future
repurchases of shares, including statements about the manner,
amount and timing of repurchases. Actual results could differ
materially from the views expressed. Factors that could cause
actual results to materially differ from those contained in the
forward-looking statements, or that could cause other
forward-looking statements to prove incorrect, include, without
limitation, adverse effects from the COVID-19 pandemic; risks that
the expected benefits from the acquisition may not be realized or
will not be realized in the expected time period, the risk that the
acquired business will not be integrated successfully and the risk
of significant transaction costs and unknown or understated
liabilities; adverse effects of general economic and financial
conditions; risks related to international sales and operations;
impacts of currency exchange rates and currency devaluation;
compliance with U.S. and foreign regulations concerning our
operations outside the U.S.; changes in trade policy, including the
imposition of tariffs; the impact of the United Kingdom’s
withdrawal from the European Union; attracting and retaining key
personnel; adverse conditions in the global automotive market or
adoption of alternative and new technologies; competition from
producers of alternative products and new technologies, and new or
emerging competitors; competition from infringing intellectual
property activity; worldwide air quality standards; a decrease in
government infrastructure spending; declining volumes and downward
pricing in the printing inks market; the limited supply of or lack
of access to sufficient crude tall oil; a prolonged period of low
energy prices; the provision of services by third parties at
several facilities; natural disasters, such as hurricanes, winter
or tropical storms, earthquakes, tornados, floods, fires; other
unanticipated problems such as labor difficulties, equipment
failure or unscheduled maintenance and repair; protection of
intellectual property and proprietary information; information
technology security breaches and other disruptions; complications
with designing and implementing our new enterprise resource
planning system; government policies and regulations, including,
but not limited to, those affecting the environment, climate
change, tax policies, tariffs and the chemicals industry; and
lawsuits arising out of environmental damage or personal injuries
associated with chemical or other manufacturing processes, and the
other factors detailed from time to time in the reports we file
with the SEC, including those described under "Risk Factors" in our
Annual Report on Form 10-K, our Form 10-Q for the periods ending
March 31, 2020 and September 30, 2020 and other periodic filings.
These forward-looking statements speak only as of the date of this
press release. Ingevity assumes no obligation to provide any
revisions to, or update, any projections and forward-looking
statements contained in this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201118005405/en/
Laura Woodcock
843-746-8197 media@ingevity.com
Investors: Jack
Maurer 843-746-8242
investors@ingevity.com
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