`___________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________
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`HYDRITE CHEMICAL CO.,
`Petitioner,
`
`v.
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`SOLENIS TECHNOLOGIES, L.P.,
`Patent Owner.
`
`___________
`
`Case IPR2015-01592
`Patent No. 8,962,059
`___________
`
`
`
`
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`
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`DECLARATION OF JENNIFER BAILEY
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`SOLENIS EXHIBIT 2004
`Hydrite v. Solenis, IPR2015-01592
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`Protective Order Material
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`Jennifer Bailey Declaration
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`I, Jennifer Bailey, hereby declare:
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`I.
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`Background
`1.
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`I am currently the Global Strategic Product Director for Biorefining of
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`Solenis Technologies L.P. (“Solenis”). This declaration is based on my personal
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`knowledge.
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`2.
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`Solenis, a Delaware based corporation, was formerly known as
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`Ashland Water Technologies (“Ashland”), a commercial business unit of Ashland
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`Inc.
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`3.
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`I started at Ashland in June 2014 as the Global Strategic Product
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`Director for Process Chemistry. Shortly thereafter, Ashland changed its name to
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`Solenis. After that change, I moved into my current role as Global Strategic
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`Product Director for Biorefining. My current responsibilities include establishing
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`the global strategy for the product line, establishing pricing initiatives for the
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`product line, leading product innovation, managing the product life cycle, planning
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`both internal and external promotional strategies, supporting mergers and
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`acquisitions activities, and launching new products.
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`II.
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`Solenis’s Dimension Corn Oil Extraction Aids
`4.
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`Solenis manufactures and distributes, among other things, chemical
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`solutions in the biorefining industry (Ex. 2007, Solenis Quick Facts Webpage at 1).
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`Attached at Ex. 2007 is a true and correct copy of a printout of Solenis’s website
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`titled “Quick Facts” available at http://solenis.com/en/about-us/quick-facts/.
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`Jennifer Bailey Declaration
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`5.
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`Solenis offers a number of innovative solutions to assist biorefineries
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`to stay competitive. One example is Solenis’s DimensionTM corn oil extraction
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`aids (“the DimensionTM products”) that enable fuel ethanol plants to increase their
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`corn oil yield (Ex. 2008, Solenis Biorefining Webpage at 1). Attached at Ex. 2008
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`is a true and correct copy of a printout of Solenis’s website titled “Biorefining”
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`available at http://solenis.com/en/solutions/market-specific-solutions/biorefining.
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`6.
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`Solenis began developing the DimensionTM products in 2009, when
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`the company operated as Ashland Water Technologies (Ex. 2009, Frequently
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`Asked Questions About Solenis’ Corn Oil Extraction Patent at 1). The
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`DimensionTM products are designed and advertised for use in ethanol production
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`processes (id.). The DimensionTM products increase corn oil yield by improving
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`the release of oil during mechanical extraction (id.). Solenis offers the
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`DimensionTM products in both standard formulations as well as custom-formulated
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`products (id.). Attached at Ex. 2009 is a true and correct copy of Solenis’s article,
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`“Frequently Asked Questions About Solenis’ Corn Oil Extraction Patent,”
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`available for download at http://cdn-solenis.netdna-
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`ssl.com/files/9614/4537/3204/CornOilExtractionPatentFAQ.pdf.
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`7.
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`The DimensionTM products improve the release of corn oil during
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`centrifugation by modifying the surface chemistry of solids and oil micelles in the
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`syrup of a corn-to-ethanol process stream (Ex. 2010, DimensionTM Corn Oil
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`Jennifer Bailey Declaration
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`Extraction Aids at 1). Thus, the oil in the treated syrup is more easily released.
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`The Dimensionm products provide a number of benefits including: increased corn
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`oil yield, improved corn oil quality, reduced system deposition, and reduced
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`downtime (id.). Attached at Ex- 2010 is a true and correct copy of a printout of
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`Solenis’s website titled “DimensionTM Corn Oil Extraction Aids.”
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`8.
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`The Dimensionm products include the following: Dimension
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`COE2061K (previously PTV M—5309), Dimension COE2061(previously DPI—
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`461), Dimension COE8058K (previously DPI—428), Dimension COE8058
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`(previously DPI-45 8), Dimension COE8143 (previously DPI-543), Dimension
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`COE8143K (previously DPI—543K), Dimension COE8144 (previously DPI—543S),
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`and Dimension COE8144K (previously DPI-543$ Kosher) (see Ex. 2013, Line
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`Card). Solenis adopted the Dimensionm tradename subsequent to its commercial
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`launch of the underlying products.
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`K—\
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`IH. The Dimension“! Products Have Been Commercially Successful
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`9.
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`The Dimensionm products enabled the corn oil extraction industry to
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`increase corn oil yield, in some cases, by as much as 200 percent (Ex- 2011,
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`“Dimensionm Corn Oil Extraction Aid Increases Corn Oil Yield and Improves
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`Com Oil Quality” at 1). Attached at Ex. 2011 is a true and correct copy of a
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`printout of Solenis’s website titled “DimensionTM Corn Oil Extraction Aid
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`Protective Order Material
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`Jennifer Bailey Declaration
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`Increases Corn Oil Yield and Improves Corn Oil Quality” available at
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`http://solenis.corn/en/industries/biorefmingzcustomer—successes/422/.
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`10.
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`Prior to Solenis’s commercialization of the Dimensionm products in
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`2010, there was no other chemical additive being marketed and sold for increasing
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`corn oil extraction during the corn to ethanol process. I asked my finance team to
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`provide me with sales of the DimensionTM products (including Dimension
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`COE2061K, Dimension COE2061, Dimension COE8058K, Dimension COE8058,
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`Dimension COE8143, Dimension COE8143K, Dimension COE8144, and
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`Dimension COE8 144K) from inception to present; I have attached a document
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`showing those sales as Ex. 2012. I have also attached, as Ex. 2013, a line card
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`showing the developmental nomenclature (which Solenis uses to track sales) and
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`the commercial product name of each of the Dimensionm products. Exhibits 2012
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`and 2013, sales data and line card information, contain infonnation that is kept by
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`Solenis in the ordinary course of business, and I regularly rely on this information
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`in performing my functions in the normal course of Solenis’s business.
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`11. As shown in Ex. 2012, the Dimensionm products were successful
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`from the beginning. Solenis introduced the Dimensionm products to the market in
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`October 2010 (id at 6). In the products’ first full year on the market, Solenis sold
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`1 or about‘ in total sales (id. at 8).
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`Protective Order Material
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`Jennifer Bailey Declaration
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`12.
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`Following the introduction of the Dimensionm products in 2010-
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`2011, other— products began to be introduced into the market by
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`orsolemstjjj
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`Zn ed. at 0.
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`Global Sales $
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`‘ 2012
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`2013
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`2014
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`(US Only) 2 2 K
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`Global LBS
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`(US Only) 2 2 2
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`13.
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`In 2015, sales of the Dimensionm products‘
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`‘ This growth continued into 2016. In the first quarter, Solenis sold
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`14.
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`Currently, there are approximately 216 com—to—ethanol plants in the
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`United States (Ex. 2014, U.S. Ethanol Plants). Of those 216 plants,_
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`“Attached at Ex. 2014 is a true and correct copy of a list of
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`Jennifer Bailey Declaration
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`U.S. Ethanol Plants from Ethanol Producer Magazine available at
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`http://www.ethanolproducer.com/plants/listplants/US/Existing/Sugar-Starch/ and
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`last modified on January 23, 2016. Ethanol Producer Magazine is a commonly
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`used and relied upon source of information in the corn oil industry. I rely on the
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`list of U.S. Ethanol Plants provided by Ethanol Producer Magazine in performing
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`my functions in the ordinary course of business.
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`15. Since launch of the DimensionTM products in October 2010, Solenis’s
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`marketing and promotional materials for them have publicized and focused on
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`adding the DimensionTM products to ethanol production process in order to
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`increase corn oil yield. For example, a brochure for the DimensionTM products
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`states that “Dimension…significantly increase[s] corn yield by improving the
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`release of oil during mechanical extraction,” and “the extraction aids have enabled
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`a number of North American fuel ethanol plants to produce up to three times more
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`corn oil than previous achieved with mechanical means alone” (Ex. 2015,
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`DimensionTM Corn Oil Extraction Aids Brochure at 2). Attached at Ex. 2015 is a
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`true and correct copy of a brochure for the DimensionTM Products that is kept in
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`Solenis’s ordinary course of business. The brochure further notes that “Dimension
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`corn oil extraction aids should be applied as received and fed at a point of adequate
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`mixing” and “[c]ommercial applications confirm that the extraction aids provide of
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`Jennifer Bailey Declaration
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`number of value-added benefits including: increased corn oil yield[,] improved
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`corn oil quality[,] reduced system deposition[, and] reduced downtime” (id.).
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`16. Solenis’s press releases also focus on adding the DimensionTM
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`products in order to increase corn oil yield. For example, in a release titled “New
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`extraction aid from Ashland Inc. increases corn oil yield from ethanol production,”
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`Solenis stated “[e]thanol producers can now capture up to three times more corn oil
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`during processing and extract a higher quality oil thanks to a new product…The
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`new corn oil extraction aid, [the DimensionTM products are] easily introduced into
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`the process and require[] no additional capital expenditure” (Ex. 2016, “New
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`Extraction Aid from Ashland Inc. Increases Corn Oil Yield from Ethanol
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`Production” at 1). The article goes on to state that “[m]any of those who are using
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`our corn oil extraction aid are producing up to three times more corn oil than they
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`previously achieved” (id.). Ex. 2016 is a true and correct copy of Solenis’s press
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`release dated May 9, 2011 entitled “New extraction aid from Ashland Inc.
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`increases corn oil yield from ethanol production” that was maintained in Solenis’s
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`ordinary course of business.
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`17. Similarly, the Solenis website promotes adding the DimensionTM
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`products during ethanol extraction in order to increase corn oil yield: “Dimension
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`extraction aids improve the release of corn oil during centrifugation”; “the
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`extraction aids have enabled a number of North American fuel ethanol plants to
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`Jennifer Bailey Declaration
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`produce up to three times more corn oil than previously achieved with mechanical
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`means alone” and; “Dimension extraction aids are proven to boost yields and
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`quality. A fuel ethanol plant reported. . .increased corn oil yield by 200 percent”
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`(Ex. 2010, DimensionTM Corn Oil Extraction Aids at l).
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`18.
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`Solenis allows customers to measure the effectiveness of adding the
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`Dimensionm products to their ethanol production process by participating in a trial
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`evaluation. During such an evaluation, Solenis works with plants to develop a trial
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`plan to test the effectiveness of the Dimensionm products.‘
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` EX-2017is
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`a true and correct copy of Solenis’s Com Oil Trial Plan dated January 10, 2011
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`that was maintained in Solenis’s ordinary course of business.
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`19.
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`I understand that trials at plants that had not previously used
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`chemical additives in the com—to—ethanol process routinely result in an increase in
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`corn oil yield. For example, in one trial, a fuel ethanol plant located in the
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`Midwestern United States installed a disk-stack centrifuge at great capital expense
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`Protective Order Material
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`Jennifer Bailey Declaration
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`to extract corn oil from its process. However, the plant’s anticipated corn oil yield
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`was not being achieved and its return on investment was not being realized. In
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`hopes of increasing its corn oil production and improving its return on capital, the
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`plant agreed to trial the DimensionTM products. The following benefits were
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`recorded during the trial:
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` Corn oil yield was increased by 200%
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` Corn oil quality was improved
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` Feed quality specifications were met
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` System downtime was reduced
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`Following the trial, the plant continued to utilize the DimensionTM products,
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`and since permanently converting to the extraction aid, the plant has increased its
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`corn oil production by more than $1 million per year (Ex. 2011,” DimensionTM
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`Corn Oil Extraction Aid Increases Corn Oil Yield and Improves Corn Oil Quality”
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`at 1).
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`Jennifer Bailey Declaration
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`See also Ex. 2018, New Additive Increases Corn Oil Yield and Provides Cleaner
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`Oil in Disk-stack System; Ex. 2019, Novel Chemistry Increases Corn Oil Yield
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`and Improves Oil Quality in Tricanter* System, and Ex. 2020, Corn Oil Extraction
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`Aid Generates 35% ROI. Attached at Exs. 2018, 2019, and 2020 are a true and
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`correct copies of case histories titled “New Additive Increases Corn Oil Yield and
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`Provides Cleaner Oil in Disk-stack System”; “Novel Chemistry Increases Corn Oil
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`Yield and Improves Oil Quality in Tricanter* System”; and “Corn Oil Extraction
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`Aid Generates 35% ROI,” respectively, that were maintained in Solenis’s ordinary
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`course of business.
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`20. The DimensionTM products have also received praise from the
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`industry. In addition to successful customer trials, Solenis’s customers have also
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`publicly praised the DimensionTM products. For example, in August 2011, shortly
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`after the introduction of the DimensionTM products to the market, Ethanol Producer
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`Magazine ran an article discussing the impact the DimensionTM products had on a
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`customer (Ex. 2021, Balancing Act). After comparing a number of different
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`products, the customer decided on the DimensionTM products (id.). Following a
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`trial, Solenis’s customer stated that “[s]ince that time [the DimensionTM products]
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`ha[ve] been basically turned on full time” and that it was “pleased with what
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`[Solenis’s] corn oil extraction aid has done….increased corn oil yield [and] no
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`negative impact on its distillers grains sales” (id.). Attached at Ex. 2021 is a true
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`Jennifer Bailey Declaration
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`and correct copy of an article from Ethanol Producer Magazine, August 2011 titled
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`“Balancing Act Golden Grain finds corn oil yield sweet spot.”
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`21.
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`I declare that all statements made herein of my own knowledge are
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`true and that all statements made on information and belief are true; and further
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`that these statements were made with the knowledge that willful false statements
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`and the like so made are punishable by fine or imprisonment, or both, under
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`section 1101 of Title 18 of the United States Code.
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`Dated April 22, 2016
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`____________________________
`Jennifer Bailey
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