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