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Attis Industries Joint Venture Partner Files Appeal in Patent Infringement Case

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Processes Covered by Patented Technology Estimated to Produce More than $500 Million Annually

MILTON, GA, Sept. 05, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Attis Industries, Inc. (NASDAQ: ATIS) (the "Company" or "Attis"), a diversified innovation and technology holding company, today announced that its joint venture partner, GS CleanTech Corporation ("CleanTech"), a wholly-owned subsidiary of GreenShift Corporation ("GreenShift"), filed its appeal of intermediate judgments issued in CleanTech's pending patent litigation against corn ethanol producers for infringement of five of CleanTech's eleven issued corn oil extraction patents. 

As previously announced, CleanTech licensed its corn oil extraction patent portfolio on an exclusive basis to FLUX Carbon LLC ("JVCo"), an 80%-owned subsidiary of Attis, on terms in which CleanTech in essence ‘outsourced' its operations to JVCo, which the parties agreed to fully capitalize to meet a number of specific objectives, including servicing the continuing and future needs of licensees, investing in growth with the parties' combined intellectual properties, protecting GreenShift's intellectual properties, and supporting all pending and future litigation for infringement and related matters.

Patented Corn Oil Extraction Technology

JVCo's rights cover a series of patents involving the extraction of oil from corn ethanol coproducts. About a third of the corn processed by dry mill corn ethanol plants is converted into ethanol. Another third is emitted to the atmosphere as a relatively pure stream of carbon dioxide. The final third is dried and sold as a commercial animal feed for about $0.08 per pound. CleanTech and its inventors developed and commercialized a process that intercepts the flow of that final third in the plant, extracts corn oil, and returns the stream back to the host for completion of drying. The extracted oil is then most commonly sold as a feedstock for refining into biodiesel for about $0.25 per pound.

Following issuance of the first of CleanTech's patents in 2009, CleanTech licensed its full portfolio of corn oil extraction patents to producers of about 12% of the 15 billion gallons of ethanol produced annually in the U.S. However, CleanTech estimates that upwards of 90% of the dry mill corn ethanol industry practices methods covered by CleanTech's patents, up from 0% before CleanTech brought its technologies to the market. Five of those patents are the subject of litigation which CleanTech has asserted against about 10% of the industry alleging infringement since 2009.

To put those amounts into perspective, a 90% market adoption rate equates to an estimated industry-wide output of corn oil capable of offsetting more than about 20 million barrels of fossil fuel-derived crude oil per year, while saving trillions of cubic feet per year of natural gas, eliminating tens of millions of metric tons per year of greenhouse gas emissions, and infusing about $500 million per year of increased income into the corn ethanol industry. A single 100 million gallon per year ethanol plant extracting about a third of its oil will produce about 23 million pounds of oil per year, and about $4 million in bottom line revenue at current commodity prices. CleanTech's early adopter licensees pay ongoing royalty fees equal to a percentage of their corn oil sales, and expect CleanTech to protect their respective competitive advantages. 

Infringement Litigation

CleanTech filed suit in October 2009, however, it suffered a setback in 2014 when, without having conducted a trial or holding a hearing on the merits, the district court presiding over its infringement litigation issued a summary judgment decision ruling that the inventions giving rise to the Patents in Suit were "reduced to practice" in 2003 as a result of limited, confidential small-scale bench testing, and that an invalidating "offer for sale" occurred when the inventors submitted a confidential non-public letter to an operating ethanol plant in 2003 in connection with the inventors' efforts to conduct a confidential full-scale feasibility test. That full-scale feasibility test eventually occurred in May 2004. CleanTech's first patent application was filed shortly thereafter. 

In September 2016, the District court ruled that the Patents in Suit were additionally unenforceable, concluding that since it had previously determined that the invention had been "reduced to practice" and "offered for sale" in 2003, the only reasonable inference that could be drawn was that CleanTech's inventors and attorneys knowingly withheld material information with the intent to deceive the USPTO about the timing of the "reduction to practice" (i.e., that the invention was "ready for patenting" after the 2003 bench test as alleged by the defendants, instead of 2004 as CleanTech's inventors and attorneys believed – and know to be correct).

CleanTech strongly disagrees with the district court's conclusions in each ruling, and believes that each decision relied heavily on an erroneous determination that the inventions were "reduced to practice" in 2003 as a result of the limited, small-scale bench testing – the first experimentation ever conducted by the inventors. Critically, no jury trial or hearing was ever held in respect of the material factual determinations supporting the District court's 2014 ruling, including material factual issues that should have resulted in the right to a jury trial.

Further, in connection with ongoing patent filings, the USPTO allowed CleanTech's new corn oil extraction patents after considering the very information that the District court found to have been withheld, and upon which the bulk of the District court's rulings were based. All of the information alleged to have been "knowingly withheld" from the USPTO in connection with the Patents in Suit was provided to and considered by the USPTO prior to issuance of several additional patents that are not covered by the District court's prior rulings (the "New Patents").

Under applicable law, a patent cannot be declared irrevocably invalid or unenforceable until all available appeals have been exhausted. The October 2014 and September 2016 rulings are non-final, fully-appealable judgments. CleanTech previously filed its notice of appeal, however, the appeal had been stayed pending resolution of certain preliminary matters. CleanTech is now free to vigorously appeal both rulings. CleanTech's initial appellate brief was filed on August 29, 2018. A copy of CleanTech's brief is available online at www.greenshift.com. A decision can be expected from the Federal Circuit in 2019.

Kevin Kreisler, GreenShift's Chief Executive Officer, said, "GreenShift and its shareholders have been waiting years to file this appeal. Conventional wisdom was that it was not feasible to recover corn oil from concentrated thin stillage before we developed our patented corn oil extraction processes. That was due in part to the viscosity, solids loading, and ethanol-specific components and conditions that facilitated formation of complex emulsions. Our discovery that corn oil could be extracted from concentrated thin stillage in the back-end of operating dry mill plants was counter-intuitive. That discovery has since contributed billions in value to the ethanol industry – value that GreenShift and its shareholders bled to build. We strongly believe in our technology and case, and we look forward to vindication on appeal."

House of Cards

Jeff Cosman, Attis' Chief Executive Officer, added, "We think the district court made obvious mistakes that created an extraordinary opportunity for us in our biorefinery acquisition and construction plans."

The following excerpt is from CleanTech's appellate brief (references to "Appellees" refer to the ethanol producers and related parties CleanTech sued for infringement): 

"This was an extraordinary case. In erroneously granting summary judgment of non-infringement, the district court ignored all the evidence in CleanTech's favor, ignored Appellees' especially heavy burden of proof on summary judgment, and repeatedly resolved disputed factual issues in favor of the summary judgment movants, Appellees. It misapplied the law, misconstrued the facts, and drew every inference in favor of Appellees, when it was required to draw all reasonable inferences in favor of CleanTech

"In erroneously granting summary judgment of invalidity, the district court made each of the same mistakes. It also ignored the presumption of validity, and ignored Appellees burden to prove invalidity by clear and convincing evidence. 

"As a result, despite a heavily-disputed factual record - with abundant evidence in CleanTech's favor - the district court erroneously resolved every summary judgment issuein favor of the summary judgment movants, Appellees.

"This was a gross distortion of justice. This panel, like CleanTech, can only speculate as to why the district court approached every issue so one-sidedly in favor of Appellees. What is not speculation, however, is that the district court's repeated summary judgment rulings in favor of Appellees – despite the clear presenceof genuine factual disputes – were error, which must be reversed.

"As for inequitable conduct – this case never should have reached the inequitable conduct phase. Appellees' entire inequitable conduct theory was premised on the idea that the July 31 Proposal invokes an "on-sale bar." However, [as stated in the brief], the July 31 Proposal did not invoke an on-sale bar, for three separate reasons – including, most significantly, that CleanTech never offered to perform the patented methods, as required by Plumtree, 473 F.3d at 1162-1163. Once the summary judgment of on-sale bar is reversed (as it must be), Appellees' inequitable conduct theory falls, like a house of cards. 

"The erroneous judgment of the district court has caused severe prejudice to CleanTech, its licensees and its bedrock oil-extraction patents. Fortunately, this Court has the power - and the understanding - to remedy the injustice done below. 

"For the foregoing reasons, the judgment of the district court must be reversed, and these cases must be remanded for further proceedings."

Cosman continued, "We have a considerable investment in GreenShift and its technologies. We looked at the patents and the history. More than 200 dry mill ethanol plants were built without corn oil extraction. None of them extracted corn oil from concentrated thin stillage before GreenShift commercialized the technology, and yet nearly all of them are doing so today, practicing methods covered by CleanTech's patents to produce about $500 million annually in industry-wide bottom-line revenue that didn't exist before corn oil extraction. We believe that GreenShift and CleanTech will prevail. We're prepared to support GreenShift and CleanTech through whatever stages of trial and appeal that may be necessary."

About GreenShift Corporation
GreenShift Corporation ("GreenShift") develops and commercializes clean technologies that facilitate the more efficient use of natural resources. GreenShift primarily does so today in the U.S. ethanol industry, where it innovates and offers technologies that improve the profitability of licensed ethanol producers. GreenShift generates revenue by licensing its technologies to ethanol producers, and by providing its licensees with success-driven, value-added services and other solutions based upon its expertise, know-how, technologies, and patent position. GreenShift was founded on the belief that the first, best and most cost-effective way to achieve positive environmental change of any magnitude is to develop technology-driven economic incentives that motivate large groups of people and companies to make incremental environmental contributions that are collectively very significant – contributions that cumulate to catalyze disruptive environmental gains. GreenShift has done so once with its portfolio of patented corn oil extraction technologies. It intends to do so again. For more information, visit: www.greenshift.com.

Attis Industries, Inc. 
Attis Industries, Inc. (NASDAQ: ATIS) is a holding company defined by our commitment to servicing our customers with unwavering respect, fairness and care. We are focused on finding and implementing solutions for the resource needs and challenges of our customers with a fundamental objective to seek rewarding solutions through technology and innovation. Our healthcare business centers on creating community-based synergies through collaborations and software solutions. Our innovation business strives to create value from recovered resources. For more information, visit: www.attisind.com

Forward-Looking Statements
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "should," "would" or similar words. You should consider these statements carefully because they discuss our plans, targets, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. These statements are subject to certain risks, uncertainties, and assumptions, including, but not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company's products and technology; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, clinical studies and future product commercialization; and, the Company's business, research, product development, regulatory approval, marketing and distribution plans and strategies; the ability of the Company to continue to meet the listing requirements of NASDAQ; the ability of the Company to execute on a business plan that permits the technologies and innovations businesses to provide sufficient growth, revenue, liquidity and cash flows for sustaining the Company's go-forward business, and the risks identified and discussed under the caption "Risk Factors" in the Attis Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (the "SEC") on April 16, 2018 and the other documents Attis files with the SEC from time to time. There will be events in the future, however, that Attis is not able to predict accurately or control. Attis's actual results may differ materially from the expectations that Attis describes in its forward-looking statements. Factors or events that could cause Attis's actual results to materially differ may emerge from time to time, and it is not possible for Attis to accurately predict all of them. Any forward-looking statement made by Attis in this press release speaks only as of the date on which Attis makes it. Attis undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.


Media and Investors Contact: 
Hayden IR
(917) 658-7878
hart@haydenir.com

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