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Corporate Counsel Q&A with Jim Butler, Vice President of Legal Affairs and Intellectual Property, Sapphire Energy Inc.


Paul Jones, Daily Journal 2 comments

Jim Butler helps biofuel company Sapphire Energy patent its work on biofuels.

Jim Butler oversees legal issues as vice president of legal affairs and intellectual property at San Diego-based biofuel company Sapphire Energy Inc., which grows algae for conversion into a biofuel that could be used interchangeably with petroleum-based fuels.

Butler was a tenured physiologist at the University of Idaho before deciding to pursue patent law. Since then, he has worked as an attorney at Senniger, Powers, Leavitt and Roedel in St. Louis, Mo., and served as a judicial clerk at the 9th U.S. Circuit Court of Appeals and the Idaho Supreme Court before joining Sapphire in 2009.

Butler recently spoke with Daily Journal Staff Writer Paul Jones about Sapphire Energy's algae-based approach to biofuel, patent work for the emerging biofuel industry and Sapphire's prospects in that sector. Here is an edited transcript of what he had to say:

DJ: Why did you decide to shift to legal work from physiology and academic life?

Butler: To be honest with you, I got tired of writing grants all the time - it's not all it's portrayed to be, and I was looking for a change. Intellectual property law seemed interesting, someplace I could still use the time I'd invested in my science education. It allows me to mesh law and science at the same time.

DJ: What type of work do you do for Sapphire? What parts of your job do you like best?

Butler: I like the intellectual property part of my job best - that's the majority of my background, and that's why I got into the legal profession. I like talking with scientists and learning what they're doing and understanding it. I share their excitement when they have a new discovery. Being a patent attorney is exciting when I come in after all the work is done and they've got something new.

I do most anything else that comes to the company - I do HR, I work on contracts, doing collaborative agreements with other companies in licensing, all that sort of thing. The only thing I don't do a lot of are things related to finance. Our CFO is also an attorney - he does a lot of the financing work."

DJ: How significant is patent work in your current position with Sapphire?

Butler: Patent work takes up about half my time. We patent the full spectrum - the scientific tools for making organisms, the organisms themselves, the method of extracting oil from the organisms, and we have some patents on the type of oil we extract, because we believe it has unique properties.

DJ: What is involved in patenting an organism?

Butler: Generally, you can patent organisms that have been evolved using what would be similar to breeding techniques - crossing organisms, selecting them for traits. As long as [their resulting traits] are novel and nonobvious, you can patent them. We patent organisms just like an agricultural company would patent plants. We do both breeding and direct genetic modification, and we patent for both mechanisms.

DJ: How is your company's situation different from other biofuel developers?

Butler: Algae are an interesting platform for producing materials. They're extremely productive and grow very fast ... We're different from a lot of the industry in that we don't have to buy our feedstock [crops that are converted into fuel]. We grow the algae - they're very basic, they just need water and sunlight and CO2, and we provide extra nutrients, which are agriculture-grade fertilizers ... So things like the price of corn or sugar don't really affect us because we don't need to go into the market and buy our materials. We don't compete with food crops for land or water - our facility in New Mexico is in the desert. We use brackish, nonpotable water that can't be used for farming. So we're not competing with food production, and we can scale our system up to produce enormous quantities that are necessary to meet the energy demands of the U.S. and other industrialized countries.

DJ: How difficult is it to develop partnerships with respect to protecting IP?

Butler: It can be extremely complicated, depending on how closely the two companies' fields overlap. With Earthrise Nutritionals, it was relatively straightforward because they're a nutrition company - they produce a food supplement, and we're not currently interested in that, and they're not interested in biofuels, per se. But sometimes companies' interests are closer, and it's harder to make sure everyone can get what they want without stepping into other people's yards.

DJ: Are you focusing on the U.S. market only, or do you plan to be an international producer? How does that affect patent work?

Butler: We're a U.S. company, and we plan to build our first commercial projects in the U.S. But we intend to be an international company, and this technology can be exported. So we file patents not only in the U.S. but foreign countries, as well. We look and see what countries our technology is suited for deployment in and file patent applications there. ... Patent law has become, through various international treaties, relatively uniform, so we can reuse a lot of [IP] work we've done in the U.S. in other countries.

DJ: How big is your legal department at Sapphire? What outside firms do you use?

Butler: Including me, it's three people: myself, a patent agent and paralegal. We use a variety of firms - I would say the main firms that we use are for general legal business - Haynes and Boome for intellectual property, and we use Arnold & Porter.

DJ: The biofuel industry is being developed in a period where there is high interest in renewable technologies by policymakers. How has government support helped or hurt your business development?

Bulter: We have a $50 million grant from the Department of Energy, and we're using some of those funds to construct our commercial demonstration project in Columbus, New Mexico. It would be much more difficult to do that without the money ... [Receiving government assistance] certainly restrains what you can do - you give up some of your flexibility when you take money from the government. But we've been able to work with them and move forward.

DJ: There's been a lot of talk about the Keystone XL Pipeline and the oil sands in Canada. Is there any concern new petroleum discoveries will undercut biofuels?

Butler: I don't think we feel threatened by the oil market - we have advantages, since from a greenhouse gas perspective, we're a more earth-friendly fuel. Our fuel produces 50 percent less CO2 emissions than petroleum-based fuel. The thing about petroleum is that, no matter how you say how much is out there, it's a finite amount, and it's going down every day. As countries industrialize, the situation will only get worse. At some point, there needs to be an alternative. We want to fill that need.

paul_jones@dailyjournal.com

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2 comments

Re: Article on Patents for Novel Algae

From: Marc Brennan, 05/07/12 08:54 PM

Fascinating! Excellent work Sapphire. This is the future for clean fuel technology. It is far more efficient than biodiesel from food crops.

The next step is by critically thinking outside the box and increasing the yields for greencrude production. By combining several strategies/growth stages into one step.

Marc Brennan BSc. MSc.
MarcBrennan1@gmail.com

China will steal your technology

From: Aaron B, 05/05/12 10:28 PM

I applaud the work you guys are doing and
I'm proud of you guys.
China will steal your technology. It's not a matter of if but when. Protect your IP. On the other hand I have serious moral problems with patenting an organism. I don't think it should be allowed for higher organisms or for anything which people now rely on daily that would be almost the equivalent to patenting water but an algae strain to make oil I'm totally ok with.

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