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Nov 18, 2020

Ingevity to challenge U.S. court ruling on emission control patent and expects limited impact on commercial operations or financial results through patent expiration in March 2022

PRESS RELEASE

NORTH CHARLESTON, S.C., November 18, 2020 – 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.


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Contact Info

Laura Woodcock

Manager, Public Relations
[email protected]

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