Gevo, the company that converted a Luverne, Minn., ethanol plant to make high-value alcohol for chemicals and plastics, declared victory over a competitor Thursday in the first of 15 patent lawsuits over its genetically engineered yeast and other technology.

“This is a significant victory. It’s a big deal and we are very, very pleased,” said Pat Gruber, CEO of Gevo Inc., based in Englewood, Colo.

For two years, Butamax Advanced Biofuels, a joint venture of Dupont and BP, has been locked in a patent battle with Gevo. Both companies have developed technology to ferment corn into an alcohol called isobutanol. It can be used as a gasoline blend, jet fuel or as replacement for petrochemicals to make fibers, plastics and solvents.

The fight over intellectual property is happening as Gevo also struggles to ramp up commercial production in Luverne. The company halted production of the new alcohol last year after a $40 million retrofit of the plant. Now it’s trying to eradicate unwanted yeasts or other bugs that hindered fermentation, using bioengineered yeasts designed for isobutanol.

That setback, plus the patent battle with Butamax, have hammered Gevo’s stock price, which recently traded in the $2 range. Thursday’s good news bumped the stock 2.7 percent to $2.26 at closing. But the stock traded at more than $25 in early 2011, after its initial public offering.

Gruber, speaking to analysts on a conference call, expressed relief that the first case won’t go to trial, freeing engineers and executives to focus on commercializing the technology.

“This trial has been a distraction, no question about it,” he said.

Gruber said the company intends to resume producing isobutanol this year. With no product to sell, Gevo has been forced to manage its cash. It had $67 million on hand at the end of 2012. It burned through $14 million last year on legal costs, which helped contribute to a $60 million loss for 2012.

Concession with a hitch

Gevo’s legal victory emerged late Wednesday when Butamax attorneys conceded in U.S. District Court in Delaware that they couldn’t win their lawsuit accusing Gevo alleging infringement on a patent to genetically modify yeast to produce isobutanol, rather than ethanol. That means the judge will enter a judgment in favor of Gevo.

In an unusual step, however, Butamax didn’t concede the case is over. Instead, Butamax said it will appeal a pretrial order issued Tuesday by the federal judge. That ruling favored Gevo by narrowly defining one key issue in the case, and tossing out parts of it. On appeal, Butamax seeks to overturn the ruling for a fresh shot at a jury trial. But Gevo contends its appeal position is strong.

The two companies still are fighting over other patents. The next lawsuit, scheduled for trial in August, was filed by Gevo, alleging Butamax infringed on its technology.

Butamax CEO Paul Beckwith insisted in an interview Thursday that Butamax is the true pioneer in the field, and began working on corn-based isobutanol in 2004.

“When we did that a lot of other companies tried to follow in our footsteps,” he said. “We are the pioneers. We absolutely need to protect our pioneer technology.”

Butamax has not yet established a commercial-scale isobutanol plant, but it has “early adopter” agreements with eight ethanol companies, including Highwater Ethanol in Lamberton, Minn., for potential plant conversions. Renewable energy contractor Fagen Inc. of Granite Falls, Minn., has signed on to work on the projects.

Beckwith said Butamax’s first ethanol plant conversion will begin this year, though he wouldn’t say exactly where.

“We are pushing ahead,” he said. “We are going to be breaking ground on the retrofit of a 50 million-gallon [a year] plant in the Midwest.”

Mike Ritzenthaler, a chemical engineer who works as an analyst for Piper Jaffray & Co., has long advised clients that Gevo had a leg up in the patent fight. He said the judge’s ruling also strengthens Gevo’s hold over technology to prevent bioengineered yeast from making ethanol.

“It is clear from the ruling that Butamax does not hold the keys to the technology to shut off the ethanol production, which is absolutely critical to producing isobutanol efficiently,” he said.

Ritzenthaler said Gevo has figured out that it must sterilize the corn mash so that only the bioengineered yeasts go to work fermenting isobutanol.

“It is a matter of getting the right systems in place,” he said.