Gevo Inc., the company developing a new biofuel in Minnesota, has won another legal victory in a patent dispute, but the near-term outlook for commercial production remains uncertain and the company's stock rose only slightly Monday from its near-record lows.

On Friday, the U.S. Circuit Court of Appeals for Washington, D.C., upheld a June decision by a federal judge in Delaware, saying that Gevo had raised a "substantial question" about a patent of its competitor, Butamax Advanced Biofuels, which is challenging Gevo's intellectual property rights.

This dispute, one of several patent battles between the two companies, concerns a genetically engineered enzyme in yeast that converts corn into isobutanol, an alcohol that both companies hope will be a profitable alternative to ethanol.

Isobutanol can be blended with gasoline or processed into other chemicals used in a range of products from paint to plastic. It also is being tested as jet fuel.

A three-judge appeals court panel upheld a district judge's ruling to deny Butamax's request for an injunction to halt sales by Englewood, Colo.-based Gevo, which this year converted a Luverne, Minn., ethanol plant to produce isobutanol.

Gevo said it is pleased with the two-paragraph ruling, while Butamax, a Wilmington, Del.-based joint venture of BP and DuPont, took comfort in the appeals panel's directive to the district judge to correct a phrase describing the sweep of Gevo's patent.

Despite the legal victory, Gevo has struggled with its first attempt to produce isobutanol on a commercial scale. In September, the company said the Luverne plant would go back to producing ethanol, temporarily halting its switch to the new biofuel. The company cited unspecified problems that needed to be solved in the fermentation process.

The September announcement caused Gevo's shares to tumble. Since its recent peak in late June -- after the favorable patent ruling -- the stock price has dropped more than 80 percent. It closed at $1.47 per share, up 1.4 percent in Monday's trading.

Brett Lund, Gevo's general counsel, said in an interview that the Luverne plant is being cleaned and readied for a temporary return to ethanol production. He said no workers have been laid off.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib