Wright's Well Control Services, LLC v. Oceaneering International, Inc. et al, No. 2:2015cv01720 - Document 260 (E.D. La. 2017)
Court Description: ORDER AND REASONS granting 210 Motion for Partial Summary Judgment. WWCS's claim for infringement of the '185 Patent is DISMISSED. Signed by Judge Sarah S. Vance on 8/28/2017. (cg)
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Wright&#039;s Well Control Services, LLC v. Oceaneering International, Inc. et al Doc. 260 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA WRIGHT’S WELL CONTROL SERVICES, LLC CIVIL ACTION VERSUS NO. 15-1720 OCEANEERING INTERNATIONAL, INC. SECTION “R” (3) ORD ER AN D REASON S Before the Court is defendant Oceaneering International, Inc.’s m otion for partial sum m ary judgm ent on plaintiff Wright’s Well Control Services, LLC’s patent infringement claim related to the 9,435,185 patent. 1 For the following reasons, the Court grants Oceaneering’s m otion. I. BACKGROU N D The facts that follow are lim ited to what is relevant to the m otion before the Court. 2 Plaintiff Wright’s Well Control Services, LLC (“WWCS”) and defendant Oceaneering International, Inc. (“Oceaneering”) both provide 1 R. Doc. 210 . A m ore in-depth discussion of the facts underlying this dispute can be found in the Court’s Novem ber 16, 20 15 Order. See generally R. Doc. 56. A m ore extensive discussion of the deep-sea technology and associated patents at issue can be found in the Court’s February 13, 20 17 Order. See generally R. Doc. 141. 2 Dockets.Justia.com hydrate rem ediation services for the oil and gas industry. This dispute concerns a technological system that WWCS developed for removing hydrates from subsea, deepwater pipelines. 3 On December 24, 20 10 , David Wright and J effery Dufrene filed two U.S. non-provisional patent applications, each of which was directed to specific aspects of WWCS’s rem ediation system. 4 According to WWCS, U.S. Patent Application No. 12/ 978,486, now issued as U.S. Patent No. 8,413,725 (the ‘725 Patent), describes and claim s the subsea separator used in WWCS’s remediation system. 5 Application No. 12/ 978,448, now issued as U.S. Patent No. 9,435,185 (the ‘185 Patent), describes aspects of the entire remediation system, focusing specifically on the system’s use of a subsea hydraulic positive displacem ent pum p. 6 The ‘185 Patent issued on September 6, 20 16. 7 The ‘185 Patent contains thirteen claim s, three independent and 10 dependent. 8 Claim 1, the m ain independent claim , is a m ethod of recovering 3 According to WWCS, a hydrate is an ice-like solid that form s when water becomes m ixed with oil and/ or gas at high pressure and low tem perature. R. Doc. 147 at 3. “Hydrate plugs” can cause a pipeline to becom e blocked, resulting in a loss of production. Id. at 3-4. 4 Id. at 13 ¶ 44. 5 Id. 6 Id. According to WWCS, Wright and Dufrene assigned all rights and interests in both the ‘725 and the ‘185 Patents to WWCS, and WWCS is the owner of both Patents. Id. ¶ 45. 7 See R. Doc. 147-20 at 2. 8 Id. at 22-23. 2 a pipeline fluid from a source located in a subsea environm ent by connecting a fluid-powered m otor and a pum p to the source of the fluid. 9 Claim s 4 and 9, the other two independent claim s, are a method for hydrate remediation and fluid recovery from a subsea location, and a m ethod for acting on or rem oving a blockage from a pipeline fluid in a subsea environment, respectively. 10 WWCS alleges that Oceaneering’s Flowline Rem ediation System infringes on Claim s 4 and 9 of the ‘185 Patent. 11 Specifically, WWCS alleges that “Oceaneering has offered to use its Flowline Remediation System, perform ing each and every step of at least Claim s 4 and 9, on a hydrate remediation job for at least W & T Offshore since September 6, 20 16.”12 Oceaneering now m oves for partial sum m ary judgment on WWCS’s claim for infringement of the ‘185 Patent. Oceaneering argues that there is no evidence Oceaneering either m ade, used, offered to sell, or sold its Flowline Rem ediation System since the ‘185 Patent issued on September 6, 20 16. 13 See 35 U.S.C. § 271(a) (“Except as otherwise provided in this title, whoever without authority m akes, uses, offers to sell, or sells any patented 9 10 11 12 13 Id. at 22. Id. at 22-23. R. Doc. 147 at 30 ¶ 86. Id. at 37 ¶ 94. R. Doc. 210 -1 at 8-9. 3 invention, within the United States . . . any patented invention during the term of the patent therefor, infringes the patent.”). In response, WWCS disputes whether Oceaneering has offered to sell its Flowline Remediation System. 14 WWCS points to the deposition of Oceaneering em ployee Chris Dyer, who testified that Oceaneering has included the use of its Flowline Remediation System s in project bids since September 20 16. 15 In its reply, Oceaneering argues that an offer to sell the Flowline Rem ediation System cannot give rise to patent infringement because method claim s, like Claim s 4 and 9 of the ‘185 Patent, can be infringed only by actual use. 16 II. LEGAL STAN D ARD Sum m ary judgment is warranted when “the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers “all of the evidence in the record but refrain[s] from m aking credibility determ inations or weighing the evidence.” Delta & 14 15 16 R. Doc. 229 at 1; [ SEALED R. D o c. 2 2 9 -1 at 4 .] R. Doc. 229 at 1. R. Doc. 233 at 4-5. 4 Pine Land Co. v. Nationw ide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 20 0 8). All reasonable inferences are drawn in favor of the nonm oving party, but “unsupported allegations or affidavits setting forth ‘ultim ate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a m otion for sum m ary judgment.” Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 10 75. “No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-m oving party.” EEOC v. Sim baki, Ltd., 767 F.3d 475, 481 (5th Cir. 20 14). If the dispositive issue is one on which the m oving party will bear the burden of proof at trial, the m oving party “m ust come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally ’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonm oving party can then defeat the m otion by either countering with evidence sufficient to dem onstrate the existence of a genuine dispute of m aterial fact, or “showing that the m oving party’s evidence is so sheer that it m ay not persuade the reasonable fact-finder to return a verdict in favor of the m oving party.” Id. at 1265. If the dispositive issue is one on which the nonm oving party will bear the burden of proof at trial, the m oving party m ay satisfy its burden by 5 m erely pointing out that the evidence in the record is insufficient with respect to an essential elem ent of the nonm oving party’s claim . See Celotex, 477 U.S. at 325. The burden then shifts to the nonm oving party, who m ust, by subm itting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonm ovant m ay not rest upon the pleadings, but m ust identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 10 75 (“Rule 56 m andates the entry of sum m ary judgment, after adequate tim e for discovery and upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party’s case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)). III. D ISCU SSION In this m otion for partial sum m ary judgm ent, Oceaneering argues that WWCS’s claim for infringem ent of the ‘185 Patent fails as a m atter of law. To prove direct patent infringement, WWCS m ust show that Oceaneering either m ade, used, offered to sell, or sold WWCS’s patented invention after the patent issued. See 35 U.S.C. § 271(a). The parties dispute whether Oceaneering has offered to sell the m ethods described in Claim s 4 and 9 of 6 the ‘185 Patent. 17 But Oceaneering contends that this dispute is im m aterial because m ethod claim s can be infringed only by use, not by an offer to sell. 18 See N TP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1318-21 (Fed. Cir. 20 0 5). Oceaneering further argues that because WWCS cannot establish direct infringement, it also cannot establish indirect infringem ent. See Pow er Integrations, Inc. v. Fairchild Sem iconductor Int’l, Inc., 843 F.3d 1315, 1331 (Fed. Cir. 20 16). Oceaneering’s argum ent that m ethod claim s can be infringed only by use prim arily relies on the Federal Circuit’s decision in NTP. The court in N TP addressed whether the defendant could be liable for infringing on plaintiff’s m ethod claim even though one step of the method was performed outside the United States. 418 F.3d at 1313-14. After holding that “a process cannot be used ‘within’ the United States as required by section 271(a) unless each of the steps is performed within this country,” the court turned to “whether a sale of a claim ed m ethod can occur in the United States, even though the contemplated performance of that method would not be wholly within the United States.” Id. at 1318. 17 18 See R. Doc. 210 -3 at 2 ¶ 6; [ SEALED R. D o c. 2 2 9 -1 at 4 .] R. Doc. 233 at 1. 7 The court first noted the linguistic difficulty of applying the concept of a sale “to a m ethod claim consisting of a series of acts.” Id. at 1319; see also id. (“It is difficult to envision what property is transferred m erely by one party perform ing the steps of a method claim in exchange for payment by another party. Moreover, perform ance of a method does not necessarily require anything that is capable of being transferred.”). The court then exam ined the legislative history of § 271(a), which “indicate[d] Congress’s understanding that m ethod claim s could only be directly infringed by use.” Id. at 1320 . For exam ple, when Congress added “offers to sell” as a form of infringement in § 271(a), a Senate report explained: “The list of exclusive rights granted to patent owners is expanded to preclude others from offering to sell or im porting products covered by a U.S. patent or offering to sell the products of patented processes.” S. Rep. 10 3-412, at 230 (1994) (em phasis added). Earlier congressional reports reveal Congress’s view that selling m ethods or processes does not constitute infringem ent. See S. Rep. No. 10 0 83, at 30 (1987) (“Under our current patent laws, a patent on a process gives the patentholder the right to exclude others from using that process in the United States without authorization from the patentholder. The other two standard aspects of the patent right—the exclusive right to m ake or sell the invention—are not directly applicable to a patented process.”); H.R. Rep. No. 8 99-80 7, at 5 (1986) (“With respect to process patents, courts have reasoned that the only act of infringement is the act of m aking through the use of a patented process . . . .”). Notwithstanding this analysis, the NTP court resolved the issue on narrower grounds. Id. at 1320 -21 (“We need not and do not hold that m ethod claim s m ay not be infringed under the ‘sells’ and ‘offers to sell’ prongs of section 271(a).”). In Ricoh Co, Ltd. v. Quanta Com puter Inc., 550 F.3d 1325, 1335 (Fed Cir. 20 0 8), the Federal Circuit again avoided the question whether “a party who sells or offers to sell a patented process infringes the patent.” See id. (finding that patented “software is not itself a sequence of actions, but rather . . . a set of instructions that directs hardware to perform a sequence of actions”). But the Ricoh court did “agree with the reasoning of N TP that the application of the concept of a sale or offer of sale to the actual carrying out of a sequence of actions is am biguous.” Id. Neither the Federal Circuit nor the Supreme Court has ever recognized that one m ay infringe a method claim by selling or offering to sell a service that perform s the m ethod. Relying on N TP, district courts have generally held that a m ethod claim m ay be infringed only by use. See, e.g., Isis Pharm ., Inc. v. Santaris Pharm a A/ S Corp., No. 3:11-CV-2214-GPC-KSC, 20 14 WL 2531973, at *3-4 (S.D. Cal. J une 4, 20 14); W .L. Gore & Assocs. v. Medtronic, Inc., 874 F. Supp. 2d 526, 9 544-45 (E.D. Va. 20 12); In re Bill of Lading Transm ission & Processing Sy s. Patent Litig., 695 F. Supp. 2d 680 , 688 (S.D. Ohio 20 10 ); Ricoh Co., Ltd. v. Quanta Com put., Inc., 579 F. Supp. 2d 1110 , 1123 (W.D. Wis. 20 0 7), aff’d in part and vacated in part, 550 F.3d 1325 (Fed. Cir. 20 0 8); Transocean Offshore Deepw ater Drilling, Inc. v. GlobalSantaFe Corp., 40 0 F. Supp. 2d 998, 10 11-12 (S.D. Tex. 20 0 5). Thus, the balance of caselaw supports Oceaneering’s position. But, as WWCS notes, a few district courts have taken the opposite view. See, e.g., CLS Bank Int’l v. Alice Corp. Pty . Ltd., 667 F. Supp. 2d 29, 36-37 (D.D.C. 20 0 9); see also W esternGeco L.L.C. v. ION Geophy sical Corp., 869 F. Supp. 2d 793, 798-99 (S.D. Tex. 20 12) (citing CLS Bank), rev’d in part on reconsideration, 20 12 WL 170 8852 (S.D. Tex. May 15, 20 12); Optigen, LLC v. Int’l Genetics, Inc., 777 F. Supp. 2d 390 , 40 3 (N.D.N.Y. 20 11) (citing CLS Bank). CLS Bank relied in part on the Supreme Court’s holding in Quanta Com puter, Inc. v. LG Electronics, Inc., 553 U.S. 617 (20 0 8), that m ethod claim s are exhaustible. See CLS Bank, 667 F. Supp. 2d at 37. In Quanta, the Court noted that although “a patented m ethod may not be sold in the same way as an article or device, . . . m ethod patents [are] exhausted by the sale of an item that em bodied the m ethod.” 553 U.S. at 628-29. 10 This Court finds the reasoning in NTP persuasive. The Suprem e Court’s holding in Quanta, upon which CLS Bank relied, is not to the contrary. First, Quanta addressed exhaustion rather than infringement. See Cardiac Pacem akers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1362-63 (Fed. Cir. 20 0 9) (declining to apply Quanta in the infringement context). Second, the Court acknowledged that “a patented method m ay not be sold in the sam e way as an article or device.” Quanta, 553 U.S. at 628. Third, the Court stated that “em bodiments of patented m ethods,” rather than m ethods them selves, m ay be sold for purposes of exhaustion. Id. The Court cited two cases where these embodim ents were the products produced under the patents. Ethy l Gasoline Corp. v. United States, 30 9 U.S. 436, 446, 457 (1940 ); United States v. Univis Lens Co., 316 U.S. 241, 248-51 (1942). Here, by contrast, Oceaneering offered to sell the service, i.e., the m ethod, of the infringing Flowline Remediation System and not products embodying the m ethod. Cf. Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770 , 774 (Fed Cir. 1993) (holding that “the sale of equipm ent to perform a process is not a direct infringement of the process within the m eaning of section 271(a)”). For these reasons, Quanta—and by extension CLS Bank—do not underm ine the Federal Circuit’s reasoning in N TP. 11 Furtherm ore, lim iting infringement of m ethod claim s to the use, rather than sale, of such methods accords with other Federal Circuit precedent. For exam ple, the Federal Circuit has stated that where “the asserted patent claim s are m ethod claim s, the sale of a product, without m ore, does not infringe the patent. Instead, direct infringement of a method claim requires a showing that every step of the claim ed m ethod has been practiced.” Mey er Intellectual Props. Ltd. v. Bodum , Inc., 690 F.3d 1354, 1366 (Fed Cir. 20 12) (citations om itted). Additionally, the Federal Circuit has held that the sale of equipm ent to perform a patented process does not constitute direct infringement of that process. Joy , 6 F.3d at 773-74. Finally, lim iting direct infringement of m ethod claim s to use of such m ethods m akes sense in light of the longstanding rule that ideas are not patentable. See Alice Corp. Pty . v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (20 14) (“Laws of nature, natural phenom ena, and abstract ideas are not patentable.” (quoting Ass’n for Molecular Pathology v. My riad Genetics, Inc., 133 S.Ct. 210 7, 2116 (20 13))). Methods, like abstract ideas, “are ‘conception[s] of the m ind, seen only by [their] effects when being executed or performed.’” Parker v. Flook, 437 U.S. 584, 589 (1978) (quoting Tilghm an v. Proctor, 10 2 U.S. 70 7, 728 (1880 )). Of course, m ethods are patentable as novel applications of ideas. See id. at 594. But short of 12 application, i.e., use, a m ethod is merely an idea. J ust as an idea without an application cannot be patented, a m ethod claim without actual application cannot be infringed. In accordance with N TP and the district courts that have followed N TP, the Court finds that the m ethod claim s in WWCS’s ‘185 Patent can be infringed only by use. WWCS has failed to put forth any evidence showing that Oceaneering used the m ethods described in the ‘185 Patent since the patent issued on September 6, 20 16. Thus, WWCS cannot establish direct infringement under 35 U.S.C. § 271(a). Because WWCS cannot establish direct infringem ent, its indirect infringem ent allegation also fails as a m atter of law. See 35 U.S.C. § 271(b); Pow er Integrations, 843 F.3d at 1331 (“We have . . . held that ‘[t]o prevail under a theory of indirect infringem ent, [plaintiff] m ust first prove that the defendants’ actions led to direct infringement of the [patent-in-suit].’” (quoting Dy nacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1274 (Fed. Cir. 20 0 4))). Accordingly, Oceaneering is entitled sum m ary judgm ent on WWCS’s claim for infringement of the ‘185 Patent. 13 IV. CON CLU SION For the foregoing reasons, Oceaneering’s partial m otion for sum m ary judgm ent is GRANTED. WWCS’s claim for infringement of the ‘185 Patent is DISMISSED. 28th New Orleans, Louisiana, this _ _ _ _ _ day of August, 20 17. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 14
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