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LLC v. Oceaneering International, Inc.

United States District Court, E.D. Louisiana

January 22, 2018

WRIGHT'S WELL CONTROL SERVICES, LLC
v.
OCEANEERING INTERNATIONAL, INC.

         SECTION “R” (3)

          ORDER AND REASONS

          SARAH S. VANCE UNITED STATES DISTRICT JUDGE

         Both parties move for summary judgment on plaintiff's claim of infringement of U.S. Patent No. 8, 413, 725 ('725 Patent).[1] Plaintiff also moves for reconsideration of the Court's claim construction order.[2] For the following reasons, the Court grants defendant's motion for summary judgment. The Court denies plaintiff's motions for summary judgment and reconsideration.

         I. BACKGROUND

         A. History of the '725 Patent

         Plaintiff Wright's Well Control Services, LLC (WWCS) and defendant Oceaneering International, Inc. (Oceaneering) both provide hydrate remediation services for the oil and gas industry. A hydrate is an ice-like solid that forms when water becomes mixed with oil and/or gas at high pressure and low temperature.[3] Hydrates can cause a pipeline to become blocked by “hydrate plugs, ” resulting in a loss of production.[4]

         WWCS alleges that in 2008, Oceaneering tried and failed to remove hydrates from a pipeline for ATP Oil and Gas Corporation.[5] ATP then asked WWCS to review Oceaneering's work, prompting WWCS to spend 18 months researching, testing, and developing a new system for preventing and removing hydrates in deepwater environments.[6] According to WWCS, its remediation system successfully cleared hydrates from ATP's pipeline by overcoming many of the design challenges that plagued earlier systems.[7]

         WWCS's hydrate remediation system utilizes a pump to reduce the pressure in the pipeline. By reducing this pressure, WWCS's system can cause solid hydrate plugs to dissociate, i.e., melt, into liquid and gas.[8] But if too much gas enters the system, the gas could reduce the pumping ability of the pump or even cause the pump to implode.[9] The separator described in the '725 Patent solves this problem by separating gas from liquid and discharging the gas to the surface. See '725 Patent at 4:47-57.

         David Wright, who founded WWCS, and Jeffrey Dufrene filed Provisional Application No. 61/290, 168 for their hydrate remediation system in December 2009, shortly after signing a nondisclosure agreement (NDA) with Oceaneering.[10] This application specifically included the subsea separator.[11] Wright and Dufrene filed non-provisional Patent Application No. 12/978, 486 for the separator on December 24, 2010.[12] They later assigned their interests in the patents to WWCS.[13] The '725 Patent for the separator issued on April 9, 2013, and U.S. Patent No. 9, 435, 185 ('185 Patent) for the hydrate remediation system issued on September 6, 2016.

         WWCS alleges that Oceaneering used information provided by WWCS under a nondisclosure agreement to create a subsea separator for its own Flowline Remediation System (FRS).[14] Oceaneering has performed hydrate remediation using the FRS on multiple jobs since terminating its business relationship with WWCS.[15] According to WWCS, Oceaneering's FRS and separator relies on the technologies described in the '725 and '185 Patents.[16]

         B. Procedural History

         On May 21, 2015, WWCS filed its initial complaint against Oceaneering, pleading patent infringement as well as various claims under Texas and Louisiana state law.[17] On November 16, 2015, the Court dismissed WWCS's breach of contract claim with prejudice to the extent that it rested on information in WWCS's patent applications or on conduct that occurred after December 11, 2012, and dismissed plaintiff's statutory trade secret misappropriation claim under the Texas Uniform Trade Secrets Act.[18] After plaintiff filed a second and third amended complaint, Oceaneering moved to dismiss plaintiff's patent infringement claims. On February 13, 2017, the Court dismissed WWCS's patent claims, but without prejudice and with leave to amend.[19]

         On February 27, 2017, WWCS filed its fourth amended complaint, which is the operative complaint.[20] The complaint asserts patent infringement claims, as well as claims for Texas common law misappropriation, Texas common law misappropriation of trade secrets, Louisiana statutory misappropriation of trade secrets under the Louisiana Uniform Trade Secrets Act (“LUTSA”), and Texas common law breach of contract, breach of confidential relationship, tortious interference with prospective business relations, fraudulent inducement, business disparagement, and unfair competition.[21] Oceaneering then filed two motions for partial summary judgment, arguing that several claims were time-barred. The Court granted these motions in part on August 23, 2017, dismissing WWCS's LUTSA claim and its claims for Texas common law misappropriation, Texas common law misappropriation of trade secrets, breach of confidential relationship, and business disparagement.[22] The Court also dismissed WWCS's claim for unfair competition to the extent the claim is based on misappropriation.[23] Additionally, Oceaneering moved for summary judgment against WWCS on its claim for infringement of the '185 Patent, arguing that Oceaneering had not used its FRS since the '185 Patent issued. The Court granted this motion on August 28, 2017.[24]

         After the parties briefed the disputed claim language of the '725 Patent, the Court held a claim construction hearing on October 12, 2017. See Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). The Court issued its claim construction order on November 6, 2017.[25] Oceaneering and WWCS have now filed cross-motions for summary judgment on WWCS's claim for infringement of the '725 Patent.[26] Additionally, WWCS moves for reconsideration of the Court's claim construction order.[27]

         C. Claims of the '725 Patent

         The '725 Patent, titled “Subsea Fluid Separator, ” contains 20 claims, three independent and 17 dependent. WWCS asserts infringement of independent Claim 1 and dependent Claims 11 and 12.[28] Claim 1 is set forth below:

         A subsea separator, comprising:

a housing having an inlet for receiving a fluid mixture, a non-gaseous fluid outlet located along the housing at a point lower than the inlet, and a gas outlet located along the housing at a point higher than the inlet;
baffle type members located within the housing for acting on fluid entering the housing; and ball valve assembly located within the housing and in communication with the gas outlet for preventing non-gaseous fluid from exiting the housing through the gas outlet, the ball valve assembly being operationally configured to open and seal the gas outlet based on the volume of non-gaseous fluid within the separator;
wherein the separator is operationally configured to operate under vacuum.

'725 Patent at 9:10-10:64.

         Dependent Claims 11 and 12 disclose specific variations of the separator described in independent Claim 1. Claim 11 discloses: “The separator of claim 1 further including an external frame attached thereto.” Id. at 9:52-53. Claim 12 discloses: “The separator of claim 1 wherein the separator is operationally configured to be fluidly connected to a subsea pump via the non-gaseous fluid outlet.” Id. at 9:54-56.

         Figure 1 of the '725 Patent, showing a simplified embodiment of the separator, is reproduced below. Figure 1 labels the housing as 10; the outer wall of the housing as 22 and the inner wall as 24; the inlet as 14; the non-gaseous outlet as 20; the gas outlet as 18; the baffle type members as 16; and a perforated tube (part of a ball valve assembly) as 30.

         (Image Omitted)

         In its claim construction order, the Court construed a number of terms in Claims 1, 11, and 12. Most importantly for purposes of the parties' motions, the Court held that the “ball valve assembly” 30 features a ball that opens or closes the gas outlet based on the volume of non-gaseous fluid within the separator, operates without external intervention, and is located inside the housing . The Court further held that the “baffle type members” 16 are plate- like structures that change the flow of a fluid, and are also located inside the housing.

         II. DISCUSSION

         A. Motion for Reconsideration

         A district court has considerable discretion to grant or deny a motion for reconsideration under Federal Rule of Civil Procedure 59(e). See Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir. 1993). But “reconsideration of a previous order is an extraordinary remedy which should be used sparingly.” Fields v. Pool Offshore, Inc., 1998 WL 43217, at *2 (E.D. La. Feb. 3, 1998); see also Bardwell v. George G. Sharp, Inc., 1995 WL 517120, at *1 (E.D. La. Aug. 30, 1995). The Court must “strike the proper balance between two competing imperatives: (1) finality, and (2) the need to render just decisions on the basis of all the facts.” Edward H. Bohlin Co., 6 F.3d at 355. A moving party must satisfy at least one of the following criteria to prevail on a Rule 59(e) motion: (1) the motion is necessary to correct a manifest error of fact or law; (2) the movant presents newly discovered or previously unavailable evidence; (3) the motion is necessary in order to prevent manifest injustice; and (4) the motion is justified by an intervening change in the controlling law. See Fid. & Deposit Co. of Md. v. Omni Bank, 1999 WL 970526, at *3 (E.D. La. Oct. 21, 1999); Fields, 1998 WL 43217, at *2; see also Compass Tech., Inc. v. Tseng Labs., Inc., 71 F.3d 1125, 1130 (3d Cir. 1995) (“Rule 59 and Rule 60(b)(2) share the same standard for granting relief on the basis of newly discovered evidence.”).

         In its motion for consideration, WWCS asserts that the Court committed manifest errors of law in construing “baffle type members” and “ball valve assembly.” WWCS first challenges the Court's conclusion that a person of ordinary skill in the art would understand the baffle type members as plate-like structures.[29] Specifically, WWCS argues that the Court's construction improperly imports a limitation from the specification. WWCS further argues that the Court's use of technical dictionaries was improper, both because the dictionaries contradict the intrinsic evidence, and because “baffle type members” is not ambiguous in light of the intrinsic evidence.

         These arguments do not reveal a manifest error of law committed by the Court in construing baffle type members. First, the Court did not import a limitation from the specification. Instead, the Court read the claim language in light of the specification. This was not only proper under Federal Circuit precedent-it was required. See Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc) (“[C]laims ‘must be read in view of the specification, of which they are a part.'” (quoting Markman, 52 F.3d at 979)). The specification refers to baffle type members only once, stating that “a suitable deflector means may include a baffle type member or other plate type member extending from the inner surface of the separator.” '725 Patent at 8:7-9 (emphasis added). As a matter of ordinary English usage, this language clearly suggests that baffle type members are a subset of plate type members.

         Second, the technical dictionaries do not contradict the intrinsic evidence. To the contrary, both technical dictionaries cited by the Court define baffles in separators as plates. See Norman J. Hyne, Dictionary of Petroleum Exploration, Drilling & Production 31 (2d ed. 2014); George E. King Eng'g, 5000 Oilfield Terms: A Glossary of Petroleum Engineering Terms, Abbreviations and Acronyms (2010). Third, the Court did not err in consulting the technical dictionaries. The Federal Circuit has approved of consideration of such evidence “if the court deems it helpful in determining ‘the true meaning of language used in the patent claims.'” Phillips, 415 F.3d at 1318 (quoting Markman, 52 F.3d at 980).

         WWCS next challenges the Court's conclusion that a person of ordinary skill in the art would understand the ball valve assembly as operating without external intervention.[30] WWCS argues that the Court improperly imported this “negative limitation” from an unknown source. WWCS further argues that if the Court imported this limitation from the primary embodiment in the specification, that too was error.

         WWCS's arguments do not reveal a manifest error of law by the Court in construing ball valve assembly. The Court first notes that its construction is not a “negative limitation, ” as WWCS argues. Instead, the Court construed the ball valve assembly as operating without external intervention, i.e., mechanically or automatically. The Court based its construction on the claim language itself. Claim 1 describes the ball valve assembly as “being operationally configured to open and seal the gas outlet based on the volume of non-gaseous fluid within the separator.” '725 Patent at 9:20-22 (emphasis added). A component that required external intervention to open and close the gas outlet would render superfluous the “based on” limitation. Federal Circuit precedent disfavors “interpretations that render some portion of the claim language superfluous.” SimpleAir, Inc. v. Sony Ericsson Mobile Commc'ns AB, 820 F.3d 419, 429 (Fed. Cir. 2016). Moreover, the Court cited the specification in this context only to confirm that the primary embodiment of the separator features a ball valve assembly that operates mechanically. For these reasons, the Court declines to reconsider its claim construction order.

         B. Oceaneering's Motion for Summary Judgment

         Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter 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 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 1075. A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must 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 nonmoving party can then defeat the motion by either countering with evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

         If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails ...


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