DynaEnergetics Eur. GmbH v. Hunting Titan, Inc.

• Decision Date: 19 September 2022
• Docket Number: Civil Action H-20-2123
• Parties: DYNAENERGETICS EUROPE GMBH, and DYNAENERGETICS US, INC., Plaintiff, v. HUNTING TITAN, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

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DYNAENERGETICS EUROPE GMBH, and DYNAENERGETICS US, INC., Plaintiff, v. HUNTING TITAN, INC., Defendant.

Civil Action No. H-20-2123

United States District Court, S.D. Texas, Houston Division

September 19, 2022

MEMORANDUM OPINION AND ORDER

SIM LAKE, SENIOR UNITED STATES DISTRICT JUDGE.

This action is brought by plaintiffs, DynaEnergetics Europe GmbH and DynaEnergetics US, Inc., (“DynaEnergetics” or “Plaintiffs”), against defendant, Hunting Titan Inc. (“Hunting Titan” or “Defendant”), under the Patent Act of the United States, 35 U.S.C. § 101, et seq., including 35 U.S.C. § 271, for alleged infringement of two United States patents for perforation gun components and systems used in oil and gas exploration:^[1] (1) U.S. Patent No 10,429,161 (“'161 Patent”), filed on June 8 2017, and issued on October 1, 2019, to DynaEnergetics GmbH & Co. KG (now DynaEnergetics Europe GmbH);^[2] and (2) U.S. Patent No. 10,472,938 (“'938 Patent”), filed on March 20, 2019, and issued on November 12, 2019, to JDP Engineering and Machine Inc. and DynaEnergetics GmbH & Co. KG (now DynaEnergetics Europe GmbH).^[3] The following motions are pending before the court: Plaintiffs' Motion for Summary Judgment (“Plaintiffs' MSJ”) (Docket Entry No. 128); Plaintiffs' Opposed Daubert Motion to Exclude the Opinions and Testimony of William Fleckenstein, Ph.D. (Docket Entry No. 129); Defendant Hunting Titan, Inc.'s Motion for Summary Judgment (“Defendant's MSJ”) (Docket Entry No. 133); Defendant Hunting Titan, Inc.'s Daubert Motion to Exclude Expert Testimony of Andrew W. Carter (Docket Entry No. 134); Defendant Hunting Titan, Inc.'s Daubert Motion to Exclude Expert Testimony of Mr. Tod Tumey (Docket Entry No. 135); Defendant Hunting Titan's Motion to Strike (“Defendant's Motion to Strike”) (Docket Entry No. 136); Plaintiffs' Opposed Daubert Motion to Exclude the Opinions and Testimony of William Fleckenstein, Ph.D. (Docket Entry No. 141); Plaintiffs' Opposed Motion to File a Sur-Reply in Response to Defendant's Reply Brief in Further Support of Its Motion for Summary Judgment (“Plaintiffs' Motion to File Sur-Reply”) (Docket Entry No. 175); and Defendant Hunting Titan, Inc.'s Opposed Motion for Leave to File Amended Answer and Counterclaims Asserting Additional Inequitable Conduct Defense (“Defendant's Motion to Amend”) (Docket Entry No. 180). For the reasons stated below Plaintiffs' MSJ will be granted in part and denied in part, Defendant's MSJ will be granted in part and denied in part, Defendant's Motion to Strike will be denied as moot, Plaintiffs' Motion to File Sur-Reply will be denied, Defendant's Motion to Amend will be denied, and the Daubert motions will all be denied without prejudice to being reurged at trial.

I. Procedural Background and Undisputed Facts

A. Procedural Background

This patent infringement action was originally filed on January 30, 2020, in the Western District of Texas. Defendant filed a motion to transfer to this district, which was granted on June 16, 2020.^[4] On September 4, 2020, the court consolidated this action with a previously filed patent infringement action involving the same parties, but different patents (Civil Action No. 17-3784), and stayed both cases pending review by the United States Patent and Trademark Office (“USPTO”) (Docket Entry No. 49). On July 15, 2021, the court entered a Memorandum Opinion and Order (Docket Entry No. 50) vacating the consolidation and stay order, denying Plaintiffs' motion for preliminary injunction in favor of consolidating preliminary injunction proceedings under Rule 65(a) with trial on the merits, and requiring the parties to submit a proposed, accelerated discovery schedule. On July 22, 2021, the court entered a Scheduling Order (Docket Entry No. 55), which has been amended several times. On August 27, 2021, Plaintiffs filed their Second Amended Complaint (Docket Entry No. 63), alleging that Defendant infringes the '161 and '938 Patents. Defendant answered on September 10, 2021, by filing Defendant's Answer, Affirmative Defenses, and Counterclaims to Plaintiffs' Second Amended Complaint (Docket Entry No. 69), asserting affirmative defenses and counterclaims seeking declaratory judgment for invalidity and unenforceability due to inequitable conduct. On September 24, 2021, Plaintiffs filed Plaintiffs' Motion to Dismiss and Strike Defendant's Third Counterclaim and Fifth Affirmative Defense for Unenforceability due to Inequitable Conduct (Docket Entry No. 71), which Plaintiffs withdrew in favor of filing their pending motion for summary judgment.^[5]

On October 28, 2021, the court held a hearing pursuant to Markman v. Westview Instruments, Inc., 116 S.Ct. 1384, 1387 (1996) (Docket Entry No. 82), and on November 23, 2021, the court issued a Memorandum Opinion and Order (Docket Entry No. 95) holding that three disputed claim terms, “tandem seal adapter,” “signal-in connector,” and “through wire connector,” need no construction because each term is subject to its plain and ordinary meaning. The most recent Scheduling Order was entered on February 7, 2022 (Docket Entry No. 125), which reopened discovery and extended the motion filing deadline to March 8, 2022.

B. Undisputed Facts

1. Technology: Perforation Guns

Plaintiffs and Defendant compete in the manufacture and sale of perforating gun systems used in the oil and gas industry. Plaintiffs allege that Defendant's H-1™ Perforating System (“H-1 System”) infringes patents related to their DynaStage System.

“Perforation guns are specialized assemblies that include explosives and are deployed into oil and gas wells where the explosives are detonated to ‘perforate' hydrocarbon-containing underground formations, for extracting fossil fuels and natural gas.”^[6]

[T]he perforating process involves carrying explosive charges downhole (into the well) and positioning them at a desired depth in order to open up communication to the rock and embedded hydrocarbons upon detonation of the explosives. The shaped charges open up tunnels through the wellbore casing lining the well and radia[ting] outward into the surrounding formation. The perforation tunnels act as conduits through which reservoir fluids flow from the formation into the wellbore and up to the surface during the production phase of the well. Each perforation creates a channel that allows oil and/or gas to leave the rock and enter the oil or gas well. . .

Perforation guns are the vessels used to transport and deliver the explosive shaped charges within the wellbore and they come in a variety of sizes and configurations. . .^[7]

Conventional perforation guns are limited due to, inter alia, “the required on-site assembly of the charge tube, positioning of the charge tube into a gun carrier, and on-site wiring of electrical and ballistic connections used to relay electrical detonation signals and detonate the shaped charges.”^[8] Plaintiffs contend that

[t]he inventors of the Patents-in-Suit removed these limitations and ushered in the era of modular, “prewired,” factory-assembled perforation guns that do not require cumbersome on-site assembly of internal components or wiring of electrical and/or ballistic connections. . . These new and improved perforating gun systems contain contactable electrical feed through connections (as opposed to wired connections) that replace the wiring and crimping between successive perforating guns in a string that was used in the prior art conventional systems. . .^[9]

Defendants contend that as early as 2012 other companies were marketing perforating guns that required no wiring or setup on site, e.g., Baker Hughes' SurePerf Select-Fire perforating system, and Schlumberger's SafeJet perforating gun system.^[10]

2. Asserted Patents and Their Prosecution History

The '161 Patent, entitled “Perforation Gun Components and Systems,” was issued on October 1, 2019. A copy of the '161 Patent is attached to Plaintiffs' Second Amended Complaint as Exhibit A (Docket Entry No. 63-1).^[11] Plaintiffs assert that “[t]he '161 Patent is generally directed to the internal components of a perforating gun system designed as a modular system that could be provided to customers as a modular perforating gun system kit.”^[12]

The '938 Patent, entitled “Perforation Gun Components and System,” was issued on November 12, 2019[,] to JDP Engineering and Machine Inc. and DynaEnergetics GmbH & Co. KG (now DynaEnergetics Europe GmbH), which has assigned any and all of its rights and interest to DynaEnergetics Europe GmbH. A copy of the '938 Patent is attached to Plaintiffs' Second Amended Complaint as Exhibit B (Docket Entry No. 63-2).^[13] Plaintiffs assert that “[t]he '938 Patent claims are directed to the electrical relay between perforation guns, as well as to a wireless detonator.”^[14] Plaintiffs contend that

[t]he claimed Plug and Go™ detonator permits pre-wired, pre-loaded, factory-assembled perforation guns that do not require on-site wiring of electrical and/or ballistic connections and eliminates the risk of inadvertent detonations from stray electrical current or voltage, reducing potential safety problems with surface handling of explosives and minimizing the assembly time by removing the need for hand-wiring or crimping wires at the wellsite.^[15]

3. Accused Products

Plaintiffs allege that Defendants' H-1 System infringes claims 1, 4, and 20 of the '161 Patent and claims 1, 5, and 7-12 of the '938 Patent, as set forth in the claim charts attached to Plaintiffs' Second Amended Complaint as Exhibits C (Docket Entry No. 63-3), and D (Docket Entry No. 63-4), respectively,^[16] and Plaintiffs' Preliminary Infringement Contentions.^[17]

II. Motions to Exclude and Strike Expert Testimony

A. Motions to Exclude

Plaintiffs have filed two motions to exclude...