Halliburton Energy Services, Inc. v. M-I LLC

• Decision Date: 25 January 2008
• Docket Number: No. 2007-1149.,2007-1149.
• Citation: 514 F.3d 1244
• Parties: HALLIBURTON ENERGY SERVICES, INC., Plaintiff-Appellant, v. M-I LLC (doing business as I Drilling Fluids L.L.C.), Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

514 F.3d 1244

HALLIBURTON ENERGY SERVICES, INC., Plaintiff-Appellant, v. M-I LLC (doing business as I Drilling Fluids L.L.C.), Defendant-Appellee.

No. 2007-1149.

United States Court of Appeals, Federal Circuit.

January 25, 2008.

Edward D. Manzo, Cook, Alex, McFarron, Manzo, Cummings & Mehler, Ltd., of Chicago, Illinois, argued for plaintiff-appellant. With him on the brief were Monte M. Bond and David L. Patterson, Dykema Gossett PLLC, of Dallas, Texas.

John R. Keville, Howrey LLP, of Houston, Texas, argued for defendant-appellee. With him on the brief were Stephen H. Cagle and Richard L. Stanley. Of counsel on the brief was S. Calvin Capshaw, Brown McCarroll LLP, of Longview, Texas.

Before MICHEL, Chief Judge, BRYSON, Circuit Judge, and FOGEL,^* District Judge.

MICHEL, Chief Judge.

Halliburton Energy Services, Inc. ("Halliburton") appeals from a final judgment of the United States District Court for the Eastern District of Texas. Halliburton Energy Services, Inc. v. M-I LLC, No. 6:05-CV-155 (E.D.Tex. Nov. 20, 2006) ("Judgment Order"). The district court granted summary judgment in favor of M-I LLC ("M-I"), holding that independent claims 1-3 and 5 and their asserted dependent claims of U.S. Patent No. 6,887,832 B2 ("the '832 patent") were invalid as indefinite under 35 U.S.C. § 112, ¶ 2. We heard oral argument on November 7, 2007. Because a claim term in each asserted claim lacked clear meaning to the ordinary artisan, we affirm.

I.

Halliburton is the assignee of the '832 patent, which relates to oil field drilling fluids that are fragile gels. In the process of drilling such wells, drilling fluid is used for a variety of purposes, such as "removing drill cuttings from the wellbore, cooling and lubricating the drill bit, aiding in support of the drill pipe and drill bit, and providing a hydrostatic head to maintain the integrity of the wellbore walls and prevent well blowouts."`832 patent col.1, II.27-31.

The '832 patent claims recite certain fragile gel drilling fluids. Claim 1 for example recites:

1. A method for conducting a drilling operation in a subterranean formation using a fragile gel drilling fluid comprising:

(a) an invert emulsion base;

(b) one or more thinners;

(c) one or more emulsifiers; and

(d) one or more weighting agents, wherein said operation includes running casing in a borehole.

(emphasis added).

During prosecution, Halliburton distinguished the claims of the '832 patent from prior art fluids by stating that the claims were "limited to" a "fragile gel" drilling fluid or the method of using a "fragile gel" drilling fluid. Thus, although the term "fragile gel" appears only in the preamble of the asserted independent claims, Halliburton concedes that the claimed drilling fluids are limited to those that are "fragile gels." Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1305 (Fed.Cir. 1999) ("If the claim preamble, when read in the context of the entire claim, recites limitations of the claim, or, if the claim preamble is `necessary to give life, meaning, and vitality' to the claim, then the claim preamble should be construed as if in the balance of the claim.") (citations omitted). The specification defines "fragile gels" as follows:

A "fragile gel" as used herein is a "gel" that is easily disrupted or thinned, and that liquifies or becomes less gel-like and more liquid-like under stress, such as caused by moving the fluid, but which quickly returns to a gel when the movement or other stress is alleviated or removed, such as when circulation of the fluid is stopped, as for example when drilling is stopped. The "fragileness" of the "fragile gels" of the present invention contributes to the unique and surprising behavior and advantages of the present invention. The gels are so "fragile" that it is believed that they may be disrupted by a mere pressure wave or a compression wave during drilling. They seem to break instantaneously when disturbed, reversing from a gel back into a liquid form with minimum pressure, force and time and with less pressure, force and time than known to be required to convert prior art fluids from a gel-like state into a flowable state.

'832 patent col.2 II.26-42.

In May 2005, Halliburton sued M-1 in the United States District Court for the Eastern District of Texas, alleging that I's Rheliant drilling mud system infringed certain claims of the '832 patent. M-I moved for summary judgment of invalidity, arguing that the asserted claims of the '832 patent were invalid for indefiniteness, lack of enablement, and/or lack of written description. After holding a combined Markman and motion hearing to address claim construction disputes as well as M-I's motion for summary judgment of invalidity, the district court granted M-I's motion for summary judgment, finding that all asserted claims of the '832 patent were invalid as indefinite. Halliburton Energy Serv., Inc. v. M-I LLC, 456 F.Supp.2d 811, 825 (E.D.Tex.2006).

First, the district court looked at the definition of fragile gel in the specification and found that it was too subjective and unclear because it relied on terms such as "easily transitions," "easily disrupted or thinned," "less gel-like," "more liquid-like," "quickly returns to a gel," "break instantaneously," and "minimum pressure, force, and time." Id. at 817. Additionally, the district court rejected Halliburton's argument that Figure 3 (depicted below) and Figure. 4¹ of the '832 patent distinguish the invention from the prior art. Id. at 822-23.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

SF fluids are prior art fluids whereas ACCOLADE^TM fluids have the characteristics of the invention of the '832 patent. '832 patent col.4 I.65-col.5 I.7. In Figure 3, at around the 70 minute mark, the height of the curve when stress is applied represents the strength of the gel that the fluid forms at rest, and the speed at which the curve falls back on itself indicates how quickly the gel breaks (i.e., transitions back to a liquid state). The district court found that this graph did not delineate the bounds of the invention because both prior art fluids and fluids of the invention exhibit the same shape curves (the curves of the 12.1 SF, 12.65 ACCOLADE, and 15.6 ACCOLADE fluids all fall directly back on themselves). Halliburton, 456 F.Supp.2d at 820. The primary difference between these fluids is the height of the curves (i.e., the strength of the gels formed), but the district court found that Halliburton had produced no evidence of "precisely how high the vertical leg of a fluid's L-shaped curve must reach—i.e., how `strong' a gel must be—for that fluid to exhibit `fragile gel behavior.'" Id.

The district court also noted that Halliburton's proposed additional limitation to the term "fragile gel," that it contains no or only low amounts of organophilic clay or lignite, was improperly imported from the specification, which states that the fragile gel of certain embodiments of the invention of the patent preferably does not have these clays. Id. at 824. The court found that the doctrine of claim differentiation further counseled against this construction because dependent claims added the limitation that the fluid is "substantially free of organophilic clay." Id. at 824-25.

In November 2006, the court issued a final judgment that all asserted claims of the '832 patent were proven invalid as indefinite, held that all other issues of infringement and validity were moot, and dismissed M-I's counterclaims without prejudice. This timely appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

II.

We review both a district court's grant of summary judgment and a conclusion that a claim is indefinite under 35 U.S.C. § 112, ¶ 2 de novo. Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed.Cir.2005).

35 U.S.C. § 112, ¶ 2 requires that the specification of a patent "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." Because claims delineate the patentee's right to exclude, the patent statute requires that the scope of the claims be sufficiently definite to inform the public of the bounds of the protected invention, i.e., what subject matter is covered by the exclusive rights of the patent. Otherwise, competitors cannot avoid infringement, defeating the public notice function of patent claims. Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1581 (Fed.Cir.1996) ("[T]he primary purpose of the requirement is `to guard against unreasonable advantages to the patentee and disadvantages to others arising from uncertainty as to their [respective] rights.'") (quoting Gen. Elec. Co. v. Wabash Appliance Carp., 304 U.S. 364, 369, 58 S.Ct. 899, 82 L.Ed. 1402, (1938)). The Supreme Court has stated that "[t]he statutory requirement of particularity and distinctness in, claims is met only when [the claims] clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise." United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236, 63 S.Ct. 165, 87 L.Ed. 232 (1942).

This court has applied the definiteness requirement of 35 U.S.C. § 112, ¶ 2 in numerous circumstances. For example, we have held claims indefinite where a claim recites means-plus-function elements without disclosing corresponding structure in the specification, Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946, 950 (Fed.Cir.2007), includes a numeric limitation without disclosing which of multiple methods of measuring that number should be used, Honeywell Int'l Inc. v. Int'l Trade Comm'n, 341 F.3d 1332, 1340 (Fed. Cir.2003), and contains a term that is "completely dependent on a person's subjective opinion," Datamize, 417 F.3d at 1350. We have also stated that a claim could be indefinite if a term does not have proper antecedent basis where such basis is not...