M-I LLC v. Fpusa, LLC
| Decision Date | 17 October 2016 |
| Docket Number | No. SA:15-CV-406-DAE,SA:15-CV-406-DAE |
| Parties | M-I LLC, Plaintiff, v. FPUSA, LLC, Defendant. |
| Court | U.S. District Court — Western District of Texas |
Before the Court is a Motion to Dissolve the Preliminary Injunction issued by this Court on November 4, 2015, filed by Defendant FPUSA, LLC ("Defendant") (Dkt. # 113). On October 13, 2016, the Court held a hearing on the matter. Ted. D. Lee, Esq., Michelle C. Replogle, Esq., and John R. Keville, Esq., appeared on behalf of Plaintiff M-I LLC ("Plaintiff"). Christopher L. Dodson, Esq., Douglas F. Stewart, Esq., and Timothy R. Geiger, Esq., appeared on behalf of Defendant. After considering the arguments made by the parties at the hearing, the evidence presented, and arguments made in the briefs, the Court, for the reasons that follow, finds that this motion should be DENIED (Dkt. # 113).
On November 4, 2015, this Court issued an Amended Order granting Plaintiff's motion to preliminarily enjoin Defendant from infringing or inducing the infringement of Claim 16 of U.S. Patent No. 9,004,288 (the "'288 Patent"), contingent upon the posting of a ten million dollar bond. Plaintiff filed the bond the following day, and the injunction took effect. Defendant now seeks to invalidate the preliminary injunction by raising additional challenges to the validity of the '288 Patent.
Plaintiff is a limited liability company engaged in the business of supplying oil drilling fluid and related equipment and services. (Dkt. # 1 ¶ 1; Dkt. # 8 at 1.) Drilling fluid serves to lubricate and cool drill bits during the drilling process, and also serves to convey drill cuttings away from the bore hole. (Dkt. # 8 at 2.) Drilling fluids are typically very expensive; thus, to reduce the cost of drilling operations, operators seek to recover and reuse as much drilling fluid as possible. (Id. at 2-3.) A "shale shaker," which is used to remove large solids from the drilling fluid, is one piece of equipment used in the recovery process. (Id. at 3.) Operators feed "slurry" (a mixture of drilling fluid and drill cuttings) onto the shaker bed, where a vibrating screen separates the drilling fluid from drill cuttings and other solids. (Id.) The drilling fluid then falls through the screen into a receptacle below. (Id.)
Plaintiff's inventor, Brian Carr, filed several patent applications with the United States Patent and Trademark Office ("USPTO") in 2006 regardingimprovements to shakers and the drilling fluid recovery process. (Id. at 3.) On April 14, 2015, one of those applications issued as the '288 Patent. The abstract of the '288 Patent describes Carr's invention as follows:
A system for separating components from a slurry of drilling fluid and drill cuttings on a shaker screen having an upper side and a lower side within a shaker. The system also has a pressure differential generator to pull an effective volume of air through a section of the shaker screen to enhance the flow of drilling fluid through the section of the shaker screen and the separation of drilling fluid from drill cuttings and further maintain an effective flow of drill cuttings off the shaker. A method of separating components of a slurry of drilling fluids and solids has the steps of delivering the slurry to a shaker, flowing the slurry over a first screen and applying an effective amount of vacuum to a first portion of the first screen to remove the drilling fluids from the slurry without stalling the solids on the first screen.
Figure 4 of the 288 Patent illustrates other aspects of Carr's invention. It shows a screen installed on top of a sump, which is fluidly connected via flow line to a degassing chamber and a pressure differential device in order to generate the desired pressure differential across the screen.
Image materials not available for display.
('288 Patent, Figures 4 and 6.)
On May 15, 2015, Plaintiff filed the instant lawsuit alleging that a shale shaker produced by Defendant infringes the '288 Patent. (Dkt. # 1.) On June 24, 2015, this Court issued an Order Granting Plaintiff's Motion for Preliminary Injunction as to claims 1 and 16 of the '288 Patent. (Dkt. # 31.) Defendant appealed. (Dkt. # 49.) On September 24, 2015, the Federal Circuit affirmed this Court's injunction with respect to Claim 16, vacated the Court's injunction as to Claim 1, and remanded for this Court to reform its injunction. The reformed injunction consistent with the Federal Circuit's direction issued on November 4, 2015.
On November 19, 2015, Defendant filed a Petition for Inter Partes Review ("IPR") before the USPTO's Patent Trial and Appeal Board ("PTAB"),seeking review of the '288 Patent. ("IPR Petition," Dkt. # 113, Ex. C; FPUSA, LLC v. M-I LLC, No. IPR 2016-00213 (P.T.A.B. Nov. 19, 2015). The IPR Petition asserted that numerous claims of the '288 Patent were unpatentable, based upon six prior art references which Defendant had not discovered at the time this Court held the hearing on the Motion for a Preliminary Injunction. (Dkt. # 113 at 5.) The PTAB panel issued a decision on June 2, 2016, which instituted review of the '288 Patent. ("IPR Decision," Dkt. # 113, Ex. J; FPUSA, LLC v. M-I LLC, No. IPR 2016-00213 at 28-29 (P.T.A.B. Jun. 2, 2016).)
Now, Defendant seeks to dissolve the November 4, 2015, injunction, arguing that the PTAB panel's decision to institute IPR against the '288 Patent amounts to a change in circumstances such that Plaintiff can no longer establish a likelihood of success on the merits. (Dkt. # 113 at 1-11.) Further, Defendant argues that even if the PTAB panel's decision to institute IPR does not amount to a change in circumstances, the discovery of the prior art warrants the dissolution of the preliminary injunction. (Id. at 11.)
A patentee suing an alleged infringer for patent infringement may, for the purpose of immediately preventing further alleged infringement, move for the "extraordinary relief" of a preliminary injunction. 35 U.S.C. § 283; Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1375 (Fed. Cir. 2009). Thepurpose of a preliminary injunction is "to preserve the status quo pending a determination of the action on the merits." Litton Sys., Inc. v. Sundstrand Corp., 750 F.2d 952, 961 (Fed. Cir. 1984). A party seeking a preliminary injunction must establish (1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm in the absence of relief, (3) that the balance of equities is in its favor, and (4) that an injunction is in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
The grant of a preliminary injunction is not unique to patent law, and the Federal Circuit applies the law of the regional circuit when reviewing and interpreting such decisions. Aevoe Corp. v. AE Tech. Co., 727 F.3d 1375, 1381 (Fed. Cir. 2013). However, "[s]ubstantive matters of patent infringement are unique to patent law, and thus the estimated likelihood of success in establishing infringement is governed by Federal Circuit law." Revision Military, Inc. v. Balboa Mfg. Co., 700 F.3d 524, 526 (Fed. Cir. 2012).
"Ordinarily, the purpose of a motion to modify an injunction is to demonstrate that changed circumstances make the continuation of the order inequitable." Black Ass'n of New Orleans Fire Fighters (BANOFF) v. City of New Orleans, La., 853 F.2d 347, 354 (5th Cir. 1988). "Modification of an injunction is appropriate when the legal or factual circumstances justifying the injunction have changed." ICEE Distrib., Inc. v. J&J Snack Foods, Corp., 445F.3d 841, 850 (5th Cir. 2006). In the context of a preliminary injunction enjoining patent infringement, discovery of prior art is a changed factual circumstance warranting reexamination of the validity of the patent. Entegris, Inc. v. Pall Corp., 490 F.3d 1340, 1343 (Fed. Cir. 2007)
A party seeking a preliminary injunction must first show a likelihood of success on the merits. Winter, 555 U.S. at 20. For a patentee-plaintiff to establish that it is likely to succeed on the merits of a patent infringement claim, it must show (1) that it is likely to prove infringement of the patent claim, and (2) that the infringed-upon claim is valid. AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1050 (Fed. Cir. 2010). To meet its burden under this prong, a patentee must prove that "success in establishing infringement is more likely than not." Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1166 (Fed. Cir. 2014) (internal quotation marks omitted). "A preliminary injunction should not issue if an alleged infringer raises a substantial question regarding either infringement or validity," and the patentee cannot show that the question "lacks substantial merit." AstraZeneca, 633 F.3d at 1050. The Court addresses the infringement and validity elements in turn below.
This Court previously found that Plaintiff met its burden of showing a likelihood of the success on the merits of its direct...
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