Quest Integrity USA LLC v. Clean Harbors Industrial Services Inc.
Filing
247
MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 3/28/2017. Associated Cases: 1:14-cv-01482-SLR, 1:14-cv-01483-SLR(nmfn)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
QUEST INTEGRITY USA, LLC
Plaintiff,
v.
CLEAN HARBORS INDUSTRIAL
SERVICES, INC.
Defendant.
QUEST INTEGRITY USA, LLC
Plaintiff,
v.
COKEBUSTERS USA INC.
Defendant.
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) Civ. No. 14-1482-SLR
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) Civ. No. 14-1483-SLR
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Thomas C. Grimm, Esquire, Jeremy A. Tigan, Esquire, and Stephen J. Kraftschik,
Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware. Counsel for
Plaintiff. Of Counsel: Douglas A. Grady of Foster Pepper PLLC.
Kelly E. Farnan, Esquire and Selena E. Molina, Esquire of Richards, Layton & Finger,
P.A., Wilmington, Delaware. Counsel for Defendant Clean Harbors Industrial Services,
Inc. Of Counsel: Michael J. Turgeon, Esquire and Robert S. Rigg, Esquire of Vedder
Price P.C.
David E. Moore, Esquire, Stephanie E. O’Byrne, Esquire, and Bindu A. Palapura,
Esquire of Potter, Anderson & Corroon, LLP, Wilmington, Delaware. Counsel for
Defendant Cokebusters USA Inc. Of Counsel: Nick Brown, Esquire, Thomas M.
Fulkerson, Esquire, and Wesley G. Lotz, Esquire of Fulkerson Lotz LLP; Michael
Hudgins, Esquire and Steven Hudgins, Esquire of The Hudgins Law Firm.
MEMORANDUM OPINION
Dated: March 28, 2017
Wilmington, Delaware
R~~strict
Judge
I. INTRODUCTION
Quest Integrity USA, LLC ("plaintiff') initiated the above lawsuits on December 15,
2014, by filing complaints against Clean Harbors Industrial Services, Inc. ("Clean Harbors")
and Cokebusters USA Inc. ("Cokebusters") (collectively, "defendants") asserting
infringement of U.S. Patent No. 7,542,874 ("the '874 patent"), entitled "2D and 3D Display
System and Method for Furnace Tube Inspection." (Civ. No. 14-1482, D.I. 1, ex. A) Plaintiff
filed for a preliminary injunction, which the court denied on June 12, 2015. (Civ. No. 141482, D.I. 99) On June 28, 2016, the court issued its claim construction. (Civ. No. 141482, D. I. 137) Now that discovery has concluded, plaintiff has reduced the number of
asserted claims to nine. Plaintiff asserts claims 1, 13, 25, 33, and 37 against defendant
Clean Harbors and claims 12, 24, 30, 33, and 40 against defendant Cokebusters. 1 (Civ.
No. 14-1482, D.I. 180 at 1; Civ. No. 14-1483, D.I. 286 at 1) Therefore, claims 1, 12, 13,
24, 25, 30, 33, and 40 of the '874 patent are pending. 2
In December 2016, the parties filed various motions for summary judgment.
Plaintiff moves for summary judgment of infringement and validity. (Civ. No. 14-1482,
D.I. 179, D.I. 183; Civ. No. 14-1483, D.I. 285, D.I. 289) Defendants move for summary
judgment of invalidity. (Civ. No. 14-1482, D.I. 184; Civ. No. 14-1483, D.I. 293) Clean
Harbors moves for summary judgment of noninfringement. (Civ. No. 14-1482, D.I. 189)
Cokebusters moves for summary judgment of noninfringement and no willfulness. (Civ.
No. 14-1483, D.I. 290)
1
The court ordered plaintiff to limit the asserted claims to "three independent and two
dependent claims." (Civ. No. 14-1482, D.I. 145 at~ 6) Meanwhile, after the court
denied reconsideration on this matter, plaintiff sees fit to complain about this
requirement yet again. (Civ. No. 14-1482, D.I. 169 at~~ 2-3; D.I. 180 at 1 n.1)
2 As is discussed herein, defendants move for invalidity of independent claim 11 and
dependent claims 27 and 28.
II. STANDARD OF REVIEW
“The court shall grant summary judgment if 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). The moving party bears the burden of
demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 415 U.S. 475, 586 n. 10 (1986). A party asserting that a fact
cannot be—or, alternatively, is—genuinely disputed must be supported either by citing
to “particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those
made for the purposes of the motions only), admissions, interrogatory answers, or other
materials,” or by “showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(A) & (B). If the moving party has
carried its burden, the nonmovant must then “come forward with specific facts showing
that there is a genuine issue for trial.” Matsushita, 415 U.S. at 587 (internal quotation
marks omitted). The court will “draw all reasonable inferences in favor of the
nonmoving party, and it may not make credibility determinations or weigh the evidence.”
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
To defeat a motion for summary judgment, the non-moving party must “do more
than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita, 475 U.S. at 586-87; see also Podohnik v. U.S. Postal Service, 409 F.3d
584, 594 (3d Cir. 2005) (stating party opposing summary judgment “must present more
than just bare assertions, conclusory allegations or suspicions to show the existence of
a genuine issue”) (internal quotation marks omitted). Although the “mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment,” a factual dispute is genuine where “the
2
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). “If the evidence is merely
colorable, or is not significantly probative, summary judgment may be granted.” Id. at
249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (stating entry of summary judgment is mandated “against a party who fails to
make a showing sufficient to establish the existence of an element essential to that
party’s case, and on which that party will bear the burden of proof at trial”).
III. DISCUSSION
A. Claim Construction
At claim construction, neither party sought construction of claims 12 and 25. 3
(Civ. No. 14-1482, D.I. 119) Plaintiff moves for summary judgment of validity of these
two claims and now proposes constructions for their limitations. (Civ. No. 14-1482, D.I.
195 at 19-21) Defendants argue that no construction is necessary but offer an alternate
construction. 4 (Civ. No. 14-1482, D.I. 220 at 26-27)
1. Standard
Claim construction is a matter of law. Phillips v. AWH Corp., 415 F.3d 1303,
1330 (Fed. Cir. 2005) (en banc). Claim construction focuses on intrinsic evidence - the
claims, specification, and prosecution history - because intrinsic evidence is “the most
significant source of the legally operative meaning of disputed claim language.”
Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Markman v.
3
Plaintiff averred that with respect to the “generate a display . . . arranged to represent
said physical geometry” limitations, “similar phrases exist in other claims, but they should
be construed consistently with Quest’s proposed construction as noted in the Joint Claim
Construction Statement.” (Civ. No. 14-1482, D.I. 128 at 24 n.11)
4 Defendants argue further that claim 12 is invalid under section 112 because “[c]laim
11 requires that the display be of a ‘plurality’ of tube segments (two or more), while the
display in dependent claim 12 (which must by law practice all the elements of claim11)
allows display of ‘one or more’ tube segments.” (Civ. No. 14-1482, D.I. 220 at 28 n.28)
3
Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S.
370 (1996). Claims must be interpreted from the perspective of one of ordinary skill in
the relevant art at the time of the invention. Phillips, 415 F.3d at 1313. In some cases,
“the district court will need to look beyond the patent’s intrinsic evidence and to consult
extrinsic evidence in order to understand, for example, the background science or the
meaning of a term in the relevant art during the relevant time period.” Teva Pharm.
USA, Inc. v. Sandoz, Inc., _ U.S. _, 135 S. Ct. 831, 841 (2015) (citation omitted).
Claim construction starts with the claims and remains centered on the words of
the claims throughout. Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d
1323, 1331 (Fed. Cir. 2001). In the absence of an express intent to impart different
meaning to claim limitations, “the words of a claim are generally given their ordinary and
customary meaning,” which is “the meaning that the term would have to a person of
ordinary skill in the art in question at the time of the invention.” Phillips, 415 F.3d at
1312-13 (quoting Vitronics, 90 F.3d at 1582). “The ordinary meaning may be
determined by reviewing various sources, such as the claims themselves, the
specification, the prosecution history, dictionaries, and any other relevant evidence.
Ultimately, ‘[t]he only meaning that matters in claim construction is the meaning in the
context of the patent.’” Ruckus Wireless, Inc. v. Innovative Wireless Sols., LLC, Civ.
No. 2015-1425, _ F.3d. _, 2016 WL 3065024, at *3 (Fed. Cir. May 31, 2016). The
specification is often “the single best guide to the meaning of a disputed term.” Phillips,
415 F.3d at 1315.
2. Analysis
Claim 12 recites “[t]he computerized method of claim 11, wherein said display is
comprised of a two-dimensional or three-dimensional representation of one or more of
4
said stacked tube segments of said furnace.” (‘874 patent, 17:35-38) Claim 25 recites
an article of manufacture claim for performing the method of claim 12. 5 (Id. at 18:46-49)
The term “wherein said display is comprised of a two-dimensional or threedimensional representation of one or more stacked tube segments of said
furnace” 6 means “inspection data from one or more of the stacked tube segments is
displayed in two or three dimensions.”7 The “said display” of claim 12 refers to the term
in claim 11 “generating a display of at least a portion of said partitioned inspection data
arranged to represent said physical geometry of a plurality of said tube segments,”
which the court construed to mean “creating a visual representation of at least a portion
of the inspection data to depict or portray the arrangement of the tube segments.”8 (Civ.
No. 14-1482, D.I. 137 at ¶ 5) The display is of the inspection data and not the tube
segments: “the computer is also programmed to generate a display of the partitioned
inspection data.” (‘874 patent, abstract) “The present invention relates generally to
furnace tube inspection systems, and more particularly to a system and method for
displaying inspection data in a two-dimensional and/or three-dimensional format to
enable visual detection of problem areas within the furnace.” (Id. at 1:20-24)
5
The parties argue claim 25 alongside claim 12.
Found in claims 12 and 25 of the ‘874 patent.
7 Defendants proposed “wherein said display is comprised of one or more of said
stacked tube segments visually represented in two or three dimensions.” (Civ. No. 141482, D.I. 220 at 27) Defendants had argued that claims 12 and 25 “merely add a 2D
or 3D requirement to the independent claims.” (Id. at 26) Defendants’ proposed
construction did not resolve plaintiff’s suggestion that (in addition to requiring 2D or 3D
displays of inspection data), claims 12 and 25 add another limitation requiring the 2D or
3D display “of the stacked tubes themselves.” (Civ. No. 14-1482, D.I. 195 at 20-21) For
reasons to be discussed below, the 2D and 3D display embodiments relate to the
display of inspection data and not representations of the furnace tubes themselves.
8 The independent claim already addresses the physical geometry of the tubes in the
so-called “Display Limitation.” For reasons to be discussed below, there is nothing in
the specification to suggest that applicant intended additional limitations (in claims 12
and 25) beyond 2D and 3D display of inspection data.
6
5
The specification identifies figures 3, 4, 5, and 6 as “two-dimensional colorcoded” charts and figure 9 as a “three dimensional color-coded chart.” (Id. at 3:55-4:20)
In example 1, “computer 102 is programmed to generate a two-dimensional display of
the wall thickness readings and/or inside radius readings collected from a furnace.” (Id.
at 9:54-56) The two-dimensional display embodiments of example 1 are disclosed with
reference to figures 3 and 4. (Id. at 9:66-11:47) Examples 2 and 3 describe that
“computer 102 is programmed to generate a two-dimensional display of the wall
thickness readings” in which the “tube segments are positioned in their proper
orientation.” (Id. at 11:52-53; 12:21-22; 11:61-62; 12:31-32; see also id. at 12:6-7;
12:42-43 (“viewing all of the tube segments in their proper orientation”)) Example 2
references figure 5, and example 3 references figures 5 and 6. (Id. at 11:56-12:17;
12:25-55)
Examples 1 and 4 discuss three-dimensional displays of inspection data “in a
manner that matches the actual physical geometry of the furnace.” (‘874 patent,
14:65-66 (emphasis added); see also 11:44-46) For instance, example 1 contemplates
a 3D display of the “wall thickness readings and/or inside radius readings.” (Id. at
11:42-43) Meanwhile, example 4 recites:
Computer 102 is also programmed to generate a display of
the partitioned inspection data that may be viewed by a data
analyst in order to visually detect problem areas within the
furnace. This display may comprise a two-dimensional or
three-dimensional representation of one or more of the tube
segments of the furnace, which may be customized in
accordance with customer requirements. For example, one
customer may require a display that shows the wall
thickness at five equally spaced positions along the length of
a specific tube segment, while another customer may require
a display that shows the minimum wall thickness for each
tube segment of the furnace. Of course this information may
also be provided to the customer in the form of a written
report that accompanies the display.
(Id. at 14:45-59) Example 4 refers to figure 9. (Id. at 14:60-15:17)
6
The specification discloses several embodiments of 2D and 3D representations
of inspection data, which range from 2D strip charts with no limitations on the orientation
of the inspection data to 3D displays of inspection data portrayed “in a manner matching
the physical geometry of the furnace.” Mere reference to these embodiments does not
support a construction limited to one of those embodiments. As discussed extensively
in the court’s claim construction order, the intrinsic record shows that applicant did not
disclaim strip charts during prosecution. (Civ. No. 14-1482, D.I. 137 at ¶¶ 9-11)
Nothing in the specification or the claims suggests that claims 12 and 25 should be read
to exclude example 1 and figures 3 and 4. Therefore, claims 12 and 25 do not add
limitations that require: (1) 2D or 3D representations of the tube segments themselves;
(2) inspection data to be displayed in a manner representing the “actual physical
geometry” of the furnace; or (3) an arrangement of the inspection data in a manner that
places tube segments in their “proper orientation.” 9
9
Plaintiff sought a construction wherein “said display is comprised of a two-dimensional
depiction of one or more of the inspected tubes displayed as a stacked set of bars
wherein each bar displays readings from a single tube segment of the furnace or a
three-dimensional depiction where the displayed tube segments match the actual
physical geometry of the furnace.” (Civ. No. 14-1482, D.I. 195 at 20-21, 24) Plaintiff
argues extensively that this construction is necessary to read out example 1 and figures
3 and 4 from claims 12 and 25, which applicant allegedly disclaimed during prosecution
and is otherwise apparent from the specification. In support, plaintiff cited to “stacked
set of bars” language from example 1 at col. 11, lines 36-46 (discussing figures 3 and 4)
and argued that “[t]his language never appears in Example 1 and never appears in the
discussion of the strip charts shown in figures 3 and 4.” (Civ. No. 14-1482, D.I. 195 at
18) Given that plaintiff’s argument contradicts the specification, the court declines to
address it. Additionally, plaintiff contended that “[e]ven if strip charts are regarded . . .
as being coextensive with [] independent claims . . . 11 and 24, claims 12/25 are
dependent and thus narrower by definition.” (Civ. No. 14-1482, D.I. 195 at 23; see also
D.I. 187, ex. 17 at 45-46) This is an improper blurring between anticipation and claim
construction. See Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc., 344
F.3d 1186, 1195 n.4 (Fed. Cir. 2003). Moreover, the strip charts in the Norco sale could
anticipate both independent claim 11 and dependent claim 12. See, e.g., In re Slayter,
276 F.2d 408, 411 (C.C.P.A. 1960). The court declines to address plaintiff’s remaining,
duplicative arguments.
7
The court has provided a construction in quotes for the claim limitations at issue.
The parties are expected to present the claim construction consistently with any
explanation or clarification herein provided by the court, even if such language is not
included within the quotes.
B. ‘874 Patent – Validity
Defendants assert that claims 1, 11, 12, 13, 24, 25, 27, 28, 30, 33, 37 and 40 of
the ‘874 patent are invalid as anticipated under pre-AIA 35 U.S.C. § 102(b) by
plaintiff’s10 sale to Orion Norco Refining located in Norco, Louisiana (“the Norco sale”),
as documented in the first of two reports (the “Norco Reports”) dated February 17-23,
2003. (Civ. No. 14-1482, D.I. 185 at 11; D.I. 187, ex. 8) Defendants contend that these
claims are also obvious under § 103 and invalid for claiming patent ineligible subject
matter under § 101. (Id. at 26-27) Plaintiff, in its answering brief, argues that the Norco
sale does not anticipate the claims and that the Norco sale was part of a pattern of
experimental sales and product improvement, which means that the FTIS product and
services were not “on sale” within the meaning of § 102(b). (Civ. No. 14-1482, D.I. 195
at 8-11) Plaintiff contends that the claims are not obvious or invalid for failing to claim
eligible subject matter. (Id. at 26, 39) Given the late timing of this argument,
defendants contend that the eleventh-hour declaration by plaintiff’s experts Robert
Caligiuri, PhD, PE, FASM (“Caligiuri”) and Shukri J. Souri, PhD (“Souri”) “should be
disregarded under (1) the sham affidavit doctrine; (2) Fed. R. Civ. P. 30(e); and/or (3)
Fed. R. Civ. P. 37.” 11 (Civ. No. 14-1482, D.I. 220 at 4)
Plaintiff moves for summary judgment of validity with respect to dependent
claims 12 and 25. (Civ. No. 14-1482, D.I. 183; Civ. No. 14-1483, D.I. 289) Plaintiff
10
The sale was by plaintiff’s predecessor, “Quest Integrated, Inc.”
11 Alternatively, defendants assert that the court should exclude the expert testimony
from evidence by relying on the Pennypack factors. (Civ. No. 14-1482, D.I. 220 at 6)
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contends that these claims are directed to figures 5, 6, and 9 of the ‘874 patent and that
the court’s claim construction did not address these narrow claim limitations. (Civ. No.
14-1482, D.I. 195 at 4-5) Plaintiff argues that, under the principle of claim
differentiation, prior art (the Norco sale) presented at the preliminary injunction could not
invalidate both the independent claims as well as the dependent claims 12 and 25. (Id.)
Defendants respond that plaintiff’s proposed construction for claim 12 is “tortured and
narrow” and that there is no “one-for-one correlation between examples in the
specifications and any specific claim.” (Civ. No. 14-1482, D.I. 220 at 28-30)
Defendants argue that the Norco sale anticipates claims 12 and 25. (Id. at 30-32)
1. Standards
a. Anticipation
Under 35 U.S.C. § 102(b), “[a] person shall be entitled to a patent unless the
invention was patented or described in a printed publication in this or a foreign country .
. . more than one year prior to the date of the application for patent in the United
States.” 12 The Federal Circuit has stated that “[t]here must be no difference between
the claimed invention and the referenced disclosure, as viewed by a person of ordinary
skill in the field of the invention.” Scripps Clinic & Research Found. v. Genentech, Inc.,
927 F.2d 1565, 1576 (Fed. Cir. 1991). In determining whether a patented invention is
explicitly anticipated, the claims are read in the context of the patent specification in
which they arise and in which the invention is described. Glaverbel Societe Anonyme v.
Northlake Mktg. & Supply, Inc., 45 F.3d 1550, 1554 (Fed. Cir. 1995). The prosecution
history and the prior art may be consulted if needed to impart clarity or to avoid
ambiguity in ascertaining whether the invention is novel or was previously known in the
art. Id. The prior art need not be ipsissimis verbis (i.e., use identical words as those
12
The ‘874 patent has a priority date before March 16, 2013, therefore, pre-AIA § 102
applies.
9
recited in the claims) to be anticipating. Structural Rubber Prods. Co. v. Park Rubber
Co., 749 F.2d 707, 716 (Fed. Cir. 1984).
An anticipation inquiry involves two steps. First, the court must construe the
claims of the patent in suit as a matter of law. Key Pharms. v. Hercon Labs Corp., 161
F.3d 709, 714 (Fed. Cir. 1998). Second, the finder of fact must compare the construed
claims against the prior art. Id. A finding of anticipation will invalidate the patent.
Applied Med. Res. Corp. v. U.S. Surgical Corp., 147 F.3d 1374, 1378 (Fed. Cir. 1998).
b. Experimental use
“[T]he on-sale bar applies when two conditions are satisfied before the critical
date. First, the product must be the subject of a commercial offer for sale. . . . Second,
the invention must be ready for patenting.” Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67
(1998). The party asserting invalidity “must [] prove the facts underlying both prongs of
the Pfaff test by clear and convincing evidence.” 13 Allen Eng’g Corp. v. Bartell Indus.,
Inc., 299 F.3d 1336, 1352 (Fed. Cir. 2002). “Whether a product was placed on sale
under § 102(b) is a question of law based upon underlying factual determinations.”
KeyStone Retaining Wall Sys., Inc. v. Westrock, Inc., 997 F.2d 1444, 1451 (Fed. Cir.
1993) (citations omitted).
“Nevertheless, an inventor who seeks to perfect his discovery may conduct
extensive testing without losing his right to obtain a patent for his invention—even if
such testing occurs in the public eye. The law has long recognized the distinction
13
In the instant case, defendants presented arguments that the Norco sale anticipates
the relevant claims before plaintiff asserted its experimental use defense. In their
December 14, 2016 declaration, defendants’ experts Scott Schaefer, PhD (“Schaefer”)
and Jerry Rau (“Rau”) included a section on “Commercial nature of pre-critical date
sales and readiness for patenting” (Civ. No. 14-1482 D.I. 187, ¶¶ 17-26) Schaefer and
Rau noted “[w]e have included this section here out of an abundance of caution, but we
believe the conclusions we reach here can also be derived from a review of the
documentation without the benefit of expert testimony on the subject.” (Civ. No. 141482 D.I. 187, ¶ 17 n.10) The court agrees.
10
between inventions put to experimental use and products sold commercially.” Pfaff, 525
U.S. at 64. In order to determine whether public use or sale is experimental, the
Federal Circuit has catalogued a nonexhaustive list of objective factors that include:
(1) the necessity for public testing; (2) the amount of control
over the experiment retained by the inventor; (3) the nature
of the invention; (4) the length of the test period; (5) whether
payment was made; (6) whether there was a secrecy
obligation; (7) whether records of the experiment were kept;
(8) who conducted the experiment; (9) the degree of
commercial exploitation during testing; (10) whether the
invention reasonably requires evaluation under actual
conditions of use; (11) whether testing was systematically
performed; (12) whether the inventor continually monitored
the invention during testing; and (13) the nature of the
contacts made with potential customers.
Electromotive Div. of Gen. Motors Corp. v. Transportation Sys. Div. of Gen. Elec. Co.,
417 F.3d 1203, 1213 (Fed. Cir. 2005) (citations omitted). These factors “represent
various kinds of evidence relevant to the question of whether pre-critical date activities
involving the patented invention—either public use or sale were primarily experimental
and not commercial.” Id. “In determining the purpose of the alleged experimental use,
objective evidence indicating a purpose for such testing and experiment is generally
preferred. An inventor’s subjective intent is generally of minimal value.” In re Smith,
714 F.2d 1127, 1135 (Fed. Cir. 1983).
2. Undisputed facts
Plaintiff (and its predecessors) sells nondestructive furnace tube inspection
services 14 (“FTIS”) to clients in the petrochemical industry. (See, e.g., Civ. No. 14-1482,
D.I. 198, ex. J at 1 (February 14, 2003 quotation for Norco services)) In connection with
FTIS, plaintiff obtained the ‘874 patent, which includes “color-coded strip chart[s]”
shown in figures 3 and 4. (‘874 patent, 3:55; 3:59; figure 3 (wall thickness readings);
figure 4 (inside radius readings)) For example, the ‘874 patent describes the strip chart
14
Plaintiff uses “FTIS” in connection with “furnace tube inspection services” as well as a
“furnace tube inspection system.”
11
in figure 3: “computer 102 is programmed to generate a strip chart 300 in which all of
the wall thickness readings for a plurality of time intervals are plotted across a plurality
of horizontal strips. The wall thickness readings are plotted successively in time from
left-to-right and bottom-to-top.” (‘874 patent, 9:66-10:4) The ‘874 patent also includes
figure 8, which is “a colorized chart . . ., which shows the composite data markers in
relation to an adaptive threshold that may be used to identify the locations of the
furnace bends.” (‘874 patent, 4:11-14)
On August 30, 2002, one of the inventors of the ‘874 patent, Phil Bondurant
(“Bondurant”), sent himself an e-mail containing an attached Microsoft Word document,
entitled “FTISPatent.doc,” that contained a disclosure about FTIS. (Civ. No. 14-1482,
D.I. 186, ex. 1) This document contains text describing an invention 15 related to FTIS
and includes three figures that are similar 16 to figures 3, 4, and 8 of the ‘874 patent.
(Id.; see also ‘874 patent, figures 3, 4, and 8)
In a February 14, 2003 quotation for services to be delivered at a refinery in
Norco, Louisiana (“first Norco quotation”), plaintiff’s predecessor described its FTIS
services as “fairly new to the commercial marketplace,” having been developed
“approximately five (5) years” before and now employing a “second generation” FTIS
15
For example, the document begins with:
This invention describes a method to analyze and display data collected from
an autonomous furnace tube inspection system. In particular, the invention
provides a processing and display methodology that allows a large data set
of wall thickness and radius information that was collected by an autonomous
inspection tool to be correlated with the physical structure of the furnace tube
and to quickly determine the location of defects within the data set.
(Civ. No. 14-1482, D.I. 186, ex. 1 at 3)
16 The court notes that, in the August 30, 2002 document, “figure 1” corresponds to
“figure 3” in the ‘874 patent, “figure 2” corresponds to “figure 4” in the ‘874 patent, and
“figure 3” corresponds to “figure 8.” By “correspond,” the court notes that the data
contained in these figures is similar, employs the same units of measurement, uses the
same scale on the axes, and includes the same notations identifying tube sections (e.g.,
“1x”).
12
sensor known as the “FTIS Intelligent Pig.” (Civ. No. 14-1482, D.I. 198, ex. J at 1) The
first Norco quotation describes the reporting to be delivered as follows:
A “Field” Inspection Report can be supplied on site within 8
hours after the data is collected and analyzed. The
inspection report will provide 2-Dimensional (2D) color
graphics of all individual piping coil segments, return bends,
and cross-over piping. Piping segments containing wall
thinning, corrosion, broad area pitting, erosion, and bulging
which exceed the client’s specified threshold level will also
be provided. . . .
A “Final” Inspection Report will . . . be professionally bound. .
. . . [and] the client will also receive an electronic copy of the
report, drawings, images, and raw data on Compact Disk
(CD). This data will also be archived at QUEST for use in
future comparison inspections.
(Id. at 6-7) The first Norco quotation resulted in the first part 17 of the Norco sale, which
was delivered in two parts and documented in the two separate Norco Reports dated
February 17-23, 2003 and March 3-7, 2003. (Civ. No. 14-1482, D.I. 187, ex. 8 and 9;
D.I. 185, ex. A at 2-3)
The first Norco Report provides an explanation of the process employed by
plaintiff’s then current FTIS. (Civ. No. 14-1482, D.I. 187, ex. 8) After the inspection of
the furnace by the AFTISJ Intelligent Pig@ is completed and A[o]nce the ultrasonic data
is processed, it is then stored for downloading to the data station at the end of the
inspection.@ (Id. at 3)
The data analysis computer is a rugged, Pentium7-based
portable computer that utilizes the Windows NT7/XP7
system. This computer is provided with the custom FTIS
application software. The FTIS software enables the
operator to configure the FTIS tool, download data from
Flash RAM, and process and display collected data.
...
The FTIS software package allows operator control and
configuration of the FTIS tool from within a fully menu driven
graphical user interface. The FTIS software also provides
17
The second part of the Norco sale is documented in a separate quotation dated
March 6, 2003, after the first report had been completed. (Civ. No. 14-1482, D.I. 198,
ex. K)
13
analysis, display, and reporting capability. Displays consist
of tabular, cross-sectional, and color surface plots of the
data.
(Id. at 3-4) With respect to A2D Modeling,@
QUEST has designed custom software, which allows 2Dimensional (2D) viewing of the Aentire@ piping coil (refer to
Figure 3). The color bar to the right represents a range of
wall thickness in inches. The piping coil data begins in the
bottom left corner and moves to the right. It then moves up
one row and repeats the left to right motion throughout the
length of the inspection. Over a mile of piping can be
presented on a single plot.
(Id. at 4) In summarizing the project, plaintiff explained that A[e]ach pass was broken
down into 23 sections for easy identification and tracing,@ e.g., sections numbered 1-9
Arefer to the piping located in the Radiant portion of the pass.@ (Id. at 7) According to
plaintiff, A[e]ach pipe section number was located between two return bends. Each
section number has its own unique identifier for ease in locating flaws detected during
the inspection . . . .@ (Id. at 8) Figure 3 is a 2-dimensional viewing of the inspection
data, organized by ASection Number@ and identifying AReturn Bends.@
14
(Id. at 4) The second Norco Report, dated March 3-7, 2003, contained descriptions of
the tubing, identified by section numbers. (Civ. No. 14-1482, D.I. 187, ex. 9 at 8) The
strip charts in the second Norco Report were similar to the first report but used hash
marks to identify bends in the tubes.
15
(Id. at 4)
For these two projects, plaintiff was paid $31,160 and $40,900 respectively, for a
total of $72,060. (Civ. No. 14-1482, D.I. 185, ex. A at 4) The Norco Reports include
color-coded strip charts showing wall thickness data and identifying furnace tube
sections. (Civ. No. 14-1482, D.I. 187, Ex 8 at 16, 20, 24, 29, 33, 37, 45, 49, 53, 57, and
61; ex. 9 at 15, 20, 25, 30, 35, 40, 46, and 51) The strip charts state that the “Wall
Thickness Data [are] generated with QUEST proprietary technology,” but the word
“confidential” does not appear anywhere in the Norco Reports. (Id.) The Norco sale
involved using a computer, ultrasonic sensors, and a computer readable medium. (Civ.
No. 14-1482, D.I. 185, ex. A at 7-96)
On December 19, 2003, Bondurant and Robert De Lorenzo (“De Lorenzo”)
prepared an invention disclosure for “FTIS Post Processing and Display.” (Civ. No. 141482, D.I. 186, ex. 2) This invention disclosure includes color images matching figures
16
1-3 in Bondurant’s August 2002 disclosure. (Id.) The text of the invention disclosure
contains minor edits from Bondurant’s August 2002 document. (Civ. No. 14-1482, D.I.
186, ex. 5) Plaintiff filed the provisional patent application that led to the ‘874 patent on
June 1, 2004. (‘874 patent, cover) Therefore, for § 102(b) purposes, the critical date is
June 1, 2003. (Civ. No. 14-1482, D.I. 185 at 3; D.I. 195 at 9)
3. Analysis – the Norco sale as § 102(b) prior art
a. Commercial sale
Plaintiff contends that the Norco sale was not a commercial sale, because
“[c]ontemporaneous documents, inventor testimony, and other testimony firmly establish
that [plaintiff’s] Norco sale was experimental.” (Civ. No. 14-1482, D.I. 195 at 8) In
support of this eleventh-hour contention, plaintiff presented declarations dated
December 28, 2016 from DeLorenzo and Bondurant (collectively “the inventors”) (Civ.
No. 14-1482, D.I. 202) and from its experts. For example, Caligiuri and Souri opined
that the Norco sale was experimental, because “[w]hen companies are developing new
technologies, they will often test experimental prototypes for clients and underwrite a
portion of the cost while charging the client part of the cost of the experiment.” (Civ. No.
14-1482, D.I. 197, ex. A at ¶ 24) Despite the significance of the § 102(b) statutory bar
to the validity of the ‘874 patent, Caligiuri and Souri, in their November 4, 2016 rebuttal
expert report on validity, expressed no opinion about the question of whether the Norco
sale was “on sale” within the scope of the statute. 18 (Civ. No. 14-1482 D.I. 187, ex. 15,
18
Defendants also point out that the inventors, during their respective depositions, had
not indicated that the Norco sale was experimental. (Civ. No. 14-1482, D.I. 185 at 4-5)
While these statements may not be the “smoking gun” that defendants assert them to
be (primarily because they are answers to compound questions (see, e.g., Civ. No. 141482, D.I. 220 at 3-4)), the Norco sale has been at the forefront of defendants’ invalidity
contentions, and plaintiff has been on notice since as early as 2015 that the Norco sale
may be prior art. (See, e.g., Civ. No. 14-1482, D.I. 99 at ¶¶ 16-20 (denying a
preliminary injunction based upon likely invalidity of the ‘874 patent in light of the Norco
sale))
17
¶ 74 (“We note that there may be some question as to whether these alleged sales
were actually ‘sales’ in the U.S. for purposes of 102(b), but our report does not address
that question.”)) The conclusory, three-paragraph declaration of Caligiuri and Souri
simply points to the declaration by the inventors and provides little insight into the
Electromotive factors. (Civ. No. 14-1482, D.I. 197, ex. A at ¶¶ 23-26)
The bulk of plaintiff’s Electromotive analysis is, therefore, based upon the
inventors’ declaration. Defendants do not dispute the inventors’ subjective intent as
evidenced by their declaration, but the declaration provides little objective evidence of
experimentation. See In re Smith, 714 F.2d 1127, 1135 (Fed. Cir. 1983) (“An inventor’s
subjective intent is generally of minimal value.”).
Nonetheless, in light of the undisputed facts in the record, the inventors’
declaration is useful in evaluating the Electromotive factors. For example, the inventors
state that “[a] ‘sale’ of the Quest product is simply a contract to perform an inspection. . .
. At no point during or after an inspection does anyone other than Quest personnel
have access to the FTIS product, including the tool and the software that is involved in
any analysis.” (Civ. No. 14-1482, D.I. 202 at ¶ 2) Defendants do not dispute this fact,
and the court notes that in the Norco sale, plaintiff was in control of the product, the
software, and the performance of the method steps, which is the second Electromotive
factor “(2) the amount of control over the experiment retained by the inventor.”
Electromotive, 417 F.3d at 1213.
The inventors explain that “there was no way for us to fully test and experiment
with the tool (hardware and software) other than to run it at full sized refineries,”
because “[a]t the time we only had a very small section of pipe, something around 50
feet at our facility in Kent [, Washington].” (Civ. No. 14-1482, D.I. 202 at ¶ 6) The first
Electromotive factor “(1) the necessity for public testing” appears to weigh in favor of
plaintiff, but every independent claim of the ‘874 patent refers to “displaying inspection
18
data.” (‘874 patent, 16:24; 17:16; 18:27-28; 19:19; 19:54; 20:17; 20:42) Despite the
fact that the ‘874 patent does not claim the sensor hardware, the inventors rely on the
hardware as their motivation for public testing:
[W]e were still experimenting and had not yet produced that
size tool. We did not want to produce the full size Quest
FTIS tool until we knew what we were doing worked, both in
hardware and in software. We knew when designing the
tools that it would be too expensive for every size to have
unique hardware. For that reason, we waited to produce
other tools until we knew we had a fully functional model in
smaller sizes. By March 2003 we still hadn’t made it up to
the 8” tool, as we remained focused on testing and
perfecting the smaller tools at the time. We knew that if we
could get the smaller tools to provide consistent data, and if
that data proved useful and accurate, we could then scale up
production. While we were still testing and experimenting,
we did not want to spend resources on tools whose designs
might be changed as a result of our trial inspections.
(Civ. No. 14-1482, D.I. 202 at ¶ 13) Public testing may have been necessary for
plaintiff’s hardware (i.e., sensors), but there is evidence in the record that plaintiff tested
software for “displaying inspection data” on datasets collected from earlier projects. 19
The necessity of public testing does not weigh in favor of an experimental sale.
The next factor, “(3) the nature of the invention,” does not weigh in favor of an
experimental sale. The invention involves the display of inspection data, 20 and the
August 2002 invention disclosure documents include a display of inspection data that is
similar to the display of data found in the Norco Reports. A comparison of these two
sets of strip charts does not suggest that plaintiff had made substantial changes of any
kind to the display of inspection data between August 2002 and February 2003.
(Compare Civ. No. 14-1482, D.I. 186, ex. 1, figure 1, with D.I. 187, ex. 8 at 16) Two
19
The invention disclosure in Bondurant’s possession in August 2002 indicates that
aspects of the display software had been “coded and tested on a variety of data sets.”
(Civ. No. 14-1482, D.I. 186, ex. 1 at 5)
20 If the invention claimed in the ‘874 patent included the sensors that required so much
testing, that would swing these factors in favor of an experimental sale, but the ‘874
patent claims are directed to displaying the inspection data.
19
related factors are “(4) the length of the test period” and “(10) whether the invention
reasonably requires evaluation under actual conditions of use,” and while these factors
may apply to the sensors, they do not appear to apply to the “displaying inspection data”
invention in the ‘874 patent.
There are four experimentation factors, which include “(7) whether records of the
experiment were kept; (8) who conducted the experiment; . . . (11) whether testing was
systematically performed; [and] (12) whether the inventor continually monitored the
invention during testing.” There is no evidence that the inventors kept records or even
identified what they were doing as experiments. Moreover, inventor Bondurant (the
primary software developer) was not present at the Norco site, nor was it his practice to
be on site; even in the intervening years, he has “never been on a job.” (Civ. No. 141482, D.I. 185, ex. C at 61:15) Inventor De Lorenzo explained how he and Bondurant
worked together:
Q.· Okay.· How would you integrate with [Bondurant] -- if you
were making·a change out on the job, how would, if he was
working with·the source code as well, how would you keep
him updated as to·what changes you were making in the
code?
A.· Okay.· Again, changes I was making to the code were
more·aesthetic, font changes, header changes.· Phil
was·responsible -- well, he was the one writing the more
core·algorithms to do the mapping to the geometry and
some of the·more complex processing of the data.
Q.· Are those what you in the code call “functions”?
A.· They would be functions.
Q.· Okay.· So Phil Bondurant was the one who would write
the·functions and then you would make I would call
“field·changes,” changes in the field to improve the look of it
or·perhaps meet a client’s specific demand for information?
A.· Yes.
Q.· Okay.· Now, what -- was sort of the mother code kept
on·Phil’s computer?
A.· The core algorithms were kept on Phil’s computer and he
would·back them up to the local server as he saw the need
to do·that.· Once he had made some improvements, he
would release·that of his own volition.
20
(Civ. No. 14-1482, D.I. 185, ex. E at 13:12-14:8) De Lorenzo, who was on site as part
of FTIS, made aesthetic formatting changes to the reports, and Bondurant, who worked
on the “more complex processing of the data,” was not present during data collection
and released software updates “of his own volition.” These undisputed facts indicate
that – as it relates to the invention in the ‘874 patent – Bondurant is the relevant
inventor. Bondurant was not present to conduct regular testing or to continually monitor
the invention during testing. De Lorenzo, the co-inventor, was unaware of any schedule
for experimenting with the data or improving the invention (displaying inspection data)
while he was on the Norco job. Based upon an undisputed record, factors seven, eight,
eleven, and twelve all weigh against an experimental sale.
There are four customer-facing factors, and these are “(5) whether payment was
made; (6) whether there was a secrecy obligation; . . . (9) the degree of commercial
exploitation during testing; . . . and (13) the nature of the contacts made with potential
customers.” Plaintiff was paid for the Norco sale, and there is no evidence that plaintiff
offered Norco a discount or made Norco aware of any alleged experimental nature of
the FTIS service. (See, e.g., Civ. No. 14-1482, D.I. 198, ex. J (Quest Quotation No. 303003 for Norco sale)) The inventors point out that plaintiff informed Norco that FTIS
was “in [its] second generation of development,” and while this may have been an
accurate representation of the state of FTIS at the time, there is nothing in the record
that indicates that plaintiff had communicated any experimental nature of plaintiff’s
activities while performing on the contract. 21 (Civ. No. 14-1482, D.I. 202 at ¶ 12; D.I.
187, ex. 10) Moreover, the record is replete with FTIS project quotations that indicate
that plaintiff was actively selling FTIS services (and not communicating experimentation
21
In fact, the inventors’ declaration states otherwise: “The customers were not involved
with any of our decisions to modify either the inspection pig or the code. Those choices
were completely our own discretion and done privately by Quest.” (Civ. No. 14-1482,
D.I. 202 at ¶ 15)
21
or confidentiality related to the reports displaying inspection data to clients) prior to the
critical date. (Civ. No. 14-1482, D.I. 187, exhibits 5, 6, 7, 11, and 14) The inventors
explain that “[t]he inspection reports we did generate were given directly to the
refineries. We did not make the reports publicly available, and it is our understanding
that refineries [] do not share the reports either.” (Civ. No. 14-1482, D.I. 202 at ¶ 17)
The quotation for the Norco sale contains a boilerplate confidentiality clause that
identifies “Proprietary Information” as:
Information contained in the company’s proposal and/or
contract or furnished by the company in connection with
either, may include information proprietary to QUEST.
Neither the proposal, contract, or any information therein,
nor any proprietary or trade show secret information
pursuant thereto, shall be disclosed to others or used for any
purpose as it may also be considered a trade secret without
the prior written approval of QUEST’s President.
(Civ. No. 14-1482, D.I. 187, ex. 10 at 11) This clause appears to relate to information
about plaintiff and its business practices and, in light of the extensive detail found
elsewhere in the quotation, the clause itself does not support plaintiff’s contention that
the Norco sale was experimental. Moreover, the Norco Reports that display inspection
data (i.e., that relate to the invention claimed in the ‘874 patent) contain strip charts that
state that the chart was “generated with QUEST proprietary technology,” but neither the
strip charts nor the reports are marked “confidential.” (Civ. No. 14-1482, D.I. 187, Ex 8
at 16, 20, 24, 29, 33, 37, 45, 49, 53, 57, and 61; ex. 9 at 15, 20, 25, 30, 35, 40, 46, and
51) There is no evidence in the record that plaintiff held the Norco client to any secrecy
obligation related to the display of inspection data. Therefore, all of the customer-facing
factors weigh against an experimental sale.
Of the thirteen Electromotive factors, only one (control) weighs in favor of
experimental sale, but the remainder weigh against. Several undisputed facts are
notable: (1) inventor Bondurant was not on the Norco customer site during data
22
collection; 22 (2) Bondurant scheduled software updates “of his own volition;” 23 (3)
plaintiff sold FTIS services at full price without a discount; (4) clients did not know about
the experimentation; 24 (5) plaintiff did not solicit feedback from clients about the display
of the inspection data; and (6) plaintiff made no attempts to keep confidential the display
and presentation of the inspection data (i.e., the invention claimed in the ‘874 patent).
For these reasons, the Norco sale was not experimental and, therefore, represents a
commercial sale under § 102(b).
b. Ready for patenting
An invention may be ready for patenting “in at least two ways: by proof of
reduction to practice before the critical date; or by proof that prior to the critical date the
inventor had prepared drawings or other descriptions of the invention that were
sufficiently specific to enable a person skilled in the art to practice the invention.” Pfaff,
525 U.S. at 67-68. “A process is reduced to practice when it is successfully performed.
A machine is reduced to practice when it is assembled, adjusted and used. A
manufacture is reduced to practice when it is completely manufactured. A composition
of matter is reduced to practice when it is completely composed.” Id. at 57 n.2 (citing
Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358, 383 (1928)). Plaintiff
asserts claims 1, 12, 13, 24, 25, 30, 33, 37, and 40. (Civ. No. 14-1482, D.I. 180 at 1;
Civ. No. 14-1483, D.I. 286 at 1)
22
Nor was it his practice to be on site for FTIS jobs.
23 His co-inventor, De Lorenzo, was not involved in the software updates, and there
does not appear to have been a schedule for experimentation and software releases.
24 The inventors state that “[f]rom job to job the customers could not necessarily tell all
the work that was going on behind the scenes, but they knew we were still
experimenting and developing the product.” (Civ. No. 14-1482, D.I. 202 at ¶ 14) This
statement supports the inventors’ subjective intent to experiment, but it does not point
the court to any objective evidence that clients knew about the experimentation.
23
i. Machine claims
Claims 1 and 40 are the pending machine claims. In order for machine claims to
be ready for patenting, a machine must be assembled, adjusted, and used as described
in the relevant claims. The first Norco Report describes the FTIS inspection tool, which
includes an ultrasonic sensor, a “Position Module [that] houses two axial encoders that
record the tool’s axial location within the furnace coil, a roll encoder that tracks spiral
rotation (roll), and two accelerometers that record the vertical orientation and unit
acceleration.” (Civ. No. 14-1482, D.I. 187, ex. 8 at 2-3) Ultrasonic data is collected,
processed, and “it is then stored for downloading to the data station at the end of the
inspection.” (Id. at 3) The data station runs “custom software, which allows 2Dimensional (2D) viewing of the ‘entire’ piping coil” in a strip chart shown in “Figure 3.
FTIS 2D Plot.” (Id. at 4) The first Norco Report documents that Norco representatives
used this machine to produce a series of strip charts as found in the report. (Id. at 16)
The first Norco Report and strip chart provide visual detection of problem areas, such as
those in section 1 and section 5 as identified in Pass A. (Id. at 15-16) Therefore, the
first Norco Report demonstrates that plaintiff assembled, adjusted, and used the FTIS
machine as described in claims 1 and 40 to produce the strip charts shown. Claims 1
and 40 were reduced to practice in the FTIS machine at this point and were ready for
patenting. 25
ii. Process claims
The pending process (method) claims are 12, 13, 33, and 37. Claims 12 and 13
depend on claim 11. (‘874 patent, 17:35-42) Claims 33 and 37 are independent. (Id.
19:19-20:8) The strip charts contained in the Norco Reports demonstrate that plaintiff
reduced to practice the method steps associated with these claims by performing the
25
Alternatively, Bondurant’s August 2002 invention disclosure was sufficiently specific
to enable a person skilled in the art to practice the invention.
24
methods, therefore, the methods claimed in claims 12, 13, 33, and 37 were ready for
patenting at the time of the Norco sale.
iii. Article of manufacture claims
Claims 24, 25, and 30 recite a “computer-readable medium,” which is an article
of manufacture. In re Beauregard, 53 F.3d 1583, 1584 (Fed. Cir. 1995) Claims 24 and
25 claim the article of manufacture that performs the methods (respectively) in claims
11 and 12. (‘874 patent, 17:16-38; 18:26-49) The manufacture of claims 24 and 25
was completely manufactured when plaintiff completed the software that generated the
strip charts and performed the method in claims 11 and 12. Claim 30 adds the
requirement of a “composite data marker,” which inventor De Lorenzo acknowledged
was in the FTIS software as of August 2002. 26 (Civ. No. 14-1482, D.I. 185, ex. E at
77:7-22) In the first Norco Report, the composite data marker identifies a “Return
Bend.” (Civ. No. 14-1482, D.I. 187, ex. 8 at 4) In the second Norco Report, the
composite data marker is shown as a hash mark that “Indicates Bend Location.”
26
For reasons to be discussed below, the court disregards the later-filed declarations by
DeLorenzo and Bondurant that contradict DeLorenzo’s deposition testimony.
25
(Civ. No. 14-1482, D.I. 187, ex. 9 at 4) Plaintiff argues that a factual dispute exists over
whether the composite data markers were implemented in the FTIS software for the
Norco sale. 27 (Civ. No. 14-1482, D.I. 195 at 13-15) Meanwhile, Bondurant’s August
2002 invention disclosure teaches a “composite bend indicator,” which combines “[a]ll
six bend detection methods (three indicators for both wall and radius) . . . in a rootmean-square manner to derive a composite bend indicator.” (Civ. No. 14-1482, D.I.
186, ex. 1 at 5) Bondurant’s disclosure explains that:
Figure 3 28 is a plot of the composite bend indicator and the
adaptive threshold that is used to identify the bend locations
within the composite signal. . . . Figures I and 2 identify
each bend with an ‘x’ above the automatically identified bend
and a tube segment number just to the left.
27
This factual dispute centers on the sham affidavits to be discussed with respect to
claim 30, below. See supra note 26.
28 Which corresponds to figure 8 in the ‘874 patent.
26
(Id.) The presence of composite data markers in both Norco Reports and in
Bondurant’s August 2002 invention disclosure demonstrates that claim 30 was ready for
patenting at the time of the Norco sale.
c. Conclusion
The § 102(b) statutory bar applies to the Norco sale with respect to the asserted
claims of the ‘874 patent, because it was a commercial sale (and not experimental), and
the inventions contained within the Norco Reports were ready for patenting.
4. Anticipation by the Norco sale
a. The display limitation
In the Norco sale, plaintiff produced reports containing strip charts. The parties
disagree whether strip charts can anticipate a limitation common to the independent
claims of the ‘874 patent (the “Display Limitation”). 29 For example, plaintiff admits that
the Norco sale anticipates five of the six limitations of claim 1, but plaintiff disputes that
the Norco sale anticipates limitation “[1-E],” which is the Display Limitation. (Civ. No.
14-1482, D.I. 187, ex. 17 at 1-26) Plaintiff presents a number of arguments that the
Norco sale does not anticipate the ‘874 patent, but (as will be discussed below) these
are ultimately questions of claim construction. 30 (Civ. No. 14-1482, D.I. 195) The
29
Claims 1, 11, 24, 33, 37, and 40 are the independent claims of the ‘874 patent.
The court construed the Display Limitation as follows: Claims 1 and 40 are system
claims that share a common Display Limitation: “generate a display of at least a
portion of said partitioned inspection data arranged to represent said physical
geometry of said tube segments” means “to create a visual representation of at least
a portion of the inspection data to depict or portray the arrangement of the tube
segments.” (Civ. No. 14-1482, D.I. 137 at ¶ 5) Claim 11 is a method claim, and claim
24 is an article of manufacture claim for performing the method of claim 11; these
claims share a common Display Limitation: “generating a display of at least a
portion of said partitioned inspection data arranged to represent said physical
geometry of said tube segments,” which means “creating a visual representation of at
least a portion of the inspection data to depict or portray the arrangement of the tube
segments.” (Id.) The Display Limitation of method claim 33 is “generating a two
dimensional or three-dimensional representation of at least a portion of said
30
27
common characteristic of these limitations is that plaintiff’s no anticipation argument
centers around the construction of the term “represent” in each Display Limitation.
b. Claim construction
With respect to the Display Limitation, plaintiff’s experts opine that the
representation of the inspection data must be to scale, represented in units of
dimensional measure, and oriented in such a way so that the data is organized as the
tubes would be arranged in a schematic diagram. (Civ. No. 14-1482, D.I. 197, ex. A at
¶¶ 9-22) Defendants argue that this issue was addressed at claim construction. (Civ.
No. 14-1482, D.I. 185 at 13-14) Defendants contend that:
The claims of the ‘874 patent expressly cover 2D Piping Coil
Layout images; thus, when these images appeared in the
Norco Sale, the Display Limitation was practiced and the
claims were fully anticipated. Quest tried and failed to
convince the Court to narrow the meaning of ‘Display
Limitation.’ Thus, based on the uncontested facts, the logic
of the preliminary injunction ruling and the Court’s Markman
opinion, the Norco Sale anticipates the ‘874 patent. The
Display Limitation is met by the Norco Report, which was a
product of the Norco Sale, because it contains 2D Piping
Coil Layout Images identical to those claimed in the ‘874
patent.
(Id. at 13) Plaintiff argues that “this is an improper reading of the court’s claim
construction order, and, as this court well knows, it would be an error to have decided
this issue in the claim construction order.” (Civ. No. 14-1482, D.I. 195 at 11) Plaintiff
avers that “the court simply declined to rule [at claim construction] that [plaintiff]
inspection data arranged to represent a physical geometry of a plurality of said
tube segments,” which means “creating a two dimensional or three-dimensional visual
representation of at least a portion of the inspection data to depict or portray the
arrangement of the tube segments.” (Id.) Claim 37 is a method claim that has a
Display Limitation: “generating a two-dimensional or three-dimensional
representation of said inspection data collected from a plurality of said tube
segments, said data arranged to represent a physical geometry of said tube
segments,” which means “creating a two dimensional or three-dimensional visual
representation of the inspection data collected from a plurality of said tube segments to
depict or portray the arrangement of the tube segments.” (Id.)
28
disclaimed strip charts. Failing to find literal disclaimer is not the same as finding that all
claims must include strip charts.” (Id. at 11-12 (emphasis omitted)) At claim
construction, the court concluded “that the applicant did not disclaim strip charts as
described in example 1.” 31 (Civ. No. 14-1482, D.I. 137 at ¶ 11)
Plaintiff’s experts, Caligiuri and Souri, summarize their opinion:
Strip charts do not represent the physical geometry of the
furnace because the inspection data are plotted to represent
the passing of time, . . . . because . . . the inspection data
from a single furnace tube may be displayed over multiple
horizontal strips. As such, this display of inspection data
does not depict or portray the arrangement of tube segments
in the furnace. These time-based strips are arranged in
parallel horizontal strips, as may be the furnace tube
segments, but this is only a superficial resemblance that is
confusing and misleading because each strip does not
represent the physical geometry of any given tube segment
and is not in correct orientation to the tube segments around
it. The time strips do not depict or portray any particular
furnace tube segment. In fact each horizontal strip of the
strip chart represents a completely arbitrary amount of time
with essentially no relation to the physical geometry of the
actual tubes
(Civ. No. 14-1482, D.I. 197, ex. A at ¶ 9) Caligiuri and Souri opine that, for tubing
arranged as in figure 1A of the ‘874 patent, “the strip chart artificially split[s] the
inspection data [and] . . . places the data in a different orientation.” (Id. at ¶ 12)
Caligiuri and Souri explain that time-based strip chart data leads to identified tube
segments, the lengths of which are “of all different values” and are “in the wrong
direction” in relation to each other. (Id. at ¶¶ 14-15)
Despite plaintiff’s efforts to generate an issue of material fact, the court is unable
to discern one. These are many of the same arguments plaintiff presented at
31
In a footnote, plaintiff re-argues its contention that “strip charts were surrendered and
effectively disclaimed when language was added to overcome a rejection based on strip
charts in prior art.” (Civ. No. 14-1482, D.I. 195 at 12 n.5) The court declines to
reconsider these arguments.
29
preliminary injunction 32 and during claim construction. The dispute is ultimately over
construction of the “represent” terms. Defendants argue that there is no need to
construe this term. 33 (Civ. No. 14-1482, D.I. 185 at 13) Plaintiff (through its experts)
argues that the Norco strip charts cannot anticipate the independent claims for several
reasons: (1) a single tube segment cannot be displayed over multiple lines, and strip
charts display tube segments over more than one line; (2) the claims require a display
of the “physical geometry of any given tube segment,” but strip charts only display the
time a sensor is within the tubes and not geometry; (3) the claims require displayed
strips to be “in correct orientation to the tube segments around it;” and (4) charts
displaying inspection data must be to the scale of the physical dimensions of the tube
segments. 34 (Civ. No. 14-1482, D.I. 197, ex. A at ¶¶ 9-15)
Plaintiff does not identify any support in the specification to justify reading these
limitations into the claims. Moreover, plaintiff’s limited argument consists primarily of
citation to case law. (Civ. No. 14-1482, D.I. 195 at 11-13) Plaintiff then re-argues that
applicant disclaimed strip charts, pointing to language in the specification that “the
average speed and the instantaneous speed can vary significantly in view of the fact
that the inspection tool does not progress through the furnace at a constant rate.” (‘874
32
For example, at the preliminary injunction, “[t]he court conclude[d] that there is
nothing in the specification or claims of the ‘874 patent that requires the inventive
system to perform or look exactly like Quest’s latest commercial iteration of its FTIS, so
long as the inspection data can be displayed in a way that suggests data markers
representing the physical geometry of the furnace.” (Civ. No. 14-1482, D.I. 99 at ¶ 20)
33 At claim construction, defendants proposed that “represent” means “to serve as a
sign or symbol, to portray by pictorial art: delineate, depict.” (Civ. No. 14-1482, D.I.
119, ex. A at 1) Plaintiff argued that “represent” did not need to be construed separately
from the context within which it appears. (Id.)
34 The court infers these limitations from Caligiuri and Souri’s explanations of why the
Norco strip charts cannot anticipate the independent claims. (Civ. No. 14-1482, D.I.
197, ex. A at ¶¶ 7-22; ex. B at ¶¶ 78-82)
30
patent, 5:3-6) However, earlier in the same paragraph, applicant explains that timebased data collection is a preferred embodiment:
Preferably, the inspection tool collects the data at a
predetermined time-based rate (although the inspection tool
could alternatively collect the data using a position-based
collection system in which data is collected when the
inspection tool has progressed a predetermined distance).
Using a time-based collection system, the data density is
determined by the data collection rate and the speed at
which the inspection tool progresses through the furnace.
(‘874 patent, 4:60-67) Souri opined that this part of the specification means that timebased strip charts are “unhelpful because it could lead to an incorrect decision as to
which tube segment needs to be replaced.” (Civ. No. 14-1482, D.I. 198, ex. D at 107)
This is directly contradicted by the specification, which teaches that, “the data analyst
will analyze strip chart 300 and/or strip chart 400 in conjunction with a mechanical
drawing of the physical layout of the furnace to provide hints as to where the bends or
ends of the tube segments should be located.” (‘874 patent, 11:1-5)
The court concludes that nothing in the specification or claims of the ‘874 patent
limits the inventive system to specific embodiments. 35 Similarly, the ‘874 patent does
not require the inventive system to perform or look exactly like plaintiff’s latest
commercial iteration of FTIS, so long as the inventive system creates “a visual
representation of at least a portion of the inspection data to depict or portray the
arrangement of the tube segments” within the plain and ordinary meaning of these
terms.
35
Nor are the claims limited solely to the displays depicted in figures 5, 6, and 9 of the
‘874 patent.
31
c. Anticipation
i. Claims 1, 11, 24, 33, and 37
The pending independent claims are 1, 11, 24, 33, 37, and 40. Defendants
argue that independent claims 1, 11, 24, 33, and 37 36 are anticipated by the Norco sale.
(Civ. No. 14-1482, D.I. 185 at 5-8) For these claims, the only dispute is over the Display
Limitations. (Id.) Defendants have identified the strip charts produced as part of the
Norco sale as anticipating the Display Limitations. The following strip chart of wall
thickness data was produced as part of “Pass L” from the first Norco project:
(Civ. No. 14-1482, D.I. 187, ex. 8 at 61) This is one of twelve such charts produced in
the first Norco Report.
36
Plaintiff argues the remaining independent claim (40) separately.
32
The second Norco project produced a slightly different type of chart, as shown in
figure 3 from the report:
(Civ. No. 14-1482, D.I. 187, ex. 9 at 4) The second Norco project produced eight strip
charts labeled passes A-H.
In response to the strip charts from the Norco Reports, plaintiff contends that
defendants rely on “an improper reading of the court’s claim construction order” and,
under its experts’ proper reading of the claims, the Norco sale does not anticipate the
“arranged to represent the physical geometry” limitations, thereby raising a genuine
issue of material fact and precluding summary judgment. 37 (Id. at 11-13) The alleged
factual disputes revolve around a straw man argument in which plaintiff contends
(without citation) that “[d]efendants . . . stat[e] that distance can be inferred from time.”
(Id. at 12)
37
Plaintiff requests reconsideration of claim construction, in which the court determined
that applicant had not disclaimed strip charts. (Civ. No. 14-1482, D.I. 195 at 11-12 &
n.5)
33
Ultimately, plaintiff’s factual dispute returns to claim construction: “Quest’s
experts believe that to ‘depict or portray the arrangement of the tube segments’ requires
a reference to physical dimensions that are not present in strip charts.” 38 (Id. at 13
(emphasis in original)) This is a question that the court has already addressed (above)
with respect to claim construction. With the claim construction resolved, there are no
genuine issues of material fact as to whether the Norco sale anticipates the “generate a
display of at least a portion of said partitioned inspection data arranged to represent
said physical geometry of said tube segments” limitations. Therefore, the court
concludes that, under § 102(b), the Norco sale anticipates claims 1, 11, 24, 33 and 37
of the ‘874 patent.
ii. Claim 13
Defendants argue claim 13 with the independent claims, because plaintiff has
based its no anticipation argument solely on claim 13 depending on claim 11 and
plaintiff’s argument that the Norco sale does not anticipate the Display Limitation in
claim 11. (Civ. No. 14-1482, D.I. 185 at 12; see also D.I. 187, ex. 17 at 48) Plaintiff
presents no arguments in response. There are no genuine issues of material fact with
respect to anticipation of claim 13 by the Norco sale, therefore, claim 13 is invalid.
iii. Claims 12 and 25
Defendants argue that claims 12 and 25 are invalid under § 102(b) as anticipated
by the Norco sale. (Civ. No. 14-1482, D.I. 185 at 21-23; D.I. 220 at 26) Plaintiff
contends that the proper construction of claims 12 and 25 “narrowly require displays
such as that shown in Figures 5, 6, and 9 of the ‘874 patent.”39 (Civ. No. 14-1482, D.I.
38
Plaintiff’s experts did not express an opinion about how a person of ordinary skill in
the art would read the relevant claim language in light of the specification, nor did they
identify any specific parts of the specification that support this requirement of physical
dimensions. (See Civ. No. 14-1482, D.I. 197, ex. B at ¶¶ 79-83)
39 The court has rejected this construction.
34
195 at 24 (citing Civ. No. 14-1482, D.I. 197, ex. B at ¶ 78-98; D.I. 198, ex. E)) However,
plaintiff’s argument is based entirely on its proposed (narrow) construction of claims 12
and 25, and the remainder of plaintiff’s arguments revolve around questions of claim
construction that the court has already addressed. 40 Nothing in plaintiff’s brief identifies
any specific factual disputes with respect to the Norco sale. 41
The court has construed the relevant claim term “wherein said display is
comprised of a two-dimensional or three-dimensional representation of one or more
stacked tube segments of said furnace” to mean “inspection data from one or more of
the stacked tube segments is displayed in two or three dimensions.” Defendants
presented unrebutted evidence that the Norco sale anticipates claims 12 and 25 in a
“one stacked tube segment” 42 configuration. 43 (Civ. No. 14-1482, D.I. 220 at 31-32)
Defendants identify a two-dimensional display of segment 34, which is a 6-inch
diameter tube segment in the convection section stack documented in the second
Norco Report.
40
For example, in the claim chart, plaintiff’s experts respond to defendants’ invalidity
assertions with “we disagree” followed by no explanation. (Civ. No. 14-1482, D.I. 187,
ex. 17 at 45-47) In the one identified dispute with respect to claim 12, plaintiff’s experts
opine that the claim construction requires display of physical dimensions. (Id. at 46-47)
41 Plaintiff argues that “there is no genuine issue of material fact” with respect to
dependent claims 12 and 25, but that there is “a dispute of fact” between the experts
with respect to independent claim 11 upon which claim 12 depends. (Civ. No. 14-1482,
D.I. 195 at 25-26)
42 This is the “one” in the “one or more of said stacked tube segments of said furnace”
found in claim 12. (‘874 patent, 17:37-38)
43 Defendants AutoSketch argument is not appropriate for summary judgment. The
experts disagree whether the AutoSketch drawing displays inspection data. (See Civ.
No. 14-1482, D.I. 220 at 31; compare D.I. 187 at ¶¶ 44-46, 70-81 with D.I. 187. ex. 15 at
¶ 85)
35
(Civ. No. 14-1482, D.I. 187, ex. 9 at 16; see also ex. 9 at 20, 26, 31, 36, 41, 47, 52)
Moreover, in any of the strip charts in the Norco Reports, inspection data from one or
more of the stacked tube segments is displayed in two-dimensions. 44
44
“[W]hatever would infringe if subsequent will anticipate if prior.” In re Slayter, 276
F.2d 408, 411 (C.C.P.A. 1960).
36
(Civ. No. 14-1482, D.I. 187, ex. 8 at 4) Figure 3 from the first Norco Report (depicted
above) includes a two-dimensional display of inspection data of 23 tube segments.
Therefore, claims 12 and 25 are invalid as anticipated by the Norco sale.
iv. Claim 27
Plaintiff does not assert claim 27, but claim 30 (which is asserted), depends on
claim 27. Defendants argue claim 27 with the independent claims, because plaintiff has
based its no anticipation argument solely on claim 27 depending on claim 24 and
plaintiff’s argument that the Norco sale does not anticipate the Display Limitation in
claim 24. (Civ. No. 14-1482, D.I. 185 at 12; see also D.I. 187, ex. 17 at 52) The court
has found claim 24 anticipated by the Norco sale. Plaintiff presents no arguments in
response. There are no genuine issues of material fact with respect to anticipation of
claim 27 by the Norco sale, therefore, claim 27 is invalid.
v. Claim 28
Plaintiff has not asserted claim 28. 45 Claim 30 (which is asserted) depends on
claim 28, which depends on claims 27 and 24. Plaintiff’s experts had argued that claim
28 is not anticipated by the Norco sale, because the Norco sale does not anticipate the
Display Limitation of claim 24 (upon which claim 28 depends). (Civ. No. 14-1482, D.I.
187, ex. 17 at 53) Defendants argue that the Norco sale anticipates the Display
Limitation in claim 24 and that claim 28 is also anticipated by the Norco sale. (Civ. No.
14-1482, D.I. 185 at 12) The court has found claims 24 and 27 anticipated by the Norco
sale. Plaintiff presents no responsive arguments in its brief. There are no genuine
issues of material fact whether the Norco sale anticipates claim 28, therefore, claim 28
is invalid.
45
Defendants argue invalidity of claim 28 in a footnote. Despite defendants’ contention
that it is necessary to resolve the validity of claim 28, the validity of (asserted) claim 30
does not hinge on the validity of claim 28.
37
vi. Claim 30
Claim 30 recites “[t]he computer-readable medium of claim 28, wherein each of
said data markers comprises a composite data marker derived from a plurality of
individual data markers.” (‘874 patent, 19:4-6) Claim 28 recites:
The computer-readable medium of claim 27, wherein sensor
data is also collected from said furnace, said sensor data
comprising a plurality of sensor readings collected by one or
more auxiliary sensors selected from the following group: an
axial encoder, an accelerometer, a roll encoder, a
gyroscope, an inertial navigation system, and combinations
thereof.
(Id. at 18:59-65) Claim 27 claims “[t]he computer-readable medium of claim 24, wherein
said inspection data comprises a plurality of inspection readings selected from the
following group: wall thickness readings of said furnace, inside radius readings of said
furnace, and combinations thereof.” (Id. at 18:54-58) The claims refer to “inspection
data” and “sensor data,” and claim 30 is limited to articles of manufacture that collect
both sets of data and that perform the method of “generating a plurality of [composite]
data markers each of which identifies a location of a physical feature of said furnace.”
(Id. at 18:32-33) For example, the specification describes that “composite data
markers: . . . identify the locations of the furnace bends.” (Id. at 12:61-63) Claim 30
teaches that the composite data marker is “derived from a plurality of individual data
markers.” (Id. at 19:5-6) The specification indicates that individual data markers are
“based upon the detection of various ‘data clues’ in the inspection data and/or sensor
data.” (Id. at 15:56-68)
Defendants deposed DeLorenzo (one of plaintiff’s 30(b)(6) witnesses) who
acknowledged that a “composite bend indicator” existed in plaintiff’s FTIS source code
in August 2002 and was present in the software during the Norco sale.
Q.· Okay.· Now, take a look at Line No. 42 back on Page
8350 -- 550 on Exhibit No. 128.
A.· Yep.
38
Q.· Is this calculation that follows what you guys have
referred·to as a composite data marker?
A.· I believe that was the intent of that -- of what this
comment·is, so yes.
Q.· So if I am correct in putting your answers together, as
of·roughly August 28th, 2002, your software allowed you
to·utilize and give to your customers these displays that
had·composite data markers in them, correct?
A.· That’s correct.
Q.· And did you actually do so for various customers?· Were
there·some of these where you utilized the automatic
composite data·marker function?
A.· We attempted it and we did both the automatic and the
kind of auto assisted, so yes, we did use it.
Q.· Okay.· All right.· And you started doing both the
automatic and the data operator assisted at least as of this
time, August of ‘02, correct?
A.· Yes, that’s how that graphic was generated.
(Civ. No. 14-1482, D.I. 185, ex. E at 77:2-22)
Plaintiff argues that the relevant “portions of code [defendants] rely on were
commented out (and thus not used).” (Civ. No. 14-1482, D.I. 195 at 13) Plaintiff
contends that the “testimony [] was elicited without giving the witness full access to the
code, including vitally relevant sections of the code. . . . This resulted in confused and
inaccurate testimony regarding the date and use of sections of the source code.” (Id. at
14 (citing Civ. No. 14-1482, D.I. 200 at ¶¶ 3-19 (DeLorenzo declaration))) Relying on
declarations from the inventors, plaintiff argues that “[a]nalysis of the full source code
inarguably demonstrates that the Norco sale did not use composite data markers.” (Id.)
Plaintiff asserts that the source code places an “X” at the composite data marker and
the Norco Reports do not contain such marks, therefore, the source code was not
present at the time. 46 DeLorenzo opines that he would have given a more accurate
46
Plaintiff presents this argument for the first time in its brief.
39
answer about the availability date 47 if he had been given the full section of code. (Civ.
No. 14-1482, D.I. 200 at ¶ 17-18)
Defendants respond that plaintiff selected DeLorenzo, a co-author of the source
code, as its 30(b)(6) witness to discuss the “existence, functionality and use of all Quest
FTIS software code from 2002 to 2004.” (Civ. No. 14-1482, D.I. 220 at 17-18)
Defendants assert that DeLorenzo prepared for his deposition by reviewing the code
and instruction manuals and speaking with (co-author) Bondurant. (Id.) Defendants
contends that plaintiff’s counsel was provided with all the exhibits presented to
DeLorenzo. (Id.) Defendants argue, based upon a detailed review of the record, that
plaintiff’s arguments as presented now are false. (Id. at 19-22) Finally, defendants
point out that, even if the composite data markers were not used in the Norco sale (as
plaintiff now contends), the source code was still present during the Norco project and
that is legally sufficient to anticipate claim 30. (Id. at 22 (citing Finjan v. Secure
Computing Corp., 626 F.3d 1197, 1203-04 (Fed. Cir. 2010)))
Under the sham affidavit doctrine, “a party may not create a material issue of fact
to defeat summary judgment by filing an affidavit disputing his or her own sworn
testimony without demonstrating a plausible explanation for the conflict.” Baer v.
Chase, 392 F.3d 609, 624 (3d Cir.2004) (citing Hackman v. Valley Fair, 932 F.2d 239,
241 (3d Cir.1991)); see also Martin v. Merrell Dow Pharms., Inc., 851 F.2d 703, 706 (3d
Cir.1988) (doctrine applies to contradictions of prior testimony). “When a party does not
explain the contradiction between a subsequent affidavit and a prior deposition, it is
appropriate for the district court to disregard the subsequent affidavit and the alleged
factual issue in dispute as a ‘sham,’ therefore not creating an impediment to a grant of
47
Both parties agree that the FTIS source code was produced backwards and that the
pages of the source code were in reverse order.
40
summary judgment based on the deposition.” Jiminez v. All American Rathskeller, Inc.,
503 F.3d 247, 254 (3d Cir.2007) (citing Hackman, 932 F.2d at 241).
Bondurant and DeLorenzo are the source of a trio of late-breaking declarations.
On December 28, 2016, the pair filed a declaration to explain that the Norco sale was,
in fact, experimental use. (Civ. No. 14-1482, D.I. 202) On the same day, each filed an
individual declaration contradicting DeLorenzo’s deposition, explaining the reason for
the contradiction, and introducing new arguments as to claim 30 and the composite data
marker. (Civ. No. 14-1482, D.I. 200; D.I. 201)
Here, plaintiff produced the source code. 48 (Civ. No. 14-1482, D.I. 222, ex. 1 at
144:11-145:12) DeLorenzo was the 30(b)(6) witness on this subject, he was prepared,
he had time to read the code, he took his time to answer, and he did not speculate.
There is nothing in the record to suggest that DeLorenzo was not afforded all the
courtesies that any deponent would expect. (See generally Civ. No. 14-1482, D.I. 222,
ex. 1 at 144:11-145:12) Had DeLorenzo been uncertain about his testimony with
respect to the August 2002 source code, he had ample opportunity to correct it, either at
the deposition or afterwards. There is no evidence that DeLorenzo sought to make any
corrections.
Plaintiff’s new arguments related to the composite bend indicator and its absence
in the Norco sale lack credibility. Plaintiff was on notice of defendants’ intent to use the
Norco sale as prior art, and the absence of the “X” marks in the strip charts in both
Norco Reports is apparent to the untrained eye. These new arguments conveniently
raise an issue of material fact with respect to anticipation and create doubt as to
whether the invention of claim 30 had been reduced to practice as of the Norco sale.
48
It is unclear who applied the Bates numbers in the backwards fashion. The source
code contains “Secure Copy-2” in the upper right hand corner. The court infers that this
was printed from a secure computer under the control of plaintiff, with the printing most
likely initiated by defendants’ experts.
41
However, there is no evidence in the record that plaintiff ever presented this argument
to defendants before its summary judgment answering brief. All the evidence suggests
that, before summary judgment, plaintiff was pursuing an altogether different line of
argumentation with respect to no anticipation of claim 30. 49
Meanwhile, there is evidence in the record that, on August 28, 2002,
DeLorenzo’s co-inventor Bondurant sent himself an invention disclosure for FTIS in
which he explained that an “approach to properly associate the FTIS data with the
furnace geometry is to algorithmically code [] visual clues to automatically or semiautomatically identify the bend locations in the data set” (Civ. No. 14-1482, D.I. 186, ex.
1 at 4) The disclosure identifies this as a “composite bend indicator”:
These visual clues have been coded and tested on a
variety of data sets and have proven to be a reliable method
of bend detection. All six bend detection methods (three
indicators for both wall and radius) are combined in a rootmean-square manner to derive a composite bend
indicator. The periodic peaks in the composite bend
indicator identify the locations of the bends.
(Id. at 5 (emphasis added)) According to the invention disclosure, the composite bend
indicator was in the FTIS code as of August 2002. 50
DeLorenzo and Bondurant’s declarations contradict DeLorenzo’s earlier
statements, Bondurant’s undisputed August 28, 2002 invention disclosure, and plaintiff’s
prior anticipation arguments. For these reasons, the court disregards the declarations
of DeLorenzo and Bondurant (Civ. No. 14-1482, D.I. 200; D.I. 201) as sham affidavits.
49
In the claim charts on anticipation by the Norco sale, plaintiff’s experts had opined
that claim 30 required “using sensor data to create composite data markers, [and] no
sensor data was used.” (Civ. No. 14-1482, D.I. 187, ex. 17 at 55 (citations omitted))
50 While this statement was not made under oath, there appears to be no deceptive
intent in a contemporaneous internal document stating that a feature had been coded
and tested in the software.
42
There is no genuine issue of material fact with respect to claim 30, therefore, claim 30 is
anticipated by the Norco sale.
vii. Claim 40
The ‘874 patent distinguishes between inspection data and sensor data. Claim
40 is a system claim. (‘874 patent, 20:17-41) Defendants argue that claim 40 is
anticipated by the Norco sale, citing statements from the Norco Reports as evidence
that the system was programmed to perform the steps as outlined in the claim. (Civ.
No. 14-1482, D.I. 185 at 25-26) A key limitation of claim 40 is that the computer be
programmed to “analyze said sensor data and generate a plurality of data markers
based upon said analysis of said sensor data” (Id. at 20:25-26) Plaintiff responds that
by the Norco sale, it was not using sensor data to locate bends in the furnace and was
instead using the ultrasonic sensors (the inspection data) to do this. (Civ. No. 14-1482,
D.I. 195 at 15-16) Defendants argue that DeLorenzo “testified that axial encoder data
was used to track location and to set data markers at bends.” (Civ. No. 14-1482, D.I.
220 at 23 (citing Civ. No. 14-1482, D.I. 222, ex. 1 at 109:21-110:11)) This testimony is
not readily apparent from the record, 51 and defendants have not demonstrated that
there is no genuine issue of material fact with respect to anticipation of claim 40.
Therefore, the court denies summary judgment of anticipation of claim 40.
5. Obviousness
Defendants also move for summary judgment of obviousness with respect to the
asserted claims. (Civ. No. 14-1482, D.I. 185 at 26-28) Defendants present no
arguments directed to specific claims, let alone the remaining asserted claim 40. (Id.)
Plaintiff moves for summary judgment of non-obviousness with respect to all asserted
51
Defendants have cited to page 132, but the record submitted to the court is
incomplete and is missing pages 129-136. Absent these missing pages, the court
declines to speculate as to their content.
43
claims and presents argument in support. 52 (Civ. No. 14-1482, D.I. 195 at 26-38) As
with defendants, plaintiff does not address its arguments to any specific claim. (Id.)
The court finds no basis to grant summary judgment for either party.
6. Section 101
Defendants move for summary judgment of invalidity for failing to claim patent
eligible subject matter under § 101, arguing the independent claims together under
claim 1. (Civ. No. 14-1482, D.I. 185 at 28) Plaintiff responds that claim 1 is not a
representative claim. (Civ. No. 14-1482, D.I. 195 at 40)
a. Standard
Section 101 defines patent-eligible subject matter as “any ... process, machine,
manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court has long
held that § 101 contains an important implicit exception. Mayo Collaborative Servs. v.
Prometheus Labs., Inc., _ U.S. _, 132 S.Ct. 1289, 1293 (2012). “Laws of nature, natural
phenomena, and abstract ideas are not patentable.” Id. (internal quotation marks,
brackets, and citations omitted). The purpose of these exceptions is to protect the
“basic tools of scientific and technological work.” Id. Defendants argue that the ‘874
patent is directed to an abstract idea and is, therefore, patent-ineligible.
In Alice, the Supreme Court endorsed a two-step “framework for distinguishing
patents that claim laws of nature, natural phenomena, and abstract ideas from those
that claim patent-eligible applications of those concepts.” Alice Corp. Pty. Ltd. v. CLS
Bank Int’l, _ U.S. _, 134 S.Ct. 2347, 2355 (2014). First, the court must determine if the
claims at issue are directed to a patent-ineligible concept. Id. If the answer is no, that
ends the matter and the defendants’ motion is denied. See, e.g., Enfish, LLC v.
52
Plaintiff manages to work in arguments about secondary considerations as well as
teaching away. A true feat, given that not a single claim limitation is discussed in the
twelve page discourse.
44
Microsoft Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) (determining at step one that the
claims were not directed to an abstract idea and, therefore, not discussing step two). If,
however, the answer is yes, then the court must “determine whether the additional
elements transform the nature of the claim into a patent-eligible application.” Alice, 134
S.Ct. at 2355.
b. Analysis
The remaining valid (and asserted) independent claim is claim 40. Claim 40
recites:
A system for displaying inspection data collected from a
furnace with a specified physical geometry, wherein said
furnace comprises a plurality of tube segments
interconnected by a plurality of bends so as to allow stacking
of at least a portion of said tube segments, said system
comprising:
a storage device for storing said inspection data and sensor
data collected from said furnace; and
a computer programmed to:
analyze said sensor data and generate a plurality of data
markers based upon said analysis of said sensor data,
wherein each of said data markers identifies a location
of a physical feature of said furnace so as to correlate
said inspection data to said physical geometry of said
furnace;
partition said inspection data at said data markers;
generate a display of at least a portion of said partitioned
inspection data arranged to represent said physical
geometry of a plurality of said tube segments and
enable visual detection of a problem area comprising
one or more of said tube segments; and
wherein said sensor data comprises a plurality of readings
collected by one or more auxiliary sensors selected
from the following group: an axial encoder, an
accelerometer, a roll encoder, a gyroscope, an inertial
navigation system, and combinations thereof.
(‘874 patent, 20:17-41) In the claim charts on anticipation, the parties identified claim
40 as having six separate limitations numbered “40[A]-[F].” (Civ. No. 14-1482, D.I. 187,
ex. 17 at 62-67)
45
Under step 1, defendants argue that claim 40 should be argued with claim 1,
which is “directed to a system . . . for displaying inspection data.” (Civ. No. 14-1482,
D.I. 185 at 32) Defendants parse claim 1 (which is supposed to be the same as claim
40) into two limitations “the Partitioning Step and the Display Step.” (Id.) Defendants
do not explain how these are the sole limitations to the claim, nor do defendants
reconcile these two broad limitations with the six identified limitations in claim 40.
Plaintiff argues that defendants’ “reductionist simplicity obscures the underlying
complexity of the ‘874 Patent, and fails to address its innovative solution to problems
arising in the field.” (Civ. No. 14-1482, D.I. 195 at 39)
Defendants compare the so-called Partitioning Step and the Display Step
(separately) to case law. Comparisons are necessary in this area of § 101
jurisprudence, and “both [the Federal Circuit] and the Supreme Court have found it
sufficient to compare claims at issue to those claims already found to be directed to an
abstract idea in previous cases.” Enfish, 822 F.3d at 1334. However, defendants
ignore the instruction in Enfish that “the ‘directed to’ inquiry applies a stage-one filter to
claims, considered in light of the specification, based on whether ‘their character as a
whole is directed to excluded subject matter.’” 53 Id. at 1335 (citing Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed.Cir.2015))).
Here, defendants’ step 1 analysis with respect to claim 1 is insufficient to
establish the most basic “directed to” inquiry under the relevant case law. 54 Despite the
numerous differences between claims 1 and 40, defendants break the six limitations of
claim 40 into the same two pieces as claim 1 and individually compare these two pieces
to different claims in different cases. Moreover, defendants do not discuss the different
53
In other words, defendants should compare the entire claim to one case at a time.
The specification should factor into this analysis.
54 Defendants do not evaluate the character of claim 1 as a whole in light of the
specification. (Civ. No. 14-1482, D.I. 185 at 32-36)
46
types of data collected and the sensor limitations. 55 At no point do defendants evaluate
the character of claim 40 as a whole in light of the specification. Defendants have failed
to provide a legally-sufficient argument as to why claim 40 is directed to an abstract
idea, therefore, summary judgment under § 101 is denied.
C. Infringement
Plaintiff moves for summary judgment of infringement of claims 13, 25, 33, and
37 by defendant, Clean Harbors (Civ. No. 14-1482, D.I. 179), and for summary
judgment of infringement of claims 12, 24, and 33 by defendant Cokebusters. (Civ. No.
14-1483, D.I. 285) Clean Harbors moves for summary judgment of noninfringement of
claims 13, 25, 33, and 37. (Civ. No. 14-1482, D.I. 189) Cokebusters moves for
summary judgment of noninfringement of claims 30 and 40 and for summary judgment
of no willfulness. (Civ. No. 14-1483, D.I. 290)
Claim 40 is the only remaining valid claim, therefore, plaintiff’s motions are
denied and Clean Harbor’s motion is granted. Cokebusters’ motion is granted with
respect to claim 30. With respect to claim 40, Cokebusters argues that plaintiff’s expert
admitted that Cokebusters performs the sensor steps in claim 40 manually and not
automatically. (Civ. No. 14-1483, D.I. 304 at 10) Plaintiff’s expert opines that
Cokebusters’ source code demonstrates that the accused product satisfies these
automatic claim limitations. (Civ. No. 14-1483, D.I. 288 at ¶¶ 155, 172) This is a
genuine issue of material fact best left to a jury. Similarly, Cokebusters moves for
summary judgment of no willfulness, arguing that “even accepting this extremely
convoluted chain of events as true, not a single factual allegation supports the
proposition that Cokebusters (even if it knew about the patent) ever believed it may
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Claim 1 is limited to “inspection data” and claims devices for collecting that inspection
data. Claim 40 recites the collection of both “sensor data” and “inspection data” and
claims specific types of sensors. Under step 1, these differences could dramatically
change the “directed to” analysis.
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infringe the ‘874 Patent.” (Civ. No. 14-1483, D.I. 304 at 12) Given the difficulty the
parties have in explaining their dispute, this “extremely convoluted chain of events” is
best left to a jury. Cokebusters’ motions for summary judgment of noninfringement of
claim 40 and no willfulness are denied.
IV. CONCLUSION
For the foregoing reasons, the court grants defendants’ motion for summary
judgment of invalidity of claims 1, 11, 12, 13, 24, 25, 27, 28, 30, 33, and 37 of U.S.
Patent No. 7,542,874 (Civ. No. 14-1482, D.I. 184; Civ. No. 14-1483, D.I. 293), denies
defendants’ motion for summary judgment of invalidity of claim 40 of U.S. Patent No.
7,542,874 (Civ. No. 14-1482, D.I. 184; Civ. No. 14-1483, D.I. 293), denies plaintiff’s
motion for summary judgment of validity of claims 12 and 25 of the ‘874 patent (Civ. No.
14-1482, D.I. 183; Civ. No. 14-1483, D.I. 289), denies plaintiff’s motions for summary
judgment of infringement of the ‘874 patent by defendants (Civ. No. 14-1482, D.I. 179;
Civ. No. 14-1483, D.I. 285), grants Clean Harbors’ motion for summary judgment of
noninfringement (Civ. No. 14-1482, D.I. 189), grants in part and denies in part
Cokebusters’ motion for summary judgment of noninfringement (Civ. No. 14-1483, D.I.
290), and denies Cokebusters’ motion for summary judgment of no willfulness (Civ. No.
14-1483, D.I. 290).
An appropriate order shall issue.
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