Wright's Well Control Services, LLC v. Oceaneering International, Inc. et al

Filing 260

ORDER AND REASONS granting 210 Motion for Partial Summary Judgment. WWCS's claim for infringement of the '185 Patent is DISMISSED. Signed by Judge Sarah S. Vance on 8/28/2017. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WRIGHT’S WELL CONTROL
SERVICES, LLC

CIVIL ACTION

VERSUS

NO. 15-1720

OCEANEERING INTERNATIONAL,
INC.

SECTION “R” (3)

ORDER AND REASONS
Before the Court is defendant Oceaneering International, Inc.’s motion
for partial summary judgment on plaintiff Wright’s Well Control Services,
LLC’s patent infringement claim related to the 9,435,185 patent.1 For the
following reasons, the Court grants Oceaneering’s motion.

I.

BACKGROUND
The facts that follow are limited to what is relevant to the motion before

the Court. 2 Plaintiff Wright’s Well Control Services, LLC (“WWCS”) and
defendant Oceaneering International, Inc. (“Oceaneering”) both provide

R. Doc. 210.
A more in-depth discussion of the facts underlying this dispute
can be found in the Court’s November 16, 2015 Order. See generally R. Doc.
56. A more extensive discussion of the deep-sea technology and associated
patents at issue can be found in the Court’s February 13, 2017 Order. See
generally R. Doc. 141.
1

2

hydrate remediation services for the oil and gas industry. This dispute
concerns a technological system that WWCS developed for removing
hydrates from subsea, deepwater pipelines. 3
On December 24, 2010, David Wright and Jeffery Dufrene filed two
U.S. non-provisional patent applications, each of which was directed to
specific aspects of WWCS’s remediation system. 4 According to WWCS, U.S.
Patent Application No. 12/978,486, now issued as U.S. Patent No. 8,413,725
(the ‘725 Patent), describes and claims the subsea separator used in WWCS’s
remediation system. 5 Application No. 12/978,448, now issued as U.S. Patent
No. 9,435,185 (the ‘185 Patent), describes aspects of the entire remediation
system, focusing specifically on the system’s use of a subsea hydraulic
positive displacement pump. 6 The ‘185 Patent issued on September 6, 2016.7
The ‘185 Patent contains thirteen claims, three independent and 10
dependent. 8 Claim 1, the main independent claim, is a method of recovering

According to WWCS, a hydrate is an ice-like solid that forms
when water becomes mixed with oil and/or gas at high pressure and low
temperature. R. Doc. 147 at 3. “Hydrate plugs” can cause a pipeline to
become blocked, resulting in a loss of production. Id. at 3-4.
4
Id. at 13 ¶ 44.
5
Id.
6
Id. According to WWCS, Wright and Dufrene assigned all rights
and interests in both the ‘725 and the ‘185 Patents to WWCS, and WWCS is
the owner of both Patents. Id. ¶ 45.
7
See R. Doc. 147-20 at 2.
8
Id. at 22-23.
2
3

a pipeline fluid from a source located in a subsea environment by connecting
a fluid-powered motor and a pump to the source of the fluid. 9 Claims 4 and
9, the other two independent claims, are a method for hydrate remediation
and fluid recovery from a subsea location, and a method for acting on or
removing a blockage from a pipeline fluid in a subsea environment,
respectively.10

WWCS alleges that Oceaneering’s Flowline Remediation

System infringes on Claims 4 and 9 of the ‘185 Patent. 11 Specifically, WWCS
alleges that “Oceaneering has offered to use its Flowline Remediation
System, performing each and every step of at least Claims 4 and 9, on a
hydrate remediation job for at least W & T Offshore since September 6,
2016.” 12
Oceaneering now moves for partial summary judgment on WWCS’s
claim for infringement of the ‘185 Patent. Oceaneering argues that there is
no evidence Oceaneering either made, used, offered to sell, or sold its
Flowline Remediation System since the ‘185 Patent issued on September 6,
2016. 13 See 35 U.S.C. § 271(a) (“Except as otherwise provided in this title,
whoever without authority makes, uses, offers to sell, or sells any patented

9
10
11
12
13

Id. at 22.
Id. at 22-23.
R. Doc. 147 at 30 ¶ 86.
Id. at 37 ¶ 94.
R. Doc. 210-1 at 8-9.
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invention, within the United States . . . any patented invention during the
term of the patent therefor, infringes the patent.”). In response, WWCS
disputes whether Oceaneering has offered to sell its Flowline Remediation
System.14 WWCS points to the deposition of Oceaneering employee Chris
Dyer, who testified that Oceaneering has included the use of its Flowline
Remediation Systems in project bids since September 2016.15 In its reply,
Oceaneering argues that an offer to sell the Flowline Remediation System
cannot give rise to patent infringement because method claims, like Claims
4 and 9 of the ‘185 Patent, can be infringed only by actual use. 16

II.

LEGAL STANDARD
Summary judgment is warranted when “the movant shows that there

is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994). When assessing whether a dispute as to any material
fact exists, the Court considers “all of the evidence in the record but refrain[s]
from making credibility determinations or weighing the evidence.” Delta &

14
15
16

R. Doc. 229 at 1; [SEALED R. Doc. 229-1 at 4.]
R. Doc. 229 at 1.
R. Doc. 233 at 4-5.
4

Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99
(5th Cir. 2008).

All reasonable inferences are drawn in favor of the

nonmoving party, but “unsupported allegations or affidavits setting forth
‘ultimate or conclusory facts and conclusions of law’ are insufficient to either
support or defeat a motion for summary judgment.” Galindo v. Precision
Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at
1075. “No genuine dispute of fact exists if the record taken as a whole could
not lead a rational trier of fact to find for the non-moving party.” EEOC v.
Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).
If the dispositive issue is one on which the moving party will bear the
burden of proof at trial, the moving party “must come forward with evidence
which would entitle it to a directed verdict if the evidence went
uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by
either countering with evidence sufficient to demonstrate the existence of a
genuine dispute of material fact, or “showing that the moving party’s
evidence is so sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear
the burden of proof at trial, the moving party may satisfy its burden by
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merely pointing out that the evidence in the record is insufficient with
respect to an essential element of the nonmoving party’s claim. See Celotex,
477 U.S. at 325. The burden then shifts to the nonmoving party, who must,
by submitting or referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest upon the
pleadings, but must identify specific facts that establish a genuine issue for
trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of
summary judgment, after adequate time for discovery and upon motion,
against a party who fails 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.” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION
In this motion for partial summary judgment, Oceaneering argues that
WWCS’s claim for infringement of the ‘185 Patent fails as a matter of law. To
prove direct patent infringement, WWCS must show that Oceaneering either
made, used, offered to sell, or sold WWCS’s patented invention after the
patent issued.

See 35 U.S.C. § 271(a).

The parties dispute whether

Oceaneering has offered to sell the methods described in Claims 4 and 9 of

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the ‘185 Patent. 17 But Oceaneering contends that this dispute is immaterial
because method claims can be infringed only by use, not by an offer to sell.18
See NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1318-21 (Fed. Cir.
2005). Oceaneering further argues that because WWCS cannot establish
direct infringement, it also cannot establish indirect infringement. See
Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843 F.3d
1315, 1331 (Fed. Cir. 2016).
Oceaneering’s argument that method claims can be infringed only by
use primarily relies on the Federal Circuit’s decision in NTP. The court in
NTP addressed whether the defendant could be liable for infringing on
plaintiff’s method claim even though one step of the method was performed
outside the United States. 418 F.3d at 1313-14. After holding that “a process
cannot be used ‘within’ the United States as required by section 271(a) unless
each of the steps is performed within this country,” the court turned to
“whether a sale of a claimed method can occur in the United States, even
though the contemplated performance of that method would not be wholly
within the United States.” Id. at 1318.

17
18

See R. Doc. 210-3 at 2 ¶ 6; [SEALED R. Doc. 229-1 at 4.]
R. Doc. 233 at 1.
7

The court first noted the linguistic difficulty of applying the concept of
a sale “to a method claim consisting of a series of acts.” Id. at 1319; see also
id. (“It is difficult to envision what property is transferred merely by one
party performing the steps of a method claim in exchange for payment by
another party. Moreover, performance of a method does not necessarily
require anything that is capable of being transferred.”). The court then
examined the legislative history of § 271(a), which “indicate[d] Congress’s
understanding that method claims could only be directly infringed by use.”
Id. at 1320. For example, when Congress added “offers to sell” as a form of
infringement in § 271(a), a Senate report explained: “The list of exclusive
rights granted to patent owners is expanded to preclude others from offering
to sell or importing products covered by a U.S. patent or offering to sell the
products of patented processes.” S. Rep. 103-412, at 230 (1994) (emphasis
added). Earlier congressional reports reveal Congress’s view that selling
methods or processes does not constitute infringement. See S. Rep. No. 10083, at 30 (1987) (“Under our current patent laws, a patent on a process gives
the patentholder the right to exclude others from using that process in the
United States without authorization from the patentholder. The other two
standard aspects of the patent right—the exclusive right to make or sell the
invention—are not directly applicable to a patented process.”); H.R. Rep. No.
8

99-807, at 5 (1986) (“With respect to process patents, courts have reasoned
that the only act of infringement is the act of making through the use of a
patented process . . . .”).
Notwithstanding this analysis, the NTP court resolved the issue on
narrower grounds. Id. at 1320-21 (“We need not and do not hold that method
claims may not be infringed under the ‘sells’ and ‘offers to sell’ prongs of
section 271(a).”). In Ricoh Co, Ltd. v. Quanta Computer Inc., 550 F.3d 1325,
1335 (Fed Cir. 2008), the Federal Circuit again avoided the question whether
“a party who sells or offers to sell a patented process infringes the patent.”
See id. (finding that patented “software is not itself a sequence of actions, but
rather . . . a set of instructions that directs hardware to perform a sequence
of actions”). But the Ricoh court did “agree with the reasoning of NTP that
the application of the concept of a sale or offer of sale to the actual carrying
out of a sequence of actions is ambiguous.” Id. Neither the Federal Circuit
nor the Supreme Court has ever recognized that one may infringe a method
claim by selling or offering to sell a service that performs the method.
Relying on NTP, district courts have generally held that a method claim
may be infringed only by use. See, e.g., Isis Pharm., Inc. v. Santaris Pharma
A/S Corp., No. 3:11-CV-2214-GPC-KSC, 2014 WL 2531973, at *3-4 (S.D. Cal.
June 4, 2014); W.L. Gore & Assocs. v. Medtronic, Inc., 874 F. Supp. 2d 526,
9

544-45 (E.D. Va. 2012); In re Bill of Lading Transmission & Processing Sys.
Patent Litig., 695 F. Supp. 2d 680, 688 (S.D. Ohio 2010); Ricoh Co., Ltd. v.
Quanta Comput., Inc., 579 F. Supp. 2d 1110, 1123 (W.D. Wis. 2007), aff’d in
part and vacated in part, 550 F.3d 1325 (Fed. Cir. 2008); Transocean
Offshore Deepwater Drilling, Inc. v. GlobalSantaFe Corp., 400 F. Supp. 2d
998, 1011-12 (S.D. Tex. 2005).

Thus, the balance of caselaw supports

Oceaneering’s position.
But, as WWCS notes, a few district courts have taken the opposite view.
See, e.g., CLS Bank Int’l v. Alice Corp. Pty. Ltd., 667 F. Supp. 2d 29, 36-37
(D.D.C. 2009); see also WesternGeco L.L.C. v. ION Geophysical Corp., 869
F. Supp. 2d 793, 798-99 (S.D. Tex. 2012) (citing CLS Bank), rev’d in part on
reconsideration, 2012 WL 1708852 (S.D. Tex. May 15, 2012); Optigen, LLC
v. Int’l Genetics, Inc., 777 F. Supp. 2d 390, 403 (N.D.N.Y. 2011) (citing CLS
Bank). CLS Bank relied in part on the Supreme Court’s holding in Quanta
Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), that method
claims are exhaustible. See CLS Bank, 667 F. Supp. 2d at 37. In Quanta, the
Court noted that although “a patented method may not be sold in the same
way as an article or device, . . . method patents [are] exhausted by the sale of
an item that embodied the method.” 553 U.S. at 628-29.

10

This Court finds the reasoning in NTP persuasive. The Supreme
Court’s holding in Quanta, upon which CLS Bank relied, is not to the
contrary. First, Quanta addressed exhaustion rather than infringement. See
Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1362-63
(Fed. Cir. 2009) (declining to apply Quanta in the infringement context).
Second, the Court acknowledged that “a patented method may not be sold in
the same way as an article or device.” Quanta, 553 U.S. at 628. Third, the
Court stated that “embodiments of patented methods,” rather than methods
themselves, may be sold for purposes of exhaustion. Id. The Court cited two
cases where these embodiments were the products produced under the
patents. Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 446, 457
(1940); United States v. Univis Lens Co., 316 U.S. 241, 248-51 (1942). Here,
by contrast, Oceaneering offered to sell the service, i.e., the method, of the
infringing Flowline Remediation System and not products embodying the
method. Cf. Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed Cir. 1993)
(holding that “the sale of equipment to perform a process is not a direct
infringement of the process within the meaning of section 271(a)”). For these
reasons, Quanta—and by extension CLS Bank—do not undermine the
Federal Circuit’s reasoning in NTP.

11

Furthermore, limiting infringement of method claims to the use, rather
than sale, of such methods accords with other Federal Circuit precedent. For
example, the Federal Circuit has stated that where “the asserted patent
claims are method claims, the sale of a product, without more, does not
infringe the patent. Instead, direct infringement of a method claim requires
a showing that every step of the claimed method has been practiced.” Meyer
Intellectual Props. Ltd. v. Bodum, Inc., 690 F.3d 1354, 1366 (Fed Cir. 2012)
(citations omitted). Additionally, the Federal Circuit has held that the sale
of equipment to perform a patented process does not constitute direct
infringement of that process. Joy, 6 F.3d at 773-74.
Finally, limiting direct infringement of method claims to use of such
methods makes sense in light of the longstanding rule that ideas are not
patentable. See Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354
(2014) (“Laws of nature, natural phenomena, and abstract ideas are not
patentable.” (quoting Ass’n for Molecular Pathology v. Myriad Genetics,
Inc., 133 S.Ct. 2107, 2116 (2013))).

Methods, like abstract ideas, “are

‘conception[s] of the mind, seen only by [their] effects when being executed
or performed.’”

Parker v. Flook, 437 U.S. 584, 589 (1978) (quoting

Tilghman v. Proctor, 102 U.S. 707, 728 (1880)). Of course, methods are
patentable as novel applications of ideas. See id. at 594. But short of
12

application, i.e., use, a method is merely an idea. Just as an idea without an
application cannot be patented, a method claim without actual application
cannot be infringed.
In accordance with NTP and the district courts that have followed NTP,
the Court finds that the method claims in WWCS’s ‘185 Patent can be
infringed only by use. WWCS has failed to put forth any evidence showing
that Oceaneering used the methods described in the ‘185 Patent since the
patent issued on September 6, 2016. Thus, WWCS cannot establish direct
infringement under 35 U.S.C. § 271(a). Because WWCS cannot establish
direct infringement, its indirect infringement allegation also fails as a matter
of law. See 35 U.S.C. § 271(b); Power Integrations, 843 F.3d at 1331 (“We
have . . . held that ‘[t]o prevail under a theory of indirect infringement,
[plaintiff] must first prove that the defendants’ actions led to direct
infringement of the [patent-in-suit].’” (quoting Dynacore Holdings Corp. v.
U.S. Philips Corp., 363 F.3d 1263, 1274 (Fed. Cir. 2004))). Accordingly,
Oceaneering is entitled summary judgment on WWCS’s claim for
infringement of the ‘185 Patent.

13

IV.

CONCLUSION
For the foregoing reasons, Oceaneering’s partial motion for summary

judgment is GRANTED. WWCS’s claim for infringement of the ‘185 Patent
is DISMISSED.

28th
New Orleans, Louisiana, this _____ day of August, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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