Canrig Drilling Technology Ltd. v. Trinidad Drilling Ltd.
Filing
38
MEMORANDUM AND ORDER denying 22 Motion for Judgment on the Pleadings.(Signed by Judge Nancy F. Atlas) Parties notified.(TDR, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CANRIG DRILLING TECHNOLOGY §
LTD.,
§
Plaintiff,
§
§
v.
§
§
TRINIDAD DRILLING L.P.,
§
Defendant.
§
CIVIL ACTION NO. H-15-0656
MEMORANDUM AND ORDER
This patent case is before the Court on the Motion for Judgment on the
Pleadings Based on Invalidity of the Asserted Patents Under 35 U.S.C. § 101
(“Motion”) [Doc. # 22] filed by Defendant Trinidad Drilling L.P. (“Trinidad”).
Plaintiff Canrig Drilling Technology Ltd. (“Canrig”) filed a Response [Doc. # 32],
Defendant filed a Reply [Doc. # 34], and Plaintiff filed a Sur-Reply [Doc. # 35].
Having reviewed the record and applicable legal authorities, the Court denies the
Motion.
I.
BACKGROUND
Canrig and Trinidad each manufacture oil and gas drilling equipment. Canrig
is the owner of reissued United States Patents No. RE44,956 (“the ’956 Patent”) and
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No. RE44,973 (“the ’973 Patent”). Canrig alleges that Trinidad infringes claims in
these two patents.
Originally, oil rig drilling was exclusively vertical. Later, in order to reach oil
and gas reserves that were inaccessible from immediately above, drilling apparatus
and methods were developed to allow directional drilling. Unlike vertical drilling,
directional drilling presents two significant challenges: (1) accurately steering the
drilling path of the well and (2) overcoming friction inherent in the directional drilling
process.
In directional drilling, a bend in the motor assembly is added just above the drill
bit. The rig operators “steer” the drilling by rotating the drill string (which is a series
of heavy, steel pipes connected together) to change the direction the bend is pointing,
also known as the “toolface orientation.”
Setting and maintaining “toolface
orientation” is necessary in order to steer the drilling path accurately. Previously, the
driller needed to rotate the drill pipe manually, count the number of rotations, and then
stop the rotation when he believed the toolface orientation was correct. This method
lacked accuracy, in part because it was monotonous and subject to human error.
Additionally, it involved a significant amount of guess work by the driller to reorient
the toolface. Drillers used their experience to estimate the number of rotations that
needed to be made at the surface in order to turn the downhole motor assembly the
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desired amount for accurate toolface orientation. When the driller made the estimated
number of rotations, he would manually stop the rotation of the drill string, measure
the toolface orientation, and repeat as many times as needed to achieve the correct
orientation.
The second challenge in directional drilling is overcoming friction between the
lower surface of the drill string and the bottom of the wellbore. This friction can
cause the drill string to stick to the bottom of the well and impede the advance of the
drill bit. By twisting the drill string back and forth (referred to as oscillation), a driller
can reduce the amount of sticking caused by friction. The driller is required to rotate
the drill string enough to eliminate sticking but not so much that it changes the
direction of the drilling.
Claims 1 and 4 of the ’973 Patent describe a system and method for rotating a
drill string to a predetermined angle. Claim 2 of the ’973 Patent and Claim 7 of the
’956 Patent describe a system and method for oscillating the drill string between
predetermined angles for the purpose of reducing friction. Canrig asserts that its
patented technology eliminates the guess work previously inherent in directional
drilling. Canrig asserts that its patented method of rotating or oscillating the drill
string to a predetermined angle enables drillers to control the rotation of the drill string
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instantly and automatically while drilling, increasing the accuracy of the directional
drilling process.
Canrig filed this lawsuit, alleging that Trinidad is infringing Claims 1, 2, and
4 of the ’973 Patent and Claim 7 of the ’956 Patent. Trinidad has moved for judgment
on the pleadings pursuant to Rule 12(c). Trinidad argues that the subject matter of
Canrig’s patents is simply the abstract concept of rotation and, therefore, is not
patentable under § 101. For the reasons explained below, Trinidad’s argument is
unpersuasive.
II.
APPLICABLE LEGAL PRINCIPLES
A.
Rule 12(c) Motion for Judgment on the Pleadings
Rule 12(c) of the Federal Rules of Civil Procedure provides, “After the
pleadings are closed -- but early enough not to delay trial -- a party may move for
judgment on the pleadings.” FED. R. CIV. P. 12(c). A Rule 12(c) motion is evaluated
under the same standard as a motion to dismiss pursuant to Rule 12(b)(6). See
Bosarge v. Miss. Bureau of Narcotics, __ F.3d __, 2015 WL 4282372, *3 (5th Cir.
July 15, 2015); Young v. City of Houston, 599 F. App’x 553, 554 (5th Cir. Apr. 13,
2015); Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1327 (Fed. Cir.
2012). In patent cases, pleading standards are those stated by the local federal court
of appeals. Bayer Schering, 676 F.3d at 1327.
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A Rule 12(b)(6) motion to dismiss is viewed with disfavor and is rarely granted.
Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011) (citing Harrington v. State
Farm Fire & Cas. Co., 563 F.3d 141, 147 (5th Cir. 2009)). The complaint must be
liberally construed in favor of the plaintiff, and all facts pleaded in the complaint must
be taken as true. Harrington, 563 F.3d at 147. The complaint must, however, contain
sufficient factual allegations, as opposed to legal conclusions, to state a claim for relief
that is “plausible on its face.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
Patrick v. Wal-Mart, Inc., 681 F.3d 614, 617 (5th Cir. 2012). “Documents that a
defendant attaches to a motion to dismiss are considered part of the pleadings if they
are referred to in the plaintiff's complaint and are central to her claim.” Bosarge v.
Miss. Bureau of Narcotics, ___ F.3d ___, 2015 WL 4282372, *4 (5th Cir. July 15,
2015) (quoting Causey v. Sewell Cadillac–Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir.2004)). Because the analyses under Rule 12(c) and Rule 12(b)(6) are similar, the
Court applies the same rule to documents attached to a motion for judgment on the
pleadings. Id. (citing Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002)).
B.
35 U.S.C. § 101
Title 35, United States Code, § 101 provides that whoever “invents or discovers
any new and useful process, machine, manufacture, or composition of matter, or any
new and useful improvement thereof, may obtain a patent therefor, subject to the
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conditions and requirements of this title.” 35 U.S.C. § 101. Section 101 “specifies
four independent categories of inventions or discoveries that are eligible for
protection: processes, machines, manufactures, and compositions of matter.” Bilski
v. Kappos, 561 U.S. 593, 601 (2010). “In choosing such expansive terms . . .
modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent
laws would be given wide scope.” Id. (quoting Diamond v. Chakrabarty, 447 U.S.
303, 308 (1980)).
The Supreme Court has identified exceptions to patentability for laws of nature,
natural phenomena, and abstract ideas. See Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
__ U.S. __, 134 S. Ct. 2347, 2354 (2014); Versata Dev. Group, Inc. v. SAP Am., Inc.,
793 F.3d 1306, 1331 (Fed. Cir. 2015). “The concepts covered by these exceptions are
‘part of the storehouse of knowledge of all men . . . free to all men and reserved
exclusively to none.’” Bilski, 561 U.S. at 602 (quoting Funk Bros. Seed Co. v. Kalo
Inoculant Co., 333 U.S. 127, 130 (1948)). The “concern that drives this exclusionary
principle [is] pre-emption.”
Alice, 134 S. Ct. at 2354.
These exceptions to
patentability are “the basic tools of scientific and technological work” and there is
concern that monopolization of these “building blocks of human ingenuity” through
the acquisition of a patent “might tend to impede innovation more than it would tend
to promote it.” Id. (citations omitted).
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The Supreme Court has warned, however, that courts must “tread carefully in
construing this exclusionary principle lest it swallow all of patent law.” Alice, 134 S.
Ct. at 2354. As a result, courts must “distinguish between patents that claim the
building blocks of human ingenuity and those that integrate the building blocks into
something more.” Id. (quotations and alternations omitted).
To determine whether the claims in a patent are directed to an unpatentable
abstract idea, the Court applies a two-step framework. See id. at 2355; Versata, 793
F.3d at 1332. The first inquiry is whether the claims at issue are directed to one of the
patent-ineligible concepts. Id.; see also Mayo Collaborative Servs. v. Prometheus
Labs., Inc., __ U.S. __, 132 S. Ct. 1289, 1296-97 (2012). “A principle, in the abstract,
is a fundamental truth; an original cause; a motive; these cannot be patented, as no one
can claim in either of them an exclusive right.” Diamond v. Diehr, 450 U.S. 175, 185
(1981). For example, “a new mineral discovered in the earth or a new plant found in
the wild is not patentable subject matter. Likewise, Einstein could not patent his
celebrated law that E=mc2, nor could Newton have patented the law of gravity.”
Mayo Collaborative Servs. v. Prometheus Labs., Inc., __ U.S. __, 132 S. Ct. 1289,
1293 (2012).
If, on the other hand, the patent’s subject matter has a “concrete or tangible
application,” it is not a patent-ineligible abstract idea. See Ultramercial, Inc. v. Hulu,
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LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). For example, in Diehr, the patent covered
a process for curing synthetic rubber. Diehr, 450 U.S. at 187. An abstract concept (a
mathematical equation) was used in conjunction with other steps in the claimed
process, including calculating the appropriate cure time through the use of a digital
computer and automatically opening the press at the proper time. Id. Although the
process used a well-known mathematical equation, the patent did not seek to pre-empt
use of that equation and, therefore, was not barred by the exceptions under § 101. Id.
The second inquiry, to be addressed only if the claims are directed to patentineligible subject matter, is whether there is an inventive element or combination of
elements. See Alice, 134 S. Ct. at 2355; Versata, 793 F.3d at 1332. This second step
requires the Court “to determine whether the claims do significantly more than simply
describe” an abstract method. Ultramercial, 772 F.3d at 715. “A claim that recites
an abstract idea must include additional features to ensure that the claim is more than
a drafting effort designed to monopolize the abstract idea.” Alice, 134 S. Ct. at 2357
(internal quotations and alterations omitted). “Put another way, there must be an
‘inventive concept’ to take the claim into the realm of patent-eligibility.” Intellectual
Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015).
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III.
ANALYSIS
Contrary to Defendant’s argument, Canrig’s patent claims in this case are not
an attempt to patent the abstract concept of rotation. Canrig does not seek to patent,
and thereby pre-empt, the use of that abstract concept in any field or industry. Nor
does Canrig attempt to patent generally all computer-assisted rotation. The subject
matter of Canrig’s patent claims is much more narrow and covers processes, not
abstract ideas.
The claims in Canrig’s patents address specific challenges in directional drilling
through a concrete process for controlling the rotation of the long drill strings to and
between predetermined angles. The patent claims are directed to a physical apparatus
and drilling process of controlled rotation by a specific amount (the predetermined
angle). Such tangible, industrial processes have long been considered eligible to
receive patent protection. See Diehr, 450 U.S. at 184.
“At some level, all inventions embody, use, reflect, rest upon, or apply laws of
nature, natural phenomena, or abstract ideas.” Alice, 134 S. Ct. at 2354 (internal
quotations and citation omitted). “Thus, an invention is not rendered ineligible for
patent simply because it involves an abstract concept.” Id. Applications of abstract
concepts to new and useful ends remains eligible for patent protection. See id. (citing
Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Although rotation in isolation is an
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abstract concept, Canrig’s patented process uses controlled rotation within
predetermined angles to orient and oscillate a drill string. This eliminates the guess
work, and resulting inaccuracies, inherent in the prior method of directional drilling.
See, e.g., Diehr, 450 U.S. at 187 (patent eligible process for molding synthetic rubber
eliminated the guess work, and resulting inaccuracies, in measuring the temperature
inside the molding press and calculating when to open the press and remove the
molded, cured product).
The claims in Canrig’s patents do not “risk
disproportionately tying up the use of the underlying idea” of rotation in the drilling
process and, as a result, are not patent ineligible under § 101.1 See Alice, 134 S. Ct.
at 2354.
IV.
CONCLUSION AND ORDER
As explained herein, the claims in the ’957 Patent and the ’973 Patent do not
address, and thereby preempt, an abstract concept. As a result, Defendant’s § 101
challenge to the patents’ validity fails and it is hereby
ORDERED that Defendant’s Motion for Judgment on the Pleadings [Doc.
# 22] is DENIED.
1
Having concluded that the claims in Canrig’s patents are not patent-ineligible abstract
concepts under § 101, the Court need not address the second prong of the test
described in Alice.
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SIGNED at Houston, Texas, this 17th day of September, 2015.
NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE
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