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Multilift Wellbore Technology Ltd. v. ESP Completion Technologies LLC

United States District Court, S.D. Texas, Houston Division

February 16, 2018

MULTILIFT WELLBORE TECHNOLOGY, LIMITED et al., Plaintiffs,
v.
ESP COMPLETION TECHNOLOGIES, LLC et al., Defendants.

          MEMORANDUM AND OPINION

          Lee H. Rosenthal, Chief United States District Judge.

         Sand and machines do not get along. Sand can slow, stop, or break machines, bringing work to a halt. Repairs or replacement can be time consuming and expensive. Hydrocarbon production is particularly vulnerable to sand's effects. The problem is acute in fracking, which injects sand and liquid into oil wells under high pressure to crack rock formations and allow petroleum and natural gas to flow more easily through the well to the surface. The fracking process increases the amount of solids mixed with the oil during production. When sand builds on top of the drilling pump, the predictable occurs. The pump stops, often needing repair or replacement, and the work is delayed. This patent-infringement case arises out of solving that problem.

         Multilift's U.S. Patent No. 9, 441, 435 (the ‘435 Patent) claims an apparatus designed to prevent pump failure from sand accumulating on top of the pump. Multilift alleges that the defendants, ESP Completion Technologies and C&J Energy Services, infringed the ‘435 Patent. (Docket Entry No. 116-1).

         The parties have asked the court to construe seven disputed terms and decide whether an eighth term is a required element or a non-limiting statement of intended use. Multilift filed an opening claim-construction brief, the defendants filed a responsive brief, and Multilift filed a reply. (Docket Entry Nos. 109, 113, 117). The parties presented a tutorial, and the court held a lengthy Markman hearing at which counsel argued their competing constructions. (Docket Entry Nos. 123, 126).

         Based on the parties' claim-construction briefing, counsels' arguments, the record, and the applicable law, the court construes the seven disputed terms and decides the issue involving the eighth term, as set out and explained below.

         I. Background

         A. The Technology

         The problem that the ‘435 Patent addresses arises when a downhole pump stops. When the pump stops, so does the upward movement of the oil and solids-primarily sand-through the production pipe from under the ground to the surface. The solids are dense and settle on top of the pump.[1] When enough solids accumulate, the pump often becomes plugged and stops. Turning the pump back on strains the motor as it tries to break through the settled solids and push the fluid up the pipe. The motor can work so hard that the heat it generates melts or damages its internal components. Repairing or replacing the pump and motor is expensive. A typical pump costs between $80, 000 to $100, 000. Losing a week or more of production while a pump is removed, repaired or replaced, and reinstalled can cost from $250, 000 to $500, 000. Pump failures from accumulated solids generally occur four or five times a year, per well.

         The ‘435 Patent is designed to avoid failures and damage caused by solids when the pump stops and is reactivated. The ‘435 Patent describes an apparatus that sits on top of a pump. The apparatus is integrated into the pipe, so that hydrocarbons can travel through the apparatus. The invention keeps solids from accumulating on top of the pump by allowing both fluids and solids to travel up and out of the apparatus, but not allowing solids to travel out of the lower opening to the top of the pump. The apparatus does this by using an inner and an outer tube. A device at the top of the inner tube allows fluid and solids to travel up through the apparatus and into the rest of the pipe, but separates most of the solids from the fluids and prevents those solids from entering the inner tube when moving downwards. The device does this by diverting the solids moving downward into the outer tube. The solids accumulate at the bottom of the outer tube, which is lower than the top of the inner tube. The solids are separated from the hydrocarbons and blocked from settling on top of the pump. When the pump is restarted, there is no problematic accumulation of solids on the top. The pump is able to push the separated fluid hydrocarbons and remaining solids up through the apparatus. Fluids and some solids travel up the inner tube, but the concentration of solids is much less than would be present without the diversion into the outer tube. The device on top of the inner tube allows the pump to continue operating, moving the hydrocarbons through the apparatus and into the pipe.

         One problem remains. The solids in the outer tube accumulate and must be removed. If not, the fix is a one-or-two time event. To keep the pump working over time, the ‘435 Patent claims a design that cleans the apparatus of the solids that have accumulated in the outer tube. The apparatus has ports, or slits, placed at regular intervals throughout the inner tube. These ports are designed so that solids entrained in the fluid, moving downward by gravity but without downward force (as when the pump is shut off), cannot enter the inner tube. But when the pump is activated, upward- moving fluids and solids are sent through the ports. The pressure of the upward-moving fluids and solids gradually breaks up the accumulation of solids in the outer tube, working down from the highest point of the accumulated solids, where their cumulative weight is least. Once the outer tube is fully cleared, the apparatus has returned to the original, pre-pump-shutdown stage. It is ready for continued use.

         B. The Infringement Allegations

         Multilift asserts one count of patent infringement under 35 U.S.C. § 271, based on the following allegations:

• the defendants infringed the ‘435 Patent by making, using, and selling a product called the Sand Eliminator since at least early 2016 and through at least October 3, 2017;
• the Sand Eliminator embodies the patented invention;
• the Sand Eliminator is substantially similar to Multilift's product, the SandGuard, “serv[ing] the same purpose, ” “operat[ing] in the same manner, ” and “function[ing] identically” to the SandGuard; and
• the defendants continued to make, use, and sell the Sand Eliminator after Multilift sent them a cease-and-desist letter on October 20, 2016.

(Docket Entry No. 116 at 3-4).

         Multilift alleges that the defendants “have infringed and continue to infringe as of October 3, 2017, directly and indirectly, through contributory and/or induced infringement, by using, selling, and/or offering to sell in the United States, at least the Sand Eliminator, which comes within and/or is operated within the scope of one or more claims of the Patent, ” and that the infringement was “intentional, deliberate, and willful.” Id. at 5. Multilift alleges that it has suffered, and will continue to suffer, irreparable harm due to the defendants' infringing conduct. Id. at 6. It seeks an injunction prohibiting future infringement of the ‘435 Patent and activities inducing or contributing to infringement, a list of all entities who were sold or offered any product that infringes the Patent, and monetary damages. Id. at 6-7.

         C. The Disputed Terms

         The parties dispute eight terms in Claim 1 or Claim 18. Unlike the first seven terms, the eighth is not disputed because of its meaning but because the parties disagree on whether the term is a required element or a non-limiting statement of intended use.

         The meaning of the following seven terms are disputed:

1. “flow” (Claims 1 and 18);
2. “production tubular” (Claims 1 and 18);
3. “a [first/second] flow path between the upper opening and the lower opening in the body” (Claim 1);
4. “flow diverter arranged to direct downward flow through the body towards the second flow path and away from the first flow path” (Claim 1);
5. “a device in the second flow path for filtering or collecting solid particles from the second flow path” (Claim 1);
6. “directing downward flow of fluid and/or entrained solids to a second flow path in the body” (Claim 18); and
7. “filtering or collecting solid particles in the second flow path” (Claim 18).

         The term that is either a required element or a non-limiting statement of intended use is:

8. “wherein fluid flowing in the first flow path in an upward directions causes fluid flow in the second flow path which carries filtered or collected solid particles away from the device” (Claim 1).

         The disputed terms in Claims 1 and 18 are set out in bold:

Claim 1. A downhole apparatus comprising:
a body configured to be coupled to a production tubular and comprising an upper opening and a lower opening;
a first flow path between the upper opening and the lower opening in the body;
a second flow path between the upper opening and the lower opening in the body;
a flow diverter arranged to direct downward flow through the body towards the second flow path and away from the first flow path; and
a device in the second flow path for filtering or collecting solid particles from the second flow path,
wherein the first flow path and the second flow path are in fluid communication with one another;
and wherein fluid flowing in the first flow path in an upward direction causes fluid flow in the second flow path which carries filtered or collected solid particles away from the device.
. . .

         Claim 18. A method of operating a hydrocarbon well, the method comprising:

providing a production tubular, a downhole pump in the production tubular, and a body coupled to a production tubular above the downhole pump and comprising an upper opening and a lower opening;
in a production phase, operating the downhole pump to cause fluid to flow in a first flow path upward through the body;
ceasing operation of the pump;
directing downward flow of fluid and/or entrained solids to a second flow path in the body;
filtering or collecting solid particles in the second flow path; and
carrying filtered or collected solid particles out of the upper opening of the body by operating the downhole pump.

         Each of these disputed terms is construed based on the record and the governing law.

         II. The Record

         The record the parties rely on for claim-construction includes: the ‘435 Patent (Docket Entry No. 116-1); excerpts from the ‘435 Patent prosecution and material documenting amendments to the Patent (Docket Entry Nos. 109-14, 113-5, 113-6); other patents, domestic and international, and patent applications (Docket Entry Nos. 109-10-109-13, 113-9 at 20, 113-9 at 26, 113-9 at 45); an excerpt from a July 24, 2017 motions hearing in the Eastern District of Texas, in which the parties argued motions for a preliminary injunction, to dismiss for improper venue, and to transfer venue (Docket Entry Nos. 109-2, 113-4); dictionaries (Docket Entry Nos. 109-5-109-8, 113-10, 113-11); and expert testimony (Docket Entry Nos. 109-3, 109-4, 113-1, 113-2, 113-7, 113-9, 117-1).

         Multilift's expert is Mr. John Bearden, a retired registered professional engineer with a Bachelor of Science and a Master of Science in mechanical engineering from Texas A&M University. (Docket Entry No. 50-8 at 3). He has more than 40 years of experience in the engineering design, development, and application of artificial-lift electric submersible pump systems. Id. Mr. Bearden worked at Borg-Warner Ingersoll Research Center; Centrilift (Byron-Jackson Pump), as a project engineer; Centrilift-Hughes, as a mechanical engineer; and Baker ...


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