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Schlumberger Technology Corp. v. BICO Drilling Tools, Inc.

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

May 3, 2018

Schlumberger Technology Corporation, Plaintiff,
v.
BICO Drilling Tools, Inc., Defendant.

          MEMORANDUM OPINION AND ORDER

          Gray H. Miller United State District Judge

         Pending before this court are two motions to dismiss defendant and counterplaintiff BICO Drilling Tools, Inc.'s (“BICO”) counterclaims. Dkt. 24, 30. After considering the motions, related briefing, the arguments made during an oral hearing that was held on Tuesday, May 1, 2018, and the applicable law, the court is of the opinion that both motions should be DENIED.

         I. Background

         This is a patent case relating to plaintiff and counterdefendant Schlumberger Technology Corporation's (“Schlumberger”) patent for “Optimized Liner Thickness for Positive Displacement Drilling Motors, ” U.S. Patent No. 6, 604, 921 (“the ‘921 Patent”). Dkt. 1. The ‘921 Patent was filed on January 24, 2002, and the date of the patent is August 12, 2003. Dkt. 25, Ex. D. Schlumberger contends that BICO infringed one of more claims of the ‘921 Patent, including but not limited to Claims 1 and 8, by importing, making, using, offering to sell, and/or selling products or systems that embody the patented inventions, including but not limited to stators BICO uses in various products. Dkt. 1.

         In BICO's second amended answer and counterclaim, it asserts several affirmative defenses including non-infringement, invalidity, and inequitable conduct. Dkt. 29. It asserts the following counterclaims, which are parallel to the aforementioned affirmative defenses: (1) a declaratory judgment of non-infringement of the ‘921 Patent; (2) a declaratory judgment of invalidity of the ‘921 Patent; and (3) a declaratory judgment of unenforceability of the ‘921 Patent due to inequitable conduct. Id.

         Schlumberger now moves for dismissal of a portion of the second and all of the third counterclaim. Dkts. 24, 30. Schlumberger contends there is no plausible reading of the alleged prior art that supports BICO's claim that the patent is invalid because prior art anticipated or made obvious a claim in the patent-in-suit. Dkt. 24. Additionally, Schlumberger contends that the inequitable conduct counterclaim fails because all of the alleged prior art was disclosed to the patent examiners. Dkt. 30.

         These motions are fully briefed and argued. The court will first review the relevant legal standards and then discuss whether dismissal of the second and third counterclaims is appropriate.

         II. Legal Standard

         A. Motion to Dismiss

         “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65 (2007). In considering a Rule 12(b)(6) motion to dismiss a complaint, courts generally must accept the factual allegations contained in the complaint as true. Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982). Generally, when “deciding a motion to dismiss for failure to state a claim, courts must limit their inquiry to the facts stated in the complaint and the documents either attached to or incorporated in the complaint.” Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017 (5th Cir. 1996). “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, [but] a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citations omitted). The “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. The supporting facts must be plausible-enough to raise a reasonable expectation that discovery will reveal further supporting evidence. Id. at 556.

         Under Federal Rule of Civil Procedure 9(b), in cases in which a party alleges fraud or mistake, the “party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). A claim of inequitable conduct must be plead with particularity pursuant to the requirements of Rule 9(b). Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1318 (Fed. Cir. 2009); Cent. Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Sols., P.C., 482 F.2d 1347, 1356 (Fed. Cir. 2007) (requiring inequitable conduct to be pled with particularity and noting that the Federal Circuit applies its own law “to the question of whether the pleadings [are] adequate”). To plead the circumstances of inequitable conduct with particularity “requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” Exergen Corp., 575 F.3d at 1327. Additionally, “a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the [U.S. Patent and Trademark Office (“USPTO”)].” Id. at 1328-29.

         B. Invalidity of a Patent

          BICO asserts invalidity under 35 U.S.C. §§ 102 and 103, and portions of § 112. Section 102(a) indicates that a person is not entitled to a patent if the claimed invention was already patented, “described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1). “Section 102 embodies the concept of novelty-if a device or process has been previously invented (and disclosed to the public), then it is not new, and therefore the claimed invention is ‘anticipated' by the prior invention.” NewMoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1369 (Fed. Cir. 2008). “[I]n order to show anticipation, the proponent must show ‘that the four corners of a single, prior art document describe every element of the claimed invention.'” Id. (quoting Xerox Corp. v. 3Com Corp., ...


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