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FMC Technologies, Inc v. OneSubsea IP UK Limited

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

September 24, 2019

FMC TECHNOLOGIES, INC., Plaintiff,
v.
ONESUBSEA IP UK LIMITED, et al., Defendants.

          MEMORANDUM AND ORDER

          NANCY F. ATLAS, UNITED STATES DISTRICT JUDGE

         This patent infringement case is before the Court on the Motion for Summary Judgment of Invalidity (“FMC’s Motion”) [Doc. # 107] filed by FMC Technologies, Inc. (“FMC”), to which OneSubsea IP UK Limited & OneSubsea LLC (collectively, “OneSubsea”) filed an Opposition and Cross-Motion for Partial Summary Judgment of No. Invalidity (“OneSubsea’s Motion”) [Doc. # 116]. FMC filed a Reply [Doc. # 123] in support of its Motion, and OneSubsea filed a Reply [Doc. # 127] in support of its Motion. The Court, having carefully reviewed the record and the governing legal authorities, grants FMC’s Motion and denies OneSubsea’s Motion.[1]

         I. BACKGROUND

         OneSubsea IP U.S. Limited is the owner of United States Patent No. 9, 945, 202 (“the ’202 Patent”). The patent application was filed March 27, 2017, and the ’202 Patent was granted April 17, 2018.

         FMC manufactures and sells versions of its vertical subsea well completion system that are designed to withstand higher pressures and temperatures found in more extreme and deeper water environments. The product is referred to as a High-Pressure High-Temperature Enhanced Vertical Deepwater Tree (“HPHT EVDT”). There is a version rated for up to 15, 000 pounds per square inch of pressure (“15ksi”) and up to 400 degrees Fahrenheit (the “15k/400F HPHT EVDT”). There is another version rated for up to 20, 000 pounds per square inch of pressure (“20ksi”) and up to 350 degrees Fahrenheit (the “20k/350F HPHT EVDT”). The two versions of the HPHT EVDT were developed together and are materially identical. FMC has presented evidence that the 15k/400F HPHT EVDT was completed before the 20k/350F version because it was needed for a Shell Offshore, Inc. (“Shell”) project.

         OneSubsea alleges that FMC is infringing the claims of the ’202 Patent through the HPHT EVDT system rated for 20ksi. See Amended Counterclaims [Doc. # 87], ¶ 17. OneSubsea alleges also that its claims are not limited to 20ksi systems. See id., ¶ 18.

         FMC argues if OneSubsea’s assertion that the 20k/350F HPHT EVDT is infringing is accepted as true, then the sale to Shell of the FMC 15k/400F HPHT EVDTs constitutes a prior sale that invalidates the ’202 Patent under 35 U.S.C. § 102(a)(1).[2] FMC cites the “well-settled maxim” that “that which infringes, if later, anticipates if earlier.” See Motion, p. 1 (citing Upsher-Smith Labs. v. Pamlab, LLC, 412 F.3d 1319, 1322 (Fed. Cir. 2005)). FMC’s Motion has been fully briefed and is now ripe for decision.

         II. SUMMARY JUDGMENT STANDARD

         Rule 56 of the Federal Rules of Civil Procedure provides for the entry of summary judgment against a party who fails to make a sufficient showing of the existence of an element essential to the party’s case, and on which that party will bear the burden at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where, as here, the movant bears the burden of proof at trial on the issues at hand, it “bears the initial responsibility of demonstrating the absence of a genuine issue of material fact with respect to those issues.” Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718 (5th Cir. 1995); see also Brandon v. Sage Corp., 808 F.3d 266, 269-70 (5th Cir. 2015); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005).[3] If the moving party meets its initial burden, the non-movant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial. Brandon, 808 F.3d at 270.

         In deciding whether a genuine and material fact issue has been created, the facts and inferences to be drawn from them must be reviewed in the light most favorable to the nonmoving party. See Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224, 234 (5th Cir. 2016). However, factual controversies are resolved in favor of the non-movant “only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.” Salazar-Limon v. City of Houston, 826 F.3d 272, 277 (5th Cir. 2016). The non-movant’s burden is not met by mere reliance on the allegations or denials in its pleadings. See Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 545 n.13 (5th Cir. 2002). Likewise, “unsubstantiated or conclusory assertions that a fact issue exists” do not meet this burden. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). Instead, the nonmoving party must present specific facts that show the existence of a genuine issue of material fact. Id.

         “When evaluating a motion for summary judgment, the court views the record evidence through the prism of the evidentiary standard of proof that would pertain at a trial on the merits.” SRAM Corp. v. AD-II Engineering, Inc., 465 F.3d 1351, 1357 (Fed. Cir. 2006). A patent is presumed valid under 35 U.S.C. § 282, and “overcoming that presumption requires clear and convincing evidence.” Spectrum Pharm., Inc. v. Sandoz Inc., 802 F.3d 1326, 1333 (Fed. Cir. 2015). As a result, at the summary judgment stage, a party asserting patent invalidity must submit clear and convincing evidence of invalidity. See Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1378 (Fed. Cir. 2005).

         III. ANALYSIS

         A. On-Sale Bar

         “To further the goal of motivating innovation and enlightenment while also avoiding monopolies that unnecessarily stifle competition, Congress has imposed several conditions on the limited opportunity to obtain a property right in an idea.” Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., __ U.S. __, 139 S.Ct. 628, 632 (2019) (internal quotations and citations omitted). One of these conditions, the on- sale bar, “reflects Congress’s reluctance to allow an inventor to remove existing knowledge from public use by obtaining a patent covering that knowledge.” Id. The on-sale bar precludes a person from receiving a patent, and can invalidate an existing patent, on an invention that was “on sale . . . before the effective filing date of the claimed invention.”[4] 35 U.S.C. § 102(a)(1). There are two requirements for the on-sale bar to apply: (1) the invention must have been “the subject of a commercial offer for sale, ” and (2) the invention “must be ready for patenting.” Helsinn, 139 S.Ct. at 633 (quoting Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67-68 (1998)).

         Under the Leahy-Smith America Invents Act (“AIA”), which was signed into law on September 16, 2011, and was fully in effect as of March 16, 2013, a person remains barred from receiving a patent on an invention that was “on sale . . . before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1). The AIA did not alter the meaning of “on sale” for purposes of § 102(a)(1) and, as a result, prior Federal Circuit rulings addressing the “on sale” bar continue to apply after enactment of the AIA. See Helsinn, 139 S.Ct. at 630.

         FMC argues that the ’202 Patent is invalid pursuant to the on-sale bar in § 102(a)(1). FMC bases its invalidity argument on its sale of ten 15k/400F HPHT EVDTs to Shell in 2015. OneSubsea argues in response that the on-sale bar applies only to sales by the inventor, not to sales by an unrelated third party such as FMC. OneSubsea argues also that, if the on-sale bar applies to sales by third parties, FMC has failed to ...


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