Paper 19
`
`Entered: February 6, 2017
`
`
`
`
`
`Trials@uspto.gov
`571-272-7822
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BAKER HUGHES INCORPORATED and
`BAKER HUGHES OILFIELD OPERATIONS, INC.,
`Petitioner,
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.,
`Patent Owner.
`____________
`
`Case IPR2016-01496
`Patent 7,134,505 B2
`____________
`
`
`
`Before SCOTT A. DANIELS, NEIL T. POWELL, and
`CARL M. DEFRANCO, Administrative Patent Judges.
`
`POWELL, Administrative Patent Judge.
`
`
`
`DECISION TO INSTITUTE
`37 C.F.R. § 42.108
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`
`I. INTRODUCTION
`
`
`
`This is a preliminary proceeding to decide whether inter partes review
`
`of U.S. Patent No. 7,134,505 B2 (Ex. 1001, “the ’505 patent”) should be
`
`instituted under 35 U.S.C. § 314(a). Packers Plus Energy Services Inc.
`
`(“Packers Plus”) is the owner of the ’505 patent. Baker Hughes
`
`Incorporated and
`
`Baker Hughes Oilfield Operations, Inc. (“Petitioner”) filed a Petition
`
`(Paper 1, “Pet.”) challenging claims 1–7, 11, and 14–27 of the ’505 patent.
`
`Rapid Completions LLC, the exclusive licensee of the ’505 patent, filed a
`
`Preliminary Response (Paper 17, “Prelim. Resp.”). After considering the
`
`Petition and Preliminary Response, we institute inter partes review on all of
`
`the challenged claims.
`
`A.
`
`The ’505 Patent
`
`II. BACKGROUND
`
`The ’505 patent describes a tubing string for treating a particular
`
`segment of a wellbore, while sealing off other segments. Ex. 1001, Abstract.
`
`Typically, a tubing string is run into a wellbore as a conduit for oil and gas
`
`products to flow to the surface. Id. at 1:23–43. But when natural formation
`
`pressure is insufficient, a well “stimulation” technique is employed, which
`
`involves injecting fracturing fluids into the formation to enlarge existing
`
`channels and thereby improve inflow into the wellbore. Id. at 1:30–34.
`
`As described in the ’505 patent, the tubing string includes a series of
`
`ports along its length, with a ball-actuated sliding sleeve mounted over each
`
`port, for selectively permitting the release of fluid from certain segments of
`
`the tubing string. Id. at 2:35–62, 6:41–7:36. Special sealing devices, called
`
`“solid body packers,” are mounted along the length of the tubing string
`
`2
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`downhole and uphole of each port. Id. at 2:35–62, 6:8–40. The solid body
`
`packers are disposed about the tubing string and seal the annulus between
`
`the tubing string and the wellbore wall, thereby dividing the wellbore into a
`
`series of isolated segments. Id. at 6:22–28. When the sliding sleeve over a
`
`particular port is activated to an open position, fluid can pass into one
`
`segment of the wellbore but is prevented from passing into adjacent
`
`segments by the packers positioned on either side of the port. Id. at 6:46–61.
`
`B.
`
`Related Matters
`
`
`
`The ’505 patent is involved in a concurrent district court action, Rapid
`
`Completions LLC v. Baker Hughes Incorporated, No. 6:15-cv-00724 (E.D.
`
`Tex.), which was filed July 31, 2015. Paper 4, 1. Additionally, the ’505
`
`patent is challenged in IPR2016-00596, where we instituted trial in August,
`
`2016.
`
`C.
`
`The Challenged Claims
`
`
`
`Of the challenged claims, claims 1, 19, and 24 are independent.
`
`Claim 1 is illustrative, and is reproduced below.
`
`1.
`An apparatus for fluid treatment of a borehole, the
`apparatus comprising a tubing string having a long axis,
`
`a first port opened through the wall of the tubing string,
`
`a second port opened through the wall of the tubing string, the
`second port offset from the first port along the long axis of the
`tubing string,
`
`a first packer operable to seal about the tubing string and mounted on
`the tubing string to act in a position offset from the first port along the
`long axis of the tubing string,
`
`a second packer operable to seal about the tubing string and mounted
`on the tubing string to act in a position between the first port and the
`second port along the long axis of the tubing string;
`
`3
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`
`a third packer operable to seal about the tubing string and mounted on
`the tubing string to act in a position offset from the second port along
`the long axis of the tubing string and on a side of the second port
`opposite the second packer,
`
`at least one of the first, second and third packer being a solid body
`packer each including multiple packing elements and a hydraulically
`actuated setting mechanism for at least one of the first, second and
`third packers to act on fluid pressure communicated to the mechanism
`from within the apparatus;
`
`a first sleeve positioned relative to the first port, the first sleeve being
`moveable relative to the first port between a closed port position and a
`position permitting fluid flow through the first port from the tubing
`string inner bore and a second sleeve being moveable relative to the
`second port between a closed port position and a position permitting
`fluid flow through the second port from the tubing string inner bore;
`
`and a sleeve shifting means for moving the second sleeve from the
`closed port position to the position permitting fluid flow,
`
`the means for moving the second sleeve selected to create a seal in the
`tubing string against fluid flow past the second sleeve through the
`tubing string inner bore.
`
`Ex. 1001, 14:12–44 (line breaks added).
`
`D.
`
`The Asserted Grounds
`
`Petitioner contends that claims 1–7, 11, and 14–27 of the ’505 patent
`
`are unpatentable under 35 U.S.C. § 103 based on the following grounds (Pet.
`
`5–6):
`
`Ground
`§ 103
`§ 103
`
`Reference(s)
`Lane-Wells1 and Ellsworth2
`Lane-Wells, Ellsworth and
`
`Challenged Claims
`1–7 and 14–27
`15
`
`
`1 Composite Catalog of Oil Field and Pipe Line Equipment 21st 1955–56
`Edition, World Oil, The Gulf Publishing Company (Ex. 1002).
`2 B. Ellsworth et al., Production Control of Horizontal Wells in a Carbonate
`Reef Structure, 1999 Canadian Institute of Mining, Metallurgy, and
`Petroleum Horizontal Well Conference (1999) (Ex. 1004).
`
`4
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`
`Ground
`
`§ 103
`
`§ 103
`
`Reference(s)
`Hartley3
`Lane-Wells, Ellsworth, and
`Echols4
`Lane-Wells, Ellsworth, and
`“based on the knowledge of
`a person of ordinary skill in
`the art.”5
`
`Challenged Claims
`
`11
`
`7 and 19
`
`As further support, Petitioner proffers the Declaration of Ali Daneshy,
`
`Ph.D. (Ex. 1007).
`
`III. ANALYSIS
`
`In this preliminary proceeding, we determine whether Bakes Hughes
`
`has demonstrated a reasonable likelihood that “at least 1 of the claims
`
`challenged in the petition” is unpatentable. 35 U.S.C. § 314(a). As always,
`
`our goal is “the just, speedy, and inexpensive resolution” of the validity of
`
`the challenged claims. 37 C.F.R. § 42.1(b).
`
`A.
`
`Claim Construction
`
`In the Petition, Petitioner proposes constructions for certain claim
`
`terms. Pet. 25–30. Patent Owner, in turn, states that it “disagrees” with
`
`Petitioner’s proposed constructions and “intends to dispute them,” but offers
`
`no construction of its own, except to say “there is no need for the Board to
`
`address these disputes now.” Prelim. Resp. 9–10. For purposes of this
`
`decision, we need not construe explicitly any claim language to determine
`
`that there is a reasonable likelihood of Petitioner prevailing on its claim
`
`challenges. See 35 U.S.C. § 314(a); Vivid Techs., Inc. v. Am. Sci. & Eng’g,
`
`Inc., 200 F.3d 795, 803 (Fed. Cir. 1999) (“[O]nly those terms need be
`
`
`3 U.S. Patent No. 5,449,039 iss. Sept. 12, 1995 (Ex. 1003).
`4 U.S. Patent No. 5,375,662 iss. Dec. 27, 1994 (“Echols”) (Ex. 1005).
`5 Pet. 6.
`
`5
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
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`construed that are in controversy, and only to the extent necessary to resolve
`
`the controversy.”).
`
`B.
`
`35 U.S.C. § 325(d)
`
`Noting that Petitioner previously has filed another petition against the
`
`’505 patent, Patent Owner argues that we should deny the Petition under
`
`§ 325(d) as an improper second bite at the apple. Prelim. Resp. 1–9, 24.
`
`Patent Owner asserts that Petitioner does not demonstrate that Lane-Wells
`
`was unavailable when Petitioner filed the earlier petition. Id. at 4–5. Patent
`
`Owner also argues that Petitioner used Patent Owner’s preliminary response
`
`from the earlier case as a roadmap for the Petition in this case. Id. at 6–8.
`
`Patent Owner further argues that Petitioner does not explain why the
`
`arguments in this Petition differ substantially from those in the earlier case.
`
`Id. at 8–9.
`
`Under § 325(d), “[i]n determining whether to institute or order a
`
`proceeding . . . , the Director may take into account whether, and reject the
`
`petition or request because, the same or substantially the same prior art or
`
`arguments previously were presented to the Office.” Consistent with Patent
`
`Owner’s arguments, Petitioner has also challenged claims 1–7, 11, and 14–
`
`27 of the ’505 patent in IPR 2016-00596. See IPR2016-00596, Paper 2. In
`
`that case, Petitioner challenges independent claims 1, 19, and 24, as well as a
`
`number of dependent claims under 35 U.S.C. § 102(b) based on Thomson.6
`
`Id. at 3–4. Here, Petitioner challenges independent claims 1, 19, and 24, as
`
`well as a number of dependent claims, under 35 U.S.C. § 103(a) based on
`
`
`6 D.W. Thomson et al., Design and Installation of a Cost-Effective
`Completion System for Horizontal Chalk Wells Where Multiple Zones
`Require Acid Stimulation, SPE (Society for Petroleum Engineers) 37482
`(1997).
`
`6
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`Lane-Wells and Ellsworth. Pet. 5. In IPR2016-00596, Petitioner does not
`
`assert that Thomson discloses using its system in an open hole section of a
`
`wellbore. See IPR2016-00596, Paper 2, 46–49. In contrast, in this case,
`
`Petitioner asserts that Lane-Wells does disclose using its system in an open
`
`hole section of a wellbore. See, e.g., Pet. 2, 32–33, 57–58. Under the
`
`circumstances of this case, we determine that the present Petition does not
`
`present “the same or substantially the same prior art or arguments” as
`
`Petitioner has already presented in IPR2016-00596. Accordingly, we do not
`
`deny the Petition under § 325(d).
`
`
`
`The Challenges As Premised on Lane-Wells in Combination
`C.
`with Ellsworth
`
`Our analysis focuses on the challenges against independent claims 1,
`
`19, and 24 as allegedly obvious over Lane-Wells and Ellsworth. The
`
`remaining challenges stem from those foundational premises. Petitioner
`
`asserts that Lane-Wells teaches most of the limitations of independent
`
`claims 1, 19, and 24. Pet. 30–35, 39–46, 51–56. Petitioner asserts that
`
`Lane-Wells teaches “a Tubing Port Valve that is used for selectively treating
`
`multiple formation zones.” Id. at 30. Petitioner provides an annotated
`
`version of Lane-Wells’ drawing of its tubing port valve. Id. at 31. Petitioner
`
`identifies this drawing as Figure 1. Petitioner’s Figure 1 is reproduced
`
`below.
`
`7
`
`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`
`
`
`Petitioner’s Figure 1 shows Lane-Wells’ tubing port valve, annotating
`
`certain components of the tubing port valve as an “inner sleeve,” a “ball,” a
`
`“ball seat,” “flow ports,” and a “spring.” Pet. 31; Ex. 1002, 17. 7 Petitioner
`
`asserts that the ball is dropped onto the seat, after which pressure build-up
`
`causes the spring to compress, such that the side ports open. Id. at 31–32
`
`(citing Ex. 1002, 17; Ex. 1007 ¶ 69).
`
`
`7 When citing to Lane-Wells, we refer to the page numbers added by
`Petitioner in the lower right hand corner.
`
`8
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`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`
`Petitioner asserts that “[t]o treat multiple zones, ‘different sized
`
`Tubing Port Valves’ are used, which allow for multiple ball drops.” Id. at 32
`
`(citing Ex. 1002, 17; Ex. 1007 ¶¶ 72–73). Petitioner elaborates that “[w]ith
`
`the Lane-Wells System, multi-zone stimulation can be achieved in either
`
`‘open-hole or cased-hole completion’ and can involve a ‘three packer set-up
`
`and two different sized Tubing Port Valves.’” Id. (citing Ex. 1002, 17;
`
`Ex. 1007 ¶¶ 70–71). Petitioner asserts that a person of ordinary skill in the
`
`art would have understood that this would involve three packers that isolate
`
`the annulus surrounding a tubing string to create three zones. Id. at 32–33
`
`(citing 1007 ¶ 71). Petitioner further asserts that a person of ordinary skill in
`
`the art would understand that Lane-Wells’ disclosure of “two different sized
`
`Tubing Port Valves” as meaning that a lower Tubing Port Valve has an inner
`
`sleeve with a smaller diameter ball seat than a ball seat of an inner sleeve of
`
`an upper Tubing Port Valve. Id. at 33 (citing Ex. 1007 ¶ 72). Petitioner also
`
`asserts that a first ball would open the inner sleeve of the lower Tubing Port
`
`Valve, and that a second, larger ball would subsequently open the inner
`
`sleeve of the upper Tubing Port Valve. Id. at 34–35 (citing Ex. 1002, 17;
`
`Ex. 1007 ¶ 73).
`
`Petitioner asserts that it was obvious to use Ellsworth’s solid body
`
`packer in Lane-Wells’ system. Pet. 35–39. Petitioner notes that Lane-Wells
`
`does not specify what type of packer to use in its system. Id. Petitioner
`
`asserts, however, that a person of ordinary skill in the art would have
`
`considered using packers that would meet the system’s minimum
`
`requirements, while possessing characteristics relevant to the selected
`
`completion. Id. Petitioner asserts that Ellsworth’s solid body packer was
`
`“well-suited for use in the Lane-Wells [s]ystem.” Id. at 36. In support of
`
`9
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`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`this, Petitioner asserts that “Ellsworth’s solid body packer . . . had been used
`
`successfully for acidizing and isolating multiple zones in an open hole.” Id.
`
`Thus, Petitioner contends, “[i]t was obvious to use Ellsworth’s solid body
`
`packer in the Lane-Wells [s]ystem because it had already been successfully
`
`used for the same purpose: open hole acidizing in a multi-zone system.” Id.
`
`at 35(emphasis omitted). Citing Dr. Daneshy’s testimony, Petitioner asserts
`
`that it would have been straightforward for a person of ordinary skill in the
`
`art to successfully use Ellsworth’s solid body packers in Lane-Wells’ system
`
`for acidizing in an open hole. Id. at 36–38. Petitioner asserts that this is so
`
`“especially given Lane-Wells’ suggestion to use its multi-zone system for
`
`open-hole acidizing, and Ellsworth’s successful use of [solid body packers]
`
`for acidizing and zonal isolation.” Id. at 38.
`
`Petitioner further contends that a person of ordinary skill in the art
`
`“would have had other independent reasons for using Ellsworth’s [solid
`
`body packers] in the Lane-Wells System.” Id. Petitioner asserts that solid
`
`body packers had already proven successful for zoned stimulation in
`
`carbonate formations (id.) and for “open-hole isolation in non-vertical
`
`formations that drill close to gauge-hole” (id. at 39). Given this, Petitioner
`
`argues that a person of ordinary skill in the art would have had good reason
`
`to use Ellsworth’s solid body packers in these applications to, e.g., lower the
`
`risk of failure. Id. at 38–39.
`
`Patent Owner argues that Petitioner has not demonstrated adequately
`
`that Lane-Wells was prior art. Prelim. Resp. 11–15. Petitioner asserts that
`
`Lane-Wells was published in 1955, making it prior art under § 102(b).
`
`Pet. 5. Petitioner cites a declaration of Margaret Kieckhefer, which states,
`
`inter alia, that the date stamp on Lane-Wells reflects that it was received at
`
`10
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`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`the Library of Congress as of November 14, 1955. Ex. 1002, 1. Ms.
`
`Kieckhefer also testifies that “[w]hen a journal or book is received at the
`
`library, it is usually date stamped within a few days of its receipt, and
`
`shelved for public access within a couple of weeks thereafter.” Id. Patent
`
`Owner notes that “‘[p]ublic accessibility’ is the touchstone inquiry for
`
`determining whether a reference constitutes a printed publication.” Prelim.
`
`Resp. 11 (citing In re Hall, 781 F.2d 897, 898–99 (Fed. Cir. 1986)). Patent
`
`Owner argues that the Petition fails to demonstrate that Lane-Wells “was
`
`publicly distributed or that it has been meaningfully indexed in a public
`
`resource.” Id. at 13.
`
`Patent Owner contends that Ms. Kieckhefer’s testimony asserts no
`
`more than that the Library of Congress received and maintained Lane-Wells
`
`as of 1955. Id. Patent Owner argues that Ms. Kieckhefer’s declaration does
`
`not provide any information about how a person of ordinary skill in the art
`
`could have located Lane-Wells at the Library of Congress. Id. Additionally,
`
`Patent Owner argues that Petitioner cannot assert that Lane-Wells was
`
`publicly accessible, given that Petitioner has stated that “none of multiple,
`
`diligent searches conducted by skilled, professional searchers prior to filing
`
`the 598 Proceeding discovered Lane-Wells, nor should they have, given that
`
`Lane-Wells was not in text-searchable form, and does not appear to have
`
`been depicted in any patent” (Paper 6, 7). Id. at 14. Patent Owner likens
`
`this case to others where documents were not shown to be printed
`
`publications because the evidence did not show sufficiently how one could
`
`have located those documents. Id. at 13–14 (citing Blue Calypso, LLC v.
`
`Groupon, Inc., 815 F.3d 1331, 1349 (Fed. Cir. 2016); Application of Bayer,
`
`11
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`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`568 F.2d 1357, 1361 (CCPA 1978); SRI Int’l, Inc. v. Internet Sec. Sys., Inc.,
`
`511 F.3d 1186, 1197 (Fed. Cir. 2008)).
`
`The determination of whether a given reference qualifies as a prior art
`
`“printed publication” “involves a case-by-case inquiry into the facts and
`
`circumstances surrounding the reference’s disclosure to members of the
`
`public.” In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004). Under
`
`the circumstances of this case, we determine that Petitioner has shown
`
`adequately for purposes of this decision that Lane-Wells qualifies as a
`
`printed publication under § 102(b). Notwithstanding Patent Owner’s
`
`citation of cases where a document in a library was not deemed publicly
`
`accessible, in this case, Petitioner provides evidence that Lane-Wells was
`
`received not by just any library, but the Library of Congress. Additionally,
`
`Petitioner provides evidence that Lane-Wells was received by the Library of
`
`Congress not shortly before, but decades before the earliest possible priority
`
`date of the ’505 patent. Under these circumstances, we determine there is a
`
`reasonable likelihood of Petitioner demonstrating that Lane-Wells was
`
`publicly accessible.8
`
`This determination is not negated by Petitioner’s contention that
`
`difficulties arose in locating Lane-Wells because it “was not in a text-
`
`searchable form, and does not appear to have been depicted in any patent.”
`
`See Paper 6, 7. This statement does not squarely address whether Lane-
`
`
`8 To the extent issues may arise regarding the admissibility of Petitioner’s
`evidence of public accessibility of Lane-Wells, we direct the parties to 37
`C.F.R. § 42.64(b)(1), which addresses the time for objecting to evidence
`submitted during a preliminary proceeding once trial has been instituted.
`Additionally, we direct the parties to 37 C.F.R. § 42.123, which addresses
`the time for submitting supplemental information relevant to a challenge on
`which trial has been instituted.
`
`12
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`

`IPR2016-01496
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`Wells “has been disseminated or otherwise made available to the extent that
`
`persons interested and ordinarily skilled in the subject matter or art
`
`exercising reasonable diligence, can locate it.” SRI, 511 F.3d at 1194–1195.
`
`Patent Owner also argues that Petitioner “fail[s] to show why a
`
`POSITA would combine the tubing port valves of Lane-Wells with the solid
`
`body packers of Ellsworth.” Prelim. Resp. 23. Patent Owner elaborates that
`
`“[m]erely asserting that a POSITA could combine the tools disclosed in
`
`those references is not the same as showing that a POSITA would have
`
`made the combination.” Id. Patent Owner further argues that if Lane-Wells
`
`discloses a system successful for acidizing, Petitioner does not demonstrate
`
`“why a person of ordinary skill in the art would modify that system.” Id.
`
`Patent Owner argues that we should give no weight to Dr. Daneshy’s
`
`testimony for certain reasons. Id. at 24. For example, Patent Owner asserts
`
`that Dr. Daneshy is not an expert on packer design. Id. Patent Owner also
`
`contends that Dr. Daneshy did not consider the objective evidence of non-
`
`obviousness and “improperly relied on the patent claims as a roadmap to
`
`locate the teachings in the prior art.” Id. (citing Ex. 2017, 43:15–20;
`
`InTouch Techs., Inc. v. VGO Commc’ns, Inc., 751 F.3d 1327, 1351 (Fed.
`
`Cir. 2014)).
`
`On this record, regarding whether a person of ordinary skill in the art
`
`would have had reason to use Ellsworth’s solid body packers in Lane-Wells’
`
`system, we find Petitioner’s assertions and evidence more persuasive than
`
`Patent Owner’s. Contrary to Patent Owner’s suggestion, Petitioner does not
`
`assert merely that Ellsworth’s solid body packers could work in Lane-Wells’
`
`system. See id. at 23. Rather, Petitioner asserts that solid body packers had
`
`proven well-suited for use in Lane-Wells’ system, particularly in certain
`
`13
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`

`

`IPR2016-01496
`Patent 7,134,505 B2
`
`applications, such that the solid body packers would have a lower risk of
`
`failure. Pet. 36–39 (citing Exs. 1004, 1006, 1007 ¶¶ 25–46, 76–77, 79,
`
`1020). At the institution stage, these and Petitioner’s other assertions and
`
`evidence sufficiently demonstrate rational underpinning for Petitioner’s
`
`assertion that a person of ordinary skill in the art would have had reason to
`
`combine Ellsworth’s solid body packers with Lane-Wells’ system.
`
`At this stage, we find unpersuasive Patent Owner’s arguments that we
`
`should give no weight to Dr. Daneshy’s testimony. Assuming, arguendo,
`
`that Dr. Daneshy is not an expert in packer design, we do not see why that
`
`would render his testimony incompetent. See Prelim. Resp. 24. Citing
`
`record evidence, Petitioner asserts that a person of ordinary skill in the art
`
`“would have had at least a Bachelor of Science degree in mechanical,
`
`petroleum, or chemical engineering and at least 2-3 years of experience with
`
`downhole completion technologies related to fracturing.” Pet. 14. Patent
`
`Owner does not dispute this assertion. Nor does Patent Owner otherwise
`
`provide any evidence or reasoning to support the suggestion that only an
`
`expert on packer design could competently testify on the subjects Dr.
`
`Daneshy does.
`
`Regarding Dr. Daneshy’s alleged failure to consider objective
`
`evidence of non-obviousness, this case differs from InTouch. There, failure
`
`to consider objective evidence of non-obviousness constituted only one of
`
`“numerous problems” that rendered the expert’s testimony “not substantial
`
`enough to support an obviousness finding.” 751 F.3d at 1348. Moreover, to
`
`the extent a failure to consider objective evidence of nonobviousness may
`
`undermine testimony on the ultimate question of obviousness, we do not
`
`agree with Patent Owner’s suggestion that it undermines Dr. Daneshy’s
`
`14
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`

`IPR2016-01496
`Patent 7,134,505 B2
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`testimony regarding factual components underlying the obviousness inquiry.
`
`See id. at 1352 n.8 (where expert testifies on ultimate question of
`
`obviousness, she/he must consider all factors relevant to that ultimate
`
`question). Here, we are persuaded that Dr. Daneshy’s testimony on factual
`
`matters underlying the question of obviousness supports Petitioner’s
`
`assertion of obviousness sufficiently at this stage of the proceeding.
`
`We also find unpersuasive Patent Owner’s argument that Dr. Daneshy
`
`improperly used the patent claims as a roadmap. See Prelim. Resp. 24. In
`
`support of this contention, Patent Owner cites Exhibit 2017 and InTouch. Id.
`
`Exhibit 2017 is a deposition transcript from cases other than this one. See
`
`Ex. 2017, 1. Accordingly, we are not persuaded that the cited testimony
`
`applies to Dr. Daneshy testimony in this case.
`
`Patent Owner also points to objective evidence of non-obviousness as
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`demonstrating patentability of the challenged claims. Prelim. Resp. 17–22.
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`Patent Owner asserts that “[b]oth Patent Owner . . . and Petitioner . . . have
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`commercialized the claimed invention.” Prelim. Resp. 17. Patent Owner
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`asserts that it “sold this technology under the name StackFRAC,” and
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`Petitioner “sold the claimed technology under the Baker Hughes product
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`name FracPoint.” Id. at 17–18. Patent Owner asserts that Dr. Daneshy “has
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`confirmed that both of these systems are open hole ball drop systems,” and
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`that “[v]arious news sources and analysts have recognized the importance
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`and success of this technology and praised [Patent Owner] for its
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`StackFRAC system.” Id. at 18.
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`Patent Owner also asserts commercial success as objective evidence
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`of non-obviousness. Patent Owner asserts that Petitioner claims it has
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`installed more than 40,000 FracPoint sleeves between 2005 and 2012 in
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`North America. Id. at 20–21. Patent Owner argues that Petitioner does not
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`dispute commercial success of the parties’ systems, and that Dr. Daneshy
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`has confirmed commercial success of the systems. Id. at 22.
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`To be given substantial weight in the determination of obviousness or
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`non-obviousness, there must be a nexus between the merits of the claimed
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`invention and objective evidence of non-obviousness. Ashland Oil, Inc. v.
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`Delta Resins & Refractories, Inc., 776 F.2d 281, 305 n.42 (Fed. Cir. 1985).
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`Additionally, the evidence must be reasonably commensurate in scope with
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`the claimed invention. See, e.g., In re Kulling, 897 F.2d 1147, 1149 (Fed.
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`Cir.1990); In re Grasselli, 713 F.2d 731, 743 (Fed. Cir. 1983). “[T]here is a
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`presumption of nexus for objective considerations when the patentee shows
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`that the asserted objective evidence is tied to a specific product and that
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`product ‘is the invention disclosed and claimed in the patent.’” WBIP, LLC
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`v. Kohler Co., 829 F.3d 1317, 1329 (Fed.Cir.2016) (quoting J.T. Eaton &
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`Co. v. Atl. Paste & Glue Co., 106 F.3d 1563, 1571 (Fed.Cir.1997)). “The
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`presumption of nexus is rebuttable.” WBIP, LLC, 829 F.3d at 1329.
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`At this stage, notwithstanding Patent Owner’s assertions and evidence
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`regarding objective considerations of non-obviousness, we are persuaded
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`that Petitioner has demonstrated a reasonable likelihood of prevailing on its
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`contentions of obviousness. We first note that the current record does not
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`persuade us of commercial success of the parties’ products. In Cable Elec.
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`Prods., Inc. v. Genmark, Inc., the Federal Circuit determined that the
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`patentee failed to provide evidence of market share and held that “[w]ithout
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`further economic evidence [ ] it would be improper to infer that the reported
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`sales represent a substantial share of any definable market.” 770 F.2d
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`1015, 1026 (Fed. Cir. 1985). Here, although Patent Owner asserts that
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`Petitioner has installed many thousands of units, Patent Owner makes no
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`assertions regarding market share. See Prelim Resp. 20–22. Regarding Dr.
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`Daneshy’s testimony that both Petitioner and Patent Owner have
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`commercially successful products, Patent Owner does not demonstrate what
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`basis Dr. Daneshy has for these statements. See id. at 22.
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`Furthermore, even if we assume the parties’ products have enjoyed
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`commercial success and praise, we are not currently persuaded that such
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`success and praise is reasonably due to the novel aspects of the claimed
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`invention. Patent Owner’s assertions and evidence characterize the
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`allegedly successful systems as, e.g., “open hole ball drop systems” (id. at
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`18), “multistage fracturing systems in horizontal wells,” (id. at 19), and a
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`“ball drop system used to complete horizontal wells in multiple stages” (id.
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`at 20) (emphasis omitted). The Petition indicates that Lane-Wells teaches an
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`open hole ball drop system for multistage fracturing. See Pet. 30–35. And,
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`at this point in the proceeding, Patent Owner does not traverse these
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`assertions with persuasive evidence or argument.
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`Accordingly, with the possible exception of use in horizontal sections,
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`it appears that Petitioner has a reasonable likelihood of demonstrating that
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`Lane-Wells discloses the features associated with the alleged praise and
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`commercial success. Where objective evidence of non-obviousness is
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`associated with features disclosed in the prior art, the evidence does not
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`support a conclusion of non-obviousness. See, e.g., Ormco Corp. v. Align
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`Tech., Inc., 463 F.3d 1299, 1312 (Fed. Cir. 2006) (“[I]f the feature that
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`creates the commercial success was known in the prior art, the success is
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`not pertinent.”). Regarding use in horizontal sections, this characteristic of
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`the commercial products does not appear tied to any of independent claims
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`1, 19, and 24, which do not recite a horizontal section. See Ex. 1001, 14:12–
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`44, 15:46–16:16, 16:35–17:5.
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`In view of the foregoing, we are persuaded that Petitioner has
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`demonstrated a reasonable likelihood of establishing that it would have been
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`obvious to use Ellsworth’s solid body packers in Lane-Wells’ system, and
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`that claims 1, 19, and 24 would have been obvious in view of this
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`combination of the references’ teachings. Having decided that Lane-Wells
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`and Ellsworth evince a reasonable likelihood that at least one of the claims
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`challenged in the Petition is unpatentable, we exercise our discretion under
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`37 C.F.R. § 42.108 to have the review proceed on all of the claims
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`challenged as obvious over Lane-Wells and Ellsworth. Additionally, we
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`note that the same foundational premise that supports the challenge based on
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`Lane-Wells and Ellsworth underlies the remaining challenges, including (a)
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`the challenge based on Lane-Wells, Ellsworth, and Hartley, (b) the challenge
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`based on Lane-Wells, Ellsworth, and Echols, and (c) the challenge based on
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`Lane-Wells, Ellsworth, and the knowledge of a person of ordinary skill in
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`the art. Accordingly, we exercise our discretion under 37 C.F.R. § 42.108 to
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`have the review proceed on each of these challenges for all of the claims. In
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`doing so, we seek to achieve finality of review at the Board and avoid
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`parallel or serial review at the district court, at least with respect to Petitioner
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`and the grounds in which Thomson and Ellsworth are proffered. See Intex
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`Recreation Corp. v. Bestway Inflatables & Material Corp., IPR2016-00180,
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`Paper 13, at 8–11 (PTAB June 6, 2016); see also Synopsys, Inc. v. Mentor
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`Graphics Corp., 814 F.3d 1309, 1316 (Fed. Cir. 2016) (stating that “[t]he
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`validity of claims for which the Board did not institute inter partes review
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`can still be litigated in district court”).
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`IV. CONCLUSION
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`After considering the evidence and arguments presented in the
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`Petition and Preliminary Response, we determine that Petitioner has
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`demonstrated a reasonable likelihood of success in proving that at least
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`independent claims 1, 19, and 24 of the ’505 patent are unpatentable. And,
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`in keeping with our mission of resolving patent validity disputes in a just,
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`speedy, and inexpensive manner, we exercise our discretion to institute inter
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`partes review on all of the challenged claims and on all of the asserted
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`grounds, as raised in the Petition.
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`Accordingly, it is hereby:
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`V. ORDER
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`ORDERED that, pursuant to 35 U.S.C. § 314(a), an inter partes
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`
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`
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`review of claims 1–7, 11, and 14–27 of the ’505 patent is instituted on the
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`following grounds:
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`claims 1–7 and 14–27 as allegedly obvious over Lane-Wells and
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`Ellsworth;
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`claim 15 as allegedly obvious over Lane-Wells, Ellsworth, and
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`Hartley;
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`claim 11 as allegedly obvious over Lane-Wells, Ellsworth, and
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`Echols;
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`claims 7 and 19 as allegedly obvious over Lane-Wells, Ellsworth, and
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`the knowledge of a person of ordinary skill in th