DCT

1:17-cv-01390

Sunoco Partners Marketing & Terminals LP v. Powder Springs Logistics LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:17-cv-01390, D. Del., 10/09/2018
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because both Defendants are organized under the laws of Delaware and therefore reside in the District.
  • Core Dispute: Plaintiff alleges that Defendants’ automated systems for blending butane into gasoline, both in-pipeline and at terminal facilities, infringe five patents related to controlling the volatility of the resulting fuel blend.
  • Technical Context: The technology addresses the in-line, automated blending of butane with gasoline to precisely control the fuel's Reid Vapor Pressure (RVP), a measure of volatility, thereby maximizing economic benefits while complying with environmental regulations.
  • Key Procedural History: This action is a Second Amended Complaint. The complaint alleges that Defendants had knowledge of the asserted patent family through commercial dealings between Sunoco and Magellan dating to at least 2006, and through citations made during the prosecution of a patent owned by Magellan.

Case Timeline

Date Event
2001-02-09 Earliest Priority Date for all patents-in-suit
2004-01-20 U.S. Patent No. 6,679,302 Issues
2006-04-25 U.S. Patent No. 7,032,629 Issues
2015-12-08 U.S. Patent No. 9,207,686 Issues
2016-11-15 U.S. Patent No. 9,494,948 Issues
2017 (Q1) Accused Powder Springs facility begins operation
2017-03-28 U.S. Patent No. 9,606,548 Issues
2017-10-04 Original Complaint Filing Date
2018-08-02 First Amended Complaint Filing Date
2018-10-09 Second Amended Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 9,494,948 - "Versatile Systems for Continuous In-Line Blending of Butane and Petroleum"

  • Issued: November 15, 2016

The Invention Explained

  • Problem Addressed: The patent addresses the imprecision and labor-intensive nature of historical methods for blending butane into gasoline, which occurred either at refineries, in pipelines, or in large storage tanks (’302 Patent, col. 1:46-2:51). These methods made it difficult to maximize the use of butane—a less expensive component—while staying within the strict, variable Reid Vapor Pressure (RVP) limits mandated by environmental regulations ('302 Patent, col. 1:20-2:8).
  • The Patented Solution: The invention provides an automated system that blends butane into gasoline in-line (i.e., within a flowing pipe) at or near the final point of distribution ('302 Patent, col. 3:15-20). The system uses sensors to measure the volatility of the incoming gasoline, a processor to calculate the precise amount of butane needed to reach a pre-programmed volatility limit, and automated valves or injectors to control the blend in real-time (’948 Patent, Fig. 6; col. 15:5-36).
  • Technical Importance: This automated, point-of-distribution approach allows fuel distributors to tailor gasoline volatility to specific regional and seasonal requirements, maximizing economic advantage while ensuring regulatory compliance ('302 Patent, col. 3:51-4:4).

Key Claims at a Glance

  • The complaint asserts independent claim 7 ('948 Patent, col. 18:13-35; Compl. ¶38).
  • The essential elements of independent claim 7 are:
    • A system for blending butane with gasoline in a pipe to form a blend.
    • A butane reservoir in fluid connection with the gasoline.
    • An injector valve for discharging butane into the gasoline.
    • A vapor pressure analyzer connected to the pipe, configured to determine the vapor pressure of the blend and transmit it to a processor.
    • A programmable logic controller (PLC) governing the flow of butane through the injector valve.
    • A processor programmed to receive the vapor pressure from the analyzer, calculate an amount of butane to inject based on a maximum preprogrammed volatility limit, and provide a control signal to the PLC.
    • The PLC is configured to adjust the injector valve based on the signal from the processor.
  • The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 9,606,548 - "Versatile Systems for Continuous In-Line Blending of Butane and Petroleum"

  • Issued: March 28, 2017

The Invention Explained

  • Problem Addressed: As a member of the same patent family, the ’548 Patent addresses the same technical problems as the ’948 Patent: the imprecision of prior art butane blending methods and the resulting inability to optimize fuel composition against regulatory and economic constraints (Compl. ¶185; '302 Patent, col. 1:46-2:51).
  • The Patented Solution: The ’548 Patent claims a system for in-line blending that uses a "volatility measurement device" to measure the gasoline stream, and a processor that is explicitly configured to receive the measurement, receive a "target volatility value," determine an "adjustment" to the butane flow rate based on both inputs, and output a signal to an injection device ('548 Patent, col. 17:10-28). This differs from the '948 Patent's claim structure by focusing on the processor's specific logical steps.
  • Technical Importance: The claimed invention provides a specific control logic for automated blending systems, enabling precise, responsive adjustments to fuel composition based on real-time data and pre-set targets ('302 Patent, col. 3:51-4:4).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and dependent claim 3 ('548 Patent, col. 17:10-34; Compl. ¶¶141, 173).
  • The essential elements of independent claim 1 are:
    • A system for blending butane with a gasoline stream having a flow rate.
    • An injection device for injecting butane into the stream at a butane flow rate.
    • A volatility measurement device in communication with the gasoline stream, configured to output data representative of a volatility measurement.
    • A processor configured to: receive the volatility measurement; receive a target volatility value; determine an adjustment to the butane flow rate based on the measurement and target value; and output a signal representing the adjustment to the injection device.
  • The complaint does not explicitly reserve the right to assert other dependent claims.

Multi-Patent Capsule: U.S. Patent No. 9,207,686

  • Patent Identification: U.S. Patent No. 9,207,686, "Versatile Systems for Continuous In-Line Blending of Butane and Petroleum," issued December 8, 2015 (Compl. ¶214).
  • Technology Synopsis: This patent claims a method for in-line blending. The method involves providing streams of petroleum and a "volatility modifying agent" (e.g., butane), providing an allowable vapor pressure, calculating a blend ratio based on these inputs, and then blending the streams at that ratio to ensure the final product's vapor pressure is at or below the allowable limit (Compl. ¶¶221, 226, 230, 236).
  • Asserted Claims: Independent claim 16 is asserted (Compl. ¶¶221, 226, 230).
  • Accused Features: The complaint alleges that the operational methods of the Powder Springs System, which involve blending butane into gasoline flowing through the Colonial pipeline to meet a target RVP below a maximum allowable limit, infringe this method patent (Compl. ¶¶218, 231-232, 237-239).

Multi-Patent Capsule: U.S. Patent No. 6,679,302

  • Patent Identification: U.S. Patent No. 6,679,302, "Method And System For Blending Gasoline And Butane At The Point Of Distribution," issued January 20, 2004 (Compl. ¶297).
  • Technology Synopsis: This patent, the earliest issued in the family, claims systems and methods for blending butane and gasoline specifically "at a tank farm" ('302 Patent, col. 13:12-13). It describes a system architecture including gasoline and butane tanks, a blending unit, and a dispensing unit at a "rack" for loading transport vehicles ('302 Patent, col. 13:12-24).
  • Asserted Claims: Method claim 27 is asserted against the Powder Springs System; System claims 1, 2, and 3 are asserted against Magellan's Blending Systems (Compl. ¶¶300, 329).
  • Accused Features: The complaint accuses Magellan's terminal facilities, which allegedly include gasoline and butane tanks, blending units, and dispensing racks for tanker trucks, of infringing the system claims (Compl. ¶¶334, 339, 342, 348). It accuses the Powder Springs System's processor-based control method of infringing the method claims (Compl. ¶¶301-317).

Multi-Patent Capsule: U.S. Patent No. 7,032,629

  • Patent Identification: U.S. Patent No. 7,032,629, "Method And System For Blending Gasoline And Butane At The Point Of Distribution," issued April 25, 2006 (Compl. ¶373).
  • Technology Synopsis: This patent claims a computer-implemented method for blending. The method involves receiving a first measurement of the gasoline's vapor pressure, calculating a blend rate, and transmitting an instruction to a PLC to adjust the butane stream for blending and subsequent distribution at a rack (’629 Patent, col. 14:17-26).
  • Asserted Claims: Independent claim 31 is asserted (Compl. ¶376).
  • Accused Features: The complaint alleges that Magellan's computer-implemented methods at its blending terminals, which use automated equipment like PLCs and processors to calculate and control blending based on vapor pressure measurements, infringe this patent (Compl. ¶¶377-378, 386-387).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are Defendants' "Powder Springs System" and "Magellan's Blending Systems" (Compl. Count I Heading).

Functionality and Market Context

  • The Powder Springs System is a butane blending facility constructed at the Atlanta Junction facility on the Colonial Pipeline (Compl. ¶¶19, 40). It is designed to enable "in-line blending of butane into gasoline flowing through Colonial's pipeline" (Compl. ¶40). The system includes butane storage reservoirs (butane tanks), injection pumps and valves, and automated control systems, including on-line vapor pressure analyzers and programmable logic controllers (PLCs), to inject butane into various gasoline pipelines (Compl. ¶¶21-22, 28, 45-46, 67). An aerial image provided in the complaint shows the newly constructed butane tanks, transfer pumps, and flow control devices adjacent to the existing Atlanta Junction Facility (Compl. Ex. 8, p. 13).
  • Magellan's Blending Systems are butane blending systems and methods that Magellan allegedly owns and operates at numerous terminal locations, including in Houston, TX, and Chattanooga, TN (Compl. ¶26). These systems are described as butane storage and blending facilities that store butane onsite for blending into gasoline and utilize automated equipment such as on-line analyzers and PLCs (Compl. ¶¶27-28, 101, 113, 118). The complaint alleges these systems are used for blending at terminals (or "tank farms") before gasoline is dispensed to tanker trucks (Compl. ¶¶330-331).

IV. Analysis of Infringement Allegations

'948 Patent Infringement Allegations

Claim Element (from Independent Claim 7) Alleged Infringing Functionality Complaint Citation Patent Citation
a butane reservoir in fluid connection with said gasoline The Powder Springs and Magellan systems include pressurized butane storage vessels, such as spheres and "bullet tanks," that supply butane for blending. ¶44, ¶100 col. 14:51-54
an injector valve for discharging butane into said gasoline The systems include injector valves, such as a control valve or a valve in combination with a pump, for discharging butane into the gasoline product. An aerial image identifies these as "Butane Flow Meters & Flow Control Devices." (Compl. Ex. 8, p. 15). ¶51, ¶56, ¶106 col. 15:33-36
a vapor pressure analyzer connected to said pipe, said analyzer configured to determine the vapor pressure of the blend...and to transmit said vapor pressure to a processor The systems include on-line vapor pressure analyzers located in an "analyzer building" that are connected to the pipeline and configured to determine the RVP of the blended product to ensure it remains within specification. ¶61, ¶67, ¶112 col. 15:5-15
a programmable logic controller governing the flow of butane through said injector valve The systems include PLCs that receive data and implement a calculated blending ratio by operating the butane control valve and/or pump. ¶70, ¶73, ¶117 col. 16:25-30
a processor programmed to receive the vapor pressure from the analyzer, calculate an amount of butane to inject...based on a maximum preprogrammed volatility limit, and provide a control signal to said programmable logic controller... The systems are "calibrated" to inject butane so the product remains within specification, which includes RVP limits. The processor determines a blend ratio based on RVP data to implement the calculated ratio via the PLC. ¶76, ¶78, ¶123 col. 16:19-25

Identified Points of Contention

  • Scope Questions: A central question may be whether the term "system for blending butane with gasoline in a pipe," as claimed in the '948 Patent, is technically distinct from the "system for blending gasoline and butane at a tank farm" claimed in the '302 Patent, and how the accused in-pipeline Powder Springs system versus the terminal-based Magellan systems map onto these potentially different claim scopes.
  • Technical Questions: The complaint alleges the accused systems are "calibrated so that the product remains within the applicable product specification" (Compl. ¶78). A key technical question will be what evidence supports the allegation that this general "calibration" performs the specific, multi-step process recited in claim 7(e), which requires the processor to receive a vapor pressure, calculate an amount of butane based on a preprogrammed limit, and provide a control signal to the PLC based on that limit.

'548 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
an injection device injecting the butane into the gasoline stream at a butane flow rate The systems include injection devices, such as pumps and control valves, that inject butane into the flowing gasoline stream. An aerial image identifies "Butane Injection Lines" leading from the blending equipment to the main pipeline (Compl. Ex. 8, p. 16). ¶147-148, ¶195 col. 15:33-36
a volatility measurement device in communication with the gasoline stream, the volatility measurement device configured to output data representative of a volatility measurement The systems include devices, alleged to be located in an "analyzer building," that measure the volatility (e.g., RVP) of the gasoline to ensure the blended product meets specifications. ¶156, ¶162, ¶198 col. 15:5-15
a processor...configured to: receive the volatility measurement; receive a target volatility value; determine an adjustment to the butane flow rate based on the volatility measurement and the target volatility value; and output a signal representative of the adjustment... The system is calibrated to keep the final product within specifications, which includes measures of volatility like RVP. This calibration process allegedly involves receiving volatility data, comparing it to a target value (the specification limit), and adjusting the blend accordingly. ¶166-168, ¶201 col. 16:19-25

Identified Points of Contention

  • Scope Questions: Practitioners may examine whether the term "volatility measurement device" is limited to the specific RVP and vapor-to-liquid ratio analyzers discussed in the specification, or if it can read on other types of sensors that might be used to maintain general "product specifications" (Compl. ¶157).
  • Technical Questions: What evidence does the complaint provide that the accused processor performs each of the discrete logical steps required by claim 1(c)? Specifically, does the processor explicitly "receive a target volatility value" as a distinct input, or does it operate on a more general control logic that simply maintains the final blend below a maximum threshold?

V. Key Claim Terms for Construction

For the '948 Patent

  • The Term: "injector valve"
  • Context and Importance: This term defines the hardware that introduces butane into the gasoline. Its construction is important because the complaint alleges it can be a "control valve or a valve in combination with a pump" (Compl. ¶56). The defendants may argue for a narrower definition that requires a single, integrated unit, potentially creating a non-infringement argument if their system uses separate components.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim uses the generic term "valve." The specification, which is nearly identical across the patent family, describes the function of injectors generally and notes that a "programmable logic controller... operates the butane control valve 16 and/or the butane pump 8" ('948 Patent, referring to Magellan patent at Compl. Ex. 7, 8:39-42), which may suggest the components can operate together to perform the injection function.
    • Evidence for a Narrower Interpretation: The detailed description in a related patent shows specific "Injectors" labeled M-101, M-102, and M-103, which are depicted as single components ('302 Patent, Fig. 2). A party could argue these specific embodiments limit the scope of the term.

For the '548 Patent

  • The Term: "determine an adjustment"
  • Context and Importance: This term is at the heart of the processor's claimed function. The infringement case may turn on whether the accused systems' method of "calibrating" the blend to stay "within the applicable product specification" (Compl. ¶167) meets this limitation. Practitioners may focus on this term because it requires an affirmative calculation step, not just a passive state of compliance.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim language is functional. The specification describes the processor's role as "calculat[ing] the amount of butane that may be blended" ('302 Patent, col. 12:21-23), suggesting any calculation that achieves the goal could suffice.
    • Evidence for a Narrower Interpretation: The specification describes a specific process where the processor "calculates the amount of butane...so that the maximum allowable volatility...is not exceeded" ('302 Patent, col. 11:30-33). This could be used to argue that the "adjustment" must be the result of a specific calculation against a maximum limit, not just a simple feedback loop or pre-set recipe.

VI. Other Allegations

  • Indirect Infringement: The complaint does not contain specific counts or factual allegations for indirect infringement (inducement or contributory infringement).
  • Willful Infringement: Willfulness is alleged for all asserted patents. The complaint alleges that Defendants had knowledge of the patents-in-suit and the broader patent family based on several grounds: (1) pre-suit commercial dealings between Plaintiff Sunoco and Defendant Magellan regarding the patented technology dating back to at least 2006 (Compl. ¶¶85, 128, 180); (2) the patents-in-suit being cited on the face of a patent owned by Magellan (Compl. ¶¶86, 129, 181); and (3) constructive knowledge from the patents' publication and issuance dates, followed by continued infringing activity after the filing of the original complaint (Compl. ¶¶91-92, 186-187).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of definitional scope: can claim terms rooted in specific contexts, such as the "system...at a tank farm" recited in the ’302 Patent, be construed to cover the accused Powder Springs System, which is described as an "in-line" blending facility on an interstate pipeline? The dispute may focus on whether functional similarities can overcome structural and environmental differences described in the various patents.
  • A key evidentiary question will be one of functional specificity: does the Defendants' alleged process of "calibrating" butane injections to keep the final product within general "specifications" perform the specific, multi-step logical functions required by claims like Claim 1 of the ’548 Patent? The case may turn on evidence showing whether the accused systems merely operate below a ceiling or execute the claimed sequence of receiving a target value, determining a discrete adjustment, and outputting a corresponding signal.