DCT
5:23-cv-00133
Terves LLC v. Magnesium Machine LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Terves, LLC (Nevada)
- Defendant: Magnesium Machine, LLC (Oklahoma)
- Plaintiff’s Counsel: McAfee & Taft A Professional Corporation
- Case Identification: 5:23-cv-00133, W.D. Okla., 02/09/2023
- Venue Allegations: Venue is alleged to be proper as Defendant resides in the district, has committed alleged acts of infringement in the district, and maintains a regular place of business in the district.
- Core Dispute: Plaintiff alleges that Defendant’s dissolvable cast magnesium materials and the downhole drilling tools manufactured from them infringe three patents related to dissolvable magnesium composites.
- Technical Context: The technology involves dissolvable magnesium-based alloys used for components in the oil and gas industry, which are designed to corrode away after use to avoid the cost and time of mechanical retrieval from a well.
- Key Procedural History: The complaint heavily references a prior litigation against Defendant's supplier, Ecometal, which resulted in a judgment of infringement and a finding of validity for the patents-in-suit. The complaint alleges Defendant was a "real party in interest" in a failed Inter Partes Review of one patent, paid a portion of the supplier's litigation fees, and was explicitly named in a permanent injunction order resulting from that prior case.
Case Timeline
| Date | Event |
|---|---|
| 2014-04-18 | Earliest Patent Priority Date (’653, ’740, ’151 Patents) |
| 2015-01-01 | Defendant allegedly attempted to reverse engineer Plaintiff's material |
| 2019-06-25 | ’653 Patent Issued |
| 2019-07-01 | Plaintiff filed suit against Defendant's supplier, Ecometal |
| 2020-06-23 | ’740 Patent Issued |
| 2020-09-01 | ’151 Patent Issued |
| 2020-09-11 | Ecometal (with Defendant as real party in interest) petitioned for Inter Partes Review of the ’653 Patent |
| 2021-07-06 | Ecometal sought ex parte reexamination of the ’653 Patent |
| 2022-03-28 | USPTO issued notice confirming validity of the ’653 Patent after reexamination |
| 2022-04-12 | Court in Ecometal case granted summary judgment of infringement to Plaintiff |
| 2023-02-09 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,329,653 - Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools
- Patent Identification: U.S. Patent No. 10,329,653, “Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools,” issued June 25, 2019. (Compl. ¶22).
The Invention Explained
- Problem Addressed: The patent describes a need for dissolvable components for oil and gas wells that overcomes the limitations of prior art materials, such as inconsistent dissolution rates, limited strength, and poor reliability. ( ’653 Patent, col. 1:36-44).
- The Patented Solution: The invention is a novel magnesium composite created by adding specific metallic additives to molten magnesium. As the mixture cools, these additives form galvanically-active particles "in situ" (in place) within the magnesium matrix. The composition, size, and distribution of these particles create micro-galvanic cells that control the corrosion rate of the entire component, while also potentially enhancing mechanical properties. (’653 Patent, Abstract; col. 2:6-17).
- Technical Importance: This manufacturing process allows for the creation of low-cost, scalable dissolvable tools with engineered dissolution rates and strength comparable to or greater than traditional alloys. (’653 Patent, col. 1:39-44).
Key Claims at a Glance
- The complaint asserts dependent Claim 2, which relies on independent Claim 1. (Compl. ¶59).
- The essential elements of asserted Claim 2 are:
- A magnesium composite comprising a mixture of a magnesium alloy and an additive material (e.g., copper, nickel, iron, or cobalt) that constitutes 0.05-45 wt. % of the mixture.
- The additive material forms an "in situ precipitation of galvanically-active intermetallic phases."
- The magnesium alloy includes over 50 wt. % magnesium and other specified metals (e.g., aluminum, zinc).
- The composite has a dissolution rate of at least 5 mg/cm²/hr. in a 3 wt. % KCl water mixture at 90° C. (’653 Patent, col. 19:1-20:4).
U.S. Patent No. 10,689,740 - Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools
- Patent Identification: U.S. Patent No. 10,689,740, “Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools,” issued June 23, 2020. (Compl. ¶23).
The Invention Explained
- Problem Addressed: Similar to the ’653 Patent, the technology addresses the need for reliable, strong, and controllably dissolvable materials for downhole oil and gas tools to avoid costly retrieval operations. (’740 Patent, col. 1:47-54).
- The Patented Solution: The patent discloses a magnesium cast composite formed by adding an additive material, specifically nickel, to a magnesium alloy. The nickel forms an "in situ precipitate" within the magnesium matrix. The invention specifies characteristics of this composite, including the nickel weight percentage, the size of the precipitate particles (no more than 50 µm), a minimum dissolution rate, and a minimum overall magnesium content. (’740 Patent, Abstract; col. 2:14-25).
- Technical Importance: This approach provides specific compositional and microstructural parameters for creating dissolvable magnesium alloys with predictable performance characteristics for the oil and gas industry. (’740 Patent, col. 1:50-54).
Key Claims at a Glance
- The complaint asserts independent Claim 20. (Compl. ¶66).
- The essential elements of Claim 20 are:
- A magnesium cast composite comprising a mixture of a magnesium alloy and an additive material.
- The additive material includes nickel, constituting at least 0.01 wt. % of the composite.
- The nickel forms an "in situ precipitate."
- A plurality of the precipitate particles have a size of no more than 50 µm.
- The composite has a dissolution rate of at least 5 mg/cm²/hr. in a 3 wt. % KCl water mixture at 90° C.
- The composite includes at least 86 wt. % magnesium. (’740 Patent, col. 39:15-28).
U.S. Patent No. 10,760,151 - Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools
- Patent Identification: U.S. Patent No. 10,760,151, “Galvanically-Active In Situ Formed Particles for Controlled Rate Dissolving Tools,” issued September 1, 2020. (Compl. ¶24).
- Technology Synopsis: This patent is directed to the final articles of manufacture—the downhole well components themselves—that are formed from a dissolvable magnesium cast material. (Compl. ¶24). The invention claims a component made of a magnesium alloy mixed with an additive material (nickel) that forms a "galvanically-active in situ precipitate," resulting in a component with a specified high dissolution rate. (’151 Patent, col. 17:56-18:2).
- Asserted Claims: The complaint asserts independent Claim 1. (Compl. ¶74).
- Accused Features: Defendant is accused of manufacturing and selling downhole well components (e.g., sleeves, frac balls, plugs) by tooling the allegedly infringing magnesium material, thereby infringing the claims of this patent. (Compl. ¶74).
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are "dissolvable cast magnesium materials" ("Infringing Materials") that Defendant imports, sells, and tools into downhole well components such as frac plugs and frac balls. (Compl. ¶27, ¶32).
Functionality and Market Context
The materials are provided as cast billets which Defendant machines into finished drilling tools. (Compl. ¶32). The primary function of these tools is to perform a temporary task in an oil or gas well (e.g., isolating a well zone) and subsequently dissolve in wellbore fluids, which eliminates the need for a separate, costly retrieval operation. (Compl. ¶1, ¶20).
The complaint alleges these products are "copycat materials" based on Plaintiff's reverse-engineered formulation and are sold at lower prices, causing Plaintiff to lose customers and suffer price erosion. (Compl. ¶7, ¶8).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
’653 Patent Infringement Allegations
| Claim Element (from Independent Claim 1 and Dependent Claim 2) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a magnesium composite comprising a mixture of a magnesium or a magnesium alloy and an additive material | The Infringing Materials contain magnesium or a magnesium alloy. | ¶59 | col. 19:1-4 |
| said additive material includes one or more metals selected from the group consisting of copper, nickel, iron, and cobalt | The Infringing Materials have copper, nickel, cobalt, or iron as an additive. | ¶59 | col. 19:6-8 |
| said additive material constituting about 0.05 wt. %-45 wt. % of said mixture | The additive constitutes about .05 wt % to 45 wt % of the mixture. | ¶59 | col. 19:4-6 |
| said additive material forming precipitant in said magnesium composite | The additive forms a precipitant in the composite. | ¶59 | col. 19:1-3 |
| said magnesium composite has a dissolution rate of at least 5 mg/cm²/hr. in 3 wt. % KCl water mixture at 90° C. | The magnesium composite has a dissolution rate of at least 5 mg/cm2/hr. in 3 wt % KCl water mixture at 90° C. | ¶59 | col. 19:8-11 |
| said magnesium alloy includes over 50 wt. % magnesium and one or more metals selected from the group consisting of aluminum, boron, bismuth, zinc, zirconium, and manganese | The magnesium alloy includes over 50 wt. % magnesium and one or more metals selected from the specified group. | ¶59 | col. 19:12-20 |
’740 Patent Infringement Allegations
| Claim Element (from Independent Claim 20) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A magnesium cast composite comprising: a mixture of a magnesium or a magnesium alloy and an additive material | The Infringing Materials are magnesium cast composites that contain magnesium or a magnesium alloy. | ¶66 | col. 39:15-18 |
| said additive material comprises nickel, wherein said nickel constitutes at least 0.01 wt. % of said magnesium cast composite | The Infringing Materials have nickel as an additive material that constitutes at least .01 wt. % of the composite. | ¶66 | col. 39:18-21 |
| wherein said nickel forms in situ precipitate in said magnesium cast composite | The Infringing Materials have in situ precipitate that includes the nickel. | ¶66 | col. 39:21-22 |
| wherein a plurality of particles of said in situ precipitate have a size of no more than 50 µm | A plurality of particles of in situ precipitate have a size of no more than 50 µm. | ¶66 | col. 39:23-24 |
| said magnesium composite has a dissolution rate of at least 5 mg/cm²/hr. in 3 wt. % KCl water mixture at 90° C. | The magnesium composite has a dissolution rate of at least 5 mg/cm²/hr. in 3 wt % KCl water mixture at 90° C. | ¶66 | col. 39:25-27 |
| said magnesium composite includes at least 86 wt. % magnesium | The magnesium composite includes at least 86 wt. % magnesium. | ¶66 | col. 39:27-28 |
- Identified Points of Contention:
- Factual Question: The complaint's infringement theory relies almost exclusively on the assertion that the accused "Infringing Materials" are the same products that were found to be infringing in a prior litigation against Defendant's supplier, Ecometal. (Compl. ¶60, ¶67). A primary point of contention may therefore be whether the products currently imported and sold by Defendant are factually identical in composition, microstructure, and performance to those previously adjudicated.
- Legal Question: The complaint does not present new, independent evidence of infringement (e.g., testing data of Defendant's products). The analysis raises the question of what discovery will be required for Plaintiff to prove that the specific quantitative limitations of the claims (e.g., wt. %, dissolution rate, particle size) are met by the products at issue in this case, beyond relying on the findings of the prior litigation.
V. Key Claim Terms for Construction
The complaint does not provide sufficient detail to identify specific claim construction disputes that have arisen between the parties. However, based on the technology, certain terms may become central to the case.
- The Term: "in situ precipitate" / "in situ formed"
- Context and Importance: This concept is the technological core of the asserted patents, distinguishing the invention from materials where particles are simply blended together (e.g., via powder metallurgy). Practitioners may focus on this term because its definition determines whether the claims cover only materials made by a specific process where particles precipitate from the melt, or a broader range of composites where secondary phases are formed within a matrix.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the process as one where additives "form secondary metallic alloys" that "begin to precipitate out of the molten metal" as it cools, language which could encompass a variety of metallurgical precipitation phenomena. (’653 Patent, col. 2:57-65).
- Evidence for a Narrower Interpretation: The detailed description also highlights a method where an additive is added to the molten magnesium at a temperature that is less than the melting point of the additive itself. (’653 Patent, col. 3:1-12). A party could argue that "in situ" formation is limited to this specific process where the additive particles never fully melt before forming intermetallics.
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement for all three patents, asserting that Defendant had knowledge of the patents from the prior litigation and intended for its downstream customers to use the infringing materials in a directly infringing manner. (Compl. ¶62, ¶69, ¶79). For the ’740 and ’151 patents, the complaint also alleges contributory infringement on the basis that the Infringing Material is a material part of the invention, is not a staple article of commerce, and is especially made for infringing uses. (Compl. ¶70, ¶79).
- Willful Infringement: Willfulness is alleged based on extensive pre-suit knowledge. The complaint asserts that Defendant actively participated in the prior litigation against its supplier, Ecometal, by paying legal fees, sharing counsel, and being named as a "real party in interest" in a failed IPR petition. (Compl. ¶30, ¶42). Willfulness is further alleged based on Defendant’s continued infringement after being explicitly named in the permanent injunction issued in the Ecometal case. (Compl. ¶54, ¶55, ¶80).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of factual identity: can Plaintiff establish that the materials currently sold by Defendant are identical in composition and structure to those sold by its supplier, Ecometal, which were previously adjudicated as infringing the patents-in-suit?
- A key legal question will be one of issue preclusion: to what extent, if any, are the findings of infringement and validity from the prior litigation against Ecometal binding on Defendant in this case, given the complaint’s detailed allegations of Defendant’s financial and legal integration with Ecometal’s defense?
- A primary question for the remedies phase will be one of culpability: do Defendant’s alleged actions, particularly the continuation of sales after being identified in the prior litigation and named in the resulting permanent injunction, constitute willful infringement sufficient to justify enhanced damages?