DCT

2:22-cv-00224

VP Sales & Mfg LP v. Guerra

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:22-cv-00224, S.D. Tex., 12/09/2022
  • Venue Allegations: Venue is alleged to be proper in the Southern District of Texas as the defendants are residents of Texas.
  • Core Dispute: Plaintiff seeks to correct the inventorship of a U.S. Patent by removing a named co-inventor, alleging he made no inventive contribution and was named as part of a scheme to fraudulently extract royalty payments.
  • Technical Context: The technology concerns a mechanical locking device for a "packing nut" used in high-pressure fluid pumps, which are critical components in the oil and gas hydraulic fracturing industry.
  • Key Procedural History: The complaint notes that Defendant Guerra allegedly admitted under oath in a separate state court proceeding that Defendant Townsend was not a rightful co-inventor. It also references a second, abated state court case where Townsend sued the Plaintiff for breach of the royalty agreement at issue.

Case Timeline

Date Event
2015-01-01 Alleged kickback scheme first proposed (approximate)
2017-04-28 Priority date from U.S. Provisional Application No. 62/491,686
2018-04-30 '896 Patent application filed
2019-04-01 Defendant Guerra leaves employment with Plaintiff (approximate)
2020-02-25 U.S. Patent No. 10,570,896 issues
2022-12-09 First Amended Complaint filed

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

U.S. Patent No. 10,570,896 - "PACKING NUT LOCK," issued February 25, 2020

The Invention Explained

  • Problem Addressed: In high-pressure reciprocating pumps, such as those used for hydraulic fracturing, intense vibrations can cause the "packing nut"—a large threaded component that seals a high-pressure chamber—to loosen over time. This loosening can lead to dangerous fluid leaks, damage to the pump, and costly operational downtime for retightening (U.S. Patent No. 10,570,896, col. 1:49-64).
  • The Patented Solution: The invention is a locking mechanism that physically prevents the packing nut from rotating. It consists of a set screw inserted through a "mating hole" in the main pump body (the "fluid end block"). The tip of the set screw is designed to engage directly between the threads of the packing nut, creating a physical interlock. This design claims to provide a more secure lock than prior friction-based methods, preventing loosening even under significant vibration ('896 Patent, Abstract; col. 5:1-19).
  • Technical Importance: By providing a more durable and reliable lock, the invention is intended to increase the operational uptime of pumps from a few hours to hundreds of hours between adjustments, enhancing both safety and economic efficiency in demanding industrial environments ('896 Patent, col. 7:31-40).

Key Claims at a Glance

The complaint does not assert claims for infringement but challenges the inventorship of the patent’s claimed subject matter as a whole (Compl. ¶¶ 26-29). Independent Claim 1 is representative of this subject matter.

  • Independent Claim 1:
    • A fluid end block component with at least one threaded bore and an angled mating hole that intersects it.
    • A set screw with a tip and a threaded section, received by the mating hole.
    • A packing nut with a threaded shoulder that is received by the threaded bore.
    • Wherein the tip of the set screw "interlocks between first and second threads" of the packing nut, preventing its displacement.
  • The complaint does not reserve the right to assert dependent claims, as the action is for correction of inventorship, not infringement.

III. The Disputed Inventorship

This case does not involve an accused instrumentality. The central dispute is the correct inventorship of the ’896 Patent.

  • Allegation: Plaintiff VP Sales alleges that Defendant Richard Townsend, though listed as a co-inventor on the issued ’896 Patent, did not conceive of or contribute to the invention (Compl. ¶26).
  • Factual Basis: The complaint alleges that Defendant Guerra, a former employee of Plaintiff and named co-inventor, testified in a deposition for a separate state court case that Townsend "did not put any input or ideas or intellectual property or whatever to create this packing nut lock" (Compl. ¶20). The complaint further alleges that naming Townsend as a co-inventor was a fraudulent "way to put him as a co-inventor so he'd get royalties" as part of a kickback scheme (Compl. ¶¶ 15-16, 21). The complaint includes a visual excerpt of this alleged deposition testimony. This excerpt shows Defendant Guerra stating that the purpose of listing Townsend was to enable him to receive royalties (Compl. p. 5).

IV. Analysis of Inventorship Allegations

As this is a correction of inventorship action, not an infringement action, the analysis focuses on the factual allegations supporting the removal of a named inventor rather than on claim infringement. The legal standard for inventorship requires an individual to have contributed to the conception of the invention.

Legal Requirement for Inventorship Allegations Challenging Townsend's Inventorship Complaint Citation Patent Citation
Contribution to Conception of the Claimed Subject Matter (e.g., the combination of the angled set screw and packing nut interlock) The complaint alleges that Defendant Townsend "did not have any input or ideas in the claimed subject matter of the '896 Patent." ¶26 col. 10:9-22
Conception is the "formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention." The complaint cites deposition testimony from the other named inventor, Jesse Guerra, allegedly stating Townsend provided no "input or ideas or intellectual property" for the invention. ¶20 col. 5:1-19
An inventor must contribute to the conception of the invention as claimed, not merely suggest a desired result or assist in reducing it to practice. The complaint alleges that the naming of Townsend was solely part of an "illicit scheme to extract payments" and not based on any inventive contribution. ¶27 col.10:9-22
  • Identified Points of Contention:
    • Factual Question: The central dispute is factual: What, if any, contribution did Defendant Townsend make to the conception of the packing nut lock invention as defined in the claims of the '896 Patent? The complaint's primary evidence is the alleged admission by the other named inventor, Guerra.
    • Legal Question: Under 35 U.S.C. § 256, correction of inventorship requires that the error arose "without any deceptive intention" on the part of the party seeking correction. The complaint pleads that VP Sales, as the patent’s assignee, "relied on Guerra and Townsend's representations" and thus acted without deceptive intent (Compl. ¶28). The case may raise the question of whether this reliance was reasonable and sufficient to meet the statutory standard.

V. Key Legal Standard: Inventorship

In a correction of inventorship case, the central legal standard is not claim construction but the definition of "inventor" under U.S. patent law.

  • The Standard: Co-inventorship
  • Context and Importance: The entire case hinges on whether Defendant Townsend's alleged activities meet the legal standard for co-inventorship. A person is a co-inventor only if they contribute to the "conception" of the invention as it is defined in at least one patent claim. Conception is the "formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice." Simply identifying a problem or providing non-inventive assistance does not suffice.
  • Evidence for Townsend's Removal (Plaintiff's View):
    • The complaint alleges that Guerra, the other inventor, explicitly stated that Townsend "did not put any input or ideas" into the invention, suggesting a complete lack of contribution to conception (Compl. ¶20).
    • The complaint frames Townsend's involvement as a business arrangement to facilitate royalty payments, not a technical collaboration (Compl. ¶¶ 15-16, 21).
  • Evidence for Townsend's Retention (Potential Defense View):
    • The complaint does not present Townsend's side of the story. A defense could argue that Townsend contributed to identifying the specific problem, suggesting desired functional parameters, or collaborating on the inventive concept in a way that rises to the level of conception, which would be a matter for discovery and trial. The patent itself lists him as an inventor, creating a presumption of correct inventorship that the plaintiff must overcome with clear and convincing evidence.

VI. Other Allegations

The complaint includes several state law claims that are factually linked to the central inventorship dispute.

  • Civil Theft (Count 2): Alleges that Townsend and his company, TRK Hunting, unlawfully appropriated royalty payments by falsely representing that Townsend was a co-inventor of the ’896 Patent (Compl. ¶¶ 31-33).
  • Civil Conspiracy (Count 3): Alleges that Guerra and Townsend conspired to create a scheme to obtain kickbacks from VP Sales under the guise of royalty payments for a fraudulent inventorship claim (Compl. ¶39).
  • Declaratory Judgment (Counts 5 & 6): Seeks a court declaration that the royalty agreement with Townsend is void due to fraudulent inducement and that, consequently, VP Sales did not breach it (Compl. ¶¶ 48, 53).

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

The resolution of this case appears to depend on the answers to two primary questions.

  • A core issue will be one of evidentiary proof: Can the plaintiff, VP Sales, provide clear and convincing evidence that Defendant Townsend did not contribute to the conception of any single claim of the ’896 Patent? The case will likely turn on the credibility and substance of deposition testimony from the individuals involved in the invention's development, particularly the two named inventors.
  • A secondary, but critical, question is one of statutory compliance: Assuming the inventorship is proven incorrect, did the error occur "without any deceptive intention" on the part of VP Sales? The court will need to determine if VP Sales's alleged reliance on its employee's and Townsend's representations is sufficient to meet this requirement for correcting the patent under 35 U.S.C. § 256.
  • Finally, the outcome of the federal inventorship claim will be largely determinative for the associated state law claims, as the allegations of theft, conspiracy, and unjust enrichment are predicated on the assertion that Townsend was not a rightful inventor and therefore not entitled to royalties.