DCT
4:15-cv-02915
Baker Hughes A Ge Co LLC v. LiquidPower Specialty Products Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Lubrizol Specialty Products, Inc. (Delaware)
- Defendant: Baker Hughes Inc., Baker Petrolite Corp., and Baker Petrolite LLC (Delaware)
- Plaintiff’s Counsel: Weil, Gotshal & Manges LLP
- Case Identification: 4:15-cv-02915, S.D. Tex., 04/26/2016
- Venue Allegations: Venue is asserted based on Defendants operating and having their principal place of business in the Southern District of Texas, and having made meaningful preparations for infringement within the district.
- Core Dispute: Plaintiff alleges that Defendant’s drag reducing agent (DRA) products for heavy crude oils infringe four patents related to methods for improving the pipeline transport of such oils.
- Technical Context: The technology involves specialized chemical polymers known as drag reducing agents, which are injected into pipelines to decrease turbulence and friction, thereby increasing the flow rate and efficiency of transporting heavy, asphaltenic crude oils.
- Key Procedural History: The complaint alleges that Defendants had pre-suit knowledge of the patents-in-suit through a March 2015 telephone call, a September 2015 letter, and Defendants' own citation of the '118 Patent's published application in unrelated patent prosecutions beginning in 2009. Subsequent to the filing of this complaint, Inter Partes Review (IPR) proceedings were initiated against all four patents-in-suit. Those proceedings resulted in the cancellation or disclaimer of all patent claims asserted in this litigation.
Case Timeline
| Date | Event |
|---|---|
| 2006-12-22 | Priority Date for all Patents-in-Suit ('118, '498, '249, '250) |
| 2009-08-25 | Alleged earliest date of Defendant's knowledge of '118 Patent application |
| 2011-09-20 | U.S. Patent No. 8,022,118 Issues |
| 2013-04-23 | U.S. Patent No. 8,426,498 Issues |
| 2013-05-28 | U.S. Patent No. 8,450,249 Issues |
| 2013-05-28 | U.S. Patent No. 8,450,250 Issues |
| During 2014 | Defendant allegedly conducts "U.S. Gulf Coast Test" of accused product |
| 2015-03-19 | Phone call where Defendant allegedly acknowledged Plaintiff's patent portfolio |
| 2015-09-15 | Plaintiff sends letter to Defendant identifying Patents-in-Suit |
| 2016-04-26 | First Amended Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,022,118 - “Drag Reduction of Asphaltenic Crude Oils”, Issued Sep. 20, 2011
The Invention Explained
- Problem Addressed: The patent's background section notes that conventional polymeric drag reducers, while effective in some hydrocarbon liquids, do not perform well in crude oils that have a low API gravity (i.e., are heavy) and/or a high content of asphaltenes ('118 Patent, col. 1:44-49). This inefficiency in drag reduction for heavy crudes limits pipeline throughput and increases operational costs ('118 Patent, col. 1:15-28).
- The Patented Solution: The invention is a method for reducing drag by treating heavy, asphaltenic crude oil with a specific type of high molecular weight polymer. The key to the solution is chemical compatibility: the polymer is selected to have a "solubility parameter" that closely matches that of the target crude oil, and it comprises repeating units that contain at least one "heteroatom" (e.g., oxygen, nitrogen) ('118 Patent, Abstract; col. 1:53-2:4). This tailored chemical structure allows the polymer to dissolve more effectively in the difficult medium of heavy crude, thereby suppressing the formation of turbulent eddies that cause friction loss ('118 Patent, col. 1:35-40).
- Technical Importance: The invention provided a method to improve the economic viability of transporting the world’s significant reserves of heavy crude oil, a task for which prior drag reduction technologies were allegedly ill-suited ('118 Patent, col. 1:9-14).
Key Claims at a Glance
- The complaint asserts independent claim 10 and dependent claims 8-9 (Compl. ¶68).
- The essential elements of independent claim 10 are:
- A method for reducing friction loss in a pipeline by introducing a drag reducing polymer into a liquid hydrocarbon.
- The liquid hydrocarbon must have an asphaltene content of at least 3% by weight and an API gravity of less than 26°.
- The treatment must not decrease the viscosity of the hydrocarbon.
- The polymer must have a solubility parameter of at least 17 MPa¹/² and be within 4 MPa¹/² of the hydrocarbon's solubility parameter.
- The polymer must comprise at least 25,000 repeating units, a plurality of which contain a heteroatom (oxygen, nitrogen, sulfur, and/or phosphorus).
- The polymer must have a weight average molecular weight of at least 1x10⁶ g/mol and be added in a concentration of 0.1 to 500 ppmw.
U.S. Patent No. 8,426,498 - “Drag Reduction of Asphaltenic Crude Oils”, Issued Apr. 23, 2013
The Invention Explained
- Problem Addressed: As with the '118 Patent, this patent addresses the problem that conventional DRAs perform poorly in heavy, asphaltenic crude oils ('498 Patent, col. 1:50-54).
- The Patented Solution: The patented method involves introducing a drag reducing polymer into a heavy, asphaltenic crude oil, where the key claimed features are that the viscosity of the treated oil is not less than its original viscosity, and that the polymer itself is characterized by having a plurality of repeating units that "comprise a heteroatom" ('498 Patent, Abstract; col. 1:55-2:2). This chemical feature is purported to enhance the polymer's ability to dissolve and function in the asphaltenic environment.
- Technical Importance: The invention offers a solution to improve pipeline efficiency for heavy crude oils by focusing on a specific chemical characteristic (the presence of heteroatoms) of the drag reducing polymer ('498 Patent, col. 2:50-54).
Key Claims at a Glance
- The complaint asserts claims 1-5 (Compl. ¶78).
- The essential elements of independent claim 1 are:
- A method of reducing friction loss by introducing a drag reducing polymer into a liquid hydrocarbon in a pipeline.
- The liquid hydrocarbon has an asphaltene content of at least 3% and/or an API gravity of less than 26°.
- The viscosity of the treated liquid hydrocarbon is not less than its viscosity prior to treatment.
- A plurality of the polymer's repeating units comprise a heteroatom.
U.S. Patent No. 8,450,249 - “Drag Reduction of Asphaltenic Crude Oils”, Issued May 28, 2013
- Technology Synopsis: The patent claims a method for reducing pipeline drag in heavy crude oil by introducing a polymer containing heteroatoms, similar to the '498 Patent ('249 Patent, Abstract). This patent's independent claim additionally recites the specific concentration range (0.1 to 500 ppmw) in which the polymer is added to the hydrocarbon ('249 Patent, col. 19:4-21).
- Asserted Claims: 1-5 (Compl. ¶89).
- Accused Features: The use of Defendants' Baker Heavy Crude DRA Products is alleged to practice the claimed method (Compl. ¶89).
U.S. Patent No. 8,450,250 - “Drag Reduction of Asphaltenic Crude Oils”, Issued May 28, 2013
- Technology Synopsis: This patent claims a method of preparing a drag reducing polymer for use in heavy crude oil ('250 Patent, Abstract). The method requires preparing the polymer to have a solubility parameter that is within 4 MPa¹/² of the solubility parameter of the target liquid hydrocarbon, ensuring chemical compatibility for effective drag reduction ('250 Patent, Claim 1).
- Asserted Claims: 1-9 (Compl. ¶100).
- Accused Features: The manufacture and sale of Defendants' Baker Heavy Crude DRA Products, which are allegedly prepared with a specific solubility parameter to match heavy crude oils, is accused of infringing this patent (Compl. ¶¶100, 45).
III. The Accused Instrumentality
Product Identification
The accused products are Defendants' "Baker Heavy Crude DRA Products," which include the "FLO™ ULTIMA 91000 DRA" and "FLO™ ULTIMA Heavy Crude DRA" (Compl. ¶16, ¶47).
Functionality and Market Context
The complaint alleges these products are drag reducing agents specifically designed and marketed for use in heavy, asphaltenic crude oils (Compl. ¶16). According to a Baker Hughes article attached to the complaint, the accused products contain a "long-chain latex polymer specifically designed to dissolve in high asphaltene-content crudes with a gravity of less than 23° API" (Compl. ¶47). The alleged mechanism of action is that the polymer molecules "disrupt the formation of turbulent eddies" to reduce drag and improve flow (Compl. ¶52). The complaint positions these products as direct competitors to Plaintiff's own "ExtremePower®" line and cites a 2014 field test where the accused DRA allegedly demonstrated a "62.5% reduction in drag" (Compl. ¶¶47, 56). A Baker Hughes article referenced in the complaint describes a field test of the accused product, providing technical data on its performance. (Compl. ¶47, citing Ex. F).
IV. Analysis of Infringement Allegations
'118 Patent Infringement Allegations
| Claim Element (from Independent Claim 10) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| introducing a drag reducing polymer... into a liquid hydrocarbon having an asphaltene content of at least 3 weight percent and an API gravity of less than about 26° | Defendants performed a "U.S. Gulf Coast Test" by injecting FLO™ ULTIMA 91000 DRA into a pipeline containing heavy, asphaltenic Canadian crude oil, alleged to meet these criteria. | ¶47, ¶51 | col. 19:18-24 |
| wherein the drag reducing polymer has a solubility parameter within 4 MPa¹/² of the solubility parameter of the liquid hydrocarbon | The complaint alleges Defendants' products are "specifically engineered to improve the flow rate of heavy oil through pipelines" and designed to dissolve in such crudes, implying this property is met. | ¶50 | col. 19:26-29 |
| wherein a plurality of the repeating units comprise a heteroatom... selected from the group consisting of an oxygen atom, a nitrogen atom, a sulfur atom and/or a phosphorus atom | The complaint does not allege a specific chemical composition but asserts the accused products are "especially made and/or adapted for use in infringing the Patents-in-Suit." | ¶31, ¶45 | col. 19:31-36 |
| wherein the drag reducing polymer has a weight average molecular weight of at least 1x10⁶ g/mol | The complaint does not provide a specific molecular weight but alleges the accused product contains a "long-chain latex polymer" consistent with high molecular weight DRAs. | ¶47 | col. 19:37-39 |
'498 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| introducing a drag reducing polymer... into a liquid hydrocarbon having an asphaltene content of at least 3 weight percent and/or an API gravity of less than about 26° | Defendants' marketing materials and field tests allegedly show use of the accused DRAs in heavy crudes with an API gravity of less than 23°, meeting the claim limitation. | ¶47, ¶56 | col. 14:5-10 |
| wherein the viscosity of the treated liquid hydrocarbon is not less than the viscosity of the liquid hydrocarbon prior to treatment with the drag reducing polymer | The complaint alleges that Defendants' instructions for using the accused products describe achieving drag reduction "without lowering the viscosity of the mixture." | ¶53 | col. 14:11-15 |
| wherein a plurality of the repeating units comprise a heteroatom | The complaint relies on the allegation that the accused products are "especially made and/or adapted" to infringe, without providing direct evidence of the polymer's chemical composition. | ¶16, ¶45 | col. 14:16-17 |
Identified Points of Contention
- Technical Questions: A primary factual dispute will concern the chemical composition of the accused DRAs. The complaint does not provide direct evidence that the accused polymers contain "heteroatoms" or possess the specific "solubility parameter" recited in the claims, relying instead on inferences from marketing materials and intended use.
- Scope Questions: The case raises the question of whether evidence of a product being "designed for" a particular use is sufficient to meet specific, quantitative claim limitations (e.g., solubility parameter within 4 MPa¹/², molecular weight >1x10⁶ g/mol) without direct measurement or analysis of the accused product itself.
V. Key Claim Terms for Construction
The Term: "solubility parameter"
- Context and Importance: This term is central to the infringement analysis of the '118 and '250 patents. Infringement requires proving that the accused polymer's solubility parameter is within a specific numerical range (4 MPa¹/²) of the hydrocarbon's. The methodology for calculating this parameter for both the polymer and the complex crude oil mixture will be a critical point of dispute.
- Intrinsic Evidence for Interpretation:
- Evidence for a Narrower Interpretation: The specification provides a detailed methodology for determining the parameter, stating it is "determined according to the Van Krevelen method" and providing the specific equations ('118 Patent, col. 11:46-12:24). Defendants may argue that this is a definitional statement limiting the term to results obtained only through this explicit method.
- Evidence for a Broader Interpretation: The claims themselves do not specify a calculation method. Plaintiff may argue that the term should be given its plain and ordinary meaning as understood by a person of ordinary skill in the art, which could encompass any scientifically accepted method for determining or estimating the parameter, not just the one exemplary method in the specification.
The Term: "a plurality of the repeating units comprise a heteroatom"
- Context and Importance: Practitioners may focus on this term because it defines a core chemical feature of the allegedly novel polymer, and the complaint lacks direct evidence that the accused products meet this limitation. Its construction will determine what types of polymers fall within the scope of the claims.
- Intrinsic Evidence for Interpretation:
- Evidence for a Narrower Interpretation: The specification provides examples of suitable monomers, such as 2-ethylhexyl methacrylate, which contains oxygen heteroatoms as part of its ester group ('118 Patent, col. 8:36-45). Defendants may argue that this context limits the term to polymers derived from such functionalized monomers, as opposed to simple polyolefins which consist only of carbon and hydrogen.
- Evidence for a Broader Interpretation: The term "comprise" is open-ended. Plaintiff may argue that a heteroatom could be present anywhere in the repeating unit, not necessarily as part of the main polymer backbone, and that "plurality" requires only that more than one repeating unit has this feature, without specifying a high percentage.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement by Defendants providing customers with products, instructions, and advertising that encourage and teach the infringing use of the DRAs in heavy crude oil (Compl. ¶¶53, 68). Contributory infringement is alleged on the basis that the accused DRAs are material to practicing the invention, are "especially made and adapted" for the infringing use, and have "no substantial non-infringing use" for anything other than treating heavy, asphaltenic crude oil (Compl. ¶¶16, 40).
- Willful Infringement: Willfulness is alleged based on Defendants' purported pre-suit knowledge of the patents. The complaint pleads that Defendants had actual knowledge from at least a March 19, 2015 phone call and a September 15, 2015 letter from the Plaintiff (Compl. ¶¶33, 37). It further alleges knowledge dating back to August 25, 2009, based on Defendants' citation of the published application for the '118 Patent in their own patent prosecution activities (Compl. ¶39).
VII. Analyst’s Conclusion: Key Questions for the Case
- Procedural Viability: The most significant issue is the legal status of the asserted intellectual property. Given that post-filing IPR proceedings resulted in the cancellation or disclaimer of every patent claim asserted in the complaint, a threshold question for the court will be whether any viable cause of action remains.
- Evidentiary Sufficiency: Assuming any claims were to survive, a key evidentiary question would be one of chemical identity: what is the actual chemical composition and what are the measured physical properties (e.g., solubility parameter, molecular weight) of the accused FLO™ ULTIMA polymers? The outcome would depend on whether Plaintiff could produce evidence showing these products meet the specific structural and quantitative limitations of the claims, moving beyond the complaint's reliance on marketing materials and inference.
- Scope of "Adapted For": A central legal question is one of inferential proof: can infringement of a method claim with specific quantitative and chemical limitations be established by showing a product was "especially made and adapted for" an infringing use, or must a plaintiff provide direct, empirical evidence that every limitation is met during the accused activity?