Green Source Holdings LLC v. Flotek Chemistry LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Green Source Holdings LLC (Delaware)
  • Defendant: Flotek Chemistry, LLC and Flotek Industries, Inc. (Delaware)
  • Plaintiff’s Counsel: Raley & Bowick, LLP
• Case Identification: 4:18-cv-00910, S.D. Tex., 07/03/2018
• Venue Allegations: Venue is alleged to be proper in the Southern District of Texas because Defendant maintains its corporate headquarters and a regular and established place of business in Houston.
• Core Dispute: Plaintiff alleges that Defendant’s Complex nano-Fluid ("CnF") chemical additives infringe six patents related to methods for extracting hydrocarbons from materials, including in-situ from oil and gas wells, using turpentine or terpene-based liquids.
• Technical Context: The technology concerns chemical compositions used for enhanced oil recovery, a critical field for maximizing production from existing or challenging hydrocarbon formations.
• Key Procedural History: The complaint notes that it was filed in part to address a Motion to Dismiss filed by the Defendant. The complaint also alleges that Defendant learned of the parent patent-in-suit during the prosecution of its own patent, a fact that may be relevant to the Plaintiff’s allegations of willful infringement.

Case Timeline

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

U.S. Patent No. 8,101,812 - "Extraction of Hydrocarbons from Hydrocarbon-Containing Materials"

• Issued: January 24, 2012

The Invention Explained

• Problem Addressed: The patent’s background section describes that prior methods for liquefying and extracting hydrocarbons from sources like coal, oil shale, and tar sands were often commercially unviable due to extreme operating conditions, such as very high temperatures and pressures, and the use of expensive or toxic reagents (’812 Patent, col. 1:36-56).
• The Patented Solution: The invention proposes a method for extracting hydrocarbons by contacting the source material with a "turpentine liquid-containing fluid" (’812 Patent, Abstract). The specification discloses the unexpected discovery that a-terpineol, a component of turpentine, is "inordinately effective in liquefying, solubilizing and/or extracting" organic matter from fossil fuels under much milder conditions than the prior art (’812 Patent, col. 7:45-51).
• Technical Importance: The patented solution suggests a more cost-effective and environmentally friendly ("green") approach to extracting hydrocarbons, potentially making previously uneconomical fossil fuel sources viable.

Key Claims at a Glance

• The complaint asserts infringement of all claims; independent claim 1 is representative (’812 Patent, col. 15:17-31; Compl. ¶22).
• Claim 1 of the ’812 Patent includes the following essential elements:
  • A method of extracting hydrocarbon-containing organic matter from a hydrocarbon-containing material.
  • Providing a first liquid consisting essentially of a turpentine liquid (alone or in combination with a turpentine-miscible second liquid where the ratio is at least 1:1).
  • Contacting the material with the first liquid to form an extraction mixture.
  • Extracting the hydrocarbon material into the turpentine liquid.
  • Separating the extracted material from a residual material.

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U.S. Patent No. 8,272,442 - "In Situ Extraction of Hydrocarbons from Hydrocarbon-Containing Materials"

• Issued: September 25, 2012

The Invention Explained

• Problem Addressed: The patent addresses challenges in in-situ oil recovery, where multi-phase fluid flow in porous underground formations often leaves a large portion (e.g., over 40%) of the original oil trapped and unrecovered, even after conventional methods like waterflooding (’442 Patent, col. 6:60-67).
• The Patented Solution: The invention claims a method of injecting a turpentine liquid into an underground formation through an injection well (’442 Patent, col. 7:10-12). This liquid dissolves the trapped hydrocarbons, creating a homogenous, single-phase solution that can flow more easily through the reservoir to a production well, thereby overcoming the multi-phase flow problems that limit recovery (’442 Patent, col. 7:13-24).
• Technical Importance: This technology presents a method for enhanced oil recovery that could significantly increase the yield from existing or depleted oil and gas reservoirs.

Key Claims at a Glance

• The complaint asserts infringement of all claims; independent claim 1 is representative (’442 Patent, col. 17:9-32; Compl. ¶22).
• Claim 1 of the ’442 Patent includes the following essential elements:
  • A method of extracting organic matter from material such as heavy crude oil, crude oil, or natural gas.
  • Providing a hydrocarbon-extracting liquid consisting essentially of a turpentine liquid.
  • Contacting the material in-situ in an underground formation with the extracting liquid to form an extraction mixture.
  • Removing the extraction liquid from the formation.
  • Separating the extracted matter from a residual material.

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U.S. Patent No. 8,404,107 - "Extraction of Hydrocarbons from Hydrocarbon-Containing Materials"

• Patent Identification: U.S. Patent No. 8,404,107, Issued March 26, 2013.
• Technology Synopsis: This patent is a continuation of the application leading to the ’812 Patent and similarly claims methods of extracting hydrocarbons by contacting a source material with a turpentine liquid to form an extraction mixture (’107 Patent, Abstract). The claims focus on forming a "homogenous one-phase" liquid.
• Asserted Claims: All claims asserted, including independent claims 1 and 27 (Compl. ¶22).
• Accused Features: The use of a terpene-based fluid (CnF) to extract hydrocarbons from underground formations (Compl. ¶19-20).

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U.S. Patent No. 8,522,876 - "In Situ Extraction of Hydrocarbons from Hydrocarbon-Containing Materials"

• Patent Identification: U.S. Patent No. 8,522,876, Issued September 3, 2013.
• Technology Synopsis: This patent is a continuation-in-part of the application leading to the ’442 Patent and is also directed to in-situ extraction of hydrocarbons from underground formations using a turpentine liquid (’876 Patent, Abstract). The claims specify that the contacting step occurs in a "natural formation."
• Asserted Claims: All claims asserted, including independent claim 1 (Compl. ¶22).
• Accused Features: The injection of CnF products into oil and gas wells to extract hydrocarbons (Compl. ¶19-20).

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U.S. Patent No. 8,685,234 - "Extraction of Hydrocarbons from Hydrocarbon-Containing Materials and/or Processing of Hydrocarbon-Containing Materials"

• Patent Identification: U.S. Patent No. 8,685,234, Issued April 1, 2014.
• Technology Synopsis: This patent, a division of the application for the ’107 Patent, is also directed to methods of extracting hydrocarbons with a turpentine liquid (’234 Patent, Abstract). The claims focus on increasing the flowability of viscous materials by forming a one-phase liquid mixture with decreased viscosity.
• Asserted Claims: All claims asserted, including independent claims 1 and 13 (Compl. ¶22).
• Accused Features: The use of CnF fluids to extract hydrocarbons from underground formations, which inherently involves altering the viscosity and flowability of the target material (Compl. ¶19-20).

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U.S. Patent No. 9,181,468 - "Extraction of Hydrocarbons from Hydrocarbon-Containing Materials and/or Processing of Hydrocarbon-Containing Materials"

• Patent Identification: U.S. Patent No. 9,181,468, Issued November 10, 2015.
• Technology Synopsis: This patent is a continuation of the application for the ’234 Patent and likewise claims methods for increasing the flowability of viscous or immobile hydrocarbons in formations or flow lines by contacting them with a non-aqueous turpentine liquid (’468 Patent, Abstract).
• Asserted Claims: All claims asserted, including independent claims 1, 13, and 16 (Compl. ¶22).
• Accused Features: The injection of CnF fluids to extract hydrocarbons from underground formations (Compl. ¶19-20).

III. The Accused Instrumentality

Product Identification

• Defendant’s "Complex nano-Fluid (‘CnF’) processes and products, including any variations or versions" (Compl. ¶19).

Functionality and Market Context

• The complaint alleges that the CnF product is a chemical additive designed with a solvent from the "terpene" chemical family (Compl. ¶19). Its alleged function is to be injected into oil and gas wells, where it contacts underground formations to extract desirable hydrocarbons by separating them from residual material (Compl. ¶20). The complaint cites Flotek’s use of the CnF product in "Wolfcamp A" and "Wolfcamp B" well studies in West Texas as specific examples of infringing use (Compl. ¶20).

IV. Analysis of Infringement Allegations

The complaint does not provide a detailed claim chart or direct technical evidence of infringement. Instead, it alleges that Defendant’s own U.S. Patent No. 9,428,683 "embodies actual CnF processes and products" and "discloses how Flotek and its customers infringe the elements" of the Asserted Patents (Compl. ¶21).

’812 Patent Infringement Allegations

’442 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: The primary dispute may turn on whether the Defendant's "terpene" solvent falls within the scope of the term "turpentine liquid" as defined and used across the Asserted Patents. The complaint makes a conclusory allegation that it does (Compl. ¶19).
• Technical Questions: The complaint does not provide technical evidence regarding the chemical composition of the accused CnF product or its precise mechanism of action. A key evidentiary question for the court will be what evidence confirms that the accused CnF product performs the claimed functions of "liquefying" and "solubilizing" hydrocarbons in the manner described by the patents, as opposed to another mechanism.

V. Key Claim Terms for Construction

The Term: "turpentine liquid"

• Context and Importance: This term is the central technological element of all asserted patents. The infringement case depends on whether the accused CnF product, described as containing a "terpene" solvent, is properly characterized as a "turpentine liquid." Practitioners may focus on this term because its scope will likely be dispositive.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specifications provide an extensive and non-limiting list of chemical compounds that qualify, including “natural turpentine, synthetic turpentine, mineral turpentine, pine oil, α-pinene, β-pinene, α-terpineol, β-terpineol,” and dozens of other related chemicals, suggesting the term is meant to be broadly inclusive of the terpene family (’812 Patent, col. 8:10-24; ’442 Patent, col. 17:42-60).
  • Evidence for a Narrower Interpretation: A defendant might argue that the term should be limited by the specific examples, which heavily emphasize α-terpineol (’812 Patent, Example 1, col. 8:62-67). Further, the phrase "consisting essentially of" in the independent claims may be argued to exclude products containing other components that materially affect the basic and novel properties of the turpentine liquid.

The Term: "extracting"

• Context and Importance: This term defines the core function of the claimed methods. The dispute may involve whether the accused product performs "extraction" via the specific solubilization mechanism described in the patent or through a different, non-infringing mechanism like physical displacement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The term could be given its plain and ordinary meaning: the act of removing one substance from another.
  • Evidence for a Narrower Interpretation: The patents repeatedly frame the invention in terms of a specific technical process: “liquefying, solubilizing and/or extracting” (’812 Patent, col. 6:8-9). This consistent linkage may support an argument that "extracting" as claimed requires the specific mechanism of dissolving the hydrocarbon into a single-phase liquid, as described throughout the specifications (’442 Patent, col. 7:13-17).

VI. Other Allegations

• Indirect Infringement: The complaint alleges both induced and contributory infringement (Compl. ¶13). For inducement, it alleges that Defendant provides "instructions for use" and "step-by-step directions to its customers on how to use its products in an infringing manner" (Compl. ¶23-24). The complaint includes a visual titled "Flotek Chemistry Clients" to identify the third-party customers who are the alleged direct infringers (Compl. p. 9).
• Willful Infringement: Willfulness is alleged based on Defendant’s purported knowledge of the Asserted Patents (Compl. ¶16). The complaint specifically alleges pre-suit knowledge, stating that "Flotek learned of the parent patent (Exhibit A) during the prosecution of its patent (Exhibit G)" (Compl. p. 5, fn. 2).

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

• A core issue will be one of definitional scope: can the term “turpentine liquid,” as defined and exemplified in the Asserted Patents with a focus on chemicals like α-terpineol, be construed to cover the specific “terpene” solvent used in Defendant’s Complex nano-Fluid product?
• A key evidentiary question will be one of factual sufficiency: the complaint provides a plausible infringement theory but relies on Defendant’s own patent as its primary evidence rather than direct analysis of the accused product. The case may therefore turn on whether facts developed during discovery confirm a technical and functional match between the accused CnF product and the patents’ claim limitations.