NCS Multistage Inc v. Packers Plus Energy Services Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: NCS Multistage Inc. (Canada)
  • Defendant: Packers Plus Energy Services Inc. (Canada) and Packers Plus Energy Services (USA) Inc. (Delaware)
  • Plaintiff’s Counsel: Blank Rome LLP
• Case Identification: NCS Multistage Inc. v. Packers Plus Energy Services Inc., et al., 6:20-cv-00700, W.D. Tex., 07/30/2020
• Venue Allegations: Venue is asserted based on Packers Plus Canada being a foreign company that has committed acts of infringement and sold the accused product in the district, and Packers Plus USA being a Texas resident that has sold the accused product and maintains a regular and established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant’s AeroSTAT Glass Barrier Sub, a downhole tool for well completions, infringes a patent related to casing floatation technology.
• Technical Context: The technology concerns tools used in oil and gas drilling to reduce friction when installing long sections of pipe (casing) into horizontal wellbores by creating a buoyant, gas-filled chamber within the pipe.
• Key Procedural History: The complaint alleges that Plaintiff notified Defendant of the patent and its infringement concerns on July 22, 2020, eight days before filing the lawsuit. This alleged pre-suit notice forms the basis for the willfulness claim.

Case Timeline

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

U.S. Patent No. 10,465,445 - "Casing Float Tool," issued November 5, 2019

• The Invention Explained:

  • Problem Addressed: The patent describes the significant difficulty in running casing to great depths in modern wells, particularly in horizontal or deviated sections, where friction ("drag") between the casing and the wellbore can prevent the casing from reaching its target depth (ʼ445 Patent, col. 1:21-30).
  • The Patented Solution: The invention is a "casing float tool" that creates a temporary, sealed, buoyant chamber within the casing string. This is achieved by installing a rupture disc assembly that separates an upper, fluid-filled portion of the casing from a lower, gas-filled portion, making the overall string lighter and easier to "float" into place (ʼ445 Patent, Abstract; col. 4:19-24). After the casing is positioned, hydraulic pressure is applied. This pressure does not directly break the disc, but instead shears a securing mechanism (e.g., a "shear ring"), which then allows the disc to be propelled into a stationary impact surface, causing it to shatter and restore the full internal diameter of the casing for subsequent operations (ʼ445 Patent, col. 2:5-19).
  • Technical Importance: This two-stage rupture mechanism allows for the use of a robust disc that can withstand the pressures of being run into the well, yet can be reliably broken with a lower hydraulic pressure than would be required to burst the disc directly, and in a manner that creates small, easily-managed fragments (ʼ445 Patent, col. 2:15-30).

• Key Claims at a Glance:

  • The complaint asserts direct infringement of at least claims 14-15, 22-25, and 27, focusing on independent claim 14 as exemplary (Compl. ¶21).
  • The essential elements of independent claim 14 (which depends from claims 8 and 1) are:
    • A float tool for a casing string.
    • A rupture disc assembly comprising a tubular member and a rupture disc.
    • The rupture disc is attached within a region of the tubular member that has a larger internal diameter than the internal diameter of the casing string.
    • The rupture disc forms an upper seal of a sealed chamber.
    • The tool further comprises a lower seal on the sealed chamber.
  • The complaint reserves the right to assert additional claims (Compl. ¶21).

III. The Accused Instrumentality

• Product Identification: The "AeroSTAT Glass Barrier Sub" (Compl. ¶2).
• Functionality and Market Context: The complaint alleges the AeroSTAT Glass Barrier Sub is a "casing floatation device" designed to create buoyancy in a casing string, making it easier to install in the horizontal portion of a wellbore (Compl. ¶15). The complaint includes a marketing image of the accused product, described as a tool to "Improve Completion System Installation" (Compl. p. 6). The device is described as a tubular body containing a glass barrier disc. After the casing is positioned in the well, hydraulic pressure is applied from the surface to rupture the disc, which "restores the internal diameter of the casing string" (Compl. ¶15).

IV. Analysis of Infringement Allegations

The complaint references a claim chart (Exhibit B) that was not publicly available with the initial filing. The infringement theory is constructed from narrative allegations.

’445 Patent Infringement Allegations

• Identified Points of Contention:
  • Structural Questions: A primary question will be whether the accused AeroSTAT product has the specific structure recited in claim 1: a rupture disc housed within a "region of the tubular member... [with] a larger internal diameter than the internal diameter of the casing string." While the complaint alleges restoration of the casing's internal diameter, it does not provide direct evidence of this specific structure in the accused product.
  • System-Level Questions: The infringement analysis for claim 14 will require evidence that the accused product is used as part of a system that includes a "lower seal" to form the claimed "sealed chamber." The complaint alleges the product is used for "float installations" (Compl. ¶15), a process that typically requires such a seal (often a "float shoe"), but it does not explicitly allege that Defendants' product itself includes or requires one for its operation.

V. Key Claim Terms for Construction

• The Term: "region of the tubular member where the rupture disc is attached has a larger internal diameter than the internal diameter of the casing string" (from claim 1).
• Context and Importance: The definition of this term is critical. The patent distinguishes itself by claiming a configuration that allows for the restoration of "full casing ID" after the disc is ruptured. The infringement analysis will turn on whether the accused product possesses this specific geometric arrangement. Practitioners may focus on this term to determine if there is a literal structural match or if the Plaintiff must rely on the doctrine of equivalents.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: A party could argue that the key inventive concept is the function of restoring full internal diameter, as emphasized in the specification's description of the benefits ('445 Patent, col. 7:1-9, "the ability to restore full casing ID is useful"). This might support a construction covering any structure that achieves this functional result.
  • Evidence for a Narrower Interpretation: The patent figures, such as Figure 2, and the detailed description explicitly depict a "radially expanded portion" (25, 29) that is structurally distinct from the main tubular body ('445 Patent, col. 8:1-3, 20-32). A party could argue this language limits the claim to this specific physical embodiment, not merely any functionally equivalent design.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of method claims 22-25 and 27. The basis for inducement is that Defendants allegedly advertise and provide instructions on their website that direct and encourage customers to use the AeroSTAT Glass Barrier Sub in an infringing manner, specifically by installing it on a casing string and running it into a well to create buoyancy (Compl. ¶22).
• Willful Infringement: The complaint alleges that Defendants had actual notice of the '445 Patent and their alleged infringement as of at least July 22, 2020, via a communication between executives (Compl. ¶16). The claim for willfulness is based on the allegation that Defendants continued to make, use, sell, and import the accused product despite a "known or obvious risk of infringement" after that date (Compl. ¶23).

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

1. A central issue will be one of structural correspondence: Does the accused AeroSTAT product literally embody the claimed structure of a rupture disc housed within a "region... [with a] larger internal diameter" than the main casing string, or will Plaintiff need to prove this element under the doctrine of equivalents? The answer will depend on evidence revealing the precise internal geometry of the accused device.
2. A second key question will concern induced infringement: Can Plaintiff demonstrate that Defendants' instructions and marketing materials specifically taught or encouraged users to combine the AeroSTAT sub with a "lower seal" to create the "sealed chamber" as required by the asserted claims, and that users directly infringed by following those instructions?
3. The viability of the willfulness claim will hinge on the court's assessment of Defendants' conduct following the alleged pre-suit notice of July 22, 2020. The key determination will be whether continued commercial activity after that date constituted objective recklessness in the face of a known risk of infringement.