NCS Multistage Inc v. Permian Petrolink LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: NCS Multistage Inc. (Canadian corporation with U.S. headquarters in Houston, TX)
  • Defendant: Permian Petrolink, LLC. (Texas LLC)
  • Plaintiff’s Counsel: Blank Rome LLP
• Case Identification: 6:20-cv-00701, W.D. Tex., 07/30/2020
• Venue Allegations: Venue is alleged to be proper in the Western District of Texas because the Defendant is a resident of Texas with a principal place of business in Midland, Texas, and has allegedly committed acts of infringement in the district, including by selling the accused products to customers in the Permian Region.
• Core Dispute: Plaintiff alleges that Defendant’s Glass Floatation Collars, used in oil and gas well completions, infringe a patent related to a "casing float tool" that creates temporary buoyancy in a casing string.
• Technical Context: The technology addresses the challenge of installing long casing strings into horizontal or deviated wellbores, where friction can prevent the casing from reaching its target depth.
• Key Procedural History: The complaint alleges that on July 10, 2020, Plaintiff notified Defendant of the patent-in-suit and its infringement concerns. This pre-suit notice forms the basis for the willfulness allegation.

Case Timeline

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

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

The Invention Explained

• Problem Addressed: The patent's background section describes the significant "drag" that occurs when running casing strings into horizontal or deviated oil and gas wells, which can prevent the casing from reaching the desired depth ('445 Patent, col. 1:20-30).
• The Patented Solution: The invention is a "float tool" that is installed as part of the casing string. It uses a "rupture disc" to seal off a lower portion of the casing, creating a buoyant, air-filled chamber ('445 Patent, col. 4:18-24). This captured air makes the entire casing string lighter, reducing friction and allowing it to be run to greater depths. As illustrated in Figure 1, the tool (10) separates a fluid-filled upper section (93) from a buoyant lower chamber (120). Once the casing is in place, hydraulic pressure is applied from the surface to break the disc, which shatters against an "impact surface" within the tool, restoring a full internal diameter for subsequent operations like cementing ('445 Patent, Abstract; col. 2:3-18).
• Technical Importance: This technology aims to reduce completion time and costs by providing a straightforward method to overcome drag in horizontal wells, avoiding more complex techniques or specialized equipment ('445 Patent, col. 2:45-49).

Key Claims at a Glance

• The complaint asserts infringement of claims 14-15, 22-25, and 27 (Compl. ¶19). Independent claim 14 is representative of the asserted apparatus claims.
• Independent Claim 14 (which depends from claims 8 and 1) requires:
  • A float tool for use in a casing string.
  • A rupture disc assembly comprising a tubular member and a rupture disc.
  • The rupture disc forms an upper seal of a sealed chamber.
  • The tool includes a lower seal on the sealed chamber.
  • The region of the tubular member where the rupture disc is attached has a larger internal diameter than the internal diameter of the casing string.
• The complaint also asserts method claims and reserves the right to assert additional claims (Compl. ¶¶19-20).

III. The Accused Instrumentality

Product Identification

• The "Glass Floatation Collar" and the "Glass Floatation Collar - Slimline" (collectively, "Glass Floatation Collars") (Compl. ¶2).

Functionality and Market Context

• The complaint alleges the Glass Floatation Collars are "casing floatation devices that create buoyancy in the casing string that makes it easier to run casing through the horizontal portion of a wellbore" (Compl. ¶13). The complaint includes an image from Defendant's marketing materials showing the exterior of the accused Glass Floatation Collar (Compl. p. 4). This functionality is achieved using "tubulars with glass barriers." It is alleged that once the casing is positioned in the well, the "glass barrier is ruptured by applying hydraulic pressure from the surface, which restores the internal diameter of the casing string" (Compl. ¶13). The complaint alleges these products are sold for use in the Permian Basin, a major oil and gas producing region (Compl. ¶7).

IV. Analysis of Infringement Allegations

The complaint references a claim chart in Exhibit C purporting to show that the accused Glass Floatation Collar meets every element of claim 14; however, this exhibit was not filed with the complaint (Compl. ¶19). The infringement theory must therefore be reconstructed from the complaint's narrative allegations.

The plaintiff's infringement theory appears to map the functionality of the accused products directly onto the elements of the asserted claims. The complaint alleges the Glass Floatation Collars are "casing floatation devices" that "create buoyancy" (Compl. ¶13), which suggests they are used to form a sealed, air-filled chamber as required by claim 8. The complaint further alleges that the "glass barrier is ruptured by applying hydraulic pressure," which corresponds to the function of the "rupture disc" in the asserted claims (Compl. ¶13). The allegation that this rupture "restores the internal diameter of the casing string" aligns with the patent's described outcome of shattering the disc to allow for subsequent wellbore operations (Compl. ¶13; '445 Patent, col. 2:40-44). The complaint provides a diagram of its own patented AirLock® system, which it states is covered by the '445 Patent, to illustrate the technology at issue (Compl. p. 3).

Identified Points of Contention

• Technical Questions: A central factual question will be whether the internal structure of the accused Glass Floatation Collar includes every limitation of the asserted claims. For instance, claim 1 requires that "the region of the tubular member where the rupture disc is attached has a larger internal diameter than the internal diameter of the casing string." The complaint does not provide evidence, such as a cross-sectional diagram of the accused product, to show the presence of this specific structural feature.
• Scope Questions: The dispute may involve whether the defendant’s "glass barrier" constitutes a "rupture disc" as that term is used in the patent. While the patent specification explicitly lists "glass" as a potential material for the frangible disc ('445 Patent, col. 14:46), the claims may be interpreted to require additional structural or functional characteristics beyond merely being a breakable barrier.

V. Key Claim Terms for Construction

• The Term: "rupture disc" (claim 1)

• Context and Importance: This term defines the central component of the invention. The outcome of the case may depend on whether the defendant’s "glass barrier" (Compl. ¶13) falls within the scope of this term. Practitioners may focus on this term to determine if it is limited to the specific embodiments described or if it covers any frangible barrier used for the same purpose.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent frequently uses the term generally to refer to a component that seals a chamber and is later broken by pressure. The specification also lists a wide range of "frangible" materials, including "glass," suggesting the term is not limited to a single material or configuration ('445 Patent, col. 14:45-48).
  • Evidence for a Narrower Interpretation: The specification describes a specific embodiment where the "rupture disc" is a "hemispherical dome" (cl. 5) that is held by a "shear ring" and designed to "shatter" upon impact with a specific "impact surface" inside the tool ('445 Patent, col. 10:7-15). A party could argue these detailed descriptions limit the scope of the term "rupture disc" to a component with these features.

• The Term: "the region of the tubular member where the rupture disc is attached has a larger internal diameter than the internal diameter of the casing string" (claim 1)

• Context and Importance: This is a precise structural limitation in the independent claim. Infringement will hinge on whether the accused product possesses this specific geometry. Practitioners may focus on this term because it presents a clear, binary factual question: the accused device either has this widened internal diameter or it does not.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: A party might argue this language only requires some degree of enlargement in the attachment area, without being limited to the exact proportions shown in the patent's figures.
  • Evidence for a Narrower Interpretation: The patent figures, such as Figure 2, clearly depict a distinct, radially expanded region (25, 29) to accommodate the rupture disc (30). A party could argue that this specific configuration, intended to restore the "full casing ID" after rupture, defines the required structure ('445 Patent, col. 2:40-44).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the method claims, stating that Permian Petrolink "directing, causing, instructing and/or encouraging its customers to use the Glass Floatation Collars" in an infringing manner. This is allegedly done through marketing materials that explain how to install and use the devices to create buoyancy and later rupture the disc (Compl. ¶20).
• Willful Infringement: The willfulness allegation is based on alleged pre-suit knowledge. The complaint specifies that on July 10, 2020, an NCS Vice President notified Permian Petrolink's owner of the '445 Patent and the alleged infringement, and that the defendant continued its accused activities despite a "known or obvious risk" (Compl. ¶21).

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

• A central issue will be one of structural correspondence: does the accused Glass Floatation Collar contain the specific geometry required by the independent claims, particularly the limitation that the rupture disc be attached within a "region of the tubular member" that has a "larger internal diameter" than the main casing string? The complaint's lack of detailed technical evidence on this point makes it a primary question for discovery.
• A key evidentiary question will be one of infringement proof: can the plaintiff demonstrate, with technical evidence beyond the general marketing descriptions cited in the complaint, that the accused "glass barrier" and its assembly operate in the specific manner required by the claims, including the mechanics of disengagement from a securing mechanism and shattering against an internal impact surface?