DCT
7:22-cv-00059
WellWorx Energy Solutions LLC v. Oilify New Tech Solutions Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Liberty Lift Solutions, LLC (Delaware); WellWorx Energy Solutions LLC (Texas)
- Defendant: Oilify New-Tech Solutions Inc. (Canada); Q2 Artificial Lift Services LLC (Delaware)
- Plaintiff’s Counsel: Bell Nunnally & Martin LLP
- Case Identification: 7:22-cv-00059, W.D. Tex., 07/16/2024
- Venue Allegations: Plaintiff alleges venue is proper because Defendants transact substantial business in the district, including marketing and selling the accused products, and further that Defendants waived any objections to venue by filing counterclaims and motions to dismiss that omitted such defenses.
- Core Dispute: Plaintiff alleges that Defendants’ WhaleShark downhole separator infringes three patents related to separating sand and other solids from fluid in oil wells.
- Technical Context: The technology addresses sand mitigation, a critical issue in oil production, particularly with the increased use of sand in modern hydraulic fracturing operations which can damage pumping equipment.
- Key Procedural History: This Supplemental Complaint was filed by Liberty Lift Solutions after it acquired the patents-in-suit from the original plaintiff, WellWorx Energy Solutions, on May 7, 2024. The complaint alleges that one defendant, Q2 ALS, was a former distributor for WellWorx and hired a key WellWorx employee, subsequently partnering with co-defendant Oilify New-Tech to develop and sell the accused product, which allegedly incorporates the patented technology.
Case Timeline
| Date | Event |
|---|---|
| 2019-06-11 | '064, '080, and '553 Patents Priority Date |
| 2019-07-26 | WellWorx and Defendant Q2 ALS execute distribution agreement |
| 2020-03-31 | U.S. Patent No. 10,605,064 Issued |
| 2020-06-24 | Defendant Oilify files first provisional application for an early version of the accused product |
| 2020-10-XX | Former WellWorx employee begins working for Defendant Q2 ALS |
| 2021-02-12 | Defendant Oilify files second provisional application for an updated version of the accused product |
| 2021-03-XX | Defendants Q2 ALS and Oilify allegedly enter partnership to commercialize accused product |
| 2021-12-14 | U.S. Patent No. 11,199,080 Issued |
| 2022-10-11 | U.S. Patent No. 11,466,553 Issued |
| 2024-05-07 | Patents-in-Suit assigned from WellWorx to Liberty Lift |
| 2024-07-16 | Supplemental Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,605,064, “Sand and Solids Bypass Separator,” Issued March 31, 2020
- The Invention Explained:
- Problem Addressed: The patent addresses the challenge of particulates, such as sand from hydraulic fracturing, which are carried into the wellbore with hydrocarbons and can damage or reduce the lifespan of downhole artificial lift equipment (Compl. ¶ 9; ’064 Patent, col. 1:49-61).
- The Patented Solution: The invention is a downhole apparatus that uses a system of concentric inner and outer tubes to separate solids from the fluid mixture before it reaches the pump. Fluid enters the apparatus through slots in the outer tube and flows downward in the channel between the tubes; the downward velocity allows heavier particulates to continue falling due to momentum while the cleaner fluid is drawn upwards into the inner tube's pump intake. A bypass captures the separated solids and directs them below the pump intake, where they can be collected in a mud anchor (’064 Patent, Abstract; col. 2:8-15).
- Technical Importance: This design aims to improve the longevity and efficiency of artificial lift systems by physically isolating the pump mechanism from abrasive solids, a significant operational cost and failure point in modern wells (Compl. ¶ 9; ’064 Patent, col. 2:1-4).
- Key Claims at a Glance:
- The complaint asserts independent claims 1 (apparatus) and 11 (method) (Compl. ¶ 48).
- Independent Claim 1 requires:
- An outer tube with a closed top, open bottom, and a plurality of slots.
- An inner tube positioned inside the outer tube, with a pump intake at its bottom end located below the outer tube's slots.
- A configuration where the fluid's downward velocity allows particulate matter to continue downward as cleaner fluid is drawn into the pump intake.
- A bypass extending from above the pump intake to below it, configured to direct the separated particulate matter away from the pump intake.
- An open bottom end of the outer tube configured to allow particulate matter from the bypass to flow to a mud anchor.
- The complaint reserves the right to assert dependent claims (Compl. ¶ 48).
U.S. Patent No. 11,199,080, “Sand and Solids Bypass Separator,” Issued December 14, 2021
- The Invention Explained:
- Problem Addressed: As a continuation of the application leading to the ’064 Patent, the ’080 Patent addresses the same problem of particulate damage to artificial lift equipment in oil wells (’080 Patent, col. 1:55-col. 2:4).
- The Patented Solution: The technology is substantially the same as described in the ’064 Patent, employing concentric tubes and fluid dynamics to separate solids. The fluid mixture enters through slots and flows downward, where momentum separates the particulates into a bypass channel, away from the pump intake (’080 Patent, Abstract; col. 4:15-51).
- Technical Importance: The invention provides a mechanical solution to improve the operational reliability of pumping systems in wells with high solids content (Compl. ¶ 9; ’080 Patent, col. 2:1-4).
- Key Claims at a Glance:
- The complaint asserts independent claims 1 (apparatus) and 11 (method) (Compl. ¶ 69).
- Independent Claim 1 requires:
- An outer tube with a closed top, open bottom, and a plurality of slots.
- An inner tube inside the outer tube with a pump intake below the slots.
- A configuration where the fluid reaches a downward velocity such that particulate matter continues downward while cleaner fluid is drawn into the pump intake.
- A bypass extending from above the pump intake to below it, configured to direct separated particulate matter away from the pump intake.
- The complaint reserves the right to assert dependent claims (Compl. ¶ 69).
Multi-Patent Capsule: U.S. Patent No. 11,466,553
- Patent Identification: U.S. Patent No. 11,466,553, “Sand and Solids Bypass Separator,” Issued October 11, 2022 (Compl. ¶ 14).
- Technology Synopsis: As a continuation in the same family, this patent discloses the same core technology for separating particulates from a fluid mixture in a production well. The invention uses an outer conduit, an inner conduit, and a bypass to divert solids away from a pump intake using fluid dynamics and gravity (’553 Patent, Abstract). Claim 1 of the ’553 Patent recites an "outer conduit having one or more openings," which may be construed differently than the "plurality of slots" recited in the earlier patents.
- Asserted Claims: Independent claims 1 (apparatus) and 11 (method) (Compl. ¶ 89).
- Accused Features: The complaint alleges the Accused Product’s structure, including its outer and inner conduits, pump intake, and bypass system, infringes the claims of the ’553 Patent (Compl. ¶ 91).
III. The Accused Instrumentality
- Product Identification: The accused product is the "WhaleShark" downhole separator (Compl. ¶ 22).
- Functionality and Market Context: The WhaleShark is marketed as a "packerless downhole separator with high-performance gas and solids separation capabilities" (Compl. ¶ 40). The complaint includes a marketing slide showing the WhaleShark's alleged structure, which includes a "Separator Collector Intake," an "Oval Pump Intake Tube," a "Solids Dip Tube," and a "Solids Weir" (Compl. ¶ 35, Ex. F at 12). Another slide describes its technology as using "a weir and a velocity acceleration tube" to speed up the fall rate of solids, making it "more difficult for solids to turn upwards towards the pump intake tube" (Compl. ¶ 36, Ex. F at 14). The product is allegedly co-branded and jointly promoted by both Defendants (Compl. ¶ 31, ¶ 39). The complaint highlights a key design change, including a depiction from an early provisional patent application for the WhaleShark that allegedly did not contain a sand drain tube, contrasted with a later version that did (Compl. ¶ 19, ¶ 21, Ex. H, Ex. I).
IV. Analysis of Infringement Allegations
'064 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A particulate separator for use with a production well producing a fluid mixture including particulate matter | The WhaleShark is used for "Solids Separation" in oil and gas wells. | ¶50 | col. 5:32-35 |
| an outer tube comprising a closed top end, an open bottom end, and a conduit extending therethrough, wherein the outer tube comprises a plurality of slots extending from an exterior surface... to the conduit | The WhaleShark is shown with an outer tube structure and a photograph depicts a plurality of slots. | ¶50 | col. 4:9-14 |
| an inner tube positioned within the conduit of the outer tube, wherein the inner tube comprises a pump intake at a bottom end of the inner tube positioned below the plurality of slots of the outer tube | A presentation slide shows an "Oval Pump Intake Tube" positioned concentrically within the outer structure, below the fluid intake area. | ¶50 | col. 4:21-29 |
| wherein the downward velocity of the fluid mixture allows the particulate matter in the fluid mixture to continue downward as the fluid is drawn into the inner tube through the pump intake | A presentation slide states the "Velocity tube speeds up the fall rate of the solids and therefore making it more difficult for solids to turn upwards towards the pump intake tube." | ¶50 | col. 5:39-49 |
| a bypass extending from above the pump intake to below the pump intake, wherein the bypass is configured to direct the particulate matter separated from the fluid mixture below the pump intake | The WhaleShark is alleged to use a "Solids Dip Tube/Velocity acceleration tube" and a "Weir" to direct solids away from the pump intake. | ¶50 | col. 5:50-54 |
| and wherein the open bottom end of the outer tube is configured to allow the particulate matter exiting the bypass to flow to a mud anchor. | The WhaleShark is described as having an "Adjustable and retrievable solids collection sump" that "uses standard mud joints." | ¶50 | col. 6:2-5 |
'080 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A particulate separator for use with a production well producing a fluid mixture including particulate matter | The WhaleShark is used for "Solids Separation" in oil and gas wells. | ¶71 | col. 5:40-43 |
| an outer tube comprising a closed top end, an open bottom end, and a conduit extending therethrough, wherein the outer tube comprises a plurality of slots... | The WhaleShark is shown with an outer tube structure and a photograph depicts a plurality of slots. | ¶71 | col. 4:9-14 |
| an inner tube positioned within the conduit of the outer tube, wherein the inner tube comprises a pump intake at a bottom end of the inner tube positioned below the plurality of slots of the outer tube | A presentation slide shows an "Oval Pump Intake Tube" positioned concentrically within the outer structure, below the fluid intake area. | ¶71 | col. 4:21-29 |
| wherein the fluid mixture reaches a downward velocity such that the particulate matter in the fluid mixture continues downward as the fluid is drawn into the inner tube through the pump intake | A presentation slide states the "Velocity tube speeds up the fall rate of the solids and therefore making it more difficult for solids to turn upwards towards the pump intake tube." | ¶71 | col. 5:48-55 |
| a bypass extending from above the pump intake to below the pump intake, wherein the bypass is configured to direct the particulate matter separated from the fluid mixture downward from above the pump intake to below the pump intake | The WhaleShark is alleged to use a "Solids Dip Tube/Velocity acceleration tube" and a "Weir" to direct solids away from the pump intake. | ¶71 | col. 6:1-6 |
- Identified Points of Contention:
- Scope Questions: A central dispute may concern whether the accused WhaleShark's combination of a "weir" and a "solids dip tube" meets the claim limitation of a "bypass." Another question is whether the use of "one or more openings" in the ’553 Patent, as opposed to a "plurality of slots" in the earlier patents, is a meaningful distinction in the context of the accused device.
- Technical Questions: The complaint relies on marketing materials to allege that the accused product operates via the claimed "downward velocity" principle (Compl. ¶¶ 50, 71). The actual physical operation of the WhaleShark's "weir" system may become a point of technical dispute, questioning whether it functions in the same way as the method described and claimed in the patents.
V. Key Claim Terms for Construction
The Term: "bypass"
- Context and Importance: This term is critical because the infringement reading depends on mapping the accused product's "Solids Dip Tube" and "Weir" onto this single claim element. Practitioners may focus on this term to determine if its scope is limited to a single, unitary conduit or if it can encompass a multi-component system that performs the same function.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claims provide a functional definition: a bypass "is configured to direct the particulate matter separated from the fluid mixture below the pump intake" (’064 Patent, col. 5:52-54). Plaintiff may argue this functional language covers any structure that achieves the result, including the accused weir and tube combination.
- Evidence for a Narrower Interpretation: The specification's primary embodiment depicts the bypass as a distinct, singular tube structure (element 70 in Fig. 4) (’064 Patent, col. 4:51-65). Defendants may argue that the term should be limited to a structure consistent with this sole embodiment.
The Term: "downward velocity of the fluid mixture allows the particulate matter... to continue downward"
- Context and Importance: This limitation describes the principle of operation for separation. The core of the infringement case rests on whether the accused product operates according to this same physical principle.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language is stated in broad, functional terms, describing a result based on fluid dynamics. Plaintiff may argue that any separator that relies on this gravitational and momentum-based effect infringes, regardless of the specific components used to create the flow.
- Evidence for a Narrower Interpretation: The specification links the creation of the required fluid dynamics to a "helical fin (68)" that directs fluid "radially downward to create a vortex" (’064 Patent, col. 4:41-47). Defendants may argue that the claimed "downward velocity" mechanism is tied to the specific vortex-creating structure shown in the embodiments, and that a different structure, such as their "weir," operates on a different principle.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement by Defendants through actions such as advertising the WhaleShark, providing instructions and oversight for its installation, and recommending its use to customers like Devon Energy (Compl. ¶¶ 42, 56). Contributory infringement is alleged on the basis that the WhaleShark is a material part of the patented invention, is not a staple article of commerce, and was especially made for infringing use (Compl. ¶¶ 57, 78).
- Willful Infringement: Willfulness is alleged based on Defendants' continued infringement after receiving notice via service of complaints in this litigation (Compl. ¶¶ 61-62). The complaint further alleges pre-suit willfulness and intentional copying, citing Defendants' hiring of a former WellWorx employee with knowledge of the technology, Q2 ALS's prior relationship with WellWorx, and the development of the accused product after the '064 Patent had issued (Compl. ¶¶ 58-59, 61). A slide from a presentation given by Defendant Oilify's CEO is presented as a depiction of the infringing structure (Compl. ¶ 35).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of claim construction: can the term "bypass," described in the patent embodiments as a single conduit, be construed broadly enough to read on the accused product's two-part "weir" and "solids dip tube" system?
- A central evidentiary question will be one of technical operation: does the accused WhaleShark separator function based on the claimed principle of a specific "downward velocity" allowing for gravitational separation, or does its "weir" system represent a fundamentally different mechanical approach to sorting solids from fluid?
- The litigation may also feature a significant focus on intent, as the complaint constructs a narrative of alleged copying, supported by the hiring of a former employee and the evolution of the accused product's design, which could be critical for the claim of willful infringement and potential for enhanced damages.