Stage Completions Inc. v. GRYPHON OILFIELD SOLUTIONS, LLC

1. Case Identification

• Case #: IPR2018-00776
• Patent #: 9,611,727
• Filed: March 14, 2018
• Petitioner(s): Stage Completions Inc. and Stage Completions (USA) Corp.
• Patent Owner(s): Gryphon Oilfield Solutions, LLC
• Challenged Claims: 1-7

2. Patent Overview

• Title: Apparatus and Method for Fracturing a Well
• Brief Description: The ’727 patent relates to downhole valve assemblies used for hydraulic fracturing in oil and gas wells. The technology involves a system of multiple valve subs, each having a unique "key profile," which can be selectively actuated by a corresponding "dart" with a matching profile, allowing for the sequential fracturing of different production zones.

3. Grounds for Unpatentability

Ground 1: Anticipation over Murray - Claims 1 and 3-6 are anticipated by Murray under 35 U.S.C. §102(b).

• Prior Art Relied Upon: Murray (Patent 7,325,617).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Murray discloses every element of the challenged claims. Murray describes a "Frac System Without Intervention" using a plurality of sliding sleeves with specific, unique internal profiles that are selectively matched by corresponding plugs (darts) pumped downhole. This system allows for the sequential opening of sleeves to treat different zones. Petitioner asserted that Murray teaches providing at least two valves with different key profiles, placing a dart with a matching profile to engage only one valve, and injecting pressurized fluid to shift a piston (sleeve) from a closed to an open position, thereby opening ports for fracturing. For dependent claims, Petitioner argued Murray discloses removing the dart by fishing it out with a fishing neck or by drilling/milling it out.

Ground 2: Obviousness over Murray and Gazda - Claims 1 and 3-7 are obvious over Murray in view of Gazda under 35 U.S.C. §103.

• Prior Art Relied Upon: Murray (Patent 7,325,617), Gazda (Patent 4,043,392).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground was presented as an alternative to the anticipation ground. To the extent Murray was deemed not to disclose certain limitations, Petitioner contended that Gazda supplied them. Specifically, if Murray was found to lack an explicit teaching of a key profile comprising "at least two grooves and a locking shoulder," Gazda was cited for its detailed disclosure of such selective locking mechanisms. Gazda teaches a system with sliding sleeve valves and well tools that use a variety of unique key profiles, including multiple grooves and locking shoulders, to ensure a tool engages only its intended valve.
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) implementing Murray’s system for selective actuation would be motivated to look for known, reliable locking mechanisms to ensure unique engagement. A POSITA would combine Gazda’s detailed and robust keying profiles (with multiple grooves and shoulders) with Murray’s overall sequential fracturing system to improve the reliability of the tool-to-valve matching.
  • Expectation of Success: Combining a known locking mechanism (Gazda) with a known fracturing system (Murray) to achieve a more reliable version of that system was a predictable design choice with a high expectation of success.

Ground 3: Obviousness over Murray and Giroux - Claims 2 and 7 are obvious over Murray in view of Giroux under 35 U.S.C. §103.

• Prior Art Relied Upon: Murray (Patent 7,325,617), Giroux (Patent 7,334,650).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground addressed the "dart cup" limitation in claims 2 and 7. Petitioner argued that while Murray discloses seals, Giroux explicitly teaches the use of "upper cup seals" on the upper end of a downhole tool to provide a seal. Giroux’s cup seals, used in a similar oilfield context, were asserted to meet the structural requirements of the claimed "dart cup." The combination of Murray's dart and Giroux's uphole cup seal would result in a dart with a cup uphole of the dart profile, as claimed.
  • Motivation to Combine: Both references are in the same field of oil and gas completion. A POSITA would understand the benefit of placing a seal uphole of the primary actuating mechanism on a downhole tool to seal off fluid flow and ensure pressure acts effectively on the tool. This is a common and well-understood design principle.
  • Expectation of Success: A POSITA would have had a reasonable expectation of success in adding a standard cup seal from Giroux to the dart in Murray, as it is a simple addition of a known element for its conventional purpose.

• Additional Grounds: Petitioner asserted additional obviousness challenges, including that claims 2 and 7 are obvious over Murray alone; claim 6 is obvious over Murray and Applicant's Admitted Prior Art (AAPA); and claims 2 and 7 are obvious over the three-way combination of Murray, Gazda, and Giroux.

4. Key Claim Construction Positions

• Petitioner argued that the claims are unpatentable under either the Patent Owner’s proposed constructions in related district court litigation or the court's preliminary constructions, which were narrower.
• "dart cup": The Patent Owner had argued for a broad construction covering any shape that creates a seal. The district court preliminarily construed it more narrowly as "a circular seal with a depressed center and raised sealing lips." Petitioner contended that the prior art disclosed structures meeting both definitions.
• "two grooves and a locking shoulder": The Patent Owner had argued that the locking shoulder could be part of one of the two grooves. The district court preliminarily found the locking shoulder must be in a different location relative to the two grooves. Petitioner argued that the prior art taught both configurations.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that the doctrine of assignor estoppel should not bar the institution of this IPR. The petition noted that an inventor listed on the ’727 patent is an executive of the Petitioner. Citing the PTAB's precedential decision in Athena Automation v. Husky Injection Molding Systems, Petitioner asserted that 35 U.S.C. §311(a) permits "a person who is not the owner of a patent" to file a petition, and that this statutory grant does not contain an exception for assignor estoppel, unlike other areas of patent litigation.

6. Relief Requested

• Petitioner requested institution of an inter partes review and cancellation of claims 1-7 of the ’727 patent as unpatentable.