Magellan Midstream Partners LP v. Sunoco Partners Marketing & Terminals LP

1. Case Identification

• Case #: IPR2019-01445
• Patent #: 9,207,686
• Filed: August 2, 2019
• Petitioner(s): Magellan Midstream Partners L.P. and Powder Springs Logistics, LLC
• Patent Owner(s): Sunoco Partners Marketing & Terminals L.P.
• Challenged Claims: 3

2. Patent Overview

• Title: Versatile Systems for Continuous In-Line Blending of Butane and Petroleum
• Brief Description: The ’686 patent relates to a method and system for the in-line blending of gasoline with a volatility modifying agent, such as butane. The claimed invention uses a feedforward control system that measures the vapor pressure of the gasoline and the agent before they are blended to calculate a blend ratio, which then controls the blending process to achieve a target volatility.

3. Grounds for Unpatentability

Ground 1: Claim 3 is obvious over Hass and Maggard.

• Prior Art Relied Upon: Hass (Patent 3,530,867) and Maggard (Patent 5,223,714).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Hass disclosed nearly all limitations of claim 3. Hass taught a system for the continuous in-line blending of a volatile stock (like butane) into a gasoline stream. However, Hass used a feedback control system, where the vapor-liquid ratio of the final blended product was measured downstream of the injection point to adjust the blending process. The only key elements missing from Hass were the feedforward-specific steps of measuring component vapor pressures upstream and calculating the blend ratio based on those pre-blend measurements.
  • Motivation to Combine: Petitioner contended that Maggard explicitly taught that feedforward and feedback control were well-known, predictable, and interchangeable alternatives for controlling the vapor pressure of gasoline blends. Maggard described using "well-known techniques of feed-forward and/or feed-back control" and noted that while its own invention used feedforward control, "alternatively, the finished blend could be measured and the result fed back, more conventionally." A person of ordinary skill in the art (POSITA) would therefore be motivated to modify the feedback system of Hass to the feedforward system of Maggard to gain the known advantages of pre-blend analysis.
  • Expectation of Success: A POSITA would have had a reasonable expectation of success because swapping one known, conventional control strategy (feedback) for another (feedforward) was a predictable design choice with well-understood principles and outcomes in the art of process control.

Ground 2: Claim 3 is obvious over Bajek and Maggard.

• Prior Art Relied Upon: Bajek (Patent 3,999,959) and Maggard (Patent 5,223,714).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that Bajek, like Hass, disclosed a feedback control system for regulating the injection of butane into gasoline streams to achieve a desired volatility. Bajek's system was described in a refinery context and involved measuring the V/L ratio of the blend downstream to control the butane flow. As with the Hass-based ground, Petitioner argued that Bajek taught all elements of claim 3 except for the feedforward control aspects.
  • Motivation to Combine: The motivation to combine Bajek with Maggard was identical to that for combining Hass with Maggard. Petitioner argued a POSITA would have recognized Bajek’s feedback system as a conventional setup and would have been motivated by the teachings of Maggard to substitute it with a feedforward control loop to achieve the same goal of volatility control, viewing it as an obvious alternative.
  • Expectation of Success: The expectation of success was high for the same reasons as in Ground 1. The modification was presented as a simple substitution of one known control architecture for another to perform the same function.

Ground 3: Claim 3 is obvious over Stanton and Maggard in view of Hass.

• Prior Art Relied Upon: Stanton (Patent 3,484,590), Maggard (Patent 5,223,714), and Hass (Patent 3,530,867).

• Core Argument for this Ground:

  • Prior Art Mapping: Petitioner argued that Stanton also disclosed a feedback-based, in-line blending system. However, to ensure the "plurality of batches of different gasoline types" limitation was met, Petitioner introduced Hass. Hass explicitly disclosed blending multiple different "stock" streams into a final product. The core feedback control system was provided by Stanton.
  • Motivation to Combine: A POSITA would combine Stanton and Hass because it was common in blending operations to use multiple component streams, making the inclusion of Hass's multi-stream architecture in Stanton's system a beneficial and logical modification. Maggard would then be used to convert the combined feedback system into a feedforward system, for the same reasons articulated in other grounds.
  • Expectation of Success: Success would be expected, as the combination involved integrating known features (multiple streams from Hass) into a conventional blending system (Stanton) and applying a known alternative control strategy (feedforward from Maggard).

• Additional Grounds: Petitioner asserted an additional obviousness challenge against claim 3 based on the combination of Chin, Maggard, and Hass, relying on a similar design modification theory.

4. Key Claim Construction Positions

• "Gasoline": Petitioner argued for a broad construction meaning "a type of petroleum-based liquid," explicitly including liquid streams within a refinery as well as downstream. This construction was critical to neutralize Patent Owner's prior arguments that distinguished refinery-based prior art (like Bajek) by limiting the invention to post-refinery, tank-farm blending. Petitioner contended the ’686 patent claims were written more broadly than its parent ’302 patent.
• "Vapor Pressure": Petitioner argued this term should be construed as defined in the specification to encompass Reid Vapor Pressure (RVP), true vapor pressure, and vapor/liquid (V/L) ratio. This broad definition allowed various measurement techniques in the prior art to satisfy the claim limitation.
• "Blending Unit": Petitioner proposed this term be construed as "any conventional apparatus that achieves blending of two or more separate streams into one," including simple T- or Y-junctions. This non-limiting construction made it easier to map the term onto the simple pipe junctions shown in the prior art.

5. Key Technical Contentions (Beyond Claim Construction)

• The central technical contention underpinning all grounds of unpatentability was the complete and predictable interchangeability of feedback and feedforward control systems for a POSITA. Petitioner argued that these were two well-known, alternative control loop configurations with understood trade-offs, and choosing one over the other was a routine design choice, not an inventive step. This principle was the foundation for combining Maggard (teaching feedforward as an alternative) with primary references that all disclosed feedback systems.

6. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §314(a) was not warranted for three main reasons. First, while a district court trial was scheduled, there was no guarantee it would proceed to a decision before the IPR concluded, and the Board had already instituted two other IPRs on related patents despite the same parallel litigation. Second, the Patent Owner added the ’686 patent to the litigation at a late stage, and Petitioner’s statutory right to file a timely IPR should not be prejudiced by this delay. Third, Petitioner strategically waited to file the IPR until the Patent Owner narrowed its asserted claims in court to only claim 3, an action taken to reduce the burden on the Board and the parties.

7. Relief Requested

• Petitioner requested institution of an inter partes review and cancellation of claim 3 of Patent 9,207,686 as unpatentable.