PTAB

IPR2021-01168

Phillips 66 v. Magema Technology LLC

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Key Events
Petition

1. Case Identification

2. Patent Overview

  • Title: Low-Sulfur Heavy Marine Fuel Oil and Methods for Producing the Same
  • Brief Description: The ’884 patent discloses a low-sulfur heavy marine fuel oil (LSFO) composition that is compliant with ISO 8217:2017 and Annex VI sulfur limits. The patent also describes a method for producing this LSFO by hydroprocessing a high-sulfur heavy marine fuel oil (HSFO) that is itself compliant with ISO 8217:2017 and of merchantable quality.

3. Grounds for Unpatentability

Ground 1: Anticipation of Claims 1-2 and 5-8 under §102 over Weiss

  • Prior Art Relied Upon: Weiss (Application # US 2018/0134974)
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Weiss disclosed every limitation of the challenged claims. Weiss described a process to refine heavy hydrocarbon fractions into a bunker fuel that complies with specifications, including the approaching 0.50% sulfur limit of Annex VI. The process involved sediment removal followed by hydrotreatment-based sulfur removal to produce an ISO-8217-compliant LSFO. Petitioner asserted that the starting material in Weiss (a bunker fuel with sulfur >0.5%) was an ISO-compliant, merchantable HSFO, and the final product was an LSFO consisting essentially of 100% hydroprocessed HSFO, sometimes blended with minority volumes of diluent materials like cutter stocks, as claimed.
    • Key Aspects: The core of this ground was that Weiss's detailed description of producing specification-compliant bunker fuel via hydrotreatment inherently disclosed the claimed product, rendering the patent's process limitations irrelevant for patentability.

Ground 2: Obviousness of Claims 4 and 9 under §103 over Weiss in view of ISO 8217:2017

  • Prior Art Relied Upon: Weiss (Application # US 2018/0134974) and ISO 8217:2017 (an international standard for marine fuels).
  • Core Argument for this Ground:
    • Prior Art Mapping: Claims 4 and 9 depend on claim 1 and add specific property limitations for RMG- and RMK-grade fuel oils, such as viscosity, density, CCAI, flash point, and sediment content. Petitioner argued that Weiss explicitly disclosed producing an ISO-8217 RMG 380 fuel oil, a common grade. The ISO 8217:2017 standard itself provided the exact ranges for these properties for all RMG and RMK grades.
    • Motivation to Combine: A person of ordinary skill in the art (POSITA) starting with the process in Weiss to create a "desired fuel oil grade" would have been motivated to meet the well-known, industry-standard specifications for common grades like RMG or RMK as defined in ISO 8217:2017. This was necessary to ensure the final product was commercially viable and suitable for use in marine engines.
    • Expectation of Success: A POSITA would have had a high expectation of success in producing a fuel meeting the ISO 8217:2017 RMG/RMK specifications, as these were standard industry targets and achieving them involved routine adjustments like blending with cutter stocks, a technique also disclosed in Weiss.

Ground 3: Obviousness of Claims 1-9 under §103 over ISO 8217:2017, Annex VI, and Weiss

  • Prior Art Relied Upon: ISO 8217:2017, Annex VI (MARPOL Annex VI regulations), and Weiss (Application # US 2018/0134974). Petitioner also referenced Applicant-Admitted Prior Art (AAPA) from the ’884 patent specification.
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground asserted that the combination of market and regulatory pressures with known refining technology rendered the invention obvious. Annex VI created the need for an LSFO (<0.50% sulfur), and ISO 8217:2017 provided the required quality standards for it to be a usable marine fuel. The prior art, including the ’884 patent itself (as AAPA) and Weiss, taught that hydroprocessing was the industry-standard method for removing sulfur from heavy fuel oils to meet such regulatory limits.
    • Motivation to Combine: A POSITA was directly motivated by the impending Annex VI sulfur cap to produce a compliant LSFO. To ensure this new fuel was commercially acceptable and safe for engines, the POSITA would naturally turn to the established ISO 8217:2017 standard for its physical properties. The motivation was to create a single fuel that met both regulatory (Annex VI) and quality (ISO 8217) requirements.
    • Expectation of Success: Given that hydroprocessing was a well-understood, standard industrial process for desulfurization, a POSITA would have had a reasonable expectation of success in applying it to a standard, ISO-compliant HSFO to produce a stable, ISO-compliant LSFO that met the Annex VI sulfur targets.

4. Key Claim Construction Positions

  • "consisting essentially of": Petitioner contended this phrase allowed for the inclusion of unrecited components that do not materially affect the "basic and novel properties" of the invention. Petitioner defined these properties as (1) a low sulfur content for Annex VI compliance and (2) the bulk properties required for a merchantable ISO 8217 fuel oil.
  • "of merchantable quality": Petitioner argued this term should be defined by its explicit definition in the ’884 patent’s specification: fit for purpose as a marine fuel, commercially saleable, and fungible with other heavy marine bunker fuel. Petitioner argued against a broader definition allegedly advanced by the Patent Owner during prosecution that would have required additional properties like stability and compatibility with dissimilar fuels (e.g., diesel).

5. Key Technical Contentions (Beyond Claim Construction)

  • No Patentable Weight for Process Limitations: A central contention was that the patent's product-by-process claims were not patentably distinct from the prior art. Petitioner argued that the process of "hydroprocessing" an HSFO did not impart any structural or functional differences to the final LSFO product compared to LSFOs disclosed or suggested in the prior art. Therefore, the product limitations alone must be considered, and those were anticipated or rendered obvious.

6. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under Fintiv was inappropriate. While acknowledging that a district court trial was scheduled to occur before a potential Final Written Decision (FWD), Petitioner asserted it filed the inter partes review (IPR) promptly after good-faith settlement negotiations failed. Critically, Petitioner stipulated that it would not pursue in the parallel litigation any invalidity ground raised or that could have been reasonably raised in the IPR. Petitioner argued this stipulation eliminated any concerns of overlapping issues and inefficient use of resources, weighing strongly in favor of institution.

7. Relief Requested

  • Petitioner requested the institution of an IPR and the cancellation of claims 1-9 of the ’884 patent as unpatentable under 35 U.S.C. §§ 102 and 103.