Phillips 66 v. Magema Technology LLC

1. Case Identification

• Case #: IPR2021-01173
• Patent #: 10,584,287
• Filed: July 12, 2021
• Petitioner(s): Phillips 66
• Patent Owner(s): Magēmā Technology LLC
• Challenged Claims: 1, 4-8

2. Patent Overview

• Title: Process for Producing Low-Sulfur Marine Fuel Oil
• Brief Description: The ’287 patent describes a low-sulfur heavy marine fuel oil (LSFO) product and a process for producing it. The claimed process involves the catalytic treatment of a high-sulfur heavy marine fuel oil (HSFO) feedstock to produce a final product compliant with ISO 8217:2017 standards and Annex VI sulfur regulations.

3. Grounds for Unpatentability

Ground 1: Obviousness over Weiss Combination - Claims 1, 4-8 are obvious over Weiss '974 in view of Weiss '515.

• Prior Art Relied Upon: Weiss '974 (Application # 2018/0134974), Weiss '515 (Application # 2014/0299515).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Weiss '974 discloses a process for producing a low-sulfur bunker fuel that meets marine fuel specifications by hydrotreating a heavy hydrocarbon fraction. This process involves a sediment removal step followed by a hydrotreatment-based sulfur removal step to produce an LSFO with less than 0.5% sulfur. Petitioner contended this resulting LSFO is inherently ISO-8217 compliant and merchantable. Weiss '515 was introduced to explicitly teach certain conventional process steps that are suggested but not detailed in Weiss '974, such as mixing the feedstock and hydrogen gas, heating the mixture before it enters the reactor, and using separators to process the hydrotreated effluent.
  • Motivation to Combine: A POSITA would combine the teachings of Weiss '974 and Weiss '515 because both address the same problem of desulfurizing heavy fuel oil fractions. Petitioner asserted that Weiss '515 provides a well-known and predictable method for implementing the general hydrotreatment and separation steps described in Weiss '974 to achieve the desired sulfur removal.
  • Expectation of Success: A POSITA would have a reasonable expectation of success because combining the detailed process parameters of Weiss '515 with the overall fuel production scheme of Weiss '974 involves applying known hydrotreating principles to achieve a predictable outcome.

Ground 2: Obviousness over Weiss and ISO Standards - Claims 1, 4-5 are obvious over ISO 8217:2017, Annex VI, Weiss '974, and Weiss '515.

• Prior Art Relied Upon: ISO 8217:2017, Annex VI, Weiss '974 (Application # 2018/0134974), and Weiss '515 (Application # 2014/0299515).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground re-frames the motivation, starting with the industry standards themselves. Petitioner argued ISO 8217:2017 and Annex VI created a clear need for an LSFO product that was both compliant with quality standards and met tightening sulfur emission limits. The combination of Weiss '974 and Weiss '515 teaches a specific, viable process for hydrotreating a standard HSFO to produce an LSFO that would meet these regulatory and quality demands.
  • Motivation to Combine: The primary motivation was to satisfy the clear market and regulatory need established by ISO 8217 and Annex VI for a low-sulfur marine fuel. A POSITA seeking to produce such a compliant fuel would have looked to known desulfurization technologies, like the hydrotreating processes detailed in Weiss '974 and Weiss '515, as a straightforward and industry-standard solution.
  • Expectation of Success: Given that hydrotreatment was the industry's standard method for sulfur removal, a POSITA would have reasonably expected that applying the processes of Weiss '974 and '515 to a standard HSFO would predictably yield an LSFO meeting the known target specifications of ISO 8217 and Annex VI.

• Additional Grounds: Petitioner asserted an anticipation challenge based on Weiss '974 alone. Petitioner also asserted additional obviousness challenges that incrementally add Weiss '444 (Application # 2014/0332444) to teach that the activating gas should be predominantly hydrogen, and optionally include Applicant-Admitted Prior Art (AAPA) as disclosing commercially available HSFO feedstocks.

4. Key Claim Construction Positions

• "of merchantable quality" (all claims): Petitioner argued this term should be construed according to its explicit definition in the '287 patent: a fuel fit for its ordinary purpose that can be commercially sold and is fungible with other heavy marine fuel oils. Petitioner contended that during prosecution, the Patent Owner attempted to narrow this definition to include heightened stability and compatibility requirements not present in the specification. Petitioner asserted that these arguments did not rise to the level of a clear and unambiguous disavowal of claim scope, and that the existing ISO 8217:2017 compliance limitation already ensures the required level of stability and quality.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §314(a) based on Fintiv factors would be inappropriate. The petition asserted that a Final Written Decision (FWD) would issue months before the scheduled trial date in the parallel district court litigation. Crucially, Petitioner stipulated that if the IPR is instituted, it will not pursue the same invalidity grounds in the district court, thereby eliminating any overlap of issues and conserving judicial resources. Petitioner further contended that the strength of the asserted grounds weighs heavily in favor of institution and that any delay in filing the petition was a direct result of the Patent Owner's litigation tactics.

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1 and 4-8 of the '287 patent as unpatentable under 35 U.S.C. §§ 102 and 103.