PTAB

IPR2021-01174

Phillips 66 v. Magema Technology LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Process for Production of Heavy Marine Fuel Oil from Distressed Fuel Oil Materials
  • Brief Description: The ’709 patent describes a two-stage process for producing low-sulfur heavy marine fuel oil (LSFO). The process involves a "pre-treatment" stage to create a high-sulfur heavy marine fuel oil (HSFO) feedstock, followed by a "core process" of hydrodesulfurization to reduce the sulfur content of the HSFO to comply with marine fuel regulations.

3. Grounds for Unpatentability

Ground 1: Obviousness over Weiss '974 and Weiss '515 - Claims 1-2 are obvious over Weiss ('974 application) in view of Weiss ('515 application).

  • Prior Art Relied Upon: Weiss (Application # US 2018/0134974) and Weiss (Application # US 2014/0299515).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Weiss '974 teaches the core elements of the claimed invention. Weiss '974 discloses a process to produce bunker fuel by first removing sediments from heavy hydrocarbon fractions (like atmospheric or vacuum residues) to create a stable, ISO-8217-compliant HSFO. This HSFO is then hydrotreated in a second step to reduce its sulfur content to less than 0.5%, producing an LSFO. Petitioner asserted this maps to the claimed pre-treatment process that yields a Feedstock HMFO, which is then catalytically treated to produce the final Product HMFO.
    • Motivation to Combine: Weiss '974 describes the hydrotreatment and subsequent separation steps generally. Petitioner contended a person of ordinary skill in the art (POSITA) would combine the teachings of Weiss '974 with Weiss '515, which details conventional and well-known methods for implementing such a process. Specifically, Weiss '515 teaches mixing the hydrocarbon feed with hydrogen gas before entering the fixed-bed reactor and using a series of high- and low-pressure separators to process the hydrotreated effluent. This combination simply applies known techniques to achieve the predictable results disclosed in Weiss '974.
    • Expectation of Success: A POSITA would have a high expectation of success, as both references operate in the same technical field of hydrotreating heavy petroleum fractions, and the combination represents a straightforward implementation of a known process using standard components.

Ground 2: Obviousness over ISO 8217/Annex VI and Supporting References - Claims 1-2 are obvious over ISO 8217:2017, Annex VI, Weiss '974, Weiss '515, Parkash, and Buchanan.

  • Prior Art Relied Upon: ISO 8217:2017 (an international standard), Annex VI (a MARPOL regulation), Weiss ('974 application), Weiss ('515 application), Parkash (Petroleum Fuels Manufacturing Handbook, 2010), and Buchanan (Application # US 2015/0353851). Petitioner also referenced Applicant-Admitted Prior Art (AAPA) concerning commercially available HSFOs.

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground asserted that the claimed process was obvious from a different starting point: the market need to desulfurize existing, standard-compliant HSFO. Petitioner argued that Parkash and Buchanan teach that standard, ISO-8217-compliant HSFO is commonly produced by blending heavy hydrocarbon feedstocks (like atmospheric residue) with cutter stocks. The combination of ISO 8217 (defining fuel quality) and Annex VI (mandating lower sulfur limits) created a clear need to desulfurize these widely available HSFOs. The process for doing so was rendered obvious by Weiss '974 and Weiss '515, which describe an effective hydrotreating method.
    • Motivation to Combine: The primary motivation was to meet the clear regulatory and commercial demand established by Annex VI and ISO 8217. A POSITA would combine the known methods of producing standard HSFO (Parkash, Buchanan, AAPA) with the industry-standard method for sulfur removal—hydrotreatment (Weiss '974, Weiss '515)—to produce a compliant LSFO. This was a simple case of applying a known solution (hydrotreating) to a known problem (excess sulfur in standard marine fuels).
    • Expectation of Success: Since hydrotreatment was the standard, well-understood method for desulfurization, a POSITA would have reasonably expected to successfully convert a standard HSFO into a regulation-compliant LSFO using the disclosed techniques.

  • Additional Grounds: Petitioner asserted additional obviousness challenges against claims 4-5 based on similar combinations, primarily adding Weiss ('444 application) to teach that a POSITA would have been motivated to use a predominantly hydrogen gas mixture (e.g., 89-95+ mol% hydrogen) to facilitate the hydrotreatment process, as required by the dependent claims.

4. Key Claim Construction Positions

  • "merchantable": Petitioner contended this term, which modifies "HMFO" in the patent, should be construed to mean compliant with ISO 8217 standards and fit for its ordinary purpose as a marine fuel. Petitioner argued against a potentially broader definition advanced by the Patent Owner in a related prosecution that would add requirements for stability, viscosity, and compatibility with other fuels like ultra-low sulfur diesel (ULSD). Petitioner asserted its proposed construction is consistent with the patent's specification and that the prior art's ISO-8217-compliant fuels meet this limitation.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under Fintiv would be inappropriate. The central argument rested on Petitioner's stipulation that, if the IPR is instituted, it will not pursue any invalidity grounds in the parallel district court litigation that were raised or reasonably could have been raised in the IPR. Petitioner contended this stipulation eliminates any significant overlap between the proceedings (Fintiv factor 4), weighing heavily in favor of institution. While acknowledging that the trial date may precede a Final Written Decision (FWD), Petitioner argued this was due to the Patent Owner's litigation conduct and that other factors, such as the strength of the grounds, favor institution.

6. Relief Requested

  • Petitioner requests institution of an IPR and cancellation of claims 1-2 and 4-5 of the ’709 patent as unpatentable under 35 U.S.C. §103.