PTAB

IPR2021-01175

Phillips 66 v. Magema Technology LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Process for Treating High Sulfur Heavy Marine Fuel Oil
  • Brief Description: The ’141 patent discloses a process for treating high-sulfur heavy marine fuel oil (HSFO) to produce a low-sulfur heavy marine fuel oil (LSFO). The process involves hydrodesulfurizing an ISO-8217 compliant HSFO feedstock to create an LSFO product compliant with international marine fuel regulations like Annex VI.

3. Grounds for Unpatentability

Ground 1: Obviousness over Weiss ’974, Weiss ’515, and ISO 8217:2017 - Claims 1-2 are obvious over Weiss ’974 in view of Weiss ’515 and ISO 8217:2017.

  • Prior Art Relied Upon: Weiss ’974 (Application # 2018/0134974), Weiss ’515 (Application # 2014/0299515), and ISO 8217:2017 (an international standard for marine fuels).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Weiss ’974 taught the core claimed process: hydrotreating a heavy hydrocarbon fraction to produce a bunker fuel that complies with specifications. The specific properties of the feedstock HSFO and product LSFO recited in claim 1 (e.g., viscosity, density, sediment content) were disclosed as being compliant with the well-known ISO 8217:2017 standard, which defined the quality requirements for such marine fuels. Weiss ’515 was argued to supply obvious implementation details for the process, such as mixing the HSFO and hydrogen gas before entering the reactor and using a conventional series of high- and low-pressure separators to process the hydrotreated effluent.
    • Motivation to Combine: A person of ordinary skill in the art (POSITA) seeking to produce a commercially viable bunker fuel as taught by Weiss ’974 would have been motivated to ensure the fuel met the international quality requirements defined by the ISO 8217:2017 standard. A POSITA would combine the general process of Weiss ’974 with the specific, well-known implementation details of Weiss ’515 to create a predictable and efficient hydrotreatment system.
    • Expectation of Success: A POSITA would have a reasonable expectation of success because combining these elements involved applying known hydrotreating principles (Weiss ’974, Weiss ’515) to produce a fuel meeting known industry standards (ISO 8217:2017).

Ground 2: Obviousness over Weiss ’974, Weiss ’515, ISO 8217:2017, and Weiss ’444 - Claims 3-4 are obvious over the combination of Ground 1 in view of Weiss ’444.

  • Prior Art Relied Upon: Weiss ’974, Weiss ’515, ISO 8217:2017, and Weiss ’444 (Application # 2014/0332444).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground built upon Ground 1 to address the limitations of dependent claims 3-4, which specify the properties of the catalyst and the composition of the "Activating Gas." Petitioner asserted that Weiss ’974 already disclosed the claimed catalyst types (e.g., nickel/cobalt and molybdenum/tungsten on an alumina carrier). The key addition of Weiss ’444 was to render obvious that the "Activating Gas" would have a hydrogen partial pressure greater than 80% of the total pressure. Weiss ’444 taught that using a higher concentration of hydrogen in the hydrotreatment gas mixture facilitates the desulfurization process.
    • Motivation to Combine: A POSITA implementing the hydrotreatment process from Weiss ’974 would be motivated to optimize its efficiency. Citing Weiss ’444, Petitioner argued a POSITA would increase the hydrogen concentration in the activating gas to improve the rate and completeness of sulfur removal, a well-known principle in hydrotreating.
    • Expectation of Success: The result of increasing hydrogen concentration was predictable, and a POSITA would expect that using a hydrogen-rich gas as taught by Weiss ’444 in the process of Weiss ’974 would successfully and efficiently produce the desired LSFO.

  • Additional Grounds: Petitioner asserted additional obviousness challenges (Grounds 3-6) against all claims (1-4) based on combinations of ISO 8217:2017, Annex VI, Weiss ’974, Weiss ’515, Weiss ’444, and Applicant-Admitted Prior Art (AAPA). These grounds re-framed the argument from the perspective of a POSITA motivated by market and regulatory pressures (Annex VI) to produce compliant LSFO, arguing it would have been obvious to hydrotreat known, commercially available HSFOs (disclosed in AAPA) using the well-known processes taught by Weiss ’974 and its supporting references.

4. Key Claim Construction Positions

  • "merchantable": Petitioner contended this term should be given its plain and ordinary meaning as defined in the ’141 patent: a fuel fit for its ordinary purpose (i.e., a residual fuel for a marine ship) that is compliant with the properties and characteristics of the ISO 8217 (2017) standard. Petitioner argued that Patent Owner’s attempts during prosecution of a related patent to redefine "merchantable" to include additional, unstated requirements (e.g., enhanced stability, compatibility with dissimilar fuels like ultra-low sulfur diesel) constituted improper attempts to import limitations and should be rejected.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under Fintiv would be inappropriate. While acknowledging a co-pending district court litigation was underway, Petitioner asserted that several factors weighed in favor of institution. Primarily, Petitioner stipulated that, if IPR is instituted, it would not pursue in the litigation any invalidity grounds that were raised or reasonably could have been raised in the IPR. Petitioner also argued it filed the IPR as quickly as reasonably possible following the failure of extensive, good-faith settlement discussions, and that the Patent Owner’s refusal to dismiss its infringement claims despite compelling non-infringement evidence drove the timing and expense of both proceedings.

6. Relief Requested

  • Petitioner requests institution of an inter partes review and cancellation of claims 1-4 of the ’141 patent as unpatentable under 35 U.S.C. §103.