Moore Rod & Pipe, LLCv.Wagon Trail Ventures, Inc.

Patent Trial and Appeal Board

Oct 2, 2014

09069646 (P.T.A.B. Oct. 2, 2014)

Trials@uspto.gov Paper 38
571-272-7822 Entered: October 2, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

MOORE ROD & PIPE, LLC.,
Petitioner,

v.

WAGON TRAIL VENTURES, INC.,
Patent Owner.

Case IPR2013-00418
Patent RE 36,362

Before JENNIFER S. BISK, GEORGIANNA W. BRADEN, and
MATTHEW R. CLEMENTS, Administrative Patent Judges.

CLEMENTS, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318(a) and 37 C.F.R. § 42.73

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I. INTRODUCTION
Moore Rod & Pipe, LLC (“Petitioner”) filed an Amended Petition
requesting an inter partes review of claims 1–20 (“the challenged claims”)
of U.S. Patent No. RE 36,362 (Ex. 1001, “the ’362 patent”). Paper 5
(“Pet.”). Wagon Trail Ventures, Inc. (“Patent Owner”) filed a Preliminary
Response. Paper 10 (“Prelim. Resp.”). On December 13, 2013, we
instituted an inter partes review of claims 1–20 on the sole ground of
unpatentability alleged in the Petition. Paper 12 (“Dec. to Inst.”). After
institution, Patent Owner filed a Patent Owner Response (Paper 18, “PO
Resp.”), to which Petitioner filed a Reply (Paper 25).
Additionally, Petitioner filed a Motion to Exclude Evidence (Paper
29), to which Patent Owner responded (Paper 31). Petitioner filed a Reply
in Support of its Motion to Exclude. Paper 32.
Oral argument was held on July 24, 2014.1
We have jurisdiction under 35 U.S.C. §§ 6(c) and 314. This Final
Written Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R.
§ 42.73.
For the reasons that follow, we determine that Petitioner has shown by
a preponderance of the evidence that claims 1–20 of the ’362 patent are
unpatentable.

1 A transcript of the oral hearing (“Tr.”) is included in the record as Paper
37.
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A. Related Proceedings
Petitioner indicates that the ’362 patent was asserted against Petitioner
in Western Falcon, Inc. v. Moore Rod & Pipe, LLC, 4:13-cv-02963 (S.D.
Tex.). Paper 11.
B. The ’362 Patent
The subject matter of the ’362 patent relates to oil field production
equipment and, in particular, to the use of polymer liners in production
tubing strings used in wells producing oil by rod pumping. Ex. 1001,
Abstract. Polymer liners, such as high density polyethylene liners, have a
coefficient of friction far superior to the coefficient of friction of steel
tubing. Id. at col. 1, ll. 36–39. When a polyethylene liner is wetted by
produced fluid, susceptibility to abrasion is further reduced. Id. at col. 1,
ll. 39–41.
The lining of pipe and tubing with polymer liners for corrosion
control was practiced prior to the filing of the ’362 patent. Id. at col. 1,
ll. 42–46. For example, the ’362 patent states that liners had been installed
in pipelines for the transportation of oil, water, gas, and sewage for some
time. Id. at col. 1, ll. 45–48. Polymer liners also were applied to tubing for
oil field tubing strings, but those applications were for the protection of
tubing utilized for injection strings, water disposal strings, or production
strings that flow or are produced with electric submersible pumps. Id. at
col. 1, ll. 48–53. In contrast, the ’362 patent is directed to the lining of
tubing strings in rod-pumped wells to reduce the abrasion and failure of the
tubing joints caused by the reciprocating rods. Id. at col. 1, ll. 42–46.
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C. Illustrative Claim
Of the challenged claims, claims 1, 2, 6, 7, 11, and 16 are independent
claims. Claim 1 is illustrative and is reproduced below:
1. An improved method of producing well fluids from a well
being produced by a rod pumping system, said rod pumping
system comprising:
a plurality of sucker rods disposed within a string of tubing
which extends into said well, said string of tubing
comprising of a plurality of tubing sections each having a
bore and an inside diameter;
a down hole pump operably connected to said sucker rods; and
means for reciprocating said sucker rods,
wherein the improved method comprises using tubing sections
having polymer liners disposed within said bore of said
tubing sections to eliminate contact between said sucker
rods and said tubing string when said sucker rods are
being reciprocated.
D. Prior Art Supporting the Instituted Challenges
Petitioner relies on the following prior art references, as well as the
Declaration of Paul D. Ching (Ex. 1005):
Oster US 4,182,537 Jan. 8, 1980 Ex. 1004
Lacy US 5,320,388 June 14, 1994 Ex. 1003
Admitted Prior Art – the background section of the ’362 patent
(col. 1, l. 14–col. 2, l. 6) (Ex. 1001).
E. The Instituted Challenge of Unpatentability
We instituted the instant trial on the ground that Petitioner had
demonstrated a reasonable likelihood of showing claims 1–20 are
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unpatentable under 35 U.S.C. § 103 over Oster, Lacy, and Admitted Prior
Art.
II. ANALYSIS
A. Claim Construction
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light of the
Specification of the patent in which they appear. 37 C.F.R. § 42.100(b); see
also Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766 (Aug.
14, 2012). Also, claim terms are given their ordinary and customary
meaning as would be understood by one of ordinary skill in the art in the
context of the entire disclosure. In re Translogic Tech., Inc., 504 F.3d 1249,
1257 (Fed. Cir. 2007).
In our Decision to Institute, we declined to provide an express
construction for “to eliminate contact between said sucker rods and said
tubing string.” Dec. to Inst. 7–8. During the course of the proceeding,
neither party further addressed the construction of “to eliminate contact
between said sucker rods and said tubing string.” We discern no reason to
change our previous determination that “to eliminate contact between said
sucker rods and said tubing string” does not require express construction.
B. Claims 1–20 - Obviousness over Lacy, Oster, and Admitted Prior Art
Petitioner alleges that claims 1–20 are unpatentable under 35 U.S.C.
§ 103(a) as obvious over Lacy, Oster, and the Admitted Prior Art. Pet. 7–56
(citing Ex. 1005 ¶¶ 28–51). Patent Owner counters that (1) a person of
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ordinary skill in the art would not have been motivated to combine Lacy
with Oster; and (2) there is objective evidence of non-obviousness. PO
Resp. 8–44.
Upon consideration of the parties’ contentions and supporting
evidence, we determine that Petitioner has demonstrated by a preponderance
of the evidence that claims 1–20 would have been obvious over Lacy, Oster,
and the Admitted Prior Art. Pet. 7–56. In our discussion below, we address
arguments made in post-institution briefing.
Admitted Prior Art
The ’362 patent describes the prior art as including “a typical rod
pumping system,” as depicted in Figure 1. Ex. 1001, col. 2, l. 36, col. 2,
l. 46. As depicted in Figure 1, a rod pumping system includes a string of
sucker rods 20 connected together by couplings 22. Id. at col. 2, ll. 52–54.
The string hangs from polished rod 14 within tubing string 24 located in
casing 26. Id. at col. 2, ll. 53–54. Sucker rods 20 are connected to
subsurface pump 28. Id. at col. 2, ll. 54–55. As the motor moves
horsehead 12, polished rod 14, and sucker rods 20 up and down, well fluids
are lifted on the upstroke. Id. at col. 2, ll. 55–48.
Lacy (Exhibit 1003)
Lacy describes a system for applying a plastic liner to tubing used
with oil wells, such as well tubing, and describes a joint formed by such
tubing incorporating the plastic liner. Ex. 1003, col. 1, ll. 10–13. According
to Lacy, “it is well known to provide tubes with a liner in order to minimize
the abrasion and the deterioration of the tube.” Id. at col. 1, ll. 25–27. “The
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liner may take the form of a layer of cement or a plastic coating applied to
the interior surface of the tube.” Id. at col. 1, ll. 27–29. Lacy further
describes:
a system for applying a rigid, self-supporting plastic liner to the
interior of a well tubing such that the liner is in contact with the
interior surface of the tube and flanges attached to either end of
the liner are in abutting, sealing contact with the ends of the
tube.
Id. at col. 3, ll. 59–64. “An ultrahigh molecular weight, high density
polyethylene (UHMWHDPE) manufactured by Philips Driscopipe, Inc.
under the trademark Driscopipe 9100, has been found to yield satisfactory
results.” Id. at col. 4, ll. 25–28. “The liner preferably is passed through a
reducing device, which may be a reducing roll, a die, or the like, so as to
elastically deform the liner and reduce the outside diameter to a dimension
less than the inside diameter of the tube.” Id. at col. 2, ll. 16–20. “The
reduced diameter liner, preferably having plain ends, is then inserted into the
tube section.” Id. at col. 2, ll. 20–21.
Oster (Exhibit 1004)
Oster describes a sucker rod coupling and guide intended to reduce
the friction caused by the contact between a long string of sucker rods and
the production tubing string within which they are moving up and down.
Ex. 1004, col. 1, ll. 15–18; col. 2, ll. 28–30. According to Oster, “many oil
wells have crooked holes so that on the up and down strokes of the sucker
rod, the sucker rod, and particularly the sucker rod couplings are caused to
rub against the well tubing.” Id. at col. 1, ll. 25–29. To address this
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problem, Oster describes the rod coupling and guide depicted in Figures 1
and 2, reproduced below:

Figure 1 of Oster depicts a longitudinal section of a
sucker rod coupling and guide. Figure 2 of Oster depicts
a cross sectional view taken along the line 2–2 of Fig. 1.
Figure 1 depicts the anti-friction sucker rod coupling and guide apparatus of
the invention within tubing string 1. “The critical feature is that the anti-
friction surface of the rod member reciprocates along the anti-friction
surface of the rod guide.” Id. at col. 5, ll. 1–3.
Petitioner’s Contentions
With respect to claim 1, Petitioner contends that (1) the preamble
(preceding “wherein the improved method comprises”) is taught in the
background section of the’362 patent itself and in Oster (Pet. 9–10);
(2) Lacy teaches “using tubing sections having polymer liners disposed within
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said bore of said tubing sections to eliminate contact” (Pet. 7–8, 10); and
(3) Oster teaches “eliminat[ing] contact between said sucker rods and said
tubing string when said sucker rods are being reciprocated” (Pet. 8, 10).
Petitioner’s arguments are persuasive.
Petitioner also contends that a person of ordinary skill in the art would
have been motivated to combine Lacy and Oster in order to “reduc[e] wear
of the sucker rods and tubing string, improving their durability and thereby
increasing oil production from the reciprocating well.” Pet. 8–9 (citing Ex.
1005 ¶¶ 50, 51). Mr. Ching testifies to the same. Ex. 1051 ¶¶ 50, 51.
Petitioner’s arguments are persuasive.
Sufficiency of Petitioner’s Reason to Combine
Patent Owner contends that a person of ordinary skill in the art would
not have been motivated to combine Lacy and Oster because the problem
addressed by Lacy is different than the problem addressed by Oster. PO
Resp. 8–10. Specifically, Patent Owner argues that Lacy is not directed to
sucker rods or a rod-pump system, and therefore, does not address wear
caused by metal-to-metal contact. Id. at 10. Petitioner counters that
(1) Patent Owner fails to address the motivation articulated by Petitioner
(Reply 2); and (2) Patent Owner improperly focuses on metal-to-metal
contact, rather than wear generally (Reply 2–4).
Patent Owner’s arguments are not persuasive because (1) Patent
Owner improperly focuses on metal-to-metal contact rather than wear
generally; and (2) the problems addressed in Lacy and Oster are not that
different. First, Patent Owner’s argument that Lacy does not address wear
caused by metal-to-metal contact is misplaced because the reason to
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combine articulated by Petitioner does not depend upon Lacy addressing
metal-to-metal contact. Second, we are persuaded that a “skilled artisan
would have been motivated by the prospect of reducing wear of the sucker
rods and tubing string, improving their durability and thereby increasing oil
production from the reciprocating well.” Pet. 9 (citing Ex. 1005 ¶¶ 50–51).
We also are not persuaded by Patent Owner’s argument that a person
of ordinary skill in the art would not have been motivated to combine Lacy
and Oster because Oster’s teaching effectively solves the problem of metal-
on-metal contact causing tubing wear. PO Resp. 10–14. Petitioner counters
that Patent Owner’s argument contradicts Patent Owner’s other argument
that Oster is evidence of a long-felt, but unsolved need in the art. Reply 4–6.
Patent Owner appears to define the “problem” as metal-on-metal contact for
purposes of this argument, while defining the “problem” as tubing wear
generally for purposes of its “long-felt but unsolved need in the art”
argument. The reason to combine articulated by Petitioner is not limited to
the problem of “reduc[ing] metal wear,” but extends to reducing tubing wear
generally. Pet. 9; Reply 2–4. Even assuming that Oster is effective to
“reduce metal wear” (PO Resp. 13), Petitioner has shown sufficiently that a
person of ordinary skill in the art would have combined Oster with Lacy to
reduce wear generally.
In view of the foregoing, we conclude that Petitioner has shown
sufficiently “articulated reasoning with some rational underpinning to
support the legal conclusion of obviousness.” KSR Int’l v. Teleflex, Inc., 550
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U.S. 398, 418 (2007) (quoting In re Kahn, 441 F.3d 977, 988 (Fed. Cir.
2006)).
Secondary Considerations
Factual inquiries for an obviousness determination include secondary
considerations based on evaluation and crediting of objective evidence of
nonobviousness. Graham v. John Deere Co., 383 U.S. 1, 17 (1966).
Notwithstanding what the teachings of the prior art would have suggested to
one with ordinary skill in the art at the time of the ’362 patent’s invention,
the totality of the evidence submitted, including objective evidence of
nonobviousness, may lead to a conclusion that the challenged claims would
not have been obvious to one with ordinary skill in the art. In re Piasecki,
745 F.2d 1468, 1471–72 (Fed. Cir. 1984). Secondary considerations may
include any of the following: long-felt but unsolved needs, failure of others,
unexpected results, commercial success, copying, licensing, and praise. See
Graham, 383 U.S. at 17; Leapfrog Enters., Inc. v. Fisher–Price, Inc., 485
F.3d 1157, 1162 (Fed. Cir. 2007).
To be relevant, evidence of nonobviousness must be commensurate in
scope with the claimed invention. In re Kao, 639 F.3d 1057, 1068 (Fed. Cir.
2011) (citing In re Tiffin, 448 F.2d 791, 792 (CCPA 1971)); In re Hiniker
Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998). In that regard, in order to be
accorded substantial weight, there must be a nexus between the merits of the
claimed invention and the evidence of secondary considerations. In re
GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995). “Nexus” is a legally and
factually sufficient connection between the objective evidence and the
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claimed invention, such that the objective evidence should be considered in
determining nonobviousness. Demaco Corp. v. F. Von Langsdorff Licensing
Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988). The burden of showing that
there is a nexus lies with the patent owner. Id.; see In re Paulsen, 30 F.3d
1475, 1482 (Fed. Cir. 1994).
Patent Owner alleges long felt need, failure of others, commercial
success, and copying as objective evidence of non-obviousness. PO Resp.
14–44. As discussed below, Patent Owner fails to provide sufficient
credible evidence to support its allegation.
Patent Owner contends that the ’362 patent fulfilled the long-felt but
unresolved need “to more effectively reduce wear and failure of the metal
tubing, sucker rods, and rod couplings in a rod-pumped well.” PO Resp. 14–
22. As evidence of the long-felt need, Patent Owner cites the background
section of the ’362 patent (id. at 15–17), earlier patents (id. at 17–21), and
the Declaration of Robert H. Davis (id. at 21–22 (citing Ex. 2009 ¶¶ 15–
22)). Patent Owner, however, has defined “need” in relative, rather than
absolute, terms (i.e., “to more effectively reduce”). Satisfying the need
identified by Patent Owner requires only that a method or system “more
effectively reduce wear” than its predecessors. Patent Owner has not
presented sufficient credible evidence that the inventions claimed in the
earlier patents did not “more effectively reduce wear” than their
predecessors. Moreover, Patent Owner argues elsewhere that Oster
effectively solved the problem of metal-on-metal contact causing tubing
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wear. PO Resp. 11. As a result, we are not persuaded that the alleged need
(i.e., “to more effectively reduce wear”) was unmet.
Patent Owner also contends that the non-obviousness of the ’362
patent is evident from the failures of others. PO Resp. 22–26. As support,
Patent Owner identifies Oster and U.S. Patent No. 4,938,285 (“Edwards”).
Id. Petitioner, however, contends that Oster is not evidence of failure simply
because it is listed as prior art on the face of Edwards. Reply 8–9. Patent
Owner presents insufficient evidence for us to determine whether others had
attempted and failed in developing the subject matter of the challenged
claims. Patent Owner does not submit evidence of any company’s attempt
to produce or use tubing sections that would infringe independent claims 1,
6, 7, 11, or 16, nor does Patent Owner submit evidence of how any company
failed in such an attempt.
Patent Owner also contends that the invention claimed in the ’362
patent has enjoyed commercial success. PO Resp. 26–40 (citing Ex. 2009
¶¶ 28–34). Specifically, Mr. Davis, declarant for Patent Owner, testifies that
certain products had sales of over $1.4 million in the United States, that 50%
of those products went into rod-pumping wells and thereby embody the
claims of the ’362 patent, and that Western Falcon2 has “roughly 100%
market share.” Ex. 2009 ¶ 30. Petitioner counters that Patent Owner fails to
establish any nexus between the claimed invention and the commercial
success. Reply 9–11. We agree with Petitioner. First, the fact that

2 Western Falcon is the exclusive licensee of the ’362 patent. Ex. 2009 ¶ 28.
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consumers buy certain products from Western Falcon is the alleged
commercial success itself, not a connection between such success and any
claimed features. If all that was necessary to prove a nexus was to show that
customers bought more of the identified product than other products, a nexus
would exist for every product that exhibits success in the marketplace.
Rather, a patent owner must show proof that the success is “the direct result
of the unique characteristics of the claimed invention.” In re Huang, 100
F.3d 135, 140 (Fed. Cir. 1996).
Second, even assuming Patent Owner’s sales and market share
numbers are correct, Patent Owner submits no factual evidence that
demonstrates the nexus between the sales and the claimed invention—e.g.,
an affidavit from a purchaser explaining that the product was purchased due
to the claimed features. In that regard, we have only Mr. Davis’s testimony
that “[i]n my opinion, the merits of the patented invention are largely
responsible for the commercial success of the four Western Falcon products,
and of the Shur-Flo product.” Ex. 2009 ¶ 34. Moreover, Mr. Davis’s
testimony that the president of MPI (maker of the Shur-Flo product)
“possessed the information on how to make the liner products” (Ex. 2009 ¶
33, n.2), suggests that the commercial success depended upon something
more—e.g., “the composition and molecular weight of the polyethylene used
to make the liner” (Ex. 2009 ¶ 37), the dimensions of the liners (id.), or the
specifics of “the formulation, the manufacture, the installation” (Ex. 1027,
126:21–127:2)—than the products being “tubing sections having polymer
liners disposed within,” as recited in the independent claims. “[I]f the
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commercial success is due to an unclaimed feature of the device, the
commercial success is irrelevant.” Ormco Corp. v. Align Tech., Inc., 463
F.3d 1299, 1312 (Fed. Cir. 2006). Accordingly, we are not persuaded that
Patent Owner has met its burden of establishing a prima facie case of nexus
between commercial success and the merits of the patented invention.
Finally, Patent Owner contends that the non-obviousness of the ’362
patent is evident from copying by Petitioners and by a license agreement.
PO Resp. 40–44. Specifically, Patent Owner alleges that Petitioner’s
product, Shur-Flo, is a copy of the product of the exclusive licensee of the
’362 patent, which Petitioner was taught how to make pursuant to a license
agreement. Id. at 42. Petitioner counters that Patent Owner (1) fails even to
allege copying by more than one entity; and (2) provides no evidence of a
patent license. Reply 11. As Petitioner points out, the license relied upon by
Patent Owner was a know-how, not a patent, license (id. (citing Ex. 1027,
127:9–12)), and is therefore, an unreliable indicator of the value of the
’362 patent. Patent Owner’s only support for copying is Mr. Davis’s
testimony that the Shur-Flo product embodies the claims of the ’362 patent
(Ex. 2009 ¶ 33) and that “it is believed that [MPI] possessed the information
on how to make [Western Falcon’s product]” (id. at ¶ 33, n.2). Patent
Owner provides no evidence, however, to corroborate Mr. Davis’s
testimony. We do not determine infringement in inter partes review, and the
evidence presented by Patent Owner is insufficient to show that Petitioner
copied Patent Owner’s products.
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After weighing the evidence of obviousness based on the combination
of Lacy, Oster, and the Admitted Prior Art, as well as the evidence of
secondary considerations regarding long-felt but unsolved need, failure of
others, commercial success, and copying, we conclude that weak evidence of
non-obviousness does not overcome Petitioner’s strong evidence of
obviousness.
Conclusion
For the foregoing reasons, we determine that Petitioner has
established by a preponderance of the evidence that claims 1–20 are
unpatentable under 35 U.S.C. § 103(a) as obvious over Lacy, Oster, and the
Admitted Prior Art.
C. Petitioner’s Motion to Exclude
The party moving to exclude evidence bears the burden of proof to
establish that it is entitled to the relief requested—namely, that the material
sought to be excluded is inadmissible under the Federal Rules of Evidence.
See 37 C.F.R. §§ 42.20(c), 42.62(a). For the reasons discussed below,
Petitioner’s Motion to Exclude is dismissed.
Petitioner’s Motion to Exclude seeks to exclude (1) the Declaration of
Robert H. Davis (Ex. 2009); (2) a compilation of case history (Ex. 2011);
and (3) claim charts (Exs. 2013, 2017). Paper 29. Patent Owner filed an
Opposition to Petitioner’s Motion to Exclude. Paper 31. Petitioner filed a
Reply to Patent Owner’s Opposition to its Motion to Exclude. Paper 32.
We decline to assess the merits of Petitioner’s Motion to Exclude. As
discussed above, even without excluding the identified evidence, we have
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concluded that Petitioner has demonstrated by a preponderance of the
evidence that the challenged claims are unpatentable. Accordingly,
Petitioner’s Motion to Exclude is dismissed as moot.
III. CONCLUSION
Petitioner has met its burden of proof by a preponderance of the
evidence in showing that claims 1–20 of the ’362 patent are unpatentable
under 35 U.S.C. § 103(a) as obvious over Lacy, Oster, and the Admitted
Prior Art.
IV. ORDER
Accordingly, it is
ORDERED that claims 1–20 of the ’362 patent are held unpatentable;
FURTHER ORDERED that Petitioner’s Motion to Exclude is
dismissed; and
FURTHER ORDERED that, because this is a Final Written Decision,
the parties to the proceeding seeking judicial review of the decision must
comply with the notice and service requirements of 37 C.F.R. § 90.2.
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For PETITIONER:

George E. Quillin, Esq.
Gerald F. Swiss, Esq.
Debra D. Nye, Esq.
Foley & Lardner LLP
gquillin@foley.com
gswiss@foley.com
dnye@foley.com

For PATENT OWNER

Douglas H. Elliott, Esq.
Sarah Kelly, Esq.
Eric Adams, Esq.
The Elliott Law Firm, PLLC
rmattox@elliottiplaw.com
skelly@elliottiplaw.com
eric@elliottiplaw.com