Trials@uspto.gov
`571-272-7822
`
`
`Paper 33
`Date: November 6, 2017
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`PACKERS PLUS ENERGY SERVICES INC.,
`Petitioner,
`
`v.
`
`BAKER HUGHES OILFIELD OPERATIONS, LLC,
`Patent Owner.
`
`______________________
`
`Case IPR2016-01003
`Patent No. 8,261,761 B2
`__________________________________
`
`
`Before MITCHELL G. WEATHERLY, BEVERLY M. BUNTING, and
`ROBERT L. KINDER, Administrative Patent Judges.
`
`KINDER, Administrative Patent Judge.
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 318(A); 37 C.F.R. § 42.73
`
`
`
`
`
`571-272-7822
`
`
`Paper 33
`Date: November 6, 2017
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`PACKERS PLUS ENERGY SERVICES INC.,
`Petitioner,
`
`v.
`
`BAKER HUGHES OILFIELD OPERATIONS, LLC,
`Patent Owner.
`
`______________________
`
`Case IPR2016-01003
`Patent No. 8,261,761 B2
`__________________________________
`
`
`Before MITCHELL G. WEATHERLY, BEVERLY M. BUNTING, and
`ROBERT L. KINDER, Administrative Patent Judges.
`
`KINDER, Administrative Patent Judge.
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 318(A); 37 C.F.R. § 42.73
`
`
`
`
`
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`Case IPR2016-01003
`Patent 8,261,761 B2
`
`
`Packers Plus Energy Services Inc., (“Petitioner”) filed a Petition
`pursuant to 35 U.S.C. §§ 311–319 to institute an inter partes review of
`claims 1–20 of U.S. Patent No. 8,261,761 B2 (“the ’761 patent”). Paper 2
`(“Pet.”). Baker Hughes Oilfield Operations, LLC (“Patent Owner”) did not
`file a Preliminary Response in this proceeding. Applying the standard set
`forth in 35 U.S.C. § 314(a), we instituted an inter partes review of all
`challenged claims. (Paper 10, “Dec.”).
`During the trial, Patent Owner filed a Patent Owner Response
`(Paper 14, “PO Resp.”), and Petitioner filed a Reply to the Patent Owner
`Response (Paper 18, “Pet. Reply”). We authorized a Patent Owner sur-
`reply. Paper 23 (PO Sur-reply.).
`An oral hearing was held on June 26, 2017, and a copy of the
`transcript has been made part of the record. Paper 28 (“Tr.”).
`We have jurisdiction under 35 U.S.C. § 6. This Decision is a Final
`Written Decision under 35 U.S.C. § 318(a) as to the patentability of the
`claims for which we instituted trial. Based on the record before us, we
`determine that Petitioner has not shown, by a preponderance of the evidence,
`that claims 1–20 of the ’761 patent are unpatentable.
`
`I. BACKGROUND
`A. Real Party in Interest
`Petitioner names Packers Plus Energy Services Inc. as the real party in
`interest. Pet. 3. Patent Owner asserts that “[t]he real parties-in-interest in
`this proceeding are Baker Hughes Oilfield Operations, LLC; Baker Hughes,
`a GE Company, LLC; and Baker Hughes, a GE Company.” Paper 31, 1.
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`B. The ʼ761 patent (Ex. 1001)
`The ʼ761 patent is titled “Selectively Movable Seat Arrangement and
`Method.” Ex. 1001, (12). The ’761 patent generally relates to a plugging
`device that may be used “[i]n industries concerned with earth formation
`boreholes, such as hydrocarbon recovery and gas sequestration.” Id. at 1:6–
`9. In this industry, plugging is sometimes desirable at multiple locations and
`the plugging may be sequential or otherwise. Id. at 1:9–13. Plugging
`systems may employ droppable members, such as balls, that engage a ball
`seat to create a desired plug. Id. at 13–17. According to the ’761 patent, it
`was known to use seats with sequentially smaller diameters at locations
`farther from the surface and to drop balls that have sequentially larger
`diameters. Id. at 1:19–26. Such a configuration allows the ball seat farthest
`from the surface to be plugged first by a ball with a smaller complementary
`diameter. Id. The ’761 patent recognizes that such a system creates
`increasingly restrictive dimensions within the borehole that can negatively
`impact flow as well as limit the size of tools that can be run into the
`borehole. Id. at 1:27–32.
`To address these identified problems, the ’761 patent discloses two
`different embodiments, each of which provides a ball seat and zone-selective
`sealing capability, using uniformly sized balls and seat mechanisms. Id.
`(Figs. 1–4 first embodiment and Figs. 5–6 second embodiment). The
`embodiments disclosed in the ’761 patent are designed to avoid the
`problematic restrictive dimensions inherent in the system, which uses
`different sized balls. Id. at 1:27–32. The restriction engaging system of the
`’761 patent allows a predetermined number of balls to pass through and,
`thus, travel downstream to the next restriction engaging system in line
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`before it forms a closed seat that catches the next ball dropped down the well
`bore. Id. at 3:54–61. The Specification of the ’761 patent refers to a
`“member” or “restriction engager,” which may be a ball, and also to a “seat
`arrangement or restriction,” which may be a ball seat. Id. at 1:36–40, 2:26–
`32. For example, as depicted in Petitioner’s annotated Figure 1 “restriction
`engagers 14 pass[] through restriction 18.” Id. at 2:45–47.
`
`
`
`Annotated Figure 1 represents a cross sectional view of a selectively
`movable seat arrangement in a resting position. Pet. 13.
`
`Further, multiple restriction engaging systems can be installed at desired
`locations along the length of a well bore. Ex. 1001, 1:9–25.
`
`The selectively movable seat arrangement depicted above also
`includes counter 22, which determines the number of iterations that pivot
`arms 26 can be forced open to allow restriction engager (ball) 14 to pass
`before they become locked in a closed position. Pressure behind ball 14 will
`cause pivot arms 26 to be forced open, thereby triggering a sequence of
`actions that cause counter 22 to index. Id. at 2:66–3:13. Specifically,
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`rotation of pivot arms 26 to an open position releases tooth 58 from
`opposing tooth 66 that has been holding it in place. Id. Upon release,
`lever 82, in turn, is forced (by biasing member 74, which is connected to the
`lever 82 via ram 62) in the direction opposite movement of ball 14 to engage
`the next adjacent opposing tooth 86. Id. at 3:14–3:27. After ball 14 passes
`the open restriction 18, pivot arms 26 return to the first pivot arm position,
`and tooth 58 is held in place by the next adjacent pivot arm tooth 66 to
`which tooth 58 was moved by biasing member 74. Id.
`Counter 22 is indexed each time ball 14 is forced through a resting
`restriction 18. The number of times counter 22 can index before the
`restriction 18 becomes closed, such that subsequent balls 14 cannot be
`forced through with pressure, is a direct function of the number of opposing
`teeth pairs 66, 86. Id. at 3:39–41. Restriction engaging system 10 may
`reach a fully indexed state, as depicted in Figure 4, in which biasing
`member 74 forces ram 62 all the way until there is contact with stop 104. Id.
`at 3:39–49.
`A second embodiment is depicted in Figures 5–7 of the ’761 patent.
`Instead of using pivoting arms to cause the counter to index when a ball is
`forced through, a plurality of deformable arms 126 act in a similar manner.
`Id. at 4:3–9. Further, counter 122 uses a rotationally indexable sleeve 170
`that rotates with each ball 114 passage and causes, upon completion of
`indexing, the arms 126 to move “longitudinally” (i.e., along the lengthwise
`direction of the well bore) from a position in which they can deform into
`annular recess 154, thereby facilitating passage of ball 114 (Fig. 5). Id.
`at 4:29–43. Arms 126 may eventually move to a position in which they are
`adjacent non-recessed portions 166 that block them from deforming (Fig. 6),
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`thereby preventing ball passage and facilitating formation of a seal between
`ball 114 and restriction 118. Id.
`C. Illustrative Claim
`Claims 1 and 14 are independent. Claim 1 is illustrative of the claims
`at issue:
`
`
`1. A selectively movable seat arrangement comprising:
`
` a
`
` plurality of seat members movable between a passable position
`where a member is passable therethrough and an impassable
`position where
`the member
`is prevented from passing
`therethrough; and
`
` a
`
` counter in operable communication with the plurality of seat
`members, the counter capable of allowing movement of the
`plurality of seat members to the passable position to allow
`passage of a member a selected number of times and then to the
`impassable position thereby preventing passage of another such
`member for a period of time.
`
`Ex. 1001, 5:42–53.
`
`D. Related Proceedings
`The parties state that the ʼ761 patent is asserted in Baker Hughes
`Oilfield Operations, Inc. v. Packers Plus Energy Services Inc., Case No.
`4:16-cv-00019 (S.D. Tex.). Pet. 3; Paper 5, 1.
`United States Patent No. 9,038,656 B2 (“the ’656 patent”) is a
`divisional of the ’761 patent. The ’656 patent was challenged in IPR2016-
`01000 filed on May 5, 2016. Paper 5, 1.
`E. Evidence Relied Upon
`Petitioner relies on the following references:
`U.S. Patent Publication No. 2009/0308588 A1, filed June 16, 2008,
`published December 17, 2009 (Ex. 1005, “Howell”);
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`U.S. Patent No. 4,113,012, filed October 27, 1977, issued September
`12, 1978 (Ex. 1006, “Evans”);
`Petitioner relies on the Declaration of George H. Medley, P.E.
`(Ex. 1003), and Patent Owner relies on the Declaration of Glen Stevick,
`Ph.D (Ex. 2101). The parties rely on other exhibits as discussed below.
`F. Instituted Ground of Unpatentability
`We instituted the instant trial based on the following grounds of
`
`unpatentability (Dec. 10, 21):
`Reference(s)
`Howell
`
`Basis
`§ 102(e)
`
`Claims Challenged
`1, 2, 7–15, and 17–20
`
`Howell and Evans
`
`§ 103(a)
`
`3–8, 16, and 17
`
`
`
`G. Claim Construction
`The Board interprets claims of an unexpired patent using the broadest
`reasonable interpretation in light of the specification of the patent in which
`they appear. See 37 C.F.R. § 42.100(b); Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131, 2144–46 (2016) (upholding the use of the broadest
`reasonable interpretation standard). Under the broadest reasonable
`interpretation standard, and absent any special definitions, 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).
`Petitioner proposes constructions for four claim terms. Pet. 6–9.
`Patent Owner proposes constructions for two claim terms. PO Resp. 24–33.
`For purposes of this Decision, having considered the evidence
`presented, we determine that only the claim term “counter” needs to be
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`addressed, and only to determine whether the term is subject to 35 U.S.C.
`§ 112 ¶ 6 (pre-AIA). See Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200
`F.3d 795, 803 (Fed. Cir. 1999) (“only those terms need be construed that are
`in controversy, and only to the extent necessary to resolve the controversy”).
`“counter”
`Claim 1 requires “a counter in operable communication with the
`plurality of seat members, the counter capable of allowing movement of the
`plurality of seat members to the passable position to allow passage of a
`member a selected number of times and then to the impassable position
`thereby preventing passage of another such member for a period of time.”
`Ex. 1001, 5:47–53 (hereafter “counter limitation”).
`Patent Owner contends the counter limitation should be construed in
`means-plus-function format pursuant to 35 U.S.C. § 112 ¶ 6. PO Resp. 24–
`30. Patent Owner acknowledges that a presumption exists that the counter
`limitation is not in means-plus-function format, yet Patent Owner contends
`the counter limitation would not be understood by a person of ordinary skill
`in the art as reciting any definite structure. Id. at 26. Patent Owner’s
`contention is supported by the testimony of Dr. Stevick, who explains that
`“‘counter’ was not used in the hydrocarbon recovery industry prior to the
`invention date to refer to any definite type of structure or class of
`structures.” Id. According to Patent Owner, “there is no ‘definite structure’
`denoted by the term ‘counter’; it is merely a function to be performed by any
`suitable structure,” and thus “‘counter’ is analogous to a ‘means for
`counting’ and should be subject to § 112, ¶ 6.” Id. at 27; PO Sur-reply 1–5.
`Petitioner disagrees that the counter limitation should be construed in
`means-plus-function format. Pet. Reply 3–9. Petitioner contends that the
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`prior art of record “show[s] that a ‘counter’ conveys particular structure to
`[a] POSA.” Id. at 3. Petitioner argues that simply alleging that a counter is
`functional is not sufficient because a counter conveys a particular class of
`structures, specifically, “the term ‘counter’ conveys a particular class of
`structures that, just as the name implies, ‘count’ the number of balls that pass
`through the assembly, and either indexes and allows the ball to pass (i.e.,
`keeps the restriction/ball seat open), or stops it (i.e., locks movement of the
`restriction/ball seat).” Id. at 4–5.
`Based on the final trial record before us, we are not convinced that the
`counter limitation should be construed as a means-plus-function term.
`Because the term “means” is not used, there is a presumption that the
`counter limitation is not subject to § 112 ¶ 6, and this presumption has not
`been overcome. The presumption is overcome when “the claim term fails to
`‘recite sufficiently definite structure’ or else recites ‘function without
`reciting sufficient structure for performing that function.’” Williamson v.
`Citrix Online, LLC, 792 F.3d 1339, 1349 (Fed. Circ. 2015) (en banc)
`(quoting Watts v. XL Sys., Inc., 232 F.3d 877, 880 (Fed. Cir. 2000)).
`Claim 1 recites “a counter in operable communication with the
`plurality of seat members,” and claim 2 further requires that “the counter
`includes a plurality of indexable positions.” Ex. 1001, 5:47–48, 5:55–56.
`This claim language suggests that the counter is a definite structure that is in
`operable communication with another definite structure – the seat members.
`Further, claim 2 recites additional defined structure for the counter.
`Similarly, method claim 15 depends from claim 14 and further requires
`“indexing a counter each time the one of the one or more members passes
`the seat arrangement.” Ex. 1001, 6:44–46. The term “counter” as used in
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`claim 15 denotes a defined structure that is indexed but requires no other
`function. See Tr. 53:17–54:4 (“there isn’t a function for counter in claim
`15”).
`The Specification of the ’761 patent describes a system that “includes,
`a restriction engager, one or more restrictions, and at least one counter
`configured to permit or prevent passage of a restriction engager through one
`of the one or more restrictions.” Id. at 1:56–59. The counter is identified in
`one embodiment as counter 22 configured to index each time restriction
`engagers 14 pass through the restriction 18. Id. at 2:45–47 (describing the
`embodiment of Figures 1 and 2), id. at 4:1–2 (describing the embodiment of
`Figures 5 and 6). The Specification identifies the counter as a defined
`structure that is capable of performing certain functions as described in the
`Specification and also claimed. The Specification refers to counter 22 as a
`structural element that “counts” the number of balls that passes through the
`assembly and either indexes and allows the ball to pass or stops the ball.
`Further, upon cross examination, Dr. Stevick testified that “[c]ounters are
`often definite mechanisms, but it’s such a broad term, that without the
`specification and drawings, it doesn’t mean much.” Ex. 1020, 68:20–69:16.
`Based on the use of the term “counter” in the Specification and
`claims, a person of ordinary skill in the art would understand the counter
`limitation to recite sufficiently definite structure. Based on the final trial
`record before us, at the time of filing of the ’761 patent, a person of ordinary
`skill in the art would understand that the term “counter” was meant to
`convey a sufficiently definite structure such that the presumption against
`reading “counter” as a means-plus-function element is unrebutted.
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`II. ANALYSIS
`Petitioner bears the burden of proving unpatentability of the
`challenged claims, and the burden of persuasion never shifts to Patent
`Owner. Dynamic Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375,
`1378 (Fed. Cir. 2015). To prevail, Petitioner must establish the facts
`supporting its challenge by a preponderance of the evidence. 35 U.S.C. §
`316(e); 37 C.F.R. § 42.1(d).
`A. Level of Ordinary Skill in the Art
`In determining the level of ordinary skill in the art, various factors
`may be considered, including the “type of problems encountered in the art;
`prior art solutions to those problems; rapidity with which innovations are
`made; sophistication of the technology; and educational level of active
`workers in the field.” In re GPAC, Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995)
`(citation omitted). In that regard, Petitioner’s expert, Mr. George H.
`Medley, testifies that
`a person of ordinary skill in the art in this field (“POSITA”) at
`the relevant time frame would have had a combination of
`experience and education in the oil and gas industry. This
`typically would consist of a minimum of a bachelor of science in
`civil, mechanical, electrical or petroleum engineering and three
`to five years of professional experience in hydrocarbon recovery.
`
`Ex. 1003 ¶ 14.
`Dr. Stevick, Patent Owner’s expert, generally agrees with Mr. Medley
`that a POSITA would have combined experience in the oil and gas industry
`and three to five years of experience in hydrocarbon recovery. Ex. 2101
`¶ 20. See also PO Resp. 46. Dr. Stevick further testifies that as to tools, the
`POSITA would not have been skilled in tool design and engineering. PO
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`Resp. 54–55 (citing Ex. 2101 ¶¶ 75–76). Instead, the POSITA would have
`had “a basic functional understanding of how tools were intended to
`function, and would have specified such tools for inclusion in tool strings
`based on instructions from tool vendors rather than specifying specific
`structural characteristics of such tools.” Ex. 2101 ¶ 21.
`Based on the evidence before us, we do not observe meaningful
`differences between the parties’ assessments of a person with ordinary skill
`in the art in terms of education and experience. Indeed, the parties’
`disagreement centers on whether the POSITA would additionally have had
`more than a basic understanding of how the tools for downhole wellbore
`equipment are intended to function. PO Resp. 54–55; Pet. Reply 12–13.
`Given the high level of skill in the art, Patent Owner’s argument that such a
`POSITA would not have more than a basic understanding of tool function is
`not persuasive. PO Resp. 54–55. Therefore, we are more persuaded by Mr.
`Medley’s broader assessment of a person with ordinary skill in the art. As
`such, for purposes of this Decision, we determine that the POSITA would
`have (1) a bachelor of science in civil, mechanical, electrical, or petroleum
`engineering (2) three to five years of experience in hydrocarbon recovery in
`the oil and gas industry, including a familiarity with the function of
`downhole wellbore equipment. We note that our analysis would be the same
`under either proposed definition.
`
`B. Anticipation by Howell
`
`Petitioner contends that claims 1, 2, 7–15, and 17–20 are anticipated
`by Howell under 35 U.S.C. § 102(e). Pet. 5, 23. Based on the final trial
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`record before us, Petitioner has not proven by a preponderance of the
`evidence that the challenged claims would be anticipated by Howell.
`As a threshold matter, we address Patent Owner’s argument that the
`disclosure of Howell is not enabling, and therefore does not anticipate the
`challenged claims. PO Resp. 53–56. To anticipate a claimed invention, a
`prior art reference must enable one of ordinary skill in the art to make the
`prior invention without undue experimentation. Amgen Inc. v. Hoechst
`Marion Roussel, Inc., 314 F.3d 1313, 1354 (Fed. Cir. 2003). At the same
`time, the burden of persuasion in an inter partes review is on the petitioner
`to prove unpatentability by a preponderance of the evidence, and this burden
`does not shift to the Patent Owner. Dynamic Drinkware, LLC, 800 F.3d at
`1378–80. This includes the burden of establishing that any reference upon
`which petitioner relies constitutes prior art under 35 U.S.C. § 102. 35
`U.S.C. § 316(e); see Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1576 (Fed.
`Cir. 1996) (holding that the challenger “bore the burden of persuasion . . . on
`all issues relating to the status of [the asserted reference] as prior art”). The
`distinct burden of production,1 however, is a shifting burden, and the
`allocation of this burden depends upon where in the process of trial the issue
`arises. See id. at 1379 (citing Tech. Licensing Corp. v. Videotek, Inc., 545
`F.3d 1316, 1326–27 (Fed. Cir. 2008)). We begin our analysis with an
`overview of Howell.
`
`
`1 The burden of production is also called the burden of going forward with
`evidence, which means both producing evidence and presenting persuasive
`argument based on the evidence. Tech. Licensing Corp. v. Videotek, Inc.,
`545 F.3d 1316, 1327 (Fed. Cir. 2008).
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`Howell (Ex. 1005)
`1.
`Howell relates to a “well bore servicing apparatus” designed to
`individually and selectively stimulate multiple “pay zones” — areas along
`the well bore that, when stimulated, cause natural gas or other desirable
`hydrocarbons to be released. Ex. 1005 ¶ 2. Howell discloses that having a
`tubing assembly with successively smaller diameter sleeves tends to restrict
`the inner diameter of the flow bore as well as the flow rates through the
`tubing string with the smaller diameter sleeves. Id. ¶ 5. Howell “includes
`embodiments for maintaining an increased or substantially uniform inner
`diameter of a treatment or completion assembly having stimulation sleeves,
`and for increasing the number of stimulation sleeves included in the
`treatment or completion assembly.” Id.
`Howell addresses the problems using a combination of obturating
`members (balls), seats, and sliding sleeves to stimulate select regions. Id.
`¶¶ 6, 7. Howell describes selectively passing a predetermined number of
`uniformly sized balls through a sleeve and an indexing assembly as well as
`the goal of catching a final ball after the predetermined number of balls have
`passed. Id. ¶¶ 45, 46, 51. The final ball allows the sleeve assembly to be
`actuated. Id. ¶ 45. Howell describes the use of “counter mechanisms to
`count the number of balls that pass through the assemblies.” Id. ¶¶ 50, 53.
`Petitioner provides annotated Figures 6A, 8, and 9, reproduced below,
`which depict Howell’s “indexing assembly 500” including a ball seat 542
`formed of collet fingers 524. Pet. 28–29
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`Annotated Figures 6A, 8, and 9 depict cross sectional views of an indexing
`assembly. Pet. 29.
`
`Howell describes an indexing slot 512, which is formed as part of inner
`sleeve 504, and control lug 514, which is formed as part of outer sleeve 502.
`Pet. 28–29; Ex. 1005 ¶ 41. Counting occurs in response to relative
`movement between outer sleeve 502 and inner sleeve 504; for example,
`control lug 514 and indexing slot 512 are described in Howell as moving
`relative to each other to count the number of balls that pass through the
`indexing assembly 500 when pressure is applied to the topside of a seated
`ball. Id. ¶ 42.
`Figures 6A and 8 represent a “stop” or “reset” position of the indexing
`assembly where collet fingers 524 are closed to form ball seat 642. Id. ¶ 43.
`When pressure is applied to the topside of seated ball 670, inner sleeve 504
`moves downward relative to outer sleeve 502, thereby also moving collet
`fingers 608 down to a position where they are free to deform radially
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`outward into recess 626. Id. Figure 9 illustrates the position in which collet
`fingers 524 have been deformed radially outward, and ball 670 is allowed to
`pass through the assembly. Id. Howell refers to this state as a “release”
`position of the indexing assembly. Id.
`Howell describes the counter being controlled by lug 514 as it is
`guided through a number of sets of stop and release positions within
`indexing slot 512. Id. These stop and release positions are depicted in
`Figure 6B of Howell. Id. ¶ 42.
`
`
`Figure 6B of Howell (Ex. 1005) represents “a profile view of an indexing
`slot of the indexing assembly of FIG. 6A.” Id. ¶ 19
`
`Petitioner alleges that Figure 6B is drawn incorrectly and Petitioner proposes
`a “corrected Figure 6B” to take its place. Pet. 30–31.
`
`
`“Corrected” Figure 6B of Howell was created by Petitioner and it shows a
`top line of “release positions” and a bottom line of “stop positions.”
`Pet. 30–31.
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`Petitioner contends that Figure 6B as depicted in Howell is improperly
`drawn and, as explained by Petitioner’s expert, “a POSITA would have
`readily recognized that the draftsperson misplaced several of the reference
`numerals, confusing ‘stop’ positions with ‘release’ positions, and neglecting
`to draw an initial ‘stop position’ in the lower right corner of the slot.”
`Pet. 30 (citing Ex. 1003 ¶¶ 52, 53). Petitioner states, “[u]nfortunately, the
`draftsperson who drafted the figures of the ‘761 patent made a few mistakes
`in Fig. 6B, as explained in the declaration of George Medley (Ex. 1003,
`Expert Dec. at 52, 53).” Id. Patent Owner agrees that Figure 6B of Howell
`is improperly drawn, but Patent Owner views these errors as part of a larger
`problem with Howell’s ability to index and arrive at final stop position 540.
`See Tr. 38, 8–11 (“So, the error that’s there is a labeling error. It’s certainly
`symptomatic of a larger problem, in that Howell couldn’t figure out how to
`make a slot that actually works.”). We discuss the issues and the parties’
`arguments with respect to Figure 6B in more detail below.
`
`Paragraph 42 of Howell also explains that “[t]he indexing slot 512
`may also be referred to as a continuous J-slot or a control grove.” Ex. 1005
`¶ 42. Referring to Figure 6B, Howell describes indexing slot 512 as
`including a plurality of reset or stop positions 530, 532, 534, as well as a
`plurality of release positions 536, 538 for lug 514 along the defined path. Id.
`Howell states that “slot 512 also includes a final engagement or actuation
`position 540.” Id.; see also id. ¶ 44 (“The lug 514 is guided through any
`number of sets of stop and release positions until the lug 514 reaches the
`final position 540.”). Apart from these descriptions, Howell offers no
`further explanation as to how lug 514 would reach final stop position 540.
`
`
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`17
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`Case IPR2016-01003
`Patent 8,261,761 B2
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`Analysis of Howell Enablement
`2.
`Given that the cited prior art has a presumption of enablement, we
`recognize that the burden of rebutting enablement of a reference rests on
`Patent Owner. See, e.g., In re Antor Media Corp., 689 F.3d 1282, 1289
`(Fed. Cir. 2012) (“[D]uring patent prosecution, an examiner is entitled to
`reject claims as anticipated by a prior art publication or patent without
`conducting an inquiry into whether or not that prior art reference is
`enabling” and thereafter “the burden shifts to the applicant to submit rebuttal
`evidence of nonenablement.”). In the present proceeding, Patent Owner first
`raised the question of enablement of Howell in its Patent Owner Response.
`See generally PO Resp. 53–56. In turn, Petitioner disputed Patent Owner’s
`contentions in its Reply. See generally Pet. Reply 10–19. We granted
`Patent Owner the opportunity to file a Sur-reply, which it did. See generally
`PO Sur-reply 5–7. Thus, we apply the underlying principle from Dynamic
`Drinkware here: although the burden of persuasion to prove unpatentability
`always rests with petitioner, the burden of production for showing that a
`patent claim is unpatentable may shift between the parties. See Tech.
`Licensing, 545 F.3d at 1327–29 (explaining that the accused
`infringer/defendant, having the ultimate burden of proving its defense of
`invalidity, had the burden of going forward with evidence that there is
`anticipating prior art, and once the accused infringer met that burden, the
`burden shifted to the patent owner to go forward with evidence that asserted
`claim is entitled to an earlier filing date); id. at 1327 (“This requires [patent
`owner] to show not only the existence of the earlier application, but why the
`written description in the earlier application supports the claim.”).
`
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`Based on the record before us, when viewed in light of Dynamic
`Drinkware, we find that Petitioner met its initial burden of production by
`relying on Howell and the supporting declaration of Mr. Medley, to support
`its argument that Howell discloses each of the limitations of the challenged
`claims. See generally Pet. 22–50. Indeed, our Decision on Institution
`confirms that Petitioner met its initial burden of production. Dec. 9–14.
`Because Petitioner offered Howell into evidence as prior art, and patent
`publications are presumed to be enabled,2 the burden of production then
`shifted to Patent Owner to come forward with evidence to demonstrate that
`the disclosure of Howell is not enabling –– which it did in its Patent Owner
`Response.
`We next consider the sufficiency of Patent Owner’s arguments and
`evidence that Howell is not enabled. Specifically, Patent Owner argues that
`Howell’s structure would not perform the functions recited in claim 1,
`including: (1) “prevent[ing] a ball from passing because it has no way of
`causing lug 514 to engage indexing slot 512 in final stop position 540” and
`(2) “count[ing] a ‘selected number’ of balls before preventing another ball
`from passing.” Id. at 53. Patent Owner details how the existing design of
`Howell could not accomplish these two functions. PO Resp. 35–41, 53–55.
`Patent Owner, supported by the testimony of Dr. Stevick, contends that
`Howell’s indexing assembly is incapable of preventing a ball from passing
`because lug 514 will never arrive at and maintain position 540. Id. at 35
`(citing Ex. 2101 ¶¶ 64, 73–74). As explained and depicted by Patent Owner:
`
`
`2 See In re Antor Media Corp., 689 F.3d 1282, 1287–88 (Fed. Cir. 2012);
`Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1355 (Fed. Cir.
`2003).
`
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`As shown in the diagram below, if the lug were able to progress
`to release position 535 and travel toward stop position 540, it
`would encounter a horizontal segment before it could arrive at
`stop position 540. Id. at ¶73. From that position, it would require
`a purely rotational motion of the sleeve for lug 514 to proceed to
`stop position 540. Id.
`
`
`However, Howell describes no mechanism by which this
`motion could happen. Id. at ¶¶69, 73. The only way that Howell
`describes to achieve rotational motion of the sleeve is for lug 514
`to engage the angled walls of slot 512. Id. This translates the
`linear, longitudinal forces imparted by the ball and spring into
`rotational motion. Id. at ¶¶61-62, 69, 73. However, when the
`lug engages the horizontal surface to the right of position 540,
`the longitudinal force can no longer cause rotational motion. Id.
`at ¶73. Angular momentum would not be adequate to cause lug
`514 to move to position 540, because the masses and speeds in
`the downhole environment would not generate enough
`momentum to cause continued rotation after linear forces cease
`(and can no longer cause rotation). Id. at ¶67. Thus, absent any
`other motive force for rotational motion—and Howell describes
`none—there is no way that the Howell indexing assembly as
`described can arrive at a position in which a ball is prevented
`from passing. Id. at ¶73. Upon engagement of the next ball, the
`lug would simply move back to release position 535, as depicted
`in the diagram below. Id. at ¶74.
`
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`PO Resp. 35–36.
`Additionally, Patent Owner explain
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