Trials@uspto.gov
`571-272-7822
`
`Paper 10
`Date: December 3, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`CIZION, LLC,
`d/b/a VULCAN INDUSTRIAL MANUFACTURING,
`Petitioner,
`v.
`KERR MACHINE CO.,
`Patent Owner.
`
`PGR2020-00065
`Patent 10,591,070 B2
`
`
`
`
`
`
`
`
`
`Before HYUN J. JUNG, JAMES J. MAYBERRY, and RYAN H. FLAX,
`Administrative Patent Judges.
`MAYBERRY, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Post-Grant Review
`35 U.S.C. § 324
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 10
`Date: December 3, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`CIZION, LLC,
`d/b/a VULCAN INDUSTRIAL MANUFACTURING,
`Petitioner,
`v.
`KERR MACHINE CO.,
`Patent Owner.
`
`PGR2020-00065
`Patent 10,591,070 B2
`
`
`
`
`
`
`
`
`
`Before HYUN J. JUNG, JAMES J. MAYBERRY, and RYAN H. FLAX,
`Administrative Patent Judges.
`MAYBERRY, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Post-Grant Review
`35 U.S.C. § 324
`
`
`
`
`
`
`
`
`
`PGR2020-00065
`Patent 10,591,070 B2
`
`INTRODUCTION
`I.
`Cizion, LLC, d/b/a Vulcan Industrial Manufacturing (“Petitioner”)
`filed a Petition requesting a post-grant review of claims 1–24 of U.S. Patent
`No. 10,591,070 B2 (the “’070 patent”). Paper 1, 1 (“Pet.” or “Petition”).
`Kerr Machine Co. (“Patent Owner”) filed a Preliminary Response. Paper 7
`(“Prelim. Resp.”).
`We may not authorize a post-grant review to be instituted
`“unless . . . the information presented in the petition filed under section 321,
`if such information is not rebutted, would demonstrate that it is more likely
`than not that at least 1 of the claims challenged in the petition is
`unpatentable.” 35 U.S.C. § 324(a). Upon consideration of the arguments
`and evidence, we determine Petitioner has demonstrated that it is more likely
`than not that at least one of the Challenged Claims is unpatentable.
`Accordingly, we institute a post-grant review of the Challenged Claims of
`the ’070 patent.
`A. Real Parties in Interest
`Petitioner states that it and its parent company, Vulcan Industrial
`Holdings, LLC, are real parties-in-interest. Pet. 2. Petitioner adds that
`Vulcan Energy Services is a sister company of Cizion, LLC. Id. Patent
`Owner identifies itself as the sole real party-in-interest. Paper 5, 1.
`B. Related Matters
`Petitioner states that “Patent Owner . . . improperly has asserted the
`’070 [p]atent against Vulcan Industrial Holdings, LLC in a lawsuit filed on
`March 19, 2020, captioned Kerr Machine Co. v. Vulcan Industrial Holdings,
`LLC, No. 6:20-cv-00200 (W.D. Tex.).” Pet. 2 (referencing Exs. 1043, 1044)
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`Patent 10,591,070 B2
`(the “Western District Action”); see also Paper 5, 1 (identifying the Western
`District Action as a related matter).
`Patent Owner also identifies a case styled Vulcan Industrial Holding
`LLC v. Kerr Machine Co., No. 4:20-cv-01852 (S.D. Tex.), as a related
`matter. Paper 5, 1 (the “Southern District Action”). Among other issues, the
`Southern District Action includes the validity and enforceability of the ’070
`patent. See Ex. 1048, 7.
`Additionally, Patent Owner identifies two pending applications
`pending at the Patent Office: U.S. Patent Application No. 15/719,124, filed
`September 28, 2017, and U.S. Patent Application No. 16/814,267, filed
`March 10, 2020. Paper 5, 1.
`C. The ’070 Patent
`The ’070 patent, titled “Sealing High Pressure Flow Devices,” issued
`March 17, 2020, from U.S. Application 16/574,918, filed September 18,
`2019. Ex. 1001, codes (54), (45), (22). The face of the patent indicates that
`this application was a divisional of U.S. Application 15/719,124, filed
`September 28, 2017, which itself was a continuation-in-part of U.S.
`Application 15/280,642, filed September 29, 2016. Id. at code (60). The
`application that issued as the ’070 patent is also related to four provisional
`applications, Provisional 62/346,915 filed June 7, 2016, Provisional
`62/318,542 filed April 5, 2016, Provisional 62/315,343 filed March 30,
`2016, and Provisional 62/234,483 filed September 29, 2015. Id.
`The ’070 patent is directed “to sealing fluid flow passages inside flow
`control devices, such as those particularly suited for use in high pressure oil
`and gas production and processing systems.” Ex. 1001, 1:5–8. The patent
`states that “[i]mprovements are needed . . . to increase operating life [of
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`Patent 10,591,070 B2
`these control devices] while reducing downtime and operating cost . . . [by]
`transfer[ing] the erosion (corrosion and abrasion) from the high pressure
`fluid device body to the component sealed with the body.” Id. 1:66–2:4.
`One such control device is a fluid end. Ex. 1001, 1:52–56. We
`reproduce the ’070 patent’s Figure 11, below.
`
`
`Figure 11 depicts “an exploded cross-sectional depiction of a fluid end” of
`the ‘070 patent. Id. at 3:16–17. This embodiment “is constructed . . . to, in
`numerous places, transfer the erosion wear from the body to the less
`complex and less expensive component that is sealed to the body.” Id. at
`8:24–27.
`Body 232 includes first conduit (discharge bore) 234, which defines
`discharge opening 235 and intake opening 231, formed opposite discharge
`opening 235. Ex. 1001, 8:27–33. That is, first conduit 234 spans from
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`Patent 10,591,070 B2
`opening 231 to opening 235. Discharge plug 236 seals discharge
`opening 235. Id. at 8:49–52. Plug 236 does not include seals mounted to
`the plug to seal the plug against opening 235. Id. at 8:52–54. “Instead, the
`plug 236 defines a sealing surface 237 for a seal (not depicted in FIG. 11)
`that is mounted in an endless groove or recess formed by a surface 239 of
`the body 232.” Id. at 8:54–57. Body 232 also includes surface 241 and
`surface 243, both defining an endless groove, or recess, intersecting bore
`234 and configured to receive a seal. Id. at 9:31–40.
`Suction bore 247 is sealed by plug 244. Ex. 1001, 9:50–53. Body
`232 includes surface 248 forming an endless groove, or recess, intersecting
`bore 247 and configured to receive a seal. Id. at 9:56–60. The ’070 patent
`indicates that this seal configuration “transfers the wear from the body 232
`to the suction plug 244.” Id. at 9:60–61. Body 232 also includes plunger
`opening 250, which receives stuffing box sleeve 254. Id. at 9:64–66.
`“[S]tuffing box sleeve 254 is characterized by a tubular sleeve.” Id. at 9:67–
`10:1. Opening 250 is formed by plunger bore 252, which includes surface
`257 defining an endless groove or recess intersecting bore 252, which
`receives a seal. Id. at 10:4–7. Suction bore 247 and plunger bore 252
`together form a second conduit in body 232, which, as seen in Figure 11,
`intersects the first conduit. Id. at 10:7–9.
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`Patent 10,591,070 B2
`We reproduce Figure 17 from the ’070 patent, below.
`
`
`
`Figure 17 depicts a “cross-sectional view of F[igure] 11 with the
`components shown installed within the fluid end,” including a “plunger and
`a plurality of packing seals.” Ex. 1001, 3:27–29.
`Packing seals 219 are disposed within stuffing box sleeve 254 (against
`surface 264, which is seen in Figure 11) and form a seal between sleeve 254
`and plunger 228. Ex. 1001, 10:1–3, 11:58–61. The ’070 patent indicates
`that this configuration “transfers the wear from the body 232 to the less
`complex and less expensive sleeve 254.” Id. at 11:61–63.
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`D. Challenged Claims
`Petitioner challenges the patentability of claims 1–24 of the ’070
`patent. Pet. 1, 7–8. Claims 1 and 6 are independent. Ex. 1001, 12:40–
`14:35. Independent claim 6 is illustrative and reproduced below.
`6.
`A fluid end assembly, comprising:
`a housing having a first conduit extending therethrough,
`and a second conduit extending therethrough that intersects the
`first conduit;
`an endless groove formed in the housing such that the
`groove surrounds the second conduit;
`a seal positioned within the groove;
`a tubular sleeve installed within the second conduit such
`that at least a portion of the sleeve engages with the seal; and
`a plurality of packing seals disposed within the sleeve; and
`a reciprocating plunger disposed at least partially within
`the sleeve and the plurality of packing seals.
`Id. at 13:1–14. Independent claim 1 differs from claim 6 in that it recites a
`“method of manufacturing” a fluid end. Id. at 12:40. The claim recites steps
`for forming or arranging the structural components recited in claim 6. Id. at
`12:42–54.
`E. Asserted Grounds of Unpatentability
`Petitioner asserts that claims 1–24 would have been unpatentable on
`the following nine grounds (Pet. 7–8):
`Claim(s) Challenged
`35 U.S.C. §
`1–4, 6–12, 17, 22–24
`102
`1–12, 15–19, 22–24
`103
`13, 14, 20, 21
`103
`
`1 Blume, US 7,186,097 B1, issued March 6, 2007 (Ex. 1003, “Blume ’097).
`2 Luharuka et al., US 2013/0319220 A1, published December 5, 2013
`(Ex. 1007, “Luharuka”).
`3 Morris et al., US 9,534,473 B2, issued January 3, 2017 from an application
`filed December 16, 2015 (Ex. 1011, “Morris”).
`
`Reference(s)/Basis
`Blume ’0971
`Luharuka,2 Blume ’097
`Luharuka, Blume ’097, Morris3
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`Claim(s) Challenged
`1–4, 6–12, 17, 22–24
`1–24
`1–3, 5, 6, 10–12, 15,
`16, 18, 19, 23
`1–8, 10–12, 15–17,
`22–24
`1–12, 15–19, 22–24
`13, 14, 20, 21
`
`35 U.S.C. §
`102
`103
`103
`
`Reference(s)/Basis
`Whaley4
`GD-3000,5 Whaley
`GD-3000, Whaley, Moeller6
`
`102
`103
`103
`
`Blume ’0127
`NOV-267Q,8 Blume ’012
`NOV-267Q, Blume ’012,
`Shampine9
`Petitioner relies on, in addition to other evidence, declaration
`
`testimony of Mr. William D. Marscher (Ex. 1012) in support of these
`grounds. Patent Owner relies on, in addition to other evidence, the
`declaration testimony of Dr. Steven M. Tipton (Ex. 2001) to support its
`preliminary response.
`The following subsections provide a brief description of the asserted
`prior art references.
`1. Blume ’097
`Blume ’097, titled “Plunger Pump Housing and Access Bore Plug,”
`issued March 6, 2007; thus, it is prior art to the claims of the ’070 patent
`under 35 U.S.C. § 102. Ex. 1003, codes (54), (45). Blume ’097 is generally
`
`4 Whaley et al., US 2015/0132157 A1, published May 14, 2015 (Ex. 1005,
`“Whaley”).
`5 Gardner Denver, “Well Servicing Pump, Model GD-3000, Operating and
`Service Manual,” dated April 2011 (Ex. 1008, “GD-3000”).
`6 Moeller et al., US 2014/0348677 A1, published November 27, 2014
`(Ex. 1006, “Moeller”).
`7 Blume, US 6,544,012 B1, issued April 8, 2003 (Ex. 1004, “Blume ’012).
`8 National Oilwell Varco, “267Q-6M Quintuplex Plunger Pump, Parts List,”
`July 21, 2008 (Ex. 1009, “NOV-267Q”).
`9 Shampine et al., US 7,845,413 B2, issued December 7, 2010 (Ex. 1010,
`“Shampine”).
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`directed “to high-pressure plunger pumps used, for example, in oil field
`operations.” Ex. 1003, 1:10–11. We reproduce Blume ’097’s Figure 13,
`below.
`
`
`Figure 13 depicts a cross-section of “a right-angular plunger pump housing
`with an offset access bore, including suction and discharge valves, an access
`bore plug . . ., and a tapered cartridge packing assembly.” Id. at 8:1–5.
`Plunger pump housing 50 includes a plunger bore (right section of horizontal
`bore and including a plunger (not numbered)), an access bore (left section of
`horizontal bore and including access bore plug 30), a suction bore (bottom
`section of vertical bore and including a suction valve (not numbered)) and a
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`discharge bore (top section of vertical bore and including a discharge plug
`(not numbered)). See, e.g., id. at Fig. 9 (labeling the bore sections of a
`similar plunger pump).
`The plunger pump depicted in Blume ’097’s Figure 13 also includes a
`tapered cartridge packing assembly, seen at the right end of the plunger bore
`and illustrated in Blume ’097’s Figure 12A. See Ex. 1003, Fig. 12A. Blume
`’097’s Figure 12B depicts a similar structure. See id. at 10:66–11:2 (“Other
`aspects of the present invention are schematically illustrated in F[igures]
`12A–12E, which show cross-sections of various tapered cartridge packing
`and gland nut assemblies installed in plunger pump housings 47, 48, 49 and
`50.”); compare id. at Fig. 12A with id. at Fig. 12B. We reproduce an
`annotated version Blume ’097’s Figure 12B from the Petition, below.
`
`
`Pet. 57. Figure 12B depicts a cross-section of a tapered packing cartridge
`(shown in yellow) and gland nut assembly 60′, with annotations added to
`identify and colorize features of the assembly. Id.; Ex. 1003, 12:47–48. The
`cartridge includes an interior region with a substantially right circular inner
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`surface and a conically tapered outer surface 63′. See id. at 11:11–13,
`12:47–53 (describing the interior of the cartridge of Figure 12A, which is
`unchanged in the cartridge of Figure 12B, and the exterior surface of the
`cartridge of Figure 12B). The interior region includes packing seals (shown
`above in blue) and the housing includes elastomer seal 67″ in an inner
`circumferential seal groove 66″ in the housing surrounding the cartridge.
`Id. at 12:55–58.
`2. Luharuka
`Luharuka, titled “Fluid End Reinforced with Abrasive Resistant
`Insert, Coating or Lining,” published December 5, 2013; thus, it is prior art
`to the claims of the ’070 patent under 35 U.S.C. § 102. Ex. 1007, codes
`(54), (43). Luharuka is generally directed to “an abrasive resistant insert,
`coating or lining for extending the life of the fluid end of a pump used in the
`field of oil and gas exploration and production.” Id. ¶ 2. We reproduce
`Luharuka’s Figure 5, below.
`
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`Figure 5 “depicts a cross-sectional view of the pump body portion.” Id.
`¶ 13. Pump body 100 includes piston bore 108, “which may be a through
`bore,” and which receives reciprocating pump plunger 114. Id. ¶ 20. Pump
`body 100 also includes discharge valve 118, intake valve 122, a plug
`adjacent to discharge valve 118, and suction cover 140. Id. at ¶¶ 20, 21, 23,
`35.
`
`Insert 200 includes a surface that is less subject to abrasion, corrosion,
`erosion, or wet fatigue and may be disposed in areas prone to wash out
`failure. Ex. 1007 ¶¶ 26–27. Insert 200 includes plunger packing assembly
`300. Id. at ¶ 28. We reproduce an annotated version of Luharuka’s Figure
`6B from the Petition, which shows details of insert 200.
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`Pet. 79. Figure 6B “depicts a cross-sectional, partial view of the pump body
`portion having an insert” 200b. Ex. 1007 ¶ 14. Insert 200b (in yellow)
`includes plunger packing assembly 300, which includes header ring 302,
`pressure ring 304, and female adaptor 306 (all three in blue). Id. at ¶ 28.
`“The plunger packing assembly 300 [structures], which are generally made
`from rubber or elastomeric materials, . . . may include different types of
`seals and rings, some of which are referred to in the art as wiper rings and
`junk rings.” Id.
`Also, “additional seals may be provided between insert 200a/200b and
`the recess portion 130 of the bore 108.” Ex. 1007 ¶ 33. Petitioner alleges
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`that the structure in the red circles annotating the figure above is one such
`seal. See Pet. 75–76.
`3. Morris
`Morris, titled “Mobile Electric Power Generation for Hydraulic
`Fracturing of Subsurface Geological Formations,” issued January 3, 2017.
`Ex. 1011, codes (54), (45). Morris issued from an application filed
`December 16, 2015, which claims priority to a provisional application filed
`December 19, 2014. Id. at codes (22), (60), 1:8–13. As the record stands at
`this point, there is no contention that Morris is not prior art to the claims of
`the ’070 patent under 35 U.S.C. § 102.
`Morris is generally directed to equipment for hydraulic fracturing
`used by the oil and gas industry to stimulate production of oil or gas wells.
`Ex. 1011, 1:17–57. Relevant to this Decision, Morris discloses a plunger-
`style pump producing a pressure of about 10,000 pounds per square inch and
`an engine supplying a power output of up to 5,000 horsepower. Id. at 5:1–
`14.
`
`4. Whaley
`Whaley, titled “Plunger Pump, Plunger, and Method of Manufacturing
`Plunger Pump,” published May 14, 2015; thus, it is prior art to the claims of
`the ’070 patent under 35 U.S.C. § 102. Ex. 1005, code (54), (43). Whaley
`relates to high pressure plunger pumps, such as those used in the oil and gas
`industry. Ex. 1005 ¶¶ 3, 4, 10. We reproduce Whaley’s Figure 1A below.
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`Figure 1A depicts a cross-section of Whaley’s plunger pump. Id. ¶ 13.
`Pump 10 includes fluid end 12 and pump power end 14. Id. ¶ 24. “[P]ump
`fluid end 12 includes . . . suction bore 18a, . . . discharge bore 18b, . . .
`plunger bore 20a, and . . . access bore 20b, . . . which intersect with . . . fluid
`chamber 16.” Id. Suction and discharge bores 18a, 18b form axis 17a, and
`plunger bore 20a and access bore 20b form axis 17b, with axis 17a
`perpendicular to axis 17b. Id. Suction bore 18a includes suction valve 23a
`and discharge bore 18b includes discharge valve 23b in communication with
`discharge port 25. Id.
`Plunger bore 20a includes reciprocating plunger 28. Ex. 1005 ¶ 25.
`Plunger 28 reciprocates within packing arrangement 30, mounted at the
`exterior end of plunger bore 20a. Id. ¶ 26. Packing arrangement 30 includes
`packing housing 31, which is removably attached to fluid end 12 and
`includes packing assembly 33, having a set of seals 35. Id.
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`5. GD-3000
`GD-3000, is an Operating and Service Manual for Gardner Denver’s
`well servicing pump, model GD-3000. Ex. 1008, 1.10 The manual is
`numbered 3-1-618, revision D, and is dated April 2011; thus, we understand
`it is prior art to the claims of the ’070 patent under 35 U.S.C. § 102. Id. The
`manual states that the “Gardner Denver GD 3000 is a high horsepower, high
`rod load multi-purpose pump for various applications such as oil and gas
`well fracturing and acidizing and potentially as a light weight drilling
`pump.” Id. at 15. We reproduce Figures 2–5 and 4–2 from GD-3000 below.
`
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`
`
`10 We refer to the pagination of the exhibit, added by Petitioner, rather than
`the page numbering of the manual itself.
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`Figure 2–5 depicts the fluid end of pump of GD-3000. Id. at 19. Figure 4–2
`depicts the packing assembly for the fluid end. Id. at 28.
`The packing assembly includes a stuffing box with a spacer, header
`ring, two packing rings, and a lantern gland. Ex. 1008, 28.
`6. Moeller
`Moeller, titled “Positive Displacement Pump and Suction Valve
`Module Therefor,” published November 27, 2014; thus, it is prior art to the
`claims of the ’070 patent under 35 U.S.C. § 102. Ex. 1006, code (54), (43).
`Moeller “relates generally to positive displacement pumps, such as
`reciprocating pumps applied to drilling mud and well service applications,
`and to valves used therein to control the flow of the pumped fluid into and
`out of the pump.” Id. ¶ 4. Relevant to this Decision, Moeller’s named
`inventors are Manuel Moeller and Jason Neal Whaley, both of whom are
`named inventors in Whaley. Compare id. at code (76) with Ex. 1005, code
`(72).
`
`We reproduce Moeller’s Figure 15, below.
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`Figure 15 depicts “a partial cross-sectional view of a fluid end of a
`reciprocating positive displacement pump.” Ex. 1006 ¶ 28. Relevant to this
`Decision, Figure 15 depicts plunger 522. Id. ¶ 64. “[A]nnular packing
`assembly 525 is radially disposed between block 514 and plunger 522.
`Packing assembly 525 forms an annular static seal with block 514 and an
`annular dynamic seal with plunger 522, which slidingly engages packing
`525.” Id.
`7. Blume ’012
`Blume ’012, titled “High Pressure Plunger Pump Housing and
`Packing,” issued April 8, 2003; thus, it is prior art to the claims of the ’070
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`patent under 35 U.S.C. § 102. Ex. 1004, code (54), (45). Blume ’012
`“relates generally to high-pressure plunger pumps used, for example, in oil
`field operations.” Id. at 1:9–10. We reproduce Blume ’012’s Figures 9A
`and 10A, below.
`
`
`
`
`Figure 9A depicts “a cross-sectional view[] of a Y-block plunger pump
`housing,” and Figure 10A depicts “a cross-sectional view of a Y-block
`plunger pump housing . . . [having] a one-piece plunger and tapered
`cartridge packing and gland nut assembly” installed. Id. at 7:8–9, 7:19–23.
`Housing 50 includes suction valve bore 110 having centerline 115 and
`discharge valve bore 112 having centerline 113. Id. at 8:27–33. Plunger
`bore 108, having centerline 76, intersects suction valve bore 110 and
`discharge valve bore 112. Id. at 8:39–41.
`Figure 10A depicts the plunger pump with its plunger and tapered
`packing assembly. Ex. 1004, 9:16–19. A tapered packing assembly is
`shown in Blume ’012’s Figure 12B, which we reproduce below.
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`Figure 12B depicts “a portion of a plunger pump housing and a tapered
`packing cartridge and gland nut assembly.” Id. at 7:51–53. Similar to the
`cartridge disclosed in Blume ’097 (discussed above), the Blume ’012
`cartridge of Figure 12B includes an interior region with a substantially right
`circular inner surface and a conically tapered outer surface 63′. See 10:22–
`25, 12:60–66 (describing the interior of the cartridge of Figure 12A, which is
`unchanged in the cartridge of Figure 12B, and the exterior surface of the
`cartridge of Figure 12B). The interior region includes packing seals and the
`housing includes elastomer seal 67″ in an inner circumferential seal groove
`66″. Id. at 12:1–5; see also Section I.E.1, supra (describing the cartridge of
`Figure 12B in Blume ’097).
`8. NOV-267Q
`NOV-267Q provides a parts list for National Oilwell Varco’s model
`267Q-6M Quintuplex Plunger Pump. Ex. 1009, 1. The parts list has an
`issue date of September 6, 2000, and a revision date of July 21, 2008; thus,
`we understand it is prior art to the claims of the ’070 patent under 35 U.S.C.
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`§ 102. Id. NOV-267Q provides schematic drawings and parts listings for
`the pump. See id. at 3–12.
`9. Shampine
`Shampine, titled “Method of Pumping an Oilfield Fluid and Split
`Stream Oilfield Pumping Systems,” issued December 7, 2008; thus, we
`understand it is prior art to the claims of the ’070 patent under 35 U.S.C.
`§ 102. Ex. 1010, code (54), (45). Shampine “relates generally to a pumping
`system for pumping a fluid from a surface of a well to a wellbore at high
`pressure.” Id. at 1:14–16. Relative to this proceeding, Shampine discloses
`that, for hydraulic fracturing applications, “the fracturing fluid is pumped at
`extremely high pressures, sometimes in the range of 10,000 to 15,000
`[pounds per square inch] or more.” Id. at 1:32–34. Also, Shampine
`discloses that its pumping system employs plunger pumps driven by “an
`engine with a maximum rating of 2250 brake horsepower.” Id. at 4:9–11.
`
`
`II. PROCEDURAL CONSIDERATIONS
`A. Our Discretion under 35 U.S.C. § 324(a)
`The Board has discretion not to institute trial. See 35 U.S.C.
`§§ 314(a) and 324(a) (each authorizing institution of a trial under particular
`circumstances, but not requiring institution under any circumstances);
`37 C.F.R. § 42.208(a) (stating “the Board may authorize the review to
`proceed”) (emphasis added); cf. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct.
`2131, 2140 (2016) (“[T]he agency’s decision to deny a petition is a matter
`committed to the Patent Office’s discretion.”); Harmonic Inc. v. Avid Tech,
`Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016) (explaining that under § 314(a),
`“the PTO is permitted, but never compelled, to institute an [inter partes
`
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`PGR2020-00065
`Patent 10,591,070 B2
`review] proceeding”). Section 314(a) relates to inter partes reviews (IPRs)
`and the similarly worded Section 324(a) relates to post-grant reviews
`(PGRs); we interpret these two statutory sections similarly. See Supercell
`Oy v. GREE Inc., PGR2020-00034, Paper 13 at 7–9 (PTAB Sept. 3, 2020)
`(determining that “the pertinent statutory language is the same in both
`section 314(a)[, governing inter partes reviews,] and section 324(a),”
`governing post-grant reviews, and that “the overall policy justifications
`associated with the exercise of discretion—inefficiency, duplication of
`effort, and the risk of inconsistent results—apply to post-grant review
`proceedings.”).
`Patent Owner contends that we should exercise our discretion and not
`institute trial because of the state of the parallel district court litigation
`(Patent Owner’s argument was made under 35 U.S.C. § 314(a); however, we
`understand it to have been intended to be made under § 324(a), as relating to
`PGRs). Prelim. Resp. 2–8; see supra Section I.B. (related matters). We
`authorized Petitioner to file a Preliminary Reply (“Prelim. Reply”) to the
`Preliminary Response (Paper 8) addressing Patent Owner’s contentions
`directed to discretionary denial under § 314(a) and Patent Owner to file a
`Sur-reply to that Preliminary Reply (“Prelim. Sur-reply,” Paper 9).
`Our precedential and informative decisions make clear that the Board
`may exercise discretion not to institute a trial before the Board in light of the
`advanced state of ongoing, parallel litigation. See NHK Spring Co. v. Intri-
`Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018)
`(precedential) (“NHK Spring”) and Apple Inc. v. Fintiv, Inc., IPR2020-
`00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv I”); see also
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (PTAB May 13, 2020)
`
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`PGR2020-00065
`Patent 10,591,070 B2
`(informative) (denying institution in light of an ongoing, parallel district
`court proceeding) (“Fintiv II”); Sand Revolution II, LLC v. Continental
`Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 (PTAB June
`16, 2020) (informative) (applying Fintiv I factors in light of ongoing,
`parallel district court litigation and instituting trial). These decisions, which
`are directed to inter partes review trials, but nonetheless generally relate to
`post-grant review trials, promote efficient use of resources and the integrity
`of the patent system by avoiding potentially conflicting decisions. See
`Supercell Oy, PGR2020-00034, Paper 13 at 7–9; see also Fintiv I at 6
`(“[T]he Board takes a holistic view of whether efficiency and integrity of the
`system are best served by denying or instituting review.”).
`In NHK Spring, the Board considered the advanced state of a parallel
`district court proceeding as a factor favoring denial of institution of an inter
`partes review proceeding. NHK Spring at 19–20. The Board later identified
`a non-exclusive list of factors to consider when applying NHK Spring to
`determine if we should exercise discretion to not institute a trial in light of a
`parallel proceeding in an advanced state. Fintiv I at 5–6.
`As an initial point, Petitioner argues that our precedents in NHK
`Spring and Fintiv do not apply to post-grant reviews. Prelim. Reply 1.
`Petitioner explains that, under statute, post-grant reviews have their own,
`unique, timetable as compared to inter partes reviews, with post-grant
`reviews available to “allow invalid patents that were mistakenly issued by
`the [Patent Office] to be fixed.” Id. Patent Owner replies that post-grant
`reviews are not exempt from our precedents in NHK Spring and Fintiv and
`that differences in inter partes reviews and post-grant reviews are accounted
`
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`PGR2020-00065
`Patent 10,591,070 B2
`for in the Fintiv I factor analysis. Prelim. Sur-reply 1 (citing Supercell Oy,
`PGR2020-00034, Paper 13 at 7).
`We agree with Patent Owner that post-grant review petitions are not
`categorically excluded from discretionary denial under our precedents in
`NHK Spring and Fintiv. See, e.g., Supercell Oy, PGR2020-00034, Paper 13
`at 7–9. In determining whether to exercise discretion to deny institution
`under 35 U.S.C. § 324(a), we consider the factors set forth in Fintiv I. Id.
`at 9. We address the parties’ arguments as to each factor in turn, below.
`Factor 1. whether the court granted a stay or evidence exists
`that one may be granted if a proceeding is instituted.
`Patent Owner argues that Petitioner moved to stay the Western
`District Action and that motion was denied. Prelim. Resp. 3. Patent Owner
`adds that “[t]he court’s order explains that ‘[e]ven if the PTAB institutes,
`the Court anticipates that the trial date will occur before the PGR’s final
`written decision.’” Id.
`Petitioner responds that it has filed a writ of mandamus appealing the
`denial of a stay and that there is a current motion to dismiss the Western
`District Action or to transfer the case to the Southern District of Texas,
`where that district is “favorable to stays pending PTAB proceedings.”
`Prelim. Reply 1–2. Patent Owner replies that “[n]o precedent supports
`considering subsequent writs of mandamus or motions to transfer as part of
`the Fintiv calculus. Even if there were, there is no evidence that either will
`be successful, only [Petitioner]’s speculation.” Prelim. Sur-reply 1–2.
`We weigh this factor as somewhat in favor of discretionary denial.
`The court has indicated that it will not stay the Western District Action. We
`
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`PGR2020-00065
`Patent 10,591,070 B2
`will not speculate as to whether the case will be transferred. But cf.
`Ex. 3001 (providing new standing order regarding venue discovery).11
`Factor 2. proximity of the court’s trial date to the Board’s
`projected statutory deadline for a final written decision.
`Patent Owner indicates that trial is set in the Western District Action
`for September 7, 2021, three months prior to our (anticipated) deadline for a
`final written decision. Prelim Resp. 2. Petitioner responds that the court has
`already moved the trial date once. Prelim. Reply 2 (referencing Exs. 1052,
`1053). Petitioner adds that the court’s schedule identifies at least nine cases
`scheduled for trial at the same time as the trial scheduled in the Western
`District Action. Id. (referencing Exs. 1054‒1062). Petitioner argues that in
`the Western District of Texas, 70 percent of trial dates have slipped
`following PTAB discretionary denials. Id. (referencing Ex. 1063).
`Petitioner also argues that new patent trial guidelines for Judge Albright, the
`judge in the Western District Action, sets trial 52 weeks after a Markman
`hearing, which is scheduled for early December of this year. Id. at 3
`(referencing Exs. 1065, 1066 at 10). Finally, Petitioner argues that the
`COVID-19 pandemic adds uncertainty to a trial date.
`Patent Owner replies that we should take the trial date at face value
`absent strong evidence to the contrary, and that no such evidence is in the
`record here. Prelim. Sur-reply 2 (citing Fintiv II, at 13). Patent Owner
`argues that even considering Petitioner’s evidence, any delay would be such
`that trial will still likely occur prior to a final written decision. Id. at 2–3.
`
`
`11 Since the close of briefing, the Federal Circuit denied Petitioner’s writ of
`mandamus. In re Vulcan Indus. Holdings, LLC, No. 2020-151, 2020 WL
`6947657, at *1 (Fed. Cir. Nov. 25, 2020).
`
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`PGR2020-00065
`Patent 10,591,070 B2
`We weigh this factor as neutral. Although the current schedule
`indicates that trial will commence a few months prior to the statutory due
`date to issue a final written decision in this proceeding, evidence in the
`record cited by Petitioner does indicate that the actual trial date is uncertain.
`This evidence includes multiple proceedings with trial dates close to the
`September 7, 2021 date and Judge Albright’s new patent trial guidelines.
`See Exs. 1053–1061. Two of these trials are to begin the week prior to the
`scheduled trial date for the Western District Action (see Exs. 1055, 1059)
`and two of these trials are scheduled for the same day (see Exs. 1057, 1061)
`as the scheduled trial date for the Western District Action. Further,
`according to Judge Albright’s own standing order governing patent cases, a
`trial scheduled for 52-weeks after the scheduled December 3, 2020
`Markman Hearing would occur around the same time as the statutory due
`date for a final written decision in this proceeding. Exs. 1066, 1069.
`Factor 3. investment in the parallel proceeding
`by the court and the parties.
`Patent Owner argues that the parties have answered claims and
`counter claims, provided invalidity and in
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