FMC Technologies, Inc v. OneSubsea IP UK Limited

IN THE UNITED STATES DISTRICT COURT September 24, 2019

FOR THE SOUTHERN DISTRICT OF TEXAS David J. Bradley, Clerk

HOUSTON DIVISION

FMC TECHNOLOGIES, INC., §

Plaintiff, §

§

v. § CIVIL ACTION NO. H-18-2459

§

ONESUBSEA IP UK LIMITED, et al., §

Defendants. §

MEMORANDUM AND ORDER

This patent infringement case is before the Court on the Motion for Summary

Judgment of Invalidity (“FMC’s Motion”) [Doc. # 107] filed by FMC Technologies,

Inc. (“FMC”), to which OneSubsea IP UK Limited & OneSubsea LLC (collectively,

“OneSubsea”) filed an Opposition and Cross-Motion for Partial Summary Judgment

of No Invalidity (“OneSubsea’s Motion”) [Doc. # 116]. FMC filed a Reply [Doc.

# 123] in support of its Motion, and OneSubsea filed a Reply [Doc. # 127] in support

of its Motion. The Court, having carefully reviewed the record and the governing

legal authorities, grants FMC’s Motion and denies OneSubsea’s Motion.1

1 Also pending are OneSubsea’s Motion for Partial Summary Judgment of Infringement

[Doc. # 117], to which FMC filed a Response [Doc. # 122], OneSubsea filed a Reply

[Doc. # 126], and FMC filed a Sur-Reply [Doc. # 130]. Additionally, OneSubsea

filed a Motion for Leave to Amend its Counterclaim and Preliminary Infringement

Contentions [Doc. # 128], to which FMC filed a Response [Doc. # 131], OneSubsea

filed a Reply [Doc. # 132], and FMC filed a Sur-Reply [Doc. # 133]. OneSubsea filed

a Motion to Strike FMC’s Sur-Reply [Doc. # 134]. Because the Court grants FMC’s

Motion regarding invalidity, the Court denies each of these motions as moot.

I. BACKGROUND

OneSubsea IP US Limited is the owner of United States Patent No. 9,945,202

(“the ’202 Patent”). The patent application was filed March 27, 2017, and the ’202

Patent was granted April 17, 2018.

FMC manufactures and sells versions of its vertical subsea well completion

system that are designed to withstand higher pressures and temperatures found in

more extreme and deeper water environments. The product is referred to as a High-

Pressure High-Temperature Enhanced Vertical Deepwater Tree (“HPHT EVDT”).

There is a version rated for up to 15,000 pounds per square inch of pressure (“15ksi”)

and up to 400 degrees Fahrenheit (the “15k/400F HPHT EVDT”). There is another

version rated for up to 20,000 pounds per square inch of pressure (“20ksi”) and up to

350 degrees Fahrenheit (the “20k/350F HPHT EVDT”). The two versions of the

HPHT EVDT were developed together and are materially identical. FMC has

presented evidence that the 15k/400F HPHT EVDT was completed before the

20k/350F version because it was needed for a Shell Offshore, Inc. (“Shell”) project.

OneSubsea alleges that FMC is infringing the claims of the ’202 Patent through

the HPHT EVDT system rated for 20ksi. See Amended Counterclaims [Doc. # 87],

¶ 17. OneSubsea alleges also that its claims are not limited to 20ksi systems. See id.,

¶ 18.

2

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811

FMC argues if OneSubsea’s assertion that the 20k/350F HPHT EVDT is

infringing is accepted as true, then the sale to Shell of the FMC 15k/400F HPHT

EVDTs constitutes a prior sale that invalidates the ’202 Patent under 35 U.S.C.

§ 102(a)(1).2 FMC cites the “well-settled maxim” that “that which infringes, if later,

anticipates if earlier.” See Motion, p. 1 (citing Upsher-Smith Labs. v. Pamlab, LLC,

412 F.3d 1319, 1322 (Fed. Cir. 2005)). FMC’s Motion has been fully briefed and is

now ripe for decision.

II. SUMMARY JUDGMENT STANDARD

Rule 56 of the Federal Rules of Civil Procedure provides for the entry of

summary judgment against a party who fails to make a sufficient showing of the

existence of an element essential to the party’s case, and on which that party will bear

the burden at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where,

as here, the movant bears the burden of proof at trial on the issues at hand, it “bears

the initial responsibility of demonstrating the absence of a genuine issue of material

fact with respect to those issues.” Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718

(5th Cir. 1995); see also Brandon v. Sage Corp., 808 F.3d 266, 269-70 (5th Cir.

2 Section 102(a)(1) provides that “[a] person shall be entitled to a patent unless – (1) the

claimed invention was patented, described in a printed publication, or in public use,

on sale, or otherwise available to the public before the effective filing date of the

claimed invention[.]” 35 U.S.C. § 102(a)(1) (emphasis added).

3

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811

2015); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005).3 If the

moving party meets its initial burden, the non-movant must go beyond the pleadings

and designate specific facts showing that there is a genuine issue of material fact for

trial. Brandon, 808 F.3d at 270.

In deciding whether a genuine and material fact issue has been created, the facts

and inferences to be drawn from them must be reviewed in the light most favorable

to the nonmoving party. See Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224, 234

(5th Cir. 2016). However, factual controversies are resolved in favor of the non-

movant “only when there is an actual controversy, that is, when both parties have

submitted evidence of contradictory facts.” Salazar-Limon v. City of Houston, 826

F.3d 272, 277 (5th Cir. 2016). The non-movant’s burden is not met by mere reliance

on the allegations or denials in its pleadings. See Diamond Offshore Co. v. A&B

Builders, Inc., 302 F.3d 531, 545 n.13 (5th Cir. 2002). Likewise, “unsubstantiated or

conclusory assertions that a fact issue exists” do not meet this burden. Morris v.

3 OneSubsea objects to much of FMC’s evidence as uncorroborated and/or

unauthenticated. Under the Federal Rules of Civil Procedure, a party may object to

material presented in support of a motion for summary judgment if the material

“cannot be presented in a form that would be admissible in evidence.” See FED. R.

CIV. P. 56(c)(2). OneSubsea has not shown that FMC’s evidence could not be

presented in an admissible form at trial. Nonetheless, FMC has now provided

authentication for its proffered evidence, and has provided testimony to support its

evidence as being within the business records exception to the hearsay rule, through

the Declaration of Jocelyn Waggoner. As a result, OneSubsea’s objections are

overruled.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 4

Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). Instead, the

nonmoving party must present specific facts that show the existence of a genuine issue

of material fact. Id.

“When evaluating a motion for summary judgment, the court views the record

evidence through the prism of the evidentiary standard of proof that would pertain at

a trial on the merits.” SRAM Corp. v. AD-II Engineering, Inc., 465 F.3d 1351, 1357

(Fed. Cir. 2006). A patent is presumed valid under 35 U.S.C. § 282, and “overcoming

that presumption requires clear and convincing evidence.” Spectrum Pharm., Inc. v.

Sandoz Inc., 802 F.3d 1326, 1333 (Fed. Cir. 2015). As a result, at the summary

judgment stage, a party asserting patent invalidity must submit clear and convincing

evidence of invalidity. See Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374,

1378 (Fed. Cir. 2005).

III. ANALYSIS

A. On-Sale Bar

“To further the goal of motivating innovation and enlightenment while also

avoiding monopolies that unnecessarily stifle competition, Congress has imposed

several conditions on the limited opportunity to obtain a property right in an idea.”

Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., __ U.S. __, 139 S. Ct. 628, 632

(2019) (internal quotations and citations omitted). One of these conditions, the on-

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 5

sale bar, “reflects Congress’s reluctance to allow an inventor to remove existing

knowledge from public use by obtaining a patent covering that knowledge.” Id. The

on-sale bar precludes a person from receiving a patent, and can invalidate an existing

patent, on an invention that was “on sale . . . before the effective filing date of the

claimed invention.”4 35 U.S.C. § 102(a)(1). There are two requirements for the on-

sale bar to apply: (1) the invention must have been “the subject of a commercial offer

for sale,” and (2) the invention “must be ready for patenting.” Helsinn, 139 S. Ct. at

633 (quoting Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67-68 (1998)).

Under the Leahy-Smith America Invents Act (“AIA”), which was signed into

law on September 16, 2011, and was fully in effect as of March 16, 2013, a person

remains barred from receiving a patent on an invention that was “on sale . . . before

the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1). The AIA

did not alter the meaning of “on sale” for purposes of § 102(a)(1) and, as a result,

4 The AIA modified to some extent the critical date for the on-sale bar. Prior to the

AIA, the on-sale bar precluded a person from receiving a patent on an invention that

had been on sale more than one year before filing a patent application. The AIA

changed the time limits for the on-sale bar, providing that a person would not be

entitled to a patent if the claimed invention was on sale before the effective filing

date. See 35 U.S.C. § 102(a)(1). The AIA also, however, made an exception for

disclosures made one year or less before the effective filing date if “made by the

inventor or joint inventor or by another who obtained the subject matter disclosed

directly or indirectly from the inventor or joint inventor . . ..” 35 U.S.C.

§ 102(b)(1)(A). Therefore, under the AIA, for sales made by the inventor, the critical

date remains one year before the application filing date, while for sales made by third

parties, the critical date is the effective filing date of the patent application.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 6

prior Federal Circuit rulings addressing the “on sale” bar continue to apply after

enactment of the AIA. See Helsinn, 139 S. Ct. at 630.

FMC argues that the ’202 Patent is invalid pursuant to the on-sale bar in

§ 102(a)(1). FMC bases its invalidity argument on its sale of ten 15k/400F HPHT

EVDTs to Shell in 2015. OneSubsea argues in response that the on-sale bar applies

only to sales by the inventor, not to sales by an unrelated third party such as FMC.

OneSubsea argues also that, if the on-sale bar applies to sales by third parties, FMC

has failed to present evidence to establish the requirements for the on-sale bar in this

case. OneSubsea’s arguments are unavailing.

B. Sales by a Third Party

Section 102(a)(1) states that a person is entitled to a patent unless the claimed

invention was on sale before the effective filing date. See 35 U.S.C. § 102(a)(1). An

exception is made for disclosures made “one year or less” before the filing date “if the

disclosure was made by the inventor or joint inventor or by another who obtained the

subject matter disclosed directly or indirectly from the inventor or a joint inventor.”

See 35 U.S.C. § 102(b)(1)(A). The statutory text supports the Federal Circuit’s

repeated holdings, discussed below, that sales before the critical date by a third party

can create an on-sale bar. If only sales by an inventor could create an on-sale bar,

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 7

there would be no need for an exception for those sales or other disclosures that are

made by an inventor one year or less before the filing date.

OneSubsea cites In re Caveney, 761 F.2d 671 (Fed. Cir. 1985), and

ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010), to support its

argument that the on-sale bar applies only to sales by the inventor.5 In Caveney, the

Federal Circuit affirmed the rejection of certain patent claims because the claimed

invention was offered for sale in the United States prior to the critical date. See

Caveney, 761 F.2d at 673. The Federal Circuit clearly stated a general rule that “sales

or offers by one person of a claimed invention will bar another person from obtaining

a patent if the sale or offer is made [prior to the critical date].” Id. at 675 (citing

Pennwalt Corp. v. Akzona Inc., 740 F.2d 1573, 1580 n.14 (Fed. Cir. 1984); General

Elec. Co. v. United States, 654 F.2d 55, 61-62 (Ct. Cl. 1981)). In the Pennwalt

footnote cited in Caveney, the Federal Circuit stated “it is well settled that the ‘on

sale’ bar applies to sales made by the inventor or another, with or without the

inventor’s consent.” Pennwalt, 740 F.2d at 1580 n.14 (citing Andrews v. Hovey, 124

U.S. 694, 719 (1888)). The Federal Circuit in Caveney discussed an exception to this

general rule “where a patented method is kept secret and remains secret after a sale of

5 OneSubsea also cites district court cases that rely on Caveney and ResQNet. The

Court bases its decision in this case on the language of § 102 and binding Federal

Circuit case law regarding the on-sale bar.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 8

the unpatented product . . ..” Caveney, 761 F.2d at 675. The Federal Circuit

explained that such secret sales prior to the critical date are not a bar if made by a non-

inventor, but explained further that the sale is not a “secret” sale for purposes of the

exception if the claimed invention was disclosed to the purchaser in the sales

transaction. See id. at 675-76. The Federal Circuit stated that when a sale is “made

by a person other than the patentee or patent applicant, as in this case, the policy

against removing inventions from the public domain and the policy favoring early

filing of patent applications justify application of the ‘on sale’ bar . . ..” Id. at 676.

Notwithstanding the clear ruling by the Federal Circuit in Caveney that the on-

sale bar can apply to sales by a third party, One Subsea relies on the slim reed of dicta

appearing in footnote 5 in Caveney. There, the Federal Circuit stated “[s]ales or offers

made by others and disclosing the claimed invention implicated the ‘public use’

provision[6] of 35 U.S.C. § 102(b).”7 Id. at 675 n.5. The footnote’s dicta does not

preclude application of the on-sale bar, in addition to the “public use” provision of

6 The “public use” bar is another means for invalidating a patent under § 102(a)(1). For

a prior “public use” to invalidate a patent, the challenger must show that the purported

use: “(1) was accessible to the public; or (2) was commercially exploited, and that

commercial exploitation of the claimed invention is a clear indication of public use.”

Quest Integrity USA, LLC v. Cokebusters USA Inc., 924 F.3d 1220, 1228 n.7 (Fed.

Cir. 2019) (quoting Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380

(Fed. Cir. 2005)). The public accessibility and commercial exploitation requirements

for the “public use” bar are not necessary for the on-sale bar to apply.

7 In prior versions of the statute, the on-sale bar and the public use provision were in

§ 102(b). The provisions are now in § 102(a)(1).

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 9

§ 102(a)(1). Significantly, the footnote’s dicta does not negate the Federal Circuit’s

definitive ruling in Caveney and the line of Federal Circuit cases the Court cited.

OneSubsea cites also to the Federal Circuit’s decision in ResQNet. In that case,

the Federal Circuit declared definitively, as it did in Caveney, that an “offer for sale,

sale, or public use, if [prior to the critical date], will bar patenting of the product, even

if the sale was not authorized by the patentee.” ResQNet.com, Inc. v. Lansa, Inc., 594

F.3d 860, 866 (Fed. Cir. 2010) (citing Caveney, 761 F.2d at 675). OneSubsea

nevertheless focuses on the Federal Circuit’s quote of Caveney’s footnote 5, inserted

in ResQNet without analysis or reference to the cases cited in Caveney’s text, that

“[s]ales or offers made by others and disclosing the claimed invention implicate the

‘public use’ provision of 35 U.S.C. § 102(b).” Id. (citing Caveney, 761 F.2d at 675

n.5). The statement in ResQNet regarding the “public use” provision of § 102(a)(1),

like the statement in Caveney’s footnote, was dicta. The Federal Circuit in ResQNet

affirmed the district court’s ruling that the on-sale bar did not apply – not because the

prior offer for sale was by a third party, but because the product offered for sale prior

to the critical date did not embody all elements of the patent’s claims. See id.

The Federal Circuit has specifically addressed on several occasions “whether

activities by a third party create[] an on-sale bar . . ..” See J.A. LaPorte, Inc. v.

Norfolk Dredging Co., 787 F.2d 1577, 1578 (Fed. Cir. 1986). In LaPorte, the Federal

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 10

Circuit stated that the on-sale bar “is not limited to sales by the inventor or one under

his control, but may result from activities of a third party.” Id. at 1581 (citing

Andrews v. Hovey, 124 U.S. 694, 719 (1888); Caveney, 761 F.2d at 676; Pennwalt

Corp. v. Akzona, Inc., 740 F.2d 1573, 1580 n.14 (Fed. Cir. 1984); General Elec. Co.

v. United States, 654 F.2d 55, 61-62 (Ct. Cl. 1981)); id. at 1583 (“the general rule [is]

that a third-party sale of a device embodying the claimed invention prior [to] the

critical date invalidates the patent”). In LaPorte, the Federal Circuit clarified any

uncertainty that may have been created by its footnote in Caveney.

The Federal Circuit later stated again that the on-sale bar is “not limited to sales

or uses by the inventor or one under the inventor’s control, but may result from

activities of a third party which anticipate the invention, or render it obvious.” In re

Epstein, 32 F.3d 1559, 1564 (Fed. Cir. 1994) (citing Andrews, 124 U.S. at 719; La

Porte, 787 F.2d at 1581; Caveney, 761 F.2d at 676; Pennwalt, 740 F.2d at 1580 n.14;

General Elec. Co. v. United States, 654 F.2d at 61-62 (Ct. Cl. 1981)).

The Court has carefully considered the parties’ arguments, the language of

§ 102, and the holdings by the Federal Circuit. The Court concludes, as the Federal

Circuit has repeatedly, that the on-sale bar is not limited to sales or offers for sale by

the inventor or one under his control, but may result from sales or offers for sale by

an unrelated third party.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 11

The Court next addresses the two on-sale bar requirements set forth by the

Supreme Court in Helsinn – whether the invention was the subject of a commercial

sale or offer for sale, and whether the invention that was sold or offered for sale was

ready for patenting at the time.

C. Commercial Sale or Offer for Sale

A commercial sale or offer for sale for purposes on the on-sale bar need not

make the invention publicly-available. See Helsinn, 139 S. Ct. at 633; Quest Integrity

USA, LLC v. Cokebusters USA Inc., 924 F.3d 1220, 1227 (Fed. Cir. 2019). “[T]he

question of whether an invention is the subject of a commercial offer for sale is a

matter of Federal Circuit law, to be analyzed under the law of contracts as generally

understood.” Merck & Cie v. Watson Labs., Inc., 822 F.3d 1347, 1350 (Fed. Cir.

2016) (quoting Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1047 (Fed.

Cir. 2001)). A commercial sale “is a contract between parties to give and to pass

rights of property for consideration which the buyer pays or promises to pay the seller

for the thing bought or sold.” The Medicines Co. v. Hospira, Inc., 881 F.3d 1347,

1351 (Fed. Cir. 2018). An offer for sale is “one which the other party could make into

a binding contract by simple acceptance.” Id.

In this case, FMC has presented evidence that Shell signed a December 2014

purchase order for FMC’s 15k-400F EVDT. See Purchase Order, Exh. 10 to Motion,

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 12

Attachment A. This allowed FMC to acquire the long-lead time items required for the

qualification and production of the HPHT EVDT product. See Declaration of Allison

Weber,8 Exh. 1 to Motion, ¶ 18. The Purchase Order included pricing and delivery

dates, including “15k 400F Gate Valve Body Forging” to be delivered by November

15, 2015. See Purchase Order, p. 17.

FMC also has presented evidence that in September 2015, Shell signed a

“Variation Order Request (VOR) Form” incorporating the Purchase Contract in

Attachment A. See Purchase Contract, Exh. 11 to Motion. The Purchase Contract

provided for Shell to purchase from FMC ten “FMC 15 ksi, 400F EVDT Production

Tree Systems.” See id. at 50. The Purchase Contract included pricing and delivery

dates. See id. at 23 (pricing); 11 (key delivery dates).

FMC also has presented evidence that the 15k/400F HPHT EVDT is not

materially different from the accused 20k/350F HPHT EVDT. See, e.g., Weber Decl.,

¶ 21 (two versions were designed to have the same core components); ¶ 26 (core

design and component interfaces of the two versions are the same). Indeed,

OneSubsea does not contest that the two versions of FMC’s HPHT EVDTs are

materially the same, or that the 15k/400F HPHT EVDT includes all the claim

8 Allison Weber was the Lead Engineer for Well Completion Systems Development for

FMC from May 2013 until December 2017, leading the design for FMC’s HPHT

EVDTs. See Weber Decl., ¶ 2. She is currently Chief Product Developer for

TechnipFMC. Id.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 13

limitations of the ’202 Patent.9 OneSubsea argues instead that FMC has failed to

present sufficient evidence that the object of the Purchase Order and the Purchase

Contract was FMC’s 15k/400F HPHT EVDT. As described above, the Purchase

Order specifically refers to FMC’s “15k-400F EVDT,” and the Purchase Contract

specifically identifies ten of FMC’s “15 ksi, 400F EVDT Production Tree Systems”

as equipment covered by the Purchase Contract. FMC’s evidence that the 15k/400F

EVDT is an HPHT product is persuasive and uncontradicted. See Deposition of

Allison Weber, Exh. 29 to Reply, p. 80. The absence of the “HPHT” letters is

immaterial because “HPHT” by definition relates to a well that is “hotter or higher

pressure than most,” having a temperature greater than 300F and requiring a BOP with

a rating in excess of 10,000 psi. See Oilfield Glossary, Exh. 27 to Reply, p. 4. The

Purchase Order and Purchase Contract identify FMC’s EVDTs with 15k psi and 400F

9 Although FMC bears the burden of proving that the EVDTs sold to Shell met all the

limitations of the claims in the ’202 Patent, that burden is satisfied by OneSubsea’s

allegation in paragraph 17 of its Amended Counterclaims [Doc. # 87] that the

materially identical accused device (the 20k/350F HPHT EVDT) infringes the ’202

Patent. See Vanmoor v. Wal-Mart Stores, Inc., 201 F.3d 1363, 1366 (Fed. Cir. 2000)

(citing Evans Cooling Sys. Inc. v. General Motors Corp., 125 F.3d 1448, 1451 (Fed.

Cir. 1997)); see also ResQNet.com, Inc. v. Lansa, Inc., 382 F. Supp. 2d 424, 438

(S.D.N.Y. 2005), rev’d on other grounds, 594 F.3d 860 (Fed. Cir. 2010) (holding that

if there is no genuine issue of material fact as to whether the product offered for sale

prior to the critical date is materially the same as the accused product, “the application

of the rule set forth in Evans Cooling Systems and Vanmoor would appear

mandated.”).

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 14

temperature, a psi and temperature that is HPHT.10 Moreover, OneSubsea has not

presented evidence that the Purchase Order and Purchase Contract are for the purchase

of any EVDT other than FMC’s 15k/400F HPHT EVDT. OneSubsea has failed to

raise a genuine issue of material fact regarding whether FMC and Shell entered into

a Purchase Order in December 2014 and a Purchase Contract in September 2015 for

Shell to purchase ten of FMC’s 15k/400F HPHT EVDTs, both events prior to the

critical date in this case.

OneSubsea argues also that there was no sale prior to the critical date because

Shell was not to receive delivery of a completed 15k/400F HPHT EVDT until

December 31, 2017. “The fact that delivery was set for dates after the critical date is

irrelevant to the finding of a commercial offer to sell.” STX, LLC v. Brine, Inc., 211

F.3d 588, 590 (Fed. Cir. 2000) (citing Pfaff, 525 U.S. at 67).

In summary, FMC has presented competent summary judgment evidence that,

prior to the critical date of March 27, 2017, it entered into a Purchase Order and a

Purchase Contract for Shell to purchase ten of FMC’s 15k/400F HPHT EVDTs. This

satisfies the “commercial sale or offer for sale” element of the on-sale bar for purposes

of 35 U.S.C. § 102(a)(1).

10 The Court notes that OneSubsea in its Preliminary Infringement Contentions uses

similar shorthand, referring to the accused “20ksi 350 High Pressure High

Temperature Enhanced Vertical Deepwater Tree as “20ksi EVDT.” See Preliminary

Infringement Contentions, Exh. 3 to Motion, p. 2.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 15

D. Ready for Patenting

A device subject to a commercial sale or offer for sale must be “ready for

patenting” for the on-sale bar to apply. The “ready for patenting” element can be

shown “by proof of reduction to practice” or by “drawings or other descriptions of the

invention that were sufficiently specific to enable a person skilled in the art to practice

the invention.” Helsinn, 139 S. Ct. at 633 (quoting Pfaff, 525 U.S. at 67-68). It is not

necessary for the device “to be ready to be put into operation for the on-sale bar to

apply.” S. Snow Mfg. Co. v. SnoWizard Holdings, Inc., 567 F. App’x 945, 953 (Fed.

Cir. June 30, 2014). Additionally, “fine-tuning of an invention after the critical date

does not mean that the invention was not ready for patenting.” Hamilton Beach

Brands, Inc. v. Sunbeam Prod., Inc., 726 F.3d 1370, 1379 (Fed. Cir. 2013).

FMC has presented evidence that by December 13, 2013, it “froze a single

design of the core component interfaces for the HPHT EVDT design to handle both

the 15k/400F and the 20k/350F ratings.” See Weber Decl., ¶ 11. By March 2014, the

HPHT EVDT design “was already at an advanced stage and the presentation to Shell

included detailed Computer-Aided Design (“CAD”) images showing the concentric

stab assembly as well as other detailed drawings.” Id., ¶ 13. FMC has presented

evidence that at the time of the September 2015 Purchase Order with Shell, “the

design of the HPHT EVDT, including the concentric production and annulus stab, was

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 16

fundamentally complete and had been qualified.” Id., ¶ 19. “The design of all core

components of both rated versions of the HPHT EVDT was complete by August

2015.” Id., ¶ 24. OneSubsea proffers no evidence to contradict any of these

averments.

OneSubsea argues that the 15k/400F HPHT EVDT was not ready for patenting

prior to the critical date because there was ongoing development and the first actual

delivery of the device to Shell did not occur until 2018. As noted above, a device is

“ready for patenting” when it is “depicted in drawings or described in writings of

sufficient nature to enable a person of ordinary skill in the art to practice the

invention.” The Medicines Co. v. Hospira, Inc., 881 F.3d 1347, 1353 (Fed. Cir. 2018)

(quoting Hamilton Beach, 726 F.3d at 1375). FMC’s evidence shows that by

March 2014, it had developed CAD designs that were sufficient in nature to allow its

engineers to manufacture the device and sufficient to entice Shell to purchase 10 of

the 15k/400F HPHT EVDTs. “It is not necessary for the assemblies or the part to be

ready to be put into operation for the on-sale bar to apply.” S. Snow, 567 F. App’x at

953. OneSubsea has not presented evidence that after the March 2014 CAD designs

and the core component designs were completed by August 2015, anything else was

required for FMC to be able to manufacture the 15k/400F HPHT EVDT. There is no

evidence that raises a genuine issue of material fact regarding whether FMC’s EVDT

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 17

product that was sold to Shell in September 2015 was ready for patenting prior to the

March 2017 critical date. As a result, FMC has satisfied the “ready for patenting”

element of the on-sale bar for purposes of 35 U.S.C. § 102(a)(1).

IV. CONCLUSION AND ORDER

Under binding Federal Circuit authority, the on-sale bar can apply when the sale

is by a third party who is unrelated to the inventor.

FMC has presented uncontroverted summary judgment evidence as to both the

“commercial sale or offer for sale” and the “ready for patenting” elements of the on-

sale bar. Specifically, FMC has presented competent summary judgment evidence

that the 15K/400F HPHT EVDT, which is materially identical to the 20k/350F HPHT

EVDT that OneSubsea alleges infringes the ’202 Patent, was the subject of a

commercial sale to Shell before the effective filing date for the ’202 Patent.

OneSubsea has failed to present evidence that raises a genuine issue of material fact

on any of these facts. FMC also has presented evidence that the 15K/400F HPHT

EVDT was ready for patenting at the time it was offered to and sold to Shell.

OneSubsea has not presented evidence that raises a genuine issue of fact for trial on

this issue. As a result, it is hereby

ORDERED that FMC’s Motion for Summary Judgment of Invalidity (“FMC’s

Motion”) [Doc. # 107] is GRANTED. It is further

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 18

ORDERED that OneSubSea’s Cross-Motion for Partial Summary Judgment

of No Invalidity [Doc. # 116] is DENIED. It is further

ORDERED that OneSubsea’s Motion for Partial Summary Judgment of

Infringement [Doc. # 117], Motion for Leave to Amend Counterclaim and Preliminary

Infringement Contentions [Doc. # 128], and Motion to Strike FMC’s Sur-Reply [Doc.

# 134] are DENIED AS MOOT. It is further

ORDERED that counsel shall appear before the Court on October 17, 2019,

at 11:30 a.m. for a status and scheduling conference.

SIGNED at Houston, Texas, this 24th day of September, 2019.

P:\ORDERS\11-2018\2459MSJInvalidity.wpd 190924.0811 19