Court Opinion

ID: 4405108
Source: CourtListenerOpinion
Date Created: 2019-06-10 16:00:44.810057+00
Date Added: 2024-06-11T14:52:34.940952
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

    PACKERS PLUS ENERGY SERVICES INC.,
                 Appellant

                           v.

 BAKER HUGHES OILFIELD OPERATIONS, LLC,
                  Appellee
           ______________________

                      2018-1490
                ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2016-
01099.
                 ______________________

                Decided: June 10, 2019
                ______________________

   CHRISTOPHER NEEDHAM CRAVEY, Jackson Walker LLP,
Houston, TX, argued for appellant. Also represented by
WASIF QURESHI.

   STEPHANIE DEBROW, Norton Rose Fulbright US LLP,
Austin, TX, argued for appellee. Also represented by MARK
T. GARRETT, WILLIAM ANDREW LIDDELL, EAGLE HOWARD
ROBINSON; JONATHAN S. FRANKLIN, Washington, DC.
                 ______________________
2           PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD

    Before LOURIE, LINN, and WALLACH, Circuit Judges.
LINN, Circuit Judge.
     Packers Plus Energy Services Inc. (“Packers Plus”) ap-
peals the Patent Trial and Appeal Board’s (“Board”) final
written decision, holding claims 1–29 of Baker Hughes Oil-
field Operations, LLC’s (“Baker Hughes”) U.S. Patent
Number 6,006,838 (“the ’838 patent”) not unpatentable as
obvious in an inter partes review. See Packers Plus Energy
Servs. Inc v. Baker Hughes Oilfield Operations, LLC, No.
IPR2016-01099, 2017 WL 6206291 (P.T.A.B. Nov. 29, 2017)
(“Decision”).
     Because the Board did not err in construing the claim
limitation “over the jetting passageways,” and because sub-
stantial evidence supports the Board’s conclusion that in-
dependent claims 1, 8, and 16 and the claims dependent
therefrom are not unpatentable over the cited prior art, we
affirm that much of the Board’s decision. Because the
Board did not independently consider the patentability of
independent claim 21 and the claims dependent therefrom,
and because we are not persuaded by the alternative
grounds for affirmance asserted by Packers Plus, we vacate
and remand the Board’s decision with respect to those
claims.
                             I
    Packers Plus first argues that the Board erred by con-
struing the limitation “over the jetting passageways” to
mean “covering the jetting passageways.” Packers Plus
contends that the Board erred in imposing a structural re-
lationship between the shiftable sleeve and the jetting pas-
sageways when in the “closed” position, rather than the
functional relationship of blocking fluid communication be-
tween the jetting passageways and the central passage-
way.
   We see no error in the Board’s construction. The plain
meaning of “over” is to describe the structural arrangement
PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD                 3

of one object with respect to another, not the functional re-
lationship thereof. Claim 1 does use functional language
in describing the shiftable sleeve in its open position
“whereby the jetting passageways are in communication
with the central passageway of each housing.” Claim 1,
however, does not use parallel language when describing
the shiftable sleeve in its closed position, opting instead for
the spatial language of “over the jetting passageways.”
Packers Plus proffers no reason why it would be appropri-
ate to rewrite the claims to make the language used to re-
cite the “closed” and “open” positions parallel.
    Packers Plus argues that even if “over” specifies a phys-
ical position, it should be construed to mean “above.” We
disagree. Nothing in the specification shows or describes a
shiftable sleeve above the jetting passageway but not also
covering it. There is simply no support for Packers Plus’s
construction. As the Board recognized, the presence of a
single dictionary definition of “over” as meaning “above”
does not make that definition a reasonable reading of the
limitation in light of the specification. See PPC Broad-
band, Inc. v. Corning Optical Commc’ns RF, LLC, 815 F.3d
734, 742–43 (Fed. Cir. 2016).
                              II
    Packers Plus next argues that the Board erred in hold-
ing Claims 1, 8, and 16 non-obvious over the combination
of U.S. Patent No. 4,099,563 (“Hutchison”) and U.S. Patent
No. 5,765,642 (“Surjaatmadja”). First, Packers Plus con-
tends that the Board erred by analyzing the obviousness of
the combination solely as presented in Baker Hughes’s Pa-
tent Owner Response (as pictured in Modified Figure 2, re-
produced below), rather than more broadly based on the
overall teachings of the references. According to Packers
Plus, because a proper obviousness analysis “does not re-
quire an actual, physical substitution of elements,” In re
Mouttet, 686 F.3d 1322, 1332 (Fed. Cir. 2012), the Board
should not have limited its obviousness analysis to the
4            PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD

                    particular configuration suggested by
                    Baker Hughes’s response.       Second,
                    Packers Plus argues that even using
                    Baker Hughes’s proffered configura-
                    tion of the combination, the Board
                    erred in finding non-obviousness only
                    by improperly narrowing the claim con-
                    struction to require the sleeve to
                    “straddle” the jetting passageway.
                         Baker Hughes responds that the
                    Board’s conclusion of non-obviousness
                    is supported by substantial evidence.
                    With respect to the placement of the
                    jetting nozzles in the combination,
                    Baker Hughes points out that Packers
                    Plus did not argue for any particular
                    position for the jetting nozzles in the
                    asserted combination presented in its
                    petition and contends that Packers
                    Plus has not offered a reason why an
                    ordinary artisan would place the noz-
                    zles in a position such that the sleeve
                    would cover the jetting passageway.
                         We agree with Baker Hughes. The
                     Board did not err by using Modified
                     Figure 2, above left, as a representation
of the proposed combination. Packers Plus’s obviousness
theory was built on “substituting” or “replacing”
Hutchison’s annular steam chamber with Surjaatmadja’s
jet nozzles. J. App’x 92 (“substituting”; J.App’x 93 (“replac-
ing Hutchison’s annular steam chamber with Sur-
jaatmadja’s nozzles”); J. App’x 95 (“[A person of ordinary
skill] would have understood simply to substitute Sur-
jaatmadja’s nozzles for Hutchison’s steam deflector”). As
the Board correctly noted, Packers Plus nowhere explained
where the jet nozzles would have been positioned in the
combination by a person of ordinary skill, much less
PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD              5

provided a reason why—in the absence of hindsight—such
a person of ordinary skill would have placed the jet nozzles
at the one particular place where the shifting sleeve would
cover the jetting passageways. Packers Plus’s citation to
its expert report does not help. That report merely opines
that “[t]here would be no design hurdle or obstacle that
would prevent a person of ordinary skill in the art from”
“simply . . . substitut[ing] Surjaatmadja’s nozzles for
Hutchison’s steam deflector.” That statement identifies no
teaching or disclosure in the cited references to suggest
where the jet nozzles should be positioned in the combina-
tion or how and whether those nozzles would “cover” the
jetting nozzle passageways. Nor does the statement proffer
any reason why the nozzles would be positioned at a par-
ticular place.
     We also agree with the Board that Packers Plus’s argu-
ment about the placement of the nozzles in the combination
is merely “unsupported attorney argument.” As the Board
correctly recognized, “[p]etitioner does not provide suffi-
cient explanation or offer credible evidence to support its
contention that a person of skill in the art would consider
it ‘reasonable and obvious’ to place Surjaatmadja’s jetting
nozzles at the same location that sliding sleeve 38 forms a
seal with the fluid passageway.” Decision, 2017 WL
6206291, at *13. The Board’s determination that Packers
Plus failed to provide sufficient reason to combine
Hutchison and Surjaatmadja in the particular configura-
tion is supported by substantial evidence.
    We also agree with Baker Hughes that the Board did
not improperly narrow its claim construction when analyz-
ing obviousness.      Substantial evidence supports the
Board’s conclusion that because the Hutchison/Sur-
jaatmadja combination as pictured above includes empty
space (in yellow) between the jetting nozzle passageways
(white and green) and the sleeve (purple), the sleeve does
not in fact “cover” the jetting nozzle passageways.” This is
not limiting the claim construction. In the same way that
6            PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD

a lid does not “cover” a box if it is held a few inches off the
top, it is perfectly reasonable for the Board to have con-
cluded that the sleeve does not “cover” the jetting passage-
ways when there is an empty space between the sleeve and
the passageway. The Board did not limit its construction
to a preferred embodiment.
                              III
     In its analysis, the Board at first recognized that Claim
21 “differs” from Claims 1, 8 and 16 in reciting that the jet-
ting passageways are “sealed from the central passageways
by the shiftable sleeve in the closed position” without recit-
ing that the sleeve has “a closed position over the jetting
passageways.” In continuing with its claim construction,
however, the Board ignored that difference and focused its
analysis solely on the word “over.” The Board ultimately
construed the limitation “over the jetting passageways” but
never separately construed the different limitation recited
in Claim 21. This was legal error. The Board compounded
its error by treating Claim 21 as if it included the construed
limitation “over the jetting passageways” and then analyz-
ing the patentability of all of the independent claims as a
single group.
    Baker Hughes does not argue that the Board’s reason-
ing with respect to the “over the jetting passageways” lim-
itation also applies to the “sealed from the central
passageways” limitation. Instead, it argues that we can af-
firm non-obviousness of Claim 21 on three alternative
grounds. We address each, infra.
                              A
    As a preliminary matter, we disagree with Packers
Plus’s contention that In re Lee, 277 F.3d 1338, 1345–46
(Fed. Cir. 2002) prohibits us from considering these alter-
native grounds on an appeal from the Board. In Lee, we
refused to affirm a decision on alternative grounds prof-
fered by the Solicitor during oral argument and not
PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD               7

considered by the Board. Id. at 1345. We explained that
consideration of these alternative grounds would “deprive[]
the aggrieved party of a fair opportunity to support its po-
sition; thus review of an administrative decision must be
made on the grounds relied on by the agency.” Id. This
follows the “familiar appellate procedure that where the
correctness of [a] lower court’s decision depends upon a de-
termination of fact . . . which has not been made, the appel-
late court cannot take the place of the [fact finder]. Like
considerations govern review of administrative orders.”
Sec. & Exch. Comm’n v. Chenery Corp., 318 U.S. 80, 88
(1943). But where the issues raised do not require us to
find facts in the first instance, we have previously consid-
ered alternative grounds to support a Board decision. See,
e.g., Click-To-Call Techs., LP v. Ingenio, Inc., 899 F.3d
1321, 1336 (Fed. Cir. 2018) (citing Killip v. Office of Pers.
Mgmt., 991 F.2d 1564, 1568–69 (Fed. Cir. 1993) and recog-
nizing, in an appeal from the Merit Systems Protection
Board , that we may “affirm the Board on grounds other
than those relied upon in rendering its decision, when up-
holding the Board's decision does not depend upon making
a determination of fact not previously made by the Board”);
Nike, Inc. v. Adidas AG, 812 F.3d 1326, 1346 (Fed. Cir.
2016), overruled on other grounds by Aqua Prods., Inc. v.
Matal, 872 F.3d 1290 (Fed. Cir. 2017). Here, the Board
considered each of the facts underlying the alternative
grounds, and both parties had the opportunity to address
the issues at the Board. We are therefore free to consider
the alternative grounds in this appeal.
                             B
    Baker Hughes first argues that substantial evidence
does not support the Board’s determination that the
Hutchison/Surjaatmadja combination discloses the “tail-
pipe string” limitation of Claim 21. Baker Hughes gives
two reasons in support of its position. It first argues that
“tailpipe” is a term of art that ordinary artisans would have
understood, and should be construed, to refer exclusively to
8            PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD

pipe hung from a casing packer or hanger packer. Such
packers remain in the hole during extraction as distin-
guished from Hutchison’s tubing string, which would be ex-
pected to be removed prior to extraction. J. App’x 26; J.
App’x 739; J. App’x 791 (Cox Dec’l, ¶ 70). Packers Plus re-
sponds that “tailpipe” string should not be construed so
narrowly.
    Baker Hughes next argues that the Board could only
find that the tubing string of Hutchison is the same as the
claimed tailpipe string by improperly shifting the burden
to Baker Hughes to show that Hutchison did not teach a
tailpipe string. Packers Plus contends that the burden was
not shifted and that substantial evidence from both parties’
experts supports the Board’s finding that Hutchison taught
the tailpipe string limitation.
     We see no error in the Board’s analysis of this limita-
tion. Claim 21 does not recite a particular type of packer.
Baker Hughes’s attempt to import that limitation into the
claim from the specification must fail. While it is true that
all of the embodiments in the ’838 patent show a string ex-
tending below a packer into an open well, claim scope is not
ordinarily limited to preferred embodiments. Here, Baker
Hughes does not provide a persuasive reason for deviating
from the general rule. Moreover, Baker Hughes’s position
that ordinary artisans would understand that a tubing
string like that taught in Hutchison necessarily excludes
the use of a production or liner hanger packer is belied by
Dr. Cox’s cross-examination testimony that “it was well
known prior to the ’838 patent to run tubulars and comple-
tion components below a production packer or liner hanger
packer.” We see no error in the Board’s reliance on this
testimony to decline Baker Hughes’s invitation to limit the
construction of “tailpipe string.”
   We also do not agree with Baker Hughes that the
Board improperly shifted the burden of proof to Baker
Hughes. In context, the Board’s statement that “Patent
PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD                9

Owner . . . does not present sufficient arguments or credible
evidence demonstrating why one of skill in the art would
not consider tubing string 19 of Hutchison to be a tailpipe
string,” Decision, 2017 WL 6206291, at *11, was simply a
rejection of Baker Hughes’s claim construction of “tailpipe
string” as necessarily requiring a production packer or
liner hanger packer. The Board did not shift the burden
with respect to obviousness.
                              C
    Baker Hughes next argues that non-obviousness of
claim 21 should be affirmed because Hutchison’s cup pack-
ers would be unsuitable for use in an open-hole bore. We
disagree. As noted above, the claims do not require a par-
ticular type of packer. Moreover, obviousness does not re-
quire the bodily incorporation of the teachings of one
reference to another reference—an ordinary artisan has
the capacity for ordinary creativity when combining refer-
ences. Allied Erecting & Dismantling Co. v. Genesis At-
tachments, LLC, 825 F.3d 1373, 1381 (Fed. Cir. 2016)
(quoting In re Keller, 642 F.2d 413, 425 (CCPA 1981)); see
also KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007)
(“A person of ordinary skill is also a person of ordinary cre-
ativity, not an automaton.”).
                              D
    Finally, Baker Hughes argues that substantial evi-
dence does not support the combination of Hutchison with
Surjaatmadja because the jet nozzles of Surjaatmadja
would render the Hutchison string unsuitable for its in-
tended purpose of evenly heating heavy oils in a well bore.
We disagree. No doubt, the use of jet nozzles in place of the
annular chambers in Hutchison would direct the steam to
particular areas, rather than create uniform heating. But
as Packers Plus correctly points out, “a reference may be
read for all that it teaches, including uses beyond its pri-
mary purpose.” Mouttet, 686 F.3d at 1331. In the cited
combination, Hutchison teaches the availability of multiple
10           PACKERS PLUS ENERGY v. BAKER HUGHES OILFIELD

modules in multiple zones within a bore, and how those dif-
ferent modules are activated to help extract oil at different
depths. That the combination would not evenly heat a re-
gion, but focus on particular areas, does not in and of itself
undermine the Board’s obviousness determination.
  AFFIRMED-IN-PART, VACATED-IN-PART, AND
                REMANDED
                           COSTS
     No costs.