MEMORANDUM AND ORDER
Pending before the Court are the following motions:
Filed by Plaintiff Tesco Corporation (“Tesco” or “Plaintiff’):
— Motion for Entry of Judgment on the Verdict as a Matter of Law, or Alternatively, Motion for Summary Judgment (Doc. No. 711)
Filed by Defendant Frank’s Casing Crew & Rental Tools, Inc. (“Frank’s”):
— Sealed Motion for Attorney’s Fees for Posh-Trial Discovery and New Trial (if Granted) (Doc. No. 633);
— Post-Trial Motion for Summary Judgment on Obviousness Based Upon Tesco Prior Art Brochures (Doc. No. 713);
— Posh-Trial Motion for Summary Judgment That Tesco’s Asserted Patent Claims are Invalid Under the On-Sale Provision of 35 U.S.C. § 102(b) (Doc. No. 721)
Filed by Defendants National Oilwell Vareo, L.P. (“NOV”) and Offshore Energy Services, Inc. (“OES”):
— Motion for Summary Judgment of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) re: Tesco’s Offer for Sale to Conoco (Doc. No. 712);
— Motion for Summary Judgment of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) (Prior Printed Publication) Re: Tesco’s August 2002 “Vision” Brochure (Doc. No. 716);
— Motion for Summary Judgment of Patent Invalidity Pursuant to 35 U.S.C. § 103(a) Obviousness (Doc. No. 723)
I. BACKGROUND
This proceeding was filed in 2008, and has been the subject of previous rulings of the Court. E.g., Doc. No. 386. The background set forth in earlier writings will not be repeated, except as necessary to provide context for the facts and law discussed herein.
Tesco owns U.S. Patent No. 7,140,443 (“the '443 patent”) and U.S. Patent No. 7,377,324 (“the '324 patent”). The '324 patent, granted in May 2008, is a continuation of the '443 patent, granted in November 2006. The two patents describe a tool used on a drilling rig. Drilling rigs are used to bore and encase holes in the ground for the purpose of extracting oil. The patents describe an apparatus and method for handling the sections of the pipe or pipe strings that are used for drilling or lining a well bore. Stated summarily, the patent covers a “Case Drilling System with a link tilt” referred to by all parties as “CDS with link tilt.” More detailed descriptions of the device and its function can be found in the Court’s earlier opinions.
Tesco brought suit against Weatherford International, Inc., NOV, OES, and Frank’s for infringement of those patents.
Plaintiff sought to have the Court enter judgment on the verdict. Defendants sought judgment as a matter of law in their favor. The Court did neither. Rather, because of internal inconsistencies in the jury verdict, and because of concern— re-enforced during the trial — that Tesco had not produced all of the discovery that Defendants had properly requested, the Court authorized additional discovery.
II. APPLICABLE LAW
A. Legal Standard for Summary Judgment
A motion for summary judgment requires the Court to determine whether the moving party is entitled to judgment as a matter of law based on the evidence thus far presented. See Fed.R.Civ.P. 56(c)(2). “Summary judgment is appropriate when, drawing all justifiable inferences in the nonmovant’s favor, there exists no genuine issue of material fact and the movant is entitled to judgment as a matter of law.” Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc.,
The Court views all evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in that party’s favor. Crawford v. Formosa Plastics Corp.,
B. On-Sale Bar
Defendants assert that they are entitled to summary judgment based on the invalidity of all of the claims at issue in this lawsuit. Under 35 U.S.C. § 102(b),
A person shall be entitled to a patent unless—
(b) the invention was ... on sale in this country, more than one year prior to the date of the application for patent in the United States.
35 U.S.C. §§ 102(a)-(b). “Section 102(b) encourages prompt disclosure of new inventions and in particular limits commer
An alleged infringer asserting patent invalidity must overcome the presumption of validity with clear and convincing evidence. Microsoft Corp. v. i4i Ltd. Partnership, — U.S. -,
The on sale bar applies where two conditions are satisfied before the critical date: (1) the product is the subject of a commercial offer for sale, and (2) the invention is ready for patenting. Pfaff v. Wells Electronics, Inc.,
1. Commercial Offer for Sale
“First, the product must be the subject of a commercial offer for sale.” Id. To satisfy this prong, a court must find (1) that the alleged offer for sale rose to the level of a “definite” offer which, upon acceptance, would form a binding contract, and (2) that the subject of the offer met each of the limitations of the claims. Scaltech, Inc. v. Retec/Tetra, LLC,
For example, in Ferag AG v. Quipp, Inc., in June of 1979, Ferag, Inc. and Bergen entered into an Equipment Sales Agreement, incorporating a prior partnership agreement among Ferag, Ferag, Inc. and Bergen, for a conveyer apparatus.
In Robotic Vision Systems Inc. v. View Engineering, Inc. (“Robotic II”), the Federal Circuit again indicated that the fact that a product does not exist at the time of an offer for sale does not forestall the possibility of an on-sale bar.
In Sparton Corp. v. United States, the Federal Circuit found it relevant that the patented technology had not even been conceived at the time of the alleged offer for sale.
Finally, and most recently, in August Technology, the Federal Circuit stated that an offer for sale could invalidate a subsequent patent even if the claimed technology had not yet been conceived at the time of the offer.
The Court provides this detailed accounting of Federal Circuit precedent because the governing law is not entirely clear. For instance, the Sparton court’s holding that a product cannot be offered for sale before it is even conceived is in tension with the Federal Circuit’s previous holding finding an on-sale bar in Ferag despite the fact that fact that the invention there had not been conceived until after the offer. Compare Sparton,
This Court finds that the best way to reconcile this line of precedent is to read Sparton narrowly. Sparton simply provides that an offer for sale before an invention is conceived cannot, standing alone, amount to an on-sale bar irrespective of when the conception ultimately occurs. Contrary to Tesco’s suggestions (Doc. No. 736, at 14-15), Sparton cannot stand for the proposition that, if the invention was not conceived by the time of an offer, there can never be an on-sale bar stemming from that original offer. Rather, as the Federal Circuit’s recent pronouncement in August Technology affirms, a subsequent conception combined with the original offer for sale, may constitute a bar if the conception date precedes the critical date. August Tech.,
2. Ready for Patenting
The second prong of the on-sale bar inquiry requires the invention to “be ready for patenting.” Pfaff,
These conditions need not be satisfied at the time of the offer for sale. Robotic Vision Sys., Inc. v. View Eng’g, Inc.,
III. ANALYSIS
The Court finds that Tesco has met its burden and shown that there is a genuine
A. Commercial Offer for Sale
Defendants argue that the Conoco Contract constitutes an offer to sell the CDS with link tilt system because the Conoco Contract was not limited to the prior art and Tesco intended to provide the new system to Conoco under the Conoco Contract. (See Doc. No. 721, at 27-33; Doc. No. 712, at 37-49.) Defendants point out that the Conoco Contract does not require a prior version of Tesco’s products. The Conoco Contract states, in paragraph 1.1, that Tesco will “eomplfy] with the provisions and specifications of Exhibits A through E attached hereto.” (Trial Ex. 461 at TESCOSD0016954, 1.1.) Exhibit A lists the “equipment materials, and services” to be provided (id. at TESCOSD0016974), including a “Casing Clamp/ Drive Sub.” (Id. at TESCOSD0016977.) However, the Conoco Contract also provides that “[t]hese rigs shall meet or exceed the specifications referenced in paragraph 1.1 and shall have passed Tesco’s function test.” (Id. at TESCOSD0016954, 1.3, 1.4.) This clause, Defendants argue, means that the Conoco Contract could be satisfied with a “Casing Clamp” or an improved tool.
Defendants further argue that Tesco was not required to provide Conoco with the prior art because trial and post-trial evidence reveals that the term “Casing Clamp” is not limited to the prior art. Defendants present a substantial amount of sworn testimony which indicates that both Conoco and Tesco employees occasionally used the term “Casing Clamp” to refer to the new technology as well as the prior art. (Doc. No. 721, at 29-32; Doc No. 712, at 47 — 49.)
Tesco argues in response that the Conoco Contract was not an offer to sell the patented technology because the Conoco Contract specifically called for the prior art, and Tesco did not enter the Conoco Contract with the intent to commercialize the CDS with link tilt. (Doc. No. 736, Tesco’s Combined Response to Frank’s Post-Trial Mot. for Summ. J. That Tesco’s Asserted Patent Claims are Invalid Under the On-Sale Provision of 35 U.S.C. § 102(b) and NOV and OES’s Mot. for Summary J. of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) re: Tesco’s Offer for Sale to Conoco, at 6-19.)
Tesco argues that the Conoco Contract did not trigger the on-sale bar because the “Casing Clamp,” expressly called for in the Conoco Contract, refers specifically to a prior version of Tesco’s casing system. (Doc. No. 736, at 6-7.) Tesco argues that the sheer fact that some individuals used the term “Casing Clamp” to refer to old and new technology cannot alter the plain terms of the contract. (Doc. No. 736, at 21-23.)
The Court rejects Tesco’s argument that the terms of the Conoco Contract specifically require the prior art. First, the plain term of the Conoco Contract allow Tesco to exceed the specifications set out in Exhibit A, which include the Casing Clamp. Tesco weakly complains that the use of the terms “meet or exceed” cannot prove that Tesco was required under the contract to provide the new art. (Doc. No. 766, Tesco’s Combined Sur-Reply to Frank’s Post-Trial Mot. for Summ. J. That Tesco’s Asserted Patent Claims are Invalid Under the On-Sale Provision of 35 U.S.C. § 102(b) and NOV and OES’s Mot. for Summary J. of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) re: Tesco’s Offer for Sale to Conoco, at 3^4.) While true, this misses the point. Because the Conoco Contract explicitly allows Tesco to provide technology that exceeds the specifications set out in Exhibit A, the real import of this language is that it shows that neither the
Furthermore, even absent the “meets or exceeds language, Defendants have proffered a substantial quantity of testimony from Conoco and Tesco employees indicating that the term “Casing Clamp” was used to refer to both new and old technology. While this evidence is unnecessary to a finding that the contract does not specifically call for the prior art, it surely weighs in favor of such a finding.
However, to prevail, Defendants cannot simply show that the Conoco Contract is ambiguous. Rather, for this Court to grant summary judgment, the facts must reveal an objectively manifested attempt on Tesco’s part to use the Conoco Contract to commercialize the CDS with link tilt. To this end, Defendants’ evidence that, although the term “Casing Clamp” is ambiguous, as used in the Conoco Contract, it actually referred to the new technology Tesco was developing, is probative. (Doc. No. 721, at 9-10, 28-32; Doc No. 712, at 40-44; Doc No. 753, Franks’ Reply to Post-Trial Mot. for Summ. J., at 12.) Specifically, Defendants present testimony pertaining to pre- and post-contract discussions indicating that Conoco desired an “automated pipe handling system.” (Fontenot Depo., at 86:10-18, 88:11-16.) Conoco employee Robert Strickler even testified that in “February of 2002, Conoco wanted a link tilt system for manipulating the pipe ... [and] Tesco was to provide a link tilt system with its casing drive system.” (Doc. No. 721, at 34-35 (citing Strickler Depo., at 67:16-68:1).) Defendants argue that this evidence reveals both Tesco and Conoco’s intent that the rig would include improved casing gripping technology. (Doc. No. 721, at 9-10, 28-32; Doc No. 712, at 40-47.)
In addition to trial and deposition testimony, Defendants also rely on several Power Point presentations that were produced only after the trial, and by Conoco, not Tesco. These include a May 7, 2002 Power Point that referred to a “new casing drive system” and reflected the original drive system and a new system that Tesco was developing, (Doc. No. 721, at 28; Doc. No. 712, at 45-46), a Power Point dated September 11, 2002 that contained photographs of the CDS with link tilt (Doc. No. 753, at 11; Exhibit D, Doc. No. 724), and another Power Point dated September 19, 2002 containing a rig graphic showing the CDS with link tilt as depicted in a brochure issued by Tesco in August 2002. (Doc. No. 753, at 11; Doc. No. 724-2, Exhibit G.)
Tesco argues that it did not enter into the Conoco Contract in an attempt to commercialize the CDS with link tilt because Tesco did not even conceive of the link tilt system that is the subject of the patent in this case until June 2002. (Doc. No. 736, at 21-23.) Tesco presents concerns about the reliability of some of the deposition testimony cited by Defendants. In particular, Tesco cites to deposition testimony by Strickler that indicates he may not have understood or accurately recalled key aspects of the old casing clamp and how it compared to the CDS with link tilt. (Doc. No. 736, at 16 (citing Strickler Depo. at 73:2-74:9, 84:21-85:8); Doc. No. 327, at 17-18.)
Defendants, in response, raise doubts about the reliability of Fontenot’s testimony that he was surprised that the Alpha Rig contained the CDS with link tilt. In addition to the above-referenced Power Points, which Defendants argue clearly informed Conoco that the rigs would include the CDS with link tilt, Defendants also cite to an email by Fontenot sent on November 8, 2002 (the critical date). In this email, Fontenot asked his coauthor, Tesco’s Tommy Warren, whether a paper they were working on should be revised to reflect the casing drilling system on the new rig. (Doc. No. 757, NOV and OES’s Reply in Support of Summ. J. of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) re: Tesco’s Offer for Sale to Conoco, at 18-19; Doc. No. 721, Ex. Q.) Defendants argue that this email, sent on the critical date, reveals a degree of knowledge of the CDS with link tilt that belies any claims that Fontenot was surprised by the tool. (Doc. No. 721, at 33-34.)
Tesco’s argument that it could not have intended to provide the CDS with link tilt under the Conoco Contract because it was not developed until June of 2002 is without merit. Ferag, Robotic II, and August Technology all stand for the proposition that an invention conceived after the original offer for sale may still invalidate a patent if it is conceived prior to the critical date. Ferag,
However, the fact that Tesco conceived of the CDS with link tilt before the critical date does not, in and of itself, convert the Conoco Contract into an offer for sale. There must also be an objective manifestation of an attempt to commercialize its
The Court has no doubt that Defendants have presented more than enough evidence for a jury to find that Tesco had always intended to provide new casing drilling technology under the Conoco Contract, and that Tesco made objectively manifested attempts to commercialize the CDS with link tilt under the Conoco Contract. Testimony from Conoco employees suggests that Conoco may have expected to receive an invention like the CDS with link tilt, and Tesco intended to provide it, from the very outset of contract negotiations. (Fontenot Depo., at 86:10-18, 88:11-16); Ferag,
Yet, the Court cannot say that there are no genuine issues of material fact as to whether Tesco made an objectively manifested attempt to commercialize the CDS with link tilt under the Conoco Contract. First, among Defendants’ key pieces of evidence is Strickler’s testimony that Conoco always expected to receive a casing drilling system with link tilts. (Doc. No. 721, at 34-35; Doc. No. 712, at 42.) This testimony is based, however, on an incorrect understanding of Tesco’s prior technology and is therefore suspect. Furthermore, Tesco presents evidence that Conoco was surprised to receive the CDS with link tilt. (Doc. No. 736, at 14-19; Fontenot Depo., at 24:3-7, 85:24-88:4.) If Defendants are right that Conoco desired and expected new technology all along, Fontenot’s reaction does not make sense. Defendants invite this Court to find that this part of Fontenot’s testimony “cannot be trusted.” (Doc. No. 757, at 18.) The Court agrees that Fontenot’s testimony is suspect, in light of the aforementioned November 8, 2002 email, which suggests that he was fully aware of the new rig system. However, just as this Court cannot ignore Strickler’s testimony, it also cannot ignore Fontenot’s; to do so would be to intrude on the province of the jury. Anderson v. Liberty Lobby, Inc.,
Accordingly, a jury could reasonably find that Strickler’s testimony should be given little weight or that Fontenot’s testimony that Conoco was surprised to receive the link tilt should be given credence. The jury could conclude, on these bases, that there was no objective manifestation of intent to commercialize the CDS link tilt through the Conoco Contract. Tesco has, therefore, met its burden of showing that a jury could reasonably find the patents at issue valid. Therefore Frank’s Post-Trial Motion for Summary Judgment That Tes
B. Ready for Patenting
Defendants argue that the CDS with link tilt was patent-ready before the critical date. (Doc. No. 721, at 20-24; Doc. No. 712, at 51-56.) In support of this argument, Defendants rely on the September 11, 2002 Power Point, which includes photographs of the CDS with link tilt, and an October 10, 2002 assembly diagram, which Defendants argue is similar to Figure 4 of the '443 patent in all relevant respects.
Tesco responds that the CDS with link tilt was not patent-ready prior to the critical date. (Doc. No. 736, at 29-32.) Tesco notes that the photographs of the CDS with link tilt show the Device hanging from a crane, not “fully assembled” or “operational.” (Doc. No. 736, at 31.) Furthermore, Tesco presents testimony that, when the CDS with link tilt was tested on October 11, 2002, it “didn’t work well.” (Doc. No. 736, at 31-32; Trial Tr. 717:16-718:1.) Tesco also argues that the October 10, 2002 assembly drawings included several differences from the '443 patent embodiment. (Doc. No. 736, at 30.) Defendants point out that these differences all relate to the washers that stabilize the link tilt, and none of the stabilization claims is at issue in this suit. (Doc. No. 753, at 14; Doc. No. 757, at 22-24.)
Defendants also present evidence that raises questions about whether the Alpha rig with the CDS with link tilt was actually delivered before the critical date. (Doc. No. 721, at 34.)
Tesco responds that the evidence presented by Frank’s that the Alpha rig was delivered prior to the critical date is taken out of context. (Doc. No. 736, at 39.) It argues that the statements Frank’s relies on were made when the authors knew the paper would be published well after the Alpha rig would have been on location, and thus should not be understood to suggest the rig was on location as of November 6, 2002. (Doc. No. 736, at 39.) NOV and OES point out that this explanation does not make sense in light of the full statement, which reads: “The first of the new Casing Drilling rigs is on location but has not spudded yet.” (Doc. No. 757, at 25; Doc No. 721, Ex. N.) Furthermore, NOV and OES point out that the papers were going to be presented in March of 2003. (Doc. No. 801, Defendants’ Reply to Tesco’s Response to Defendants’ Supplemental Briefing, at 7.)
Relying on the September 2002 Power Points, Defendants argue that the CDS with link tilt was reduced to practice by at least September of 2002. (Doc. No. 721, at 20-21, Doc. No. 712, at 53-54.) However, Tesco proffers evidence that the invention still did not work well when it arrived on the Conoco lease at Lobo Field, which Tesco contends was on or after the critical date. (Doc. No. 736, at 31-32, 39; Trial Tr. 717:16-718:1.) Tesco relies on its own interrogatory responses and on a spreadsheet detailing when the fourteen
The Court recognizes that neither Tesco’s interrogatory responses nor the spreadsheet are competent summary judgment evidence. Interrogatory responses may constitute competent summary judgment evidence if they satisfy the other requirements of Rule 56. See 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2722 at 51-52 (1983). Verified or sworn pleadings are competent summary judgment evidence; unverified answers to interrogatories and interrogatories not based on personal knowledge are not. See Fowler v. S. Bell Tel. & Tel. Co.,
Nor can the Court conclude, however, that the CDS with link tilt was delivered to Lobo Field before the critical date. Defendants argue that the CDS with link tilt was reduced to practice before the critical date because the Alpha rig was actually delivered to the Conoco lease before the critical date. (Doc. No. 721, at 34.) If Defendants are right that the Alpha rig was “on location” by November 6, 2002, then perhaps the CDS with link tilt was, in fact, reduced to practice before the critical date. However, Tesco explains that the statements Defendants rely on were forward looking and not meant to reflect the state of events as of November 6, 2002. (Doc. No. 736, at 39.) Although the Court is highly skeptical of this explanation in light of the fact that the paper was to be presented in March of 2003, whether Tesco’s explanation is credible is ultimately a jury question. The Court has not been presented with evidence indicating when this paper was to be finalized for publication. There is some indication that Warren hoped to send the “final form” of the paper by “Monday,” presumably the Monday of November 11, 2002, in order for it to be reviewed by Conoco’s management. (Doc. No. 795, Frank’s Supp. Br. Re: On-Sale Questions Raised by Court Order of September 17, 2012, Ex. FF.) If the paper was due to be finalized for publication shortly after these emails and drafts were exchanged, a jury could find that the statement was written with the expectation that the paper would be finalized sometime after the first rig was delivered but before it had spud its first well.
Furthermore, even if the CDS with link tilt was delivered before November 8, 2002, Tesco’s Kevin Nikiforouk testified that, when the CDS with link tilt was tested upon arrival at Lobo Field, before the washers were added, “it really didn’t work well.” (Trial Tr. 717:16-718:1.) While it is true that there is no requirement that the invention be workable on a “commercial scale,” see In re Cygnus Telecommunications Technology, LLC, Patent Litigation,
Finally, Defendants present evidence that the October 10, 2002 drawing is identical in all material respects to the figure in Tesco’s patent. However, to prevail on the second patent-readiness test enunciated in Pfaff, Defendants must proffer evidence that the drawings were “sufficiently specific to enable a person skilled in the art to practice the invention.” Pfaff,
The Court need not resolve these disputes. As discussed above, summary judgment is inappropriate because there is a material question of fact as to whether there was a commercial offer for sale of the CDS with link tilt. Nonetheless, the Court notes that there likely exist genuine issues of material fact that would preclude this Court from finding that the CDS with link tilt was patent-ready before the critical date.
IV. CONCLUSION
Frank’s Post-Trial Motion for Summary Judgment That Tesco’s Asserted Patent Claims are Invalid Under the On-Sale Provision of 35 U.S.C. § 102(b) (Doc. No. 721) and NOV and OES’s Motion for Summary Judgment of Patent Invalidity Pursuant to 35 U.S.C. § 102(b) re: Tesco’s Offer for Sale to Conoco (Doc. No. 712) are DENIED.
IT IS SO ORDERED.
Notes
. The Court also requested supplemental briefing from the parties regarding an on sale bar argument that none of the parties had not originally raised. (Doc. No. 787.) Because of the great expense and delay that another trial would require, the Court found it appropriate to raise the issue sua sponte, in order to explore all possible arguments that would enable the parties and this Court to avoid another trial. After reviewing the supplemental briefing, the Court does not believe the on-sale bar inquiry can be resolved on the theory it raised. However, the Court does consider the arguments raised and the evidence presented in the supplemental briefing to the extent that it is helpful to resolving the original motions for summary judgment based on on-sale bar.
. The Court will refer to the remaining defendants, NOV, OES, and Frank’s, collectively as "Defendants.”
. The Court’s prior order addressing on-sale bar emphasized that Tesco must "inten[d] to be bound” to provide the patented invention. (Doc. No. 381, at 48, 51.) To the extent that the Court’s prior opinion suggested that Tesco must "inten[d] to be bound” to provide the patented invention, the Court now retracts this characterization. The Court now finds that language requiring a patentee to ''in-ten[d] to be bound” is concerned with the
. Actually, Tesco claims that Strickler testified that Conoco was expecting the Casing
. Tesco also claims that a Conoco employee, Gary Hamilton, visited Tesco’s Calgary yard for three days in order to observe the rig, and never once saw the CDS with link tilt. (Doc. No. 736, at 28.) Tesco presents this claim as further evidence that Conoco did not expect to receive the CDS with link tilt. (Doc. No. 736, at 28.) The deposition testimony Tesco cites in support of this claim indicates only that Hamilton could not recall if he saw the CDS with link tilt on his visit. (Hamilton Depo., at 43:21-44:16.) Thus, the Court ignores this purported evidence. Furthermore, Tesco again failed actually to provide the cited testimony to the Court; instead, the Court located the testimony in an Exhibit previously filed by Frank’s. (Doc. No. 285.) Needless to say, Tesco’s repeated failure actually to provide record evidence it relies on, and its mischaracterizations of the evidence in its briefing, are neither appropriate nor helpful to this Court.
. Because Frank's includes this evidence in its discussion of whether the CDS with link tilt was ready for patenting, the Court analyzes it here. However, the Court notes that this evidence is also probative of whether there was a commercial offer for sale of the CDS with link tilt prior to the critical date.
. Although the claims regarding stabilization are no longer at issue in this case, the Court cannot conclude that improvements, such as adding washers, could not affect the overall workability of the CDS with link tilt.