M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc.

99 F. Supp. 3d 969, 2015 U.S. Dist. LEXIS 46848, 2015 WL 1608403
CourtDistrict Court, D. Minnesota
DecidedApril 10, 2015
DocketCivil No. 14-4857 ADM/HB
StatusPublished
Cited by1 cases

This text of 99 F. Supp. 3d 969 (M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., 99 F. Supp. 3d 969, 2015 U.S. Dist. LEXIS 46848, 2015 WL 1608403 (mnd 2015).

Opinion

MEMORANDUM OPINION AND ORDER

ANN D. MONTGOMERY, District Judge.

I. INTRODUCTION

On January 29, 2015 the undersigned United States District Judge heard oral argument on Defendant Dynamic Air Inc.’s (“Dynamic Air”) Motion to Dismiss [Docket No. 16]. For the reasons discussed below, Dynamic Air’s motion is denied.

II. BACKGROUND

This patent infringement action presents a single but interesting question: does the United States Patent Act (“Patent Act”). apply on U.S.-flagged ships in international waters? The facts giving rise to this lawsuit are recited in this Court’s February 2014 Order in a related case, Civil No. 13-2385, and will not be repeated in full here. See M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., No. 13-2385, 2014 WL 494680, 2014 U.S. Dist. LEXIS 14804 (D.Minn. Feb. 6, 2014) (hereinafter M-I Drilling Fluids, Case No. 13-2385). In short, Plaintiff M-I Drilling Fluids UK, Ltd. (“M-I Drilling”) alleges Dynamic Air infringed on its patented CLEANCUT® pneumatic conveyance system technology1 related to transporting oil well waste from oil rigs.2 Compl. [Docket No. 1]. When oil wells are drilled, cuttings from the drilling are brought to the surface. Id. ¶ 5. CLEANCUT® collects and contains the waste, allowing it to be transported in an environmentally friendly way. Id. ¶ 7. MI Drilling seeks damages and a permanent injunction to enjoin further infringement of its patents by Dynamic Air.

A. Parties

This suit involves the Brazilian subsidiaries of M-I Drilling and Dynamic Air. M-I Drilling is a United Kingdom limited-liability company with its principal place of business in the UK. Id. ¶ 2. M-I Drilling is a “supplier of drilling fluid systems and equipment engineered to improve drilling performance.” Id: M-I Swaco do Brasil (“M-I Brazil”) is a sister company and customer of M-I Drilling. Id. ¶ 17.

Dynamic Air is a Minnesota corporation with its principal place of business in St. Paul, Minnesota. Id. ¶ 3. Dynamic Air is a developer, designer, and manufacturer of pneumatic conveyance systems. Id. ¶ 14. Dynamic Air has been involved in the [971]*971pneumatic conveyance industry since 1969. Dynamic Air Ltda. (“Dynamic Ltda.”) is Dynamic Air’s Brazilian subsidiary with its principal place of business in Brazil. Id.. ¶ 17.

Petróleo Brasileño (“Petrobras”) is a Brazilian company that issued a request for proposal for a pneumatic conveyance system to contain and transport drill cuttings from Petrobras-owned Brazilian oil rigs. Id.

B. M-I Brazil and Dynamic Ltda. submit proposals to Petrobas

Between October 2011 and January 2012, Petrobras requested proposals for a pneumatic conveyance system to remove drill cuttings from its oil rigs located in international waters off the coast of Brazil. Id. ¶ 17. M-I Brazil and Dynamic Ltda submitted proposals. Id. Dynamic Ltda was awarded the contract and worked with Dynamic Air to direct the “design, manufacture, and installation of certain pneumatic conveyance systems for Petrobras.” Id. ¶ 19. Dynamic Air directed Dynamic Ltda to install the conveyance and containment systems aboard at least two U.S.flagged ships. Id. ¶ 20. Dynamic Air provides “onsite support” for these systems, “including supervising and assisting in the installation and startup of the systems” aboard the ships. Id. ¶ 21.

In. January 2013, M-I Drilling alleged that Dynamic Air either installed or directed the installation of a pneumatic conveyance system on the U.S.-flagged ship HOS Resolution (“Resolution ”), located in international waters. Id. ¶ 23. In February 2013, the pneumatic conveyance system was used to transport drill cuttings from an offshore Petrobras oil rig to the Resolution. Id. ¶ 24.

In August 2013, M-I Drilling alleged that another Dynamic Air pneumatic conveyance system was manufactured, sold, delivered and installed aboard the U.S.flagged HOS Pinnacle (“Pinnacle”), also located in international waters off the coast of Brazil. Id. ¶ 26. This system was also used to transport drill cuttings from another offshore Petrobras oil rig to the Pinnacle. Id.

M-I Drilling alleges these installed systems aboard the Resolution and Pinnacle infringe upon its Asserted Patents. Id. ¶¶ 28-29.

C. M-I Drilling files several lawsuits

Three lawsuits are pending based on the facts described above. In August 2013, M-I Drilling, individually or in conjunction with M-I Brazil, sued Dynamic Ltda in Brazil. Def.’s Mem. Supp. Mot. Dismiss [Docket No. 18] 2. According to the parties, that case is proceeding on the merits in the Brazilian Court system. Id.

M-I Drilling also filed a patent infringement complaint against Dynamic Air and Dynamic Ltda in this Court in August 2013. In February 2014, the undersigned dismissed the Complaint without prejudice based on a finding that the Court lacked personal jurisdiction over Dynamic Ltda and for failure to state a claim against Dynamic Air. M-I Drilling Fluids, Case No. 13-2385. In March 2014, the undersigned vacated its previous dismissal of Dynamic Air Ltda from the lawsuit. See M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., Case No. 13-2385, 2014 WL 991129, 2014 U.S. Dist. LEXIS 31007 (D.Minn. Mar. 11, 2014). M-I Drilling argued the Court erred by concluding, sua sponte, that it lacked personal jurisdiction over Dynamic Air Ltda. M-I Drilling also argued that the Court erred in concluding that M-I Drilling failed to serve Dynamic Air Ltda because it was in the act of completing the lengthy international service process. Out of “an abundance of caution and in the interest of fairness,” MI Drilling was granted the opportunity to complete its efforts to serve Dynamic Air [972]*972Ltda. Because the procedure for effectuating service of Dynamic Air Ltda is ongoing, M-I Drilling filed an amended complaint against Dynamic Air in November 2014, seeking to cure the deficiencies highlighted the Court’s February 2014 Order.

III. DISCUSSION

The parties agree that the sole issue presented by this motion is whether the U.S. Patent Act applies to protect M-I Drilling’s patented technology in use on board the Resolution and the Pinnacle, U.S.-flagged ships in international waters.3 The parties dispute whether Dynamic Air’s motion is properly considered as a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) or for failure to state a claim under Rule 12(b)(6). M-I Drilling cites Litecubes, LLC v. Northern Light Prods., Inc. for the proposition that the geographic location of alleged infringing activity is an element of the claim, not a jurisdictional question. 523 F.3d 1353, 1362 (Fed.Cir.2008). Dynamic Air contests the applicability of Litecubes, but admits “there is no difference in the outcome if the issue is analyzed as one of subject matter jurisdiction or substantive patent law.” Def.’s Rep. Mem. [Docket No. 25] 8.

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99 F. Supp. 3d 969, 2015 U.S. Dist. LEXIS 46848, 2015 WL 1608403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/m-i-drilling-fluids-uk-ltd-v-dynamic-air-inc-mnd-2015.