MGM Well Services, Inc. v. MEGA LIFT SYSTEMS, LLC

534 F. Supp. 2d 705, 2007 U.S. Dist. LEXIS 97319, 2007 WL 4935258
CourtDistrict Court, S.D. Texas
DecidedJanuary 30, 2007
DocketCivil Action H-05-1634
StatusPublished
Cited by2 cases

This text of 534 F. Supp. 2d 705 (MGM Well Services, Inc. v. MEGA LIFT SYSTEMS, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MGM Well Services, Inc. v. MEGA LIFT SYSTEMS, LLC, 534 F. Supp. 2d 705, 2007 U.S. Dist. LEXIS 97319, 2007 WL 4935258 (S.D. Tex. 2007).

Opinion

*709 MEMORANDUM AND ORDER

NANCY F. ATLAS, District Judge.

This patent infringement case is before the Court on a Motion for Summary Judgment filed by Defendant Mega Lift Systems, LLC (“Defendant’s Motion”) [Doc. # 111]. Also pending are Plaintiff MGM Well Services, Inc.’s Motion for Summary Judgment on Inequitable Conduct, Laches, and Equitable Estoppel [Doc. # 105], Motion for Summary Judgment on Validity [Doc. # 109], Motion for Summary Judgment on Asserted Invalidity Defenses [Doc. # 110], and Motion for Summary Judgment on Infringement [Doc. # 116]. All pending motions have been fully briefed. Based on the Court’s review of the full record in this case and the application of governing legal authorities, the Court grants Plaintiffs Motion for Summary Judgment on Inequitable Conduct, Laches, and Equitable Estoppel, Motion for Summary Judgment on Validity, and Motion for Summary Judgment on Asserted Invalidity Defenses. The Court denies Plaintiffs Motion for Summary Judgment on Infringement and denies Defendant’s Motion in all respects.

I. FACTUAL AND PROCEDURAL BACKGROUND

MGM Well Services, Inc. (“MGM”) is the owner of United States Patent No. 6,719,060 (“the '060 Patent”) which was issued on April 13, 2004. The '060 Patent relates to a two-piece plunger lift system 1 for use in gas wells to remove accumulated liquids and thereby increase the gas flow through the well to the surface.

MGM was previously granted United States Patent No. 6,209,637 (“the '637 Patent”), for a two-piece plunger lift system that includes a solid piece shaped like a dart and a separate hollow cylindrical piece. Under the '637 Patent, the two pieces, when dropped into the well, fall independently through the well pipe. When the two pieces reach the bottom of the well, they unite to operate much like a one-piece piston moving upward from the force of the gas being produced. When the two united pieces reach the surface, a decoupler near or at the surface of the well separates them and the two pieces again fall independently into the well to repeat the process.

MGM then obtained United States Patent No. 6,467,541 (“the '541 Patent”), for a two-piece plunger lift system similar to the system described in the '637 Patent, except the solid piece is a ball and the hollow cylindrical piece is referred to as a sleeve. When the united two-part plunger reaches the surface, a separator rod dislodges the ball from the sleeve, and the ball falls into the well. The sleeve is held in place by a mechanical device until the liquid below accumulates to such an extent that it needs to be removed for optimum gas flow. The disadvantage of this two-piece system is that the mechanical device holding the sleeve at the surface requires the venting of a small amount of gas to release the sleeve to fall back into the well, and oil and gas companies usually do not want to vent gas into the atmosphere.

The '060 Patent addresses this disadvantage by devising a “catcher assembly” located in a housing connected to the well at the surface that utilizes the unique shape of the separator rod and the flow of gas from the well to hold the plunger sleeve at the surface against gravity as desired. To release the plunger sleeve so it will fall back down the well, a motor *710 valve near the surface is closed for a few seconds blocking the gas flowing in the well from reaching the plunger.

MGM became aware that Mega Lift Systems, LLC (“Mega Lift”), one of its prior distributors, was selling an allegedly infringing two-piece plunger lift system called the “Chaser” system. MGM filed this lawsuit against Mega Lift for patent infringement. In defense and as its counterclaim, Mega Lift asserts that the '060 Patent is unenforceable based on MGM’s inequitable conduct before the United States Patent Office (“USPO”) and based on laches and equitable estoppel. Mega Lift also asserts that the '060 Patent is invalid because it was either anticipated by or made obvious by United States Patent No. 2,001,012 (“the '012 Patent”) issued in May 1935, because the patented device was on sale more than one year before the '060 Patent application was filed (the “on-sale bar”), and/or because MGM failed to identify all inventors of the patented device. Mega Lift also argues that its Chaser system does not infringe the '060 Patent.

Following an evidentiary hearing on MGM’s Motion for Preliminary Injunction, the Court issued a Memorandum and Order on July 19, 2005, 2005 WL 1693152, granting the requested injunction. See Memorandum and Order [Doc. # 29]. On July 26, 2005, the Court issued an Amended Discovery Order [Doc. #43] and a Docket Control Order [Doc. # 44] to govern in this case. On September 13, 2005, the Court granted the parties’ joint motion and dismissed all claims and counterclaims regarding a separate patent issued to Mega Lift. See Agreed Order of Dismissal of Specific Claims and Counterclaims [Doc. #52],

On February 1, 2006, the Court conducted a hearing pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370, 390, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996) (“Markman hearing”). Subsequently, on February 10, 2006, 2006 WL 322586, the Court issued its Memorandum on Claim Construction [Doc. #77], construing the disputed terms in the claims of the '060 Patent.

After the close of discovery on August 18, 2006, the parties filed dispositive and other motions. In a Memorandum and Order issued January 16, 2007, 2007 WL 150606 [Doc. # 171], the Court granted MGM’s Motion Seeking Exclusion of the Expert Report and Testimony of Dr. Charles W. Alworth, Mega Lift’s designated expert. The Court excluded all reports and testimony by Dr. Alworth on both patent law and technical issues.

On January 17, 2007, the Court conducted an evidentiary hearing on MGM’s Motion to Exclude Based on Spoliation of Evidence, in which MGM sought to exclude all evidence of certain tests conducted by Mega Lift’s President, James Bart-ley. During the hearing, Bartley and Mega Lift’s counsel conceded that the test results were unreliable and inconclusive. On that basis, the Court in a Memorandum and Order entered January 19, 2007, 2007 WL 192895 [Doc. # 173], excluded evidence of the Bartley tests and test results. The Court denied, however, MGM’s additional request for a deemed admission that the pressure beneath the plunger in Mega Lift’s system is greater than the pressure above the plunger. See January 19, 2007 Memorandum and Order, p. 5.

In a Memorandum and Order entered January 24, 2007, 2007 WL 433283 [Doc. # 175], the Court granted MGM’s Motion to Exclude Evidence and Argument Regarding Defenses and Evidence That Defendant Failed to Timely Disclose. Specifically, the Court excluded all evidence of a two-piece plunger system allegedly manufactured and sold by Dan Casey that uses a separator rod (“the Casey System”) and *711

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534 F. Supp. 2d 705, 2007 U.S. Dist. LEXIS 97319, 2007 WL 4935258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mgm-well-services-inc-v-mega-lift-systems-llc-txsd-2007.