Sandbox Logistics LLC v. Proppant Express Investments

Court of Appeals for the Federal Circuit·Decided May 18, 2020·No. 19-1684·Unpublished

Opinion

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit

SANDBOX LOGISTICS LLC, OREN TECHNOLOGIES, LLC,

Plaintiffs-Appellants

v.

PROPPANT EXPRESS INVESTMENTS LLC, PROPPANT EXPRESS SOLUTIONS LLC, Defendants-Appellees

2019-1684

Appeal from the United States District Court for the Southern District of Texas in No. 4:17-cv-00589, United States District Judge George C. Hanks, Jr.

Decided: May 18, 2020

JOHN C. O'QUINN, Kirkland & Ellis LLP, Washington, DC, for plaintiffs-appellants. Also represented by CALVIN ALEXANDER SHANK, JASON M. WILCOX; GIANNI CUTRI, Chicago , IL.

JONATHAN S. FRANKLIN, Norton Rose Fulbright US LLP, Washington, DC, for defendants-appellees. Also represented by STEPHANIE DEBROW, Austin, TX; MARK 2 SANDBOX LOGISTICS LLC v. PROPPANT EXPRESS INVESTMENTS

FRANCIS EBERHARD, CHARLES BRUCE WALKER, JR., Houston , TX.

Before LOURIE, WALLACH, and HUGHES, Circuit Judges.

WALLACH, Circuit Judge.

Appellants SandBox Logistics LLC and Oren Technologies , LLC (together, “SandBox”) sued Appellees Proppant Express Investments LLC and Proppant Express Solutions LLC (together, “PropX”) in the U.S. District Court for the Southern District of Texas (“District Court”) alleging infringement of claims 2 and 13 of U.S. Patent No. 9,296,518 (“the ’518 patent”), claims 6 and 17 of U.S. Patent No. 9,403,626 (“the ’626 patent”), claims 1, 3, 7, 8, 16, 18, 19, and 21–23 of U.S. Patent No. 9,440,785 (“the ’785 patent ”), and claims 4 and 7 of U.S. Patent No. 9,511,929 (“the ’929 patent”) (collectively, “the Asserted Claims”). 1 After a Markman hearing, the District Court issued an opinion, construing the parties’ disputed claim terms. See Sandbox Logistics LLC v. Grit Energy Sols. LLC, Nos. 3:16-CV-12, 4:17-CV-589, 2018 WL 3344773, at *2–17 (S.D. Tex. July 9, 2018) (Opinion). Thereafter, SandBox and PropX stipulated to non-infringement of the Asserted Claims by PropX’s accused products (“the Accused Products”), and the District Court entered a final judgment in favor of PropX. See J.A. 1–4 (Final Judgment).

SandBox appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). We affirm.

1 SandBox also sued Liberty Oilfield Services LLC, J.A. 115, which is not a party to this appeal.

SANDBOX LOGISTICS LLC v. PROPPANT EXPRESS 3 INVESTMENTS

BACKGROUND

I. The ’518, ’626, and ’929 Patents Entitled “Proppant Storage Vessel and Assembly Thereof,” the ’518, ’626, and ’929 patents share a common specification that “relates to storage containers” for proppant and “[m]ore particularly, . . . to storage container assemblies whereby a product in one container can flow to an interior volume of a lower container.” ’518 patent col. 1 ll. 34–37. 2 The ’518, ’626, and ’929 patents explain that “[p]roppant is a material, such as grains of sand, ceramic, or other particulates” used during hydraulic fracturing (or “fracking”) to “prevent . . . fractures from closing[.]” Id. col. 1 ll. 53–54. 3 The ’518, ’626, and ’929 patents disclose “a proppant storage vessel . . . compris[ing] a container having a first end wall, a second end wall, a first side wall[,] and a second side wall.” Id. col. 3 ll. 20–22; see id. col. 4 l. 48 (“Each of the containers is [an] ocean freight container .”). “The container also has a top wall and a bottom wall” and “[a] hatch . . . formed on the bottom wall” which “is movable between an open position and a closed position .” Id. col. 3 ll. 22–26. An “inclined surface” extends from each wall to the bottom hatch, id. col. 3 ll. 26–32, “to assure that the proppant contained within the [container] is suitably funneled toward the bottom hatch[,]” id. col. 7 ll. 18–21. The container may include “support brace[s]” to “structurally enhance the strength of the container . . . so as to . . . withstand the weight of the proppant that is

2 Because the ’518, ’626, and ’929 patents share a common specification, we cite to only the ’518 patent for ease of reference, unless otherwise specified.

3 “Hydraulic fracturing is the propagation of fractions in a rock layer caused by the presence of pressurized fluid[,] . . . made in order to release petroleum, natural gas, coal seam gas, or other substances for extraction.” ’518 patent col. 1 ll. 36–41.

4 SANDBOX LOGISTICS LLC v. PROPPANT EXPRESS INVESTMENTS

contained therein.” Id. col. 7 ll. 24–44. The ’518, ’626, and ’929 patents disclose that the containers may be “vertically aligned in a stacked orientation[,]” id. col. 6 l. 65, so that proppant “in one container can flow to an interior volume of a lower container[,]” id. col. 1 ll. 36–37, and ultimately onto a “portable conveyer . . . placed below the bottom hatch” of the lowermost container, id. col. 6 ll. 7–8; see id. col. 4 ll. 2–6 (“The bottom hatch of the second container is aligned with the opening of the first container such that a proppant in the first container can flow through the [bottom ] hatch thereof into the interior volume of the first container .”); see also id., Figs. 1, 2.

II. The ’785 Patent

Entitled “Method of Delivering, Storing, Unloading, and Using Proppant at a Well Site,” the ’785 patent “relates to storage containers” and “[m]ore particularly, . . . to proppant discharge systems wherein proppant can be discharged from the storage container. Additionally, the [’785 patent] relates to a process for providing proppant to a well site by the transport and delivery of the proppant containers .” ’785 patent col. 1 ll. 16–21. The ’785 patent discloses “a container for the transport and storage of proppant . . . compris[ing] a box having a bottom, a pair of side walls[,] a pair of end walls[,] and a top.” Id. col. 7 ll. 53–55; see id. col. 10 ll. 32–36 (“[T]he container . . . is a ten-foot [International Organization for Standardization] container.”). An “inlet [is] formed at or adjacent to the top” of the box and an “outlet” is formed “at the bottom.” Id. col. 7 ll. 56–57. A “ramp” extends from each wall to the outlet, id. col. 7 ll. 60– 64, and “serve[s] to funnel[] the proppant that is retained within . . . the container . . . toward the outlet[,]” id. col. 10 ll. 44–46. The container also includes an “exterior frame” that “provides structural support for the container . . . and generally surrounds the exterior of the container” with “a plurality of vertical bars that extend so as to form a cage- like configuration around the walls[.]” Id. col. 9 l. 64, col. 10 ll. 15–20; see id., Figs. 1, 2.

SANDBOX LOGISTICS LLC v. PROPPANT EXPRESS 5 INVESTMENTS

III. Procedural History

In February 2017, SandBox sued PropX in the District Court, alleging infringement of the Asserted Claims. J.A. 115. In March 2018, the District Court held a Markman hearing. J.A. 125–26. In July 2018, the District Court issued its Opinion, construing, among other terms, “[t]he term ‘bottom’ in the ’518, ’626, and ’929 patents[,]” Sandbox Logistics, 2018 WL 3344773, at *4, and “[t]he term ‘structural support members’ in the [’]785 patent[,]” id. at *15. 4 Thereafter, SandBox and PropX stipulated to non-infringement of the Asserted Claims by the Accused Products and the District Court entered the Final Judgment in favor of PropX. See J.A. 1–4.

DISCUSSION

I. Standard of Review and Legal Standard “The proper construction of a patent’s claims is an issue of Federal Circuit law[.]” Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1228 (Fed. Cir. 2011) (citation omitted ). “[C]laim construction must begin with the words of the claims themselves.” Amgen Inc. v. Hoechst Marion Roussel, Inc., 457 F.3d 1293, 1301 (Fed. Cir. 2006) (citation omitted). “[W]ords of a claim are generally given their ordinary and customary meaning,” which is “the meaning

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