Well Master Corporation v. Flowco Production Solutions, LLC

District Court, D. Colorado·Decided December 6, 2023·No. 1:21-cv-02145·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Senior Judge Christine M. Arguello

Civil Action No. 21-cv-02145-CMA-KAS

WELL MASTER CORPORATION,

Plaintiff,

v.

FLOWCO PRODUCTION SOLUTIONS, LLC,

Defendant.

ORDER DENYING DEFENDANT’S PARTIAL MOTION TO DISMISS

This matter is before the Court on Defendant’s Partial Motion to Dismiss. (Doc. # 125.) The Motion is fully briefed. See (Docs. ## 154, 158.) The Court heard oral argument on October 25, 2023. See (Doc. # 187.) For the following reasons, the Motion is denied. BACKGROUND A. FACTS This patent infringement case involves “plunger lift systems” (“plungers”) which both Plaintiff Well Master Corporation (“Well Master”) and Defendant Flowco Production Solutions, LLC (“Flowco”) manufacture and sell. Plaintiff Well Master owns three patents concerning plunger lift systems—United States Patent Numbers 7,395,865 (“the ‘865 patent”); 7,793,728 (“the ‘728 patent”); and 8,627,892 (“the ‘892 patent”). (Docs. ## 20-1 to 20-3.) The Motion to Dismiss, however, concerns only the ‘865 patent and ‘728 patent. A plunger is a cylindrical and oftentimes metallic device placed in the interior chamber or “tubing” of an oil-and-gas well. A plunger allows for the cultivation of otherwise unreachable1 natural gas while simultaneously ejecting wastewater suspended in the well tubing. The plunger works by sliding down to the well’s bottom and sealing the well, which builds pressure below the plunger. That pressure eventually lifts the plunger along with oil, wastewater, and the natural gas below. These substances get separated and collected once they reach the surface. E.g., (Doc. # 137

at ¶ 14.) Machining specific shapes into a plunger improves the device’s performance and produces additional functions. Cutting fins into the plunger’s base can induce rotation to better seal the well tubing. Sharpening the edges of those fins lets them double as a cleaning implement. Machining a chamber or “bore” up through the plunger’s bottom, when combined with perpendicularly intersecting holes drilled through the side wells, can channel gas through the plunger to generate turbulence and improve rotation. See generally (Doc. # 20-1 at 4–5.)

1 When a well taps into a new natural gas pocket, high gas pressure pushes the gas to the surface. Over time, the gas pressure decreases and fluids used in the extraction process collect within the tubing, which makes some remaining gas unreachable. E.g., (Doc. # 20 at ¶ 29); see also (Doc. # 20-1 at 1). B. PROCEDURAL HISTORY Well Master commenced this infringement action on August 9, 2021. (Doc. # 1.) After some pre-answer motions practice, Flowco petitioned the PTAB for inter partes review of all three patents-in-suit in their entirety. (Doc. # 83 at 1–2.) On September 12, 2022, the Court stayed this case pending the PTAB’s decision on whether to institute review. (Doc. # 98.) On June 7, 2023, the Court lifted the stay after being notified by the parties that the PTAB declined to institute review. (Docs. ## 115, 124.) Consequently, Flowco filed its answer, counterclaims, and the partial motion to dismiss on June 30, 2023. (Docs. ## 125–126.) Well Master answered Flowco’s counterclaims on August

10, 2023. (Doc. # 148.) Oral argument on the partial motion to dismiss occurred on October 25, 2023. (Doc. # 167.) II. APPLICABLE LAW A. RULE 12(b)(6) Under Rule 12(b)(6), a defendant may move to dismiss any cause of action that “fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). When deciding a Rule 12(b)(6) motion, “the court's function . . . is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (internal quotation omitted). A legally sufficient complaint must contain

factual allegations that, “if accepted as true, [would] ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in turn, requires pleaded facts that support a “reasonable inference that the defendant is liable for the misconduct alleged.” Id. A plaintiff's factual allegations, when examined under the Rule 12(b)(6) standard, are presumed true and construed “in the light most favorable to the plaintiff.” E.g., Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991). However, not all factual allegations receive this presumption. A court will not presume as true any conclusory allegations unsupported by facts or “[t]hreadbare recitals of the elements of a cause of action.” Iqbal, 556 U.S. at 678. “In the patent context, a Rule 12(b)(6) motion to dismiss may be a proper vehicle to determine patent eligibility under 35 U.S.C. § 101.” Securenet Sols. Grp., LLC v.

Senstar Corp., No. 19-cv-02913, 2020 WL 2557625, at *18 (D. Colo. May 20, 2020) (citing Genetic Techs. Ltd. v. Merial LLC, 818 F.3d 1369, 1373-74 (Fed. Cir. 2016)). The Court’s § 101 determination, however, “may only look to allegations in ‘the sources properly considered on a motion to dismiss, such as the complaint, the patent[s], and materials subject to judicial notice.’” E.g., Ivanti, Inc. v. Patch my PC, LLC, No. 22-cv- 00643, 2023 WL 2933406, at *4 (D. Colo. April 13, 2023) (internal citations omitted). Specific to the patent context, a plaintiff’s typical presumption of truth extends to well- pleaded factual allegations of activities that are well-understood, routine, or conventional. Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1128 (Fed. Cir. 2018).

B. PATENT ELIGIBILITY Section 101 of the Patent Act defines patentable subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. This language is broad by design. See Diamond v. Chakrabarty; 447 U.S. 303, 309 n.6 (1980); see also Bilski v. Kappos, 561 U.S. 593 (2010); accord S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H.R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). (“Congress intended statutory subject matter to ‘include anything under the sun that is made by man.’”). However, “[t]his is not to suggest that § 101 has no limits or that it embraces every discovery.” Chakrabarty, 447 U.S. at 309. Longstanding patent jurisprudence makes clear that “‘laws of nature, natural phenomena, and abstract ideas’ are not patentable” to protect “‘basic tools of scientific and technological work’ [from] monopolization.” Mayo Collaborative Servs. v.

Prometheus Lab’ys, Inc., 566 U.S. 66, 70 (2012) (first quoting Diamond v. Diehr, 450 U.S. 175, 185 (1981); then quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).

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