No Spill, LLC v. Scepter Can. Inc.

NO SPILL, LLC, et al., Plaintiffs, v. SCEPTER CANADA, INC., et al., Defendants.

No. 2:18-cv-02681-HLT

United States District Court, D. Kansas

February 2, 2023

MEMORANDUM AND ORDER

HOLLY L. TEETER UNITED STATES DISTRICT JUDGE

This is a patent infringement case about flame mitigation devices (“FMDs”) used in portable fuel containers. Plaintiffs assert that Defendants' portable fuel containers infringe various claims of their^[1] two related United States Patents: 9,174,075 (“the ‘075 Patent”) and 10,029,132 (“the ‘132 Patent”).^[2] Defendants contend that the accused products do not infringe the asserted claims and that the asserted claims are directed to ineligible subject matter and are invalid.

The parties have filed cross-motions for summary judgment. Docs 533 and 539. The motions generally raise the following issues: patent-eligible subject matter, claim definiteness claim coverage/noninfringement, predicate invalidity issues and anticipation/obviousness. The Court determines that the asserted claims are directed to patent-eligible subject matter and satisfy the definiteness requirement. The Court also determines that Defendants failed to timely disclose their 35 U.S.C. § 102(g) defense based on the alleged prior invention by Damon Johnston. The Court grants summary judgment on these issues and denies the rest of the motions.^[3]

I. BACKGROUND

Plaintiffs are the owner by assignment of the asserted patents. Thomas M. Cray is the sole inventor on both patents, and both patents are titled “Explosion inhibiting portable fuel container and method of inhibiting explosions.” The patents are related.

The ‘075 Patent was filed on September 16, 2014, and it issued on November 3, 2015. It claims priority to two provisional applications: 61/653,240 filed on May 30, 2012 and 61/754,266 filed on January 18, 2013. It has 21 claims. Claims 1 and 12 are independent claims. The ‘132 Patent is a continuation of the ‘075 Patent, and it issued on July 14, 2018. It has 18 claims. Claim 1 is the sole independent claim.

Plaintiffs sued Defendants in December 2018 for patent infringement. Plaintiffs generally allege that Defendants' SmartControl, AmeriCan, EasyFlo, and “Military Style” fuel containers literally infringe claims 1, 4 8, 13, and 17 of the ‘075 Patent and claims 1, 9, 14, 17, and 18 of the ‘132 Patent. The Court construed the claims in June 2021. Doc. 257. The Court bifurcated the infringement and invalidity issues from the rest of the case and set those issues for trial in March 2023. Doc. 393. Before the Court are cross-motions for summary judgment on the issues set for trial.

II. STANDARDS

Summary judgment is appropriate if there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party bears the initial burden of establishing the absence of a genuine issue of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-movant to demonstrate that genuine issues remain for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). In applying this standard, courts view the facts and any reasonable inferences in a light most favorable to the non-moving party. Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 569 (10th Cir. 1994). “An issue of material fact is genuine if a ‘reasonable jury could return a verdict for the nonmoving party.'” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).^[4],^[5]

III. PATENT-ELIGIBLE SUBJECT MATTER

The initial issue before the Court is whether the asserted claims in the ‘075 Patent are patent eligible under 35 U.S.C. § 101 or are instead drawn to a patent-ineligible law of nature. Section 101 defines the subject matter eligible for patent protection as “any new or useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Id. These four categories are broad and flexible, but the Supreme Court has recognized three nontextual but implicit exceptions: laws of nature, natural phenomena, and abstract ideas. Alice Corp. Pty. Ltd. v. CLS Bank Intl., 573 U.S. 208, 216 (2014).

The Supreme Court has explained that the concern that drives these exceptions is one of pre-emption because these three categories are the basic tools of scientific and technological work and monopolization of those tools impedes innovation instead of promoting it. Id. But this concern must be balanced against the realization that all inventions at some level “embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Id. at 217 (internal quotation omitted). The challenge therefore is to “distinguish between patents that claim the building blocks of human ingenuity and those that integrate the building blocks into something more, thereby transforming them into a patent-eligible invention.” Id. (cleaned up).

The Supreme Court identified a two-step framework to help courts make this distinction. The court must first “determine whether the claims at issue are directed to a patent-ineligible concept.” Id. If so, the court must next “consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.” Id. (internal quotation omitted).

The Court starts with step one and concludes that the asserted claims are directed to a patent-eligible concept. The independent claims of the ‘075 Patent are directed to a fuel container comprising: a hollow tank body, a fuel dispensing assembly, and a fuel retention structure located proximate the main container opening. The fuel retention structure comprises a plurality of perforations through which liquid fuel must flow to dispense the liquid fuel from the container. And the fuel retention structure is configured to retain sufficient liquid fuel to provide a “too rich to combust” fuel vapor-air mixture proximate the container opening (claim 1) or within the fuel retention structure (claim 12).

The face of each independent claim is drawn to a fuel container that includes physical structures with defined parameters that are designed to trap and retain fuel. Although the independent claims utilize a law of nature to prevent explosions, the claims apply that law of nature in a new and useful way. See Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352, 1361 (Fed. Cir. 2017) (requiring claims be directed to a new and useful technique). And the asserted dependent claims merely build on the independent claims and include progressively more detailed limitations. For example, the fuel retention structure must be “configured to receive a conventional gasoline pump nozzle” (dependent claims 4 and 13); the perforations must be configured to permit at least 5 gallons per minute of fuel to flow through the fuel retention structure (dependent claims 4 and 13); the fuel retention structure must be made of a synthetic resin material (dependent claim 8); the sidewall and bottom wall of the fuel retention structure must be at least 25% open (dependent claims 6 and 7, from which depends claim 8); and the sidewall must have a height of between 3 and 10 inches (dependent claim 17).

Defendants reject this outcome, but their arguments do not alter this analysis. Defendants initially contend that the asserted claims are directed to unpatentable laws of nature about intermolecular forces and combustion ratios (e.g., “too rich to combust”). They contend that the asserted claims pre-empt technological development and claim the results of these laws of nature without limiting the claims to a particular method of achieving the results. They support these points by explaining that the asserted claims cover “every possible structure in the neck of a gas can that employs the well-known natural law of a ‘too-rich-to-combust' environment” and “preempt all methods for causing an internal environment to exceed the [upper flammability limit].” Doc. 534 at 21, 28.

But this argument misstates the focus of the asserted claims and overstates their breadth. Both independent claims admittedly note the concept of combustion ratios and claim 12 uses the phrase intermolecular forces to describe how the fuel is retained in the perforations, but the claims are not directed to these concepts and instead are directed to a patent-eligible application of these concepts to prevent explosions in fuel containers. See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (explaining that it is not enough that a law of nature merely be “involved” in the claim). This outcome is reinforced by a review of the written description. The written description (as even Defendants' expert recognizes) discloses two embodiments that utilize the same law of nature but that are not covered by the asserted claims: a dam structure near the container's neck and an inverted pocket in the neck. See, e.g., ‘075 Patent at 3:15-50; Doc. 554-1 at 32. These embodiments illustrate that the asserted claims do not pre-empt all future methods of exploiting this law of nature. The written description also discloses an embodiment wherein the fuel retention structure is an absorbent sponge-like material in the container's main body, which is yet another embodiment that does not read on the asserted claims.

Defendants next argue that the asserted dependent claims only add desirable results and routine and generic concepts. They contend the use of perforated structures in gas containers is conventional and point to the traditional metal flame arrester. See, e.g., ‘075 Patent at 3:15-50; Doc. 554-1 at 32. This argument blurs the line between step one and step...