Richards Layton & Finger
 

Chief Judge Stark Denies Motion for Preliminary Injunction and Grants Motion to Dismiss Indirect Infringement and Willfulness

May 9, 2018

In Oil Lift Technology Inc. v. Millennium Oilflow Systems & Technology Inc., No. 17-1212-LPS-CJB (D. Del. Apr. 10, 2018), Chief Judge Stark denied Oil Lift Technology Inc.’s motion for a preliminary injunction against the defendants, Millennium Oilflow Systems & Technology Inc. and MOST Oil USA Inc., and granted in part the defendants’ motion to dismiss claims of indirect and willful infringement. The technology at issue concerned blowout preventers with rod lock clamps used in the oil extraction industry.

On the request for an injunction, the Court found that Oil Lift failed to show a likelihood of success. The parties disputed whether a particular claim limitation (“grippingly and frictionally engaging said polished rod”) of the asserted patent excluded a “biting engagement” mechanism from the scope of the claim, as opposed to a “frictional engagement.” Chief Judge Stark concluded that, at this stage, the proposed construction excluding a biting engagement was more likely to be adopted, and that the only testing on the accused product in the record was consistent with evidence of a “biting” mechanism of engagement. Oil Lift also argued that a consent judgment of infringement against the same products from litigation in Canada over a related patent showed a likelihood of success, but the Court found that the relevant limitation of the patent at issue there was broader than and different from the limitation at issue.

Chief Judge Stark also found that Oil Lift failed to show irreparable harm. According to the Court, there was no evidence that Oil Lift lost sales due to infringing conduct or would have to reduce its price to compete with the defendants in the absence of an injunction. The Court found that the majority of the accused products were sold to one company and its subsidiaries, and had been even before the asserted patent issued. The Court also found that Oil Lift should have known of the accused activity at least from the negotiations to resolve the related Canadian litigation, and that Oil Lift waited about three years from the issuance of the asserted patent to seek an injunction. There was also evidence that Oil Lift had licensed rights to the patent, which suggested money could adequately compensate for any harm.

The Court denied defendant Millennium Oilflow’s motion to dismiss the claims of direct and induced infringement against it, finding that the allegations were sufficiently pleaded and that the argument to the contrary depended largely on material outside the pleadings. But the Court granted both defendants’ motion to dismiss the claims of contributory and willful infringement, finding that the pleadings did not adequately allege that the accused products lacked substantial noninfringing uses, and that the allegations of willfulness based on the Canadian litigation did not amount to egregious conduct because of the difference in claim language in the patent at issue in that proceeding.

Analysis: Chief Judge Stark found that the defendants had sufficient knowledge of the asserted patent for purposes of both indirect infringement and willfulness because they were aware of the plaintiff’s pending patent applications, notwithstanding their lengthy prosecution, and the defendants had earlier consented to judgment of infringement on a related patent in a foreign infringement litigation.