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Energy Heating, LLC v. Heat On-The-Fly, LLC

United States Court of Appeals for the Federal Circuit

May 4, 2018, Decided

2016-1559, 2016-1893, 2016-1894

Opinion

 [*1296]  [***1568]   Stoll, Circuit Judge.

Appellants Heat On-The-Fly, LLC and Super Heaters North Dakota, LLC (together, "HOTF")1 appeal the district court's judgment of inequitable conduct, summary judgment of obviousness, denial of judgment as a matter of law of no tortious interference, construction of disputed claim terms, and dismissal of HOTF's counterclaim of direct infringement. Cross-Appellants Energy Heating, LLC and Rocky Mountain Oilfield Services, LLC (together, "Energy"); [**2]  and Marathon Oil Company and Marathon Oil Corporation (together, "Marathon") appeal the district court's denial of attorneys' fees under 35 U.S.C. § 285.

We affirm the district court's declaratory judgment that U.S. Patent No. 8,171,993 is unenforceable due to inequitable conduct, and therefore do not reach the district court's summary judgment of obviousness, claim construction order, or summary judgment of no direct infringement. We also affirm the district court's judgment of tortious interference and denial of remedies under the North Dakota Unlawful Sales or Advertising Practices Act. Finally, we vacate the district court's denial of attorneys' fees under § 285 and remand on that issue alone.

Background

The '993 patent, which is at the heart of the disputes on appeal, is titled "Water Heating Apparatus for Continuous Heated Water Flow and Method for Use in Hydraulic Fracturing."  [***1569]  '993 patent col. 1 ll. 1-5. It relates to a "method and apparatus  [*1297]  for the continuous preparation of heated water flow for use in hydraulic fracturing," also known as "fracing."2 Id. at col. 1 ll. 28-30, 36-37. More specifically, the invention relates to heating water on demand or inline during the fracing process, instead of using preheated water in large standing tanks. [**3]  See id. HOTF also refers to this as heating water "on-the-fly." The sole named inventor is Mr. Hefley, the founder of Heat On-The-Fly. He filed the earliest provisional application, Patent App. No. 61/276,950, on September 18, 2009. Thus, the critical date for analyzing the on-sale and public-use bars under 35 U.S.C. § 1023 is September 18, 2008, one year before the priority date.

Claim 1 of the '993 patent reads as follows:

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889 F.3d 1291 *; 2018 U.S. App. LEXIS 11729 **; 126 U.S.P.Q.2D (BNA) 1566 ***; 2018 WL 2072122

ENERGY HEATING, LLC, AN IDAHO LIMITED LIABILITY COMPANY, ROCKY MOUNTAIN OILFIELD SERVICES, LLC, AN IDAHO LIMITED LIABILITY COMPANY, Plaintiffs-Cross-Appellants. MARATHON OIL CORPORATION, MARATHON OIL COMPANY, Third-Party Defendants-Cross-Appellants v. HEAT ON-THE-FLY, LLC, A LOUISIANA LIMITED LIABILITY COMPANY, SUPER HEATERS NORTH DAKOTA, LLC, A NORTH DAKOTA LIMITED LIABILITY COMPANY, Defendants-Appellants

Subsequent History: As Amended July 19, 2018.

Prior History:  [**1] Appeals from the United States District Court for the District of North Dakota in No. 4:13-cv-00010-RRE-ARS, Chief Judge Ralph R. Erickson.

Energy Heating, LLC v. Heat On-The-Fly, LLC, 2016 U.S. Dist. LEXIS 95623 (D.N.D., Mar. 4, 2016)

Disposition: AFFIRMED-IN-PART AND VACATED-AND-REMANDED-IN-PART.

CORE TERMS

district court, patent, inequitable conduct, attorney's fees, heating, experimental, infringement, invention, tortious interference, Advertising, continuation, on-sale, frac, clear and convincing evidence, unlawful sale, Practices, deceive, critical date, unenforceable, water-heating, commercial sale, public use, bad faith, inventor, argues, cold, cool, Oil, declaratory judgment, summary judgment

Business & Corporate Compliance, Infringement Actions, Defenses, Inequitable Conduct, Patent Law, Jurisdiction & Review, Standards of Review, Inequitable Conduct, Burdens of Proof, Elements, Statutory Bars, On Sale Bar, Experimental Use Exception, Civil Procedure, Appeals, Standards of Review, De Novo Review, Trials, Judgment as Matter of Law, Torts, Procedural Matters, Preemption, Antitrust & Trade Law, Consumer Protection, False Advertising, State Regulation, Pleadings, Amendment of Pleadings, Conforming Pleadings to Evidence, Evidence, Burdens of Proof, Preponderance of Evidence, Damages, Collateral Assessments, Attorney Fees, Abuse of Discretion