CAFC Denies Patentee "Benefit of Ambiguity", Holds Patent Invalid Under 112

Halliburton Energy Services, Inc. v. M-I LLC (2007-1149), January 25, 2008

Halliburton appealed a summary judgment decision from the ED Texas which held claims invalid for indefiniteness under 35 U.S.C. 112(2). Halliburton's patent relates to oil field drilling fluids that are fragile gels. During prosecution, Halliburton distinguished the claims of the patent by stating that the claims were "limited to" a "fragile gel" drilling fluid or the method of using a "fragile gel" drilling fluid. Thus, although the term "fragile gel" appears only in the preamble of the asserted independent claims, it was conceded that the claimed drilling fluids are limited to those that are "fragile gels."

The district court looked at the definition of fragile gel in the specification and found that it was too subjective and unclear because it relied on terms such as "easily transitions," "easily disrupted or thinned," "less gel-like," "more liquid-like," "quickly returns to a gel," "break instantaneously," and "minimum pressure, force, and time." While a graph was provided in the figures that purported to show the "fragile gel's" characteristics, the district court found that the graph did not delineate the bounds of the invention because both prior art fluids and fluids of the invention exhibit the same shape curves.

The district court also noted that Halliburton’s proposed additional limitation to the term "fragile gel," that it contains no or only low amounts of organophilic clay or lignite, was improperly imported from the specification, which states that the fragile gel of certain embodiments of the invention of the patent preferably does not have these clays. The court found that the doctrine of claim differentiation further counseled against this construction because dependent claims added the limitation that the fluid is "substantially free of organophilic clay."

On appeal, the CAFC sffirmed the district court. Looking at the claim differentiation argument first, the CAFC stated:

[N]othing in the specification of the ’832 patent requires the fragile gel drilling fluid as claimed to have low or no organophilic clay. Instead, the specification merely says there is no need for such clays. Absence of need for a component does not necessarily mean that that component is absent, or present only in low amounts. Additionally, the specification states that "preferably" none of these clays are added; this strongly suggests that absence of clays is simply a preferred embodiment. This reading is reinforced by the dependent claims: claims 20, 58, 95, 125 add the limitation that the fluid is "substantially free of organophilic clay." Thus, a requirement of low or no organophilic clays is not properly part of the construction of "fragile gel" as contained in the asserted independent claims.

The CAFC further found that the specification failed to distinguish the characteristics of a "fragile gel" from the prior art as well:

[W]e reject Halliburton’s assertion that a "fragile gel" can be defined by an L-shaped curve alone because the specification does not distinguish how the "fragile gels" claimed in the ’832 patent performed differently than the disclosed prior art—how much more quickly the gels broke when stress was imposed or how much more quickly the gels reformed when stress was removed. Halliburton’s failure to distinguish the fragileness of the drilling fluids of the invention from the close prior art (the 12.1 SF fluid that exhibited the L-shaped curve behavior) is fatal.

[E]ven if the ’832 patent distinguished "fragile gels" of the invention from those of the prior art, it did not place any limit on the scope of what was invented beyond the prior art . . . By failing to identify the degree of the fragility of its invention, Halliburton’s proposed definition would allow the claims to cover not only that which it invented that was superior to the prior art, but also all future improvements to the gel’s fragility. While patentees are allowed to claim their inventions broadly, they must do so in a way that distinctly identifies the boundaries of their claims.

In this case . . . Halliburton asks that we resolve the ambiguity in a way that gives it the broadest possible construction (i.e., that its claim covers all future improvements without regard to whether Halliburton invented such improvements); such a construction would undermine the notice function of the claims because it would allow Halliburton to benefit from the ambiguity, rather than requiring Halliburton to give proper notice of the scope of the claims to competitors. Additionally, adopting the broadest possible construction could retard innovation because cautious competitors may steer too far around that which Halliburton actually invented, neglecting improvements that otherwise might be made.

As an aside, the CAFC sent a message to the PTO on such situations:

We note that the patent drafter is in the best position to resolve the ambiguity in the patent claims, and it is highly desirable that patent examiners demand that applicants do so in appropriate circumstances so that the patent can be amended during prosecution rather than attempting to resolve the ambiguity in litigation.

AFFIRMED.