Judges: Michel (author), Bryson, Fogel (District Judge sitting by designation)
[Appealed from E.D. Tex., Judge Davis]
In Halliburton Energy Services, Inc. v. M-I LLC, No. 07-1149 (Fed. Cir. Jan. 25, 2008), the Federal Circuit affirmed the district court’s grant of SJ in favor of M-I LLC (“M-I”) that the asserted claims of Halliburton Energy Services, Inc.’s (“Halliburton”) U.S. Patent No. 6,887,832 (“the ’832 patent”) were invalid as indefinite under 35 U.S.C. § 112, ¶ 2.
The ’832 patent and its claims relate to oil field drilling fluids that are fragile gels. For example, claim 1 recites, inter alia, “[a] method for conducting a drilling operation in a subterranean formation using a fragile gel drilling fluid . . . .” Slip op. at 2. Halliburton sued M-I, alleging that M-I’s Rheliant drilling mud system infringed certain claims of the ’832 patent. M-I moved for SJ of invalidity, arguing, inter alia, that the asserted claims of the ’832 patent were invalid as indefinite. After holding a combined Markman and motion hearing, the district court granted M-I’s SJ motion, finding that all asserted claims of the ’832 patent, which contained the limitation that the drilling fluid be a “fragile gel,” were invalid as indefinite. Halliburton appealed.
On appeal, the Federal Circuit explained that § 112, ¶ 2 requires that the specification of a patent “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” Id. at 6. It noted that it has held claims to be indefinite only where a person of ordinary skill in the art could not determine the bounds of the claims, i.e., the claims were insolubly ambiguous. It added that “[i]f the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, [it has] held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.” Id. at 7 (first alteration in original). Nevertheless, observed the Court, “this standard is met where an accused infringer shows by clear and convincing evidence that a skilled artisan could not discern the boundaries of the claim based on the claim language, the specification, and the prosecution history, as well as [the] knowledge of the relevant art area.” Id.
Applying these principles, the Court concluded that because neither Halliburton’s proposed definition nor any other possible construction resolved the ambiguity in the scope of the term “fragile gel,” the claims containing that term were indefinite. In so concluding, the Court analyzed the three-part definition of “fragile-gel” set forth by Halliburton, starting with the third part. With respect to the third part, i.e., no or low organophilic clay or lignite, the Court concluded that “fragile gels” that have no or low organophilic clay or lignite were merely preferred embodiments of the invention covered by certain dependent claims, and thus “fragile gel” as used in the independent claims was not limited to those embodiments. Although the specification of the ’832 patent stated that there was no need for organophilic clays, the Federal Circuit asserted that “[a]bsence of need for a component [did] not necessarily mean that that component [was] absent, or present only in low amounts.” Id. at 9.
The Federal Circuit then reviewed the remainder of Halliburton’s definition, i.e., a fragile gel was one that easily transitioned to a liquid state upon the introduction of force and returned to a gel when the force is removed, and that was capable of suspending drill cuttings and weighting materials at rest. While the Court agreed that the remainder of the definition was supported by the specification, it found that this did not end the inquiry. The Court noted that “[e]ven if a claim term’s definition can be reduced to words, the claim is still indefinite if a person of ordinary skill in the art cannot translate the definition into meaningfully precise claim scope.” Id. at 10. The Court explained that here, Halliburton’s definition did not resolve the ambiguity as to the scope of “fragile gel” even when it is considered in the context of the intrinsic record and the knowledge of a person of ordinary skill in the art.
Specifically, Halliburton argued, relying on Figure 3 of the ’832 patent, that the first part of its definition, i.e., a gel that easily transitions from gel to liquid and back again, was sufficiently objective so that a skilled artisan would understand the limits of the claimed “fragile gel.” Rejecting this argument, the Federal Circuit reasoned that the inclusion of a prior art fluid in Figure 3 made the distinction between “fragile gels” and the prior art unclear. The Court added that “Halliburton’s failure to distinguish the fragileness of the drilling fluids of the invention from the close prior art . . . [was] fatal.” Id. at 13.
The Court found that even 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. The Court observed that 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. Accordingly, the Court noted that it was unclear whether a person of ordinary skill in the art would have interpreted Halliburton’s claims as having an upper bound of fragility.
The Federal Circuit observed that “where a claim is ambiguous as to its scope[, it has] adopted a narrowing construction when doing so would still serve the notice function of the claims.” Id. at 14. In this case, however, noted the Court, Halliburton was asking that the Court resolve the ambiguity in a way that gives it the broadest possible construction, i.e., that its claims cover all future improvements without regard to whether Halliburton invented such improvements. The Court found that 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. The Court thus held that the term “fragile gel” was not sufficiently definite if construed in accordance with the first part of Halliburton’s proposed definition because a person of ordinary skill in the art could not determine how quickly the gel must transition to a liquid when force is applied and how quickly it must return to a gel when the force is removed.
The Federal Circuit also found that the second part of Halliburton’s definition, i.e., the fragile gel was capable of suspending drill cuttings and weighting materials at rest, fared no better because nothing in the record suggested what degree of such capability was sufficient. The Court noted that under Halliburton’s construction, an artisan would not know from one well to the next whether a certain drilling fluid was within the scope of the claims because a wide variety of factors could affect adequacy. In other words, explained the Court, a given fluid might be adequate to suspend drill cuttings in some formations and/or well configurations, whereas in others it would not be. The Court added that “[w]hen a proposed construction requires that an artisan make a separate infringement determination for every set of circumstances in which the composition may be used, and when such determinations are likely to result in differing outcomes (sometimes infringing and sometimes not), that construction is likely to be indefinite.” Id. at 16-17.
The Federal Circuit also observed that the first two parts of Halliburton’s definition were functional. It noted that in some instances, use of functional language can fail “‘to provide a clear-cut indication of the scope of subject matter embraced by the claim’ and thus can be indefinite.” Id. at 17 (citation omitted). It added that when a claim limitation is defined in purely functional terms, the task of determining whether that limitation is sufficiently definite is a difficult one that is highly dependent on context. The Court stated that the patent drafter is in the best position to resolve the ambiguity in patent claims, and that a functional limitation can be made more definite by using, for example, “quantitative metric (e.g., numeric limitation as to a physical property) rather than a qualitative functional feature.” Id. at 18. The Court also suggested that functional language can be clarified by providing “a formula for calculating a property along with examples that meet the claim limitation and examples that do not.” Id. The Court did not discern any other construction that could properly be adopted that would render the claims definite. Accordingly, it affirmed the district court’s SJ decision, holding that M-I provided clear and convincing evidence that the term “fragile gel” was indefinite