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Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC

United States District Court, D. Delaware

September 18, 2019

SUNOCO PARTNERS MARKETING & TERMINALS L.P., Plaintiff,
v.
POWDER SPRINGS LOGISTICS, LLC, and MAGELLAN MIDSTREAM PARTNERS, L.P., Defendants.

          REPORT AND RECOMMENDATION

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court in this patent infringement case is Defendants Powder Springs Logistics, LLC ("Powder Springs") and Magellan Midstream Partners, L.P.'s ("Magellan," and collectively with Powder Springs, "Defendants") motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (the "Motion"). (D.I. 138; October 11, 2018 Oral Order) With the Motion, Defendants argue that the patents asserted by Plaintiff Sunoco Partners Marketing & Terminals L.P. ("Sunoco" or "Plaintiff) are directed to patent-ineligible subject matter pursuant to 35 U.S.C. § 101 ("Section 101") and that Plaintiffs allegations of willful infringement fail to meet the Twombly/lqbal pleading standard. The Court has previously issued a Report and Recommendation addressing the Motion with regard to Plaintiffs claims of willful infringement. (D.I. 322) This Report and Recommendation will address the Motion as it relates to the assertion that certain claims of the patents-in-suit are patent ineligible pursuant to Section 101. For the reasons that follow, the Court recommends that the Motion be DENIED in that respect.

         I. BACKGROUND

         In this patent case, Plaintiff alleges that Defendants infringe five of Plaintiff s patents. Those patents are United States Patent Nos. 9,494,948 (the '"948 patent"), 9,606,548 (the '"548 patent"), 9,207,686 (the '"686 patent"), 6,679,302 (the '"302 patent") and 7,032,629 (the '"629 patent") (collectively, "the asserted patents" or "the patents-in-suit"). The patents-in-suit relate to systems and methods for the automated blending of butane and gasoline.

         The Court hereby incorporates its summary of the technology at issue and its summary of the patents-in-suit set out in the Court's January 8, 2018 Report and Recommendation, (D.I. 68 at 1-8); further information about these subjects relevant to the pending Motion will be set out in Section III below. Additionally, the Court also incorporates its summary of the procedural background of this matter, which was set out in the Court's August 7, 2019 Report and Recommendation. (D.I. 322 at 2-3)

         II. STANDARD OF REVIEW

         This portion of the instant Rule 12(b)(6) Motion asserts that certain claims of the patents-in-suit are directed to patent-ineligible subject matter. The Court has often set out the relevant legal standards for review of such a motion, including in Genedics, LLC v. Meta Co., Civil Action No. 17-1062-CJB, 2018 WL 3991474, at *2-5 (D. Del. Aug. 21, 2018). The Court hereby incorporates by reference its discussion in Genedics of these legal standards and will follow those standards herein. To the extent consideration of this portion of Defendants' Motion necessitates discussion of other, related legal principles, the Court will set out those principles in Section III below.

         III. DISCUSSION

         The five patents-in-suit share two specifications. The '629 patent and the '302 patent (the "generation-1 patents") share a specification and the '948 patent, '548 patent, and '686 patent (the "generation-2 patents") also share a specification.[1] The generation-2 specification explicitly incorporates the generation-1 specification by reference. ('686 patent, col. 1:7-18)

         In assessing the eligibility of the challenged claims of the patents, the Court will first discuss which of these claims will be addressed herein as representative. Thereafter, it will analyze the relevant claims under the test for patent eligibility set out in Alice Corp. Pty. Ltd. v. CLS Bank lnt'l, 573 U.S. 208 (2014).

         A. Representative Claims at Issue

         In their opening briefs, Defendants put at issue the eligibility of certain claims of the generation-1 patents (claims 17-33 of the '629 patent and claims 18-35 of the '302 patent)[2] and all of the claims of the generation-2 patents. (D.I. 139 at 1-2) In doing so, Defendants made arguments as to why each of these claims are patent ineligible. (See generally D.I. 29; D.I. 139) That said, Defendants tended to focus their eligibility arguments as to all claims on a few purportedly representative claims: claim 17 of the '629 patent, claims 18, 23 and 27 of the '302 patent, claim 1 of the '548 patent, claim 7 of the '948 patent and claim 1 of the '686 patent. (D.I. 29 at 4-6; D.I. 139 at 5-11)

         In its answering briefs, with regard to the generation-1 patents, Plaintiff did not explain why the above-referenced, assertedly-representative claims were, in fact, not representative. (See, e.g., D.I. 145 at 5) Nor did Plaintiff, in pushing back on Defendants' arguments, specifically address the content of any other challenged claim of the generation-1 patents. Thus, the Court can treat claim 17 of the '629 patent, and claims 18, 23, and 27 of the '302 patent, as representative; it will therefore refer to the content of those claims below in assessing the arguments for and against the eligibility of the generation-1 patent claims. See Berkheimer v. HP Inc., 881 F.3d 1360, 1365-66 (Fed. Cir. 2018) (noting that courts "may treat a claim as representative ... if the patentee does not present any meaningful argument for the distinctive significance of any claim limitations not found in the representative claim or if the parties agree to treat a claim as representative"); TMI Sols. LLC v. Bath & Body Works Direct, Inc., C.A. No. 17-965-LPS-CJB, 2018 WL 4660370, at *6 (D. Del. Sept. 28, 2018) (same).

         With regard to the generation-2 patents, Plaintiff did make distinct arguments in its answering briefs regarding eligibility as to claims beyond those called out as representative by Defendants (e.g., as to claim 7 of the '548 patent, claims 1 and 3 of the '948 patent[3] and claim 7 of the '686 patent). (D.I. 45 at 11; D.I. 145 at 4-5) Thus, normally the Court would be required to separately assess each of these additional claims in its eligibility analysis. See Berkheimer, 881 F.3d at 1365-66. Yet in light of the nature of the decision here, the Court will not need to address all of these additional claims; instead it will primarily focus on the purportedly-representative generation-2 patent claims identified by Defendants.

         Below, the Court sets out the text of each of the claims Defendants described as being representative, as well as claim 7 of the '686 patent, which was also discussed at length at the second oral argument, (see, e.g., D.I. 197 at 39, 42, 64, 74-75):

Claim 17 of the '629 patent:
17. A computer-implemented method for blending a butane stream with a gasoline stream comprising the steps of:
receiving a first measurement indicating a vapor pressure of the gasoline stream; receiving a second measurement indicating a vapor pressure of the butane stream; calculating a blend rate at which the butane stream can be blended with a gasoline stream; and transmitting an instruction to a programmable logic controller for adjusting the butane stream to the calculated blend rate for blending with the gasoline stream and distributing at a rack.

('629 patent, col. 14:38-49)

Claim 18 of the '302 patent:
18. A method for optimizing butane purchase decisions for a petroleum products tank farm comprising:
a) in an information processing unit, setting a value for the quantity of butane in a tank at time zero;
b) drawing a butane stream from the tank of butane;
c) blending the butane stream with gasoline for a first interval of time from time zero until time one;
d) monitoring the consumption of butane blended with the gasoline during the first interval of time, and transmitting data regarding the consumption during the first interval of time to the information processing unit; and
e) transforming the consumption data during the first interval of time, and the butane quantity at time zero, to an output of data comprising the butane consumption rate during the first interval of time, and the quantity of butane in the tank at time one.

('302 patent, col. 14:51-67)

Claim 23 of the '302 patent:
23. A method for simplifying record keeping requirements for butane use at a petroleum products tank farm comprising:
a) drawing a gasoline stream from a tank of gasoline;
b) drawing a butane stream from a tank of butane;
c) blending the butane stream and the gasoline stream to form a blend;
d) monitoring the volatility of the gasoline stream and the butane stream;
e) monitoring the rate at which the butane stream is blended with the gasoline stream;
f) inputting the monitored volatilities and monitored blend rate to an information processing unit; and
g) generating a report that tabulates the monitored volatilities and monitored blend rate, or a summary thereof.

('302 patent, col. 15:31-46)

Claim 27 of the '302 patent:

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