UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD. EPIC LIFT SYSTEMS, LLC, Petitioner,

Transcription

1 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD EPIC LIFT SYSTEMS, LLC, Petitioner, v. INTEGRATED PRODUCTION SERVICES, INC., Patent Owner Case Patent No. 6,719,060 PETITION FOR INTER PARTES REVIEW

2 TABLE OF CONTENTS I. MANDATORY NOTICES (37 C.F.R. 42.8)... 1 A. Real Party in Interest... 1 B. Related Matters... 1 C. Lead and Back-up Counsel and Service Information... 1 II. COMPLIANCE WITH REQUIREMENTS FOR INTER PARTES PETITION PURSUANT TO 37 C.F.R (A)... 2 III. IDENTIFICATION OF CLAIMS BEING CHALLENGED AND RELIEF REQUESTED PURSUANT TO (B))... 2 IV. TECHNOLOGY GENERALLY... 3 A. Conventional Plungers... 4 B. Continuous Run Plungers... 5 V. STATE OF THE ART... 6 VI. U.S. PATENT NO. 6,719, A. The Specification B. Prosecution History of 060 Patent C. Person of Ordinary Skill in the Art VII. CLAIM CONSTRUCTION A. at least one of the flow passages being of variable cross-sectional size (claims 1, 9) B. Other Terms VIII. PRECISE REASONS FOR RELIEF REQUESTED A. Brief Description of the Asserted Prior Art The 637 Patent Knox Popov B. Analogous Art C. Motivation and Rationale to Combine The 637 Patent and Knowledge of those of Skill in the Art The 637 Patent and Knox D. Expected Results/Reasonable Expectation of Success ii

3 1. The 637 Patent and Knowledge of those of Skill in the Art The 637 Patent and Knox E. Element-by-Element Invalidity Analysis Claim Claim Claim Claim Claim Claim Claim Claim Claim Claim Claim Claim IX. CONCLUSION iii

4 Cases TABLE OF AUTHORITIES In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004) In re GPAC Inc., 57 F.3d 1573 (Fed. Cir. 1995)... 1 In re Suitco Surface, Inc., 603 F.3d 1255 (Fed. Cir. 2010) Okajima v. Bourdeau, 261 F.3d 135, (Fed. Cir. 2001) Other Authorities MPEP Office Trial Practice Guide, 77 F.R. 48,756 (Aug. 14, 2012) Rules 35 U.S.C. 102(b) U.S.C U.S.C Regulations 37 C.F.R. 1.14(a)(1)(iii) C.F.R (b) iv

5 37 C.F.R. 42.8(b)(2)... 1 v

6 I. MANDATORY NOTICES (37 C.F.R. 42.8) A. Real Party in Interest Epic Lift Systems, LLC ( Epic ) is the real party in interest. B. Related Matters Patent Owner is asserting U.S. Patent No. 6,719,060 (filed Nov. 12, 2002) (the 060 Patent) (Ex. 1001), along with two other patents, against Epic in Integrated Production Services, Inc. v. Epic Lift Systems, LLC f/k/a Epic Well Services LLC; Civil Action No. 4:14-cv-00246, pending in the Southern District of Texas Houston Division. C. Lead and Back-up Counsel and Service Information Lead Counsel Back-up Counsel Back-up Counsel Back-up Counsel David Cabello Reg. No. 31,455 EpicIPR@counselip.com (832) Keith Rutherford Reg. No. 36,262 EpicIPR@counselip.com (832) James Hall Reg. No. 66,317 jhall@counselip.com (832) Stephen Zinda Reg. No. 67,272 szinda@counselip.com (832) Service of any documents via mail or hand-delivery may be made on Petitioner at: Wong, Cabello, Lutsch, Rutherford and Brucculeri LLP, SH 249 1

7 Suite 600 Houston, Texas The fax number for Petitioner s counsel is (832) Petitioner consents to electronic service by at EpicIPR@counselip.com. II. COMPLIANCE WITH REQUIREMENTS FOR INTER PARTES PETITION PURSUANT TO 37 C.F.R (A) Petitioner certifies that (1) the 060 Patent is available for inter partes review; and (2) Petitioner is not barred or estopped from requesting inter partes review of any of the challenged claims on the grounds identified herein. The undersigned authorizes the Commissioner to charge the fee specified by 37 C.F.R (a) to Deposit Acct. No , referencing attorney docket number In addition, the undersigned representative authorizes the Commissioner to charge any additional fees which may be required, or credit any overpayment, to Deposit Account No Concurrently, Petitioner is filing a Power of Attorney and Exhibit List pursuant to 37 C.F.R (b) and 42.63(e), respectively. Proof of Service of this petition pursuant to 42.6(e) and (a) is provided in the attached certificate of service. III. IDENTIFICATION OF CLAIMS BEING CHALLENGED AND RELIEF REQUESTED PURSUANT TO (B)) Petitioner requests institution of trial and cancellation of claims 1, 5 9, 13 15, and of the 060 Patent ( Challenged Claims ), because: 2

8 1) All Challenged Claims are rendered invalid as anticipated under pre- AIA 35 U.S.C. 102(b) by U.S. Patent No. 6,209,637 to Edward Wells 1 ( the 637 Patent ) (Ex. 1003). 2) Challenged Claims 8 and are rendered invalid as anticipated under 35 U.S.C. 102(b) by Experience in Introducing Plunger Lift at Fields of the Ukhta Complex, Gazovoe delo, No. 9, (1968) A.A. Popov ( Popov ) (Ex. 1010). 3) All Challenged Claims are rendered invalid as obvious under pre-aia 35 U.S.C. 103 by the 637 Patent in combination with the knowledge of those having ordinary skill in the art and the state of the art. 4) Challenged Claims 1, 7 9, 15, are rendered invalid as obvious under pre-aia 35 U.S.C. 103 by the 637 Patent in view of U.S. Patent No. 2,821,142 (filed June 20, 1955) ( Knox ) (Ex. 1006). IV. TECHNOLOGY GENERALLY The technology of the 060 Patent generally relates to plunger lifts for producing oil and gas from wells that have been produced over time and no longer reliably flow on their own due to decreased formation pressure, but are still capable of producing a significant amount of gas. Ex at 1: In wells that flow on 1 Mr. Wells is also the sole inventor of the '060 Patent. 3

9 their own, the flow of gas may eventually be cut off if fluid builds up in the production string and creates a hydrostatic liquid column pressure that becomes equal to the gas formation pressure. Ex Operators for many decades have used what is called plunger lift (i.e., artificial lift ) to maintain production in wells where this cut off may occur, by extracting unwanted liquid from the bottom of a gas well. Id. 33. There are two forms of plunger lifts: conventional and continuous. Id. 34. Both forms start with the basic idea of dropping a plunger to the bottom of the production string to create a seal and using the upward flow of gas to carry unwanted liquid out of the well. Id. Both forms use the same basic surface and downhole equipment, including a master valve, controller, and an optional autocatcher. Id A. Conventional Plungers Conventional plunger lift systems require that the well be shut in for the entire duration that the plunger falls to the bottom of the well. Id. 41. Because the plunger creates a seal with the production tubing, the flow rate of gas to the surface would prevent the conventional plunger from falling to the bottom of the well. Id. Therefore, the well is closed when the plunger falls through the tubing string. Id. To close the well, a plunger lift controller sends an electric or pneumatic signal to close a motor valve located at the surface, downstream of the well head. Id. 42. With the well closed/shut-in (i.e., no gas flow), the plunger free falls through the tubing to the 4

10 bottom hole spring location. Id. When it is desired to bring the plunger back to the surface, a controller sends a signal to the open the control (i.e. motor) valve. Id. If the reservoir pressure is sufficient when the well is opened, the plunger will rise to the surface, pushing the unwanted liquid column above it and out of the well. Id. The plunger will be held at the surface by the upward flow of gas until the controller sends a signal to shut in the well (i.e., stopping the upward flow of gas) and allow the plunger to fall to the bottom to begin a new cycle. Id. B. Continuous Run Plungers Continuous run plunger lift systems use either a two-piece plunger or a singlepiece bypass plunger. Id. 43. Both have an internal passageway that is open for gas and liquids to pass through as the plunger falls, yet closes when the plunger is at the bottom, blocking the internal flow path just prior to the plunger ascending to the surface. Id. This allows the plunger to fall against the upward flow of fluid and is advantageous over conventional plungers because it does not require the well to be shut-in the entire duration that the plunger falls, thus allowing for more production for some wells. Id. The two-piece plunger consists of an upper component (e.g., sleeve) and lower component (e.g., ball or mandrel) that fall into the well separately, but unite to close the internal passageway in the upper member so that when united, the gas flow rate will push the plunger to the surface. Id

11 The two-piece plunger lift cycle generally starts with a lower component being dropped at some distance ahead of a sleeve (i.e., an upper component), and then the sleeve follows. Id. 45. The ball and sleeve unite at the bottom of the well and create a seal, creating a pressure differential which propels the united plunger to the surface and carries out the unwanted liquid. Id. A separator rod dislodges the ball from the sleeve when they reach the well head, and the cycle repeats. Id. It is desired to hold the sleeve at the surface long enough to ensure the ball reaches the bottom of the well before the sleeve, otherwise the sleeve may catch up to the ball and prevent liquid from being carried to the surface. Id. If the separator rod is adequately sized, it will fill the passage in the sleeve and create a pressure differential across the sleeve such that the sleeve will remain on the rod so long as the flow rate is sufficient to hold the sleeve. Id. The well may be very briefly shut in to allow the sleeve to fall off the rod, and then the well may be reopened so that the sleeve can fall against the upward flow of gas. Id. The shut-in time required for this type of continuous run plunger is much less than that required for conventional plungers, which is a significant improvement in terms of gas production. Id. V. STATE OF THE ART Plunger lift technology as an artificial lift technique has been around for years. Id. 47. At least as early as the 1930s, it was known in the art to use two-piece pistons for plunger lift, as shown in U.S. Patent No. 2,001,012 (filed March 21, 1934) 6

12 ( Burgher ) (Ex. 1007). Id. Burgher showed the use of a ball-and-sleeve two-piece plunger. See Ex at figs.1 & 10; Ex Burgher described using a separator rod at or below the surface to pass through the sleeve and to dislodge the ball from its mated position with the sleeve. Ex at 3, col. left, ll , 59 69; Ex Burgher explained that once the ball was knocked out of the sleeve, the ball would fall back downhole immediately. Ex at 3, col. left, ll ; Ex The sleeve, once separated from the ball, would continue to rise due to momentum and production fluids flowing up through the production string. Ex at 3, col. left, ll ; Ex Burgher designed his system to allow the ball to get a considerable distance ahead of the sleeve when falling into the well. Ex at 2, col. right, ll ( A feature of the invention is that the ball 1 moves downwardly in the lift tube a considerable distance in advance of the piston.... ); Ex He explained that his design of using a separator rod at a point below the discharge outlet was intentional so the ball would always reach the bottom of the well before the sleeve. Ex at 3, col. left, ll (explaining that this design was to ensure that the valve and piston are returning in proper order to the lower end of the lift tube... ); Ex While Burgher used the combination of the upward flow of gas and the momentum of the sleeve, others recognized that the upward flow of formation contents alone could be used to hold the plunger in the well head. Ex For 7

13 instance, U.S. Patent No. 2,970,547 (filed May 15, 1958) ( McMurry ) (Ex. 1008) describes a conventional plunger lift system where a production valve is closed to allow the plunger to fall and opened to bring the plunger to the surface and to hold it in the well head for the desired length of time. Ex at 1:56 67; Ex In McMurry s system, the formation pressure held the plunger in the well head without the need for a catching device that physically holds the sleeve at the surface. Ex This was a very well-known method of holding a conventional plunger in a well head by the filing date of the 060 Patent. Id. By 1965, two-piece ball-and-sleeve plungers that used upward flow alone to hold the sleeve in the well head were also known. Id. 49. For example, Popov explains that in 1965, an entity of the Russian government was focused on plunger lift as an artificial lift technique. Ex at 3 ( In 1965 introduction of a plunger lift designed by the All-Union Scientific Research Institute of Gas was started in the gas fields of the Ukhta complex, and it differed from the previously used ones by its simplicity and operational reliability. ). 2 Around that time, plunger lift was being 2 Ex beginning at page 1 and ending at page 13 is the original Popov reference and translation submitted to the Patent Office by Patent Owner during reexamination of the 637 Patent. See Ex at 2, 11, However, because the figures of the Popov translation as transmitted to the Patent Office by Patent Owner were not 8

14 used in a number of gas fields in Russia. See id. at 2. Those plunger lift systems used a two-piece ball-and-sleeve plunger (Ex at fig. 4) with a straight separator rod, as was known in the art by the 1960s (as evidenced by Burgher). See id. at 3 ( The plunger is then introduced into the tubing with a ball, which, moving downward (Figure 2) and upward (Figure 3), periodically extracts liquid from the hole bottom to the surface. ). Popov also taught that his sleeve was held on the separator rod for some period of time by the upward gas flow. See id. at 3 ( As soon as the lower end of the plunger during its ascent is level with the end of the stempusher, the ball separates from the plunger (Figure 4) and drops downward. Gas that has accumulated beneath the plunger passes through the cylindrical opening of the plunger into the well gathering system and then to the gas pipeline. The plunger then falls back to the lower shock absorber (Figure 5). (emphasis added)); Ex Those of skill in the art would recognize that Popov is describing how the upward flow of gas temporarily holds the sleeve on the rod, as it is only after the accumulated gas passes through the opening in the sleeve that it then falls back down. Ex Popov also recognized that more cycle control was needed in the Russian fields and mentioned that the use of cyclical controllers was being investigated. See Ex. very clear (see e.g., Ex at 4, figs. 4 & 5), enlarged figures from the untranslated Popov reference and their translations have been included in Ex at

15 1010 at 8 ( In 1967 under the guidance of the All-Union Scientific Research Institute of Gas, work was started in gas wells 75 and 83 of the Nibel sk field to test and introduce a special control device, consisting of a pneumatic relay and two pneumatic check valves. Introduction of this apparatus will permit control of the operating cycle of the plunger lift and will automate the process of removing the liquid extracted by the plunger from the drain. ); Ex Those of skill in the art would have understood based on Popov s disclosure that the controller would have been used to temporarily shut the well, allowing the sleeve to fall off the rod. Ex This was (and still is) the only known industry accepted method of holding the sleeve at the surface with a controller, other than using an auto-catcher (which is not mentioned anywhere in Popov). Id. Once separated, the well would be opened as the sleeve continued to fall against a flow rate through the production string and a new cycle would begin. Id. While Popov taught using a controller and straight separator rod for the purpose of holding the sleeve in the well head, Knox (a 1958 patent) disclosed using a separator rod (51) with an enlargement (65) that acted to seal or nearly seal the passage through the plunger so that a pressure differential would be created across the plunger and it would be held in the well head, as shown in Figure 7. Ex at 3:64 71; Ex In order to drop the plunger back into the well, the control valve was closed, which stopped the upward flow of formation contents and allowed 10

16 the plunger to fall off the rod. Ex at 4:49 61; Ex Knox taught that this was an improved means of holding a plunger in the well head for a desired period of time. Ex at 1:69 72; Ex In summary, by 1934 (Burgher) it was known that a two-piece plunger could be held in the well head using the upward flow of gas and the momentum of the sleeve. Ex By at least 1958 (McMurry) it was known that conventional plungers could be held in the well head using the upward flow of gas alone. Id.; see also Ex at 2:26 28 (explaining that conventional plungers were known to be held by the upward flow of gas and allowed to fall by shutting the well in). By 1965 (Popov) it was known that the upper sleeve of a two-piece plunger could be held in the well using solely a pressure differential created by the upwardly flowing gas from the well. Ex And by 1958 (Knox) it was known that an enlargement on a rod could be used to create the necessary pressure differential to hold a plunger sleeve in the well head. Id. VI. U.S. PATENT NO. 6,719,060 A. The Specification The 060 Patent is directed to a two-part plunger and accompanying plunger lift system. See Ex at [57], 2:52 61; Ex While two-piece plungers having an upper member held in the well head by the upward flow of gas had existed in the art for many decades before the Patent Owner s filing date (as shown in the 11

17 state of the art discussion), Patent Owner purports to offer an advance over the art. Ex In reference to Figure 1, the 060 Patent describes a two-piece plunger that has a solid ball 36 that fits into an accompanying sleeve 34. Ex at 5:33 40; Ex The ball 36 and sleeve 34 are designed to fall separately and independently into the well, and will nest together after they reach the bottom. Ex at 5:52 59; Ex When the ball 36 and sleeve 34 unite at the bottom of the well, a pressure differential is created across them that propels them to the well head. Ex at 3:60 65; Ex At the well head, there is a separator rod 62 that projects down such that as the united ball and sleeve reach the surface, the rod slips through the sleeve and contacts the top of the ball. Ex at 6:40 46; Ex This causes the ball to separate from the sleeve, breaking the seal between the two and permitting the ball to fall back down to the bottom of the well. Ex at 6:40 46; Ex The 060 Patent illustrates three different embodiments that allow the sleeve to be held on the separator rod in the wellhead without the need for an auto-catcher or other mechanical parts acting on the sleeve. The 060 Patent first describes using a straight separator rod that occupies almost the entire passage of the sleeve such that when the sleeve is on the separator rod, a pressure differential is created by the upwardly flowing formation contents 12

18 that holds the sleeve in the wellhead. Ex at 7:1 4 ( Theoretically, the pressure drop can be created by a simple cylindrical rod acting through a cylindrical passage in the sleeve. ); Ex The 060 Patent also describes using an enlargement or bulge on the separator rod that effectively seals the inner passage of the sleeve and thus creates a pressure drop induced by the gas flowing upwardly through the well head. Ex at 7:17 30; Ex Figure 3 identifies this bulge as element 90. The 060 Patent finally describes, in reference to Figure 6, using an upwardly diverging slot 108 opening into a patch or enlargement 110 welded on the side of the housing 102. Ex at 8:7 15; Ex Thus, as the bottom of the sleeve rises past the slot 108, it allows gas to flow out of slot 108 as the effectively [sic] size of the outlet slot 108 increases thereby reducing the pressure drop across the sleeve 34. In the event well flow subsides somewhat, the sleeve 34 moves downwardly thereby closing off part of the slot 108 and increasing the pressure drop across the sleeve 34 and raising the sleeve 34. Ex at 8:18 24; Ex The 060 Patent appears to hail the novel portion of the patent as the ability to hold the sleeve in the well head without the use of a physical latch, such as an autocatcher. See Ex at 3:8 11, 6:54 57; Ex B. Prosecution History of 060 Patent The 060 Patent was filed on November 12, 2002 as U.S. Application No. 13

19 10/292,238. Ex at 20. The 060 Patent was allowed without any rejections by the PTO and has undergone no further examination by the PTO. Id. at 67. C. Person of Ordinary Skill in the Art The level of ordinary skill in the art is reflected by the prior art of record. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001); In re GPAC Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995). In this case, the person of ordinary skill in the art has at least a bachelor s degree in petroleum engineering or mechanical engineering or the like, or at least 1 to 3 years of experience working with plunger lift technology (whether conventional or continuous). Ex VII. CLAIM CONSTRUCTION In an inter partes review, claim terms are given their broadest reasonable construction in light of the specification of the patent in which it appears. 37 C.F.R (b). Under this standard, [t]he focus of the inquiry regarding the meaning of a claim should be what would be reasonable from the perspective of one of ordinary skill in the art. MPEP (citing In re Suitco Surface, Inc., 603 F.3d 1255, 1260 (Fed. Cir. 2010)). A. at least one of the flow passages being of variable cross-sectional size (claims 1, 9) A person of ordinary skill in the art would understand this term to mean at least one of the flow passages having a cross-sectional size that changes. Ex As discussed supra at Section VI.A, the 060 Patent teaches multiple 14

20 embodiments where a passageway of varying size is used to hold the sleeve in the well head. Id. In one embodiment, a bulge on the separator rod is used to hold the sleeve in the well head. Ex at 7:17 44; Ex When the sleeve is on the rod, there is a first portion of the passage between the sleeve and the non-bulging portion of the rod that has a cross-sectional size. Ex at 7:34 37; Ex There is also a second portion of the passage between the sleeve and the bulge itself that has a smaller cross-sectional size than the first portion. Ex at 7:37 44; Ex Thus, the size of the passage changes from its first larger portion to the second smaller portion. Ex In yet another embodiment, a variable passage exists between the sleeve and the housing. As the sleeve begins to move downward to block a flow outlet in the housing, the size of the flow passage between the housing and sleeve reduces (i.e., changes). Ex at 8:20 23; Ex As the sleeve moves upward and uncovers more of the flow outlet in the housing, the size of the flow passage between the sleeve and housing increases (i.e., changes). Ex at 8:18 20; Ex B. Other Terms While Petitioner offered additional constructions during the underlying litigation, those constructions were proposed under the narrower district court claim construction standard pursuant to Phillips. Under the claim construction standard 15

21 applied in inter partes reviews, all remaining terms should be construed according to their plain and ordinary meaning and should be given their broadest reasonable interpretation, as understood by one of ordinary skill in the art and consistent with the disclosure. Trial Practice Guide, 77 Fed. Reg , (Aug. 14, 2012); Ex The remaining terms of the Challenged Claims are routine mechanical terms that one of ordinary skill in the art would easily understand based on the intrinsic evidence. Ex VIII. PRECISE REASONS FOR RELIEF REQUESTED A. Brief Description of the Asserted Prior Art 1. The 637 Patent The 637 Patent to Wells (the inventor of the 060 Patent) issued on April 3, 2001, more than a year before the filing date of the 060 Patent, and is thus prior art under section 102(b). The 637 Patent was before the PTO during prosecution of the 060 Patent but never cited against it. See Ex at [56]. The 637 Patent describes a two-piece plunger that has a mandrel 40 and sleeve 26 designed to fall separately and independently into the well and to nest together after they both reach the bottom. Ex at 5:3 12; Ex At the well head, there is a separator rod that projects down such that as the sleeve and nested mandrel reach the surface, the rod slips through the sleeve and contacts the top of the pin on the mandrel. Ex at 6:7 22; Ex The 16

22 mandrel is then dislodged from the sleeve, causing the mandrel to fall to the bottom of the well. Ex at 6:22 25; Ex The 637 Patent emphasizes the importance of ensuring that the mandrel reaches the bottom of the well before the sleeve. See, e.g. Ex at 6:35 38, 7:19 23; Ex In one embodiment, the 637 Patent ensures that the mandrel reaches the bottom first using an auto-catcher and controller to control the frequency of the plunger lift cycles. See id. at 6:34 39 ( A catcher 32 may be provided to latch onto the sleeve 38 and thereby hold it for a while to provide a delay period between successive cycles of the piston 26 and to make certain that the sleeve 38 and mandrel 40 fall separately toward the bottom of the well 10. (emphasis added)), 6:52 58 (explaining that [u]pon a signal from a controller (not shown) the sleeve is released by the catcher). The use of an auto-catcher is optional in the 637 Patent, as it states the catcher 32 may be provided. Ex The 637 Patent also teaches that the sleeve may be held in the well head using the upward flow of gas. See Ex at 6:26 33 (explaining that the sleeve may stick or be pinned in the well head by the upward flow of gas); Ex A bypass or outlet in the housing below the separator rod helps prevent the piston from sticking in the well head assembly. Ex at 6:26 33 ( The bypass 36 helps prevent the piston 26 from sticking in the well head assembly Thus, there will be a tendency of gas flowing through the well head assembly 20 to move through 17

23 the bypass 36 rather than pinning the sleeve 38 against the stop 100. ); Ex The 637 Patent states that a catcher may be provided to hold the sleeve in the lubricator so that the mandrel reaches the bottom of the well before the sleeve, but does not indicate that a catcher is required to achieve this condition. Ex at 6:34 38; Ex Furthermore, the 637 Patent teaches that it was common for conventional plunger lifts to hold the plunger in the well head using the upward flow of gas and to close the well to allow the plunger to fall to the bottom of the well. See Ex at 2:25 28 ( Conventional plunger lift systems comprise a piston that is dropped into the well by stopping upward flow in the well, as by closing the wing valve.... ); 2:40 42 (explaining that in conventional plunger lifts the well must be shut in so the piston is able to fall to the bottom of the well ). Long before the 637 Patent was filed, it was well-known in the field of plunger lift technology that conventional plungers could be held in the well head using the upward flow of gas alone. Ex Thus, the 637 Patent teaches that the sleeve of a two-piece plunger would be held in the well head by the upward flow of gas, and that in 3 The 637 Patent also discloses a valve 103 that controls flow through the bypass 36. The only apparent purpose of that valve is to control how easily the sleeve is held in the well head by upward flow, further indicating that using the upward flow to hold the sleeve was an intended feature of the 637 Patent. Ex , n

24 conventional plunger lifts that effect was often used to hold the sleeve in the well head. Id. 2. Knox Knox, which is prior art under section 102(b), teaches a free piston well pump for use in gas wells to extract liquid. See Ex at 1:57 62 ( [I]t is the principal object of this invention to provide a free piston well pump device in which a plurality of valved plungers travel in the same eduction tube, [4] and operate to transfer well fluid from a lower plunger to a higher plunger.... ). Knox was not before the PTO during prosecution of the 060 Patent. See Ex at [56]. As shown in Figures 3 and 7, Knox teaches a separator rod (51) containing an enlargement (65) (i.e., a bulge) that is designed to hold the plunger on the well head using the upward flow of formation contents, which creates the necessary pressure differential. Ex at 3:63 70, 4:49 61; Ex Knox explains that the enlargement provides an improved means for maintaining the upper plunger at the wellhead until the lower plunger has reached the lower end... of the production tubing. Ex at 1:69 72; Ex Knox also teaches that a control valve must be closed to reduce the upward flow of gas to allow the plunger to fall off the rod. Ex at 4:54 61; 4 The term eduction tube as used in Knox is synonymous with production tube. Ex at 32, n.4. 19

25 Ex Thus, Knox teaches that an enlargement on a rod may be used to hold a plunger in the well head until a production valve is closed. Ex at Popov Popov, prior art under 102(b), describes a common two-component gas lift plunger that acts as a free-piston type pump. Ex. 1010; Ex Popov was not before the PTO during prosecution of the 060 Patent. See Ex at [56]. Popov teaches a well head above ground level as illustrated in Figure 1, reproduced to the right. The well head has a plunger lift valve 4, which controls flow through the production tubing and allows the well to be shut in so no gas flows upwardly. See Ex at 14, fig.1; Ex An above ground separator rod, indicated by a red box on the right, appears to be illustrated as hanging from the top of the well head, which corresponds to metal rod 3 from Figure 4. Ex In reference to the figures shown above, the ball and sleeve are dropped down the production tubing (Figure 2). See Ex at 3 ( The plunger is then introduced into 20

26 the tubing with a ball, which, moving downward (Figure 2) and upward (Figure 3), periodically extracts liquid from the hole bottom to the surface. ); Ex In order to extract liquid, the ball and sleeve then unite at the bottom of the well, and the ball blocks the internal flow passageway in the sleeve (Figure 5). Ex at 16; Ex With this passageway blocked, the ball and sleeve are exposed to an upward pressure differential and rise to the top of the well together with accumulated liquid on top (Figure 3). Ex at 15; Ex As soon as the united piston reaches the surface, the above ground separator rod 3 separates the rising piston into its two components: its sleeve and ball (Figure 4). See Ex at 3; Ex Popov explains that the sleeve is held in the well head for some duration of time by the upward flow of gas. Ex at 3 ( As soon as the lower end of the plunger during its ascent is level with the end of the stem-pusher, the ball separates from the plunger (Figure 4) and drops downward. Gas that has accumulated beneath the plunger passes through the cylindrical opening of the plunger into the well gathering system and then to the gas pipeline. The plunger then falls back to the lower shock absorber (Figure 5). (Emphasis added)); Ex Thus, a sufficient amount of gas must accumulate beneath the sleeve before the production fluid passes through the cylindrical opening of the sleeve and the sleeve is able to fall off the rod. Ex Those of skill in the art would understand that Popov is describing the delay between the sleeve dropping into the well after the ball, because the flow of 21

27 formation contents will hold the sleeve in the well head at least temporarily. Id. Popov also goes on to acknowledge the usefulness of a controller at the surface to control the cycle of the piston. See Ex at 8 (discussing the introduction of a special control device, consisting of a pneumatic relay and two pneumatic check valves [that] will permit control of the operating cycle of the plunger lift and will automate the process of removing the liquid extracted by the plunger from the drain. ). Those of ordinary skill in the art would understand that the controller would be used to close a valve to shut in the well, thereby allowing the sleeve to fall off the rod. Ex This was (and still is) the only industry-accepted method of controlling a two-piece plunger lift cycle without using an auto-catcher. Id. B. Analogous Art In order for a reference to be analogous art, it must be: (1) from the same field of endeavor as the claimed invention (even if it addressed a different problem); or (2) reasonably pertinent to the problem faced by the inventor (even if it is not in the same field of endeavor as the claimed invention). In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004). As demonstrated above, the 637 Patent, Knox, Popov and the 060 Patent are all related to the exact same field of endeavor the removal of formation contents from a well using a plunger lift system. Ex Each system operates in virtually an identical way using the same principles of physics. Id. Additionally, each reference is reasonably pertinent to the problem to be 22

28 solved by the 060 Patent. Id. 73. The '060 Patent purportedly solves two problems: (1) holding the plunger in the wellhead without moving parts acting on the plunger, (see Ex at 3:8 11, 4:4 12) by using the upward flow of gas to hold the sleeve (see id. at 6:26 33); and (2) ensuring a delay between dropping the upper and lower portions of the plunger so that the lower plunger reaches the bottom of the well first (see id. at 10:13 25). Similarly, the '637 Patent, Knox, and Popov teach at least one way of holding the sleeve in the well head using the flow of gas to create a delay and control cycling, as discussed supra at Section VIII.A. Ex C. Motivation and Rationale to Combine 1. The 637 Patent and Knowledge of those of Skill in the Art As shown in the discussion infra at Section VIII.E, the 637 Patent teaches every element of the Challenged Claims, including holding the sleeve in the well head using the upward flow of formation contents. To the extent the Board finds otherwise, the 637 Patent in view of the state of the art would still render each claim obvious to those of ordinary skill in the art, as it would be obvious to use the upward flow of formation contents alone to hold the sleeve in the well head based on the 637 Patent alone and the state of the art. Ex (a) Combining Prior Art Elements According to Known Methods to Yield Predictable Results 5 5 Each of the rationales discussed below requires that a person of ordinary skill in 23

29 Modifying the embodiment of the 637 Patent to hold the sleeve in the well head with the upward flow of gas would have required nothing more than taking the known method of using the upward flow of gas to hold a plunger at the surface in conventional plungers and combining it with the 637 Patent s two-piece plunger. Ex In fact, the 637 Patent teaches that conventional plungers can be held at the surface using the upward flow of gas and that even the two-piece sleeve will also be held (or pinned) at the surface by the upward flow of gas in some cases. Ex at 2:23 42, 6:26 33; Ex Using the upward flow of fluid to hold the sleeve of a two-piece plunger was also known in the art, as evidenced by Popov and Burgher. Ex This modification would have been simple, as it would entail making the passage of the sleeve smaller or the rod larger (or a combination of both) in order to create a sufficient seal that holds the sleeve in the well head. Ex The same type of seal is used with conventional plungers to achieve the same holding function, as well as the plungers of Popov and Burgher. While the 637 Patent disparages the use of a control valve to shut in a well with a conventional plunger to allow plunger to fall to the bottom, this is only the art would have recognized that the results of the combination were predictable. That element is collectively addressed infra at Section VIII.D.1. 24

30 because a conventional plunger must be shut in the entire time the plunger is falling to the bottom. Ex at 2:39 53; Ex Those of skill in the art would have understood that for a two-piece plunger, the shut-in duration is much shorter because the plunger need not reach the bottom of the well before reopening the valve as with a conventional plunger. Ex This is because the two-piece plunger of the 637 Patent falls against the flow of fluid. Ex ; Ex at 2: Thus, it would have been obvious that the two-piece plunger of the 637 Patent could have been used without an auto-catcher by holding it in the wellhead using formation contents and simply shutting the well in (very briefly) to allow the well to fall off the separator rod. Ex (b) Use of a Known Technique to Improve Similar Devices in the Same Way/Applying a Known Technique to a Device Ready for Improvement to Yield Predictable Results. The 637 Patent teaches a base device in the form of a continuous plunger. Ex Conventional plungers are a comparable device because they are also used to create a seal to carry unwanted liquid from a well. Id. Those of skill in the art would have recognized that method of holding the plunger in the well head used 6 The argument in this paragraph is applicable to all of the rationales discussed herein and overcomes any assertion that the 637 Patent teaches away from Petitioner s obviousness positions proposed herein. 25

31 with conventional plungers would have been an improvement when used with the two-piece plunger of the 637 Patent, because no auto-catcher would be required, thereby reducing the cost, complexity, and maintenance of the overall system. Id. In fact, using the upward flow of gas to hold the sleeve of a two-piece plunger was known in the art, as evidenced by Popov and Burgher. Id. 81. (c) Obvious to Try Choosing from a Finite Number of Identified, Predictable Solutions, with a Reasonable Expectation of Success The 637 Patent teaches that there was a known need for ensuring that the lower component reaches the bottom before the upper component and for controlling production cycles. Ex at 6:34 38; Ex The 637 Patent also teaches that an auto-catcher may be used to solve those problems or address those needs. Id. If an auto-catcher was not used, the only industry accepted method for accomplishing those goals would have been using the upward flow of gas to hold the sleeve. Ex The 637 Patent teaches that this occurs in conventional plungers, as well as the two-piece plunger of the 637 Patent. Ex at 2:39 44, 6:26 33; Ex Moreover, Popov and Burgher evidence that it was known in the art that the upward flow of gas could be used to hold a two-piece plunger at the surface. Ex As such, the only identifiable, predictable solution to address those needs when not using an auto-catcher (as suggested by the 637 Patent) would be to use the upward flow of gas. Ex

32 (d) Suggestion or Motivation to Modify/Combine As discussed supra at Section VIII.C.1.c, the 637 Patent explains there is a need to ensure that the lower member reaches the bottom of the well first and for cyclical control, and states that an auto-catcher is optional for accomplishing those goals. The only other known way to hold the sleeve in the well head is by the upward flow of gas, which the 637 Patent expressly teaches may be used to pin the sleeve in the well head. Ex ; Ex at 6: Thus, there was a clear motivation to use the upward flow of gas to hold the sleeve when an auto-catcher was not used, as that was the only other known option at the time evidenced by Popov and Burgher. Ex Such a modification would have been a known advantageous alternative, as it would reduce the cost of the overall plunger lift system, reduce the risk of mechanical failure of an auto-catcher, ensure the lower component reaches the bottom first, and remove the need for long shut-in times. Id. 2. The 637 Patent and Knox As shown in the discussion of each claim infra at Section VIII.E, the 637 Patent teaches every element of the Challenged Claims, including a variable passageway sufficient to hold the sleeve in the housing. However, even if the 637 Patent did not anticipate all of the Challenged Claims, the 637 Patent in view of Knox renders the claims obvious. Ex (a) Combining Prior Art Elements According to Known 27

33 Methods to Yield Predictable Results 7 As discussed infra at Section VIII.E, Knox expressly teaches using an enlargement on a rod in order to hold a plunger in a well head, which creates a variable passageway between the sleeve and rod. Ex All of the combined elements the 637 Patent s plunger lift system and the enlargement from Knox perform exactly the same function in combination. Ex Knox explains that this is an improved means for maintaining the upper plunger at the well head until the lower plunger has reached the lower end of the eduction tube and that the enlargement is intended to ensure the plunger is held in the well head by the upward flow of gas without the need for a latching device, which is the exact same purpose of the enlargement in the 060 Patent. Ex at 1:69 72; Ex (b) Simple Substitution of One Known Element for Another to Obtain Predictable Results The enlargement of Knox also satisfies the variable passageway limitation by simple substitution. Id. 93. As illustrated in the element-by-element analysis section infra at Claim 1(f), the enlargement could easily be superimposed onto the rod of the 637 Patent to perform the exact same function. Id. The substituted 7 Each of the rationales discussed below requires that a person of ordinary skill in the art would have recognized that the results of the combination were predictable. That element is collectively addressed infra at Section VIII.D.2. 28

34 component (i.e., the bulge) and its function was clearly known in the art, as Knox expressly states it was intended to hold an upper plunger to allow a lower plunger to reach the bottom of the well first. Ex at 3:63 71; Ex As explained supra at Section VIII.C.2.a, all of the combined elements of the 637 and Knox perform exactly the same function in combination as they do separately, and modifying the 637 Patent to include the enlargement would be a simple change to those of ordinary skill in the art. Ex (c) Use of Known Technique to Improve Similar Devices in the Same Way/Applying a Known Technique to a Device Ready for Improvement to Yield Predictable Results The 637 Patent teaches a base device in the form of a continuous plunger that can be improved upon by the enlargement of Knox. Id. 97. The inventions of both references are comparable because they are both plunger lifts for extracting gas. Id. The invention of Knox would improve the 637 Patent just like the bulge of the 060 Patent because they both operate using the same principles of physics to achieve the same purpose. Id. Knox explains that the plunger 20 is held within the housing 14 for the required time interval and is prevented from dropping out of the housing under the force of gravity. Ex at 3: As explained by the 060 Patent, this approach does not require close tolerances along the entire length of the rod. Ex at 7:17 18; Ex Thus, Knox teaches an improved method for holding the plunger in the wellhead for the desired length of time. Id. 29

35 The function of the substituted component (i.e., the bulging rod of Knox) was clearly known in the art, as Knox explains exactly what that bulging rod accomplishes, and that function is the same as the function as the catcher of the 637 Patent. Ex (d) Suggestion or Motivation to Combine/Modify As previously discussed supra at Section VIII.C.1.d, the 637 Patent teaches that controlling the plunger lift cycle and ensuring the lower component reaches the bottom before the sleeve is important. The 637 Patent also teaches that holding the sleeve may be done using an auto-catcher, and when an auto-catcher is not used, the only other known way of holding the sleeve would be using the upward flow of gas. Ex at 6:26 38; Ex Thus there is a motivation or suggestion to use the upward flow of gas alone to hold the sleeve when an auto-catcher is not used. Id. One way to do this, which is taught by the 637 Patent, is to use a straight separator rod that almost entirely occupies the passage of the sleeve. Id. As explained by the 060 Patent, however, [t]his approach is not an optimum approach because the flow rate assumption has to be relatively low requiring tolerances to be fairly close meaning that under more normal flow conditions, there may be a larger pressure drop across the piston sleeve 34 than is desirable. Ex at 7: Knox teaches that its method is an improved means for holding the sleeve in the well head using only the upward flow of gas (Ex at 1:69 72), and that means 30

36 does not require close tolerances along the entire length of the rod because of the bulge (Ex ). As such, those of skill in the art would have had a motivation to use Knox s bulge feature with the 637 Patent, as it improves the operation of the 637 Patent invention. Id. D. Expected Results/Reasonable Expectation of Success 1. The 637 Patent and Knowledge of those of Skill in the Art The results of using the plunger lift system of the '637 Patent without a catcher and reducing the size of the passage (i.e., the clearance) between the sleeve and the separator rod would have been entirely predictable and expected, as the '637 Patent already explains that the sleeve may be held on the separator rod by the upward flow of gas and that conventional plungers used this method to hold the plunger at the surface. Ex , 78, 81, 85. One of skill in the art would have known that a narrow gap between the sleeve and rod would ensure the sleeve is held in the well head under a lower pressure drop (or lower flow rate) and would only require minor adjustments to the dimensions of the rod or sleeve passage. Id These simple adjustments could be accomplished by a person with a basic understanding of mechanical principles. Id. As such, the results of modifying the '637 Patent to hold the sleeve in the well head without mechanical moving parts would have been expected. Id. That this was expected is evidenced by Popov and Burgher, each of which teach holding the sleeve of a two-piece plunger at the surface using gas flow. 31

37 2. The 637 Patent and Knox All of the combined elements the 637 Patent s plunger lift system and the enlargement from Knox perform exactly the same function in combination. Ex , 92, 96, 98. Thus, simply taking the enlargement on the rod in Knox and superimposing it into the separator rod of the system of the 637 Patent would have been very simple to those of skill in the art. Id This would require nothing more than altering the size of the enlargement to correspond to the inner passage of the sleeve of the 637 Patent to allow for a sufficient seal to create the necessary pressure differential. Id. E. Element-by-Element Invalidity Analysis Each element of the Challenged Claims is found in the prior art as discussed below. The indicator (alone) is used to show that the indicated reference anticipates the element. The indicator in view of is used to show a combination renders a particular element obvious. For example, with regard to claim 9, all elements are shown in the 637 Patent alone so every element has the 637 Patent (alone) indicator. However, element (e) is also taught by the combination of the 637 Patent in view of Knox. Thus, element (e) also has the indicator 637 Patent in view of Knox. As such, Claim 9 is anticipated by the 637 Patent alone, but also rendered obvious by the 637 Patent in view of Knox (because of the combination for element (e)). To the extent the obviousness combination is found to be applicable, 32

38 this would of course carry over to all claims depending from Claim 9 (e.g., Claims would also be rendered obvious, even though the limitation added by those claims may be taught by the 637 Patent alone). 1. Claim 1 (a) A plunger lift for a well producing through a production string communicating with a hydrocarbon formation, 637 Patent (alone): The 637 Patent discloses a plunger lift for a well producing through a production string communicating with a hydrocarbon formation. See e.g., Ex at Abstract ( A plunger lift for a hydrocarbon well includes... ); 1:4 5 ( This invention relates to a plunger lift system for moving liquids upwardly in a petroleum well. ); Fig. 1 (showing wellhead assembly 20 and production string 12 for communicating with hydrocarbon formation 14). (b) comprising a free piston having at least two sections, movable independently downwardly in the well, the sections comprising a lower component and a sleeve providing a seating surface for receiving the lower component so the lower component and sleeve join together in the well for pushing liquid, above the piston, upwardly 637 Patent (alone): The 637 Patent discloses a free piston having at least two sections in the form of an upper sleeve and mandrel, each of which are dropped independently in the well. See id. at 2:58 60 ( In this invention, a multipart piston includes separate pieces that are independently allowed to fall inside the production string toward the productive formation. ), fig.2 (showing sleeve and mandrel). The 33

39 sleeve provides a surface for the mandrel to seat in the sleeve so that the sleeve and mandrel unite for pushing liquid upward together. Id. at 3:1 9 ( When the lower piece nears the bottom of the well, it falls into any liquid near the bottom of the well.... When the upper pieces reaches the lower piece, they unite into a single component that has a cross-sectional area comparable to existing plunger lift pistons, i.e., any gas entering the production string from the formation is under the piston and pushes it upwardly, thereby pushing any liquid upwardly in the well to the surface. ), 7:3 8 (describing how the mandrel seats in the passage of the sleeve). (c) and a catcher assembly on the well at the surface comprising a housing, 637 Patent (alone): The 637 Patent discloses a catcher assembly that includes a housing and separator rod for holding the sleeve in the wellhead. See id. at 6:8 11 ( The decoupler 30 comprises a rod 92 sized to pass into the top of the sleeve 38 and is fixed to a piston 94. ); 7:24 25 ( In more normal situations, the sleeve 38 will be retained on the catcher 30 so the piston 26 cycles much less often. ); Ex The 637 Patent also explains that the auto-catcher is an optional feature, as it states the auto-catcher may be provided. Id. at 6:34 36; Ex The 637 Patent further teaches that the upward flow of gas may hold the sleeve on the rod in the well head even in the auto-catcher embodiment. Ex at 6:26 33; Ex Thus, regardless of whether an auto-catcher is used, the housing and separator 34

40 rod 92 act as a catcher to hold the sleeve in the wellhead using the upward flow of gas. See Ex (d) a separator rod in the housing for receiving the sleeve thereon and dislodging the lower component, 637 Patent (alone): The 637 Patent discloses a separator rod in the housing for receiving the sleeve thereon and dislodging the lower component. See Ex at 3:19 22 ( When the united components reach the well head at the surface, a decoupler separates the sleeve from the mandrel and allows the mandrel to fall toward the bottom of the well. ), 6:8 11 ( The decoupler 30 comprises a rod 92 sized to pass into the top of the sleeve 38 and is fixed to a piston 94. ), fig.1 (showing separator rod 92 for separating the sleeve and mandrel). (e) the housing, rod and sleeve providing therebetween flow passes for formation contents, 637 Patent (alone): As shown in annotated Figure 1 of the 637 Patent from Mr. Cosby s declaration, there is a flow passage between the housing and sleeve, indicated in red. Ex The specification also explains that: The exterior of the sleeve 38 provides a seal arrangement 50 to minimize liquid on the outside of the sleeve [and to] restrict[] liquid flow on the outside of the sleeve 38. Ex at 4:28 38 (emphasis added). Because the 637 Patent says the liquid flow on the outside of the sleeve is minimized or restricted, as opposed to completely stopped, there is clearly a 35

41 flow passage between the sleeve and housing. Ex Moreover, those of skill in the art would understand that there would not be a complete seal between the exterior of the sleeve and the inside of the production tubing, as this could cause the sleeve to get stuck as it moves up and down the well. Id. Additionally, as shown on the right (Ex. 1003, fig. 1), when the sleeve (blue) is on the separator rod and partially covering the bypass outlet, there is a passageway between the lower part of the sleeve and the lower outlet opening (indicated in red). Ex The 637 Patent also teaches that there is a flow passage between the interior of the sleeve 38 and the separator rod 92. Id Specifically, in reference to Mr. Cosby s declaration, annotated Figure 1 (maintaining original drawing scale but rearranged for easier viewing) shows the size of the upper passage through the top of the sleeve relative to the size of the separator rod 92. Id. The width of the smallest 8 As explained in detail infra at Claim 1(f), Patent Owner has accused Petitioner s product of having a passage between the sleeve and lower outlet opening, which Patent Owner alleges is part of the housing. If Patent Owner s application of the claims is encompassed under the broadest reasonable interpretation, the 637 Patent teaches clearly this limitation as discussed here. Ex , n.6. 36

42 inner passage of the sleeve is indicated by red arrows, and the width of the separator rod is indicated by blue arrows. Id. For the rod to pass through the sleeve, the opening in the sleeve must be larger than the rod, as evidenced by Mr. Cosby s drawing. Id. Moreover, those of skill in the art would understand that the rod 92 would have to be constructed so that there is at least a small gap between the sleeve and rod, otherwise the sleeve would get stuck on the rod by friction, impairing movement of the sleeve. Id. Additionally, the sleeve must fall off the rod using only gravity, and a small amount of resistance created by a tight fit between the sleeve and rod would prevent this from occurring. Id. Thus, there is a gap (i.e., passage). Id. The 637 Patent also teaches a flow passage between the separator rod and the housing, as shown right in red in Fig 1, and the 637 Patent explains that there are a series of grooves in the stop 100 that allow formation products to pass around the stop 100 and into flow line Ex at 6:13 17; Ex (f) at least one of the flow passages being of variable crosssectional size producing a pressure drop sufficient to hold the sleeve in the housing against gravity. 637 Patent (alone) or in view of the state of the art: The 637 Patent explains that there is a tendency for the sleeve to get held in the well head by the upward flow of formation gas and that the lower bypass outlet is intended to help 37

43 prevent this from happening: The bypass 36 helps prevent the piston 26 from sticking in the well head assembly 20 and may include a valve 103. [9] The bypass 36 opens into the well head assembly 20 below the bottom of the sleeve 38 when it is in its uppermost position in the well head assembly 20. Thus, there will be a tendency of gas flowing through the well head assembly 20 to move through the bypass 36 rather than pinning the sleeve 38 against the stop 100. Id. at 6: However, even when using the lower bypass, those of skill in the art would have understood that higher flow rates would cause the sleeve to still get held in the well head. Ex Those of skill in the art would have understood that well conditions vary dramatically from well to well, and even within a single well, the flow rate will change significantly. Id. In wells with high flow rates, even with the bypass outlet opening, the sleeve would still be capable of being pinned against the top of the stop 100. Id. During the litigation, Patent Owner accused Petitioner s product of infringing because, according to Patent Owner, the variable passageway may be created between the sleeve and the outlet opening of the lower bypass (similar to the lower 9 The only apparent purpose of valve 103 is to vary the amount of time the sleeve is held on the rod, which further evidences that using the upward flow of gas to hold the sleeve was an intended feature of the 637 Patent. Ex , n

44 outlet opening of bypass 36 in the 637 Patent). Ex at 8 9. If that is within the broadest reasonable interpretation of the Challenged Claims, then the 637 Patent expressly teaches it as discussed here. Ex As illustrated below, as the sleeve (blue) slides down the rod (92) and blocks the lower outlet, the sleeve restricts the upward flow of gas enough to cause the sleeve to move upwardly on the rod via the upward flow of gas. Id. This constitutes a flow passage of variable cross-sectional size between the sleeve and housing sufficient to produce a pressure drop to hold the sleeve in the wellhead. Id. As shown in annotated Fig. 1 on the left below (Fig. A), when the sleeve (blue) is at the top of the separator rod, there is a passageway between the sleeve and the housing (indicated by the red circle) Notably, the separator rod 92 would actually move upward more than shown in the figure when the sleeve initially impacts the stop 100 because of the resulting compression of the spring 28. Ex , n.8. 39

45 Figure A Figure B Figure C As shown in Figure B, that passageway is reduced in size (indicated by red circle) as the sleeve slides down the separator rod. Id The passage is a variable passage because it is greater in size when the lowest end of the sleeve is above the bottom of the outlet opening and reduces in size as the sleeve slides down the rod to the block the outlet opening. Id. Looked at in another way, in reference to annotated Figure C, when the sleeve covers the bypass outlet opening, the flow passage at the outlet (green) is larger than the flow passage between the sleeve and housing wall (red). Id. Thus, there is a variable passage between the sleeve and housing. Id. The 637 Patent also teaches a variable cross-sectional passage between the 40

46 separator rod and the sleeve. Id In reference to annotated Figure 2 on the right, which shows a detailed view of the sleeve, when the separator rod (brown) is inside the central passage of the sleeve, there is a flow passage between the sleeve and the separator rod. Id. The flow passage is represented by the red, blue, yellow, and green markings. Id. The red indicates the passage at its smallest, while the blue, yellow, and green represent the passage as it progressively increases in size, respectively. Id. Thus, the flow passage between the sleeve and rod varies at different points. Id. As previously discussed, the 637 Patent explains that there will be a tendency for the sleeve to get pinned in the wellhead by the upward flow of gas. Those of skill in the art would understand that this pinning is caused by the pressure drop created when the sleeve is on the separator rod due to the upward flow of gas. Id. Because the rod largely occupies the central passage of the sleeve, it creates a sealing effect similar to the mandrel when it is nested in the sleeve. Id. Because the central passage of the sleeve has a varying inner diameter, it has a variable passageway sufficient to create a pressure drop that holds the sleeve in the well head. Id. 41

47 Figure A Figure B The 637 Patent also teaches that the flow passage between the housing and separator rod is a variable one that is sufficient to hold the sleeve on the rod, as shown by Figures A and B above. Id When the sleeve is not on the rod, as shown in Figure A, there is a larger passage (green) between the rod and housing. Id. However, as shown in Figure B, as the sleeve (blue) slides up and down the rod 92, the passageway between the rod 92 and housing (green) is reduced at the point the sleeve, housing, and rod are all aligned in parallel (indicated in red). Id. As the size of the passage between the housing and rod is decreased, a pressure drop sufficient to hold or pin the sleeve in the well head is created. Id. While the 637 Patent anticipates this limitation as discussed above, even if it did not, it certainly would have been obvious based on the 637 Patent alone to modify the variable passages discussed above to create a pressure differential sufficient to hold the sleeve as discussed supra at Section VIII.C.1. Ex Patent in view of Knox: When combining the enlargement of Knox with the separator rod of the 637 Patent, a pressure drop sufficient to hold the sleeve in 42

48 the well head is created by a variable passage between the sleeve and rod and the sleeve and the housing. Id In reference to Figure 7 of Knox (shown below), the specification explains: When the upper plunger 20 enters the central cavity 13, the lower end 62 of the spear 51 projects downward through the central passage 23 in the plunger 20 and engages the valve head 26 to move it to open position. The upper end of the plunger 20 strikes the lower side of the flange 53 after the valve 25 is open. The spring 56 cushions the shock in bringing the plunger 20 to rest within the housing 14. The well fluid raised by the plunger 20 passes out through the flow pipe 63 and through the flow bean 78 and control valve 64. The spear 52 is provided with a lateral enlargement 65 which forms a restriction 66 within the longitudinal passage 23 in the upper plunger 20. The effect of this restriction 66 is to apply an upward force to the plunger 20 so long as gas passes through the restriction. In this way, the plunger 20 is held within the housing 14 for the required time interval and is prevented from dropping out of the housing under the force of gravity. Ex at 3: As such, Knox teaches using an enlargement on a rod to create a pressure differential sufficient to hold a plunger in a wellhead. Ex As explained supra at Section VIII.C.2, those of skill in the art would have found it obvious to simply modify the separator rod of the 637 Patent to include an 43