United States District Court, D. Minnesota
Scott J. Pivnick, Esq., Alston & Bird, LLP, Washington, DC, on behalf of Plaintiff.
Kevin P. Hickey, Esq., Bassford Remele, PA, Minneapolis, MN, on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
ANN D. MONTGOMERY, UNITED STATES DISTRICT JUDGE.
On January 29, 2015 the undersigned United States District Judge heard oral argument on Defendant Dynamic Air Inc.'s (" Dynamic Air" ) Motion to Dismiss [Docket No. 16]. For the reasons discussed below, Dynamic Air's motion is denied.
This patent infringement action presents a single but interesting question: does the United States Patent Act (" Patent Act" ) apply on U.S.-flagged ships in international waters? The facts giving rise to this lawsuit are recited in this Court's February 2014 Order in a related case, Civil No. 13-2385, and will not be repeated in full here. See M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., No. 13-2385, (D. Minn. Feb. 6, 2014) (hereinafter M-I Drilling Fluids, Case No. 13-2385). In short, Plaintiff M-I Drilling Fluids UK, Ltd. (" M-I Drilling" ) alleges Dynamic Air infringed on its patented CLEANCUT® pneumatic conveyance system technology related to transporting oil well waste from oil rigs. Compl. [Docket No. 1]. When oil wells are drilled, cuttings from the drilling are brought to the surface. Id. ¶ 5. CLEANCUT® collects and contains the waste, allowing it to be transported in an environmentally friendly way. Id. ¶ 7. M-I Drilling seeks damages and a permanent injunction to enjoin further infringement of its patents by Dynamic Air.
This suit involves the Brazilian subsidiaries of M-I Drilling and Dynamic Air. M-I Drilling is a United Kingdom limited-liability company with its principal place of business in the UK. Id. ¶ 2. M-I Drilling is a " supplier of drilling fluid systems and equipment engineered to improve drilling performance." Id. M-I Swaco do Brasil (" M-I Brazil" ) is a sister company and customer of M-I Drilling. Id. ¶ 17.
Dynamic Air is a Minnesota corporation with its principal place of business in St. Paul, Minnesota. Id. ¶ 3. Dynamic Air is a developer, designer, and manufacturer of pneumatic conveyance systems. Id. ¶ 14. Dynamic Air has been involved in the
pneumatic conveyance industry since 1969. Dynamic Air Ltda. (" Dynamic Ltda" ) is Dynamic Air's Brazilian subsidiary with its principal place of business in Brazil. Id. ¶ 17.
Petroleo Brasilerio (" Petrobras" ) is a Brazilian company that issued a request for proposal for a pneumatic conveyance system to contain and transport drill cuttings from Petrobras-owned Brazilian oil rigs. Id.
B. M-I Brazil and Dynamic Ltda submit proposals to Petrobas
Between October 2011 and January 2012, Petrobras requested proposals for a pneumatic conveyance system to remove drill cuttings from its oil rigs located in international waters off the coast of Brazil. Id. ¶ 17. M-I Brazil and Dynamic Ltda submitted proposals. Id. Dynamic Ltda was awarded the contract and worked with Dynamic Air to direct the " design, manufacture, and installation of certain pneumatic conveyance systems for Petrobras." Id. ¶ 19. Dynamic Air directed Dynamic Ltda to install the conveyance and containment systems aboard at least two U.S.-flagged ships. Id. ¶ 20. Dynamic Air provides " onsite support" for these systems, " including supervising and assisting in the installation and startup of the systems" aboard the ships. Id. ¶ 21.
In January 2013, M-I Drilling alleged that Dynamic Air either installed or directed the installation of a pneumatic conveyance system on the U.S.-flagged ship HOS Resolution (" Resolution" ), located in international waters. Id. ¶ 23. In February 2013, the pneumatic conveyance system was used to transport drill cuttings from an offshore Petrobras oil rig to the Resolution. Id. ¶ 24.
In August 2013, M-I Drilling alleged that another Dynamic Air pneumatic conveyance system was manufactured, sold, delivered and installed aboard the U.S.-flagged HOS Pinnacle (" Pinnacle" ), also located in international waters off the coast of Brazil. Id. ¶ 26. This system was also used to transport ...