Sunoco v. U.S. Venture, Inc. — Summary Judgment in Patent Infringement on Invalidity Issue

A manufacturer of systems that blend butane into gasoline prior to retail sale sued a competitor, accusing it of infringing on its patents. The competitor argued that the patents were invalid because the original inventors had sold their patented system to a third company more than a year before they filed for patents on the system, and because the plaintiff had allegedly engaged in inequitable conduct while prosecuting its patent claim. The Northern District of Illinois rejected the competitor’s arguments, finding that the sale of the system was made for experimental purposes and that the plaintiff’s conduct did not meet the high threshold required to invalidate the patents.

The plaintiff, Sunoco Partners, acquired its patents when it purchased the butane blending business of a company called Texon Terminals in 2010. The competitor, U.S. Venture, Inc. is in the business of mixing butane into gasoline prior to its distribution to retail outlets. In 2012, Venture retained Technics, Inc. to install a butane blending system at three of Venture’s fuel terminals located in Green Bay, Madison, and Milwaukee, Wisconsin. Sunoco later filed suit against U.S. Venture and Technics in federal court, accusing the companies of infringing on its patents when they installed the butane-blending systems at U.S. Venture’s fuel terminals.

Sunoco then filed partial motions for summary judgment, seeking a decision on whether its patents were valid despite the inventors’ sale of their system more than one year prior to the date they filed for patents, and whether its patents were unenforceable due to alleged inequitable conduct.

Venture alleged that Sunoco’s patents were invalid because the inventors sold a patented system to Equilon Enterprise LLC more than one year before they filed for their patents. The district court stated that patents are presumed valid, and that presumption can only be overcome by clear and convincing evidence. The court found that the inventors of the system had sold their invention more than a year prior to filing for their patents, but that the sale was made for experimental purposes, primarily to learn whether or not their systems would work once installed.

The court then found that Sunoco did not invalidate its patents by acting inequitably. Venture claimed that Sunoco’s patents were invalid because the inventors and their patent attorneys omitted certain information about sales that occurred prior to the filing date of the patents, and failed to disclose Venture’s invalidity and inequitable conduct arguments to the U.S. Patent and Trademark Office after the litigation began. The court stated that inequitable conduct if proved, bars enforcement of a patent. The court, however, found that Venture had not met the heavy burden of showing such conduct. The court stated that Venture had not shown that the inventors and their attorneys knew the sale that occurred prior to the filing of the patent was material and had made a deliberate decision to withhold information about it. The court ultimately granted Sunoco’s partial motions for summary judgment on the issues of invalidation due to a prior sale and the question of inequitable conduct.

You can view the full opinion here.

The court then found that Sunoco did not invalidate its patents by acting inequitably. Venture claimed that Sunoco’s patents were invalid because the inventors and their patent attorneys omitted certain information about sales that occurred prior to the filing date of the patents, and failed to disclose Venture’s invalidity and inequitable conduct arguments to the U.S. Patent and Trademark Office after the litigation began. The court stated that inequitable conduct if proved, bars enforcement of a patent. The court, however, found that Venture had not met the heavy burden of showing such conduct. The court stated that Venture had not shown that the inventors and their attorneys knew the sale that occurred prior to the filing of the patent was material and had made a deliberate decision to withhold information about it. The court ultimately granted Sunoco’s partial motions for summary judgment on the issues of invalidation due to a prior sale and the question of inequitable conduct.Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes.  Our Oak Park and Elgin business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0333 or our toll-free number (833) 306-4933.  You can also contact us online here.