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` MURRAY DALLAS
` IN THE UNITED STATES DISTRICT COURT
` FOR THE EASTERN DISTRICT OF TEXAS
` TYLER DIVISION
`OIL STATES ENERGY §
`SERVICE, L.L.C., f/k/a §
`STINGER WELLHEAD §
`PROTECTION, INC., §
` §
` Plaintiff, §
` §
`VS. § Civil Action No.: 6:12-CV-611
` §
`TROJAN WELLHEAD §
`PROTECTION, INC., f/k/a §
`GUARDIAN WELLHEAD §
`PROTECTION, INC., §
` §
` and §
` §
`GREENE'S ENERGY GROUP, §
`LLC, §
` §
` Defendants. §
`
` ORAL DEPOSITION OF MURRAY DALLAS
` Houston, Texas
` Thursday, March 13, 2014
`
` Reported by:
` RENE WHITE MOAREFI, CSR, CRR, CLR, CCR
` JOB NO. 71428
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` March 13, 2014
` ORAL DEPOSITION OF MURRAY DALLAS, held at
` the offices of Morgan, Lewis & Bockius, LLP,
` 1000 Louisiana Street, Suite 4000, Houston, Texas,
` from 8:51 a.m. to 2:04 p.m., before Rene White
` Moarefi, Texas Certified Shorthand Reporter,
` Certified Realtime Reporter, Certified LiveNote
` Reporter, Louisiana Certified Court Reporter, and
` Notary Public in and for the State of Texas.
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` MURRAY DALLAS
` A P P E A R A N C E S
`
` MORGAN LEWIS & BOCKIUS
` Attorney for Plaintiff
` 1000 Louisiana Street
` Houston, Texas 77002
` BY: CLAY ERIK HAWES, ESQ.
`
` FOLEY & LARDNER
` Attorney for Defendant
` 3000 K Street, N.W.
` Washington, D.C. 20007
` BY: JOHN FELDHAUS, ESQ.
` BRADLEY ROUSH, ESQ.
`
` Also Present:
` MS. MYRA THETFORD - VIDEOGRAPHER
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` MURRAY DALLAS
` I N D E X
` PAGE
` APPEARANCES.................................. 3
` MURRAY DALLAS
` EXAMINATION
` By Mr. Feldhaus........................... 6
` REPORTER'S CERTIFICATION..................... 173
` E X H I B I T S
` PAGE LINE
` Exhibit 15 ............................. 12 23
` U.S. Patent No. 4,867,243
` (no Bates - 14 pages)
` Exhibit 16 ............................. 17 15
` US Patent No. 3,830,304
` (no Bates - 8 pages)
` Exhibit 17 ............................. 51 8
` Brochure entitled Providing
` Quality Wellhead Protection Services
` Worldwide with handwritten annotations
` (OSES_015945 - OSES_015956)
` Exhibit 18 ............................. 64 16
` US Patent No. 6,179,053
` (no Bates - 17 pages)
` Exhibit 19 ............................. 87 3
` US Patent file for Patent No.
` 6,179,053
` (no Bates - 106 pages)
` Exhibit 20 ............................. 107 20
` US Patent No. 4,076,079
` (no Bates - 3 pages)
` Exhibit 21 ............................. 108 24
` File History of US Patent
` 5,819,851
` (no Bates - 130 pages)
` Exhibit 22 ............................. 111 15
` US Patent No. 4,076,079
` (no Bates - 9 pages)
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` EXHIBITS (cont'd.)
` PAGE LINE
` Exhibit 23 ............................. 113 19
` File History for US Patent No.
` 5,927,403
` (no Bates - 86 pages)
` PREVIOUSLY MARKED EXHIBITS
` Exhibit 3 .............................. 11 19
` Settlement Agreement
` (GEG-0001703 - GEG-0001715)
` Exhibit 7 .............................. 34 9
` Plaintiff's Second Supplemental
` Objections and Responses to Defendant
` Greene's Energy Group's First Set of
` Interrogatories
` (No Bates - 11 pages)
` Exhibit 8 .............................. 38 20
` Brochure entitled Providing
` Quality Wellhead Protection Services
` Worldwide
` (OSES_015945 - OSES_015956)
` Exhibit 10.............................. 84 25
` US Patent No. 6,817,423
` (No Bates - 17 pages)
` Exhibit 11.............................. 60 20
` US Patent No. 6,289,993
` (No Bates - 12 pages)
` Exhibit 12.............................. 35 21
` US Patent No. 5,819,851
` (No Bates - 14 pages)
` Exhibit 13.............................. 96 22
` Canadian Patent No. 2,195,118
` (No Bates - 32 pages)
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` MR. HAWES: Object to --
` A. -- change my testimony.
` MR. HAWES: -- the form of the
` question.
` Q. (BY MR. FELDHAUS) Well, could you explain
` to me what you invented then?
` MR. HAWES: Object to the form of
` the question.
` A. I invented a wellhead isolation -- or a
` tool that -- that isolated the BOPs -- they call it a
` BOP protector -- that would hook up on the top of the
` BOPs when you -- you had pressure or no pressure on
` the well and be able to insert it and then be able to
` pull the well -- pull the tool with pressure on the
` well that I can go in and out -- out of the -- out of
` the BOPs or frac valves and insert the tool under
` pressure and pull it under pressure or either/or
` under pressure with full bore access.
` Q. (BY MR. FELDHAUS) So you did not invent
` the basic concept of a BOP protector with full bore
` access, then. Is that your testimony?
` MR. HAWES: Object to the form of
` the question.
` A. Well, I believe I did, but I -- I invented
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` it going in and out of the wellbore under pressure.
` Q. (BY MR. FELDHAUS) Now, it's your -- is it
` your testimony that at the time that you filed the
` '053 patent, you had no knowledge of any device in
` any form that allowed full bore access in --
` A. I can't remember back then. I -- again,
` I've said this I don't -- I don't know how many
` times. I do not remember. It's been quite a few
` years ago. I've looked at drawings. I know -- I
` just don't remember.
` Q. So you just don't --
` A. You'd have to talk to my attorney.
` Q. You just don't know whether you were aware
` of a BOP protector that --
` A. I didn't say I didn't know.
` Q. -- allowed full bore access.
` A. I just said -- I -- I don't know. Maybe
` I -- all I can say is, is I don't remember.
` Q. But your attorney --
` A. Maybe at the time I did. I -- I don't
` know. I just don't remember.
` Q. So I would have to ask your attorney what
` you remembered?
` A. Now, if you talk to my --
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` MR. HAWES: Object to the form of
` the question.
` A. -- attorney, he might remember.
` Q. (BY MR. FELDHAUS) Do you keep records of
` your patent applications -- or excuse -- strike that.
` Did you keep records of your patent
` applications?
` MR. HAWES: Object to the --
` A. When?
` MR. HAWES: -- form of the
` question.
` Q. (BY MR. FELDHAUS) When?
` A. Right now?
` Q. When Stinger was --
` No. When Stinger was -- when you owned
` Stinger.
` MR. HAWES: Same objection.
` A. I didn't personally -- at home, you mean,
` or what?
` Q. (BY MR. FELDHAUS) Well, no, in your
` company.
` A. Yeah, I think we had it, we should have.
` I mean, we were running the tools, we -- Max would
` also -- we filed in -- the patent offices in United
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` States and Canada would have a record of it.
` Q. But did you keep records of your
` communications with your attorney regarding your
` patent applications?
` A. Not that I'm aware.
` Q. Well, if your -- if your attorney sent you
` some documents, say, a -- a patent application to be
` filed, you would look that over, right?
` MR. HAWES: Object to the form of
` the question.
` A. Yeah, I'd look over whatever he sent me,
` yeah.
` Q. (BY MR. FELDHAUS) Would you then throw it
` away?
` MR. HAWES: Object to the form of
` the question.
` A. I don't know where it is. I've --
` Q. (BY MR. FELDHAUS) Well, I'm not asking if
` you know where it is now. I'm asking what you did
` for it -- with it when you got it.
` A. I don't know. It'd be at the office.
` Q. Where at the office?
` MR. HAWES: Object to the form of
` the question.
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` A. Probably in a file cabinet.
` Q. (BY MR. FELDHAUS) I mean, was someone
` responsible for filing such documents?
` MR. HAWES: Same objection.
` A. Well, they were always cleaning my desk.
` If it come in, then it would go -- certain things
` would be filed to whatever. I don't know.
` Q. (BY MR. FELDHAUS) Did you have a
` secretary?
` A. Yes.
` Q. What was her name?
` A. Nancy Eunglund.
` Q. Could you spell that?
` A. E-u-n-g-u-l-a-n-d or E-u-n-g-l-u-n-d,
` yeah, that's it.
` Q. I mean, did -- did you have -- what I'm
` trying to get at is, did you have a file folder where
` you kept documents related to each of your patent
` applications?
` A. I did at the time when we were going back
` and forth. I mean -- I mean, you're doing a patent,
` my patent attorney and myself would go back and forth
` lots.
` Q. And -- and so --
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` A. And --
` Q. -- you'd -- you'd keep that --
` A. Well --
` Q. -- correspondence?
` A. -- while I was doing the patent, I would.
` Once the patent was done, I don't know, probably
` threw it away. I don't know. Because the patent's
` there, it's there. It's done. It's filed. And once
` we got the patent there and passed, it's just -- to
` me just a bunch of paper.
` Q. Well -- but when --
` A. A patent is a patent.
` Q. Did -- did you instruct someone to destroy
` those files?
` MR. HAWES: Object to the form of
` the question.
` A. Oh, I don't know. I didn't instruct
` anybody to -- it was my stuff, I'd do whatever I
` wanted with it. I don't know what I done with it. I
` can't answer that. I can't remember.
` Q. (BY MR. FELDHAUS) Did you ever meet
` Hermann Hericks?
` A. No.
` Q. How about Richard Easterwood?
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` A. (Moving head side to side.)
` Q. Was your '851 patent in any way based on
` the Cummings design?
` MR. HAWES: Object to the form of
` the question.
` A. No, I don't -- not really. I -- I don't
` know. I -- I don't think so, no. But -- but the
` Cummings design is a tubing. Could have been a
` tubing.
` Q. (BY MR. FELDHAUS) But what is your
` design?
` A. Went through BOPs and it isolated casing
` and was full bore access.
` Q. So do you consider isolating tubing to be
` different than isolating casings?
` MR. HAWES: Object to the form of
` the question.
` A. It's totally different.
` Q. (BY MR. FELDHAUS) Why is it totally
` different?
` A. They're isolating tubing. They're
` isolating inside the tubing. We weren't doing that.
` Q. Well, if you're isolating casings and you
` inside -- isolate inside the casing, is that
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` different than isolating inside the tubing?
` MR. HAWES: Object to the form of
` the question.
` A. If you're isolating inside the casing, it
` would be the same except it would be casing. It
` would be bigger. So there was what they call casing
` savers.
` Q. (BY MR. FELDHAUS) Your company had casing
` savers, right?
` A. Yes, we did.
` Q. So is that essentially the same as a -- as
` isolating inside the tubing?
` MR. HAWES: Object to the form of
` the question.
` A. Well, it -- a casing saver was -- I --
` would go inside the casing.
` Q. (BY MR. FELDHAUS) And you would consider
` that a wellhead isolation tool if it's inside the
` casing?
` MR. HAWES: Object to the form of
` the question.
` A. Yes, I would.
` Q. (BY MR. FELDHAUS) Even if it went through
` a blowout protector?
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` MR. HAWES: Same objection.
` A. Sometimes it went through blowout
` protectors.
` Q. (BY MR. FELDHAUS) Is a blowout protector
` part of a wellhead?
` A. No.
` Q. What -- what constitutes the wellhead?
` MR. HAWES: Object to the form of
` the question.
` A. Valves, production valves.
` Q. (BY MR. FELDHAUS) What's the -- can you
` tell me the story behind the '993 patent?
` MR. HAWES: Object to the form of
` the question.
` A. The 99 -- the '993 patent.
` Q. (BY MR. FELDHAUS) Yes, Exhibit 11.
` A. Let's see over here.
` The '993 patent -- well, what do you mean
` by "story"?
` Q. Well, I think you testified that each
` patent has its own story.
` A. Okay.
` MR. HAWES: Object to the form of
` the question. I don't know if there's a question
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` pending.
` A. Well, we had the -- the '851 patent
` earlier. And like I had mentioned before, there
` was -- there was problems with that patent -- or not
` with the patent, but problems with the tool.
` That tool was way too high. It was big,
` it was cumbersome, and we're going extensive rates
` with the fraccing. And the rates seemed to pick up
` more and more as we drilled out horizontally further
` and further to be able to get the fracture
` treatments, so the rates would -- would end up going
` extremely high. And with the height on '851, it
` was -- we considered dangerous.
` Q. (BY MR. FELDHAUS) So what was the
` solution to that problem?
` A. Pardon me?
` Q. What was your solution?
` A. To make a tool that was low profile over
` top of the BOPs that didn't have a long and extended
` tube. And we were finding out, also, that to get on
` higher pressure -- the '851 was a low pressure, and
` we were starting then to -- as horizontal drilling
` come in to being a little bit more, that we're
` getting on higher pressure, deeper wells with
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` higher -- higher formation pressures. The '851
` patent -- or the '851 tool that's mentioned in that
` patent just would not do that type of work, so we had
` to -- because of stroke length, because of the
` limitation to the -- to the tube.
` So to get more stroke length with that
` design, you had the length in the tube. It had got
` extremely high into the wellhead. And with it
` shaking, it just -- it would be fine on low pressure,
` small valve, low stroke applications like the
` original, but we couldn't do these other wells. So I
` patented a tool with the removable setting tool that
` would do -- that would do the higher pressure and the
` longer stroke.
` Q. (BY MR. FELDHAUS) How did you learn about
` the -- the problems that you just described?
` A. Well, like you asked me earlier, we had
` managers. If there's problems in the field or these
` foreseen problems, I was aware of it.
` Q. So the managers would report to you what
` the problems were?
` A. Well, if you couldn't do some of the
` jobs -- because the -- the -- the '851 patent, if it
` wouldn't do some of the jobs because of its stroke,
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` it wasn't capable enough stroke, then you wouldn't do
` the job. So I believe at that time that was -- well,
` it was a concern of ours that we're losing not only a
` market we can get into, but to be able to -- to
` supply full bore access tools that we could pull on
` and off a well under high pressure and give us a low
` profile. So that's why -- that's why the '053 patent
` was designed and built.
` Q. Actually, we were talking about the '993.
` A. The '993. Okay. '993, '053, they're --
` they're -- these patents come later than the first
` patent, the '851.
` Q. And in the '993 patent, Exhibit 11, can
` you tell me what the function of the Element 18 is?
` MR. HAWES: Object to the form of
` the question.
` A. The function of which?
` Q. (BY MR. FELDHAUS) Lockdown nut, 18.
` MR. HAWES: Same objection.
` A. Lockdown nut. Oh, from off the first
` page?
` Q. (BY MR. FELDHAUS) Yes.
` A. It would lock the mandrel down to the
` flange assembly that was put on the well.
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` Q. How do they do that?
` MR. HAWES: Object to the form of
` the question.
` A. Well, I'd had threads sticking up, and the
` nut was a nut, and you turn this -- turn the nut once
` it got down so that the nut would start on the
` threads, and you would turn the nut until it was
` securely tight.
` Q. (BY MR. FELDHAUS) When was it securely
` tight?
` MR. HAWES: Object to the form of
` the question.
` A. When the nut was all the way down.
` Q. (BY MR. FELDHAUS) Well, what do you mean
` by "all the way down"?
` A. When the nut screwed down onto 22.
` Q. How far down --
` A. 18 screwed down to 22. This is
` adjustable.
` Q. Why is it adjustable?
` MR. HAWES: Object to the form of
` the question.
` A. Because when you stroke, you'd -- you'd
` stroke down and then you'd get to -- you -- you'd
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` screw 18 down until it screwed down to 22 and grab
` enough threads, it would hold -- hold a mandrel
` assembly in place.
` Q. (BY MR. FELDHAUS) What do you mean by "in
` place"?
` MR. HAWES: Object to the form of
` the question.
` Q. (BY MR. FELDHAUS) I'd just say: What do
` you mean by "in place"?
` A. Well, it would put the mandrel down where
` we -- at a fixed point where we wanted it into the
` tubing head spool.
` Q. And so the nut would push the mandrel down
` to form a seal against the --
` A. Well, you had hydraulics, too --
` THE REPORTER: Wait. I didn't get
` the end of your question or your answer.
` MR. FELDHAUS: Sorry.
` Q. (BY MR. FELDHAUS) The question is: So
` the -- the nut would push the mandrel down until it
` formed a seal against the bit guide; is that right?
` MR. HAWES: Object to the form of
` the question.
` A. No, it would -- sealing against the bit
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` cover, sealing into the outer embodiment -- or the
` inner embodiment of the tubing head spool.
` Q. (BY MR. FELDHAUS) Is your testimony that
` there's no seal formed against the bit guide in
` the --
` A. No, we --
` Q. -- '993 patent?
` A. -- come down to the bit guide and we
` touched on top of the bit guide, and then we had
` outside seals like O-rings and they would seal in the
` inside embodiment of the tubing head spool.
` Q. Is your testimony there was no seal formed
` against the bit guide?
` MR. HAWES: Object to the form of
` the question.
` A. No.
` Q. (BY MR. FELDHAUS) So your testimony is --
` is what? What -- there was --
` A. Well --
` Q. -- a seal formed --
` THE REPORTER: Please wait until
` he finishes.
` THE WITNESS: Okay.
` Q. (BY MR. FELDHAUS) There was a seal formed
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` against the bit guide, wasn't there?
` MR. HAWES: Object to the form of
` the question.
` A. I think on -- on here, on Figure 6, it
` clearly shows the O-rings, 104. That's where it's
` sealing.
` Q. (BY MR. FELDHAUS) What is 98?
` A. 98 is a rubber that we put on the bottom
` between the mandrel and the bit guide so that it
` squeezed down and it would stop backwash flow coming
` up from 76 past 98 to the -- to the tool embodiment
` on the ID of the sealing -- sealing mechanism.
` Q. So if --
` A. If you had high rates, very abrasive sand,
` and if you had any kind of a space in there at all,
` it would cut -- it would cut out the wellhead, so it
` had to be done tight.
` Q. 98 is a high-pressure fluid seal, isn't
` it?
` A. What -- what's that?
` Q. 98. Your patent describes it as a
` high-pressure fluid seal, doesn't it?
` A. I don't know what -- it's -- I can't --
` you know, it might have been an error in -- in when
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` it was written up or whatever, but that's not its
` intent. The intent clearly was 6 with -- with the
` O-ring seals.
` And this is why we went, I think, in some
` other patents that we got with the tubing head spool,
` putting the profiles and going to all the wellhead
` companies to put the sealing profiles in.
` Q. Could you look at Column 7 of the '993
` patent?
` A. Yeah.
` Q. In line -- in line 49, reads: The annular
` ridge, 100, not only provides an area of increased
` comp -- compression, it also inhibits extrusion of
` the high pressure fluid seal, 98, from a space
` between the packoff assembly and the bit guide when
` the mandrel is exposed to extreme fluid pressures.
` The annular ridge, likewise, helps ensure that the
` high pressure fluid seal securely seats against the
` bit guide.
` Are you -- are you saying that that
` section of the patent's wrong?
` A. Well, the "high pressure" isn't really a
` seal. It seals off in -- in the tubing head spool.
` The -- the rubber that's on the bottom is -- is part
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` of the mandrel tool, and it's to keep backwash and
` sand from -- from migrating or cutting out the
` cutting out between the bit guide and -- and tool.
` The -- the bit guides are what they are.
` They're bit guides. And they're open over the top.
` And what they do is they guide the drill bit through
` when they're drilling on the drilling stage when
` they're doing their laterals.
` And drill bits -- a lot of drill bits are
` coned. They're very, very sharp. A lot of them are
` even made out of diamonds in extreme drilling
` situations.
` So you'd have a bit guide there, and these
` bits had come down and would guide the drill bit past
` the drill -- past the -- the -- the bit guide so it
` didn't hit the top of the casing. And in doing so
` with the bits, it would nick and it -- it would cause
` bit guides. I mean, it caused gashes, it caused
` everything up on the top of it. If you can imagine
` the weight of string of drill pipe with bits -- bit
` on it going in on the hole. And they just can't
` automatically just centralize it. It's got to have
` some way to guide it. So to seal against the bit
` guide, it would be futile.
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` But with these nicks in there, it would
` cause main -- a big problem if it started to do a
` wash during the fracture treatment. So this is why
` we put -- we -- we -- we come down with the tool, we
` seat it up against the bit guide. We like to put a
` bit of pressure on it -- I don't know what they do
` now. But we had our sealing all the time in the
` tubing head spool with -- like on -- I think it was
` Figure 6, 104.
` Q. So your testimony, then, is that the term
` "seal" as used in relation to Element 91 in your '993
` patent which you read and understood and agreed to is
` incorrect; is that right?
` A. No, I didn't say --
` MR. HAWES: Object to the form of
` the question.
` A. -- it's incorrect. It's just -- maybe a
` bad choice of words between maybe Max and myself, I
` don't know, but it's not -- what we're meaning here
` is we're -- we -- we've -- we've got our mandrel and
` it's -- they're mandrel extensions. It's all one
` mandrel in different pieces. And it's got, for
` better shade -- I mean, you can call things lots of
` different words. You can call it a cup tool or
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` whatever you want --
` THE REPORTER: What -- what kind
` of tool?
` THE WITNESS: Cup tool.
` A. -- or whatever you want on the bottom of
` it, but all I'm saying is, is as we're coming down
` and we're compressing on top of the bit guide and
` then that locks down the nut and it secures it on top
` of the bit guide so that that tool is down low enough
` that the seals, as in Figure 6, 104, are sealing
` against -- and I -- I think it's one or more seals.
` I think sometimes what I've seen, they might run six
` seals. But they run O-ring seals. And to make sure
` that they're sealing off -- because we go to great
` pains when we set all this up to be able to cut the
` inside diameter of the tubing head spools to a
` certain inside diameter and to a certain finish so
` that these tools would seal into the bit -- or it
` into the tubing head spool.
` Q. (BY MR. FELDHAUS) Okay.
` A. And that's what we did.
` Q. Sure.
` Now, you said you did a lot of reading.
` What materials did you read?
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` MR. HAWES: Object to the form of
` the question.
` A. Stuff like rig reports, drilling reports.
` At -- when this is all going on, this was basically
` the advent of -- basically started with a fellow by
` the norm -- name of George Mitchell, Mitchell Energy.
` And he later sold to a company called Devon Energy.
` They're --
` Q. (BY MR. FELDHAUS) When you say "this was
` going on," what -- when what was going on?
` A. The drilling -- horizontal drilling
` with -- with multiple stage fraccing.
` Q. Okay.
` A. So the rates -- what I seen at the time,
` because we -- we were running tools in wells for
` George Mitchell and Devon Energy and several other
` companies, that these jobs were getting bigger and
` bigger, higher -- extremely high rates, and we're
` using casing savers and sealing off in the casing.
` And it just got to the point that your --
` what we call the spurt on the bottom of the -- of the
` coming out of our mandrel or cup tools that sat
` inside the casing where it's such a high rate that
` they could actually go and wash out the casing during
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` the course of a fracture treatment.
` And this was a huge problem, so we had to
` slow down the rates. And you slow down the rates in
` the hydraulic treatment. That means in your
` horizontal section, you're going -- you've got to
` have so much rate to fracture, so that would mean
` instead of doing at 50 barrels a minute, you might do
` four jobs at 50 barrels a minute as opposed to two
` jobs at 100. So then you'd have to remove the tools.
` So this is where it all come -- come about
` was to be able to make a tool that sealed off into
` the -- into the tubing head spool with full bore
` access that would go in a