throbber
UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`WESTERNGECO LLC
`
`VS.
`
`ION GEOPHYSICAL
`CORPORATION, EUGRO
`GEOTEAM,
`INC., ET AL
`
`O9-CV-1827
`
`Houston, Texas
`
`7:30 a.m.
`
`July 30, 2012
`
`JURY TRIAL
`
`Volume 6
`
`Morning Session
`
`BEFORE THE HONORABLE KEITH P. ELLISON
`UNITED STATES DISTRICT JUDGE
`
`APEEARANCES:
`
`GD~JCDLNJ>LUPOF4
`
`MD
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15 FOR THE PLAINTIFF:
`
`Lee L. Kaplan
`16 SMNSER, KAPLAN & VESELKA, LLP
`700 Louisiana, Suite 2300
`17 Houston, Texas 77002
`713.221.2300
`
`18
`
`19 Gregg F. Locascio
`KIRKLAND & ELLIS LLP
`20 655 Fifteenth Street Northwest
`Washington, DC 20005
`21 202.879.5290
`
`22
`
`Sarah Tsou
`
`23 Timothy K. Gilman
`KIRKLAN & ELLIS LLP
`
`24 Citigroup Center
`153 East 53rd Street
`25 New York, New York 10022
`212.446.6435
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporteI@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 1
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Direct~Walker/By Mr. Locascio
`
`1 Q.
`
`If you turn to PTX 114.
`
`2 A.
`
`That's the one.
`
`The 114 that's on the second page.
`
`3 What's that?
`
`956 reference. That's —— a bit small, but
`
`4
`
`if you look at the second paragraph.
`
`MR. LOCASCIO: Blow that up. Thank you.
`
`THE WITNESS:
`
`Zoom in on that.
`
`Another example where Q—Marine's enhanced
`
`acquisition techniques is in maximizing subsurface coverage
`
`33 surveys.
`
`So this was -— this is actually a magazine
`
`10 article.
`
`It's a final draft which was sent for me for fact
`
`11 approval. But it's a magazine article having to do with a
`
`12 trade show.
`
`13
`
`And over the Marlim complex of fields
`
`14 operated by Petrobras in Campos basin, heavily obstructed
`
`15 area, known for unpredictable currents and sea states.
`
`16 Innovative utilization,
`
`remote source vessel, continuous
`
`17 recording and streamer steering enabled subsurface
`
`18 coverage.
`
`19
`
`So on that project, say it was a direct
`
`2O award, we acquired it and they could tell from —— given the
`
`21 quality of the data, which they'd never got before,
`
`they
`
`22 could see that there were actually two fields,
`
`that the two
`
`23 bits weren't actually connected. And so,
`
`that completely
`
`24 changed their development plans for the second field.
`
`25
`
`MR. LOCASCIO: Dave, can you zoom out a second?
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 2
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Directwwalker/By Mr. Locasaio
`
`BY MR. LOCASCIO:
`
`Q.
`
`At the bottom left, it's sort of looks like there's a
`
`Q video game.
`
`Do you see that?
`
`08:18:11
`
`A.
`
`Yeah.
`
`Q.
`
`Can you tell us about that?
`
`A.
`
`We have —— we do have fun sometimes. This —— we
`
`wanted to get the —- find a way of getting the point over
`
`to our customers, because this was still very new. And
`
`0&1&25
`
`so, we —— this was on the trade show floor for two or
`
`three years, and we invited our customers to sit down.
`
`And it's —— the graphics were fairly simplistic, but
`
`behind it was -- we'd introduced the enhancement to Q
`
`called "advanced spread control," and that really
`
`08m8m7
`
`L
`
`automated and got these different modes.
`
`So we had them steer the vessel through
`
`some obstructions, around some obstructions, and they did
`
`it twice.
`
`The first time they did it conventionally, and
`
`the second time we switched the streamer steering on and
`
`08m9m2
`
`they could get through the —— get through the
`
`obstructions.
`
`It proved to be very popular, and we gave
`
`them —- there was a PS3 as a prize at the end of each day
`
`for the highest score, and you basically started from
`
`20,000 to down when you were offline.
`
`o8n9n9
`
`There was interest because we had -- it
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 3
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Directewalker/By Mr. LoCascio
`
`was great for us because the students all came along, but
`
`the people who won it every day were the older people
`
`because the students are doing this, and older people are
`
`just a little bit more calm.
`
`So they tended to win.
`
`And
`
`they said, PS3. What the hell am.l going to do with that?
`
`Q.
`
`Sir, was the technology behind the scenes, if you
`
`will, running this similar to the actual lateral steering
`
`technology you used on the boat?
`
`A.
`
`It was exactly.
`
`It was a massive computer actually
`
`behind it. Didn't look very —— graphically that exciting.
`
`No, it was exactly that.
`
`So we put currents into it, and it behaved
`
`exactly the way the streamers do behave in the real world.
`
`So it was —— it was a bit of entertainment, but it was
`
`serious as well.
`
`Q.
`
`I want talk to you about other customer reactions.
`
`I‘ you can turn to PTX 94 in your binder.
`
`Were there oil companies that believed
`
`that lateral steering was critical to 4D efforts?
`
`A.
`
`There were.
`
`So this is ~— this is a magazine article
`
`for "Offshore Technology." And of course,
`
`they phoned us
`
`up and asked us for pictures, but we had no control over
`
`what went into this one.
`
`So you can't say you're not
`
`going to do it.
`
`H was pleased when it came out.
`
`So "Offshore Technology" is one that is used
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@ao1.com
`
`¢>C0D0F4
`
`5 6 7 8 9 0
`
`L1
`
`L2
`
`L3
`
`4 5
`
`L6
`\
`
`7
`
`{\ OD
`
`‘\ Q3
`
`Pd CD
`
`PO F4
`
`P0 P0
`
`P0 DJ
`
`DJ J>
`
`DJ CD
`
`WESTERNGECO Exhibit 2121, pg. 4
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Di'rect—Wal]<er/By Mr. Locascio
`
`for all our industry,
`
`the oil industry.
`
`So some of you
`
`guys may be in the oil industry if we're in Houston. You
`
`may read this magazine.
`
`I don't know.
`
`So to get a seismic article in "Offshore
`
`Technology" was quite —— at the time quite unusual.
`
`Anyway, yes, so it's ~~
`
`If you look at this top section --
`
`MR. LOCASC: 0: Dave, can we pull up this?
`
`BY MR. LOCASCIO:
`
`Q.
`
`It says,
`
`"WesternGeco's marine seismic solution is
`
`gaining acceptance among E&P companies for it's high
`
`definition images and vast improvement in repeatability."
`
`Are the E&P companies the oil companies?
`
`A.
`
`Yes.
`
`The E&P stands for exploration and production.
`
`I was very happy with that headline.
`
`MR. LOCASCIO: And if you turn to the second
`
`page. Dave, if you can flip.
`
`8 9
`
`10
`
`ll
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`BY MR. LOCASC:O:
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`Q.
`
`There's a picture down here at the bottom that I want
`
`to ask you about.
`
`A.
`
`Right.
`
`Q.
`
`A.
`
`Can you tell the jury what that is?
`
`Yes. This is a screen dump.
`
`So on the boat,
`
`the
`
`navigators who are monitoring where everything is in the
`
`instrument room are watching continuously where everything
`
`Johnny C. Sanchez, RJVIR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 5
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Diroct—Walker/By Mr. LoCascio
`
`CI)\10‘\U'!»J>QJl\)9—‘
`
`is. And.we position everything so we know where it is.
`
`So the convention on the left—hand side is
`
`a screen dump.
`
`It was a Q-Marine vessel, but we switched
`
`the steering off. And this —- I wanted this picture.
`
`Switch the steering off, and there was a
`
`bit of a cross—current, and you can see where —— I think
`
`that this was about the last shot point before we switched
`
`the gun. You can understand they bottled at that point.
`
`Q.
`
`Looks like you're flying pretty close to the edge
`
`there.
`
`A.
`
`Very close to the edge, yeah.
`
`I was —— I thought it
`
`was a great shot, but I was glad I saw it after.
`
`I think
`
`if I'd been on board,
`
`I would have —— whew.
`
`Anyway, so that's conventional, and then
`
`we switched the steering on.
`
`So it's the same vessel.
`
`And then the second —— the picture on the right—hand side
`
`is the steered streamers. And those two pictures were
`
`taken 20 minutes apart.
`
`Q.
`
`So that's real data. That's not just somebody's
`
`cartoon of what this looks like?
`
`A.
`
`Oh, no, no. That's real screen data. That's a
`
`screen dump from the on board Vessel.
`
`MR. LOCASCIO: Thanks, Dave.
`
`BY MR. LOCASCIO:
`
`Q.
`
`Sir, what's WesternGeco's policy on licensing its
`
`Johnny C, Sanchez, RMR, CRR — jcscourtreportor@aol.<:om
`
`WESTERNGECO Exhibit 2121, pg. 6
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Direct—Walker/By Mr. LoCasci'o
`
`Q.
`
`Why?
`
`A. Well, there's two reasons: One,
`
`i talked about
`
`someone having —— putting a bid in a country where the
`
`government may have a say, so you may say we would put in
`
`something -— and probably our competitors would as well --
`
`not just specific to ours —— put in something that just
`
`meets that technical requirement, even though you don't
`
`know that's a real technical requirement, and then we'd
`
`put in an alternative that meets the technical
`
`requirement.
`
`The only thing is we want to demonstrate the
`
`value of our technology.
`
`Q. What do you mean?
`
`A. Well, we can —— we can show customers, well, if you
`
`did it without,
`
`then you can work through in cost. We may
`
`work up a costing on exactly what a project would cost
`
`without, and demonstrate the saving costing with, and then
`
`they can make up their mind. And it's there in black and
`
`white because it's our opportunity.
`
`It's our shop window
`
`to —— the technical people are convinced, but we need to
`
`deal with procurement departments as well.
`
`Q.
`
`Let's look at another tender, sir, PTX 543.
`
`can we pull that up some. Thank you.
`
`If we can j
`
`blowup from this piece right here.
`
`Can you explain to the jury what we're
`
`looking at here in Plaintiff's 543?
`
`Johnny C. Sanchez, HMR, CRR — jr:scourfreporter@aol.com
`
`1 2 3 4 5 6 7 8 9
`
`1O
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`WESTERNGECO Exhibit 2121, pg. 7
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Di'rect—Walker/By Mr. LoCascio
`
`OI)\10\U‘|nJ>(;J[\)!-—‘
`
`A.
`
`So this is Apache PA Australia.
`
`So this is when you
`
`look at it, this is three surveys.
`
`It says "WA26lP334P"
`
`and "246" and "247P" combined.
`
`So the northwest shelf of Australia is a
`
`very perspective area.
`
`It's a very interesting area.
`
`Zt's partly -— there's quite lot of production from it and
`
`it's open, and Apache is particularly active.
`
`It's got a
`
`lot of blocks out there.
`
`Okay. Did you bid on this job?
`
`We did bid on this job.
`
`And did you get this job?
`
`No, we didn't, unfortunately. Which was particularly
`
`a shame on this one because this three was just the start
`
`of a whole sequence of projects.
`
`Q.
`
`A.
`
`Q.
`
`Do you know who got this job?
`
`Fugro did with ION DigiFlN.
`
`And how do you know that Apache wanted lateral
`
`steering on this job?
`
`A.
`
`So if you go down a bit on this —— so first of all,
`
`it's Apache, and it's February 2010.
`
`So I know Dave
`
`Marcus, who is a very dominant character, chief physicist
`
`for Apache will be saying I want streamer steering on all
`
`this project because he decided at the end of 2008.
`
`So if
`
`I had nothing else, again,
`
`that would be a big clue.
`
`Q.
`
`Does the letter we're looking at here, tell you
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.Com
`
`WESTERNGECO Exhibit 2121, pg. 8
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Direct—Walker/By Mr. Locascio
`
`something as well?
`
`A.
`
`Yeah.
`
`If you go to the middle,
`
`the big paragraph
`
`there's a bit that's underlined.
`
`Q.
`
`Did you underline that or did it come that way from
`
`Apache?
`
`A.
`
`No, it came that way from Apache. They want to be
`
`absolutely clear on their requirements.
`
`Q.
`
`A.
`
`And what does it say?
`
`So if you look at the —— don't read it all, but that
`
`first line preferred acquisition, it says 10 times 75
`
`times, 5000 meters.
`
`Q.
`
`A.
`
`is that right here in that first sentence?
`
`Yeah. And underneath it just two lines down it says,
`
`10 times 75 times 6,600 meters.
`
`Q.
`
`Now,
`
`that way of describing a streamer array with 3
`
`numbers, 10 times 75 times 5000 meters. What does that
`
`say?
`
`A.
`
`So that says I want 10 streamers,
`
`I'd like 10
`
`streamers.
`
`I want them 75 meters apart, and they will be
`
`for these —— remember this is three projects. One project
`
`wanted 5,000 meters, and the other two projects I think
`
`wanted 6,600 meters long.
`
`So I've got a very long spread
`
`with streamers quite close together for that part of the
`
`s-l>(A)l\3I—‘
`
`}\VI\1\.\LbOJl\)|—-’(3k0CD\1ONU‘!
`
`lI
`
`:\ CW
`
`1\ Q
`
`E\ %
`
`I4 KO
`
`I\J O
`
`l\) |—‘
`
`K) R)
`
`l\) (.0
`
`K) »I>
`
`world.
`
`l\) U‘!
`
`Q.
`
`Okay. And what does that indicate to you about the
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 9
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`DireCL—Walker/By Mr. LoCascio
`
`l
`
`customer's requirements for this job?
`
`A.
`
`He's obviously —— the needs have that streamer
`
`separation, so even if it wasn't Apache, we'd be looking
`
`and saying we'd want to do streamer steering on this
`
`project.
`
`Q.
`
`Because for a 6,600—meter streamer --
`
`A.
`
`75 meters apart, that's a very dense spread without
`
`lateral steering.
`
`Q.
`
`Did they tell you anything else, or did you have to
`
`just go on that basis?
`
`A.
`
`No.
`
`if you turn to the next page and you can see
`
`there's a bit in bold, right in the middle. And they
`
`said —— you can read that, "Proposals offering streamer
`
`lengths greater than 6,500 and 5,000 meters, and number of
`
`streamers fully steerable of 4 or more will be
`
`considered."
`
`Q. What does that mean?
`
`A.
`
`So that means I must,
`
`:'m not going to compromise on
`
`streamer length, go ahead and 6,500 and greater than
`
`5,000. Now, because the streamer length really controls
`
`how deep you can get your seismic image from, so that's --
`
`streamer length is really important and number of
`
`streamers fully steerable, so they must be fully
`
`steerable. At the time some people were saying I'll just
`
`steer the tail.
`
`So fully steerable. And what's
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreportcr@aol.com
`
`WESTERNGECO Exhibit 2121, pg. 10
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`Direct~Wal]<er/By Mr. LoCascio
`
`interesting here is it says four or more.
`
`Q.
`
`A.
`
`I thought he wanted 10?
`
`He wanted 10, but what he's signaling here is he will
`
`compromise on the number of streamers. That's a soft
`
`technology requirement that they must be fully steerable
`
`and they must be that length.
`
`Q.
`
`If we can turn to the next header, 822 in your
`
`binder.
`
`If we can pull that up.
`
`A"
`
`By the way, he also puts it explicitly underlined
`
`in —— in case we didn't get the point, it's on Page 008,
`
`it says,
`
`"A method for steering the streamers will be
`
`considered as a prerequisite."
`
`1 2 3 4 5 6 7 8 9
`
`1O
`
`11
`
`12
`
`13
`
`Q.
`
`Okay. Dave, can you pull that up?
`
`14
`
`15
`
`16
`
`17
`
`18
`
`A.
`
`A little bit belt and suspenders maybe, but I think,
`
`you know --
`
`M. LOCASCIO:
`
`543.
`
`THE W_ TNLSS: You couldn't fail to get the
`
`message on that one.
`
`19
`
`BY MR. LOCASCIO:
`
`2O
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Q. Where did you see that it was a prerequisite in this?
`
`A”
`
`Q.
`
`A.
`
`Q.
`
`If you look at Page 008 ~-
`
`Okay.
`
`If you look Section 1, which has been underlined.
`
`Okay. This is the first sentence where it said,
`
`"A
`
`method for steering of the streamers will be considered a
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aoI.com
`
`WESTERNGECO Exhibit 2121, pg. 11
`PGS v. WESTERNGECO
`IPR2014-00689
`
`

`
`09:11:15
`
`CO~J(7\(II#5L0B0F4
`
`Direct~Walkcr/By Mr. LoCascio
`
`prerequisite"?
`
`3’
`
`Yeah.
`
`Q.
`
`That's pretty clear indication that you have to have
`
`it on this job?
`
`A.
`
`Yeah.
`
`if we missed the subtle and the unsubtle,
`
`that's the kick where it hurts,
`
`just in case we were
`
`asleep on —— and the person doing the bid was asleep.
`
`Q.
`
`Dave, if we can go to 822 again, please.
`
`Mr. Walker, if you turn to the binder to PTX
`
`822. Can you tell us what tender this is?
`
`A.
`
`Yes.
`
`So this is a Tullow for Cote d'Ivoire, which is
`
`Ivory Coast.
`
`Q. Where is that?
`
`A.
`
`That's in the Gulf of Guinea. We're doing a lot of
`
`Guinea. This is the gulf of Guinea in West Africa.
`
`So
`
`it's two or three countries to the west of Nigeria for
`
`that job.
`
`And did you bid on this job?
`
`We did bid on this job.
`
`And did you get this job?
`
`No. We lost this.
`
`To who?
`
`To Fugro with ION DigiFIN.
`
`Does this tender tell you anything that indicates you
`
`09:12:08
`
`need to use lateral steering?
`
`Johnny C. Sanchez, RMR, CRR ~ jCscourtreporter@aoZ.com
`
`WESTERNGECO Exhibit 2121, pg. 12
`PGS v. WESTERNGECO
`IPR2014-00689

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