".
`'
`
`t,
`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 1 of 31
`
`United Stetes District Court
`Southern District of TIXiI
`FILED
`APR 0 1 2010
`
`DIII.LEbdley,Cl8llcClfCfollt
`
`-
`
`Civil Action No. 4:09-CV-01827
`
`Jury Trial Demanded
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`)))))))))))))
`
`WESTERNGECO L.L.C.,
`
`Plaintiff,
`
`v.
`
`ION GEOPHYSICAL CORPORATION,
`
`Defendant.
`
`WESTERNGECQ'S MOTION TO. COMPEL THIRD-PARTY PRODUCTION
`
`Lee L. Kaplan
`lkaplan@skv.com
`SMYSER KAPLAN
`& VESELKA, tIL.P.
`Bank ofAmerica Center
`700 Louisiana, Suite 2300
`HouSton, TX 77002
`Tel: (713) 221-2323
`Fax: (713) 221.,2320
`
`Attorneysfor PlaintfjJlCounterclaim Defendant
`WesternGeco L.L. C.
`
`O/Counsel:
`
`John M. Desmarais, P.C.
`john.desmarais@kirldand.com
`Timothy K. Oilman
`timotby.gilman@kirkland.com
`Sarah K. Tsou .
`sarah.tsou@kirkland.com
`Rochelle Lee
`rochelle.lee@kirkland~com
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, New York 10022
`Tel.; (212) 446-4800
`Fax: (212) 446-4900
`
`Dated: March 31, 2010
`
`WESTERNGECO Exhibit 2010, pg. 1
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 2 of 31
`
`TABLE OF CONTENTS
`
`SUMMARY OF ARGUMENT
`
`NATURE AND STAGE OF THE PROCEEDING
`
`STATEMENT OF FACTS
`
`I.
`
`ION Provides Components of Steerable Streamer Systems to
`Fugro-Geoteam, Polarcus and PGS
`
`II.
`
`III.
`
`IV.
`
`(b).
`
`(b)
`
`Fugro-Geoteam Has Refused to Produce Relevant~ Responsive
`Documents in Its Possession~ Custody or ControL
`(a)
`Fugro-Geoteam Uses ION Accused Products for Steerable
`Streamer Arrays
`Fugro Isa Single~ Wor1d-Wide~Integrated Company with
`Substantial Contacts in Houston
`Fugro-Geoteam Has Refused to Produce Documents
`(c)
`Polarcus Has Refused to Produce Relevant~ Responsive Documents in Its
`Possession; Custody or Control
`·
`;
`(a)
`Polarcus Uses ION Aocused Products for Steerable Streamer
`Arrays
`Polarcus Is a Sirtgle~ Wor1d-Wide~ Integrated Company with
`Substantial Contacts in Houston
`Polarcus Has Refused to Produce Documents
`(c)
`PGS, Inc. Has Refused to PrOduce Relevant~ Responsive Documents in Its
`Possession~ Custody or Control
`(a)
`PGS Uses ION Accused Products for Steerable Streamer Arrays
`PGS·ls a Single, Wor1d-Wide~ Integrated Company with
`(b)
`Substantial Contacts in Houston
`PGS~ Inc. Has Refused to Produce Documents
`(c)
`STATEMENT OF ISSUES
`
`ARGUMENT
`
`I.
`
`II.
`
`Compelling Production Is Appropriate When Third Parties Have Relevant,
`Responsive Documents in Their Possession, Custody or ControL
`
`ION's Customers Have Responsive Documents Relevant to the Claims and
`Defenses in this Case
`(a)
`The Use onON's Accused Products by ION's Customers Is
`Relevant to ION's Infringement under 35 U.S.C. § 271(b), (c)
`The Use onON's Accused Products by ION's Customers Is
`Relevant to ION's Infringement under 35 U.s.C. § 271(t)
`
`(b)
`
`1
`
`2
`
`3
`
`3
`
`3
`
`3
`
`4
`5
`
`7
`
`7
`
`8
`9
`
`11
`l1
`
`11
`12
`14
`
`14
`
`.14
`
`17
`
`17
`
`.17
`
`WESTERNGECO Exhibit 2010, pg. 2
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 3 of 31
`
`(c)
`
`TheUse of IONts Accused Products by ION's Customers Is
`Relevant to ION's Counterclaims
`,
`Fugro-Geoteam Should Produce Relevant, Responsive Documents in Its
`Possession, Custody or Control
`~
`
`Polarcus Should Produce Relevant, Responsive Documents in Its
`Possession, Custody or Control
`
`PGS, Inc. Should Produce Relevant, Responsive· Documents in Its
`Possession, Custody or Control
`
`III.
`
`IV.
`
`V.
`
`CONCLUSION
`
`18
`
`19
`
`20
`
`22
`
`24
`
`ii
`
`WESTERNGECO Exhibit 2010, pg. 3
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 4 of 31
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Addamax Corp. v. OpenSoftware Foundation, Inc.,
`148 F.R.D. 462 (D. Mass. 1993)
`
`Alcan Int'l Ltd. v. S.A. Day Mfg. Co.,
`176 F.R.D. 75 (W.D.N.Y. 1996)
`
`;
`
`Barksdale v. Union Planters Nat'l Bank,
`175 Fed. Appx.. 690 (5th Cir. 2006)
`
`Camden Iron & Metal v. Marubeni Am. Corp.,
`138 F.R.D. 438 (D.NJ. 1991)
`
`Cooper Indus., Inc.. v. British Aerospace, Inc.,
`102 F.R.D. 918 (S.D.N.Y. 1984)
`
`Dollar v. Long Mfg.,
`561 F.2d 613 (5th Cir. 1977)
`
`First Nat'l City Bank v. IRS,
`271 F.2d 616 (2dCir. 1959)
`
`·
`
`Gonannies, Inc. v. Goaupair.com, Inc.,
`No. 3:06-CV-0631-L, 2007 WL 1112592 (N.D.Tex. April 13, 2007)
`
`Halliburton Energy Servs., Inc. v. M-I, LLC,
`1:06MCOOl, 2006 WL 3085622 (S.D. Ohio Sep. 15,2006)
`
`Ice Corp. v. Hamilton Sundstrand Corp.,
`245 F.R.D. 513,518 (D. Kan. 2007)
`
`In re Subpoena to Chronotek Sys., Inc.,
`No. 07-0279,2007 WL 2177013 (S.D.Tex. July 27, 2007)
`
`Jones v. Oriental Trading Co.,
`H-03-3392, 2005 WL 1923585 (S.D.Tex. Aug. 10,2005)
`
`LG Display·Co. v. Chi Mei Optroelectronics Corp.,
`Civil No. 08cv2408-L, 2009 WL 223585 (S.D. Cal. Jan. 28, 2009)
`
`NTP, Inc. v. Research In Motion, Ltd.,
`261 F.Supp.2d 423 (E.D.Va. 2002)
`
`Oppenheimer Fund, Inc. v. Sanders,
`437 U.S. 340 (1978)
`
`iii
`
`15, 16
`
`16,23
`
`14
`
`15, 16
`
`passim
`
`14
`
`16,20
`
`21
`
`passim
`
`16
`
`22,24
`
`21
`
`16,22
`
`18
`
`14
`
`WESTERNGECO Exhibit 2010, pg. 4
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 5 of 31
`
`Synthes v. G.M Does Refs,
`563 F.3d 1285 (Fed. Cir. 2009)
`
`Statutes
`
`35 U.S.C. § 271(b)
`
`:
`
`35 U.S..C. § 271 (c)
`
`:
`
`,
`
`35 U.S.C. § 271(f)
`
`Rules
`
`FED. R. ClV. P. 26(B)(1)
`
`FED. R. ClV. P. 34(A)(1)
`
`FED. R. ClV. P. 45
`
`·21
`
`1,17
`
`1, 17
`
`1, 17, 18
`
`14
`
`15
`
`1, 7, 15,24
`
`iv
`
`WESTERNGECO Exhibit 2010, pg. 5
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 6 of 31
`
`Plaintiff WesternGeco L.L.C. ("WesternGeco") respectfully moves, pursuant to FED. R.
`
`CIV. P. 45, to compel third-parties Fugro-Geoteam, Inc. ("Fugro-Geoteam"), Polarcus America
`
`("Polarcus"), and Petrolewn Oeo-Services, Inc. ("PGS, Inc.") (collectively, "the Third Parties")
`
`to produce relevant, responsive documents that are within their possession, custody or control.
`
`SUMMARY OF ARGUMENT
`
`WesternGeco filed its Complaint on June 12, 2009 to halt
`
`ION Geophysical
`
`Corporation's ("ION's") willful infringement of five WestemGeco patents relating to steerable
`
`marine seismic streamers.
`
`(D.l. 1) This includes infringement under, inter alia, 35 U.S.C.
`
`§ 271 (b), (c) and (t) for ION's provision of components to customers who assemble them into
`
`infringing systems either within the United States Or abroad.
`
`(D.I. 1) ION's customers' use of
`
`these infringing products is relevant to this litigation.
`
`Fugro-Geoteam, Polarcus and .PGS are such customers. They are making, using, selling,
`
`offering for sale, andlo r combining products and services that incorporate ION's infringing
`
`products. They are in possession, custody or control of documents relating to these activities.
`
`Accordingly, WestemGeco subpoenaed these Third Parties.
`
`But the Third Parties have refused to produce relevant, responsive material within their
`
`possession, custody or control.
`
`They have hidden behind a moving target of corporate
`
`relationships to argue that parents, subsidiaries and sister organizations, but somehow not the
`
`Third Parties themselves, house the relevant material. And they have argued that these
`
`documents exist outside the United States and are therefore beyond the subpoena power of this
`
`Court. Neither argument has merit.
`
`Even if a Third Party's parent, sUbsidiary or sister houses the documents, publicly
`
`available infonnation shows that each Third Party works with such parent, subsidiary or sister as
`
`a single, worldwide,
`
`integrated company. They share offices, officers, websites, financial
`
`1
`
`WESTERNGECO Exhibit 2010, pg. 6
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 7 of 31
`
`statements, email domains, telephone exchanges and advertisements. The Third Parties hold
`
`themselves out as having "worldwide responsibility" or "headquarters" for activities of their
`
`corporate affiliates involving ION's infringing products. Therefore, the Third Parties can access
`
`relevant,
`
`responsive documents.
`
`This is ~~possession, custody or control," and requires
`
`compliance with the subpoenas.
`
`Similarly, the alleged housing of documents outside the United States is inapposite to the
`
`subpoenas. The Third-Parties -
`
`all of whom have substantial contacts and permanent offices in
`
`the Southern District of Texas -
`
`can access these documents even if housed abroad. The choice
`
`to store material in foreign offices does not exempt them from the subpoena power of this Court.
`
`For months, WesternGeco has tried to work with the Third Parties to resolve any
`
`objections. However,
`
`they have continued their refusal
`
`to produce relevant, responsive
`
`documents. Because of the limited time remaining for discovery in this case, WestemGeco
`
`respectfully moves to compel third-party production.
`
`NATURE AND STAGE OF THE PROCEEDING
`
`WestemGeco filed its Complaint on June 12,2009 to halt ION's willful infringement of
`
`five patents relating to steerable seismic streamers.
`
`(DJ. 1) ION filed its Answer on June 16,
`
`2009, asserting eleven counterclaims
`
`including tortious
`
`interference with contract and
`
`prospective business relations, business disparagement and antitrust.
`
`(OJ. 6) Fact discovery
`
`ends on June 9, 2010. (0.1.22) Trial is scheduled to begin on September 13,2010. (DJ.9-2)
`
`2
`
`WESTERNGECO Exhibit 2010, pg. 7
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 8 of 31
`
`STATEMENT OF FACTS
`
`I.
`
`ION PROVIDES COMPONENTS OF STEERABLE STREAMER
`SYSTEMS TO FUGR~GEOTEAM,POLARCUS AND PGS
`
`ION manufactures and sells components for marine seismic surveys. This includes
`
`ION's DigiFIN and DigiBIRD steering devices and its ORCA "command and control software"
`
`(collectively, "the ION Accused Products"):
`
`"
`;
`.
`
`,
`
`.. ri- --- ~~
`.
`:::
`;:
`...
`\
`-
`~~. ~~....-7_£: __:-
`;h--_....
`~ClIJ[
`
`I
`
`.
`
`' .
`j,
`
`(DigiFIN)
`
`(DigiBIRD)
`
`(ORCA)
`
`DigiFIN "provides lateral streamer control, allowing streamers to be deployed closer together to
`
`improve image quality." (Ex. 1) DigiBIRD is a "[s]treamer depth controller[]" that "protect[s]
`
`the investment of seismic acquisition contractors by allowing the vessel operator to bring the
`
`cable to the surface in shallow water or to dive the cable to avoid shipping traffic." (Ex. 2) And
`
`the ORCA "command and control software ... [flor streamer based seismic survey operations"
`
`"is the 'brain' behind ION's ... approach to streamer technology, fully integrating with ION's ...
`
`DigiFIN products."
`
`(Ex. 3)
`
`ION's customers for these ION Accused Products include
`
`Fugro-Geoteam, Polarcus and PGS, Inc. (See, e.g., Exs. 4-6)
`
`II.
`
`FUGR~GEOTEAMHAS REFUSED TO PRODUCE RELEVANT, RESPONSIVE
`DOCUMENTS IN ITS POSSESSION, CUSTODY OR CONTROL
`
`<a>
`
`Fugro-Geoteam Uses ION Accused Products for Steerable Streamer Arrays
`
`Fugro-Geoteam uses the ION Accused Products to perfonn marine seismic surveys.
`
`According to the Fugro-Geoteam Company Profile,
`
`"Fugro-Geoteam has worldwide
`
`responsibility for marine seismic data acquisition within the Fugro Group." (Ex. 7 at WG69635)
`
`3
`
`WESTERNGECO Exhibit 2010, pg. 8
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 9 of 31
`
`As disclosed in an AprillMay 2009 Fugro-Geoteam press release: "Fugro-Oeoteam has invested
`
`in steerable streamer technology across its 3D seisntic fleet."
`
`(Ex. 8 at WG66028)
`
`Publicly-available information confirms that at least five marine seismic vessels operated by
`
`Fugro-Geoteamuse ION's accused DigiFIN products for streamer steering.
`
`(Ex. 9; Ex. 10; Ex.
`
`11 at WG26268-69; Ex. 12 at WG13138; Ex. 13 at 9; Ex. 14 at 94) And at least three of those
`
`vessels are equipped with lON's accused ORCA "command and control system" for "towed
`
`streamer surveys." (Ex. 4; Ex. 14 at p. 94; Ex. 15) Fugro is making, using, selling, offering to
`
`sell and/or combining systems and services incorporating the ION Accused Products.
`
`(b)
`
`Fugro Is a Single, World-Wide,Integrated
`Company with Substantial Contacts in Houston
`
`The 2008 Annual Report of Fugro N.V. states that "Fugro N.V. is the holding company
`
`for a large number of operating companies located throughout the world carrying out a variety of
`
`activities."
`
`(Ex. 16 at 18)
`
`''To promote client-orientation and efficiency the Group's
`
`organisational structure is highly decentralised, but cohesive." (Id.) "Fugro is organised into
`
`three divisions-geotechnical, surVey and geosciences services-that work together worldwide .
`
`. . "
`
`(Id. at 54) "[T]he Holding Company looks after matters which for reasons of efficiency
`
`(advanced specialisation or financing) are best handled centrally."
`
`(Id.)
`
`The 2009 Annual
`
`Report of Fugro N.V. explains the advantages of this "cohesi[on]," "work[ing] together" and
`
`"[c]ooperation" among Fugro's business units:
`
`Effective cooperation between Fugro's business units is promoted at various
`levels.
`,
`.
`. Capacity utilisation and cooperation are optimised through the
`exchange ofequipment, employees and expertise between the various activities .
`. . . Fugro promotes technological renewal by clustering the knowledge available
`within and outside the Group. The integration of information systems
`enhance the service provided to clients.
`
`(Ex. 17at 9) (emphasis added)
`
`4
`
`WESTERNGECO Exhibit 2010, pg. 9
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 10 of 31
`
`"Fugro-Geoteam has worldwide responsibility for marine seismic data acquisition within
`
`the Fugro Group."
`
`(Ex. 7 at WG6963S) Fugro Geoteam, Inc. and Fugro Norway Marine
`
`Services ASA ("Fugro Norway") are both wholly owned subsidiaries of Fugro N.V.
`
`(Ex. 17 at
`
`145-47; Ex. 18) One of the Directors of Fugro N.V., Hans Meyer, serves as an officer of
`
`Fugro-Geoteam and as the Chief Executive Officer of Fugro Norway.
`
`(Ex. 18; Ex. 19 at 8; Ex.
`
`20 at 3) Hans Meyer's address is listed as 6100 Hillcroft, Houston, Texas 77081, the same
`
`address as Fugro-Geoteam's office for North and South American operations. (Ex. 7 at 2; Ex. 20
`
`at 3) All three of the officers for Fugro-Geoteam-Hans Meyer, W. Scott Rainey, and Paul Van
`
`Riel-are either senior management for or on the executive board of Fugro N.V. (Ex. 16 at 18;
`
`Ex. 17 at 20; Ex. 19 at 8)
`
`All of the Fugro entities with offices in Houston, including Fugro-Geoteam, share the
`
`same address (6100 Hillcroft, Houston, Texas 77081).
`
`(EX. 21 at 4-6) All of the Fugro entities
`
`with offices in Oslo, including Fugro-Geoteam and Fugro Norway, share the same address
`
`(Hoffsveien Ie, Oslo, Norway).
`
`(Ex. 21 at 1-3; Ex. 7 at 2; Ex. 18) Fugro operates as a single,
`
`world-wide,
`
`integrated company with substantial contacts in Houston. And worldwide
`
`responsibility for marine seismic surveys by any entity in "the Fugro Group" falls under
`
`Fugro-Geoteam. (Ex. 7 at WG69635)
`
`(c)
`
`Fugro-Geoteam Has Refused to Produce Documents
`
`(i)
`
`The November Fugro Subpoena
`
`On November 13, 2009, WestemGeco served a subpoena duces tecum issued out of the
`
`Southern District of Texas upon Fugro-McClelland Marine Geosciences, Inc. ("Fugro-MMG") at
`
`6100 Hillcroft, Houston, Texas 77081. (Ex. 22) The subpoena requested, inter alia, documents
`
`related to the manufacture, use, license, distribution, supply, purchase, sale, or offer for sale by
`
`Fugro of "Streamer Control Devices," including systems incorporating ION Accused Products.
`
`5
`
`WESTERNGECO Exhibit 2010, pg. 10
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 11 of 31
`
`(Id at 6) The subpoena included a request for documents in the possession, custody or control
`
`of, inter alia, Fugro-Geoteam. (Id at 4)
`
`On November 19, 2009, counsel for WesternGeco conferred with Bradley A. Jackson,
`
`U.S. General Counsel for Fugro, Inc.
`
`(Ex. 23) During that conference and in subsequent
`
`correspondence, Mr. Jackson refused to produce documents and indicated that Fugro-Geoteam
`
`was the Fugro entity with relevant information. (Ex. 23; Ex 24) WesternGeco offered to reissue
`
`the subpoena in the name of Fugro-Geoteam or have Mr. Jackson accept service of the existing
`
`subpoena in Houston on behalf of Fugro-Geoteam, a company he also represents. (Ex. 24)
`
`Instead of responding to this request, Mr. Jackson represented that documents responsive
`
`to the subpoena are housed with a foreign affiliate and not in Fugro-Geoteam's Houston office.
`
`(Ex. 25) .Despite counsel for WesternGeco's explanation that relevant and responsive documents
`
`include all material within Fugro-Geoteam's possession, custody or control, whether located in
`
`Houston, elsewhere in the United States or abroad, Fugro refused to produce any of these
`
`documents.
`
`(Ex. 25) And Fugro never responded to WesternGeco's request that Mr. Jackson
`
`accept service of a subpoena on behalfof Fugro-Geoteam. (Ex. 26; Ex. 27)
`
`(ii)
`
`The January Fugro Subpoena
`
`On January 22, 2010, WesternGeco served a subpoena duces tecum issued out of the
`
`Northern District of Texas upon Fugro-Geotearn's registered agent-eT Corporation System. l
`
`(Ex. 75)
`
`On February 3, 2010, and without any prior communications, counsel
`
`for
`
`Fugro-Geoteamnotified WesternGeco that Fugro-Geoteam would file a motion to quash the
`
`subpoena i1'l three hours unless WesternGeco withdrew it.
`
`(Ex. 28) Despite Fugro's prior
`
`representation, it now stated that Fugro Norway-not Fugro-Geoteam-·had possession and/or
`
`CT Corporation System is located in Dallas, Texas. (Ex. 33 at 1)
`
`6
`
`WESTERNGECO Exhibit 2010, pg. 11
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 12 of 31
`
`control of the requested documents.
`
`(Id) Counsel for WestemGeco responded, noting its
`
`willingness to discuss Fugro-Geoteam's objections and attempt to reach a resolution.
`
`(Ex. 29)
`
`Instead, Fugro-Geoteam filed the Motion to Quash based on alleged jurisdictional flaws.
`
`(Ex.
`
`30)
`
`The parties subsequently agreed to withdraw the subpoena from the Northern District of
`
`Texas and re-file it from the SouthemDistrict of Texas based on Fugro-Geoteam's agreetnentto
`
`accept service. (Seel e.g., Ex. 27; Ex. 31)
`
`(iii)
`
`The February Fugro Subpoena
`
`On February 15, 2010 WestemGeco served a subpoena duces tecum issued out of the
`
`Southern District of Texas upon Fugro-Geoteam.
`
`(Ex. 32) Fugro-Geoteam has failed to file any
`
`objections or otherwise respond to the February Fugro Subpoena, and the time to do so has
`
`expired.2 Fugro-Geoteam has refused to produce any documents in response to the November
`
`Fugro Subpoena, the January Fugro Subpoena or the February Fugro Subpoena.
`
`III.
`
`POLARCUS HAS REFUSED TO PRODUCE RELEVANT, .RESPONSIVE
`DOCUMENTS IN ITS POSSESSION. CUSTODY OR CONTROL
`
`(a)
`
`Polarcus Uses ION Accused Products for Steerable Streamer Arrays
`
`Polarcus uses the ION Accused Products to perform marine seismic surveys. According
`
`to Polarcus's September 15, 2009 Prospectus, Polarcus executed a contract with ION for
`
`"streamer positioning and control systems," which constitutes an "[i]mportant agreement[] for
`
`Polarcus." (Ex. 34 at WG69789; see also Ex. 5 at WG70004 ("ION Geophysical Corporation
`
`says that its Marine Imaging Systems group was awarded a fleet-wide contract by the Polarcus
`
`Group . . . . The contract, with a value in excess of $25 million, includes DigiFINTM . . . and
`
`2
`
`Pursuant to Federal Rule or Civil Procedure 45(e), the court "may hold in contempt a person
`who, having been served, fails without adequate excuse to obey the subpoena."
`
`7
`
`WESTERNGECO Exhibit 2010, pg. 12
`PGS v WESTERNGECO
`IPR2014-01478
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`

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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 13 of 31
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`ORCA® command and control systems"); Ex. 35 at WG14107) The Prospectus also states that
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`Polatcus, acting through its subsidiaries, has ordered from ION "streamer position and control
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`systems for each vessel with a total approximate value of USD 22 million for the four vessels."
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`(Ex. 34 at WG69833). At least two of these vessels were projected to become operational in the
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`fourth quarter of 2009, with an additional two vessels becoming operational in the second quarter
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`of 2010~ (Id at WG69788) Polarcus has engaged in substantial "tender activity," including
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`"pre-qualifi[cation]" for submitting project tenders as well as at least "12 active tenders for
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`projects," i.e., offers for sale.
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`(Id at WG69821-22, WG69826) Polarcus is making, using,
`
`seIling, offering to sell and/or combining systems and services incorporating the ION Accused
`
`Products.
`
`(b)
`
`Polarcus Is a Single, World-Wide, Integrated
`Company with Substantial Contacts in Houston
`
`According to Polarcus's 2009 Report, it is a "pure play marine geophysical company"
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`that "offers contract seismic surveys and multi client projects worldwide."
`
`(Ex. 36 at 2)
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`Polarcus's various offices share a common website (www.polarcus.com) which purports to offer
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`products and services from a single entity named "Polarcus."
`
`(Ex. 45) The various offices also
`
`share a common e-mail domain.
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`(Ex. 45) Polatcus documents tout a 'I[g]lobal footprint" and
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`state that Ilseismic industry veterans in London and Houston complement the Dubai-based HQ
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`sales & marketing team ... to provide a global market coverage." (Ex.. 39 at 69981; see also Ex.
`
`40 at Slide 7) Polarcus documents indicate that it maintains a IIPolarcus Houston Office" which
`
`houses its Vice President of Marketing for North and South America, Richard Price.
`
`(Ex. 39 at
`
`WG69981; Ex. 34 atWG69857; Ex. 40 at Slide 7; see also Exs. 41)
`
`Polarcus's Prospectus states that II[i]n Q32008 a marketing presence was established in
`
`Houston..." (Ex. 34 at WG69823) Polarcus appeared in November 2008 and October 2009 at
`
`8
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`IPR2014-01478
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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 14 of 31
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`"the industry's leading trade conference, the Society of Exploration Geophysicists (SEG) held
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`annually in the United States."(Id) Polarcus's October 2009 SEG presentation in Houston
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`included the projected deployment of Polarcus Asima-a marine seismic vessel-·in the second
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`quarter of 2010 targeting markets in the Americas.
`
`(Ex. 39 at WG69984, WG69996; see also
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`Ex. 42 at Slide 5) Polarcus's September 15, 2009 Prospectus confirms that "regional markets
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`such as the Gulf of Mexico ... and the Eastern U. S. and Canadian seaboard are being researched
`
`to identify opportunities for contracts..." (Ex. 34 at WG69821) As described in its Prospectus,
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`Polarcus's participation at SEG in the United States in both 2008 and 2009 "is focused on
`
`broadening clients' awareness of the key aspects of the Company's service offering and
`
`establishing credibility in the Company's capabilities." (Ex. 34 at WG69823) Polarcusoperates
`
`as a singh~, world-wide, integrated company with substantial contacts in Houston.
`
`(c)
`
`Polareus Has Refused to Produce Documents
`
`On November 13, 2009, WesternGeco served a subpoena duces tecum issued out of the
`
`Southern District of Texas upon Polarcus at 1510 Eldridge Parkway, Houston, Texas 77077.3
`
`(EX. 44) The subpoena requested, inter alia, documents related to the manufacture, use, license,
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`distribution, supply, purchase, sale, or offer for sale by Polarcus of "Streamer Control Devices/'
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`including systems incorporating ION Accused Products. (Ex. 44 at 6)
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`On December 3, 2009, after a stipulated extension, Polarcus objected to the subpoena,
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`arguing that it does not have "possession, custodY,or control" of the requested documents; that
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`the requested documents are located outside the United States; that the subpoena is overbroad
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`and presents an undue burden; and that Polarcus is not subject to the Court's jurisdiction.
`
`(Ex.
`
`3 According to Polarcus's website, its "North and South American Office" is located at 1510
`Eldridge Parkway, Houston, Texas 77077 (Ex. 45)
`
`9
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`WESTERNGECO Exhibit 2010, pg. 14
`PGS v WESTERNGECO
`IPR2014-01478
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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 15 of 31
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`46 at 2-4) Counsel for WestemGeco conferred with counsel for Polarcus and explained that the
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`requested documents are within Polarcus's possession, custody or control and that service on
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`Polarcus ofa subpoena from the Southern District of Texas is proper. (Ex. 47)
`
`In the spirit of cooperation and in an effort to avoid involving the Court, counsel for
`
`WestemOeco provided narrowed categories of relevant material within Polarcus's possession,
`
`custody and/or control and offered an extension of the deadline for the production:
`
`(1) documents evidencing the quantity, type and price of ION steerahle streamer
`equipment (e.g., DigiFIN, DigiBIRD and ORCA) purchased by Polarcus;
`
`(2) instructions, user manuals, tutorials, guides or other material concerning the
`operation of ION equipment purchased by Polarcus;
`
`(3) communications between ION andPolarcus regarding the configuration,
`operation, installation or capabilities of ION equipment;
`
`(4) tender, bids, operation logs and other documents which evidence Polarcus' use
`or proposed use of ION equipment;
`
`(5) marketing analyses, technical tests and other documents regarding the value or
`need for streamer steering technology, such as ION equipment; and
`
`(6) documents evidencing the existence and design of any or allegedly
`non-infringing alternative for steering seismic streamers.
`
`(Ex. 47)
`
`On December 11,2009, counsel for Polarcus agreed to produce documents responsive to
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`categories (1)-(3), but only ifWesternGeco agreed to waive any rights to further discovery. (Ex.
`
`48) On December 22, 2009, counsel for WestemGeco agreed to consider Polarcus's proposal
`
`but stated that it could not categorically waive its rights without review of those documents. (Ex.
`
`49) Polarcus refused to al10w WestemGeco to review the material before waiving all rights to
`
`further discovery, and maintained its refusal to produce documents responsive to categories
`
`(4)-(6).
`
`(Exs. 50-53) And despite several requests from WestemGeco, Polarcus has failed to
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`10
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`IPR2014-01478
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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 16 of 31
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`even confirm its proposal regarding documents responsive to categories (1)-(3).
`
`(See, e.g., Ex.
`
`54) To date, Polarcus has refused to produce any documents.
`
`IV.
`
`PGS, INC. HAS REFUSED TO PRODUCE RELEVANT, RESPONSIVE
`DOCUMENTS IN ITS POSSESSION•.CUSTODV OR CONTROL
`
`(a)
`
`PGS Uses ION Accused Products for Steerable Streamer Arrays
`
`POS uses the ION Accused Products to perform marine seismic surveys. A September
`
`24, 2007 press release stated that ION "completed open water testing of its DigiFJNTM streamer
`
`control system on the Petroleum Oeo-Services (PGS) seismic vessels Atlantic Explorer and
`
`Pacific Explorer."
`
`(Ex. 6)
`
`It further stated that POS is "actively involved in maturing this
`
`technology through the ION-POS Launch Partner Agreement." (Id.)
`
`In a 2008 presentation,
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`POS touted its use of "Digifin steerable streamers deployed on Ramform Sovereign." (Ex. 55 at
`
`W025967-68) A December 11, 2009 press release confioned that "DigiFIN-·from seismic
`
`equipment manufacturer ION Geophysical is being used by ... POS.. ."
`
`(Ex. 56) And a
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`December 18, 2008 press release announced that PGS signed a five-year agreement that "PGS
`
`will upgrade all existing 2D and 3D towed streamer vessels to ORCA® command & control in a
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`phased manner and that all new-build POS vessels will be outfitted with Orca upon
`
`commissioning."
`
`(Ex. 57) PGS is making, using, selling, offering to sell and/or combining
`
`systems and services incorporating the ION Accused Products.
`
`(b)PGS Is a Single, World-Wide, Integrated
`Company with Substantial Contacts in Houston
`
`PGS, Inc. is a Delaware corporation with its principal place of business in Houston,
`
`Texas. (Ex. 58) It is a wholly-owned subsidiary of Petroleum Geo-Services ASA ("PGS ASA"),
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`a Norwegian company.
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`(ld; Ex. 59) Both share a common website, www.pgs.com. which
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`purports to offer products and services from a single entity named "POS" with "consolidation of
`
`its corporate functions" in Houston, London and Oslo.
`
`(Ex. 60 at 1; Ex. 61 at 1; Ex. 74) That
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`11
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`WESTERNGECO Exhibit 2010, pg. 16
`PGS v WESTERNGECO
`IPR2014-01478
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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 17 of 31
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`website states that "PGS operates on a worldwide basis with headquarters in Oslo, Norway and
`
`Houston, Texas." (Ex. 37) PGS's 2008 annual report describes itself as a single entity and states
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`that "[t]he company is represented .... with [a.] larger regional office[] in ... Houston." (Ex. 62
`
`at 9)
`
`In a December 2006 presentation, PGS similarly described its Marine division as having
`
`"Global Operations" with offices in Houston. (Ex. 63 at WG32399, WG32420) It also disclosed
`
`PGS's "new multi~client survey in Gulf of Mexico •.. located offshore Louisiana and Texas"
`
`and predicted "[c]ontinued expansion in" "mower 48 USA," a "very active market." (Id.)
`
`Both PGS, Inc. and PGS ASA share a common e-mail domain.
`
`(Ex. 38) PGS directs
`
`investor relations inquiries to both PGS, Inc. and PGS ASA offices.
`
`(Ex. 38) PGS's financial
`
`reports consolidate revenue from both PGS, Inc. and PGS ASA in a single statement.
`
`(Ex. 64)
`
`In October 2009, PGS ASA presented its third quarter results in Houston, Texas. (Id) PGS, Inc.
`
`and PGS ASA share executives-John Reinhardsen and Gottfred Langseth-who are
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`respectively "Director, President" and "Director" of PGS, Inc. and Chief Executive Officer and
`
`Chief Financial Officer of PGS ASA.
`
`(Ex. 65 at 2; Ex. 61 at 2) The business address of
`
`Mr. Reinhardsen and Mr. Langseth for PGS,
`
`Inc.
`
`is the Same address as PGS ASA's
`
`headquarters (Stranveien 4, Lysaker, Norway).
`
`(Ex. 33; Ex. 61 at 1) The business address for
`
`another Director of PGS, Inc.-ehristin Steen-Nilson-is also the same address as PGS ASA's
`
`headquarters.
`
`(Ex. 33 at 4)
`
`In addition, the Chief Executive Officer of PGS, Inc.-Sverre
`
`Strandenes-is a Group President at PGS ASA.
`
`(Ex. 66 at 1; Ex. 62 at 44) PGS operates as a
`
`single, world-wide, integrated company with substantial contacts in Houston.
`
`(c)
`
`PGS,!nc. Has Refused to Produce Documents
`
`On December 8, 2009, counsel for WestemGeco contacted PGS in-house counsel in an
`
`effort to request relevant documents and witnesses in PGS's possession, custody or control. (Ex.
`
`67) On December 22, 2009, outside counsel for PGS, Inc. refused to provide documents or
`
`12
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`IPR2014-01478
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`Case 4:09-cv-01827 Document 81 Filed in TXSD on 04/01/10 Page 18 of 31
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`witnesses and instead suggested that WesternGeco contact PGS ASA (without providing direct
`
`contact information for PGS ASA). (Ex. 58) In its response, counsel for WesternGeco requested
`
`that PGS, Inc. reconsider its refusal to respond to WesternGeco's requests and explained that,
`
`based on the facts recited above, PGS, Inc. has possession, custody or control of relevant
`
`material. (Ex. 76) PGS, Inc. again refused to produce the relevant documents. (Ex. 72)
`
`On January 22, 2010, WestetnGeco served a subpoena duces tecum issued out of the
`
`Southern District of Texas upon PGS, Inc.
`
`(Ex. 68) The subpoena requested, inter alia,
`
`documents related to the manufacture, use, license, distribution, supply, purchase, sale, or offer
`
`for sale by PGS of "Streamer Control Devices," including the ION Accused Products.
`
`(Id. at 7)
`
`Included in the definition of "PGS" were PGS, Inc. and PGS ASA. (Id. at 3)
`
`On February 8, 2010, PGS, Inc. objected to the subpoena, arguing that PGS ASA, not
`
`PGS, Inc., housed the requested documents.
`
`(Ex. 69 at 2) PGS, Inc. agreed to produce only a
`
`few documents "related to the marketing and sales of ION products that are in ... the files of
`
`PGS, Inc. employees that have directly communicated with ION during the relevant period." (Id.
`
`at 4) PGS, Inc.'s production consists of only sixty-seven documents, none of which relate to
`
`PGSls use of the ION Accused Products.
`
`On March 15, 20IO,counsel for WesternGeco reiterated its request that PGS, Inc.
`
`reconsider its refusal to produce relevant, responsive material within its possession, custody or
`
`control. (Ex. 70) In the spirit of cooperation, WesternGeco again provided narrowed categories
`
`of relevant material within PGS, Inc.'s possession, custody and/or control:
`
`type and price of ION steerable streamer equipment (e.g.,
`(1) the quantity,
`DigiFIN and/or ORCA) purchased by PGS;
`
`(2) instructions, user manuals, tutorials, guides or other material· concerning the
`operation of ION equipment purchased by PGS;
`
`13
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`WESTERNGECO Exhibit 2010, pg. 18
`PGS v WESTERNGECO
`IPR2014-01478
`
`

`
`Case 4:09-cv-0