`
` Nos. 2013-1527, 2014-1121, -1526, -1528
`______________________________________
`
`United States Court of Appeals
`For The Federal Circuit
`______________________________________
`
`WESTERNGECO L.L.C.,
`
`
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`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff-Cross-Appellant,
`
`
`v.
`
`ION GEOPHYSICAL CORPORATION,
`
`
`
`Defendant-Appellant.
`
`
`
`______________________________________
`
`
`
`
`
`
`
`
`
`
`Appeals from the United States District Court for the Southern District of
`Texas in case no. 09-cv-1827, Judge Keith P. Ellison.
`______________________________________
`
`CORRECTED NON-CONFIDENTIAL BRIEF FOR DEFENDANT-
`APPELLANT ION GEOPHYSICAL CORPORATION
`
`David J. Healey
`Fish & Richardson P.C.
`One Houston Center
`1221 McKinney Street,
`Suite 2800
`Houston, TX 77010
`Tel: 713-654-5300
`
`Justin M. Barnes
`Fish & Richardson P.C.
`12390 El Camino Real
`San Diego, CA 92130
`Tel: 858-678-5070
`
`Frank Porcelli
`Fish & Richardson P.C.
`One Marina Park Drive
`Boston, MA 02210
`Tel: 617-542-5070
`
`
`
`
`Attorneys for Defendant-Appellant
`
`
`
`
`
`1
`
`ION 1060
`ION Geophysical v. WesternGeco
`IPR2015-00567
`
`

`

`
`
`CERTIFICATE OF INTEREST
`
`1.
`
`The full name of every party represented by counsel is:
`
`Counsel for the Defendant-Appellant certifies the following:
`
`
`
`
`
`
`The name of the real party in interest (if the party named in the
`2.
`
`caption is not the real party in interest) represented by counsel is:
`
`
`
`All parent corporations and any publicly held companies that own 10
`3.
`
`percent or more of the stock of the party or amicus curiae represented by me are:
`
`
`
`
`
`
`ION Geophysical Corporation
`
`N/A
`
`N/A
`
`
`
`The names of all law firms and the partners or associates that
`4.
`
`appeared for the party or amicus now represented by me in the trial court or agency
`or are expected to appear in this Court are:
`
`
`Fish & Richardson P.C.: David J. Healey, Justin M. Barnes, Frank
`Porcelli, Brian G. Strand, Francis J. Albert, Olga May, Kevin Su,
`Robert Courtney, Bailey Harris, Jackob Ben-Ezra;
`
`Porter Hedges L.L.P.: Ray Torgerson, Jonathan Pierce, Jonna
`Summers, Eric Wade, Susan Hellinger
`
`Jones Day: David Burgert
`
`
`
`i
`
`2
`
`

`

`
`
`TABLE OF CONTENTS
`
`Page
`
`
`CERTIFICATE OF INTEREST .......................................................................... i
`RELATED CASES ............................................................................................. 1
`JURISDICTIONAL STATEMENT ................................................................... 1
`ISSUES PRESENTED ........................................................................................ 2
`STATEMENT OF THE CASE ........................................................................... 3
`STATEMENT OF FACTS ................................................................................. 6
`A.
`The Underlying Technology .......................................................... 6
`B.
`The Bittleston Patents’ Chain of Title ............................................ 8
`C. WG Focused on Extraterritorial Activities for Liability and
`Damages ....................................................................................... 13
`Pertinent District Court Rulings ................................................... 14
`D.
`Post-Verdict Changes in the Law ................................................. 19
`E.
`SUMMARY OF ARGUMENT ........................................................................ 21
`ARGUMENT .................................................................................................... 24
`
`I. WG Lacks Standing for the Bittleston Patents ....................................... 24
`
`A.
`
`B.
`
`C.
`
`ION Has Not Waived and Is Not Estopped from Challenging
`Standing, Particularly in Light of WG’s Misstatements .............. 27
`
`There Is No Assignment from the Inventors to WG in the
`Chain of Title ................................................................................ 31
`
`The Corporate Agreements Pre-Dating the Inventors’
`Assignments Cannot Convey Legal Title to WG ......................... 34
`
`II.
`
`The District Court’s Improper 271(f) Rulings Require a New Trial ...... 35
`
`A.
`
`B.
`
`C.
`
`D.
`
`The Court Applied the Wrong Intent for 271(f)(1) ...................... 37
`
`The Error Prejudiced ION at Trial ............................................... 40
`
`The Court’s Error Regarding 271(f)(1) Necessarily Infected
`271(f)(2) ....................................................................................... 41
`
`Plain Error Based on the Subsequent Commil Decision
`Requires a New Trial .................................................................... 45
`
`III. Lost Profits are Unavailable as a Matter of Law .................................... 47
`
`A.
`
`The District Court Failed to Consider the Post-Verdict Power
`Integrations Decision Banning Extraterritorial Lost Profits ........ 48
`
`
`
`ii
`
`3
`
`

`

`
`
`B.
`
`C.
`
`This Court and the Supreme Court Have Recognized That
`Damages Cannot Be Tied to Purely Extraterritorial Acts ............ 50
`
`Panduit Cannot be Satisfied Because ION and WG do not
`Compete in the Marketplace, Here or Abroad ............................. 56
`
`CONCLUSION ................................................................................................. 59
`
`
`
`ADDENDUM
`
`Memorandum and Order on Post-Trial Motions, dated
`June 19, 2013 ..................................................................................... A000001-48
`
`Memorandum and Order on Plaintiff’s Motion for Summary
`Judgment of Willful Infringement, dated June 29, 2012 ................... A000049-58
`
`Memorandum and Order on Defendants’ Motions to Exclude Expert
`Testimony of Raymond Sims and Certain Motions in Limine,
`dated July 16, 2012 ............................................................................ A000059-70
`
`Jury Verdict Form, dated August 16, 2012 ........................................ A000071-78
`
`Memorandum and Order on WesternGeco’s Motion for Supplemental
`Damages, Motion to Strike, and ION’s Motion to Compel, dated
`October 24, 2013 (filed under seal) ................................................... A000079-92
`
`Order on Defendant’s Motion for Remittitur, dated April 30, 2014
`(filed under seal) ................................................................................ A000093-96
`
`Final Judgment, dated May 7, 2014 ................................................... A000097-98
`
`U.S. Patent No. 6,691,038 .................................................................. A000478-92
`
`U.S. Patent No. 7,080,607 ................................................................. A000503-14
`
`U.S. Patent No. 7,162,967 ................................................................. A000515-25
`
`U.S. Patent No. 7,293,520 ................................................................. A000526-36
`
`
`
`
`iii
`
`4
`
`

`

`
`
`Assignment of Control System for Positioning of Marine Seismic Streamers
`from Oyvind Hillesund to Schlumberger Technology Corporation,
`dated February 26, 2001 .................................................................... A012195-96
`Assignment of Control System for Positioning of Marine Seismic
`Streamers from Simon Bittleston to Schlumberger Technology
`Corporation, dated February 26, 2001 ............................................... A012197-98
`
`Assignment Record of U.S. Patent 6,932,017 from the United States
`Patent and Trademark Office website ...................................................... A012199
`
`
`CONFIDENTIAL MATERIAL OMITTED
`
`The material omitted on pages 12, 34 and 35 reflect terms of a confidential
`agreement.
`
`
`
`
`
`
`iv
`
`5
`
`

`

`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`
`
`Cases
`
`Advanced Display Sys., Inc. v. Kent State Univ.,
`212 F.3d 1272 (Fed. Cir. 2000) .......................................................................... 37
`
`Agro Dutch Industries Ltd. v. United States,
`508 F.3d 1024 (Fed. Cir. 2007) .......................................................................... 38
`
`Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular
`Sys., Inc.,
`131 S. Ct. 2188 (2011) ........................................................................................ 31
`
`Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular
`Sys., Inc.,
`583 F.3d 832 (Fed. Cir. 2009) ............................................................................ 31
`
`BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc.,
`1 F.3d 1214 (Fed. Cir. 1993) .............................................................................. 57
`
`Boeing Co. v. Comm'r of Patents and Trademarks,
`853 F.2d 878, (Fed. Cir. 1988) ........................................................................... 27
`
`Brown v. Duchesne,
`60 U.S. 183 (1856) .............................................................................................. 51
`
`Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc.,
`576 F. 3d 1348 (Fed. Cir. 2009) (en banc) ..................................................passim
`
`Commil USA, LLC v. Cisco Sys., Inc.,
`720 F.3d 1361 (Fed. Cir. 2013) ...................................................................passim
`
`Commil USA, LLC v. Cisco Systems, Inc.,
`737 F.3d 699 (Fed. Cir. 2013) ............................................................................ 45
`
`Crawford v. Falcon Drilling Co., Inc.,
`131 F.3d 1120 (5th Cir. 1997) ............................................................................ 46
`
`
`
`v
`
`6
`
`

`

`
`
`Crystal Semiconductor Corp. v. TriTech Microelectronics Intern.,
`Inc.,
`246 F.3d 1336 (Fed. Cir. 2001) .......................................................................... 57
`
`CytoLogix Corp. v. Ventana Med. Sys., Inc.,
`424 F.3d 1168 (Fed. Cir. 2005) .......................................................................... 37
`
`Deepsouth Packing Co. v. Laitram Corp.,
`406 U.S. 518 (1972) .......................................................................... 39, 49, 52, 54
`
`Gasoline Products Co. v. Champlin Refining Co.,
`283 U.S. 494 (1931) ...................................................................................... 42, 44
`
`Gellman v. Telular Corp.,
`449 F. App’x 941 (Fed. Cir. 2011) ......................................................... 25, 27, 31
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`––– U.S. ––––, 131 S.Ct. 2060 (2011)................................................ 6, 20, 22, 35
`
`Harper v. Virginia Dep't of Taxation,
`509 U.S. 86, 113 S.Ct. 2510 (1993) .................................................................... 45
`
`Jimenez v. Wood Cnty., Tex.,
`621 F.3d 372 (5th Cir. 2010) .............................................................................. 37
`
`Johns Hopkins Univ. v. CellPro, Inc.,
`152 F.3d 1342 (Fed. Cir. 1998) .......................................................................... 50
`
`Johnson v. U.S.,
`520 U.S. 461 (1997) ............................................................................................ 45
`
`Jowers v. Lincoln Elec. Co.,
`617 F.3d 346 (5th Cir. 2010) .............................................................................. 36
`
`Kaempe v. Myers,
`367 F.3d 958 (D.C. Cir. 2004) ............................................................................ 26
`
`LG v. Quanta,
`128 S. Ct. 2109 (2008) ........................................................................................ 52
`
`Limelight Networks v. Akamai Technologies,
`134 S. Ct. 2111 (2014) ........................................................................................ 37
`
`
`
`vi
`
`7
`
`

`

`
`
`Liquid Dynamics Corp. v. Vaughan Co.,
`449. F.3d 1209, 1222-23 (Fed. Cir. 2006) .......................................................... 37
`
`Lucent Techs. v. Gateway, Inc.,
`543 F.3d 710 (Fed. Cir. 2008) ........................................................................ 1, 27
`
`MeadWestVaco Corp. v. Rexam Beauty and Closures, Inc.,
`731 F.3d 1258 (Fed. Cir. 2013) .......................................................................... 36
`
`Microsoft Corp. v. AT&T Corp.,
`550 U.S. 437 (2007) .......................................................................... 48, 49, 51, 55
`
`Mitutoyo Corp. v. Cent. Purchasing, LLC,
`No. 03 C 0990, 2006 WL 644482 (N.D. Ill. Mar. 9, 2006) ................................ 57
`
`Mitutoyo Corp. v. Cent. Purchasing, LLC,
`499 F.3d 1284 (Fed. Cir. 2007) .................................................................... 57, 58
`
`Morrow v. Microsoft Corp.,
`499 F.3d 1332 (Fed. Cir. 2007) .......................................................... 6, 25, 51, 53
`
`Owen Equip. & Erec. Co. v. Kroger,
`437 U.S. 365 (1978) ...................................................................................... 28, 30
`
`Pandrol USA LP v. Airboss Ry. Prods.,
`320 F.3d 1354 (Fed. Cir. 2003) .................................................................... 29, 30
`
`Paradise Creations, Inc. v. UV Sales, Inc.,
`315 F.3d 1304 (Fed. Cir. 2003) .......................................................................... 25
`
`Regional Props., Inc. v. Financial & Real Estate Consulting Co.,
`752 F.2d 178 (5th Cir. 1985) .............................................................................. 30
`
`Rite-Hite v. Kelley,
`56 F.3d 1538 (Fed. Cir. 1995) ............................................................................ 52
`
`Robert Bosch, LLC v. Pylon Mfg. Corp.,
`719 F.3d 1305 (Fed. Cir. June 14, 2013) ............................................................ 21
`
`In re Sealed Appellant,
`194 F.3d 666 (5th Cir. 1999) .............................................................................. 36
`
`
`
`vii
`
`8
`
`

`

`
`
`SiRF Technology, Inc. v. International Trade Com'n,
`601 F. 3d 1319 (Fed. Cir. 2010) ......................................................................... 25
`
`Speedplay, Inc. v. Bebop, Inc.,
`211 F.3d 1245 (Fed. Cir. 2000) .......................................................................... 31
`
`Spine Solutions, Inc. v. MedTronic Sofamor Danek USA, Inc.,
`620 F.3d 1305 (Fed. Cir. 2010) .......................................................................... 30
`
`Swift & Co. v. Hocking Valley R. Co.,
`243 US 281 (1917) .................................................................................. 28, 29, 30
`
`T.D. Williamson, Inc. v. Laymon,
`723 F. Supp. 587 (N.D. Okla. 1989) ............................................................. 53, 54
`
`T.D. Williamson, Inc. v. Laymon,
`923 F.2d 871 (Fed. Cir. 1990) (unpublished) ..................................................... 53
`
`Tyco Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc.,
`587 F.3d 1375 (Fed. Cir. 2009) .................................................................... 24, 27
`
`U.S. Philips Corp. v. Iwasaki Elec. Co.,
`505 F.3d 1371 (Fed. Cir. 2007) .................................................................... 25, 27
`
`U.S. v. Williamson,
`183 F.3d 458 (5th Cir. 1999) ............................................................ 45, 53, 54, 55
`
`Vidrine v. Kansas City S. Ry. Co.,
`466 F.2d 1217 (5th Cir. 1972) ............................................................................ 42
`
`Wechsler v. Macke Int’l Trade, Inc.,
`486 F.3d 1286 (Fed. Cir. 2007) .............................................................. 47, 48, 57
`
`Whitehead v. Food Max of Mississippi, Inc.,
`163 F.3d 265 (5th Cir. 1998) .............................................................................. 44
`
`Rules / Statutes
`
`28 U.S.C. §1295(a) (1) ............................................................................................... 1
`
`35 U.S.C. § 261 ...................................................................................... 25, 30, 31, 35
`
`35 U.S.C. § 271(f) .......................................................................................... 3, 51, 54
`
`
`
`viii
`
`9
`
`

`

`
`
`37 C.F.R. § 3.54 ....................................................................................................... 26
`
`37 C.F.R. § 3.73(b) ...................................................................................... 11, 12, 26
`
`37 C.F.R. § 3.73(b)(i)-(ii) ........................................................................................ 26
`
`MPEP 324.X ............................................................................................................ 26
`
`Federal Rule of Evidence 1002 ................................................................................ 32
`
`Federal Rule of Evidence 1003 ................................................................................ 32
`
`Federal Rule of Evidence 1007 ................................................................................ 33
`
`
`
`
`
`
`
`ix
`
`10
`
`

`

`
`
`RELATED CASES
`
`ION is not aware of any cases related to the present appeal.
`
`JURISDICTIONAL STATEMENT
`
`ION denies the district court had subject matter jurisdiction, and that this
`
`Court has subject matter jurisdiction, regarding U.S. Patent Nos. 7,080,607,
`
`7,162,967 and 7,293,520 (collectively “the Bittleston patents”). WesternGeco
`
`(“WG”) lacks Article III standing to sue on the Bittleston patents since it has never
`
`had legal title to them.
`
`ION’s motion for partial dismissal of the appeal for lack of standing on the
`
`Bittleston patents was filed on July 1, 2014 (D41). This Court “deem[ed] it the
`
`better course to deny the motion and for ION to raise their jurisdictional arguments
`
`in their brief.” D53.
`
`ION timely filed a notice of appeal from the May 7, 2014 Final Judgment.
`
`ION also filed notice of appeals for two prior Orders (June 19, 2013 and October
`
`23, 2013). All three notices of appeal were consolidated into this appeal. This
`
`Court has appellate jurisdiction over the appeal under 28 U.S.C. §1295(a) (1).
`
`Compare Lucent Techs. v. Gateway, Inc., 543 F.3d 710, 717 (Fed. Cir. 2008)
`
`(finding jurisdiction for appeal proper, then holding plaintiff lacked standing).
`
`
`
`
`
`1
`
`11
`
`

`

`
`
`ISSUES PRESENTED
`
`1) Where the only written assignments in the record are from the inventors
`
`to a third party, and plaintiff misstated that it was the assignee when
`
`filing these documents at the PTO, did the district court err in finding
`
`standing based largely on presuming title from the patent publication, and
`
`drawing an adverse inference against defendant based on when it raised
`
`subject matter jurisdiction?
`
`2) Did the district court err in holding § 271(f)(1) liability requires only
`
`intent that components be combined abroad, rather than intent to
`
`circumvent the patent or induce what would be infringement if in the
`
`U.S., and accordingly finding defendant liable on summary judgment?
`
`a. Did the court’s refusal to provide clear jury instructions limiting
`
`the summary judgment ruling, and refusal to forbid plaintiff’s
`
`repeated references to defendant as an adjudicated infringer,
`
`hopelessly infect other liability issues, warranting a new trial?
`
`b. Is defendant entitled to a new trial on §§ 271(f)(1) and (f)(2) under
`
`Commil where it had a good faith belief the patents were invalid,
`
`and the court held those arguments were objectively reasonable?
`
`3) Did the district court err in allowing lost profits as a matter of law where
`
`plaintiff’s purported lost sales were for services abroad, where plaintiff
`
`
`
`2
`
`12
`
`

`

`
`
`and defendant did not compete in the same markets either inside or
`
`outside the U.S., and the purported lost profits were based on foreign
`
`parties’ systems built and used overseas, which included defendant’s
`
`components?
`
`STATEMENT OF THE CASE
`
`ION manufactures components for use in the marine geophysical survey
`
`industry. WG, (purported) patentee and appellee, alleged that ION violated 35
`
`U.S.C. § 271(f) by supplying from the United States ION’s DigiFIN product and
`
`Lateral Controller software, which ION’s foreign customers incorporate into
`
`complex systems to perform marine geophysical surveys for oil and gas
`
`exploration. WG alleged a reasonable royalty on the DigiFIN component and
`
`Lateral Controller software, as well as lost profits on 10 alleged “lost bids” to
`
`foreign customers for services outside the United States.
`
`This appeal primarily relates to the district court’s improper extension of
`
`extraterritorial liability for infringement and lost profits. But only primarily.
`
`Before reaching those issues, there is the threshold issue of subject matter
`
`jurisdiction for the Bittleston patents. WG does not have, and never has had, legal
`
`title to these patents. Instead, the assignment of record in the PTO is to a different
`
`entity, Schlumberger Technology Corporation (“STC”). There are no written
`
`assignments to anyone other than STC. This issue was not raised until after
`
`
`
`3
`
`13
`
`

`

`
`
`verdict, but with good reason – WG’s misstatements at the PTO caused the patents
`
`to issue with WG (incorrectly) listed as the assignee.
`
`The district court adopted, with no cited authority, a “presumption” that WG
`
`was the assignee based on the patents as originally published – even though this is
`
`contrary to Federal Circuit precedent. Further, despite WG’s actions that obscured
`
`legal title, the district court drew an inference against ION based on timing. The
`
`district court’s analysis was erroneous because (1) it improperly shifted the burden
`
`on standing to ION, (2) timing is irrelevant for standing, and (3) WG’s
`
`misstatements to the PTO masked the problem. WG could never do what the law
`
`requires – establish a chain of title from the inventors based on effective written
`
`assignments. On any standard of review, especially de novo, the standing ruling
`
`must be reversed.
`
`Regarding infringement, the district court improperly applied 271(f) to
`
`expand the patents’ extraterritorial effect beyond that permitted by statute. First,
`
`the court wrongfully held 271(f)(1) did not require intent analogous to 271(b), e.g.,
`
`deliberately circumventing the patentee’s rights by purposefully inducing abroad a
`
`combination known to be infringing. Based on this faulty interpretation, the court
`
`granted summary judgment that ION infringed ‘520 patent claim 18 under
`
`271(f)(1), while simultaneously denying summary judgment under (f)(2) on the
`
`same claim because WG had not shown that ION intended to cause infringement.
`
`
`
`4
`
`14
`
`

`

`
`
`This ruling infected the trial, the jury instructions, and eventually the verdict.
`
`Over ION’s objections, WG continually labeled ION as an infringer throughout
`
`trial. WG argued the case was not about infringement, because ION had already
`
`been found to infringe; rather the case was really about damages. Yet under any
`
`circumstance, and certainly in view of Commil, liability was not established since
`
`validity remained disputed. ION requested clarifying jury instructions to partially
`
`offset this severe prejudice, but the Court refused. Ultimately, the jury’s verdict
`
`was driven by the powerful impression resulting from the court’s incorrect rulings
`
`that ION was ‘guilty as charged.’ The summary judgment ruling must be reversed,
`
`and a new trial is required on liability for all claims on all issues.1
`
`Worse yet, the district court allowed WG to pursue lost profits based solely
`
`on competition abroad for services between WG’s ships overseas and ION’s
`
`foreign customers. Since all acts involved in the “loss” from these competing bids
`
`and performance of services were outside the United States, the lost profits
`
`awarded were for purely foreign activities of others. Similarly, the district court’s
`
`explicit instructions for lost profits required that the parties compete in the same
`
`
`1 Additionally, Commil warrants a new trial under the plain error standard, based
`on new precedent. The October 2013 dissent from en banc in late October 2013
`first gave notice that many judges on this Court considered it to be a change in the
`law, but this was long after this case’s post-trial motions, after ION’s first notice of
`appeal had been docketed, and even after the district court’s October 23, 2013
`initial opinion on supplemental damages and final wording of the injunction.
`
`
`
`5
`
`15
`
`

`

`
`
`market (overseas or not), but it was uncontested that ION sold only components to
`
`survey companies and WG sold only services to oil and gas exploration companies.
`
`Global-Tech should have alerted the district court that its mental state
`
`standard for 271(f)(1) was unduly expansive. Power Integrations should have
`
`confirmed that the lost profits analysis was fatally flawed. Microsoft and Cardiac
`
`Pacemakers should have made clear the policy against extraterritorial expansion of
`
`U.S. patent law. But the district court refused to disturb the verdict, pushing
`
`forward post-trial in spite of the law.
`
`STATEMENT OF FACTS
`
`A. The Underlying Technology
`
`Marine geophysical surveys attempt to locate and characterize pockets of oil
`
`or gas beneath the ocean floor. To perform a survey, a seismic vessel is outfitted
`
`with an array of “streamers,” computers, software, and other equipment.
`
`A001186-87, A002477-78. A streamer is made up of a series of neutrally buoyant
`
`cables connected end to end, sometimes miles in length. A001182, A001348.
`
`Each streamer has seismic data collection equipment, such as “hydrophones”
`
`(specialized microphones for detecting underwater sounds) and devices that affect
`
`the streamer’s vertical and lateral movement. A000508 at 1:20-28 and 1:34-49,
`
`A001505-08. A device at the ship creates seismic waves that permeate the ocean
`
`floor so that other seismic equipment (e.g., hydrophones) collect data about oil and
`
`
`
`6
`
`16
`
`

`

`
`
`gas deposits. Sophisticated algorithms and hardware analyze this data to generate
`
`the survey results. A000508 at 1:28-33, A001188-89, A001249-51. Companies
`
`that operate these seismic survey vessels compete for business from oil and gas
`
`exploration companies.
`
`The types of services at issue are known as “2D,” “3D” and “4D” surveys.
`
`A 2D survey employs a single towed streamer, and produces an image of a narrow
`
`“slice” of the subsurface below. In a 3D survey, an array of multiple streamers is
`
`towed in parallel. A 4D survey is similar in concept to time-lapse photography: a
`
`prior 3D survey is repeated over the same area multiple times to measure changes
`
`in the migration of oil or gas. A001189-91.
`
`A survey and the resulting data’s accuracy can be affected by environmental
`
`conditions such as waves or obstacles, which can skew the streamer array, cause
`
`streamers to become tangled with each other, or cause interference “artifacts.”
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`A000508 at 1:42-45, 2:5-8. Over time, techniques were developed to control
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`streamer motion and offset or avoid tangling and artifacts; one example is the
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`depth at which streamers are towed. Depth is changed and maintained by a series
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`of devices along each streamer known as “birds.” A000508 at 1:42-57. One
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`leading example is ION’s unaccused DigiBIRD, which ION has sold to many
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`survey companies, including WG, for decades. A004186-87, A001343-44,
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`A001891, A002378, A003944. Each “bird” typically has a depth sensor and a
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`7
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`17
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`horizontal wing. Changes in the “wing” angle of the birds are coordinated by an
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`onboard computer, which adjusts the birds upward or downward to adjust streamer
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`depth as the streamer is pulled through the water. A000508 at 1:49-57. In the
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`same way, a streamer can be moved laterally (horizontally) by devices with
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`vertically-oriented wings (also called a “fin”) such as ION’s accused DigiFIN.
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`A000508 at 1:58-63, A001193-94.
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` Some birds have dual wings that control both vertical and lateral motion,
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`like WG’s Q-Fin that WG uses to conduct its own surveys. A001330-32.
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`According to the Bittleston patents’ specification, automatic systems to control
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`streamers’ lateral or horizontal positions were well known in the art (including Dr.
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`Bittleston’s PCT application for a dual-axis bird, which is 102(b) art for the
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`patents-in-suit), and thus the inventions were directed to particular ways of
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`controlling the streamer arrays’ position. A000508 at 1:58-2:57.2
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`B.
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`The Bittleston Patents’ Chain of Title
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`The three Bittleston patents focus on the control system that changes or
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`maintains the positions of the streamers. The patents share common inventors and
`
`
`2 For the fourth patent-in-suit, U.S. Patent No. 6,691,038 to Zajac, WG asserted
`claim 14, which is to a system comprising a towing vessel, an array of streamers, at
`least one attached “active streamer positioning device” (“ASPD”), a “master
`controller” that makes use of “tracking systems” and an “environmental sensor” to
`determine corrective positioning commands to be issued to one or more ASPD to
`maintain a specified geometry of the streamer array. A000490 at 12:14:39.
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`8
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`18
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`a common specification with each other and with the first U.S. patent in the chain
`
`of priority, U.S. patent 6,932,017, which was in suit but dropped immediately
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`before trial. A000508 at 1:4-6, A000519 at 1:7-11, A000531 at 1:7-11, A010661,
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`D47 at 2 n.1. WG asserted the Bittleston patents were important to improve
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`control of streamer arrays.
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`Entities and people relevant to Bittleston patents’ title are:
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`• Schlumberger Ltd: Incorporated in Curacao, it is the holding
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`company of one of the largest corporate groups in the world, with
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`numerous subsidiaries and related entities across the globe.
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`• STC: A member of the Schlumberger group of companies, which
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`transferred certain assets into a joint venture with Baker-Hughes in
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`2000 to form plaintiff WG. A012699.
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`• The Geco companies: Originally founded in Norway, and later
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`acquired by the Schlumberger group. A001495.
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`• WesternGeco L.L.C. (“WG”): A Delaware limited liability company
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`formed in 2000 as a joint venture between Schlumberger and Baker-
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`Hughes, combining certain Schlumberger units and assets, including
`
`the Geco companies and certain property of STC, with those of Baker
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`Hughes’s subsidiary Western Geophysical. A012689-797. Since
`
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`9
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`19
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`
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`2006, WG has been 100% owned by one or more Schlumberger
`
`entities, mainly STC.
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`• Dr. Bittleston: Named inventor on the Bittleston patents. He
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`originally went to work for Geco in 1993. A001495.
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`• Mr. Hillesund: Named inventor on the Bittleston patents. He
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`originally went to work for Geco in 1994. A004507-09.
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`The Bittleston patents name only Dr. Bittleston and Mr. Hillesund as
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`inventors. Both inventors, in separate writings dated February 26, 2001, assigned
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`their rights to STC, and STC only. A012195-98. No other written assignments
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`signed by the inventors or STC have been produced.
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`The February 2001 assignment from Dr. Bittleston is the only assignment on
`
`record in the PTO.3 It was first filed for the ‘017 patent, its cover page for
`
`recordation shows STC as assignee, and accordingly the PTO database shows STC
`
`as owner. A012199-202. The reel and frame citations for the ‘520 and ‘967
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`patents reference only this same assignment, yet the cover pages WG filed with the
`
`assignment state WG, not STC, as the assignee. A012203-10. There is no PTO
`
`assignment on record for the ‘607 patent.
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`The ‘017 patent shows WG as the assignee, despite the written assignment
`
`of record to STC. This traces back to the prosecuting attorney writing on the Fee
`
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`3 Mr. Hillesund’s assignment was never recorded.
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`10
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`20
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`
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`Transmittal Form that WG was to be published as the assignee. A012211-12. But
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`this form expressly states it is not an assignment. Id.
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` Like the ‘017 patent, each subsequent Bittleston patent was published
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`(incorrectly) listing WG as the assignee, based on WG’s misstatements to the PTO.
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`A000503 at [73], A000515 at [73], A000526 at [73]. In these cases, WG 1) filed a
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`form under 37 C.F.R. § 3.73(b) for each application, stating WG had authority to
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`prosecute based on the February 2001 assignment (to STC), and 2) filed cover
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`pages with the Bittleston-STC assignment listing WG as owner rather than STC.
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`A013277, A013393, A013479, A012204-06, A012208-10.
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`Because WG’s misstatements caused the patents to publish with WG
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`wrongly listed as the assignee, lack of standing was not apparent. But when ION
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`discovered the defect in 2012, it pressed WG for proof of title. A012216-20.
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`Lackin