UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`
`
`BAKER HUGHES INCORPORATED and
`BAKER HUGHES OILFIELD OPERATIONS, INC.,
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES INC.,
`Patent Owner
`
`___________________
`
`Case IPR2016-00596
`Patent 7,134,505
`___________________
`
`
`
`
`
`EXCLUSIVE LICENSEE RAPID COMPLETIONS LLC’S
`PRELIMINARY RESPONSE
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`

`
`Case IPR2016-00596
`Patent 7,134,505
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`
`
`D.
`
`B.
`
`TABLE OF CONTENTS
`I.
`Introduction. ..................................................................................................... 1
`II. Wellbore completion background. .................................................................. 3
`A. Water shut-off completions prevent unwanted fluids from entering a
`wellbore. ................................................................................................ 4
`B. Well stimulation is very different than water shut-off. ......................... 7
`C.
`The ’505 patent technology is a nonobvious multistage fluid treatment
`approach that is an alternative to cased hole plug-and-perf fracturing.
` .............................................................................................................10
`The ’505 patent technology has been praised as “revolutionary” and
`“game-changing.” ................................................................................15
`III. Claim constructions. ......................................................................................18
`IV. Petitioners have not established that the challenged claims are unpatentable
`under any of the proposed grounds................................................................18
`A. Grounds 1–8—Petitioners fail to establish that Thomson is prior art. ...
` .............................................................................................................18
`Ground 3—Petitioners fail to establish that claims 23 and 27 are
`unpatentable over Thomson and Ellsworth. ........................................23
`1.
`Applicable law. .........................................................................24
`2.
`The asserted prior art describes a modified plug-and-perf
`completion and a water shut-off completion, not open hole
`multistage fluid treatment. ........................................................25
`a)
`Thomson is directed to a variation of a plug-and-perf
`completion. .....................................................................26
`Ellsworth is directed to a conventional water shut-off
`completion. .....................................................................27
`A person of ordinary skill in the art would not have expected a
`combination of Thomson and Ellsworth to yield predictable
`results. .......................................................................................27
`
`b)
`
`3.
`
`
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`Combining Thomson and Ellsworth would alter the “basic
`principles” of their operation. ...................................................31
`Ground 1—Petitioners fail to establish that claims 1–7, 11, 14–22, and
`24–26 are unpatentable over Thomson. ..............................................32
`1.
`Claim 1—Petitioners fail to disclose that Thomson discloses
`the claimed solid body packer...................................................33
`Claim 7—Petitioners fail to show that Thomson discloses the
`claimed compression ring. ........................................................37
`Claim 19—Petitioners fail to show that Thomson discloses
`every claim feature. ...................................................................40
`a)
`Petitioners fail to show that Thomson discloses the
`claimed solid body packer. .............................................40
`Petitioners fail to show that Thomson discloses the
`claimed hydraulically driven piston. ..............................40
`Claim 24—Petitioners fail to show that Thomson discloses
`every claim feature. ...................................................................42
`D. Ground 2—Petitioners fail to establish that claim 15 is unpatentable
`over Thomson and Hartley. .................................................................42
`Ground 4—Petitioners fail to establish that claim 11 is unpatentable
`over Thomson and Echols. ..................................................................42
`Ground 5—Petitioners fail to establish that claims 1–7, 11, 14–22, and
`24–26 are unpatentable over Thomson and Brown. ...........................45
`1.
`Claims 1–7, 11, 14–22, and 24–26—Petitioners fail to
`articulate how the combination of Thomson and Brown
`discloses or suggests every claim feature. ................................45
`Claims 1–7, 11, 14–22, and 24–26—Thomson teaches away
`from being combined with Brown. ...........................................47
`G. Ground 6—Petitioners fail to establish that claim 15 is unpatentable
`over Thomson, Brown, and Hartley ....................................................51
`
`2.
`
`3.
`
`4.
`
`2.
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`E.
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`F.
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`Case IPR2016-00596
`Patent 7,134,505
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`4.
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`C.
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`b)
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`Case IPR2016-00596
`Patent 7,134,505
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`H. Ground 7—Petitioners fail to establish that claims 23 and 27 are
`unpatentable over Thomson, Ellsworth, and Brown. ..........................51
`Ground 8—Petitioners fail to establish that claim 11 is unpatentable
`over Thomson, Brown, and Echols. ....................................................52
`Conclusion. ....................................................................................................53
`
`I.
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`
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`V.
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`
`Table of Authorities
`
`Case IPR2016-00596
`Patent 7,134,505
`
`Cases:
`
`A.C. Dispensing Equip. Inc. v. Prince Castle LLC,
`IPR2014-00511, Paper 16 (Sept. 10, 2014) ............................................................. 20
`
`Blue Calypso, LLC, v. Groupon, Inc.,
`815 F.3d 1331 (Fed. Cir. 2016)................................................................................ 22
`
`Bungie, Inc. v. Worlds Inc.,
`IPR2015-01321, Paper 13 (Nov. 30, 2015) ............................................................. 21
`
`Cisco Sys., Inc. v. Constellation Techs. L.L.C.,
`IPR2014-01085, Paper 11 (Jan. 9, 2015) ................................................................. 19
`
`Creston Electronics, Inc. v. Intuitive Building Controls, Inc.,
`IPR2015-01379, Paper 16 (Dec. 15, 2015) .............................................................. 21
`
`DeSilva v. DiLeonardi,
`181 F.3d 865 (7th Cir. 1999) ................................................................................... 20
`
`DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc.,
`567 F.3d 1314 (Fed. Cir. 2009).......................................................................... 25, 28
`
`GP Strategies Corp. v. Chart Inc.,
`IPR2015-00558, Paper 8 (July 31, 2015) ................................................................ 22
`
`In re Hall,
`781 F. 2d 897 (Fed. Cir. 1986)................................................................................. 19
`
`In re Klopfenstein,
`380 F.3d 1345 (Fed. Cir. 2004)................................................................................ 22
`
`In re Lister,
`583 F.3d 1307 (Fed. Cir. 2009)................................................................................ 22
`
`In re Ratti,
`270 F.2d 810 (1959) ................................................................................................. 25
`
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`Case IPR2016-00596
`Patent 7,134,505
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`
`
`Kyocera Wireless Corp. v. Int’l Trade Comm’n,
`545 F.3d 1340 (Fed. Cir. 2008)................................................................................ 19
`
`KSR Int’l Co. v. Teleflex, Inc.,
`550 U.S. 398 (2007) ........................................................................................... 24, 47
`
`Massachusetts Institute of Technology, v, AB Fortia,
`774 F.2d 1104 (Fed. Cir. 1985)................................................................................ 22
`
`Plas-Pak Indus., Inc. v. Sulzer Mixpac AG,
`600 F. App’x 755 (Fed. Cir. 2015) .................................................................... 25, 31
`
`SRI Int’l, Inc. v. Internet Sec. Sys., Inc.,
`511 F.3d 1186 (Fed. Cir. 2008)................................................................................ 19
`
`Symantec Corp. v. The Trustees of Columbia University in the City of New York,
`IPR2015-00370, Paper 13 (June 17, 2015) .............................................................. 19
`
`Wright Med. Tech., Inc. v. Biomedical Enters., Inc.,
`IPR2015-00786, Paper 7 (Aug. 10, 2015) ......................................................... 21, 23
`
`Statutes:
`35 U.S.C. 312(a)(3) ...................................................................................... 45, 51, 52
`
`Regulations:
`37 C.F.R. § 42.100(b) .................................................................................. 45, 51, 52
`
`Other Authority:
`MPEP 2143 .............................................................................................................. 25
`
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`Case IPR2016-00596
`Patent 7,134,505
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`Exhibit List
`Description
`A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and
`Economics, SPE 164009, Society of Petroleum Engineers
`(2013)
`Encyclopedia of Hydrocarbons, Chapter 3.1: Upstream
`technologies. Novel well and production architecture (ENI:
`Istituto Della Enciclopedia Italiana Fondata Da Giovanni
`Treccani S.p.A., 2007).
`D. Lohoefer, Comparative Study of Cemented versus
`Uncemented Multi-Stage Fractured Wells in the Barnett Shale,
`SPE 135386, Society of Petroleum Engineers (2010)
`R. Seale et al., Effective Stimulation of Horizontal Wells—A
`New Completion Method, SPE 106357, Society of Petroleum
`Engineers (2006)
`Canada’s Top Energy Innovators 2015: Exploration and
`Development, Alberta Oil Magazine (Mar. 2015)
`J. Bentein, Leading the Way: Multistage fracking pioneer
`Packers Plus plays major role in cracking the tight oil code,
`Canadian OilPatch Technology Guidebook, vol. 4 (2012)
`J. Pachner, Entrepreneur of the Year: National Winner,
`Financial Post Magazine (Dec. 2009)
`Innovation—Groundbreaking Innovation in Calgary, Calgary
`Herald (Feb. 12, 1014)
`J. Chury, The Oil Patch Report: Packers Plus Technology
`Becoming the Industry Standard, Resource World Magazine
`(Dec. 2010/Jan. 2011)
`P. Roche, Open-Hole or Cased and Cemented, New
`Technology Magazine (Nov. 2011)
`R. Ghiselin, Qittitut Consulting, Sleeves vs. Shots—The Debate
`Rages (Aug. 2011)
`Van Dyke, Kate, “Fundamentals of Petroleum,” Fourth Ed.,
`The University of Texas at Austin (1997)
`“Proven Performance: Read how Packers Plus systems and
`solutions have delivered results around the world,” Packers
`Plus Energy Services Inc., accessed May 24, 2016,
`http://packersplus.com/proven-performance/?type=case-
`
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`Exhibit
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`2012
`
`2013
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`
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`study&system=stackfrac-hd-system&pag=3%20#p3
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`I.
`
`Introduction.
`The Board should not institute trial in this inter partes review because
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`Case IPR2016-00596
`Patent 7,134,505
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`Petitioners have not met their burden of showing a reasonable likelihood of
`
`prevailing in proving the unpatentability of any of the challenged claims of U.S.
`
`Patent No. 7,134,505 (the ’505 patent).
`
`Each proposed ground of unpatentability is primarily based on Thomson.
`
`But Petitioners provide no evidence or explanation that Thomson was actually
`
`published. Instead, Petitioners solely rely on an unsupported, conclusory statement
`
`that Thomson was published in 1997.
`
`Even assuming that Thomson was published, Petitioners fail to show that the
`
`applied references render the challenged claims unpatentable. For example, claims
`
`23 and 27 are directed to a method of fluid treating an open hole section of a
`
`wellbore by forcing wellbore treatment fluid out through an opened port. A person
`
`of ordinary skill in the art (PHOSITA) would not have combined Thomson and
`
`Ellsworth (i.e., Grounds 3 and 7) to achieve the claimed fluid treatment method in
`
`an open hole wellbore section for two reasons. First, the results of this suggested
`
`combination would have been unpredictable, as neither Thomson nor Ellsworth
`
`discloses open hole multistage wellbore fluid treatment. Thomson is directed to a
`
`variation of conventional plug-and-perf cased hole fracturing, and Ellsworth is
`
`directed to water shut-off operations, not even wellbore fluid treatment. And
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`although Petitioners assert that combining Thomson and Ellsworth would have
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`Case IPR2016-00596
`Patent 7,134,505
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`been straightforward and predictable, Petitioners’ own expert previously stated
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`that, as of 2007, hydraulic fracturing—a wellbore fluid treatment—was not
`
`performed in horizontal open hole wellbores. Second, Thomson’s variation of
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`plug-and-perf fracturing operation is fundamentally based on using a cased
`
`wellbore and a perforating gun. Combining Thomson and Ellsworth would
`
`eliminate Thomson’s required wellbore and perforating gun, changing the basic
`
`principle of operation of plug-and-perf fracturing. Even today, open-hole
`
`multistage wellbore fluid treatment is seen as fundamentally different than plug-
`
`and-perf fracturing.
`
`Claims 1–7, 11, and 14–18 are directed to apparatuses for fluid treating a
`
`borehole that are similar to the apparatuses used in method claims 23 and 27, and
`
`claims 19–22 and 24–26 are directed to methods similar to those recited in claims
`
`23 and 27, without being limited an open hole application. Each of these claims
`
`recites a solid body packer. In the first set of proposed grounds of
`
`unpatentability—Grounds 1, 2, and 4—Petitioners assert that Thomson discloses
`
`the claimed packer features, but rely on impermissible speculation about the
`
`structure and operation of Thomson’s packers. There is no record evidence that
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`Thomson does indeed disclose the claimed solid body packer.
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`Appreciating these deficiencies of Thomson, Petitioners propose a second
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`Case IPR2016-00596
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`
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`set of unpatentability grounds for claims 1–7, 11, 14–22, and 24–26—Grounds 5,
`
`6, and 8—that rely on Brown for allegedly disclosing the claimed packer features.
`
`This second set of grounds is similarly deficient. Petitioners only address how
`
`Brown allegedly discloses the claimed packer features. Petitioners do not explain
`
`how the Thomson-Brown combination discloses each claim feature as required by
`
`both statute and rule. Petitioners also ignore known reasons, including Thomson’s
`
`express teaching away, not to combine Thomson with Brown.
`
`In sum, Petitioners have not shown a reasonable likelihood of prevailing in
`
`proving the unpatentability of any of claims 1–7, 11, and 14–27. The Board should
`
`therefore deny institution.
`
`II. Wellbore completion background.
`Before producing oil or gas from a well, a well must be drilled and then
`
`“completed.” The term “completion” refers to the work performed on a well after
`
`being drilled, but before the well actual produces oil or gas. (See Ex. 2012, Van
`
`Dyke, p. 147 (“After a well has been drilled and the company has determined that
`
`the reservoir will be economical to produce, the work of setting the final string of
`
`casing, preparing the well for production, and bringing in the oil or gas begins.”).
`
`Completion encompasses a wide variety of operations that can be performed on a
`
`well. For example, completions include (1) casing, liner, or tubing installation
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`operations; (2) well stimulation operations such as hydraulic fracturing and
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`acidizing; (3) water shutoff operations; and (4) oil or gas lift operations. (See, e.g.,
`
`Ex. 2012, Van Dyke, pp. 147-151 (casing, liner, or tubing installation operations),
`
`pp. 158–160 (oil or gas lift operations); Ex. 1008, (well stimulation operations).)
`
`For this inter partes review proceeding, two types of completions are particularly
`
`relevant: well stimulation operations and water shut-off operations. Petitioners
`
`assert that tools and techniques used for water shut-off operations are
`
`interchangeable with tools and techniques for stimulating a well. But this assertion
`
`fundamentally misunderstands the history and purposes of these two distinct
`
`completion types, as would have been understood by a PHOSITA.
`
`A. Water shut-off completions prevent unwanted fluids from
`entering a wellbore.
`
`Horizontal drilling allows operators to drill through narrow pay zones and
`
`significantly increase oil and gas production. One way to complete a horizontal
`
`wellbore is to perform an open hole completion. That is, casing may be cemented
`
`along the vertical wellbore section to protect wellbore integrity, but the horizontal
`
`wellbore portion is left without casing. In this open hole wellbore portion, the rock
`
`face is directly exposed to the wellbore, which allows oil and gas to seep into the
`
`wellbore and up to the surface, as illustrated below.
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`Another technique for completing a wellbore uses a (non-cemented)
`
`perforated liner or casing. This completion type is similar to an open hole
`
`completion, except that a length of liner or casing with holes is installed into the
`
`horizontal wellbore section. Similar to an open hole completion, the entire rock
`
`face of the horizontal wellbore section is directly exposed to the wellbore, but the
`
`liner or casing protects against collapse of the wellbore. This type of completion is
`
`illustrated below.
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`Although an open hole completion (see Figure on p. 5) or a non-cemented
`
`cased hole (see Figure immediately above) can be effective for many types of
`
`wells, these completions cause problems if a portion of the wellbore passes through
`
`an undesirable formation. For example, if the wellbore extends into a brine-
`
`producing formation, brine water can seep into the wellbore and pollute the oil or
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`gas flowing to the surface. The solution to this problem is a water shut-off
`
`completion. To perform water shut-off, a perforated tubing string with packers is
`
`installed to isolate the brine-producing formation from the oil-and-gas-producing
`
`formation. With this isolation, only oil and gas enters the wellbore. The annotated
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`diagram below illustrates water shut off—the oil or gas (red) enters the perforated
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`Case IPR2016-00596
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`tubing string in the wellbore, but due to the packers, water (blue) is isolated and is
`
`shut off) from entering the wellbore.
`
`
`
`B. Well stimulation is very different than water shut-off.
`Compared to water shut-off completion, wellbore fluid treatment is more
`
`complicated. There are two types of wellbore fluid treatments: (1) hydraulic
`
`fracturing and (2) acidizing. (Ex. 1008, pp. 162–64.) In hydraulic fracturing, fluid
`
`is pumped down a wellbore at a high enough pressure to actually fracture the
`
`formation and open up channels for fluid to enter the rock. (Ex. 1008, p. 162
`
`(discussing hydraulic fracturing).) In acidizing, acid is pumped down a wellbore so
`
`that the acid interacts with a formation to fracture the formation and open up
`
`channels for fluid to enter the rock. (Id., p. 164.)
`
`A typical wellbore fluid treatment may call for multiple treatments. Each
`
`treatment can significantly increase the amount of oil and gas that enters the
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`wellbore. To perform multiple fluid treatments in a single wellbore, portions of the
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`wellbore must be isolated into different “zones” or “stages” that can be fractured
`
`separately. At the time of the invention, the leading technique for accomplishing
`
`this sort of “multistage” fluid treatment was a completion operation called “plug-
`
`and-perf.”
`
`To perform a plug-and-perf completion, casing is first cemented in place
`
`throughout the horizontal wellbore portion. (See, e.g., Ex. 2003, D. Lohoefer,
`
`Comparative Study of Cemented versus Uncemented Multi-Stage Fractured Wells
`
`in the Barnett Shale, SPE 135386, Society of Petroleum Engineers, p. 2 (2010)
`
`(describing plug-and-perf completions (i.e., “Cemented liner, multistage fracturing
`
`method”)). A perforating gun is then placed at a desired location in the cased
`
`wellbore to create a small perforation in the cement and casing so that fluid in the
`
`wellbore can access the formation adjacent the perforations. Fluid is then pumped
`
`into the wellbore. Because the only exit points for this fluid are the perforations
`
`through the casing, fractures form beginning at the perforations. In this way, the
`
`precise placement of fractures can be controlled. (See Ex. 2001, A. Casero, Open
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`Hole Multi-Stage Completion System in Unconventional Plays: Efficiency,
`
`Effectiveness and Economics, SPE 164009, at 5 (2013) (identifying “[c]ontrol
`
`location of Fracture Initiation” as one advantage of plug-and-perf completion).)
`
`Next, the operator installs a “frac plug” to seal off the downhole fractured portion
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`of the cased wellbore. The operator then repeats the perforating and pumping steps
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`Case IPR2016-00596
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`uphole from the frac plug to create a second set of fractures uphole from the frac
`
`plug. This process can be repeated multiple times. (See id.) Once the plug-and-perf
`
`operation is completed, the frac plugs are drilled out to allow production from all
`
`fractured zones through the tubing string. (See id.)
`
`Cementing thousands of feet of casing into the horizontal wellbore section is
`
`no small feat. As noted by Petitioners, “any time a formation is stable enough to
`
`complete a well without casing, there is an inherent motivation for a POSITA to
`
`not case the well.” (Petition, p. 48.) But while cemented casing is not necessary for
`
`all wells (e.g., open hole, slotted liner, and water shut-off wells), cemented casing
`
`was believed to be a critical component for multistage fluid treatment completions
`
`at the time of the invention. Indeed, as late as 2007, the Encyclopedia of
`
`Hydrocarbons declared that “whenever completion operations require hydraulic
`
`fracturing, the horizontal holes are in fact cased, cemented, and perforated to
`
`facilitate effective fracturing.” (Ex. 2002, Encyclopedia of Hydrocarbons, Chapter
`
`3.1: Upstream technologies. Novel well and production architecture, at 190 (ENI:
`
`Istituto Della Enciclopedia Italiana Fondata Da Giovanni Treccani S.p.A., 2007).)
`
`Wellbores are cased during wellbore fluid treatments because the cemented casing
`
`ensures that fracturing fluid only contacts the formation through the narrow
`
`perforations in the casing, and thus fractures only initiate from those pre-selected
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`locations. (See A. Casero, SPE 164009 at 5 (listing fracture initiation as an
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`Case IPR2016-00596
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`advantage of plug-and-perf completions and stating that “[s]ome of the features of
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`the OHMS approach are often depicted as disadvantages, such as the inferred
`
`inability to control the initiation point of the fractures.”).)
`
`C. The ’505 patent technology is a nonobvious multistage fluid
`treatment approach that is an alternative to cased hole plug-and-
`perf fracturing.
`
`To selectively control fluid treatment along the wellbore, segments of the
`
`wellbore can be isolated with packers and individually treated. (’505 patent, 1:40–
`
`43; 6:17–32.) The ’505 patent discloses one such fluid treatment method that uses
`
`a tubing string 14 having a plurality of ports 17. (Id. at 6:8–16.) Tubing string 14
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`can also include a plurality of packers 20 that seal the annulus between tubing
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`string 14 and the wellbore wall, and divide the wellbore into isolated segments
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`wherein fluid can be applied to one segment of the well. (Id. at 6:17–32.) Packers
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`20 can be solid body packers. (Id. at 6:33–34.) Tubing string 14 can further include
`
`a plurality of sliding sleeves 22 that control the opening of ports 17. (Id. at 6:41–
`
`53.) And the inventors of the ’505 patent recognized that, in open hole
`
`applications, a tubing string using solid body packers are particularly useful. (Id. at
`
`6:35–40.)
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`The owner of the ’505 patent, Packers Plus,1 first commercialized this
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`Case IPR2016-00596
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`
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`technology under the name StackFRAC and has used it to fracture wells
`
`throughout the world. (Ex. 2013, “Proven Performance: Read how Packers Plus
`
`systems and solutions have delivered results around the world,” Packers Plus
`
`Energy Services Inc., accessed May 24, 2016, http://packersplus.com/proven-
`
`performance/?type=case-study&system=stackfrac-hd-system&pag=3%20#p3.)
`
`One stage of Packer Plus’s StackFRAC system is shown below.
`
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`
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`1 Respondent, Rapid Completions LLC, is the exclusive licensee and the entity in
`
`charge of enforcing the patents.
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`The Packer Plus’s StackFRAC system is an open hole multistage fracturing system
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`Case IPR2016-00596
`Patent 7,134,505
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`that includes a tubing string, a plurality of sliding sleeve subassemblies each
`
`having a port, and a plurality of solid body packers.
`
`The ’505 patent technology is very different from plug-and-perf fracturing
`
`that uses a perforated and cemented casing. (See, e.g., A. Casero, SPE 164009 at 1
`
`(“This efficiency has been accomplished by using two very distinct completion
`
`approaches: the Plug and Perf. method and the Open Hole Multi Stage (OHMS)
`
`completion system (typically ball activated fracturing ports).”) (emphasis added).)
`
`Instead of generating fractures through narrow perforations in a cemented casing,
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`the ’505 patent technology exposes an entire zone of the wellbore to the treatment
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`fluid. Specifically, treatment fluid pumped out of a tubing string port fills the entire
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`annular space of open hole wellbore section defined by the packers, the tubing
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`string, and the wellbore wall. As shown in the annotated image below, fluid
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`pumped into an annular segment does not necessarily create a fracture directly
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`adjacent the port through which the fluid enters the annular segment. Instead, the
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`fracture tends to form at the natural weak point in the wellbore wall, which may or
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`may not be adjacent the port.
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`Allowing fractures to form anywhere within an annular segment is heresy to
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`a plug-and-perf traditionalist. For example, some argue that open hole multistage
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`fracturing creates fractures at random locations. (See A. Casero, SPE 164009 at 5
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`(listing fracture initiation as an advantage of plug-and-perf completions and
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`stating, “Some of the features of the OHMS approach are often depicted as
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`disadvantages, such as the inferred inability to control the initiation point of the
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`fractures . . . .”).) As a result, the supposed disadvantage is that fractures can
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`propagate between adjacent zones as shown below.
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`Despite facing this initial industry skepticism, the ’505 patent technology
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`has gained acceptance and widespread acclaim. In fact, a number of studies have
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`shown that, in some of the most important formations in the United States and
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`Canada, the ’505 patent technology actually creates more effective, better
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`producing fractures. (Ex. 2004, Seale, p. 3 (“Although the time and cost savings
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`were significant, the true reward was the greater than five fold average production
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`increase [relative to a cemented plug-and-perf completion] that was realized by
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`using the [open hole multistage fracturing] system.”); Lohoefer, p. 3–4 (finding
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`that open hole multistage fracturing completions outperformed cemented plug-and-
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`perf completions).)
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`D. The ’505 patent technology has been praised as “revolutionary”
`and “game-changing.”
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`The Patent Owner’s StackFRAC system, which the ’505 patent covers, has
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`been used to fracture thousands of wells throughout the world. And this technology
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`has raised the industry’s praise and recognition:
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`•
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`In 2009, Ernst & Young awarded Packers Plus and Dan Themig its
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`entrepreneur of the year award and highlighted Packers Plus’s StackFRAC
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`system. (Ex. 2007, J. Pachner, Entrepreneur of the Year: National Winner,
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`Financial Post Magazine, at 42 (Dec. 2009) (noting that “[w]ith Packers
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`Plus technology, the Bakken oilfield went from producing 100 barrels of oil
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`a day in 2006 to 60,000 now”).)
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`•
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`In 2010, the Oil Patch Report stated that “Packers Plus technology [is]
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`becoming the industry standard.” (Ex. 2009, J. Chury, The Oil Patch Report:
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`Packers Plus Technology Becoming the Industry Standard, Resource World
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`Magazine, at 74 (Dec. 2010/Jan. 2011) (“After 10 years of marketing their
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`innovative StackFRAC system, Packers Plus has become the darling of the
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`oil and gas sector, not just in North America, but worldwide.”) (emphasis
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`added).)
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`•
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`In 2011 NewTech Magazine reported that the “open-hole ball drop system is
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`typically associated with Calgary-based Packers Plus Energy Services Inc.”
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`(Emphasis added.) (Ex. 2010, P. Roche, Open-Hole or Cased and Cemented,
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`New Technology Magazine (Nov. 2011).)
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`•
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`In 2011, Qittitut Consulting released an extensive study of the “two most
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`popular multistage completion methods” in the United States: traditional
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`cased hole plug-and-perf fracturing systems, and open hole multistage
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`fracturing systems. (Ex. 2011, R. Ghiselin, Qittitut Consulting, Sleeves vs.
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`Shots—The Debate Rages (Aug. 2011).)
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`•
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`In 2012, Canadian OilPatch Technology Guidebook profiled Packers Plus
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`and its StackFRAC technology, labeling Packers Plus a “[m]ultistage
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`fracking pioneer” and stating: “When the history of all the business success
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`stories emerging from the development of the tight oil and gas reservoirs in
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`western Canada and the western United States is chronicled, the story of a
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`12-year-old Calgary-based company that specializes in an area of oilfield
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`technology unheard of until the last few years might be the most
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`remarkable.” (Ex. 2006, J. Bentein, Leading the Way: Multistage fracking
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`pioneer Packers Plus plays major role in cracking the tight oil code,
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`Canadian OilPatch Technology Guidebook, at 39, vol. 4 (2012) (emphasis
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`added).) This article explained that the “StackFRAC technology . . .
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`revolutionized the completions sector by introducing multistage fracturing
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`systems in horizontal wells, [and is] credited with unlocking the potential of
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`tight and shale oil and natural gas.” (Id. (emphasis added).)
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`•
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`In 2014, the Calgary Herald reported: “Perhaps one of the greatest
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`demonstrations of game-changing innovation developed in Calgary is that
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`of Packers Plus. Creators of the StackFRAC system, the first ball drop
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`system used to complete horizontal wells in multiple stages, the company
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`has truly revolutionized the oil and gas industry.” (Emphasis added.) (Ex.
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`2008, Innovation—Groundbreaking Innovation in Calgary, Calgary Herald
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`(Feb. 12, 1014).)
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`•
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`In 2015, Alberta Oil Magazine explained: “StackFRAC, the company’s
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`prize product and primary innovation, is an open hole ball drop completion
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`system that’s widely credited with unlocking old resource plays that were
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`thought to be too expensive or too technically challenging to tap.”
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`(Emphasis added.) (Ex. 2005, Canada’s Top Energy Innovators 2015:
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`Exploration and Development, Alberta Oil Magazine (Mar. 2015) (emphasis
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`added).)
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`In sum, by providing an effective technique for open hole multistage
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`wellbore fluid treatment by pumping fluid into an open hole wellbore section
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`instead of through cemented perforations, the inventors made a significant and
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`lasting contribution to the industry. While this technology has not displaced plug-
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`and-perf fracturing, open hole multistage wellbore fluid treatment is recognized as
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`Case IPR2016-00596
`Patent 7,134,505
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`an important alternative.
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`III. Claim constructions.
`Petit