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 IPR2016-00598
`Patent 7,861,774
`___________________
`
`
`
`EXCLUSIVE LICENSEE RAPID COMPLETIONS LLC’S
`SURREPLY1
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`1 On March 31, 2017, Respondent requested authorization to file a motion to
`strike Petitioners’ reply and new supporting evidence or in the alternative submit a
`surreply and supplemental expert declaration. On April 6, 2017, the Board denied
`Respondent’s request to file a motion and authorized a 5 page surreply responsive
`to sections II and III of the reply that is not accompanied by an expert declaration.
`
`
`
`
`___________________
`
`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 IPR2016-00598
`Patent 7,861,774
`___________________
`
`
`
`EXCLUSIVE LICENSEE RAPID COMPLETIONS LLC’S
`SURREPLY1
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`1 On March 31, 2017, Respondent requested authorization to file a motion to
`strike Petitioners’ reply and new supporting evidence or in the alternative submit a
`surreply and supplemental expert declaration. On April 6, 2017, the Board denied
`Respondent’s request to file a motion and authorized a 5 page surreply responsive
`to sections II and III of the reply that is not accompanied by an expert declaration.
`
`
`
`
`
`Exhibit
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`2006
`
`2007
`2008
`
`2009
`
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`2015
`2016
`2017
`
`Exhibit List
`Description
`A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and
`Economics, SPE 164009 (2013)
`Encyclopedia of Hydrocarbons, Chapter 3.1: Upstream
`technologies
`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)
`Exploration and Development, Alberta Oil Magazine
`Leading the Way: Multistage fracking pioneer Packers Plus
`plays major role in cracking the tight oil code, Canadian
`OilPatch Technology Guidebook (2012)
`Financial Post, “Entrepreneur of the Year: National Winner”
`Innovation—Groundbreaking Innovation in Calgary, Calgary
`Herald (Feb. 12, 1014)
`J. Chury, Packers Plus Technology Becoming the Industry
`Standard, The Oil Patch Report (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.
`(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-
`study&system=stackfrac-hd-system&pag=3%20#p3
`reserved
`reserved
`Ali Daneshy Deposition Transcript (11/9/2016)
`Packers Plus advertising brochure (2010)
`
`
`
`
`
`
`ii
`
`
`
`
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`
`2023
`
`2024
`
`2025
`
`2026
`2027
`2028
`2029
`
`2030
`
`2031
`
`2032
`
`2033
`2034
`2035
`2036
`2037
`2038
`
`Baker Hughes, “FracPoint Completion System Isolated
`Openhole Horizontal Well in Lower Huron Shale” (2011)
`Baker Hughes, “Enhancing Well Performance Through
`Innovative Completion Technologies,” presentation, (Sept.
`10-12, 2012)
`Canadian Society for Unconventional Resources, Press
`Release, “Unconventional Industry Awards Innovative
`Thinking” (Oct. 3, 2012)
`BH00364675, CONFIDENTIAL Ball activated sliding
`sleeves report
`Rigzone, Schlumberger Acquires Stake in Packers Plus (Nov.
`22, 2005)
`Britt, L. and Smith, M., Horizontal Well Completion,
`Stimulation Optimization, and Risk Mitigation, SPE 125526
`(2009)
`BH00363808, CONFIDENTIAL Baker Hughes Engineering
`Materials
`RC_PAC00019434, CONFIDENTIAL Packers Plus
`Engineering Drawing
`Baker Hughes 2008 10-K Shareholder Report
`Baker Hughes 2010 10-K Shareholder Report
`Baker Hughes 2013 10-K Shareholder Report
`Packers Plus case study, StackFRAC system provides
`superior production economics
`Packers Plus Case Study, StackFRAC HD system enables
`high stimulation rates
`Packers Plus StackFRAC Video,
`http://packersplus.com/solution/stackfrac-hd-system/
`Baker Hughes FracPoint Video,
`https://www.youtube.com/watch?v=s5ZQCRRZzXE
`Business News Network Packers Plus Feature
`UN-REDACTED H. McGowen Declaration
`UN-REDACTED J. J. Girardi Declaration
`REDACTED H. McGowen Declaration
`REDACTED J. J. Girardi Declaration
`Ingersoll, C, “BP and the Deepwater Horizon Disaster of
`2010” (Apr. 3, 2012)
`
`
`
`
`
`
`iii
`
`
`
`
`
`2039
`
`2040
`
`2041
`
`2042
`
`2043
`
`2044
`
`2045
`2046
`2047
`
`2048
`
`2049
`
`2050
`
`2051
`2052
`
`2053
`2054
`
`Crosby, D.G., “Methodology to Predict the Initiation of
`Multiple Transverse Fractures from Horizontal Wellbores”
`(2001)
`Kaiser, P., “Hydraulic Fracturing Mine Back Trials – Design
`Rationale and Project Status” (2013)
`Stoltz, L.R., “Probabilistic Reserves Assessment Using A
`Filtered Monte Carlo Method In a Fractured Limestone
`Reservoir” SPE 39714 (1998)
`Emanuele, M. A., “A Case History: Completion and
`Stimulation of Horizontal Wells with Multiple Transverse
`Hydraulic Fractures in the Lost Hills Diatomite” SPE 39941
`(1998)
`Gaynor, Tom M., “Tortuosity Versus Micro-Tortuosity –
`Why Little Things Mean a Lot” SPE/IADC 67818 (2001)
`Cramer, David, “Stimulating Unconventional Reservoirs:
`Lessons Learned, Successful Practices, Areas for
`Improvement” SPE 114172 (2008)
`M. Delaney Declaration
`Tess MacLeod Declaration (served but not filed)
`Ahmadzamri, A.F., “Development and Testing of Advanced
`Wireline Conveyance Technology for Rugose Open Hole
`Conditions” IPTC 17442 (2014) (served but not filed)
`Calixto, Eduardo, “Gas and Oil Reliability Engineering,
`Modeling and Analysis” 2nd Edition (2016) (served but not
`filed)
`Cramer, D.D., “The Application of Limited-Entry Techniques
`in Massive Hydraulic Fracturing Treatments” SPE 16189
`(1987) (served but not filed)
`Lloyd, B., “Rotary steerable drilling improves deployment of
`advanced completion” World Oil, January 2011 (served but
`not filed)
`McGowen Access Database (served but not filed)
`Scott Sanchez Deposition Transcript Excerpts (7/29/16)
`(served but not filed)
`Ali Daneshy Deposition Transcript (3/29/2017)
`Damgaard, A.P., “A Unique Method for Perforating,
`Fracturing, and Completing Horizontal Wells” SPE 19282
`(1992)
`
`
`
`
`
`
`iv
`
`
`
`
`
`2055
`
`2056
`
`Abass, Hazim, “A Case History of Completing and Fracture
`Stimulating a Horizontal Well” SPE 29443 (1995)
`M. Delaney Declaration
`
`
`
`
` v
`
`
`
`
`
`In their Petition, Petitioners argued that a POSITA would be motivated to
`
`remove the cemented casing from Thomson to minimize costs. Pet. at 26-27. In
`
`response, Rapid Completions explained that Petitioners cannot meet their burden
`
`of demonstrating obviousness merely by noting that a component of a system is
`
`expensive. Resp. at 53-57. After all, a POSITA reviewing Thomson in 2001
`
`would recognize that the casing, MSAF tools, packers, fracturing fluid, and the
`
`well itself are all expensive components of the system. Even so, a POSITA would
`
`not attempt hydraulic fracturing without fluid or producing oil without first drilling
`
`a well. The burden is on Petitioners to demonstrate a teaching in the prior art that
`
`supports removing a component. Petitioners have not done so, and in fact, a
`
`POSITA would not have removed the casing from Thomson, because this
`
`component was perceived as an important part of the system. It allowed the
`
`operator to precisely control the location of fractures to avoid perceived problems
`
`such as fractures migrating into adjacent zones and improper fracture spacing.
`
`In their reply, Petitioners urge the Board to “ignore” these problems, but
`
`their arguments are exceedingly weak. Reply at 10-11. According to Petitioners,
`
`Respondent’s expert failed to specify the time frame of his analysis. Not true; he
`
`conducted his analysis from the perspective of a POSITA in 2001. Ex. 2034 at 20-
`
`25. Petitioners also argue that their expert never admitted that the production loss
`
`from improper fracture spacing could be “significant.” Reply at 10-11. That is
`
`
`
`
` 1
`
`
`
`
`
`technically true, but a straw man—he conceded the loss could be “a large number.”
`
`Ex. 2016 at 30:17-31:3. Overall, the evidence shows that a POSITA would have
`
`had serious concerns about removing Thomson’s casing, and Petitioners fail to
`
`identify any arguments or evidence in the Petition that address this issue.
`
`Desperate to make up for the serious defect in their Petition, Petitioners now
`
`offer new theories based on new alleged prior art. According to Petitioners, the
`
`non-asserted Ellis reference encourages a POSITA to remove the casing from a
`
`multi-stage fracturing system to avoid problems like screen-out.2 Reply at 11.
`
`This is a highly misleading explanation of the reference,3 which Petitioners likely
`
`only argued in reply because of the limited opportunities for patent owner rebuttal.
`
`Ellis does describe screenout problems when attempting multi-stage
`
`fracturing in cased wells. Ex. 1023 at 5. However, Ellis does not simply
`
`recommend removing the casing from those systems. Rather, it recommends
`
`eliminating the use of multiple stages. Id. Because Ellis abandoned multi-stage
`
`fracturing, there was no need to cement and case the wells. Cf. id. at 3 (explaining
`
`
`2 Even Dr. Daneshy acknowledged that there were no arguments or evidence
`submitted with the Petition to support this theory. Ex. 2053 at 62:4-7, 60:11-61:10.
`
`3 Petitioners cite Dr. Daneshy’s second declaration para. 44 as stating that
`Ellis teaches multiple fractures in an open hole system. Reply at 7. That
`paragraph says no such thing, and Dr. Daneshy confirmed this in his deposition.
`Ex. 2053, (“Q. Ellis is saying that he developed a new system that just does single-
`stage fracturing instead of multi-stage fracturing. Is that fair? MR. GARRETT:
`Same objection. A. Yes.”).
`
`
`
`
` 2
`
`
`
`
`
`that the Red Oak well was initially an unstimulated open hole well, but it was later
`
`cemented and cased to perform multistage fracturing). Thus, Ellis contradicts
`
`Petitioners’ assertion that casing was only used to preserve wellbore stability.
`
`According to Ellis, it was thought necessary for multi-stage fracturing. Id. (“Thus,
`
`the contingency plan to set and cement a liner to pump multiple transverse
`
`fractures was implemented.”).
`
`Ellis notes that the goal of a conventional multi-stage fracturing job is to
`
`induce multiple “transverse” fractures by pumping through perforations in the
`
`casing. Id. at 2-3. These fractures form at each perforation and grow
`
`perpendicular to the wellbore. In contrast to this approach, Ellis recommends
`
`pumping a single stage open hole treatment. Id. at 7. To make up for the fact that
`
`this open hole job would not be segmented into separate stages, Ellis recommends
`
`drilling the wellbore in a direction that
`
`is aligned with the stress in the
`
`formation. Id. at 4. This ensures that
`
`when fluid is pumped into the well, it
`
`will create a longitudinal fracture, i.e. a
`
`fracture parallel with the wellbore as depicted in Ellis figure 2 reproduced here.
`
`Writing in 2000, Ellis demonstrates familiarity with the same fracturing
`
`approaches described in the Response—single stage open hole fracturing (e.g.,
`
`
`
`
` 3
`
`
`
`
`
`bullheading) and multi-stage cased hole fracturing (e.g., plug and perf, Thomson).
`
`Ellis takes it for granted that his audience would not consider open hole multi-stage
`
`fracturing as a viable option. Thus, Ellis confirms that the conventional wisdom
`
`taught against this technique, not in favor of it as Petitioners contend.
`
`Moreover, Ellis’s description of the screenout problem is entirely consistent
`
`with Mr. McGowen’s testimony regarding a POSITA’s views in 2001. Mr.
`
`McGowen explained that a POSITA in 2001 would have believed that initiating
`
`multiple fractures too close together would influence the stress field in the
`
`formation and create complex fracture geometries known as “near wellbore
`
`tortuosity.” Resp. at 17. This tortuosity was believed to result in reduced
`
`production and screenouts. Ex. 2034 at 25; Ex. 2039 at 2. To avoid these
`
`problems in multi-stage fracturing jobs a POSITA would space the perforations far
`
`enough apart to avoid fracture complexity (“reduced density perforations”). Ex.
`
`2034 at 25; Ex. 2039 at 2; Ex. 2053 at 89:11-22. Thus, Mr. McGowen explained
`
`that a POSITA would not attempt open hole multistage because the lack of casing
`
`prevents a POSITA from controlling the fracture initiation points.
`
`Ellis also explains that screenouts are caused by “tortuosity” and “multiple
`
`competing fractures.” Ex. 1023 at 2. It notes that a screenout was experienced in a
`
`well where “high shot density” perforating guns were used. Id. at 4. Ellis avoided
`
`screenout in subsequent wells by avoiding multiple fractures altogether and opting
`
`
`
`
` 4
`
`
`
`
`
`to create a longitudinal fracture. Id. at 4. Again, Ellis confirms that the
`
`conventional wisdom taught against open hole multi-stage fracturing.
`
`Finally, Petitioners also argue that Mr. McGowen “conceded” that open hole
`
`multistage fracturing had been conducted before the patented invention, but Mr.
`
`McGowen merely testified that he was aware of the Yost reference asserted by
`
`Weatherford (Yost has not been submitted in this proceeding). Ex. 1021 at 96:3-
`
`16. His awareness of that reference does not indicate that a POSITA would rely on
`
`it, nor is it an excuse for Petitioners to assert new theories. That is precisely what
`
`Petitioners have attempted to do; they use Mr. McGowen’s testimony as an excuse
`
`to mention another new alleged prior art reference, Coon. But even if the Board
`
`were to consider this new reference, it reinforces Respondent’s position. Ex. 1019
`
`at 14 (explaining that “[t]he next evolutionary step of the ECP and sliding sleeve
`
`completion is the addition of a cased and cemented hole”). Ex. 1019 at 14.
`
`Authors addressing some of the same systems described in Coon also confirm that
`
`cemented casing was perceived as necessary for multi-stage fracturing. Ex. 2054
`
`at 1 (“Successful liner installation and cementation is considered a prerequisite to
`
`ensure adequate zonal isolation for multiple fracture treatments in horizontal
`
`wells.”); Ex. 2055 at 9 (“Casing and cementing a horizontal well is essential to
`
`provide zone selectivity and isolation during fracture stimulation.”).
`
`
`
`
` 5
`
`
`
`
`
`
`
`Dated: April 17, 2017
`
`
`
`
`
`
` Respectfully submitted,
`
`Rapid Completions LLC
`
`
`By /Justin T. Nemunaitis/
`Hamad M. Hamad, Reg. No. 64,641
`Bradley W. Caldwell (pro hac vice)
`Justin T. Nemunaitis (pro hac vice)
`CALDWELL CASSADY CURRY, P.C.
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas 75201
`Telephone: 214.888.4848
`Facsimile: 214.888.4849
`hhamad@caldwellcc.com
`bcaldwell@caldwellcc.com
`jnemunaitis@caldwellcc.com
`rapid@caldwellcc.com
`
`Dr. Gregory Gonsalves, Reg. No. 43,639
`GONSALVES LAW FIRM
`2216 Beacon Lane
`Falls Church, Virginia 22043
`Telephone: 571.419.7252
`gonsalves@gonsalveslawfirm.com
`
`
`
`
`
`
`
`
`
`
`
`
`
`CERTIFICATION OF SERVICE
`
`
`
` The undersigned hereby certifies that the foregoing document was
`
`served electronically via e-mail in its entirety on the following counsel of record
`
`for Petitioner:
`
`Mark T. Garrett (Lead Counsel)
`Eagle H. Robinson (Back-up Counsel)
`NORTON ROSE FULBRIGHT US LLP
`mark.garrett@nortonrosefulbright.com
`eagle.robinson@nortonrosefulbright.com
`
`
`
`
`
`
`
`
`
`
` /Hamad M. Hamad/
`
`Hamad M. Hamad, Reg. No. 64,641
`
`
`
`
`
`
`
`Date: April 17, 2017
`
`
`
`
`
`
`
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
