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`·1· ·UNITED STATES PATENT AND TRADEMARK OFFICE
`· · ·BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`·3· · · · WEATHERFORD INTERNATIONAL, LLC,
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`·4· · · · · · WEATHERFORD/LAMB, INC.,
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`·5· · · ·WEATHERFORD US, LP and WEATHERFORD
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`·6· · · · · ARTIFICIAL LIFT SYSTEMS, LLC
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`·7· · · · · · · · · Petitioners
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`·9· · · · · · · · · · · ·v.
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`11· · · PACKERS PLUS ENERGY SERVICES, INC.,
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`12· · · · · · · · · Patent Owner
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`13
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`14
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`15· · · · · · · ·Case IPR2016-01517
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`16· · · · · · · · Patent 7,134,505
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`17· · · · · · · ·Case IPR2016-01509
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`18· · · · · · · · Patent 7,861,774
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`19· · · · · · · ·Case IPR2016-01514
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`20· · · · · · · · Patent 7,543,634
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`·1· · · · · · · ·ORAL VIDEOTAPED DEPOSITION OF
`·2· · · · · · · · · · · · ·VIKRAM RAO
`·3· · · · · · · · · · · ·April 27, 2017
`·4
`·5· · · · ORAL VIDEOTAPED DEPOSITION OF VIKRAM RAO,
`·6· ·produced as a witness at the instance of the
`·7· ·Respondent and duly sworn, was taken in the
`·8· ·above-styled and numbered cause on the 27th day of
`·9· ·April, 2017, from 9:38 a.m. to 12:50 p.m., before
`10
`11· ·Laurie Carlisle, Certified Shorthand Reporter in and
`12
`13· ·for the State of Texas, reported by computerized
`14
`15· ·machine shorthand at the offices of Heim Payne &
`16
`17· ·Chorush LLP, 1111 Bagby, Suite 2100, Houston, Texas,
`18
`19· ·pursuant to the Federal Rules of Civil Procedure and
`20
`21· ·the provisions stated on the record or attached
`22
`23· ·hereto.
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`·1· · · · · · · · · · · · APPEARANCES
`·2
`·3· ·FOR PETITIONER:
`·4
`·5· · · · MR. JASON M. SHAPIRO
`· · · · · Edell, Shapiro & Finnan, LLC
`·6· · · · 9801 Washingtonian Boulevard, Suite 750
`· · · · · Gaithersburg, Maryland· 20878
`·7· · · · Telephone: 301.424.3640
`· · · · · E-mail: js@usiplaw.com
`·8
`·9· · · · MR. DOUGLAS WILSON
`· · · · · Heim Payne & Chorush LLP
`10· · · · 9442 Capital of Texas Highway North
`· · · · · Plaza One, Suite 500-146
`11· · · · Austin, Texas· 78759
`· · · · · Telephone: 512.343.3622
`12· · · · E-mail: dwilson@hpcllp.com
`13
`14· ·FOR RAPID COMPLETIONS:
`15
`· · · · · MR. HAMAD HAMAD
`16· · · · Caldwell Cassady Curry
`· · · · · 2101 Cedar Springs Road, Suite 1000
`17· · · · Dallas, Texas· ·75201
`· · · · · Telephone: 214.888.4853
`18· · · · E-mail: hhamad@caldwellcc.com
`19
`20· ·ALSO PRESENT:
`21· · · · Mr. David Morris
`22· · · · Mr. Ryan Ligon, Videographer
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`·1
`·2· · · · · · · · · · · · · ·INDEX
`·3
`·4· ·VIKRAM RAO
`·5· ·Examination by Mr. Hamad ..........................5
`·6
`·7
`·8
`·9
`10· · · · · · · · · · · · · EXHIBITS
`11
`12· ·Exhibit 1· · · Copy of deposition of Ali· · · · · 52
`· · · · · · · · · · Daneshy
`13
`· · ·Exhibit 2· · · Declaration of Vikram Rao· · · · · 56
`14
`· · ·Exhibit 3· · · U.S. Patent 7,861,774· · · · · · · 77
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`16
`17
`18
`19
`20
`21
`22
`23
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`25
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`·1· · · · · · · · · THE VIDEOGRAPHER:· We're on the
`·2· ·record.· Today is April 27, 2017.· The time is
`·3· ·9:38 a.m.· Beginning the deposition of Vikram Rao.
`·4· ·Will the attorneys present please state their names
`·5· ·for the record.
`·6· · · · · · · · · MR. HAMAD:· Hamad Hamad on behalf of
`·7· ·Rapid Completions.
`·8· · · · · · · · · MR. SHAPIRO:· Jason Shapiro on behalf
`·9· ·of Petitioner, and with me today is David Morris,
`10· ·in-house counsel for Weatherford, and Doug Wilson,
`11· ·Weatherford's litigation counsel.· Also on the phone
`12· ·is my associate, Mark DeBoy of Edell, Shapiro &
`13· ·Finnan.
`14· · · · · · · · · · · · VIKRAM RAO,
`15· ·having been first duly sworn, testified as follows:
`16· · · · · · · · · · · · EXAMINATION
`17· · · ·Q.· · (By Mr. Hamad) Good morning, sir.· Could
`18· ·you please state your full name for the record.
`19· · · ·A.· · Yes.· Vikram Rao.
`20· · · ·Q.· · And that's Dr. Rao?
`21· · · ·A.· · That is Dr. Rao.
`22· · · ·Q.· · Dr. Rao, do you understand that you're
`23· ·under oath today?
`24· · · ·A.· · I do.
`25· · · ·Q.· · Is there any reason you can't give full,
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`·1· ·complete and accurate testimony?
`·2· · · ·A.· · No.
`·3· · · ·Q.· · For the sake of the court reporter, can we
`·4· ·try to agree not to talk over each other?
`·5· · · ·A.· · Right.
`·6· · · ·Q.· · Also for the sake of the reporter, can you
`·7· ·please provide verbal responses instead of head
`·8· ·shakes or "uh-huhs" or "huh-uhs"?
`·9· · · ·A.· · Got it.
`10· · · ·Q.· · If you need a break, please let me know and
`11· ·we'll try to get to a stopping point.· For example,
`12· ·if there's a question pending, I'll ask that you
`13· ·answer the question before we break.· Is that okay?
`14· · · ·A.· · Sure.
`15· · · ·Q.· · And if you don't understand a question, can
`16· ·you please let me know?
`17· · · ·A.· · Sure.
`18· · · ·Q.· · If you answer a question, I'll assume that
`19· ·you understood.· Is that fair?
`20· · · ·A.· · Got it.
`21· · · ·Q.· · At any point during the deposition if you
`22· ·remember additional information or need to clarify or
`23· ·correct a previous answer, please let me know and
`24· ·we'll try to do it right then when it's fresh on your
`25· ·mind.· Is that okay?
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`·1· ·Might have been Baroid Corporation.
`·2· · · ·Q.· · I'm sorry.· Could you spell that last one
`·3· ·for the record?
`·4· · · ·A.· · Yeah.· So it's Baroid, B-A-R-O-I-D,
`·5· ·Corporation.
`·6· · · ·Q.· · Thank you.· Approximately how many times
`·7· ·have you been previously deposed?
`·8· · · ·A.· · Possibly somewhere in the neighborhood of
`·9· ·three or four times.
`10· · · ·Q.· · Have you given sworn testimony at a hearing
`11· ·that might not have been in a deposition?
`12· · · ·A.· · Yes.
`13· · · ·Q.· · About how many times is that?
`14· · · ·A.· · Two or three times.
`15· · · ·Q.· · Do you remember those matters?
`16· · · ·A.· · Yes.· The last one was in Canada a couple
`17· ·of months ago.
`18· · · ·Q.· · And what was that proceeding?
`19· · · ·A.· · It was an intellectual property proceeding.
`20· · · ·Q.· · Do you remember the name of the proceeding?
`21· · · ·A.· · Yes.· It's actually the counterpart
`22· ·litigation to this one in Canada.
`23· · · ·Q.· · So the counterpart proceeding between Rapid
`24· ·and Weatherford in Canada?
`25· · · ·A.· · And a number of other defendants, yes. I
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`·1· · · ·A.· · Got it.
`·2· · · ·Q.· · Dr. Rao, you were hired by Weatherford to
`·3· ·opine on the patents at issue in this proceeding,
`·4· ·correct?
`·5· · · ·A.· · I was -- I am, yes.
`·6· · · ·Q.· · Approximately when were you hired?
`·7· · · ·A.· · Spring of last year, somewhere there.
`·8· · · ·Q.· · Spring of 2016?
`·9· · · ·A.· · Yeah, 2016.
`10· · · ·Q.· · Dr. Rao, have you been deposed before?
`11· · · ·A.· · In other proceedings?
`12· · · ·Q.· · Yes, sir.
`13· · · ·A.· · Yes.
`14· · · ·Q.· · What proceedings were those?
`15· · · ·A.· · They were all intellectual property related
`16· ·proceedings.
`17· · · ·Q.· · Do you remember the names of the cases or
`18· ·proceedings?
`19· · · ·A.· · Not particularly.· In every case I acted on
`20· ·behalf of my company, which would have been
`21· ·Sperry-Sun, Dresser Industries or Halliburton.
`22· · · ·Q.· · So in these other intellectual property
`23· ·matters, you were deposed on behalf of either
`24· ·Sperry-Sun or Halliburton?
`25· · · ·A.· · Or the entity may not have been Sperry-Sun.
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`·1· ·call it a counterpart.· The Canadian patent was
`·2· ·extremely similar to the '774.
`·3· · · ·Q.· · Going back to the matters where you had
`·4· ·been previously deposed, approximately when did those
`·5· ·occur?
`·6· · · ·A.· · They would have occurred in the period
`·7· ·starting around late 1980s through the '90s.· I think
`·8· ·that's about right, yes.
`·9· · · ·Q.· · Do you remember approximately when your
`10· ·last deposition was?
`11· · · ·A.· · Not really.· Somewhere in the '90s.· I'm
`12· ·trying to remember which case.· In the '90s, I
`13· ·believe.
`14· · · ·Q.· · Dr. Rao, can you please describe your
`15· ·experience in the oil and gas industry?
`16· · · ·A.· · Yes.· So I started out -- in the oil and
`17· ·gas industry I started out in NL Industries in 1979
`18· ·as a part of a group that developed disruptive
`19· ·technologies called drilling systems technology.· And
`20· ·that went on for a few years, and then I -- I was
`21· ·responsible for one of those
`22· ·measurement-while-drilling systems, and then when we
`23· ·were done developing it, it and the other ancillary
`24· ·systems, I was picked to launch it in the field.· So
`25· ·I launched all our initial MWD offerings in the
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`·1· ·field, marketing operations and all of the associated
`·2· ·matters to do a commercial launch, including setting
`·3· ·up district field operations in various places
`·4· ·including Aberdeen and Norway.
`·5· · · · · · · · · And then when we successfully launched
`·6· ·it commercially, we created a company to commercially
`·7· ·launch it, and it's called Sperry-Sun.· Actually,
`·8· ·Sperry-Sun as an entity existed before and was
`·9· ·purchased as a launch vehicle for the measurement
`10· ·while drilling, which I will use an acronym MWD, and
`11· ·I was then vice president of variously -- either
`12· ·technology or business development at Sperry-Sun.
`13· · · · · · · · · Sperry-Sun was then -- well,
`14· ·Sperry-Sun and its parent, Baroid, was bought by
`15· ·Dresser in 1994 or thereabouts.· I continued in
`16· ·similar positions in the executive management team of
`17· ·Sperry-Sun, and then -- and so basically they didn't
`18· ·mess with us.· We were just a division of Dresser.
`19· ·And then Halliburton bought Dresser in 1990 -- late
`20· ·'98.· When that happened I assumed new positions with
`21· ·Halliburton.· Those shifted into other areas.· I was
`22· ·vice president of something called integrated
`23· ·technology products, which was products and services
`24· ·that transcended division lines.· And then I was
`25· ·responsible for the reservoir engineering group, and
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`·1· ·completions?
`·2· · · ·A.· · Either acquired or joint ventured or taking
`·3· ·positions in.· And then I was directly involved -- as
`·4· ·is fairly common in a ventures group, the ventures
`·5· ·group main person then sits on the boards of these
`·6· ·companies and, as you might know, when it's small
`·7· ·companies, the boards are very hands-on.· So I had a
`·8· ·very hands-on experience with these companies.
`·9· · · ·Q.· · You said you ended your career with
`10· ·Halliburton as senior VP and chief technology
`11· ·officer.· Is that right?
`12· · · ·A.· · That is correct.
`13· · · ·Q.· · What were your roles at Halliburton?
`14· · · ·A.· · So it started out leading those three areas
`15· ·that I spoke of, which is integrated technology
`16· ·products, reservoir group, and so the reservoir group
`17· ·I can expand a little bit is Halliburton and
`18· ·Schlumberger were the only service companies that did
`19· ·something fairly unique, which is called integrated
`20· ·offerings.· They performed services and sometimes got
`21· ·paid in results.· Not sometimes.· They got paid in
`22· ·results.· And sometimes in oil or in some other way.
`23· ·Other service companies didn't do that.· So to do --
`24· ·accomplish something like that, we needed a strong
`25· ·reservoir group.· So the reservoir group -- reservoir
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`·1· ·I was responsible for the ventures arm, which was the
`·2· ·arm that took positions in small startups and then in
`·3· ·some cases bought them, in some cases did joint
`·4· ·ventures.· So -- and most of these were in the
`·5· ·fields -- as it turns out in the fields of
`·6· ·completions, mostly.
`·7· · · · · · · · · And then, over time, I assumed more
`·8· ·responsibility and ended my career with Halliburton
`·9· ·as senior VP and chief technology officer of
`10· ·Halliburton.· Happy to expand on any portion thereof.
`11· · · ·Q.· · Thank you.· In your answer you said most of
`12· ·these were in the field of completions.· Were you
`13· ·referring to the startups that were acquired while
`14· ·you were in charge of Dresser's venture arm?
`15· · · · · · · · · MR. SHAPIRO:· Objection, form.
`16· · · ·A.· · Would you repeat the question?
`17· · · ·Q.· · Sure.· In your answer you said:· As it
`18· ·turns out in the fields of completion mostly, and I
`19· ·think you said most of these were in the fields -- as
`20· ·it turns out in the fields of completions mostly. I
`21· ·was trying to figure out what you were referring to.
`22· · · ·A.· · I was referring to the startups in those
`23· ·cases.
`24· · · ·Q.· · To be clear, the startups that were
`25· ·acquired by Dresser happened to be in the field of
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`·1· ·engineering group of that integrated services
`·2· ·offering reported to me.
`·3· · · · · · · · · Sometime thereafter, the VP of
`·4· ·technology left, and I took over all of the portfolio
`·5· ·of technology of Halliburton.· And at that point just
`·6· ·about anything that involved technology reported to
`·7· ·me, and sometime in the middle of 2005 or so, I
`·8· ·decided that our intellectual property needed some
`·9· ·attention.· So I started the intellectual asset
`10· ·management group.· I hired Annie Cullotta,
`11· ·C-U-L-L-O-T-T-A, to head up the group.· And so we
`12· ·created the intellectual asset management group.
`13· · · · · · · · · In that capacity we basically improved
`14· ·the portfolio of the company to be more cost
`15· ·effective and more impactful.· I had a personal hand
`16· ·in it, of course, but I had a principle that the top
`17· ·ten moneymakers in our portfolio, I would lay my
`18· ·hands on it from the time of filing until the final
`19· ·office action until issuance, in order to be sure
`20· ·that -- well, I was a layperson, but I still wanted
`21· ·to be sure that it was a good property.
`22· · · · · · · · · And then basically a CTO in major
`23· ·corporations is a bit different in each corporation.
`24· ·My approach was to truly understand what the clients'
`25· ·needs were and to serve them.· I had research
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`·1· ·directors in various places, in Carollton, in Duncan,
`·2· ·Oklahoma, in Houston and Cheltenham, England and so
`·3· ·forth, and they reported to me.· All the developments
`·4· ·that merited my attention, and I gave them some
`·5· ·criteria, were then made known to me, and I kept my
`·6· ·hands on them.
`·7· · · · · · · · · Mostly I had an absolute stricture.
`·8· ·If there was a problem in the field of significance,
`·9· ·I had to be informed about it, and then I made myself
`10· ·familiar with it.· So that sort of thing.· CTOs are
`11· ·all a little different in how they operate. I
`12· ·operated in that way.
`13· · · ·Q.· · While at Halliburton, were you involved in
`14· ·the development of new technologies?
`15· · · ·A.· · Well, yes.· That's what the job was
`16· ·basically, serving the client, and if the client
`17· ·needed new technology, we developed it.
`18· · · ·Q.· · While at Halliburton, were you involved in
`19· ·the development of new completion technologies?
`20· · · ·A.· · Yes.· So aside from -- as I said, the
`21· ·startups that we undertook, the ones that we paid
`22· ·special interest to, were two joint ventures with
`23· ·Shell.· One was called Enventure.· Enventure is E-N
`24· ·then the word venture, all one word.· I think it was
`25· ·called Enventure Global Technologies.· And then the
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`·1· ·need was.
`·2· · · ·Q.· · Dr. Rao, approximately when did you retire
`·3· ·from Halliburton?
`·4· · · ·A.· · April of 2008.· I followed my wife to North
`·5· ·Carolina.· She took a job in North Carolina, and I
`·6· ·hung it up.
`·7· · · ·Q.· · Now do you consult with companies in the
`·8· ·oil and gas field?
`·9· · · ·A.· · Yes, I do.· In fact, mostly in the oil and
`10· ·gas field.· So right now I consult with Biota -- in
`11· ·fact, I was their acting CTO until we found a real
`12· ·one which -- actually, it's in my book, a chapter in
`13· ·my book.· It's directed to using DNA analysis for
`14· ·improving the productivity of horizontal --
`15· ·horizontally fractured reservoirs.
`16· · · · · · · · · I also consult for Eastman Chemicals.
`17· ·I can't talk much about that -- well, I can't talk
`18· ·much about any of these in depth -- where they're
`19· ·developing technologies for the more effective
`20· ·conductivity of fractured conduit.· So conductivity
`21· ·is where you improve the permeability basically.· And
`22· ·so there is some new technology, and I'm helping them
`23· ·with that.· I work for BioLargo, which is developing
`24· ·new technologies in cleanup of water.· And let's see
`25· ·who -- well, you get the picture.· I'm very much --
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`·1· ·other was called Well Dynamics.· And Well Dynamics
`·2· ·was loosely characterized as intelligent completions,
`·3· ·also known as smart completions.· And Enventure was a
`·4· ·very new technology of something called expandable
`·5· ·tubulars.· In fact, I had a couple of patents with
`·6· ·Enventure in the space of zonal isolation in
`·7· ·horizontal wells.· But, yeah, so those were in
`·8· ·completions.
`·9· · · · · · · · · Also, I would say one of the most
`10· ·interesting things we did was the expandable liner
`11· ·hangar, which I would have to say revolutionized
`12· ·liner hangars.· So, yeah, it turns out the reason for
`13· ·that, why the emphasis in completions, is because we
`14· ·identified, even back in the '90s in Sperry-Sun, that
`15· ·in horizontal wells, drilling had overtaken
`16· ·completions.· So drilling advances in horizontal
`17· ·wells were substantial.· Completion advances were
`18· ·lacking.· And I carried that knowledge forward in
`19· ·Halliburton.· We agreed in management that that was
`20· ·the case.· So we had more of an emphasis on
`21· ·completions and then on stimulation, as it turns out,
`22· ·because of the advent of shale oil and gas.
`23· · · · · · · · · And so that's why the emphasis was
`24· ·more -- my emphasis was more on completions and
`25· ·stimulation than on drilling because that's where the
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`·1· ·and I work for venture capitalists and Norwegian
`·2· ·venture capitalists investing in new technologies in
`·3· ·upstream.
`·4· · · ·Q.· · Dr. Rao, as part of your consulting work,
`·5· ·do you advise companies on how to complete wells?
`·6· · · ·A.· · Well, this is -- a completion is -- yes.
`·7· ·Yes.· The completion is a part of -- completion is a
`·8· ·funny word.· Stimulation in some parlance includes --
`·9· ·is included in completions.· Now, you can complete a
`10· ·well without stimulating it; but yes, mostly the
`11· ·completions that I'm directly involved with end up
`12· ·with stimulation.
`13· · · ·Q.· · Just to make sure we're on the same page --
`14· · · ·A.· · Yes.
`15· · · ·Q.· · -- do I understand you correctly that
`16· ·you're saying in some scenarios you can complete a
`17· ·well without stimulating, but in most cases that
`18· ·you're involved with, you're doing both completion
`19· ·and stimulation?
`20· · · ·A.· · Correct.
`21· · · · · · · · · MR. SHAPIRO:· Objection, form.
`22· · · ·A.· · In most of the technologies that I am
`23· ·assisting in, the completions involved -- also
`24· ·involve stimulation.
`25· · · ·Q.· · Do you design frac jobs for wells for
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`·1· ·companies while you consult with them?
`·2· · · ·A.· · No, I don't.
`·3· · · · · · · · · MR. SHAPIRO:· Hold on.· Objection,
`·4· ·form.
`·5· · · ·A.· · So one of the things that we are doing is
`·6· ·directing where the fractures should be.· So, for
`·7· ·example, in Biota the analytics techniques allow you
`·8· ·to target zones better.· So as it turns out, in
`·9· ·horizontal wells not all zones produce in the same
`10· ·way.· In today's technology it's very antiquated in
`11· ·that respect in the sense that it's basically a
`12· ·shotgun approach.· So let me use the analogy Biota is
`13· ·figuring out how to use a rifle, and so we are
`14· ·developing technologies to use rifle shots.· In other
`15· ·words, improve the way horizontal wells are
`16· ·stimulated.· So in that sense I suppose I'm involved
`17· ·in completion design -- in fracturing design.
`18· · · ·Q.· · Just for the record, can you please spell
`19· ·that company's name?
`20· · · ·A.· · Biota, B-I-O-T-A, Technology.· It's a
`21· ·chapter in my book.· It's $59.· I'm kidding.
`22· · · ·Q.· · I should have brought that to mark it as an
`23· ·exhibit.
`24· · · · · · · · · Dr. Rao, approximately when was the
`25· ·last time that you worked with Biota on directing
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`·1· ·involvement.· So are you on site, or are you kind of
`·2· ·drawing up schematics, are you supervising people,
`·3· ·that sort of thing?
`·4· · · · · · · · · MR. SHAPIRO:· Objection, form.
`·5· · · ·A.· · Oh, no.· It's still in development.· The
`·6· ·technology is still in development.· It is being
`·7· ·field tested.
`·8· · · ·Q.· · Are you in the field when it is being
`·9· ·tested?
`10· · · ·A.· · No.· I'm an advisor.· I'm a
`11· ·consultant/advisor.
`12· · · ·Q.· · Backing up to your work with Halliburton,
`13· ·while you were there were you involved in the design
`14· ·of frac jobs for wells?
`15· · · · · · · · · MR. SHAPIRO:· Objection, form.
`16· · · ·A.· · My people were designing frac jobs for
`17· ·wells.
`18· · · ·Q.· · And these are individuals that reported to
`19· ·you?
`20· · · · · · · · · MR. SHAPIRO:· Objection, form.
`21· · · ·A.· · Well, our company was structured where the
`22· ·operations did not report to technology, but the
`23· ·field operations personnel had tech support people
`24· ·who reported to technology.· So it's a little more
`25· ·complicated than that.
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`·1· ·where a fracture should be in a horizontal well?
`·2· · · ·A.· · Last week.
`·3· · · ·Q.· · And your work with Biota is present and
`·4· ·ongoing?
`·5· · · ·A.· · Yes, it is.
`·6· · · ·Q.· · Can you please describe your involvement in
`·7· ·designing how to direct where a fracture should occur
`·8· ·in a horizontal well through your work with Biota?
`·9· · · ·A.· · It would be a bit difficult to describe.
`10· ·It's very technical.· Let's just say that the Biota
`11· ·techniques allow you to identify which zones are the
`12· ·most productive zones and, therefore, in principle
`13· ·you would then not fracture every zone.· So, for
`14· ·example, right now if you've got a 5,000-foot
`15· ·horizontal, it is customary to divide the horizontal
`16· ·well up into 300-foot zones or segments, and then the
`17· ·fracturing is done within those zones, essentially in
`18· ·a geometric basis.
`19· · · · · · · · · So at Biota we are developing
`20· ·technologies that say don't be geometric, figure out
`21· ·which zones are more likely to be productive and
`22· ·thereby reduce your overall cost of production.
`23· · · ·Q.· · Sorry, maybe my question wasn't clear.
`24· · · ·A.· · Yeah.
`25· · · ·Q.· · I'm trying to understand the level of
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`Page 21
`·1· · · ·Q.· · Who were you referring to when you said,
`·2· ·"my people were designing frac jobs for wells"?
`·3· · · ·A.· · Well, so as I said, frac jobs are designed
`·4· ·by operations people.· They're supported by technical
`·5· ·support people who, in the main, would have been in
`·6· ·one of the research facilities in Carrolton perhaps
`·7· ·or in Duncan or in Houston, and those research
`·8· ·directors reported to me.· I had a general principle,
`·9· ·which is that if there was something innovative being
`10· ·done and that was being then operated in the field,
`11· ·then I need to know about it.· But the more important
`12· ·principle was if something went wrong, I needed to be
`13· ·immediately on top of it and being told.· So I was
`14· ·directly involved only when things were really
`15· ·innovative or really wrong.
`16· · · ·Q.· · In your work at companies prior to
`17· ·Halliburton, were you directly involved in the design
`18· ·of frac jobs for wells?
`19· · · · · · · · · MR. SHAPIRO:· Objection, form.
`20· · · ·A.· · In the -- prior to Halliburton I worked
`21· ·primarily in drilling and not in fracturing.· And in
`22· ·the drilling developments that we did -- for example,
`23· ·the measurement while drilling, the MWD, when we made
`24· ·the developments, yeah, I was in the field.· I was in
`25· ·equipment shacks sleeping there while we were doing
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`·1· ·the field testing.· I was in the field when we put
`·2· ·the field offices up.· When we did the one in Bergen,
`·3· ·Norway, I was very directly involved.· Sal Marganuera
`·4· ·set it up for me, but I was directly involved.· When
`·5· ·I was in Bergen, I didn't stay in hotels.· I stayed
`·6· ·in the staff house so I could talk to the real
`·7· ·people.· So it was pretty all hands-on.· There are
`·8· ·two types of research engineers, the ones who are
`·9· ·hands-on and who are not.· I happen to be in the
`10· ·category who was.
`11· · · ·Q.· · Dr. Rao, when I refer to the '774 patent,
`12· ·do you understand which patent I'm referring to?
`13· · · ·A.· · I do.
`14· · · ·Q.· · And in this proceeding you are designated
`15· ·and assert that you are an expert in the field of the
`16· ·'774 patent, correct?
`17· · · ·A.· · Yes.
`18· · · ·Q.· · Do you think you would have also been an
`19· ·expert in the field of the '774 patent back in
`20· ·November of 2001?
`21· · · ·A.· · Yes.
`22· · · ·Q.· · Dr. Rao, are you familiar with the term
`23· ·"plug and perf" fracturing?
`24· · · ·A.· · I am.
`25· · · ·Q.· · What is that?
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`·1· ·cement casing?
`·2· · · · · · · · · MR. SHAPIRO:· Objection, form.
`·3· · · ·A.· · Yeah, the perforating gun perforates first
`·4· ·through the steel wall, then through the cement, if
`·5· ·there is one, and then into the formation, correct.
`·6· ·Not correct.· That is what it does.
`·7· · · ·Q.· · Dr. Rao, are you familiar with the term
`·8· ·"open hole ball drop" fracturing?
`·9· · · · · · · · · MR. SHAPIRO:· Objection, form.
`10· · · ·A.· · You would have to -- I'm familiar -- you'd
`11· ·have to describe it for me if you -- but I'm familiar
`12· ·with ball drop matters, most sleeves, I'm familiar
`13· ·with open holes, and I'm familiar with fracturing.
`14· · · ·Q.· · Can you describe the ball drop matters that
`15· ·you said you were familiar with?
`16· · · ·A.· · Yeah, so it's been common for decades to
`17· ·drop balls to move sleeves in order to perform
`18· ·various functions.· And the sleeves usually open up a
`19· ·conduit to someplace on the outside, usually the
`20· ·annulus, sometimes it's the casing.· Cased annulus.
`21· ·So it's the annulus, but it's either the cased
`22· ·annulus or open annulus.
`23· · · ·Q.· · Are you familiar with a fracturing
`24· ·technique where a packer is used to provide zonal
`25· ·isolation and balls are dropped to open sleeves to
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`·1· · · ·A.· · Well, it's a matter of fracturing mostly in
`·2· ·a cased-in cemented hole where you -- zonally you can
`·3· ·fracture different zones using that technique, the
`·4· ·plug and perf, which is basically you -- well, do you
`·5· ·want me to describe the technique to you?
`·6· · · ·Q.· · Yes, sir, please.
`·7· · · ·A.· · So you set a plug which -- in the first
`·8· ·zone at the bottom and you fracture immediately about
`·9· ·the plug into that zone and then you set the next
`10· ·plug about and fracture in the next zone.· And in
`11· ·each case you have to drop a perforating gun and
`12· ·perforate through the casing and the cement in order
`13· ·to achieve the -- to get the conduit for the
`14· ·fracturing fluid.· So a very similar -- anyway,
`15· ·that's it.
`16· · · ·Q.· · What is a perforating gun?
`17· · · ·A.· · Perforating gun is a device whereby you
`18· ·shoot -- it used to be bullets in the old days, but
`19· ·now they're shape charges into the -- into the
`20· ·formation in order to create a fluid path.· Basically
`21· ·bung holes into the wall.· B-U-N-G.· Slang.
`22· · · ·Q.· · And the perforating gun is shooting the
`23· ·bullets or the charges --
`24· · · ·A.· · Shape charges.
`25· · · ·Q.· · -- through the formation as well as the
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`·1· ·fracture through the open hole segments?
`·2· · · · · · · · · MR. SHAPIRO:· Objection, form.
`·3· · · ·A.· · I'm familiar with ball drop methods to open
`·4· ·sleeves in order to be able to introduce fluid to
`·5· ·treat the annulus in some way.· The annulus may be
`·6· ·cased and perf'd, or it could be open, yes.
`·7· · · ·Q.· · Dr. Rao, prior to November 2001, would a
`·8· ·person of ordinary skill in the art in the field of
`·9· ·the '774 patent -- sorry, strike that.· I missed a
`10· ·word.
`11· · · · · · · · · Prior to November 2001, what would a
`12· ·person of ordinary skill in the art in the field of
`13· ·the '774 patent expect a fracture to look like?
`14· · · · · · · · · MR. SHAPIRO:· Objection, form.
`15· · · ·A.· · What do you mean by "expect a fracture to
`16· ·look like"?· A fracture is a fracture.
`17· · · ·Q.· · You were working for which company in 2001?
`18· · · ·A.· · In 2001, Halliburton.
`19· · · ·Q.· · At Halliburton, if you were to draw a
`20· ·diagram of a frac job or a well, how would you depict
`21· ·a fracture?
`22· · · · · · · · · MR. SHAPIRO:· Objection, form.
`23· · · ·A.· · A practitioner fractures the well.· It then
`24· ·produces fluid to a greater degree than it would have
`25· ·without it any fracture.· A practitioner is generally
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`·1· ·unconcerned with what a fracture morphology is.· I'm
`·2· ·familiar with fracture morphology, but it's not
`·3· ·something that a practitioner of ordinary skill would
`·4· ·be concerned with.
`·5· · · ·Q.· · In the November 2001 time frame, would a
`·6· ·person of ordinary skill in the art not have any idea
`·7· ·as to what a fracture would look like?
`·8· · · · · · · · · MR. SHAPIRO:· Objection, form.
`·9· · · ·A.· · I'm not understanding what you mean by
`10· ·"look like."· Do you mean what is the nature of the
`11· ·fracture?· I'm not clear on the question.· Look like
`12· ·means what?· The morphology of it in the formation,
`13· ·is that what you mean?
`14· · · ·Q.· · Yes, sir.
`15· · · ·A.· · So once a fracture initiates into the
`16· ·formation, it propagates.· First step is to initiate.
`17· ·There's two steps.· It is initiate and then to
`18· ·propagate.· Fractures will propagate in directions
`19· ·where they are dictated by the earth -- oh, yes.
`20· ·Once I get technical, it gets hard.· Okay.· Let me
`21· ·back up.
`22· · · · · · · · · Fracturing has two stages.· First is
`23· ·initiation, and the other is propagation.· Once the
`24· ·fracture initiates in the borehole wall, it
`25· ·propagates in a direction that is dictated by the
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`Page 28
`·1· · · ·Q.· · Would a practitioner in the November 2001
`·2· ·time frame have understood the morphology description
`·3· ·you just provided?
`·4· · · · · · · · · MR. SHAPIRO:· Objection, form.
`·5· · · ·A.· · I would say a practitioner in 2001 would be
`·6· ·relatively unconcerned with the morphology.· He or
`·7· ·she would be more concerned with whether they got a
`·8· ·net production rate increase.· They would be
`·9· ·relatively unconcerned with this semi-esoteric
`10· ·explanation I just gave you.· I didn't know why we
`11· ·had the video.· Now I know, so I can wave my arms.
`12· · · ·Q.· · Since November 2001, has that morphology --
`13· ·sorry.· Strike that.
`14· · · · · · · · · Since November 2001, has that
`15· ·understanding of the morphology description you
`16· ·described changed?
`17· · · · · · · · · MR. SHAPIRO:· Objection, form.
`18· · · ·A.· · Science perceives -- in other words,
`19· ·understanding of how fractures propagate continues to
`20· ·be better understood, but the practitioner's desire
`21· ·to know it is not changed.· The practitioner today
`22· ·would be equally unconcerned about these esoterica as
`23· ·a practitioner in 2001.· Science would advance to
`24· ·where the modeling has improved to where there's a
`25· ·better understanding, but a lot of this is just in
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`Page 27
`·1· ·earth stresses around the borehole wall.· There are
`·2· ·two principal directions that are generally known.
`·3· ·One is in a lateral or in a transverse direction.· In
`·4· ·each case the direction is in the plane that we're
`·5· ·talking about.· So when we say a lateral or
`·6· ·horizontal plane, it's a plane.· It's not a vector.
`·7· ·And so the fracture propagates in -- so-called
`·8· ·longitudinal fracture propagates in a plane which --
`·9· ·oh, that's right.· We've got video.
`10· · · · · · · · · So you've got a borehole wall.· You
`11· ·initiate a fracture through it.· At that point where
`12· ·does it go?· Okay.· It can either go in a plane which
`13· ·is called longitudinal plane which is here -- here is
`14· ·the borehole wall.· This is the plane.· It goes
`15· ·somewhere here.· Or it could go in a transverse
`16· ·plane, which is this direction, and it will go
`17· ·somewhere there or there or there.
`18· · · · · · · · · So principally they are considered to
`19· ·be either longitudinal fractures, which are in the
`20· ·longitudinal plane, or transverse fractures within
`21· ·transverse plane, or something in between.· It
`22· ·depends upon the direction of the borehole relative
`23· ·to the principal stresses in the earth and in the
`24· ·stress a