`
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`
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`Paper No. 79
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`BAKER HUGHES, A GE COMPANY, LLC
`and
`BAKER HUGHES OILFIELD OPERATIONS LLC
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.
`Patent Owner
`
`______________
`
`Case IPR2016-01506
`Patent 7,861,774
`______________
`
`
`PETITIONERS’ CORRECTED REPLY1
`
`
`
`1 As authorized by the Board (by email) on July 9, 2018, this Paper replaces
`Paper 62 in IPR2016-00598 (Petitioners’ Reply for joined proceeding IPR2016-
`01506) and corrects citation errors therein.
`
`37131993.1
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`Petitioners’ Exhibit List
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`Case IPR2016-01506
`Patent 7,861,774
`
`Description
`Exhibit
`1001 U.S. Patent No. 7,861,774 (“the ’774 Patent”)
`1002 Affidavit of Margaret Kieckhefer, of the Library of Congress,
`regarding excerpts from COMPOSITE CATALOG OF OIL FIELD AND PIPE
`LINE EQUIPMENT, Vol. 2 (21st ed. World Oil 1955) (“Lane-Wells”)
`1003 B. Ellsworth, et al., Production Control of Horizontal Wells in a
`Carbonate Reef Structure, 1999 Canadian Institute of Mining,
`Metallurgy, and Petroleum Horizontal Well Conference (“Ellsworth”)
`1004 U.S. Patent No. 5,449,039 (“Hartley”)
`1005 Declaration of Ali Daneshy, Ph.D. (“Daneshy1”)
`1006 KATE VAN DYKE, FUNDAMENTALS OF PETROLEUM
`ENGINEERING (4th ed. 1997)
`1007 RON BAKER, A PRIMER OF OIL WELL DRILLING (5th ed.
`(revised) 1996)
`1008 U.S. Patent No. 4,099,563 (“Hutchison”)
`1009 U.S. Patent No. 5,375,662 (“Echols”)
`1010 U.S. Patent No. 6,257,338
`1011 Excerpts of Prosecution History of the ’774 Patent
`1012 U.S. Provisional Application No. 60/404,783
`1013 Excerpts of Prosecution History of U.S. Patent No. 7,134,505 (“the
`’505 Patent”)
`Declaration of Christopher D. Hawkes, Ph.D., P.Geo., regarding the
`proceedings of the 7th One-Day Conference On Horizontal Well
`Technology Operational Excellence (Canada November 3, 1999)
`(including Ex. 1003 at 102-110)
`M.J. Eberhard, et al., Current Use of Limited-Entry Hydraulic
`Fracturing in the Codell/Niobrara Formations—DJ Basin, SPE
`(Society for Petroleum Engineering) 29553 (1995)
`Affidavit of Nancy Chaffin Hunter, regarding the proceedings of the
`10th Middle East Oil Show & Conference (Bahrain March 15-18,
`1997) (including D.W. Thomson, et al., Design and Installation of a
`Cost-Effective Completion System for Horizontal Chalk Wells Where
`Multiple Zones Require Acid Stimulation, SPE (Society for Petroleum
`Engineering) 37482 (1997)) (“Thomson”)
`
`1014
`
`1015
`
`1016
`
`37131993.1
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`i
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`Case IPR2016-01506
`Patent 7,861,774
`
`Exhibit
`
`1017
`
`Description
`Affidavit of Nancy Chaffin Hunter, regarding the proceedings of the
`Production Operation Symposium (Oklahoma City, OK April 2-4,
`1995) (including R. Coon and D. Murray, Single-Trip Completion
`Concept Replaces Multiple Packers and Sliding Sleeves in Selective
`Multi-Zone Production and Stimulation Operations, SPE 29539
`(1995)) (“Coon”)
`1018 Howard, G. C. & Fast, C. R., HYDRAULIC FRACTURING
`(AIMMPE 1970)
`1019 Hyne, Norman J., DICTIONARY OF PETROLEUM
`EXPLORATION, DRILLING, & PRODUCTION (1991)
`1020 U.S. Patent 4,018,272 (“Brown”)
`1021 U.S. Patent No. 4,279,306
`1022 K.W. Lagrone, et al., A New Development in Completion Methods,
`SOCIETY OF PETROLEUM ENGINEERING, Paper 530-PA (1963)
`11232 Affidavit of Velma J’Nette Davis-Nichols, regarding Lane-Wells (see
`Ex. 1002) (including Lane-Wells at Appendix A)
`Affidavit of Debbie Caples, regarding Ex. 1006 and Ex. 1007
`(including Ex. 1006 at Appendix B and Ex. 1007 at Appendix D) –
`NOT FILED
`1125 Affidavit of Rodolfo Diaz, regarding Ex. 1022 (including Ex. 1022 at
`Appendix A and related materials at Appendix B) – NOT FILED
`1126 Declaration of Rebekah Stacha, regarding Ex. 1015 (including Ex.
`1015 at Exhibit A) – NOT FILED
`1127 Affidavit of Troy Price, regarding Ex. 1018 (including Ex. 1018 at
`Appendix A) – NOT FILED
`1128 Affidavit of Troy Price, regarding Ex. 1019 (including Ex. 1019 at
`Appendix A) – NOT FILED
`1129 Table Associated with qrySumNetValuebyFamily from Ex. 2051
`(contains PROTECTIVE ORDER MATERIAL)
`1130 March 1, 2017 email from Justin Nemunaitis, confirming RE Packer
`revenue in Ex. 1129 was included in revenue figure reported at Ex.
`2050 at 42:9
`1131 Transcript of February 28, 2017 Deposition Testimony of Harold R.
`McGowen III (“McGowen1”)
`
`1124
`
`
`2 Exs. 1023 et seq. have been renumbered 1123 et seq. for clarity, given joinder.
`37131993.1
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`ii
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`Case IPR2016-01506
`Patent 7,861,774
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`Description
`Exhibit
`1132 Second Declaration of Ali Daneshy, Ph.D. (“Daneshy2”)
`1133 UNREDACTED Transcript of July 27, 2017 Deposition Testimony of
`Harold R. McGowen III (“McGowen2”) (contains PROTECTIVE
`ORDER MATERIAL)
`1134 U.S. Patent No. 5,360,066 (“Venditto”)
`1135 U.S. Patent No. 5,499,678 (“Surjaatmadja”)
`1136 U.S. Patent No. 6,508,307 (“Almaguer”)
`1137 U.S. Patent No. 2,689,009 (“Brainerd”)
`1138 REDACTED Transcript of July 27, 2017 Deposition Testimony of
`Harold R. McGowen III (“McGowen2”)
`
`
`
`
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`37131993.1
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`iii
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`
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`Case IPR2016-01506
`Patent 7,861,774
`
`I.
`II.
`
`V.
`
`Table of Contents
`STRONG EVIDENCE OF OBVIOUSNESS ................................................. 1
`LANE-WELLS DID NOT FREEZE POSITA IN 1955 (POR 18-20, 45-
`48) .................................................................................................................... 1
`III. STRONG OPEN-HOLE MOTIVATIONS (POR 61-67) ............................... 3
`IV. RC MISCHARACTERIZES POSITA’S VIEWS (POR 7-20) ....................... 7
`A.
`Cemented Casing: Not Required .......................................................... 7
`B.
`POSITA Did Not Fear OHMS Fracturing (POR 16-18, 43-45) ......... 11
`RC’S SECONDARY CONSIDERATIONS ARE TOO WEAK TO
`OVERCOME OBVIOUSNESS (POR 20-44) .............................................. 12
`A.
`The Claimed Methods Did Not Contravene Accepted Wisdom
`(POR 22-25) ........................................................................................ 12
`RC Has Not Established Nexus (POR 41-44) ..................................... 14
`B.
`RC’s Industry Praise Lacks Nexus (POR 26-31) ................................ 18
`C.
`RC’s Commercial Success Lacks a Nexus (POR 37-41) .................... 20
`D.
`RC’s Copying Evidence Is Meritless (POR 31-37) ............................ 23
`E.
`Length of Intervening Time (POR 44) ................................................ 24
`F.
`VI. RC’S “PRINTED PUBLICATION” ARGUMENTS ARE
`MERITLESS .................................................................................................. 25
`VII. SBP SHOULD BE DEFINED ....................................................................... 26
`
`
`
`
`
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`37131993.1
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`iv
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`Table of Authorities
`
`Case IPR2016-01506
`Patent 7,861,774
`
` Page(s)
`
`Cases
`Amazon.com, Inc. v. Barnesandnoble.com, Inc.,
`239 F.3d 1343 (Fed. Cir. 2001) ............................................................................ 2
`Apple Inc. v. Samsung Elecs. Co.,
`816 F.3d 788 (Fed. Cir. 2016) ............................................................................ 25
`Cable Electric Products, Inc. v. Genmark, Inc.,
`770 F.2d 1015 (Fed. Cir. 1985) .......................................................................... 22
`CaptionCall, L.L.C. v. Ultratec, Inc.,
`IPR2015-00637 (Paper 98) (P.T.A.B. Sep, 7, 2016) .......................................... 15
`Classco, Inc. v. Apple, Inc.,
`838 F.3d 1214 (Fed. Cir. 2016) .............................................................. 17, 18, 19
`Dunnhumby USA, LLC v. Emnos USA Corp.,
`No. 13-CV-0399, 2015 WL 1542365 (N.D. Ill. Apr. 1, 2015) ........................... 26
`Ecolochem, Inc. v. S. Cal. Edison Co.,
`227 F.3d 1361 (Fed. Cir. 2000) .......................................................................... 24
`In re Fulton,
`391 F.3d 1195 (Fed. Cir. 2004) ............................................................................ 9
`Geo M. Martin Co. v. Alliance Mach. Sys. Int’l,
`618 F.3d 1294 (Fed. Cir. 2010) ............................................................................ 8
`Instradent USA, Inc. v. Nobel Biocare Services AG,
`IPR2015-01786 (Paper 106) (P.T.A.B. Feb. 15, 2017) ...................................... 25
`In re Kubin,
`561 F.3d 1351 (Fed. Cir. 2009) ............................................................................ 6
`Laird Techs., Inc. v. GrafTech Int’l Holdings, Inc.,
`IPR2014-00024 (Paper 46) (P.T.A.B. Mar. 25, 2015) ................................. 20, 22
`Leo Pharm. Prod., Ltd. v. Rea,
`726 F.3d 1346 (Fed. Cir. 2013) .......................................................................... 24
`37131993.1
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`v
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`LG Chem, Ltd. v. Celgard, LLC,
`IPR2014-00692 (Paper 76) (P.T.A.B. Oct. 5, 2015) .......................................... 15
`LKQ Corp. v. Clearlamp, LLC,
`IPR2013-00020 (Paper 73) (P.T.A.B. Mar. 27, 2014) ....................................... 23
`Medichem, S.A. v. Rolabo, S.L.,
`437 F.3d 1157 (Fed. Cir. 2006) ............................................................................ 6
`MotivePower, Inc. v. Cutsforth, Inc.,
`Case IPR2013-00274 (Paper 91) (P.T.A.B. Sep. 9, 2016) ................................. 25
`MPHJ Tech. Investments, LLC v. Ricoh Americas Corp.,
`847 F.3d 1363 (Fed. Cir. 2017) .......................................................................... 27
`Richdel, Inc. v. Sunspool Corp.,
`714 F.2d 1573 (Fed. Cir. 1983) .............................................................. 20, 21, 22
`Rothman v. Target Corp.,
`556 F.3d 1310 (Fed. Cir. 2009) .......................................................................... 24
`W.L. Gore & Assoc., Inc. v. Garlock, Inc.,
`721 F.2d 1540 (Fed. Cir. 1983) .......................................................................... 12
`Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC,
`683 F.3d 1356 (Fed. Cir. 2012) .......................................................................... 24
`Wyers v. Master Lock Co.,
`616 F.3d 1231 (Fed. Cir. 2010) ........................................................................ 6, 9
`Rules and Statutes
`Rule 42.65(a) ............................................................................................................ 23
`Rule 65(a) ................................................................................................................. 21
`Other Authorities
`77 Fed. Reg. 48,756, 48,763 .............................................................................. 21, 23
`
`
`37131993.1
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`vi
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`I.
`
`STRONG EVIDENCE OF OBVIOUSNESS
`Rapid Completions LLC (“RC”) does not identify any differences between
`
`the Lane-Wells-Ellsworth system and the claimed system. Instead, stressing
`
`alleged secondary considerations, RC questions POSITA’s motivation to use the
`
`system for open-hole fracturing.
`
`First, RC argues that a POSITA would have been too afraid of open-hole
`
`fracturing and unsure of its benefits to even consider it. But RC’s position is
`
`undermined by its own expert and prior art describing open-hole multi-stage
`
`(“OHMS”) fracturing in 1988.
`
`Second, RC argues that POSITA would not consider fracturing because
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`Lane-Wells’ use of “acidizing” did not include acid fracturing in 1955. That was
`
`not the law in 1955, nor is it now. A POSITA in 2001 had the benefit of another
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`45 years of development in the art, which used “acidizing” to include acid
`
`fracturing by that time.
`
`Finally, RC’s alleged secondary considerations are grounded in sales or
`
`discussions of the system itself rather than its use in an open-hole, which is the only
`
`alleged difference over the prior art.
`
`II. LANE-WELLS DID NOT FREEZE POSITA IN 1955 (POR 18-20, 45-48)
`RC asserts Lane-Wells’ use of “acidizing” in 1955 refers solely to non-
`
`fracturing operations and provides “no reason to use [Lane-Wells] for …
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`fracturing.” POR at 48. But “[t]he relevant inquiry is what a … [POSITA] would
`
`have gleaned from [Lane-Wells] at the time that the patent application leading to
`
`the [’774 Patent] was filed.” Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239
`
`F.3d 1343, 1364 (Fed. Cir. 2001); McGowen2, 11:20-12:10, 148:19-24.
`
`Further, this narrow reading of “acidizing” is as mistaken as its premises.
`
`RC points to Lane-Wells’ explanation that some of its packers are “for …
`
`[a]cidizing,” and others are “excellent in formation fracturing operations.” POR at
`
`46 (citing Lane-Wells at 15-16). Rather than show what POSITA would have
`
`understood, RC offers attorney argument that Lane-Wells thereby distinguishes
`
`acidizing from fracturing. POR at 46. This is mistaken. Lane-Wells’ wording is
`
`not inconsistent with “acidizing” encompassing fracturing—even then, POSITAs
`
`still used “acid fracturing” (along with “hydraulic fracturing,” which often denoted
`
`non-acid fracturing). See, e.g., Petition at 36-38 (and cited evidence).
`
`Second, RC asserts that 1950s references indicate that Lane-Wells’ use of
`
`“acidizing” refers to “etch[ing] … the wellbore,” not “fractur[ing].” POR at 47.
`
`This is incomplete. Brainerd—published before Lane-Wells—discloses a process
`
`for “ACIDIZING WELLS,” in which a “viscous [acid] emulsion is injected … to
`
`fracture [a] formation.” Ex. 1137 at Title, 2:5-10 (emphasis added).
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`III. STRONG OPEN-HOLE MOTIVATIONS (POR 61-67)
`RC frames Petitioners’ obviousness theory as “because Lane-Wells
`
`describes an apparatus that could be used for ‘acidizing,’ a POSITA would use that
`
`apparatus for fracturing.” POR at 63. RC concludes that because a POSITA
`
`would allegedly recognize that “‘acidizing’ does not inherently require fracturing,”
`
`the Petition does not “demonstrate a teaching in the prior art of … [OHMS]
`
`fracturing.” Id. (emphasis added).
`
`RC conflates inherency, based on what is necessarily in Lane-Wells, with
`
`Petitioners’ theory of obviousness, resting on a POSITA’s view of the collective
`
`evidence. The Petition explains that “[e]ven if ‘acidizing’ had not encompassed
`
`acid fracturing, a POSITA would have … desir[ed] to use the Lane-Wells System
`
`to perform acid fracturing in at least some formations.” Petition at 36-37 (citing
`
`Daneshy1 at ¶¶85-86). As Dr. Daneshy explained, “in any of the various
`
`formations in which acid fracturing was known to be desirable, a [POSITA] using
`
`the Lane-Wells System would have employed acid fracturing” because doing so
`
`was known to increase hydrocarbon production. Ex. Daneshy1 at ¶85 (citing Ex.
`
`1006 at 164; Daneshy1, ¶¶32-33).
`
`The Petition also explains why a POSITA would have been motivated to use
`
`the Lane-Wells System for hydraulic fracturing, with a reasonable expectation of
`
`success. Petition at 37-38 (citing Daneshy1 at ¶¶77, 79, 86); see also Petition at
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`11-13 (and cited evidence). “For example, it was already known that a
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`combination of packers and sliding sleeves could enable a single tubing string to be
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`used for multi-zone acidizing and low-volume sand fracturing in an open hole,
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`uncased wellbore.” Petition at 37 (citing Daneshy1, ¶86)). This belies RC’s
`
`contention that OHMS fracturing was not already known in the prior art.3
`
`Further, in suitable wellbores, a POSITA would have chosen open-hole over
`
`cased to reduce costs; for example, Ellsworth explains eliminating cemented liners
`
`reduced costs of horizontal completions. Ellsworth at 8; Petition at 39-40;
`
`Daneshy1 at ¶¶29, 49-51, 76. McGowen confirmed that economics drive such
`
`decisions. McGowen1 at 18:8-13.
`
`RC’s own evidence also shows such efficiencies drove development and
`
`were realized. See Ex. 2003 at 2-3; see also Ex. 2004 at 1, Abstract (plug and perf
`
`(“P&P”) was often “costly and time prohibitive” and Packers Plus’s (“PP’s”)
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`system eliminated problems with casing and was more efficient), 2 (“lowered
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`completion [] and operation costs”), 3 (same at first full paragraph of second
`
`column); Ex. 2011 at 4 (66% said cost savings drove OHMS fracturing usage).
`
`Moreover, the record is replete with evidence supporting both a POSITA’s
`
`motivation to perform OHMS fracturing and reasonable expectation of success:
`
`3 As does RC’s exhibit 2075 (“Yost”), which described OHMS fracturing using
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`“port collars” between external casing packers as early as 1988.
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` Coon taught OHMS fracturing (acid and low-volume sand) between
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`inflatable packers (see Petition at 11, 37).4
`
` Ellsworth taught that while, “[h]istorically, inflatable packers [like
`
`those in Coon] were used for water shut-off, stimulation, and segment
`
`testing[, m]ore recently, [SBPs] have been used to establish open hole
`
`isolation” (Petition at 14-15, 34 (citing Ellsworth at 3)), showing that
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`SBPs could isolate open-hole segments (Petition at 35 (citing
`
`Daneshy1, ¶¶43, 83)).
`
` Dr. Daneshy’s explanation that Ellsworth likely fractured the
`
`formation while acidizing (Ex. 2017 at 74:23-78:19); and
`
` Kilgore’s explanation that SBPs seal an open-hole during his method,
`
`usable in “injection operations” (Ex. 1010 at 4:4-7, 4:35-42 (cited by
`
`Daneshy1, ¶¶42, 53 and Petition at 12, 15)).
`
`The evidence renders the cases RC cited on POR 62 inapposite.
`
`McGowen disagrees that Ellsworth’s acidizing reached fracturing pressure.
`
`POR at 657 (citing Ex. 2081 at §8.3). However, McGowen conceded there is no
`
`4 RC’s assertion at POR 49 that “Petitioners fail to demonstrate that [Coon] was
`
`actually locatable by a POSITA” is belied by Ms. Hunter’s testimony that Coon
`
`was “made available to the public as soon as [it was] catalogued” in February
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`2000. Coon at 2/19-3/19, ¶¶5-6.
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`single matrix acidizing pressure (McGowen2 at 148:13-18), and no single acid
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`fracturing pressure (id. at 148:10-12, 148:16-18, 81:15-19). As a result, non-
`
`fracturing pressure in one well can fracture another. See id. at 81:20-82:3, 82:24-
`
`83:23; cf. id. at 148:4-9; Daneshy2, ¶¶38-40. Nor did McGowen contend matrix
`
`acidizing pressure would be below fracture pressure by any particular amount and
`
`did not know Ellsworth’s actual pressure. McGowen2 at 65:25-66:15, 115:2-8.
`
`Finally, RC argues Petitioners have not shown that a POSITA would have
`
`expected success. See POR at 63-65. But this argument is unsupported. Id. To
`
`the extent McGowen’s uncited opinion at 10:28-11:6 of Ex. 2084 is considered, it
`
`is improperly premised on unclaimed conditions like “large volume”5 of acid
`
`pumped at “extremely high pressure.”6 See Wyers v. Master Lock Co., 616 F.3d
`
`1231, 1243 (Fed. Cir. 2010). Even if a POSITA had some reservation about
`
`possibly losing isolation between zones, any such reservation would not have
`
`outweighed the evidence showing that a POSITA would have reasonably expected
`
`SBPs to isolate. See Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1165 (Fed.
`
`Cir. 2006) (reasonable does not require “certainty”); In re Kubin, 561 F.3d 1351,
`
`1360 (Fed. Cir. 2009).
`
`
`5 See McGowen2 at 79:23-80:1 (no fluid volume claimed).
`
`6 See McGowen2 at 80:2-10 (no pressure claimed beyond fracturing).
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`37131993.1
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`McGowen has conceded SBPs (like Ellsworth’s) could be used for
`
`fracturing (McGowen1 at 19:3-7), and a POSITA would have appreciated that a
`
`packer suited for matrix acidizing was suited for acid fracturing provided it was
`
`capable of handling fracturing pressure (McGowen2 at 143:20-144:4). Achieving
`
`such capability was within a POSITA’s skill. Id. at 144:10-145:13; see also id. at
`
`12:25-13:16, 141:9-142:9, 143:3-19.
`
`Dr. Daneshy explains that packers were rated for pressure rather than use.
`
`Daneshy2, ¶41. And Coon’s Fig. 1 confirms that even inflatable packers were
`
`known for OHMS fracturing. Coon at 13/19.
`
`IV. RC MISCHARACTERIZES POSITA’S VIEWS (POR 7-20)
`A. Cemented Casing: Not Required
`RC argues POSITA would have believed cemented casing was needed for
`
`proper fracture spacing, which allegedly controlled reservoir drainage and avoided
`
`near wellbore tortuosity. POR at 12-15. These arguments fail.
`
`1. Only Claim 9 Requires Fractures In Two Segments
`RC’s fracture spacing arguments depend upon RC’s assumption that
`
`multiple fractures must be achieved across different wellbore segments. See POR
`
`at 15 (“In short, a POSITA motivated to create multiple fractures ….”). These
`
`arguments are necessarily limited to claim 9, the only challenged claim reciting
`
`fracturing in two wellbore segments. See Petition at 43-60 (claim element 1[n] and
`
`claim element 9[b]).
`37131993.1
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`2. OHMS Fracturing Had Been Performed
`Contrary to his statement cited at POR 64, McGowen admitted cemented
`
`casing was not required for horizontal multi-stage fracturing and agreed that
`
`“going without cemented casing would have been an option to consider.”
`
`McGowen1 at 75:25-76:2, 72:24-76:2. He also conceded that OHMS fracturing
`
`had already been conducted using external casing packers and shiftable sliding
`
`sleeves. Id. at 75:25-79:4. Coon’s Fig. 1 shows such an OHMS fracturing system
`
`(acid or low-volume sand). Coon at 13/19.
`
`3.
`
`RC’s Fracture-Spacing-Hurts-Drainage Argument Is Not
`Tied to Pre-Invention Evidence or the Claims
`RC argues that cemented casing was required to avoid poor drainage. See
`
`POR at 14-16. But none of the claims recite producing hydrocarbons from the
`
`second or third annular wellbore segments. See Geo M. Martin Co. v. Alliance
`
`Mach. Sys. Int’l, 618 F.3d 1294, 1303 (Fed. Cir. 2010). Nor is any production
`
`level claimed. McGowen1 at 32:5-9.
`
`Regardless, RC’s argument that a POSITA would have avoided OHMS
`
`fracturing to avoid poor drainage lacks any pre-invention evidence (Ex. 2050/2051
`
`(“McGDec.”) at 24:24-25). RC cites Ex. 2011 as support (POR at 15), but it is
`
`dated 2011. Likewise, RC’s questions to Dr. Daneshy eliciting the cited testimony
`
`were not tied to any timeframe or a POSITA’s perspective (Ex. 2016 at 30:6-16,
`
`30:17-31:3, 28:24-31:3).
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`37131993.1
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`McGowen fails to provide any pre-invention support for his contentions
`
`(McGDec. at 23-25, cited at POR at 14-15), which Dr. Daneshy contradicts. Dr.
`
`Daneshy explained that a POSITA likely would not have appreciated the
`
`possibility of fractures growing together across a packer. Ex. 2085 at 73:8-75:15;
`
`see also McGowen1 at 108:9-110:21.
`
`Nor does the law require obvious combinations to be optimal. In re Fulton,
`
`391 F.3d 1195, 1200 (Fed. Cir. 2004). Even if McGowen had cited corroborating
`
`pre-invention evidence, his assertions that imprecise fracture spacing could harm
`
`drainage would remain inadequate because the claims do not require wellbore
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`segments of particular length (see Ex. 1001 at 13:60-16:27), fractures at any
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`particular location in a segment (see id.; McGowen1 at 23:18-25:13; McGowen2 at
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`79:1-80:10), or any particular hydrocarbon production (McGowen1 at 32:5-9). See
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`Wyers, 616 F.3d at 1243.
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`4.
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`RC’s Tortuosity Was Caused by Casing Perforations, Not
`Open-Hole Fracturing
`RC cites McGowen’s contention that cemented casing is required to
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`precisely place perforations to avoid undesirable near-wellbore tortuosity. POR at
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`14-15 (citing McGDec. at 25). But that tortuosity was caused by fracturing
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`through casing perforations, not open-hole fracturing. See Daneshy2, ¶¶31-36.
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`While POSITAs wanted to avoid tortuosity (see Venditto at 4:53-55;
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`Almaguer at 3:18-20), it was not due to open-hole fracturing. See McGowen2 at
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`37131993.1
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`9
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`22:22-28:16 (unable to cite reference explicitly teaching away from open-hole
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`fracturing due to tortuosity). Instead, RC’s cited tortuosity arose from fracturing
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`through mis-aligned perforations in casing. See Venditto at 4:9-33; Surjaatmadja
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`at 1:62-2:1; Almaguer at 3:7-20; Daneshy2, ¶¶31-33. The problems McGowen
`
`identified followed. See Almaguer at 3:23-31 (higher pumping pressures);
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`Venditto at 5:4-7, 5:46-50 (same); Venditto at 5:4-26, 5:32-34, 5:51-56 (narrow
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`fracture widths); Venditto at 5:27-41 (proppant bridging); Surjaatmadja at 2:1-4
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`(screenouts); Daneshy2, ¶¶33, 30.
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`A POSITA would have known that open-hole fracturing, which did not force
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`fluid through perforations, would not cause the same degree of problems.
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`Daneshy2, ¶¶34-35. For example, Venditto, in the context of a microfrac test
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`involving open-hole fracturing, recognized this tendency of open-hole fractures to
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`align with the direction of fracture propagation. Venditto at 6:29-41; Daneshy2,
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`¶34. To avoid tortuosity, a POSITA would have been drawn to, rather than
`
`avoided, open-hole fracturing. Daneshy2, ¶35.
`
`Neither paper cited by McGowen is inconsistent. Daneshy2, ¶¶36-37, 24-
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`30. The cited Emanuele (Ex. 2066) sentence about unfavorable fracture initiation
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`(Emanuele at 9-10/13) does not state that open-hole fracturing causes such
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`37131993.1
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`problems.7 See Daneshy2, ¶¶24-28. Emanuele instead addresses cased and
`
`cemented wells.
`
` Emanuele at 10-11/13 and 3-4/13; Daneshy2, ¶¶24-26.
`
`Emanuele’s discussion is also inapposite because proppant—not required by the
`
`claims (McGowen2 at 79:1-5)—contributed to the screenout (Emanuele at 9-
`
`10/13). McGDec at 23:8-10. Like Emanuele, Crosby (Ex. 2063), cited on page 25
`
`of McGDec., does not relate tortuosity to open-hole fracturing. See Crosby at
`
`Abstract; Daneshy2, ¶¶27-30. RC’s citations (on POR 64) to Exs. 2078, 2079,
`
`2098, 2099, and 2002 do not help RC for the reasons explained above.
`
`B.
`POSITA Did Not Fear OHMS Fracturing (POR 16-18, 43-45)
`RC’s suggestion that a POSITA would fear using the Lane-Wells-Ellsworth
`
`system to open-hole acid frac is baseless. POR at 15-17. None of McGowen’s
`
`pre-invention date references taught that open-hole fracturing was dangerous (see
`
`McGowen1 at 110:22-111:2), and he could not identify a relevant stimulation
`
`procedure that resulted in, or was avoided for fear of, injury (id. at 111:3-13).
`
`RC hints that a POSITA would have considered risks to life/limb and
`
`operational challenges to outweigh economic benefits. POR at 15-17 (citing
`
`McGDec. at 18, 20). But RC’s evidence reflects risks with P&P. See, e.g., Ex.
`
`7 Nor does RC contend any pre-invention reference explicitly teaches away from
`
`open-hole fracturing (McGowen1 at 79:11-82:4), or OHMS fracturing in an open
`
`wellbore that is stable and drilled close to gauge (McGowen2 at 17:19-18:6).
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`37131993.1
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`2004 at 1/5 (2nd col., 1st paragraph), 2/5 (2nd full paragraph); Ex. 2001 at 3/5 (P&P-
`
`related “safety” considerations).
`
`RC’s position conflicts with McGowen’s confirmation that a POSITA would
`
`avoid even sometimes-needed expenses—like cemented casing—when possible.
`
`Cf. McGowen2 at 37:3-40:3.
`
`Moreover, McGowen’s views depend on his incorrect belief that a POSITA,
`
`with a few years of experience, would have had “ultimate responsibility” for a
`
`completion assembly. McGowen1 at 56:17-58:10; Daneshy2, ¶16. But a POSITA
`
`would not have had ultimate responsibility, even if he/she suggested the
`
`completion (Daneshy2, ¶¶20-23), as McGowen seemed to recognize (McGowen1
`
`at 56:17-58:10).
`
`V. RC’S SECONDARY CONSIDERATIONS ARE TOO WEAK TO
`OVERCOME OBVIOUSNESS (POR 20-44)
`A. The Claimed Methods Did Not Contravene Accepted Wisdom
`(POR 22-25)
`RC does not contend that any single pre-invention reference explicitly
`
`teaches away from using a system like Lane-Wells or the Lane-Wells-Ellsworth
`
`system to fracture a stable open-hole. See McGowen1 at 79:11-82:4; see also
`
`McGowen2 at 17:19-18:6 and 22:22-27:25. However, W.L. Gore & Assoc., Inc. v.
`
`Garlock, Inc., on which RC relies, effectively requires a teaching away to support a
`
`contrary-to-accepted-wisdom argument. 721 F.2d 1540, 1551-52 (Fed. Cir. 1983).
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`37131993.1
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`12
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`RC’s arguments that proper perforation placement was required (POR at 13-
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`15) are irrelevant because the problems such placement sought to avoid were not
`
`caused by (did not teach away from) open-hole fracturing. RC’s other evidence
`
`and arguments (POR at 20-26) are likewise unavailing:
`
` Bi-wing fractures (POR 20-21) are neither claimed nor precluded in
`
`open-hole. See McGowen2 at 79:19-22, 153:13-22;
`
` Ex. 2078 (POR 21) reflects that Yost’s OHMS fracturing system (Ex.
`
`2078 at 2, fn.4) was known despite the alleged “conventional wisdom;”
`
` Ex. 2098 (POR 21) was published in 1988 prior to Yost’s (Ex. 2075 at 1-
`
`2, Fig. 2) and Coon’s (at 13/19) descriptions of OHMS fracturing;
`
` RC does not explain why Ex. 2079 includes the cited statement, such as
`
`whether the Dan Field was known as being too soft for open-hole
`
`fracturing (see McGowen2 at 35:16-37:2 (discussing Dan Field in
`
`context of Ex. 2099)). Regardless, it did not teach away from open-hole
`
`fracturing and was not necessarily state-of-the-art (McGowen2 at 67:2-
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`19);
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`37131993.1
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`13
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` The cited page of Ex. 2099 (POR 21)8 is also limited to the Dan field, and
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`does not purport to challenge Yost’s or Coon’s OHMS fracturing; and
`
` RC does not tie Ex. 2015 (Dr. Daneshy’s 2007 encyclopedia section) to
`
`2001’s “conventional wisdom.”
`
` POR at 21.
`
` Regardless,
`
`that
`
`encyclopedia is related to unique—and dissimilar—applications ((Ex.
`
`2016 (replacement) at 15:1-17:14); see also McGDec. at 35:11-12;
`
`McGowen1 at 14:4-25 (Ellsworth’s highly-depleted reservoir)).
`
`Even if OHMS fracturing contravened conventional wisdom at some time, that
`
`time was well before 2001. Coon and Yost show that OHMS fracturing was used
`
`in 1988 and was an accepted option in 1995. See Coon at 13/19 (cited in Petition
`
`at 37); Ex. 2075 at 1-2, Fig. 2 (filed by RC and referenced generally as “Yost” at
`
`POR 21, 49, 66).
`
`B. RC Has Not Established Nexus (POR 41-44)
`RC does not address nexus for any secondary consideration but commercial
`
`success, where it first argues—via one sentence—that the Board should presume
`
`any commercial success is due to the patented invention (POR 41) because
`
`“McGowen has opined that StackFRAC and FracPoint are ‘the invention disclosed
`
`8 Regardless, the RC-cited portions of Exs. 2078 and 2098 and the RC-cited page
`
`of Ex. 2099 show that the RC-cited cemented-casing approach sought to avoid the
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`problems caused by misaligned casing perforations, not open-hole fracturing.
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`37131993.1
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`and claimed in the patent.’ Ex. 2050, McGowen Dec. at 43.” This improperly
`
`incorporates by reference McGowen’s page 43 analysis (which itself does not
`
`show how either system meets any method claim); as a result, the Board need not
`
`grant RC’s alleged nexus or commercial success evidence substantial weight. See,
`
`e.g., CaptionCall, L.L.C. v. Ultratec, Inc., IPR2015-00637, slip op. at 64-65 (Paper
`
`98) (P.T.A.B. Sep, 7, 2016).
`
`Regardless, claim 1 is the only claim McGowen substantively addressed.
`
`McGDec. at 43:5-13 and claim 1 charts; McGowen1 at 139:3-5, 133:14-139:5.
`
`McGowen’s declaration (even if incorporated by reference) offers nothing to
`
`support a nexus to any other claim. McGowen1 at 139:3-5, 133:14-139:5. While
`
`RC has cited to page 43 and “Exs. A, B” of McGowen’s expert report (Ex. 2050),9
`
`RC does not discuss with specificity the details of McGowen’s analysis or how it
`
`allegedly shows that each limitation of claim 1 is met. POR at 35-36; see also id.
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`at 25, 37-44. Substantial weight need not be given to such improperly incorporated
`
`expert arguments. See, e.g., LG Chem, Ltd. v. Celgard, LLC, IPR2014-00692, slip
`
`op. at 32-33 (Paper 76) (P.T.A.B. Oct. 5, 2015).
`
`Even if considered in full, McGowen’s claim 1 analyses are insufficient to
`
`entitle RC to any nexus presumption.
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