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’ REPLY IN SUPPORT OF MOTION TO EXCLUDE
`
`
`28801404.1
`
`
`______________
`
`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’ REPLY IN SUPPORT OF MOTION TO EXCLUDE
`
`
`28801404.1
`
`
`
`Petitioners’ Exhibit List
`
`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”)
`1014 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)
`1015 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)
`
`28801404.1
`
`i
`
`
`
`Case IPR2016-01506
`Patent 7,861,774
`
`Description
`Exhibit
`1016 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”)
`1017 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)
`1123 Affidavit of Velma J’Nette Davis-Nichols, regarding Lane-Wells (see
`Ex. 1002) (including Lane-Wells at Appendix A)
`1124 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
`Table Associated with qrySumNetValuebyFamily from Ex. 2051
`(contains PROTECTIVE ORDER MATERIAL)
`
`1129
`
`28801404.1
`
`ii
`
`
`
`Case IPR2016-01506
`Patent 7,861,774
`
`1131
`
`1139
`
`Description
`Exhibit
`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
`Transcript of February 28, 2017 Deposition Testimony of Harold R.
`McGowen III (“McGowen1”)
`Second Declaration of Ali Daneshy, Ph.D. (“Daneshy2”)
`1132
`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”)
`January 19, 2017 Letter and Written Interrogatories propounded by
`plaintiffs in Rapid Completions LLC, et al. v. Baker Hughes Canada
`Co., Federal Court File No. T-1569-15) (Ottawa), regarding Canadian
`patent No. CA 2,412,072 (the “Related Canadian Litigation”)
`January 30, 2017 Letter and Responses to Ex. 1139
`Excerpt from February 16, 2017 transcript of Related Canadian
`Litigation
`
`1140
`1141
`
`
`
`28801404.1
`
`iii
`
`
`
`Case IPR2016-01506
`Patent 7,861,774
`Ex. 2039 – Mr. Delaney’s testimony is irrelevant because he is neither the author
`
`of Ex. 2039 nor someone with personal knowledge of it. Ex. 2082 at ¶¶ 1, 2, 8.
`
`Weatherford’s failure to object to Ex. 2039 is irrelevant because Weatherford is not
`
`a party to this proceeding. The Weatherford logos and product marks are
`
`sponsored solely by attorney argument. RC admits that it relies on Ex. 2039 as
`
`evidence that Weatherford in fact sells the particular type of systems described
`
`therein. Paper 70 at 1-2. RC’s Rule 703 argument is inapplicable because RC
`
`cites to Ex. 2039 (POR at 23, 28-29), and not to a McGowen opinion it underlies.
`
`Ex. 2044 – Dr. Rao’s testimony is not in the form of an affidavit (see 37 C.F.R. §
`
`42.53(a) (“Uncompelled direct testimony must be submitted in the form of an
`
`affidavit.”) (emphasis added)), and Petitioners were not notified of his deposition
`
`(37 C.F.R. § 42.53(d)(1)). Because there was no direct testimony within the scope
`
`of Rule 53, there was no opportunity for cross. See 37 C.F.R. § 42.53(d)(5)(ii).
`
`RC has not shown Dr. Rao is unavailable under any of the criteria of
`
`Rule 804(a). Regardless, Rule 804(b)(1) does not apply for the same reasons
`
`above. Patent Owner has not shown that the Federal Rules of Civil Procedure
`
`related to unavailability of witnesses apply or that the asserted facts related to
`
`unavailability are true. Nor has Patent Owner established that Rule 807 applies. It
`
`has not explained—beyond a conclusory assertion—how any of the three objected-
`
`to portions of testimony is offered as evidence of a material fact, and its assertion
`
`28801404.1
`
`1
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`
`
`Case IPR2016-01506
`Patent 7,861,774
`that Dr. Rao works for Weatherford is not a substitute for showing how any of the
`
`three objected-to testimony portions is more probative for any alleged material fact
`
`than any other evidence that RC could have obtained through reasonable efforts,
`
`such as the Daneshy testimony cited at POR 51:6-10.
`
`Ex. 2047 – The Lorraine decision concerns admissibility of electronically-stored
`
`information (“ESI”).
`
` The disputed ESI appears
`
`to have been “e-mail
`
`correspondence between counsel” for an arbitration dispute between the parties
`
`(Lorraine v. Markel American Ins. Co., 241 F.R.D. 534, 537 (D. Md. 2007)), not a
`
`document purportedly created by a third party that was produced by a party to the
`
`suit. And the page of the Lorraine decision cited by RC is mere dicta. Id. at 552.
`
`Regardless, Petitioners did not create Ex. 2047. Thus, there is no basis for the
`
`“presumption” of authenticity to which RC retreats. See U.S. v. Brown, 688 F.2d
`
`1112, 1115-1116 (7th Cir. 1982) (rejecting defendant’s argument that business
`
`records he produced for a company of which he was president were not authentic).
`
`The “Rystad Energy” markings are sponsored solely by attorney argument.
`
`Authenticity aside, RC’s reliance on hearsay exception (18) fails because RC
`
`cites directly to Ex. 2047 in its POR (Paper 52 at 30-31, 40), rather than to Mr.
`
`McGowen’s citation to Ex. 2047 (on Exs. 2050/2051 page 45/49 and Exs.
`
`2081/2084 pages 26/29-27/29). Hearsay exception (17) does not apply because,
`
`regardless of whether Ex. 2047 is a “market report,” RC has not shown that Ex.
`
`28801404.1
`
`2
`
`
`
`Case IPR2016-01506
`Patent 7,861,774
`2047 is “generally relied on by the public or by persons in particular occupations.”
`
`See FRE 803(17) (emphasis added). Mr. McGowen’s specialized reliance (uncited
`
`by RC in its POR) does not fit the rule. RC’s purported non-truth-of-the-matter
`
`purpose for Ex. 2047—that “persons in the field expected the patented technology
`
`to have had a significant market share”—is irrelevant and improper new argument.
`
`RC’s Rule 703 argument fails. The rule permits otherwise inadmissible
`
`evidence to be disclosed to a jury if a court determines it has sufficient probative
`
`value in helping the jury evaluate the opinion the evidence underlies. But, as
`
`explained above, Ex. 2047 underlies no opinion by Mr. McGowen that RC relies
`
`on in its POR. See POR at 5-6, 12-16, 18, 19, 24, 26, 35, 39, 41, 50, 52, and 64-65.
`
`Finally, RC does not rebut Petitioners’ relevance objections.
`
`Exs. 2050 and 2051 – Petitioners’ ability to cross examine Mr. McGowen about
`
`product names and numbers does not change their status as hearsay. Rule 703 does
`
`not apply because experts do not rely on product names and numbers alone to
`
`establish that claim language is met. Rule 702 does not apply because the
`
`objected-to product names and numbers are not testimony that is “based on
`
`sufficient facts or data” or “the product of reliable principles and methods.” FRE
`
`702(b)-(c). Furthermore, striking those names and numbers from Mr. McGowen’s
`
`report would impact Mr. McGowen’s opinions on pages 2/15, 3/15, 4/15, and 6/15
`
`of Ex. B of Exs. 2050/2051 (as identified in Paper 67 at 6) by rendering them, and
`
`28801404.1
`
`3
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`
`
`Case IPR2016-01506
`Patent 7,861,774
`RC’s reliance on them (POR at 26, 35), inadequately supported. Finally, RC does
`
`not rebut Petitioners’ relevance objections.
`
`Ex. 2052 – RC’s speculation about the alleged timing of FracPoint’s development
`
`relative to when Petitioners allegedly obtained page 13/34 of Ex. 2052 is improper
`
`new argument. RC’s statement that “Petitioners do not dispute” its copying story
`
`and were “unable to find a fact witness” to dispute its copying story is misleading;
`
`RC’s unsupported attorney argument merited no “conflicting evidence or
`
`testimony.” Moreover, RC did not reveal that in the Related Canadian Litigation
`
`(see supra at iii), where RC’s baseless allegation was more substantively raised, a
`
`related Canadian entity of Petitioners refuted it. See Ex. 1139 at 1 (1. & 2.) and 3-
`
`4 (ques. 1-6 and 8-14); Ex. 1140 at 1 (¶2) and 1-3 (responses to ques. 1-6 and 8-
`
`14); Ex. 1141 (trial testimony) at 188:5-195:6.
`
`RC’s irrelevance rebuttal fails. RC correctly concedes that its “patented
`
`invention” is the use of the prior art system for fracturing in an open hole (Paper
`
`70 at 9-10), but then incorrectly contends that Petitioners’ development of the
`
`FracPoint system gives rise to a nexus presumption (id. at 10). The FracPoint
`
`system is not the claimed method invention, so it cannot give rise to a nexus
`
`presumption under WBIP. WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1329 (Fed.
`
`Cir. 2016) (product must be the claimed invention for nexus presumption); cf. id. at
`
`1331 (accused product was claimed invention) (emphasis added). Thus, even if
`
`28801404.1
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`4
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`
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`Case IPR2016-01506
`Patent 7,861,774
`Ex. 2052 suggested copying (it does not), Ex. 2052 would still be irrelevant
`
`because it would not support a nexus under WBIP or any other decision. RC’s
`
`Rule 703 argument fails because RC cites directly to Ex. 2052, not to Mr.
`
`McGowen’s testimony regarding Ex. 2052. POR at 32-33.
`
`Ex. 2053 – This exhibit is irrelevant for the same reasons as Ex. 2052.
`
`Ex. 2054 – RC’s self-authenticating, Rule 902(6) argument should be rejected as
`
`circular. See IPR2014-01347, slip op. at 7-8 (Paper 25) (P.T.A.B Jan. 6, 2016).
`
`While the article does have “rigzone” in the URL, there is no evidence about what
`
`“rigzone” is or what “the layout” of a typical Rigzone article is. RC thus offers
`
`insufficient support for Rule 901(b)(4). Mr. Delaney’s testimony is irrelevant
`
`because he is neither the article’s author nor someone with personal knowledge of
`
`it. Cf. IPR2015-00273, slip op. at 18, 29 (Paper 40) (P.T.A.B. June 16, 2016).
`
`Authenticity aside, Rule 803(18) does not apply because RC cites directly to Ex.
`
`2054 in its POR, not to McGowen’s citation to Ex. 2054 (on 46/49 of Ex. 2050).
`
`Rule 703 does not apply because RC cites Ex. 2054 directly (see POR at 26-31),
`
`not to any testimony by McGowen that Ex. 2054 underlies.
`
`Exs. 2074, 2092, and 2093– RC’s POR does not cite any McGowen testimony
`
`about any of these exhibits. Objections are withdrawn to Exs. 2078-79 & 2098-99.
`
`Ex. 2100 – RC’s POR does not cite any McGowen testimony about this exhibit.
`
`October 19, 2017
`
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`/Mark T. Garrett/
`Mark T. Garrett
`
`28801404.1
`
`5
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`
`
`
`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that on October 19,
`
`2017, a complete copy of PETITIONERS’ REPLY IN SUPPORT OF MOTION
`
`TO EXCLUDE was served on Patent Owner’s Exclusive Licensee via email (by
`
`consent), as follows:
`
`hhamad@caldwellcc.com
`bcaldwell@caldwellcc.com
`jnemunaitis@caldwellcc.com
`gonsalves@gonsalveslawfirm.com
`rapid@caldwellcc.com
`
`
`
`/Mark T. Garrett/
`Mark T. Garrett (Reg. No. 44,699)
`
`
`
`
`28801404.1
`
`
`
`
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