UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`Paper No. 28
`
`BAKER HUGHES, A GE COMPANY, LLC
`and
`BAKER HUGHES OILFIELD OPERATIONS LLC
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.
`Patent Owner
`
`______________
`
`Case IPR2016-01380
`Patent 9,303,501
`______________
`
`PETITIONERS’ REPLY
`
`28599972.4
`
`
`______________
`
`Paper No. 28
`
`BAKER HUGHES, A GE COMPANY, LLC
`and
`BAKER HUGHES OILFIELD OPERATIONS LLC
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.
`Patent Owner
`
`______________
`
`Case IPR2016-01380
`Patent 9,303,501
`______________
`
`PETITIONERS’ REPLY
`
`28599972.4
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`Petitioners’ Exhibit List
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`Case IPR2016-01380
`Patent 9,303,501
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`Description
`Exhibit
`1001 U.S. Patent No. 7,134,505 (the “’501 Patent”)
`1002 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”)
`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 Affidavit of Aileen Barr of Halliburton Energy Services, Inc.,
`regarding Halliburton Completion Products, Second Edition (1997)
`(“Halliburton”), “Attachment A” thereto
`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
`1010 U.S. Patent No. 6,257,338 (“Kilgore”)
`1011 Excerpts of File History of the ’501 Patent
`1012 U.S. Provisional Application No. 60/404,783, to which the ’501 Patent
`claims priority
`1013 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)
`1014 U.S. Patent No. 7,861,774 (“the ’774 Patent”)
`1015 U.S. Patent No. 5,947,204
`1016 U.S. Patent No. 4,434,854
`
`28599972.4
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`Description
`Exhibit
`1017 Dictionary Definitions from WEBSTER’S THIRD NEW
`INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE
`(1986)
`1018 Excerpts of File History of U.S. Patent No. 6,644,411
`1019 U.S. Serial No. 60/331,491, to which the ’501 Patent claims priority
`1020 M.S. van Domelen, Enhanced Profitability with Non-Conventional
`IOR Technology, SPE 49523 (1998)
`1021 Declaration of Nancy Chaffin Hunter regarding the proceedings of the
`10th Middle East Oil Show & Conference (Bahrain March 15-18,
`1997) (including Ex. 1002 at 97-108)
`1022 U.S. Patent No. 2,537,066
`1023 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”)
`1024 U.S. Patent No. 3,306,365 (“Kammerer”)
`1025 U.S. Patent No. 5,181,569
`1026 U.S. Patent No. 6,230,811
`1027 Excerpts of File History of U.S. Patent No. 6,435,282
`1028 Excerpts of File History of ’774 Patent
`1029
`9/21/2016 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 102/253-110/253 and
`228/253-236/253) – NOT FILED
`1030 Affidavit of Debbie Caples regarding Kate Van Dyke,
`FUNDAMENTALS OF PETROLEUM ENGINEERING (4th ed.
`1997) and RON BAKER, A PRIMER OF OIL WELL DRILLING (5th
`ed. (rev.) 1996) (including Ex. 1006 at Appendix B and Ex. 1007 at
`Appendix D) – NOT FILED
`
`28599972.4
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`Description
`Exhibit
`1031 Table Associated with qrySumNetValuebyFamily from Ex. 2051
`(contains PROTECTIVE ORDER MATERIAL)
`1032 March 1, 2017 email from Justin Nemunaitis, confirming RE Packer
`revenue in Ex. 1031 was included in revenue figure reported at Ex.
`2050 at 42:9.
`1033 Transcript of February 28, 2017 Deposition Testimony of Harold R.
`McGowen III (“McGowen1”)
`1034 Second Declaration of Ali Daneshy, Ph.D. (“Daneshy2”)
`1035 UNREDACTED Transcript of July 27, 2017 Deposition Testimony of
`Harold R. McGowen III (“McGowen2”) (contains PROTECTIVE
`ORDER MATERIAL)
`1036 U.S. Patent No. 5,360,066 (“Venditto”)
`1037 U.S. Patent No. 5,499,678 (“Surjaatmadja”)
`1038 U.S. Patent No. 6,508,307 (“Almaguer”)
`1039 REDACTED Transcript of July 27, 2017 Deposition Testimony of
`Harold R. McGowen III (“McGowen2”)
`
`
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`Case IPR2016-01380
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`Table of Contents
`
`I.
`II.
`
`V.
`
`THE EVIDENCE OF OBVIOUSNESS IS STRONG .................................... 1
`THE OPEN-HOLE MOTIVATIONS ARE STRONG (POR AT 54-
`56) .................................................................................................................... 1
`III. RC MISCHARACTERIZES POSITA’S VIEWS (POR AT 9-21) ................ 7
`A.
`Cemented Casing: Not a Requirement ................................................. 7
`B.
`POSITA Did Not Fear OHMS Fracturing (POR at 16-18, 43-45) ..... 11
`IV. RC’S SECONDARY CONSIDERATIONS ARE TOO WEAK TO
`OUTWEIGH THE OBVIOUSNESS SHOWING (POR AT 21-43) ............ 13
`The Claimed Methods Did Not Contravene Accepted Wisdom
`A.
`(POR at 22-25) .................................................................................... 13
`RC Has Not Established Nexus (POR at 41-43) ................................. 15
`B.
`RC’s Industry Praise Lacks a Nexus (POR at 25-29) ......................... 18
`C.
`RC’s Commercial Success Lacks a Nexus (POR at 35-38) ................ 20
`D.
`RC’s Copying Evidence Is Meritless (POR at 30-35) ........................ 24
`E.
`RC’S “PRINTED PUBLICATION” ARGUMENTS ARE
`MERITLESS .................................................................................................. 25
`VI. SBP SHOULD BE DEFINED ....................................................................... 26
`
`
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`Table of Authorities
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`Case IPR2016-01380
`Patent 9,303,501
`
` Page(s)
`
`Cases
`Amkor Tech., Inc. v. Int’l Trade Comm’n,
`692 F.3d 1250 (Fed. Cir. 2012) ............................................................................ 5
`Cable Electric Products, Inc. v. Genmark, Inc.,
`770 F.2d 1015 (Fed. Cir. 1985) .......................................................................... 22
`Classco, Inc. v. Apple, Inc.,
`838 F.3d 1214 (Fed. Cir. 2016) ..................................................17, 18, 19, 20, 21
`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) ............................................................................ 1
`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, slip op. (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) ................................. 21, 23
`LG Chem, Ltd. v. Celgard, LLC,
`IPR2014-00692 (Paper 46) (P.T.A.B. Oct. 5, 2015) .......................................... 17
`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
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`MPHJ Tech. Investments, LLC v. Ricoh Americas Corp.,
`847 F.3d 1363 (Fed. Cir. 2017) .......................................................................... 26
`Orion IP, LLC v. Hyndai Motor Am.,
`605 F.3d 967-974-75 (Fed. Cir. 2010) ................................................................ 25
`Richdel, Inc. v. Sunspool Corp.,
`714 F.2d 1573 (Fed. Cir. 1983) .................................................................... 21, 22
`Rothman v. Target Corp.,
`556 F.3d 1310 (Fed. Cir. 2009) .......................................................................... 24
`W.L. Gore & Assoc. v. Garlock, Inc.,
`721 F.2d 1540, 1551-52 (Fed. Cir. 1983) ........................................................... 13
`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, 24
`Rule 65(a) ................................................................................................................. 22
`Other Authorities
`77 Fed. Reg. 48,756, 48,763 .............................................................................. 22, 23
`
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`I.
`
`THE EVIDENCE OF OBVIOUSNESS IS STRONG
`Rapid Completions LLC (“RC”) does not identify any differences between
`
`the modified Thomson system (with Halliburton pump-open plug (“HPOP”)), and
`
`the claimed system. Instead, stressing alleged secondary considerations, RC
`
`questions a POSITA’s motivation to modify and use the system for fracturing.
`
`RC fails to overcome Petitioners’ strong showing of obviousness.
`
`First, RC’s argument that a POSITA would have no reason to use the HPOP
`
`in place of Thomson’s pump-out plug (POR V.B) is not sponsored by their expert
`
`(McGowen2, at 75:18-77:13), is contrary to Dr. Daneshy’s explanation, and relies
`
`on the mistaken premise that only an optimal combination can be obvious. In re
`
`Fulton, 391 F.3d 1195, 1200 (Fed. Cir. 2004) (obvious does not require optimal).
`
`Second, RC’s argument that minimizing costs is not a valid motivation to
`
`use the modified Thomson system in an open hole is belied by RC’s own evidence
`
`and expert evidence, which show that efficiencies drove development.
`
`Finally, RC’s alleged secondary considerations are grounded in sales or
`
`discussions of the system itself rather than its open-hole use, which is the only
`
`alleged difference relative to the prior art.
`
`II. THE OPEN-HOLE MOTIVATIONS ARE STRONG (POR AT 54-56)
`RC argues Petitioners provided “no motivation to remove casing from a
`
`known fracturing system like Thomson.” POR at 54-55. RC is incorrect.
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`As Petitioners showed, in wellbores suited for open-hole completion, a
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`POSITA would have wanted to minimize costs relative to cased completions,
`
`(Petition at 42-43; Daneshy1, ¶¶48-50, 83; Ellsworth at 8; Thomson at 101), and
`
`Ellsworth explains eliminating cemented liners enhanced cost-effectiveness of
`
`horizontal completions. See Ellsworth at 8 (cited in Petition at 42 and in
`
`Daneshy1, ¶83 (cited in Petition at 42-43)). A POSITA would have been
`
`motivated by Thomson’s significant reductions in operational time and consequent
`
`cost savings relative to those “normally required to stimulate multiple zones.”1
`
`McGowen1 at 37:20-38:5 (“hundreds of thousands of dollars per day”), 44:22-
`
`47:25 (12-18 hours to stimulate with Thomson versus initial estimate of 30 days
`
`without). McGowen confirmed that economics drive such decisions. McGowen1
`
`at 18:8-13.
`
`RC’s 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”)
`
`system eliminated problems with casing and was more efficient), 2 (“lowered
`
`completion and operations costs”), 3 (same – first full paragraph, second column);
`
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`1 Thomson at 101 (cited in Petition at 42 and in Daneshy1 at ¶83; see also
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`Daneshy1 at ¶50 (cited in ¶83)); see also Thomson at 103 (Table 5).
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`Ex. 2011 at 4 (66% said cost savings drove open-hole multi-stage (“OHMS”)
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`usage).
`
`RC argues that a POSITA would recognize that doing away with Thomson’s
`
`MSAF tools and the fracturing fluid (making stimulation impossible) would be the
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`next (il)logical step. POR at 55. But as the citations above reflect, contrary to
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`RC’s implication, Petitioners have not asserted that a POSITA would want to use
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`Thomson’s modified system in every open hole. Rather, a POSITA would have
`
`done so in formations like Ellsworth’s “with sufficient structural integrity to
`
`maintain a circular wellbore without casing.” Petition at 42, 40-43.
`
`RC also argues that Petitioners “merely assume[d]” or “rel[ied] on
`
`conclusory statements from their expert” that using Thomson’s modified system in
`
`an open hole “would be a straightforward task yielding predictable results.” POR
`
`at 55-56. But this neglects Petitioners’ arguments and evidence. See Petition at
`
`40-43 and 60-63 and cited evidence.
`
`For example, Petitioners relied on Thomson as showing solid body packers
`
`(“SBPs”) isolating segments in a cased hole during acid fracturing. See, e.g.
`
`Petition at 55-56 (citing Thomson). Coon (unaddressed by RC) also taught open-
`
`hole acid fracturing between inflatable packers (see Petition at 12, 17, 42). And
`
`Ellsworth taught that while, “[h]istorically, inflatable packers [like those in Coon]
`
`were used for water shut-off, stimulating, and segment testing, … [m]ore recently,
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`[SBPs] have been used to establish open hole isolation” (Petition at 41 (citing
`
`Ellsworth at 3)), showing that SBPs could isolate open-hole segments (Petition at
`
`41 (citing Daneshy1, ¶¶42, 83-87)). These evidence-backed assertions fully
`
`support the articulated motivations, and reasonable expectation of success, for
`
`using Thomson’s modified system (with its packers or Ellsworth’s) for open-hole
`
`fracturing.
`
`Moreover, additional record evidence (unaddressed by RC) supports
`
`Petitioners’ position:
`
` Expert report of Kevin Trahan’s, Patent Owner’s expert in Halliburton
`
`litigation, showing POSITA’s background knowledge (see Petition at 15-
`
`18), and explaining that (1) in “hard formations a tool that was designed
`
`for use in cased hole may be used in open hole” (Ex. 1011 at 21/50
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`(NPL40); Ex. 1028 at 34/57), and (2) “many tools, including … packing
`
`elements, … initially designed for cased hole, with no contemplation of
`
`being used in open hole, have been used in open hole successfully” (Ex.
`
`1028 at 34/57). See Petition at 17; id. at 17-18 (citing Ex. 1011 at 27/50;
`
`Ex. 1028 at 18-19/57);
`
` Dr. Daneshy’s explanation that Ellsworth likely fractured the formation
`
`while acidizing (Ex. 2016 at 74:22-78:19); and
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` Kilgore’s explanation that SBPs seal an open hole during his method,
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`usable in “injection operations” (Kilgore at 4:4-7, 4:35-42 (cited by
`
`Daneshy1, ¶¶41, 52 and Petition at 13, 16)).
`
`This evidence renders the cases RC cited on POR 54 inapposite. See, e.g., Amkor
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`Tech., Inc. v. Int’l Trade Comm’n, 692 F.3d 1250, 1260-61 (Fed. Cir. 2012) (no
`
`evidence beyond references of alleged combination supported obviousness).
`
`McGowen disagrees that Ellsworth’s acidizing reached fracturing pressure.
`
`POR at 47 (citing Ex. 2081/2084 at §8.3). However, McGowen conceded there is
`
`no single matrix acidizing pressure (McGowen2 at 148:13-18), and no single acid
`
`fracturing pressure (id. at 148:10-12, 148:16-18, 81:15-19). Accordingly, 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 53-56. This argument is unsupported. Id. To the
`
`extent McGowen’s uncited opinion at 10:28-11:6 of Ex. 2081/2084 is considered,
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`it is improperly premised on unclaimed conditions like “large volume”2 of acid
`
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`2 See McGowen2 at 79:23-80:1 (no particular volume of fluid claimed).
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`pumped at “extremely high pressure.”3 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, it would not have outweighed the
`
`evidence 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 of success”); In re Kubin, 561 F.3d 1351, 1360 (Fed.
`
`Cir. 2009).
`
`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
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`such capability was within a POSITA’s skill. Id. at 144:10-145:13.
`
`Dr. Daneshy explains packers were rated for pressure rather than use.
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`Daneshy2, ¶41. Coon’s Figure 1 system confirms that even inflatable packers
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`were known for OHMS fracturing. Coon at 13/19.
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`3 See McGowen2 at 80:2-10 (no particular pressure claimed beyond fracturing).
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`III. RC MISCHARACTERIZES POSITA’S VIEWS (POR AT 9-21)
`A. Cemented Casing: Not a Requirement
`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 13-16. These arguments fail.
`
`1. Only Claim 7 Requires Fractures in Two Segments
`RC’s fracture spacing arguments presume that multiple fractures must be
`
`achieved across different wellbore segments, or zones. See Section IV.A.2. of
`
`POR. These arguments are necessarily limited to claim 7, the only challenged
`
`claim reciting fracturing in two wellbore segments. See Petition at 43-60 (claim
`
`element 1[r] and claim 7).
`
`2. OHMS Fracturing Had Been Performed
`Contrary to his statement cited at POR 56, 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 occurred. Id. at 75:25-79:4. Coon’s Fig. 1 shows such an OHMS
`
`system, which gave “the option of acid or low-volume sand fracturing.” Coon at
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`14/20.
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`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. POR
`
`3.
`
`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) (“commercial speed” not required).
`
`Nor is any production level claimed. McGowen2 at 32:5-9.
`
`Regardless, RC’s argument that a POSITA would have avoided OHMS
`
`fracturing for fear of poor drainage lacks any pre-invention evidence (Ex.
`
`2050/2051 (“McGDec.”) at 24:24-25). RC cites Ex. 2011 as support (POR at 16)
`
`but it is dated 2011. Likewise, RC’s questions to Dr. Daneshy eliciting the cited
`
`testimony were not tied to any particular timeframe or even the perspective of a
`
`POSITA. Ex. 2016 at 30:6-16, 30:17-31:3, 28:24-31:3.
`
`McGowen also fails to provide any pre-invention support for his contentions
`
`(McGDec. at 23-25, cited at POR at 15-16), which Dr. Daneshy contradicts. For
`
`instance, 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 McGowen2 at 108:9-110:21.
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`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 segments of particular
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`length (see Ex. 1001 at 13:65-16:35), fractures at particular locations in a segment
`
`(see id.; McGowen1 at 23:18-25:13; McGowen2 at 79:1-80:10), or particular
`
`hydrocarbon production (McGowen2 at 32:5-9). See Wyers, 616 F.3d at 1243.
`
`4.
`
`RC’s Wellbore Tortuosity Problems Were Caused by
`Casing Perforations, Not Open-Hole Fracturing
`RC cites McGowen’s contention that cemented casing is required to
`
`precisely place perforations to avoid near-wellbore fracture tortuosity. POR at 15-
`
`16 (citing McGDec. at 25). Bat that tortuosity was caused by fracturing through
`
`casing perforations, not open-hole fracturing. See Daneshy2, ¶¶31-36.
`
`While POSITAs wanted to avoid tortuosity (see Venditto at 4:53-55;
`
`Almaguer at 3:18-20), it was not due to open-hole fracturing. See McGowen2 at
`
`22:22-28:16 (unable to cite reference explicitly teaching away from open-hole
`
`fracturing due to tortuosity). Instead, RC’s cited tortuosity arose from fracturing
`
`through mis-aligned perforations in casing. See Venditto at 4:9-33; Surjaatmadja
`
`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);
`
`Venditto at 5:4-7 and 5:46-50 (same); Venditto at 5:4-26 and 5:32-34 and 5:51-56
`
`(narrow fracture widths); Venditto at 5:27-41 (proppant bridging); Surjaatmadja at
`
`2:1-4 (screenouts); Daneshy2, ¶¶33, 30.
`
`A POSITA would have known that open-hole fracturing, which did not force
`
`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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`naturally align with the direction of fracture propagation. Venditto at 6:29-41;
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`Daneshy2, ¶34. To avoid tortuosity, a POSITA would have been drawn to, rather
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`than avoided, open-hole fracturing. Daneshy2, ¶35.
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`Neither paper cited by McGowen is inconsistent. Daneshy2, ¶¶36-37, 24-
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`30. The cited Emanuele (Ex. 2042) 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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`problems.4 See Daneshy2, ¶¶24-28. Emanuele instead addresses cased and
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`cemented wells.
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` Emanuele at 10-11/13 and 3-4/13; Daneshy2, ¶¶24-26.
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`Emanuele’s discussion is also inapposite because the claims do not require
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`proppant (McGowen2 at 79:1-5), which contributed to the screenout (Emanuele at
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`9-10/13). McGDec at 23:8-10. Like Emanuele, Crosby (Ex. 2039), cited on page
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`25 of McGDec., does not relate near-wellbore tortuosity issues to open-hole
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`fracturing. See Crosby at Abstract; Daneshy2, ¶¶27-30. RC’s citations (on POR
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`56) to Exs. 2078, 2079, 2098, and 2099 (and mis-cited Ex. 2002) also do not help
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`RC for the reasons explained below in Section IV.A.
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`4 Nor does RC contend any pre-invention reference explicitly teaches away from
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`open-hole fracturing (McGowen1 at 79:11-82:4) or OHMS fracturing in a stable
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`and drilled-close-to-gauge wellbore (McGowen2 at 17:19-18:6).
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`B.
`POSITA Did Not Fear OHMS Fracturing (POR at 16-18, 43-45)
`RC’s suggestion that a POSITA would fear using Thomson’s modified
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`system to open-hole acid frac is baseless. POR at 17. None of McGowen’s pre-
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`invention date references taught that open-hole fracturing was dangerous (see
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`McGowen1 at 110:22-111:2), and he could not identify a relevant stimulation
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`procedure that resulted in, or was avoided for fear of, injury (id. at 111:3-13).
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`RC suggests a POSITA would have considered risks to life/limb and
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`Thomson’s operational challenges to outweigh the economic benefits of using
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`Thomson’s system in an open hole. POR at 44-45 (citing McGDec. at 28). But
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`Thomson’s “risks” were operational5 (Daneshy2, ¶8, and ¶¶4-7&9-15), not risks to
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`life/limb (McGowen1 at 58:11-59:6). They did not concern Thomson’s MSAF
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`tools or packers (Daneshy2, ¶8), and were not uncommon in the industry, even
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`with proven tools. Id., ¶15. And RC’s own evidence reflects risks with P&P. See,
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`e.g., Ex. 2004 at 1/5 (2nd col., 1st paragraph), 2/5 (2nd full paragraph); Ex. 2001 at
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`3/5 (P&P-related “safety” considerations). Ultimately, McGowen backed away
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`from his contention that Thomson’s alleged failures cost hydrocarbon reserves,
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`5 McGowen was also uncertain that the first Thomson “risk” he previously
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`sponsored actually resulted in expense or operational problems. McGowen1 at
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`33:20-39:10 and 41:21-24; see also Daneshy2 at ¶¶9-12.
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`admitting he was uncertain any such fears would outweigh Thomson’s cost
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`savings. McGowen1 at 60:2-61:6, 34:3-39:10, 41:21-24, 44:22-48:14.
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`RC also attempts to straightjacket Thomson to cemented casing. POR at 43-
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`45. But RC’s argument that Thomson’s authors “took it for granted that fracturing
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`fluid must be pumped through perforations in cemented casing in order to create
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`effective fractures” is unsponsored speculation. It also conflicts with RC’s
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`expert’s confirmation that a POSITA would avoid even sometimes-needed
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`expenses—like cemented casing—when possible. Cf. McGowen2 at 37:3-40:3.
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`Moreover, McGowen’s views depend on his incorrect belief that a POSITA,
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`with only a few years of experience, would have had “ultimate responsibility” for a
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`completion assembly. McGowen1 at 33:16-21, 53:9-24, 56:17-58:10; Daneshy2,
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`¶16. He therefore attributed an unreasonably high risk-aversion (see McGowen1 at
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`40:8-41:20, 43:7-44:21, 53:16-24; Daneshy2, ¶¶17-23), rendering a POSITA
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`unable to even consider Thomson’s system and cost-savings (McGDec. at 24:20-
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`22; McGowen1 at 37:20-38:5, 44:22-47:25; contra Dansehy2, ¶¶20-23). A
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`POSITA would not have had ultimate responsibility, even if he/she suggested the
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`completion (Daneshy2, ¶¶20-23), as even McGowen seemed to recognize
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`(McGowen1 at 56:17-58:10).
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`IV. RC’S SECONDARY CONSIDERATIONS ARE TOO WEAK TO
`OUTWEIGH THE OBVIOUSNESS SHOWING (POR AT 21-43)
`RC tied its arguments about praise, copying, and commercial success to the
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`claims of the ’774 Patent, not those of the ’501 Patent. See POR at 26 (citing
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`McGDec. at 7, Ex. B), 34-35 (citing ’774 Patent claim 1), and 39 (citing Ex.
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`2081/2084 at § 11). Thus, none of RC’s praise, copying, or commercial success
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`arguments are relevant. Section 11 of McGowen’s second declaration focuses on
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`the ’774 Patent’s invention for alleged commercial success. Ex. 2081/2084 at
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`22:23-24:7. He asserts that the ’501 Patent’s pressure-actuated sleeve limitations
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`are “practiced” by the StackFrac and FrackPoint systems (id. at 27:6-20), but does
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`not tie that contention to specific sales, and admitted those sales are not tied to the
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`claims. See McGowen2 at 124:2-125:16, 76:4-18, 77:10-13.
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`A. The Claimed Methods Did Not Contravene Accepted Wisdom
`(POR at 22-25)
`RC does not contend that any single pre-invention reference explicitly
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`teaches away from using a system like Thomson+HPOP to fracture an open hole
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`like Ellsworth’s. See McGowen1 at 79:11-82:4; see also McGowen2 at 17:19-18:6
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`and 22:22-27:25. As reflected in W.L. Gore & Assoc., Inc. v. Garlock, Inc., on
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`which RC relies, a teaching away is effectively required to support a contrary-to-
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`accepted-wisdom argument. 721 F.2d 1540, 1551-52 (Fed. Cir. 1983).
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`RC’s arguments that proper perforation placement was required (POR at 13-
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`16) are irrelevant because, as explained above, the problems such placement
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`sought to avoid were not caused by (and thus did not teach away from) open-hole
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`fracturing. None of RC’s additional evidence or arguments (POR at 21-23)
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`establish conventional wisdom that taught away from open-hole fracturing:
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` Bi-wing fractures (POR 21) are not claimed or precluded in open-hole.
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`See McGowen2 at 79:19-22, 153:13-22;
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` Ex. 2078 (POR 22) reflects that Yost’s OHMS fracturing system (Ex.
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`2078 at 2, fn.4) was known despite the alleged “conventional wisdom;”
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` Ex. 2098 (POR 22), even if assumed true, was published in 1988 prior to
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`Yost’s (Ex. 2075 at 1-2, Fig. 2) and Coon’s (at 13/19) descriptions of
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`OHMS fracturing;
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` Neither RC nor its expert explains why Ex. 2079 includes the cited
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`statement, such as whether the Dan Field was known as being too soft for
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`open-hole fracturing (see McGowen2 at 35:16-37:2 (discussing Dan
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`Field in context of Ex. 2099)). Regardless, it did not teach away from
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`open-hole
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`fracturing, and was not necessarily
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`state-of-the-art
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`(McGowen2 at 67:2-19);
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` The cited page of Ex. 2099 (POR 22)6 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
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` RC does not tie Ex. 2002 (Dr. Daneshy’s 2007 encyclopedia section) to
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`2001’s “conventional wisdom.”
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` POR at 22.
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` Regardless,
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`that
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`encyclopedia related to unique—and dissimilar—applications ((Ex. 2016
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`(replacement) at 15:1-17:14); see also McGDec. at 35:11-12; McGowen1
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`at 14:4-25 (Ellsworth’s highly-depleted reservoir)).
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`Finally, even if OHMS fracturing contravened conventional wisdom at some time,
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`that time was well before 2001. Coon and Yost show that OHMS fracturing was
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`used in 1988 and was an accepted option in 1995. See Coon at 13/19 (cited in
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`Petition at 37); Ex. 2075 at 1-2, Fig. 2 (filed by RC and referenced generally as
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`“Yost” at POR 21, 49, 66).
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`B. RC Has Not Established Nexus (POR at 41-43)
`RC does not address nexus for any secondary consideration but commercial
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`success, where it points to Packers Plus, Baker Hughes, and Weatherford
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`advertising and marketing documentation. This evidence is deficient, as explained
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`below. RC does not allege these systems had the required pressure-activated
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`6 Regardless, the RC-cited portions of Exs. 2078 and 2098 and the RC-cited page
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`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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`sleeve. See POR at 41 (describing “specific combination of elements covered by
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`the claims” as “solid body packer isolation, ball-activated sliding sleeves, and open
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`hole fracturing in horizontal wells”). Nor does RC cite expert testimony showing
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`these systems met all claim elements.
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`RC alleges that these commercial systems include only the elements of the
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`’774 Patent’s claim 1. See McGowan2 at 77:20-78:25 (admitting only differences
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`between ‘774 Patent’s claim 1 and ’501 Patent’s claim 1 is pressure-activated
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`sleeve). This is significant because there is no difference between Thomson’s
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`system and any of PP’s StackFRAC, Petitioners’ FracPoint, or Weatherford’s
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`ZoneSelect systems relative to the ’774 Patent’s claim 1. See McGowen2 at 161:1-
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`18 (no structural differences between Thomson and commercial systems), 139:11-
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`140:2 (same for StacFrac, Fracpoint); Petition at 30-34 (Thomson vs. ’501 Patent’s
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`claim 1); see also McGowen1 at 64:1-65:25, 67:5-9, 67:22-69:23, 71:10-72:23.
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`Regardless, the ’774 Patent’s claim 1 is the only one McGowe
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