`
`Paper 23
`Entered: February 23, 2017
`
`Trials@uspto.gov
`571-272-7822
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`WEATHERFORD INTERNATIONAL, LLC,
`WEATHERFORD/LAMB, INC., WEATHERFORD US, LP, and
`WEATHERFORD ARTIFICIAL LIFT SYSTEMS, LLC,
`Petitioners,
`
`v.
`
`PACKERS PLUS ENERGY SERVICES INC.,
`Patent Owner.
`____________
`
`Case IPR2016-01509
`Patent 7,861,774 B2
`____________
`
`Before SCOTT A. DANIELS, NEIL T. POWELL and
`CARL M. DEFRANCO, Administrative Patent Judges.
`
`DANIELS, Administrative Patent Judge.
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
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`IPR2016-01509
`Patent 7,861,774 B2
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`I.
`
`INTRODUCTION
`
`A. Background
`This is a preliminary proceeding to decide whether inter partes review
`of U.S. Patent No. 7,861,774 B2 (Ex. 1001, “the ’774 patent”) should be
`instituted under 35 U.S.C. § 314(a). Packers Plus Energy Services Inc.
`(“Packers Plus”) is the owner of the ’774 patent. Weatherford International
`LLC, and others, (“Weatherford”) filed a Petition (Paper 1, “Pet.”)
`challenging claims 1, 3–7, 9–10, 12 and 16 of the ’774 patent. Rapid
`Completions LLC, (“Rapid”) the exclusive licensee of the ’774 patent, filed
`a Preliminary Response (Paper 18, “Prelim. Resp.”).1 After considering the
`Petition and Preliminary Response, we institute inter partes review on all of
`the challenged claims.
`B. Additional Proceedings
`The ’774 patent is involved in a concurrent district court action, Rapid
`Completions LLC v. Baker Hughes Incorporated, No. 6:15-cv-00724 (E.D.
`Tex.), which was filed July 31, 2015. Pet. 4. The ’774 patent is also
`challenged in IPR2016-00598 and IPR2016-01506. Id.
`C. The ’774 Patent
`The ’774 patent describes a tubing string for treating and stimulating
`flow from particular segments of an oil or gas well formation while sealing
`off other segments. Ex. 1001, Abstract. Typically, a tubing string is run into
`a wellbore as a conduit for oil and gas products to flow to the surface. Id. at
`1:28–48. But when natural formation pressure is insufficient, a well
`“stimulation” technique is employed, which involves injecting fracturing
`
`
`1 Although Packers Plus is the owner of the ’774 patent, because Rapid
`asserts itself as the exclusive licensee with all substantial rights to enforce
`the ’774 patent, we refer to Rapid as the respondent in this proceeding.
`2
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`fluids into the formation to enlarge existing channels and thereby improve
`inflow into the wellbore. Id. at 1:35–39. And, because a wellbore may cross
`multiple zones within an oil or gas formation, only some of which contain
`desirable products, the ability to inject “treatment fluids wherein fluid is
`injected into selected intervals of the wellbore, while other intervals are
`closed,” is key to controlling and optimizing production from the well. Id. at
`2:28–30. As described in the ’774 patent, the tubing string includes a series
`of ports along its length, with a ball-actuated sliding sleeve mounted over
`each port, for selectively permitting the release of fluid from certain
`segments of the tubing string. Id. at 2:39–65, 6:37–7:31. Special sealing
`devices, called “solid body packers” or “SBPs,” are mounted along the
`length of the tubing string downhole and uphole of each port. Id. at 2:39–65,
`6:4–36. The solid body packers are disposed about the tubing string and seal
`the annulus between the tubing string and the wellbore wall, thereby
`dividing the wellbore into a series of isolated segments. Id. at 6:18–24.
`When the sliding sleeve covering a particular port is activated to an open
`position, fluid can pass into one segment of the wellbore but is prevented
`from passing into adjacent segments by the packers positioned on either side
`of the port. Id. at 6:50–57.
`D. Illustrative Claim
`Claim 1, the only independent claim at issue, recites a method for
`“fracturing a hydrocarbon-containing formation accessible through a
`wellbore.” As paraphrased below, the method comprises essentially the
`following steps:
`“running a tubing string into an open hole and uncased,
`non-vertical section of the wellbore, the tubing string having a
`long axis and an inner bore and comprising”
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`3
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`“a first port” and “a second port” in the wall of the tubing
`string,
`“a first sliding sleeve having a seat with a first diameter”
`and “a second sliding sleeve having a seat with a second diameter
`smaller than the first diameter,” moveable relative to the first and
`second ports, respectively, between closed and open positions,
`“a first solid body packer,” “a second solid body packer,”
`and “a third solid body packer” mounted between and on either
`side of the first and second ports “to seal about the tubing string
`and against a wellbore wall,” upwards.
`“expanding radially outward the first, second and third
`solid body packers” until they set and seal against the wellbore
`wall and “create a first annular wellbore segment” and “a second
`annular wellbore segment” between the solid body packers that
`are “substantially isolated from fluid communication” with each
`other,
`“conveying a fluid conveyed sealing device through the
`tubing string to pass through the first sliding sleeve and to land
`in and seal against the seat of the second sliding sleeve moving
`the second sliding sleeve to the open port position permitting
`fluid flow through the second port,” and
`“pumping fracturing fluid through the second port and into
`the second annular wellbore segment
`to
`fracture
`the
`hydrocarbon-containing formation.”
`Id. at 13:61–15:6.
`E. The Alleged Grounds of Unpatentability
`Weatherford contends that the challenged claims are unpatentable on
`the following specific grounds.2
`
`
`2 Weatherford supports its challenge with a Declaration of Dr. Vikram Rao,
`Ph.D. (Ex. 1007). See infra.
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`4
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`References
`Yost,3 Thomson4, and Ellsworth5
`Thomson and Ellsworth
`
`
`Basis Claims Challenged
`§ 103 1, 3–7, 9–10, 12 and 16
`§ 103 1, 3–7, 9–10, 12 and 16
`
`CLAIM CONSTRUCTION
`II.
`In the Petition, Weatherford proposes a construction for three claim
`terms. Pet. 20–22. Rapid, in its Preliminary Response, states that it
`“disagrees” with Weatherford’s proposed constructions and “intends to
`dispute them,” but offers no construction of its own, except to say “there is
`no need for the Board to address these disputes now.” Prelim. Resp. 20.
`Also, Rapid proposes that the phrase “the second annular wellbore segment”
`as recited in claim 1, for example, should also be construed. Id. at 20–21.
`We recognize that Rapid is under no obligation to respond to the
`Petition in a preliminary proceeding. Nonetheless, construing the claims at
`this stage may be necessary to determine whether to institute in the first
`instance and may also benefit the parties by serving as a road map for trial.
`That said, however, construing the claims without hearing first from Rapid
`poses a risk because, come the time of trial, Rapid may very well dispute
`that initial construction in its patent owner response, thereby forcing the
`
`
`3 Ex. 1002, A.B. Yost et al., Production and Stimulation Analysis of Multiple
`Hydraulic Fracturing of a 2,000-ft Horizontal Well, SPE 19090, Society of
`Petroleum Engineers, Gas and Technology Symposium, Dallas TX, (June 7–
`9, 1989) (“Yost”).
`4 Ex. 1003, 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 37482, © Society of Petroleum Engineers
`(1997) (“Thomson”).
`5 Ex. 1004, B. Ellsworth et al., Production Control of Horizontal Wells in a
`Carbonate Reef Structure, © 1999 CIM 1999 Horizontal Well Conference
`(“Ellsworth”).
`
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`Board to revisit the issue and possibly adopt a new construction after
`interpreting the claims differently in the preliminary proceeding. See SAS
`Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341, 1351 (2016) (“What
`concerns us is not that the Board adopted a construction in its final written
`decision, as the Board is free to do, but that the Board ‘change[d] theories in
`mid-stream.’” (quoting Belden Inc. v. Berk-Tec LLC, 805 F.3d 1064, 1080
`(Fed. Cir. 2015)). Also, it would benefit the Board to receive Weatherford’s
`response to Rapid’s proposed construction in its Reply. So as to avoid the
`claim terms from becoming moving targets, we think a better approach in
`this case is to defer the issue of claim construction until we hear from both
`parties regarding Weatherford’s proposed constructions as well as Rapid’s
`proposed construction. For purposes of this decision, we need not construe
`explicitly any claim language to determine that there is a reasonable
`likelihood of Weatherford prevailing on its claim challenges. See 35 U.S.C.
`§ 314(a); Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803
`(Fed. Cir. 1999) (“[O]nly those terms need be construed that are in
`controversy, and only to the extent necessary to resolve the controversy.”).
`
`
`III. ANALYSIS
`A. Real Party-in-interest
`Weatherford’s Petition states that “Weatherford International, LLC;
`Weatherford/ Lamb, Inc.; Weatherford US, LP; and Weatherford Artificial
`Lift Systems, LLC are the real parties-in-interest.” Pet. 4. Rapid asserts that
`Weatherford has failed to list Baker Hughes as a real party-in-interest
`pursuant to 35 U.S.C. § 312(a)(2), and the Petition therefore, should be
`denied. PO Resp. 1.
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`1. Facts
`As mentioned above, the ’774 patent is involved in the following
`district court action: Rapid Completions LLC v. Baker Hughes Incorporated,
`No. 6:15-cv-00724 (E.D. Tex.) (“the lawsuit”). Pet. 4, Prelim. Resp. 2.
`Rapid initiated the lawsuit by filing and serving a complaint
`(Ex. 2021) in 2015 accusing Weatherford, Baker Hughes, and others of
`infringing the ’774 patent. Prelim. Resp. 2 (citing Ex. 2021).
`In February 2016, Baker Hughes filed an initial set of IPRs (IPR2016-
`00596, 00597, 00598, 00650, 00656, and 00657) contesting the validity of
`among others, the ’774 patent. Following Rapid’s Preliminary Responses
`filed in the initial set of IPRs, Baker Hughes filed a second set of IPRs
`(IPR2016-01496, 01505, and 01506) in July 2016, also contesting the
`validity of the ’774 patent and other patents.
`Also in July 2016, Weatherford filed three IPRs (IPR2016-01509,
`01514, and 01517) (the “Weatherford IPRs”). In each of the Weatherford
`IPRs, Rapid asserts that Baker Hughes is an unnamed real party-in-interest
`under 35 U.S.C. § 312(a)(2). Prelim. Resp. 1.
`2. The Parties’ Contentions
`Rapid contends that Baker Hughes and Weatherford have combined
`efforts “to obtain multiple bites at the invalidity apple,” and that in this
`proceeding, “unnamed party Baker Hughes had an opportunity to influence
`the theories asserted in this Petition.” Id. at 1–2. Rapid’s contentions that
`Baker Hughes is properly a real party-in-interest are as follows:
`(a) Weatherford and Baker Hughes are co-defendants and are working
`together in the lawsuit to invalidate the ’774 patent (Prelim.
`Resp. 2);
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`(b) Weatherford and Baker Hughes served joint invalidity contentions
`(Ex. 2022) in the underlying lawsuit, and the metadata associated
`with the invalidity charts indicates they were authored by Baker
`Hughes outside counsel (Id. at 3 (citing Exs. 2027, 2028));
`(c) Weatherford expressly authorized Baker Hughes’s outside counsel
`to act on their behalf in obtaining certain discovery in the lawsuit
`(Id. (citing Ex. 2029 8:21–9:3));
`(d) Weatherford did not join the initial IPRs filed by Baker Hughes,
`apparently indicating that they did not want to be bound by any
`estoppel that applied to Baker Hughes’s IPRs (Id. (citing Ex. 2038,
`1–2));
`(e) After receiving Rapid’s Preliminary Responses in the initial IPRs,
`Baker Hughes uncovered additional prior art and filed its second
`set of IPRs, including this additional prior art, allegedly addressing
`the deficiencies Rapid pointed out in their Preliminary Responses
`in the initial set of IPRs (Id. at 4–5 (citing Exs. 2031, 2034));
`(f) Baker Hughes counsel informed Rapid’s counsel via email (Ex.
`2034) that Baker Hughes intended to update its invalidity
`contentions in the lawsuit based on (1) additional prior art
`disclosed by Packers Plus, (2) additional prior art recently located
`by Baker Hughes, and (3) positions taken by Rapid in the IPRs (Id.
`at 4 (citing Ex. 2034));
`(g) Baker Hughes authored the supplemental invalidity contentions
`served on Rapid in the underlying lawsuit (Id. at 4–5 (citing
`Ex. 2031); and
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`(h) Subsequent to Baker Hughes’s second set of IPRs, Weatherford
`and Baker Hughes both filed IPRs asserting prior art directed to
`“overcoming the deficiency identified in [Rapid’s] preliminary
`responses.” (Id. at 5).
`Based on this evidence, Rapid alleges that Weatherford and Baker
`Hughes, as co-defendants in the underlying district court lawsuit, are joint
`defense partners and that “the two have specifically mounted a joint
`invalidity defense against the patent at issue.” Id. at 10.
`Following a telephone conference with the parties, the Board
`authorized, via email dated December 12, 2016, a five page reply (“Reply”)
`permitting Weatherford an opportunity to respond to Rapid’s allegation that
`Baker Hughes is a real party-in-interest in this proceeding. Weatherford
`argues that Baker Hughes has not exercised control, nor had the opportunity
`to control this proceeding, and thus is not a real party-in-interest to this
`proceeding. Reply 1.
`Weatherford contends that the evidence asserted by Rapid fails to
`rebut the presumption that Weatherford correctly identified the proper real
`parties-in-interest in this proceeding. Id. at 1–3. Weatherford additionally
`asserts certain evidence purporting to show that Weatherford and Baker
`Hughes have acted independently in this inter partes review proceedings
`before the Board. Id. at 3–5.
`3. Principles of Law
`Section 312(a) of Title 35 of the United States Code provides inter
`
`alia:
`
`(a) REQUIREMENTS OF PETITION.—A petition filed under
`section 311 may be considered only if—
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`(1) the petition is accompanied by payment of the fee
`established by the Director under section 311;
`(2) the petition identifies all real parties in interest;
`Generally, a petition is accorded a rebuttable presumption that its
`identification of real parties-in-interest is accurate and complete. See
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., Case IPR2013-
`00453, slip op. at 2 (PTAB Feb. 23, 2015) (Paper 91). If the patent owner
`produces sufficient evidence that “reasonably brings into question the
`accuracy of a petitioner’s identification of the real parties in interest,” the
`Board considers the totality of the relevant evidence to determine whether
`Petitioner has met its overall burden of persuasion to show that identification
`to be accurate and complete. See id. “Whether a party who is not a named
`participant in a given proceeding nonetheless constitutes a ‘real party-in-
`interest’ . . . to that proceeding is a highly fact-dependent question.” Office
`Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (2012) (citations
`omitted).
`[T]he spirit of that formulation as to IPR . . . proceedings means
`that, at a general level, the ‘real party-in-interest’ is the party that
`desires review of the patent. Thus, the ‘real party-in-interest’
`may be the petitioner itself, and/or it may be the party or parties
`at whose behest the petition has been filed.
`Id. (emphasis added).
`Multiple factors are relevant to the issue of whether a non-party may
`be recognized as a “real party-in-interest” or “privy.” Id. (citing Taylor v.
`Sturgell, 553 U.S. 880, 893–895, 893 n.6 (2008)). A common consideration
`is whether the non-party exercised or could have exercised control over a
`party’s participation in a proceeding. Id. (citing Taylor, 553 U.S. at 895).
`Other factors may include the non-party’s relationship to the petitioner, the
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`non-party’s relationship to the petition itself (including the nature and degree
`of its involvement in the filing of the petition), and the nature of the
`petitioner. Id. at 48,760. The concept of control generally means that “it
`should be enough that the nonparty has the actual measure of control or
`opportunity to control that might reasonably be expected between two
`formal coparties.” Id. (citation omitted). The non-party’s participation may
`be overt or covert, and evidence of that participation may be direct or
`circumstantial, but the evidence as a whole must show that the non-party
`possessed effective control from a practical standpoint. Gonzalez v. Banco
`Cent. Corp., 27 F.3d 751, 759 (1st Cir. 1994). The inquiry is not based on
`isolated facts, but rather must consider the totality of the circumstances. Id.
`4. Analysis
`Having considered the evidence presented by Weatherford and Rapid,
`we are not persuaded that Baker Hughes controls or had the ability to control
`the present proceeding. We agree with Rapid that Weatherford and Baker
`Hughes are collaborating in a joint defense on the infringement contentions
`asserted by Rapid in the lawsuit. Prelim. Resp. 3 (citing Ex. 2029 8:21–9:3;
`Ex. 1029, 10). Weatherford does not, in fact, substantively dispute this
`allegation and, indeed, filed a redacted copy of the parties Joint Defense
`Agreement. See Reply, 2–3 (“[A]ll of PO’s evidence is directed to actions
`taken as part of a joint defense group in the litigation, or Baker Hughes’
`separately filed IPR petitions in which Petitioners had no involvement.”) see
`also Ex. 1029, 1, 10. We also appreciate that Weatherford and Baker
`Hughes may have divided up responsibility for certain aspects of the lawsuit.
`For example, Baker Hughes apparently authored the initial and supplemental
`invalidity contentions served on Rapid in the lawsuit and obtained certain
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`discovery used by the defendants in the lawsuit. See Exs. 2027, 2028, 2029,
`2031. This evidence, however, relates specifically to the underlying lawsuit,
`and to the extent it is true, is not evidence of cooperation by Weatherford
`and Baker Hughes in this IPR proceeding. There is nothing surreptitious
`about separate entities, as either third parties, or separate parties to a lawsuit,
`proclaiming shared interests to protect communications that are relevant to
`advance the interests of the entities possessing the common interest. See In
`re Regents of Univ. of California, 101 F.3d 1386, 1389 (Fed. Cir. 1996)
`(“The protection of communications among clients and attorneys ‘allied in a
`common legal cause’ has long been recognized.”) (quoting In re Grand Jury
`Subpoena Duces Tecum, 406 F.Supp. 381, 386 (S.D.N.Y.1975)). The fact
`that Weatherford and Baker Hughes, have a desire and common interest in
`invalidating the ’744 patent and other patents, and have collaborated
`together, and as co-defendants in the underlying lawsuit invoked a common
`interest privilege with respect to sharing potentially invalidating prior art
`references, does not persuade us that Baker Hughes has any ability to control
`the instant Petition or is directing or funding the present proceeding.
`As noted by Rapid, the Board has issued decisions determining, based
`on evidence of control, that a non-party entity is a real party-in-interest.
`Prelim. Resp. 7 (citing Zoll Lifecor Corp. v. Philips Elecs. North America
`Corp., Case IPR2013-00609 (PTAB Mar. 20, 2014) (Paper 15) (the “Zoll
`Decision”)). In the Zoll Decision, the Board was persuaded that an unnamed
`party to the IPR, Zoll Medical, exercised consistent control over Zoll
`Lifecore for over six years, including control of the inter partes review. Id.
`at 11. Specific evidence of control included Zoll Lifecor’s acknowledgment
`that Zoll Medical controlled 100% of Zoll Lifecor and approved Zoll
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`Lifecor’s corporate budget and plans. Id. Other evidence of control
`included the fact that common counsel for Zoll Medical and Zoll Lifecor
`would not state affirmatively that counsel did not provide input into
`preparation of the IPRs. Id. at 11–12. Additional evidence showed that only
`Zoll Medical’s management team attended court-ordered mediation in the
`underlying district court litigation filed against Zoll Lifecor. Id. at 12.
`We have no such evidence in this proceeding. Weatherford and Baker
`Hughes are not related corporate entities, but apparently, competitors.
`Reply 1. Weatherford’s counsel states affirmatively in their Reply that
`Petitioner (recognizing its duty of candor) asserts that Baker
`Hughes did not provide any funding for filing or attorneys/expert
`fees in the present proceeding . . . Baker Hughes did not direct or
`control the filing of the petition in the present proceeding, and
`had no degree of involvement in the filing.
`Reply 4. Weatherford also related to the district court in the underlying
`lawsuit that
`[s]ince the very beginning of this case, Defendants have operated
`independently with regard to IPRs. Weatherford decided to file
`its IPRs when it did on a completely independent basis, with no
`consultation or agreement – explicit or implicit – with Baker
`Hughes.
`Ex. 1028, 8.
`Here, the playing field may not appear level to the extent Rapid must
`defend their patent in Weatherford’s and Baker Hughes’ separate IPR
`filings. Apart from this, Rapid has not however, explained sufficiently the
`significance of their contentions that (a) Weatherford did not join in the
`initial or second set of Baker Hughes petitions and (b) that the present
`Petition and Baker Hughes’s second set of petitions both include prior art
`allegedly directed to “overcoming the deficiency identified in [Rapid’s]
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`preliminary responses.”. See Prelim. Resp. 3, 5. Weatherford and Baker
`Hughes are separate corporate entities and their separately filed IPRs assert
`different grounds. Although the Board has discretion with respect to joinder
`and consolidation of cases relating to the same patent under 35 U.S.C.
`§ 315(c)–(d), Rapid has not apprised us of any rule, case law, or Board
`precedent that requires independent entities, who are not in privity nor real
`parties-in-interest, to join, consolidate or otherwise combine their separate
`efforts to invalidate the same patent.
`The evidence of record here shows that Weatherford and Baker
`Hughes have strategized and shared information in the lawsuit, but there is a
`dearth of evidence that Baker Hughes controls, or had the opportunity to
`control this proceeding. Generally, common interests or activities, including
`common legal interests and activities, are insufficient without a specific
`connection to the petition/proceeding at issue. See, e.g., Syntroleum v. Neste
`Oil, Case IPR2013-00178, Paper 22 at 7 (co-defendants with shared counsel
`in a co-pending District Court action insufficient); Trial Practice Guide
`48,760 (participation in joint defense group insufficient); cf. GEA Process
`Eng’g, Inc. v. Steuben Foods, Inc., Case 2014-00041, slip op. at 14–21
`(PTAB Dec. 23, 2014) (paper 140 (labeled as paper 135)) (non-party that
`funded specific petition/proceeding at issue on behalf of petitioner is real
`party in interest).
`The evidence shows more persuasively as Weatherford points out
`from the Joint Defense Agreement that the Petitioners have specifically
`contracted to ensure that, despite cooperating in the lawsuit, their respective
`IPRs remain independent and subject to no outside control or funding apart
`from the filing entity itself. Reply 4 (citing Ex. 1029, 10). Based on the
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`present record, we are not persuaded that Rapid provides sufficient rebuttal
`evidence that reasonably brings into question the accuracy of Weatherford’s
`identification of the real party-in-interest.
`B. 325(d)
`Rapid requests that we exercise our discretion under 35 U.S.C.
`§ 325(d) and decline to initiate inter partes review because substantially the
`same prior art and arguments were presented against the ’774 patent in
`IPR2016-00598. Prelim. Resp. 13–20. We disagree. While the Thomson
`and Ellsworth references are the same in both proceedings, the primary
`reference in ground 1 of this proceeding, Yost, allegedly disclosing multi-
`zone fracturing of an uncased wellbore, is a different primary reference and
`has merit for different reasons. Pet. 6. Weatherford’s ground 2 in this
`proceeding, arguably asserting Thomson and Ellsworth as in the -598 IPR,
`relies upon different evidence to support the assertions of obviousness and
`the level and motivation of one of ordinary skill in the art. See Pet. 55.
`Under the circumstances of this case, we determine that the present Petition
`does not present “the same or substantially the same prior art or arguments”
`as Weatherford has already presented in IPR2016-00598. Accordingly, we
`do not deny the Petition under § 325(d).6
`
`
`6 Rapid also argues that the Petition should be denied as “multiple bites at
`the invalidity apple” that purportedly uses our institution decision from the
`-597 IPR as a “roadmap.” Prelim. Resp. 13–19. We are not persuaded that a
`second petition on the same patent should be denied in the absence of
`sufficient evidence that it presents the same or substantially the same prior
`art or arguments as presented in the initial petition. See 35 U.S.C. § 325(d).
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`C. The Challenges as Premised on Yost, Thomson and Ellsworth
`1. Overview of Yost
`Yost discloses a U.S. Department of Energy sponsored stimulation
`test of a horizontal wellbore in the Devonian shales of Wayne County, West
`Virginia. Ex. 1002, 2.7 In the test, a casing string with 14 sliding sleeve
`ported collars was inserted into a horizontal uncased wellbore. Id. The
`casing string included eight external casing packers (“ECP’s”) providing
`eight separate open hole zones along the length of the casing string. Id.
`Apparently, only seven of the ECP’s properly inflated so that only seven
`zones were available for testing. Id. The casing string and zones 1–8 are
`illustrated, below.
`
`Figure 2 of Yost, above, depicts the casing string and sliding sleeve
`openable ports within each of the eight zones. A “straddle tool” (not shown)
`was used to open and close the port collars in the individual zones. Id.
`
`
`
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`7 We refer to Rapid’s annotated page numbers applied to the Yost reference.
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`The test included 24-hour pressure build-up in each of the seven
`isolated zones along a 2,221-foot length of the horizontal wellbore, and for
`each zone, data collection relating to various characteristics of the well
`including “average reservoir pressure values, skin values, and average
`permeability values for the various zones with the different stimulation
`jobs.” Id. at 2. For each zone different “frac jobs” were undertaken to
`stimulate the Devonian shale formation using different pressurized fluids,
`e.g. nitrogen, liquid CO2, and nitrogen-foam with proppants. Id. at 3. Yost
`concludes that “[a]s a result of the different frac jobs in the various zones,
`the production was enhanced in all zones. This improvement in production is
`reflected in the increase in flow rates and a decrease in skin factor values.”
`Id. at 5.
`
`2. Overview of Ellsworth
`Ellsworth discloses that “[m]ore recently, solid body packers (SBP’s)
`(see Figure 4) have been used to establish open hole isolation.” Ex. 1004, 3.
`Ellsworth’s Figure 4 is reproduced below.
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`Figure 4, above, shows a solid body packer, including a setting
`cylinder, a setting shear, a mandrel lock, a five piece packing element, and a
`sheer release. Id. at Fig. 4. Ellsworth teaches that a solid body packer
`provides a hydraulically actuated mechanical packing element. Id. at 3.
`Ellsworth explains that “[t]he objective of using this type of tool is to
`provide a long-term solution to open hole isolation without the aid of
`cemented liners.” Id.
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`3. Overview of Thomson
`Thomson teaches a Multi Stage Acid Frac Tool (“MSAF tool”) having
`a sliding sleeve and threaded ball seat, with “the smallest ball seat in the
`lowest sleeve and the largest ball seat in the highest sleeve.” Ex. 1003, 21.
`As explained by Thomson, the MSAF tool permits that
`stimulation of 10 separate zones is accomplished in 12-18 hours
`by a unique procedure that lubricates varying sized low-specific
`gravity balls into the tubing and then pumps them to a mating
`seat in the appropriate MSAF, thus sealing off the stimulated
`zone and allowing stimulation of the next zone which is made
`accessible by opening the sleeve.
`Id. Thomson’s Figure 5, below, depicts the MSAF tool in cross-section.
`
`Thomson’s Figure 5, reproduced above, depicts in the upper
`illustration labeled “Closed Position,” the MSAF tool having a sliding sleeve
`covering fluid ports in the closed position, and in the lower illustration,
`labeled “Open Position,” the sliding sleeve having been motivated by a ball
`into an open position uncovering the fluid ports.
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`4. Analysis
`Our analysis focuses, initially, on the challenge against independent
`claim 1 and the asserted combination of Yost, Thomson and Ellsworth.
`Weatherford asserts that Yost discloses all the steps of claim 1 except “that
`Yost used inflatable packers and ported collar sliding sleeves instead of
`SBPs and ball-actuated sliding sleeves.” Pet. 27. Weatherford provides in
`their Petition an annotated version of Yost’s Figure 2 as reproduced below.
`
`
`Yost’s Figure 2, as annotated by Weatherford, above, depicts a tubing
`string within an open hole (i.e. “uncased”) of a horizontal wellbore. Id. at
`30–31 (citing Exs. 1002, Abst., 1–2, 10; 1007 ¶¶ 75–79).
`Yost appears to disclose a tubing string having a long-axis and an
`inner bore including a series of sliding sleeves with ports positioned
`downstream from one another along the length of the tubing string.
`Ex. 1002, 2, Fig. 2, (Yost describes a “casing string along with 14 sliding
`sleeve ported collars which were used to provide access to the formation in
`lieu of perforations.”). Yost’s tubing string apparently extends horizontally
`without a casing to facilitate
`injecting fracturing fluids in an open hole fracturing condition
`behind pipe. This was the method of completion used in this
`2000 foot horizontal well to avoid the problems of formation
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`damage associated with cementing and to eliminate the need for
`tubing-conveyed perforating of numerous treatment intervals.
`Ex. 1002, 1. Yost further discloses external casing packers defining eight
`zones along the length of the tubing string. Id. at 2. As shown by
`Weatherford’s annotations of Yost’s Figure 2, above, Yost is understood to
`disclose a first, second, and third packers offset from respective ports where
`the packers seal the tubing string against the wellbore wall of the uncased
`open hole horizontal wellbore.
`As asserted by Weatherford, Yost appears to disclose all the steps and
`elements of claim 1 except for the packers being solid body type packers and
`the sliding sleeves being actuated by a “fluid conveyed sealing device” such
`as a ball. Pet. 27. Weatherford contends that Thomson’s MSAF tool
`teaches a known alternative to Yost’s sliding sleeve collars and that one of
`skill in art would have known to substitute the MSAF tool “to eliminate
`through-tubing tools and to save time” in either a cased or uncased hole. Id.
`at 32–35 (citing Ex. 1007 ¶ 81–92). Weatherford argues that using
`Thomson’s system in an open uncased
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