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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`___________________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`___________________________
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` WEATHERFORD INTERNATIONAL, LLC, WEATHERFORD/LAMB, INC.,
`WEATHERFORD US, LP, and WEATHERFORD ARTIFICIAL LIFT
`SYSTEMS, LLC,
`Petitioners
`
`v.
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`PACKERS PLUS ENERGY SERVICES INC.,
`Patent Owner
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`
`
`Case IPR2016-01509
`Patent 7,861,774
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`EXCLUSIVE LICENSEE’S NOTICE OF APPEAL
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`Pursuant to 35 U.S.C. §§ 141 and 142 and 37 C.F.R. §§ 90.2(a), 90.3 and
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`104.2, Exclusive Licensee, Rapid Completions LLC, (“Rapid Completions”)
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`hereby provides notice of its appeal to the United States Court of Appeals for the
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`Federal Circuit for review of the Final Written Decision of the United States Patent
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`and Trademark Office (“USPTO”) Patent Trial and Appeals Board (“PTAB”) in
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`Inter Partes Review 2016-01509, concerning U.S. Patent 7,861,774 (“the ’774
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`patent”), entered on February 22, 2018, attached hereto as Appendix A.
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`ISSUES TO BE ADDRESSED ON APPEAL
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`A. Whether the PTAB erred in concluding that claims 1, 3–7, 9–10, 12 and
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`16 would have been obvious under 35 U.S.C. § 103 over Yost, Thomson
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`and Ellsworth?
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`B. Whether the PTAB erred in concluding that claims 1, 3–7, 9–10, 12 and
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`16 would have been obvious under 35 U.S.C. § 103 over Thomson and
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`Ellsworth?
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`C. Whether the PTAB erred in giving insufficient weight to Patent Owner’s
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`secondary considerations of non-obviousness?
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`D. Whether the PTAB erred in concluding that Patent Owner did not
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`demonstrate commercial success?
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`E. Whether the PTAB erred in concluding that Patent Owner did not
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`demonstrate a long-felt but unsolved need?
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`F. Whether the PTAB erred in concluding that Patent Owner did not show
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`that the claimed invention was contrary to accepted wisdom and
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`produced unexpected results?
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`G. Whether the PTAB erred in concluding that a person of ordinary skill in
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`the art would have been motivated to combine the teachings of the prior
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`art and would have achieved the claimed inveniton with a reasonable
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`expectation of success?
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`H. Whether the Board erred in considering new evidence submitted for the
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`first time in Petitioners’ Reply?
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`Rapid Completions reserves the right to challenge any finding or
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`determination supporting or related to the issues listed above, and to challenge any
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`other issues decided adversely to Rapid Completions in the Final Written Decision
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`and/or any orders, decisions or rulings underlying the Final Written Decision.
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`Simultaneous with submission of this Notice of Appeal to the Director of the
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`United States Patent and Trademark Office, this Notice of Appeal is being filed
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`with the Patent Trial and Appeal Board. In addition, this Notice of Appeal, along
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`with the required docketing fees, is being filed with the United States Court of
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`Appeals for the Federal Circuit.
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`Dated: April 20, 2018
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`Respectfully submitted,
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`/Gregory J. Gonsalves/
`Dr. Gregory Gonsalves
`Reg. No. 43,639
`2216 Beacon Lane
`Falls Church, Virginia 22043
`(571) 419-7252
`gonsalves@gonsalveslawfirm.com
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that in addition to being filed electronically
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`through the Patent Trial and Appeal Board’s E2E system the foregoing NOTICE
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`OF APPEAL was served on the Director of the United States Patent and
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`Trademark Office, at the following address (in accordance with 37 C.F.R. §§
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`90.2(a), 104.2):
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`Director of the United States Patent and Trademark Office
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`c/o Office of the General Counsel
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`United States Patent and Trademark Office
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`P.O. Box 1450 Alexandria, Virginia 22313-1450
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`CERTIFICATE OF FILING
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`The undersigned certifies that on April 17, 2018, a true and correct copy of
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`the foregoing NOTICE OF APPEAL was filed electronically with the Clerk’s
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`Office of the United States Court of Appeals for the Federal Circuit at the
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`following address:
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`Clerk of Court
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`United States Court of Appeals for the Federal Circuit
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`717 Madison Place NW
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`Washington, DC 20005
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing NOTICE OF
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`APPEAL was served on April 20, 2018, by filing this document though the
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`PTAB’s E2E system as well as by delivering a copy via electronic mail to the
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`attorneys of record for the Petitioners as follows:
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`
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`Lead Counsel
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`Jason Shapiro
`Reg. No. 35,354
`EDELL, SHAPIRO & FINNAN, LLC
`9801Washingtonian Blvd.
`Suite750
`Gaithersburg,MD 20878
`js@usiplaw.com
`301-424-3640
`
`Backup Counsel
`
`Patrick Finnan
`Reg. No. 39,189
`EDELL, SHAPIRO & FINNAN, LLC
`9801Washingtonian Blvd.
`Suite750
`Gaithersburg,MD 20878
`pjf@usiplaw.com
`301-424-3640
`
`
`Dated: April 20, 2018
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`
`
`
`
`/Gregory J. Gonsalves/
`Dr. Gregory Gonsalves
`Reg. No. 43,639
`2216 Beacon Lane
`Falls Church, Virginia 22043
`(571) 419-7252
`gonsalves@gonsalveslawfirm.com
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`Appendix A
`Appendix A
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`Trials@uspto.gov
`571-272-7822
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`Paper 65
`Entered: April 3, 2018
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`PUBLIC VERSION – REDACTED
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`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,
`Petitioner,
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`v.
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`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.
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`DANIELS, Administrative Patent Judge.
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`FINAL WRITTEN DECISION
`35 U.S.C. § 318(a) and 37 C.F.R. § 42.73
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`IPR 2016-01509
`Patent 7,861,774 B2
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`PUBLIC VERSION – REDACTED
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`
`I.
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`INTRODUCTION
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`A. Background
`Weatherford International LLC, and others, (“Weatherford” or
`“Petitioner”) filed a Petition (Paper 1, “Pet.”) challenging claims 1, 3–7, 9–
`10, 12, and 16 of the ’774 patent and supporting its challenge with the
`testimony of Dr. Vikram Rao, Ph.D. (Ex. 1007). We instituted trial for
`claims 1, 3–7, 9–10, 12 and 16 of the ’774 patent on certain grounds of
`unpatentability alleged in the Petition. Paper 23 (“Decision to Institute” or
`“Inst. Dec.”).
`After institution of trial, Rapid Completions LLC, (“Rapid” or “Patent
`Owner”) the exclusive licensee of the ’774 patent, filed a Patent Owner
`Response, along with a Declaration by Mr. Harold E. McGowen, PE,
`(“McGowen Declaration”).1 Petitioner filed a Reply (Paper 39, “Pet.
`Reply”) and both parties filed motions to exclude certain evidence. See
`Papers 44, 46.
` A consolidated hearing for IPR2016-01509, IPR2016-01514 and
`IPR2016-01517, each involving the same Petitioner and the same Patent
`Owner, was held on November 2, 2017. The ’774 patent is a continuation
`of U.S. Patent No. 7,534,634, which is in turn, a continuation of U.S. Patent
`No. 7,134,505, which are at issue in the latter two proceedings. The
`transcript of the consolidated hearing has been entered into the record.
`Paper 61. (“Tr.”).
`
`
`1 Packers Plus is the owner of the ’774 patent, however, 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.
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`2
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`We have jurisdiction under 35 U.S.C. § 6(c). This final written
`decision is issued pursuant to 35 U.S.C. § 318(a).
`Weatherford has shown by a preponderance of the evidence that
`claims 1, 3–7, 9–10, 12 and 16 of the ’774 patent are unpatentable.
`B. Additional Proceedings
`In addition to this petition, 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 method for fluid treatment of a well bore,
`namely “fracing,” or “fracturing” and a tubing string tool for treating and
`stimulating flow from particular segments of the well bore in an oil or gas
`formation while sealing off other segments. Ex. 1001, Abstract. The well
`bore can be either an open hole or a cased hole. Id. at 3:66–4:3. Typically, a
`tubing string is run into a well bore 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 to obtain a desired product flow, a well “stimulation” technique
`is employed, i.e. fracing, which involves injecting fracturing fluids into the
`formation to enlarge existing channels and thereby improve inflow into the
`well bore. Id. at 1:35–39. And, because a well bore 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 well bore, while other intervals are closed,” is key to
`controlling and optimizing production from the well. Id. at 2:28–30.
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`Figure 1b of the ’774 patent is reproduced below. We note that Figure
`1b as illustrated has a vertical orientation, and referring to Figure 1a and
`other figures as well as the claims, the well bore can be configured also in a
`non-vertical orientation, for example horizontal.
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`
`As shown, above, in Figure 1b, and described in the ’774 patent,
`tubing string 14 includes a series of ports 16c, 16d, 16e, along its length,
`with a ball-actuated sliding sleeve 26c, 26d, 26e, 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,” 20d, 20e, 20f, 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 well bore wall, thereby
`dividing the well bore into a series of isolated segments, also called stages.
`Id. at 6:18–24.
`As further observed in Figure 1b, when sliding sleeve 26e covering
`port 16e is activated by ball 24e to an open position as shown, fluid can pass
`into one segment of the well bore but is prevented from passing into adjacent
`segments by packers 20e and 20f positioned on either side of the port. Id. at
`6:50–57. Thus, ball 24e, as the smallest ball passes through sleeves 26c and
`26d before activating sliding sleeve 26e. With port 16e open, as shown
`above, a stimulation of this segment of the well bore can be undertaken.
`With this structure, sequential stimulation of the adjacent well bore
`segments can be implemented because “[e]ach of the plurality of sliding
`sleeves has a different diameter seat and therefore each accept different sized
`balls.” Id. at 7:14–15. In other words, working uphole, each consecutive
`sliding sleeve has a slightly larger seat and is activated by a slightly larger
`ball than the previous sliding sleeve. Id. Hence, a sequential stimulation of
`each adjacent uphole segment of the well bore is achieved with the
`increasing sleeve seat and ball diameter.
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`
`D. Illustrative Claim
`Of the challenged claims, claim 1 is the only independent claim. Each
`of dependent claims 3–7, 9–10, 12 and 16 depend directly from claim 1.
`Claim 1, as set forth in substantive part below, illustrates the claimed subject
`matter:
`1. A method for fracturing a hydrocarbon-containing formation
`accessible through a well bore, the method comprising:
`running a tubing string into an open hole and uncased non-
`vertical section of the well bore, the tubing string having a
`long axis and an inner bore and comprising:
`a first port opened through the tubing string wall,
`a second port opened through the tubing string wall, the
`second port downhole from the first port along the long axis
`of the tubing string,
`a first sliding sleeve having a seat with a first diameter . . .
`a second sliding sleeve having a seat with a second diameter
`smaller than the first diameter . . .
`a first solid body packer . . .
`a second solid body packer . . .
`a third solid body packer . . .
`wherein the tubing string is run into the well bore . . .
`expanding radially outward the first, second and third solid
`body packers until each of the first, second and third packers
`sets and seals against the well bore wall in the open and
`uncased, non-vertical section of the well bore . . . and create
`a first annular well bore segment between the first and second
`solid body packers and a second annular well bore segment
`between the second and third solid body packers . . .
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`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
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`pumping fracturing fluid through the second port and into the
`second annular well bore
`segment
`to
`fracture
`the
`hydrocarbon-containing formation.
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`E. The Alleged Grounds of Unpatentability
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`Petitioner contends that the challenged claims are unpatentable on the
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`following specific grounds-
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`—Im Claims Challened
`Yost 2 Thomson,3 and Ellsworth4
`§ 103
`§ 103
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`1, 3—7, 9—10, 12, and 16 Thomson and Ellsworth
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`1, 3—7, 9—10, 12, and 16
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`2 Ex- 1002, AB. Yost et al., Production and Stimulation Analysis ofMlltiple
`Hydraulic Fracturing ofa 2, 000-ft Horizontal Well, SPE 19090, Society of
`Petroleum Engineers, Gas and Technology Symposium, Dallas TX, (June 7—
`9, 1989) (“Yost”).
`3 Ex. 1003, D.W. Thomson et al., Design and Installation ofa Cost-Eflective
`Completion System for Horizontal Chalk Wells Where Multiple Zones
`Require Acid Stimulation, SPE 37482, © Society of Petroleum Engineers
`(1997) (“Thomson”).
`4 Ex. 1004, B. Ellsworth et al., Production Control ofHorizontal Wells in a
`Carbonate ReefStructure, © 1999 CIM 1999 Horizontal Well Conference
`(“Ellsworth”).
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`CLAIM CONSTRUCTION
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`II.
`A. Legal Standard
`In an inter partes review, claim terms in an unexpired patent are
`interpreted according to their broadest reasonable construction in light of the
`specification of the patent in which they appear. 37 C.F.R. § 42.100(b); see
`also In re Cuozzo Speed Techs., LLC., 778 F.3d 1271, 1278–82 (Fed. Cir.
`2015) (“Congress implicitly adopted the broadest reasonable interpretation
`standard in enacting the AIA,” and “the standard was properly adopted by
`PTO regulation.”). Claim terms are given their ordinary and customary
`meaning as would be understood by a person of ordinary skill in the art at
`the time of the invention and in the context of the entire patent disclosure.
`In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). If the
`specification “reveal[s] a special definition given to a claim term by the
`patentee that differs from the meaning it would otherwise possess[,] . . . the
`inventor’s lexicography governs.” Phillips v. AWH Corp., 415 F.3d 1303,
`1316 (Fed. Cir. 2005) (en banc) (citing CCS Fitness, Inc. v. Brunswick
`Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002)). We apply this standard to the
`claims of the ’774 patent.
`Petitioner offers interpretations for several terms, “solid body packer,”
`“without tripping in a string or wire line” and “without setting any slips.”
`Pet. 26–27. Patent Owner disputes Petitioner’s interpretation of “solid body
`packer,” and argues that the “second annular well bore segment” must be “in
`an open hole, non-vertical section of the well bore.” PO Resp. 3–6.
`B. Solid body packer
`Referring to U.S. Provisional Application No. 60/404,783, to which
`the ’774 patent claims priority, Petitioner contends that “solid body packer”
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`means “a tool to create a seal between tubing and casing or the borehole wall
`using a packing element which is mechanically extruded, using either
`mechanically or hydraulically applied force.” Pet. 26 (citing Ex. 1015, 4;
`Ex. 1007 ¶¶ 58–66; Ex. 1001 at 4:4–7, 6:29–30, 8:34–43, 9:1–4, 10:38–39).
`Patent Owner disagrees with Petitioner’s construction stating that the
`parties “dispute what distinguishes solid body packers from other types of
`packers.” PO Resp. 3. Patent Owner asserts specifically that “solid body
`packer” should be construed “to mean ‘a packer including a solid, extrudable
`packing element.’” Id.
`Despite the parties disagreement as to the specific definition of “solid
`body packer,” and whether a definition provided in a related provisional
`application should carry the day as argued by Petitioner, the parties
`apparently agree that a solid body packer” as recited in the claims, does not
`cover an inflatable, hollow, or swellable, type of packer that has a packing
`element which expands due to fluid force. Compare Pet. Reply 2–3 with PO
`Resp. 30. What is clear from the specification of the ’774 patent is that a
`solid body packer is distinguishable from an inflatable, or swellable, packer
`because it does not use an inflatable bladder. See Ex. 1001, 1:45–48
`(explaining that inflatable packers “are inflated with pressure using a
`bladder.”). And, consistent with the specification, the claims expressly
`recite a “solid body packer.” Id. at 14:23. We agree, therefore, with the
`parties’ contentions that a solid body packer, as recited in the claims of the
`’774 patent, does not cover an inflatable packer.
`Beyond this, our decision does not rely on any specific definition of a
`solid body packer and neither do the parties advance any substantive
`arguments based on their respective definitions. This term, therefore, needs
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`no further construction. See 35 U.S.C. § 314(a); see also 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.”).
`C. Second annular well bore segment
`Petitioner does not dispute Patent Owner’s contention that the “second
`annular well bore segment” must be an open hole, non-vertical segment of
`the well bore. See PO Response 5–6, and see Pet. Reply 1–3. A reasonable
`reading of claim 1 supports Patent Owner’s contention, specifically the
`clause describing “the first and second annular well bore segments providing
`access to the hydrocarbon-containing formation along the well bore wall in
`the open hole and uncased, non-vertical section of the well bore.” Ex. 1001,
`14:61–64 (emphasis added).
`Beyond the correct interpretation of this claim term, our decision does
`not rely on a specific definition of “second annular well bore segment,” and
`therefore no express definition of this term is necessary. See Vivid Techs.,
`200 F.3d at 803.
`D. Other Constructions
`We do not provide explicit constructions for the remaining claim
`terms asserted by Petitioner because they are not disputed and a construction
`is not necessary for our determinations in this proceeding. See id., see also
`Pet. 26–27.
`
`III. MOTIONS TO EXCLUDE EVIDENCE
`Weatherford and Rapid each move to exclude evidence proffered by
`their respective opponents. We address, below, each of their motions in
`turn.
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`
`A. Petitioner’s Motion to Exclude Exhibits 2004–2020, 2045–2047,
`2051–2055, 2058–2059, 2061, 2081, 2083, 2085–2089, 2091, and
`2097
`
`Exhibits 2051 and 2081
`Petitioner moves initially to exclude portions of Exhibits 2051 and
`2081, which are declarations by Patent Owner’s declarant, Mr. McGowen,
`under FRE 702, 705, and the PTAB’s Trial Practice Guide at § II(A)(4) and
`also under 37 C.F.R. § 42.65(a). Pet. Mot. 3–7. Petitioner argues
`specifically that portions of Mr. McGowen’s declarations relating to
`commercial success and estimates of revenue due to competitors’ allegedly
`infringing products, are “expert testimony for which it refuses to disclose the
`underlying facts or data.” Id. at 4.
`It is not clear that Mr. McGowen’s estimates of Baker Hughes’s
`revenue from its IsoFrac and FracPoint well completion systems, are
`inadmissible under FRE 702 and 705. FRE 705 states that “an expert may
`state an opinion — and give the reasons for it — without first testifying to
`the underlying facts or data.” Further, 37 C.F.R. § 42.65(a) states that
`“[e]xpert testimony that does not disclose the underlying facts or data on
`which the opinion is based is entitled to little or no weight.” Thus,
`Petitioner’s arguments with respect to Exhibits 2051 and 2081 go more to
`weight of the declarant’s testimony rather than admissibility. We do not,
`therefore exclude Exhibits 2051 and 2081. We appreciate that Mr.
`McGowen’s initial estimates are based on information not available to
`Petitioner in this proceeding. See Pet. Mot. 4, see also Ex. 2051 42, n. 6 (“In
`arriving at this revenue estimate, I identified, analyzed, and summarized
`Baker Hughes confidential data containing information on the cost and/or
`profit derived from the sale of equipment that was run into a well.”).
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`However, Mr. McGowen’s subsequent reliance on only publically available
`Baker Hughes’s marketing sources and a cash estimate of “revenue per frac
`stage” is reasonably within Mr. McGowen’s experience and expertise in the
`field. See Ex. 2081 23–24, see also Ex. 2051, 1–3. Because the actual
`revenue value is admittedly a “rough estimate,” we accord little if any
`weight to the asserted financial figure itself. Id. We do credit, to some
`extent, Mr. McGowen’s inference that Baker Hughes has derived certain
`business revenue from its FracPoint system. See Ex. 2051, 41–42, see also
`Ex. 2081, 22–24.
`
`Exhibits 2004–2012, 2014, 2020, 2045–2047,
`2054, 2061, and 2086–2089
`Petitioner next moves to exclude Exhibits 2004–2012, 2014, and 2020
`asserting that Patent Owner failed to properly authenticate these exhibits
`under FRE 901. Pet. Mot. 7. Specifically, Petitioner argues that Exhibits
`2083 and 2091, declarations attesting to the authenticity of certain other of
`the documents represented in these exhibits, were filed with Patent Owner’s
`Response, and not filed within 10 days of Petitioner’s objections, and are
`thus untimely under 37 C.F.R. § 42.64(b)(2). Id.
`We are not persuaded that Exhibits 2083 and 2091 are untimely. The
`Board has previously determined that prior to filing a patent owner response
`it is not always necessary for a patent owner to serve supplemental evidence
`within the 10 business days afforded by 37 C.F.R. § 42.64(b)(2). See
`Nuvasive, Inc. v. Warsaw Orthopedic, Inc., IPR2013-00206, Paper 22 at 3
`(PTAB Oct. 15, 2013) (In Nuvasive, the Board explained that “the potential
`prejudice to Patent Owner (e.g., submitting its new testimonial evidence
`several weeks prior to the due date for patent owner response) outweighs
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`any potential prejudice to Petitioner.”). Petitioner has not, in this
`proceeding, argued that it has suffered any prejudice or asserted that the
`declarations do not authenticate the noted exhibits, only that Exhibits 2083
`and 2091 were not filed in accordance with 37 C.F.R. § 42.64(b)(2). We
`decline to exclude these exhibits on this basis alone.
`To the extent Exhibits 2004–2012, 2014, and 2020, are not
`sufficiently authenticated by a declarant, we determine that these documents
`are also industry publications, periodicals and text books containing
`publication numbers, printing dates and publisher indicia, all of which are
`understood at least under FRE 902 (6) as characteristics of self-
`authenticating documents.
`Petitioner argues also that Exhibits 2004–2012, 2014, 2020, 2045–
`2047, 2054, 2061, and 2086–2089 are not relevant under FRE 401. Pet.
`Mot. 7–10. Specifically, Petitioner contends that these documents, offered
`to show industry praise, have not been sufficiently shown as relating to
`StackFRAC tools and system covered by the claims of the ’774 patent. Id.
`at 8. (“Petitioner alleges that [n]ot one of these exhibits mentions the long
`list of steps recited in claim 1 of the ’774 Patent, which requires a series of
`steps performed in a horizontal, open hole using three solid body packers
`and two ball drop sliding sleeves.”). Petitioner’s arguments are not
`persuasive because these exhibits are replete with references to Packers
`Plus’s StackFRAC system. See for example Exs. 2004, 2005, 2009. Exhibit
`2009 is an article from the June 2015 issue of New Technology Magazine
`and states that
`[t]he open-hole ball-drop system is typically associated with
`Calgary-based Packers Plus Energy Services Inc., though a
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`number of competitors also run similar systems. A packer is set
`in the external casing, uncemented. In the case of the Packers
`Plus StackFRAC system, balls made of thermal-plastic material
`such as Teflon are dropped into the well to shift a sleeve, isolate
`the previous frac and open the next frac port up-hole.
`Ex. 2009, 1. And, although this is not an element-by-element comparison of
`StackFRAC with the claims recited in the ’774 patent, this article fairly
`explains that StackFRAC is a multi-stage open hole horizontal well
`completion system using solid body (as opposed to swellable) packers, and a
`continuous frac ball drop process using moveable sleeve and port opening
`tools. Id. Further, as discussed in greater detail below with respect to nexus
`and secondary considerations, we credit Mr. McGowen’s testimony and
`claim charts at Exhibit A of his declaration showing persuasive evidence
`corroborating the assertion that StackFRAC is most likely the commercial
`embodiment used in the claimed method recited in the ’774 patent. See
`Ex. 2051, Ex. A.
`Additionally, and to address Petitioner’s contention that Exhibit 2014
`is not relevant because it is dated 2007, many years after the filing of the
`’774 patent, we note that Patent Owner relies upon this exhibit in the context
`of open hole multi-stage (“OHMS”) being contrary to accepted wisdom, and
`mainly to show that even as of 2007 a person of ordinary skill in the art
`would still have understood casing and cementing a well bore as
`conventional and necessary. See PO Resp. 22. We are therefore not
`apprised of a persuasive reason or facts upon which to exclude as irrelevant
`any of Exhibits 2004–2012, 2014, 2020, 2045–2047, 2054, 2061, and 2086–
`2089.
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`Exhibits 2010, 2013, 2015, 2016–2019, 2045, 2047, 2052–2055,
`2058–2059, 2085, and 2097
`Petitioner moves to exclude Exhibits 2010, 2013, 2015, 2016-2019,
`2045, 2047, 2052–2055, 2058–2059, 2085, and 2097 because they “are out
`of court statements offered for the truth of the matter asserted that do not fall
`within any hearsay exception and thus should be excluded under FRE 802.”
`Pet. Mot. 10.
`With respect to Exhibits 2010, 2085, and 2097 our Decision does not
`rely upon these exhibits and therefore Petitioner’s Motion is moot as to these
`exhibits.
`Exhibit 2013, similar to Exhibits 2015, 2017, 2045, 2047, and 2055, is
`an industry publication, in this case a technical paper published by the
`Society for Petroleum Engineers, SPE 164009. See Ex. 2013 (SPE 164009
`is titled “Open Hole Multi-Stage Completion System in Unconventional
`Plays: Efficiency, Effectiveness and Economics.”). This paper is relied upon
`by Patent Owner to support its contention that the patented technology
`operates contrary to the conventional wisdom. See PO Resp. 23. The
`statement in SPE 164009 relied upon by Patent Owner to support this
`contention states that “[s]ome of the features of the OHMS approach are
`often depicted as disadvantages, such as the inferred inability to control the
`initiation point of the fractures”). Ex. 2013, 5. This statement is not,
`however, being offered for the truth of the matter asserted in the statement
`itself, i.e., whether or not the inability to precisely control fracture points in
`OHMS completions “are often depicted as disadvantageous.” Id. Whether
`or not the statement is true, it is offered mainly for the sake that it was
`espoused and printed in an industry publication, and represents a state of
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`mind, i.e. that in 2001 a person of ordinary skill in the art would have
`understood that accepted wisdom was to use cemented casing plug and perf
`completion methods, as opposed to OHMS. It is not hearsay for Patent
`Owner to infer from this statement that a person of skill in the art would
`have been skeptical of using OHMS completion techniques due to its
`inability to control fracture point initiation. Id. For the same and similar
`reasons, we are not persuaded that Exhibits 2015, 2017, 2045, 2047, and
`2055 are inadmissible as hearsay.
`Exhibits 2016 and 2085 are transcripts of videotaped depositions of
`Ali Daneshy, a witness for Baker Hughes in other IPR proceedings also
`involving Packers Plus. Mr. Daneshy’s testimony, under oath in the other
`IPR proceedings is submitted here essentially as a declaration, and his
`testimony in those proceedings relates also to the ’774 patent. See Ex. 2016,
`8:21–25. Petitioner had the opportunity also in this proceeding to depose
`Mr. Daneshy and did not. Mr. Daneshy’s sworn deposition testimony in
`these exhibits are his own recollections, not that of another, and because
`Petitioner had the opportunity to cross-examine Mr. Daneshy in this
`proceeding, his prior testimony is not inadmissible.
`Exhibits 2018–2019 and 2052–2053, 2058–2059 are various technical
`documents, advertisements, and a slideshow relied upon by Patent Owner to
`show copying by Baker Hughes. Pet. Mot. 13. For example Exhibit 2052 is
`alleged to be a Packers Plus’s internal document, which is provided for
`comparison with Exhibit 2053, a Baker Hughes document. These
`documents Patent Owner contends, are the same technical drawings, with
`Exhibit 2053 allegedly having an altered product label, crediting the Packers
`Plus’s technical drawing to Baker Hughes Iso-Frac system. PO Resp. 31–
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`34. Again, to the extent there are statements in these documents, the
`documents are not hearsay as the documents are used for purposes of
`comparison, to allege copying, not for the truth of the matter, statements or
`otherwise, depicted in the documents themselves. This same analysis
`applies to the video comparison provided by Patent Owner in Exhibits 2058–
`2059, as well as the marketing and slide show documents in Exhibits 2018
`and 2019. See PO Resp. 34–35. This is not hearsay under FRE 802.
`For these reasons, we deny Petitioner’s Motion to Exclude.
`B. Patent Owner’s Motion to Exclude Exhibits 1008 and 1011–1014
`Patent Owner filed a Motion to Exclude 1008 and 1011–1014.
`Paper 46. Petitioner file an Opposition to Patent Owner’s Motion to
`Exclude. Paper 48. Patent Owner responded by filing a Reply to Its Motion
`to Exclude, in which Patent Owner states “to the extent the Board overrules
`[Petitioner’s] hearsay and authentication objections . . . , [Patent Owner]
`withdraws the present motion.” Paper 53, 1. Thus, given that we deny
`Petitioner’s Motion to Exclude, Patent Owner’s Motion to Exclude is
`withdrawn.
`
`IV. ANALYSIS
`A. Claims 1, 3–7, 9–10, 12 and 16 — Alleged obviousness over Yost,
`Thomson, and Ellsworth
`Petitioner asserts that claims 1, 3–7, 9–10, 12 and 16 would have been
`obvious over Yost, Thomson, and Ellsworth.
`A patent is invalid for obviousness:
`if the differences between the s
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