`___________________
`
`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
`___________________
`
`
`EXCLUSIVE LICENSEE RAPID COMPLETIONS LLC’S SURREPLY1
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`1 On September 15, 2017, Respondent requested authorization to file a motion to
`strike Petitioners’ reply and new supporting evidence or in the alternative submit a
`surreply and supplemental expert declaration. On September 25, 2017, the Board
`denied Respondent’s request to file a motion and authorized a 6 page surreply
`limited to addressing the new Yost theory, Overbey, and McLellan without an
`accompanying expert declaration.
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`
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`I.
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`Response to Petitioners’ New Yost Theory.
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`According to Petitioners, “multi-stage open-hole fracturing [“OHMS”] was
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`prevalent by 2001.” Reply at 1. Their own expert has testified otherwise:
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`IPR2016-01509
`Patent 7,861,774
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`Q. Well, what I'm asking is this hypothetical person of skill in the art,
`would they have thought it was obvious prior to 2001 to do open hole
`multistage fracturing?
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`A. The -- the obvious part throws me because I don't what you mean by
`it was obvious. If somebody wished to do multistage fracturing, then -
`- then they could read Thomson. And Thomson did -- Thomson did
`multistage fracturing. So there was literature available to the
`POSITA to do such a thing, but the motivation by and large was
`not there.
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`Ex. 2101 at 13:11-24. Of course, some references taught some of the components
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`of OHMS, but as Dr. Rao acknowledges, POSITA lacked the motivation to
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`combine them into the claimed invention.
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`Mindful of this problem, Petitioners now attempt to supply a new
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`motivation—attempting OHMS in a low pressure, naturally fractured formation to
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`fracture across zones. Reply at 10. According to Petitioners, this was the true goal
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`of Yost. Id. However, Dr. Rao testified that a POSITA would not interpret Yost
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`as proof that the goal of multi-stage fracturing should be to frack around packers:
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`Q. Does Yost teach that it should be a goal to extend fractures into
`portions of the formation adjacent different stages of the wellbore?
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`When Yost did his work, he determined that he intersected natural
`fractures. And natural fractures do extend into Jones -- zones -- into
`areas of rock adjacent other zones. So I don't know that he taught it,
`but the work he did showed that the fractures did extend into areas
`of rock adjacent to the other zones.
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`- 1 -
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`IPR2016-01509
`Patent 7,861,774
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`Ex. 2101 at 39:3-14 (emphasis added). Indeed, before Petitioners developed their
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`new theory, Dr. Rao had testified: “Q. And when Yost pumped fluid into a zone,
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`the goal was to open fractures and create fractures in that particular zone, correct?
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`A. To open fractures -- yes. You were in that zone and that's the zone in which you
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`would either create or open up existing fractures, correct.” Ex. 2044 at 63:11-16
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`(emphasis added). He did not testify that the goal was to frack around the packers.
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`Thus, Petitioners fail to show that a POSITA would view fracking around the
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`packers as an accomplishment to be desired. The weight of the evidence confirms
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`that such a result can be detrimental to effective fracturing. Resp. at 13-15, 21-26.
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`Regardless, even if a POSITA sought to interconnect fractures throughout a
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`wellbore, Dr. Rao explained why a POSITA would not attempt OHMS for that
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`goal. During his first deposition he testified that, prior to 2001, most horizontal
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`wells were drilled in a low pressure, naturally fractured formation—the Austin
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`Chalk formation. Ex. 2044 at 32:4-12. Despite that, POSITA did not use OHMS:
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`In fact, Austin Chalk has the vast majority of all horizontal wells in the
`world. Did not require the sophistication of zonal isolation. They were
`able to get what they needed to do with lower cost approaches of either
`what's called a “Hail Mary frac” [i.e., “bull-heading”] or just to be able
`to direct it to certain spots. But zonal isolation was not seen as needed
`in that time frame.
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`Ex. 2044 at 31:14-32:3. That makes sense. Resp. at 14-15. If a POSITA were
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`motivated to fracture a formation in a way that intermingled fractures throughout
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`the wellbore, Petitioners have offered no evidence that the POSITA would divide
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`- 2 -
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`IPR2016-01509
`Patent 7,861,774
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`the wellbore into multiple, sequentially opened, open hole stages. After all, if the
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`zone 1 treatment fractured part of zone 2, the zone 2 treatment is likely to flow into
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`the already opened fractures and not complete the fracturing of zone 2. Ex. 2051 at
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`28. (“If the subsequent fractures grow into the earlier fractures, the subsequent
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`fracture treatments are wasted.”).2 A POSITA would have also been concerned
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`about problems such as screenouts. See infra II. Thus, Petitioners’ new theory
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`fails to provide a motivation for a POSITA to diverge from the conventional
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`approaches acknowledged by Dr. Rao.
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`
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`There is also a further problem with Petitioners’ new theory. In their
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`Petition, they assert that a POSITA would have been motivated to replace the
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`inflatable packers of Yost with Ellsworth packers. Ellsworth teaches that its
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`packers are preferable to inflatable packers for maintaining long term isolation of
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`fluids in the formation adjacent different zones, i.e. for water shut off. Ex. 1004 at
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`5. But Petitioners now contend that the POSITA’s goal is to intermingle those
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`fluids in interconnected fractures. This defeats Petitioners’ original basis for
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`combining Yost and Ellsworth. Moreover, if a POSITA anticipated a fracturing
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`operation to open numerous natural fractures, Petitioners fail to offer evidence that
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`this would motivate a POSITA to use Ellsworth or Thomson packers. For
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`2 This could explain why Yost reported an initial 15 to 1 improvement ratio in zone
`1, but significantly less improvement in subsequent zones.
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`- 3 -
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`IPR2016-01509
`Patent 7,861,774
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`example, they offer no evidence that a POSITA would expect such a packer to
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`maintain isolation rather than expecting the dynamic fracturing operation to breach
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`the packer seal in the annulus or induce fractures in the formation that could more
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`easily extend across the shorter packer seals connecting two zones. In short,
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`Petitioners’ new theory fails to show that a POSITA would operate against the
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`conventional wisdom that fractures should be placed at precise intervals using
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`perforations in a cased hole with a cemented annulus. Moreover, even if a
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`POSITA did seek to induce fractures irrespective of location, Petitioners only show
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`that he would bull-head, or at most, use inflatable external casing packers.
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`II. Response to Overbey
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`Despite the problems outlined above, Petitioners contend that Yost would
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`have motivated a POSITA to attempt OHMS in a commercial well. As an initial
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`matter, Petitioners identify no support in Overbey for their theory that a POSITA
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`would employ OHMS to frack across zones. Regardless, Overbey does not
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`demonstrate the commercial viability of Yost. Even if Petitioners had qualified
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`Overbey as prior art—they have not—it supports the opposite conclusion.
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`Overbey explains that the Yost well was “an experimental well.” Ex. 1036 at 46.
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`The purpose of the Overbey report was to test a modified Yost strategy that is
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`“more likely to be used in a purely commercial well.” Id. The result: a well that
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`failed to meet its minimum commercial target. Id. at 104.
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`- 4 -
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`IPR2016-01509
`Patent 7,861,774
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`Moreover, Overbey detailed precisely the types of problems that would be
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`concerning to a POSITA. For example, it recounted “the extreme difficulty
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`encountered in fracing Zone 2,” which resulted in a screenout. Ex. 1036 at 66.
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`Overbey theorized that: “If these fractures are in clusters of relatively closely-
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`spaced fractures, then it may have been almost impossible to drive one or more
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`fractures perpendicular to the wellbore and of a width sufficient to accept a high
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`density sand-laden fluid.” Ex. 1036 at 66. In other words, Overbey concluded that
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`the multiple natural fractures in this open interval competed for fluid and made it
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`impossible to effectively fracture the zone. Overbey also reported a screenout in
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`zones 3 and 4, and he explained that the cost of remediating these screenouts
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`forced the DOE to abandon stimulation of a planned fifth stage. Id. 65-69, 99.
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`In short, Overbey would have reinforced the conventional wisdom in favor
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`of using bullheading or plug and perf. This is particularly true given that Overbey
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`partially cemented the wellbore and it reported cementing costs that were less than
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`the costs of purchasing and operating the packers and port collars. Id. at 109.
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`III. Response to McLellan
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`Petitioners also cite McLellan as alleged evidence of open hole multi-stage
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`fracturing. Again, this reference undercuts their theories. McLellan identifies plug
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`and perf and single-stage stimulation as the available options for horizontal
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`stimulation as of 1992. Ex. 1042 at 3. It goes on to describe the use of an
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`- 5 -
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`IPR2016-01509
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`inflatable straddle packer tool as an alternative, not OHMS. This tool consisted of
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`a tubing string with exit holes placed in between two packers. Ex. 1042 at 5. The
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`distance between the packers was only 4.5m long and McLellan moved and set the
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`tool 27 times to treat the targeted zone. Modifying Yost to stimulate in 4.5 meter
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`increments would require a fifty-fold increase in the number of packers required.
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`There is no evidence that a POSITA would have perceived that approach as
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`feasible, let alone preferable to plug and perf or bullheading.
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`Moreover, McLellan reports that his ultimate goal was to pump acid along a
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`single 150 meter interval to acidize the rock matrix to a depth of 2 meters from the
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`wellbore. Ex. 1042 at 5. This treatment was designed to remove drilling
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`particulates that McLellan believed to be clogging the pore spaces of the rock.
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`However, it takes time for acid to permeate the pore spaces of rock and spend its
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`chemical energy. Id. at 5. Had McLellan pumped acid into the entire 150 meter
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`interval at once, it would either spend to early (as appears to have occurred, Id.) or
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`it could have resulted in a fracture that would drain the acid away from the
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`wellbore into the far-field. Id. at 6; Ex. 2081 at 11-12. By confining each acid
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`treatment to the 4.5 meter space in between the straddle packers, this technique
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`minimized the risk that the acid would be wasted. The fact that McLellan went to
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`the expense of employing this tool is yet another indication that POSITA did not
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`view OHMS as a viable stimulation technique.
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`- 6 -
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`Dated: September 29, 2017
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`
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`Respectfully submitted,
`
`Case IPR2016-00598
`Patent 7,861,774
`
`Rapid Completions LLC
`
`By /Justin T. Nemunaitis/
`
`Hamad M. Hamad, Reg. No. 64,641
`Bradley W. Caldwell (pro hac vice)
`Justin T. Nemunaitis (pro hac vice)
`CALDWELL CASSADY CURRY,
`P.C.
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas 75201
`Telephone: 214.888.4848
`Facsimile: 214.888.4849
`hhamad@caldwellcc.com
`bcaldwell@caldwellcc.com
`jnemunaitis@caldwellcc.com
`rapid@caldwellcc.com
`
`Dr. Gregory Gonsalves, Re. No.
`43,639
`GONSALVES LAW FIRM
`2216 Beacon Lane
`Falls Church, Virginia 22043
`Telephone: 571.419.7252
`gonsalves@gonsalveslawfirm.com
`
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`Case IPR2016-00598
`Patent 7,861,774
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`CERTIFICATE OF SERVICE UNDER 37 C.F.R. § 42.6 (e)(4)
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`The undersigned hereby certifies that the foregoing document was served
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`via electronic mail, as previously consented to by Petitioner upon the following
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`counsel of record:
`
`Jason Shapiro (Lead Counsel)
`Patrick Finnan (Back-up Counsel)
`EDELL,SHAPIRO & FINNAN,
`LLC
`
`js@usiplaw.com
`pjf@usiplaw.com
`epatent@usiplaw.com
`
`Date: September 29, 2017
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`
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`
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`/Hamad M. Hamad/
`
`Hamad M. Hamad, Reg. No. 64,641
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