Paper No. 20
`
`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
`
`
`
`_
`
`Inter Partes Review No. IPR2017-01232
`Patent 9,303,501
`
`_
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`PETITIONERS' REPLY
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`
`
`TABLE OF AUTHORITIES
`
`IPR2017-01232
`Patent 9,303,501
`
`B & B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015), .................. 4
`
`Brown & Williamson Tobacco Corp. v. Philip Morris, 229 F. 3d 1120 (Fed. Cir. 2000)
`
` ................................................................................................................................. 20
`
`ClassCo, Inc. v. Apple, Inc., 838 F. 3d 1214 (Fed. Cir. 2016) .................................... 17
`
`Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988) .............. 6
`
`Galderma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731 (Fed. Cir. 2013) ......................... 7
`
`Graham v. John Deere Co. of Kansas City, 383 US 1, 36 (1966) .............................. 15
`
`Harari v. Lee, 656 F.3d 1331 (Fed. Cir. 2011) ............................................................. 2
`
`In re Applied Materials, Inc., 692 F. 3d 1289 (Fed. Cir. 2012) .................................. 17
`
`In re Hall, 781 F.2d 897 (Fed. Cir. 1986) ..................................................................... 6
`
`MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373 (Fed. Cir. 2018) ....................... 4
`
`Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364 (Fed. Cir. 2005) ................ 20
`
`Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299 (Fed. Cir. 2006) ............................ 20
`
`Paice LLC v. Ford Motor Company, 881 F.3d 894 (Fed. Cir. 2018) ........................... 2
`
`Power-One, Inc. v. Artesyn Technologies, Inc., 599 F. 3d 1343 (Fed. Cir. 2010) ..... 22
`
`Sam Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005)........ 5
`
`Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358 (Fed. Cir. 2011) ......................... 16
`
`W. Union Co. v. MoneyGram Payment Sys., Inc., 626 F.3d 1361 (Fed. Cir. 2010) ... 16
`
`Wyers v. Master Lock Co., 616 F.3d 1231 (Fed. Cir. 2010) ....................................... 16
`
`ii
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`

`

`
`TABLE OF CONTENTS
`
`I. 
`INTRODUCTION .............................................................................................. 1 
`
`IPR2017-01232
`Patent 9,303,501
`
`II. 
`
`CLAIM CONSTRUCTION ................................................................................ 2 
`
`III.  THE CLAIMS ARE INVALID .......................................................................... 3 
`
`A. PO Is Collaterally Estopped from Asserting Patentability of the '501 Claims
`
`
`
`
`
`3 
`
`B.  Halliburton Is a Prior Art Printed Publication ........................................... 6 
`
`C.  PO's Mischaracterizations of Yost Highlight the Weakness of Its Position
`
`6 
`
`D. PO's Criticisms of Ellsworth Are Irrelevant ............................................ 15 
`
`E.  Dependent Claims Are Invalid ................................................................ 15 
`
`F.  PO's Secondary Consideration Evidence Fails ........................................ 15 
`
`1.  The Secondary Consideration Arguments Are Moot ........................ 15 
`
`2.  PO's Commercial Success Evidence Fails ......................................... 16 
`
`3.  There is No Nexus to the Claims ....................................................... 17 
`
`4.  The Alleged Commercial Success Is Unrelated to the Claimed Methods
`
`
`
`19 
`
`G. PO's Conventional Wisdom and Surprising Results Arguments Fail ..... 20 
`
`H. PO's Industry Praise Arguments Fail ....................................................... 22 
`
`I.  PO's Copying Argument Fails ................................................................. 23
`
`
`
`iii
`
`

`

`
`EXHIBIT LIST
`
`Exhibit
`1001
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`1007
`1008
`
`1011
`1012
`1013
`1014
`
`1015
`1016
`1017
`1018
`1019
`1020
`1021
`1022
`1023
`1024
`
`1025
`1026
`1027
`
`IPR2017-01232
`Patent 9,303,501
`
`Description
`
`U.S. Patent No. 9,303,501 ("the '501 Patent")
`A.B. Yost, II, et al. Production and Stimulation Analysis of Multiple
`Hydraulic Fracturing of a 2,000-ft Horizontal Well, SPE (Society
`for Petroleum Engineering) 19090 (1989) ("Yost")
`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")
`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")
`Declaration of Rebekah Stacha of the Society of Petroleum
`Engineers
`Affidavit of Roberto Pellegrino
`Declaration of Vikram Rao
`Transcript of Continued Deposition of Daniel Jon Themig –
`01/08/2007
`Affidavit of Kevin Trahan
`Expert Report of Kevin Trahan
`First Supplemental Expert Report of Kevin Trahan
`Supplemental Engineering Report Prepared by Ronald A. Britton,
`P.E.
`U.S. Provisional Application No. 60/404,783
`U.S. Patent No. 3,062,291 to Brown
`U.S. Patent No. 2,738,013 to Lynes
`U.S. Patent No. 4,224,987 to Allen
`U.S. Patent No. 6,006,838 to Whiteley et al.
`Prosecution History of U.S. Patent No. 7,861,774
`Prosecution History of U.S. Patent No. 7,543,634
`Prosecution History of U.S. Patent No. 7,134,505
`Prosecution History of U.S. Patent No. 6,907,936
`U.S. Provisional Patent Application No. 60/331,491 filed on
`November 19, 2001.
`Hart Petroleum Volume 71, Number 6, June 1998
`Declaration of Christopher D. Hawkes, Ph.D., P.Geo.
`Declaration of Carrie Anderson
`iv
`
`

`

`
`Exhibit
`1028
`
`1029
`
`1030
`1031
`1032
`1033
`1034
`
`1035
`1036
`1037
`1038
`
`1039
`1040
`1041
`
`1042
`
`1043
`
`1044
`
`1045
`
`1046
`
`1047
`
`1048
`
`IPR2017-01232
`Patent 9,303,501
`
`(1997)
`
`Description
`
`Halliburton Completion Products, Second Edition
`("Halliburton")
`Affidavit of Aileen Barr of Halliburton Energy Services, Inc.,
`regarding Halliburton Completion Products, Second Edition (1997)
`Prosecution History of U.S. Patent No. 9,303,501
`Prosecution History of U.S. Patent No. 8,397,820 (including patent)
`Prosecution History of U.S. Patent No. 8,746,343 (including patent)
`Prosecution History of U.S. Patent No. 9,366,123 (including patent)
`Overbey et al., Drilling, Completion, Stimulation, and Testing of
`Hardy HW#1 Weil, Putnam County, West Virginia
`U.S. Patent No. 6,253,856 to Ingram et al.
`U.S. Patent No. 5,947,204 to Barton
`U.S. Patent No. 4,330,039 to Vann et al.
`Notice of Deposition in No. CV-44,964 in the 238th Judicial District
`Court of Midland County, Texas (Served, Not Filed)
`Declaration of Richard S. Carden (Served, Not Filed)
`Declaration of Steven D. Shapiro (Served, Not Filed)
`“Energy Research Abstracts,” Vol. 18, No. 3, ISSN: 0160-3604,
`March 1993 (Served, Not Filed)
`Patrick J. McLellan, et al., A multiple-zone acid stimulation
`treatment of a horizontal well, Midale, Saskatchewan, THE JOURNAL
`OF CANADIAN PETROLEUM TECHNOLOGY, Vol. 31, No. 4, April 1992,
`at 71 ("McLellan")
`C.M. Kim & H.H. Abass, Hydraulic facture initiation from
`horizontal wellbores: Laboratory experiments, in ROCK MECHANICS
`AS A MULTIDISCIPLINARY SCIENCE: PROCEEDINGS OF THE 32ND US
`SYMPOSIUM ON ROCK MECHANICS, 231(Jean-Claude Roegiers ed.,
`CRC Press 1991) ("Kim and Abass")
`Reply Declaration of Vikram Rao in IPR2016-01509 (IPR2016-
`01509 Exhibit No. 1035)
`Transcript of February 28, 2017 Deposition Testimony of Harold R.
`McGowen III
`Errata Sheet for Transcript of February 28, 2017 Deposition
`Testimony of Harold R. McGowen III
`Transcript of July 26, 2017 Deposition Testimony of Harold R.
`McGowen III
`Naturalgasintel.com, Information on the Upper Devonian/Huron
`Shales,
`Natural
`Gas
`Intelligence,
`http://www.naturalgasintel.com/udhinfo (last visited August 13,
`v
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`
`
`Description
`
`2017)
`W.K. Overbey, et al., Inducing Multiple Hydraulic Fractures From
`a Horizontal Wellbore, SPE (Society for Petroleum Engineering)
`18249 (1988)
`
`
`Exhibit
`
`1049
`
`
`
`
`
`
`vi
`
`

`

`
`
`I.
`
`INTRODUCTION
`
`IPR2017-01232
`Patent 9,303,501
`
`The Board held that all challenged claims of related U.S. Patent No. 7,861,774
`
`("'774 patent") were unpatentable on essentially the same ground asserted in the present
`
`IPR. Weatherford Int’l, LLC v. Packers Plus Energy Servs. Inc., IPR2016-01509, Paper
`
`62 (P.T.A.B. Feb. 22, 2018) ("'774 Opinion"). Patent Owner ("PO") agrees that the '501
`
`claims challenged in this IPR are largely identical to the '774 claims. PO does not assert
`
`that the '501 claims are patentably distinct from the ’774 claims; therefore, PO is
`
`collaterally estopped from asserting patentability of the challenged '501 claims.
`
`Even if PO were not collaterally estopped from asserting validity of the
`
`challenged claims, the crux of PO's Response ("POR") is that cemented casing was
`
`required in 2001 for multistage fracturing because a POSITA would have been fearful
`
`of open-hole fracturing due to the possibility of "complex fracture geometries"
`
`spreading across multiple zones. POR at 13-18. The Board has already rejected PO's
`
`contention on the same record presented in this proceeding. '774 Opinion at 29 ("A
`
`person of ordinary skill in the art [“POSITA”] also would have known that there existed
`
`circumstances in which open hole multi-stage fracing might also be successful."). Yost
`
`and other references document that multi-stage open-hole fracturing was prevalent by
`
`2001, and Yost expressly states fracturing across multiple zones is beneficial. PO's
`
`secondary indicia evidence is weak, at best, and cannot overcome the strong prima facie
`
`case of obviousness. Id. at 57 ("[W]e determine that evidence of obviousness is the
`1
`
`

`

`
`most convincing evidence in the record."); see also id. at 62.
`
`IPR2017-01232
`Patent 9,303,501
`
`II. CLAIM CONSTRUCTION
`The broadest reasonable interpretation of "solid body packer" ("SBP") is the
`
`definition in PO's Provisional Application No. 60/404,783 to which the '501 patent
`
`claims priority. Ex. 1001 at 18 (1:7-25); Ex. 1015 at 4. The provisional application is
`
`incorporated by reference in the '501 specification at 1:24-25. The '501 specification
`
`explicitly states that the '501 Patent "claims priority to (i) U.S. Provisional Application
`
`No. 60/331,491, filed Nov. 19, 2001, and (ii) U.S. Provisional Application No.
`
`60/404,783, filed Aug. 21, 2002." And that "Each of these applications is incorporated
`
`by reference herein." Ex. 1001 at 18 (1:24-25). This claim identifies with detailed
`
`particularity the specific material subject to incorporation (Provisional Application
`
`No. 60/404,783, and not just particular portions thereof) and where the material can
`
`be found (Provisional Application No. 60/404,783). Such language is plainly
`
`sufficient to incorporate the priority application in its entirety. Paice LLC v. Ford
`
`Motor Company, 881 F.3d 894, 907 (Fed. Cir. 2018) ("The sentence identifies with
`
`detailed particularity the specific material subject to incorporation (Severinsky, and
`
`not just particular portions thereof) and where that material can be found (U.S. Patent
`
`No. 5,343,970)."); see also Harari v. Lee, 656 F.3d 1331, 1335-36 (Fed. Cir. 2011)
`
`(prior applications were incorporated in their entirety based on "broad and unequivocal
`
`language": "'The disclosures of the two applications are hereby incorporate[d] by
`2
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`reference'"). PO offers no reason why its express definition of SBP was not
`
`incorporated by reference, and no basis for not adopting its express definition in the
`
`present proceeding.
`
`III. THE CLAIMS ARE INVALID
`A.
`PO Is Collaterally Estopped from Asserting Patentability of the '501
`Claims
`
`PO asserted before the Board that the challenged claims in the related '774
`
`patent were nonobvious over Yost in view of Thomson and Ellsworth. The Board held
`
`that all challenged '774 claims were unpatentable over Yost in view of Thomson and
`
`Ellsworth. '774 Opinion at 57.
`
`PO admits that the challenged claims of the '501 patent are largely identical to
`
`the '774 challenged claims “except that the '501 claim adds narrowing limitations
`
`related to a hydraulically actuated sleeve." POR at 3. PO does not argue that the
`
`addition of the hydraulically actuated sleeve adds patentable significance. PO
`
`identifies the “key issue in this proceeding” relating to obviousness in the same manner
`
`as it did in the ‘774 IPR without any reference to the hydraulically actuated sleeve
`
`limitations. Compare POR at 23 with IPR2016-01509, Paper 33, at 20 (P.T.A.B. May
`
`31, 2017). Instead, PO repeats the same arguments it raised in the '774 IPR, which
`
`were rejected by the Board in a final written decision. '774 Opinion.
`
`Because the Board rejected PO's contentions of both law and fact on a
`
`3
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`substantially identical record to that presented here, PO is collaterally estopped from
`
`asserting validity of the '501 claims and from asserting anything contrary to the
`
`Board’s findings of fact or conclusions of law in the prior '774 Opinion. MaxLinear,
`
`Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376 (Fed. Cir. 2018) ("B & B Hardware[,
`
`Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293, 1303 (2015),] is particularly relevant
`
`here, as the Court held that 'issue preclusion should apply' to the final written decision
`
`of the Trademark Trial and Appeal Board ('TTAB')."). Moreover, "'precedent does
`
`not limit collateral estoppel to patent claims that are identical . . . . If the differences
`
`between the unadjudicated patent claims and adjudicated patent claims do not
`
`materially alter the question of invalidity, collateral estoppel applies.'" Id. at 1377. In
`
`MaxLinear the Federal Circuit remanded an IPR decision holding that all challenged
`
`claims were not unpatentable to the Board for reconsideration in view of the preclusive
`
`effect of an intervening decision holding the independent claims invalid in a different
`
`IPR proceeding. The Federal Circuit stated:
`
`On remand, the Board must consider whether the dependent claims
`4, 6-9, and 21 can survive the unpatentability of claims 1 and 17 from
`which they depend in view of the prior art cited in the '728 IPR. The Board
`must decide whether the remaining claims present materially different
`issues that alter the question of patentability, making them patentably
`distinct from claims 1 and 17.
`
`Id. at 1377-78. Here, PO has not argued that the additional hydraulically actuated
`
`sleeve limitations of the '501 claims render them patentably distinct from the largely
`
`identical and invalid '774 claims. Nor could PO credibly make such an argument. Even
`4
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`if the invalidity of the '774 claims did not preclude validity of the '501 claims, the
`
`factual and legal decisions necessary to the Board’s decision on the '774 claims are
`
`preclusive. Sam Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323,
`
`336 n.16 (2005) ("Under collateral estoppel, once a court has decided an issue of fact
`
`or law necessary to its judgment, that decision may preclude relitigation of the issue
`
`in a suit on a different cause of action involving a party to the first case.").
`
`The only arguments PO makes based on the additional hydraulically actuated
`
`sleeve limitations are that Halliburton does not teach that the hydraulic sleeve could
`
`be used for open-hole, multistage fracturing and that Halliburton teaches that the
`
`Mirage Disappearing Plug solves the problems identified by Thomson. POR at 59.
`
`With respect to the first argument, Petitioners’ evidence, which is unrefuted by
`
`PO, shows that it would have been obvious to a POSITA to use the Halliburton
`
`hydraulic sleeve in this application. Ex. 1007 at ¶¶ 44, 68-69, 86, 139-40. PO offers
`
`no evidence to the contrary. Moreover, the Board has previously found that
`
`"combining the tools and techniques disclosed in the prior art was not difficult and was
`
`within the level of ordinary skill in the art." '774 Opinion at 57.
`
`PO's second argument that Halliburton teaches that the Mirage Disappearing
`
`Plug solves the problems identified by Thomson, even if true, only shows that it would
`
`also have been obvious to use the Mirage Disappearing Plug with the Thomson system.
`
`It does not show that it would not have been obvious to use the Halliburton hydraulic
`
`5
`
`

`

`
`sleeve in the system of Yost.
`
`IPR2017-01232
`Patent 9,303,501
`
`B. Halliburton Is a Prior Art Printed Publication
`PO makes the nonsensical assertion that the Halliburton reference (Halliburton's
`
`1997 product catalog) is not a printed publication even though Petitioners' declaration
`
`plainly states, "The 1997 Catalog was available to any customer or potential customer,
`
`as well as others, seeking a copy in 1997." Ex. 1029 at ¶ 4. The declaration further
`
`explains how "Halliburton, as a regular practice and in the normal course of its
`
`business, prints these types of product catalogs every few years, including the 1997
`
`Catalog, and disseminates them to customers and/or potential customers from the year
`
`they are printed until the next edition is printed." Id. There is no contrary evidence in
`
`the record. The Halliburton reference is therefore a prior art printed publication. Orion
`
`IP, LLC v. Hyundai Motor Am., 605 F.3d 967, 974-75 (Fed. Cir. 2010) ("[T]he
`
`Electronic Parts Catalog … qualifies as a prior art printed publication because it was
`
`accessible to those interested in the business of auto parts prior to November 10,
`
`1988."); see also Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1568-69
`
`(Fed. Cir. 1988) ("Evidence of routine business practice can be sufficient to prove that
`
`a reference was made accessible before a critical date."); In re Hall, 781 F.2d 897, 899
`
`(Fed. Cir. 1986) ("[G]eneral library practice may be relied upon to establish an
`
`approximate time when a thesis became accessible.").
`
`C.
`
`PO's Mischaracterizations of Yost Highlight the Weakness of Its
`
`6
`
`

`

`
`
`Position
`
`IPR2017-01232
`Patent 9,303,501
`
`PO's attempts to overcome obviousness based on the cited art are without merit.
`
`Yost discloses a successful open-hole multistage fracturing system and method using
`
`packers and sliding sleeves. '774 Opinion at 49-50 (“The gist of Patent Owner’s
`
`position is that the initial Yost reference, as cited by Petitioner, does not show
`
`sufficient economic benefits, e.g. increasing profitability of a well, such that one of
`
`ordinary skill in the art would have used open hole completions for multi-stage fracing
`
`in a commercial application. We disagree."); Paper 23 at 28 ("Yost suggests some
`
`degree of success in using open hole fracturing to boost production."). PO's expert
`
`admitted these points in his deposition and declaration. Ex. 1047 at 48:5-51:15, 54:19-
`
`55:2; Ex. 2081 at 16 (observing that "the outcome of Yost is increased production").
`
`PO's expert further admitted that the simple substitution of SBPs and ball-drop
`
`sliding sleeves for the inflatable packers and sliding sleeves in the Yost method would
`
`yield the '774 claimed inventions, which basically mirror the '501 claims except for
`
`the hydraulically actuated sleeve. Ex. 1047 at 54:19-55:2. PO's primary argument in
`
`the face of these admissions is that Yost was merely an experiment that would not
`
`have motivated a POSITA to use the system in a commercial well. POR at 45-46. The
`
`law contradicts PO's position; it matters not whether the art discloses a commercial or
`
`non-commercial system. Galderma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731, 737
`
`(Fed. Cir. 2013) ("Nothing in the statute or our case law required Tolmar to prove
`
`7
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`obviousness by starting with a prior art commercial embodiment and then providing
`
`motivation to alter that commercial embodiment.").
`
`Ignoring this law further, PO contends that "the Yost well differs sharply from
`
`a well a POSITA would actually work on for a commercial application," citing the
`
`Devonian shale reservoir's "low pressure." POR at 44. But PO's expert conceded that
`
`he does not know whether commercial wells in the Devonian shale were drilled after
`
`Yost. Ex. 1047 at 76:1-12. In fact, there has been and continues to be commercial
`
`drilling activity in the alleged "low pressure" Devonian shale, completely undermining
`
`PO's argument. Ex. 1048 at 6; Ex. 1044 ¶¶ 19-20. Similarly, PO's expert admitted
`
`that he has no evidentiary support for PO's argument that Yost's well contained a "very
`
`short horizontal portion compared to commercial wells drilled in 2001." POR at 44-
`
`45; Ex. 1047 at 74:6-10.
`
`PO also criticizes Yost, without support, as "not even report[ing] a successful
`
`multi-stage fracturing job." POR at 45. Yet Yost unequivocally states that "the
`
`horizontal well produced at a rate 7 times greater than the field current average of 13
`
`mcfd for stimulated vertical wells." Ex. 1002 at 1; see also '774 Opinion at 51 ("We
`
`are persuaded by the evidence in this proceeding that Yost provides motivations to
`
`consider and use open hole . . . ."). PO's expert conceded that "none of the papers
`
`describing the RET No. 1 well said that Yost's system [ ] was not commercially
`
`viable . . . ." Ex. 1047 at 109:1-4.
`
`8
`
`

`

`IPR2017-01232
`Patent 9,303,501
`
`PO also concocts the theory that Yost sought to avoid propagating fractures
`
`across zones and "failed spectacularly." POR at 45-47. Even if this were Yost's
`
`intention (it was not), fracturing across arbitrarily designated zones would not be a
`
`"failure." PO's expert testified that an extensive fracture network "can be beneficial
`
`because it improves permeability," which "can improve oil and gas production." Ex.
`
`1047 at 92:8-18, 92:19-25. Moreover, he agreed that communication of fracturing
`
`fluid "through the formation to another zone" does not remove a method from the
`
`scope of the '774 claims, and thus does not remove it from the virtually identical '501
`
`claims. Id. at 93:21-94:6; see also Ex. 1044 at ¶¶ 10-11 and 14.
`
`To support its theory about Yost’s intentions, PO cites Ex. 2075 (SPE 17759)
`
`(another Yost publication about RET#1) and testimony of Petitioners' expert, Dr. Rao.
`
`None of this evidence supports PO's theory. Dr. Rao testified that “Yost teaches that
`
`the authors sought to and did in fact achieve communication across zones via the
`
`formation.” Ex. 1044 at ¶¶ 15-16 (emphasis in original). And Ex. 2075 at 2, the very
`
`page that PO cites, describes the "overall stimulation rationale" as follows:
`
`1) Primary design was to propagate natural fractures with a slight
`difference in orientation from principal stress orientation.
`2) Injection at low rates allows fluid to select pre-existing natural
`fractures to be propagated.
`3) Injection at pressures which will keep the fracture(s) from growing
`out of zone.
`
`9
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`

`

`IPR2017-01232
`Patent 9,303,501
`
`4) By starting off at low rates and not exceeding 200 psi above closure
`pressure with average BHTP natural fractures would be propagated.
`5) By increasing injection rates additional fractures would be induced
`which would likely create a network of interconnected fractures
`with orientations of N37ºE, N52ºE, and N67ºE.
`
`Ex. 2075 at 2 (emphases added).
`
`PO presumably relies on the third item. But Item 3 cannot be viewed alone
`
`because it is a part of the overall stimulation rationale. Item 5 says that increasing
`
`injection rates "would likely create a network of interconnected fractures." Thus, the
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`stimulation rationale contemplates starting with low rates and pressures to propagate
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`natural fractures without extending out of zone and (contrary to PO's theory) later
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`increasing those rates (which will necessarily increase pressures) to induce additional
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`fractures and create a network of interconnected fractures without regard to zones.
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`Even more telling is that PO only briefly mentions SPE 18249, and its expert
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`intentionally failed to cite the paper, which he admitted that he had read. Ex. 1047 at
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`60:7-22. It states:
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`Pressure testing and gas sampling of the isolated zones confirm that
`fracture communication was accomplished along nearly 1000 feet of
`borehole by stimulation of one 400 foot long section. A technique for
`inducing multiple hydraulic fractures with multiple orientations was
`demonstrated.
`
`Ex. 1049 at 1 (emphasis added). The authors reference fracturing across zones as an
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`Patent 9,303,501
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`accomplishment, not a failure. PO's expert conceded that Figure 8 in SPE 18249
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`shows the fracture network (including interconnecting multiple fractures) Yost
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`expected to induce. Ex. 1049 at 3, 10; Ex. 1047 at 100:22-102:11.
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`Nevertheless, PO's expert opines
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`that
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`the authors hoped
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`that
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`those
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`interconnections would stop at packer locations that would arbitrarily create zone lines
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`in the formation. This is pure fantasy. In fact, the authors of SPE 18249 state, "As
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`more experience is gained [ ], it may be possible to interconnect fractures all along the
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`wellbore by stimulating only specific intervals with tailored rates and pressures." Ex.
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`1049 at 5. In other words, it may be possible to fracture an entire horizontal wellbore
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`by only injecting fracturing fluid in a few zones, which would be an accomplishment.
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`Id. at 3 (hypothesizing that "extension of natural fractures with multiple orientations
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`will produce a complex interconnected fracture network which will be a much more
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`efficient drainage system"), 5 (concluding that this hypothesis had been confirmed).
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`Thus, SPE 18249, which PO's expert read but omitted, expressly contradicts his
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`opinion that Yost failed.
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`PO's next mischaracterization of Yost relies on SPE 18255 for the proposition
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`that "[a]ctual breakdown of the shale may not have occurred." POR at 46. PO omits
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`the rest of the passage, which states that "fluid leak-off and subsequent expansion of
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`the existing fracture system took place." Ex. 2076 at 2. PO's theory is that Yost
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`expanded natural fractures, but did not induce new fractures. First, as admitted by
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`PO's expert, SPE 18255 is only discussing a few stimulations performed on zone 1 in
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`the RET#1 well. Ex. 1047 at 81:3-84:7. Thus, SPE 18255 cannot be used to
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`characterize the other zones. Second, both expansion of natural fractures and inducing
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`new fractures satisfy the claims. PO's expert conceded that "open[ing] a natural
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`fracture" "would still be considered a – a frac" within '774 claim 1 and therefore within
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`'501 claim 1. Ex. 1047 at 91:24-92:5.
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`Third, Yost induced new fractures as plainly stated in various Yost papers. SPE
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`19090 references "multiple hydraulic fracturing treatments." Ex. 1002 at 1. SPE
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`18249 references the "conclusive evidence that multiple hydraulic fractures were
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`induced during each pumping event." Ex. 1049 at 5; see also id. at 2 (describing
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`"induced fractures along a third direction"). PO's expert admitted that the authors of
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`SPE 18249 reported that they induced new fractures on RET#1. Ex. 1047 at 89:23-
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`90:9. He was also unwilling to testify that a POSITA reading the Yost papers would
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`believe that new fractures were not induced. Id. at 90:2-6.
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`Finally, citing SPE 21264 (Ex. 2077) and SPE 37354 (Ex. 2100), PO asserts that
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`Mr. Yost elected cased-hole fracturing after Yost's publication. POR at 50-51.
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`Although SPE 21264 cites several articles describing Yost (Ex. 2077 at 7 (notes 5, 6,
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`and 7)), it never criticizes open-hole fracturing and never suggests cemented casing is
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`preferred over open-hole. Ex. 1047 at 107:17-108:15. Instead, SPE 21264 describes
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`a cemented well stimulation that was deemed uneconomical. Ex. 2077 at 6; Ex. 1047
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`at 108:16-108:25. In contrast, PO's expert admitted that "none of the papers describing
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`the RET No. 1 well said that Yost's system described there was not commercially
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`viable." Ex. 1047 at 109:1-4. Thus, SPE 21264 does not negate the extensive
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`teachings in the art that open-hole, multistage fracturing was a viable option in some
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`circumstances.
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`The same is true of SPE 37354, which concluded that cased horizontal wells
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`cannot be economically drilled in the Clinton sandstone. Ex. 2100 at 1; Ex. 1047 at
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`139:4-16. Moreover, the authors explain that a nearby well (CW#7) experienced hole
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`collapse, resulting in the use of intermediate cemented casing on the CW#14 well
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`described in the paper. Ex. 2100 at 2-3. Based in part on these observations, PO's
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`expert agreed that it is "not surprising that they would case [and] cement CW No. 14
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`given the experience in this formation." Ex. 1047 at 141:2-4, 141:24-142:2. SPE
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`37354 never criticizes open-hole, multistage fracturing or says that cemented casing
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`is necessary for multistage fracturing.
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`Instead, the art reflects a recognition that open-hole, multistage fracturing is a
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`preferred technique in some circumstances. DOE's work after Yost included a 1992
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`publication authored by William K. Overbey, Jr., one of the coauthors of Yost (SPE
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`19090). Ex. 1034 at 1; Ex. 1039 at 1. Overbey explains why open-hole, multistage
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`fracturing was selected for the well that the paper describes:
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`[ ] Options considered for isolating the individual zones included
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`conventional cementing of the casing with perforations to access the
`individual zones, use of inflatable casing packers in the casing string
`with port collars to access the zones as was done in the BDM/RET#1
`(Reference 1) well, [and] a combination of these two techniques.
`the
`Because of
`the relatively successful completion of
`BDM/RET#1 well, the casing packer – port collar option was selected
`for completing the Hardy HW#1. [ ] The original completion plan called
`for 5 TAM International, Inc. port collars to be placed in the casing string
`with one of the port collars fitted with a "bull plug" for opening with
`applied pressure and another fitted with a "baffle" for opening by
`dropping a ball and applying pressure. This design should have allowed
`the farthest two zones to be accessed and stimulated with a conventional
`ball-and-baffle technique and without having to use an "opening tool" to
`open the port collars.
`
`Ex. 1034 at 48 (emphases added).
`
`On this post-RET#1 well, the DOE rejected cemented casing in favor of open-
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`hole fracturing as described in Yost SPE 19090. Overbey even describes the RET#1
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`completion as "relatively successful." Although PO asserts that Overbey encountered
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`problems in its fracture stimulation, there is no evidence that the problems experienced
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`were because of the open-hole completion. Overbey nowhere asserts that open-hole,
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`multistage fracturing is not a suitable technique in the right circumstances. Thus, the
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`evidence shows that not only did the DOE not abandon Yost's open-hole fracturing,
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`they used it again on a subsequent well because they regarded it as "relatively
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`successful."
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`PO's Criticisms of Ellsworth Are Irrelevant
`
`D.
`PO's discussion of how Ellsworth allegedly fails to teach fracturing (POR at 53-
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`55) is irrelevant as Ellsworth has not been relied upon for fracturing. See, e.g., Petition
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`at 38-40, 46-47, 51-52, 54-56. Ellsworth is relied upon to show that SBPs were an
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`obvious alternative to Yost's inflatable packers and to show modifying Thomson's
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`system to provide zonal isolation in an open-hole wellbore was obvious. Id. Ellsworth
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`is also relied upon to show that it was known to run packers in the well unset and to
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`pressure up against an openable device to set them. E.g., Petition at 59, 66-67.
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`Ellsworth explicitly teaches zonal isolation for the stimulation (e.g., acidizing) of
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`open-hole wellbores using SBPs, and teaches that such packers are a known alternative
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`to inflatables. See, e.g., Ex. 1004 at 5-8.
`
`E. Dependent Claims Are Invalid
`PO does not argue that any dependent claim is separately patentable over '501
`
`claim 1. Thus, for all the reasons expresse