`Jeffrey W. Reis
`LANE POWELL PC
`1420 Fifth Avenue, Suite 4200
`Seattle, Washington 98111
`Telephone: (206) 223-7000
`Facsimile: (206) 223-7107
`wesnerg@lanepowell.com
`reisj@lanepowell.com
`
`(pending pro hac vice admission)
`
`
`
`
`
`Randy J. Cox
`BOONE KARLBERG P.C.
`201 West Main St., Suite 300
`P.O. Box 9199
`Missoula, Montana 59807-9199
`Telephone: (406) 543-6646
`Facsimile: (406) 549-6804
`rcox@boonekarlberg.com
`
`John C. Herman
`Peter M. Jones
`ROBBINS GELLER RUDMAN
` & DOWD LLP
`3424 Peachtree Road, N.E., Suite 1650
`Atlanta, Georgia 30326
`Telephone: (404) 504-6500
`Facsimile: (404) 504-6501
`jherman@rgrdlaw.com
`pjones@rgrdlaw.com
`
`(pending pro hac vice admission)
`
`Attorneys for Plaintiff Adelos, Inc.
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MONTANA
`MISSOULA DIVISION
`
`
`ADELOS, INC.,
`
`Plaintiff,
`
`vs.
`HALLIBURTON COMPANY;
`HALLIBURTON ENERGY SERVICES,
`INC.; OPTIPHASE, INC.;
`SENSORTRAN, INC.; and PINNACLE
`TECHNOLOGIES, INC.,
`Defendants.
`
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`
`Cause No. _________________
`
`COMPLAINT FOR PATENT
`INFRINGEMENT AND
`CONVERSION
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`HALLIBURTON, Exh. 1012, p. 0001
`
`
`
`
`
`Plaintiff Adelos, Inc. (“Plaintiff” or “Adelos”), for its Complaint against
`
`Defendants Halliburton Company; Halliburton Energy Services, Inc.; Optiphase,
`
`Inc.; SensorTran, Inc.; and Pinnacle Technologies, Inc. (collectively, “Defendants”
`
`or “Halliburton”), hereby demands a jury trial and alleges as follows:
`
`I.
`
`INTRODUCTION
`
`1.
`
`Adelos brings this action as a result of Defendants’ unlawful scheme
`
`to obtain improper access to and misappropriate its proprietary technology
`
`developed out of its work with the United States Navy’s BLUE ROSE technology.
`
`Under the guise of developing a business relationship, Defendants obtained
`
`Adelos’ technical information, tried clandestinely to obtain a patent on it, and
`
`falsely claimed and marketed it as their own without any notice to Adelos or the
`
`United States Navy.
`
`2.
`
`Adelos’ technology turns ordinary fiber optic cable into a highly adept
`
`sensing device. The United States Navy developed the first generation of this
`
`technology for deployment in a highly classified and effective anti-submarine
`
`warfare program. The United States Navy ultimately saw the incredible
`
`commercial potential of this technology in such diverse industries as oil and gas
`
`exploration and homeland security and decided to declassify and patent it.
`
`3.
`
`Adelos was selected by the United States Navy to be its world-wide
`
`exclusive licensee to market and commercialize the BLUE ROSE technology. In
`
`- 2 -
`
`HALLIBURTON, Exh. 1012, p. 0002
`
`
`
`
`
`addition to the four United States Patents originally granted to the United States
`
`Navy,1 Adelos has spent considerable time, effort and resources in making
`
`significant advances to this technology. Many of these advances are contained
`
`within more than a dozen pending patent applications covering various aspects of
`
`this novel technology, providing for a fiber optic sensor array that can detect real-
`
`time, location-specific changes along an optical fiber, such as sound, pressure and
`
`temperature. The Navy Patents, the related pending patent applications, the
`
`technical information regarding the technology, and the advances made to this
`
`technology by Adelos are collectively referred to herein as “the Adelos Proprietary
`
`Technology.”
`
`4.
`
`The Adelos Proprietary Technology has been commercially
`
`successful, with Adelos securing significant contracts with the Department of
`
`Energy and the United States Air Force Nuclear Weapons Center, resulting in
`
`significant revenue for Adelos.
`
`5.
`
`In late 2011, Halliburton approached the United States Navy and
`
`expressed a strong desire in acquiring rights to the BLUE ROSE technology. The
`
`United States Navy referred Halliburton to Adelos. Halliburton then began
`
`
`1
`Adelos is the exclusive licensee of United States Patent No. 7,030,971 (the “’971 Patent”)
`(attached hereto as Exhibit A); United States Patent No. 7,268,863 (the “’863 Patent’”) (attached
`hereto as Exhibit B); United States Patent No. 7,271,884 (the “’884 Patent”) (attached hereto as
`Exhibit C); and United States Patent No. 7,274,441 (collectively, the “Navy Patents”). In this
`action, Adelos is asserting the ‘971 Patent, the ’863 Patent, and the ‘884 Patent (collectively, the
`“Asserted Patents”).
`
`- 3 -
`
`HALLIBURTON, Exh. 1012, p. 0003
`
`
`
`
`
`discussions with Adelos and represented that it was interested in acquiring rights to
`
`the Adelos Proprietary Technology.
`
`6.
`
`From early 2012 through late 2014, Halliburton proceeded to extract
`
`detailed information regarding the Adelos Proprietary Technology, which included
`
`convincing Adelos to perform testing for Defendants at Adelos’ headquarters in
`
`Montana so that they could observe the technology in action. Believing that
`
`Halliburton was acting in good faith in developing a business relationship with
`
`Adelos, Adelos provided a wealth of technical information to Halliburton.
`
`7.
`
`In August 2013, Halliburton secretly filed a foreign “PCT” application
`
`(PCT/US13/054588) (attached hereto as Exhibit D) that disclosed the very same
`
`technology that is the heart and soul of the Adelos Proprietary Technology.
`
`8.
`
`In this application, Halliburton purported to disclose, for the first time,
`
`the very same technology that Halliburton was simultaneously seeking information
`
`on from Adelos. The application falsely claimed that agents of Halliburton were
`
`the sole inventors of the disclosed technology. Halliburton never revealed to
`
`Adelos or the United States Navy that it had filed, or intended to file, this
`
`application and likewise failed to disclose the Navy Patents in this application.
`
`9.
`
`In January 2016, six months after it broke off discussions with
`
`Adelos, Halliburton again attempted to convert the Adelos Proprietary Technology
`
`by secretly filing a United States patent application (No. 14/903,503), again
`
`- 4 -
`
`HALLIBURTON, Exh. 1012, p. 0004
`
`
`
`
`
`claiming that agents of Halliburton were the sole inventors. Halliburton never
`
`disclosed to Adelos or the United States Navy that it had filed, or intended to file,
`
`this application.
`
`10.
`
`In addition to the filing of these patent applications that converted the
`
`Adelos Proprietary Technology, Halliburton also began to incorporate the
`
`technology disclosed in the Asserted Patents in its own products and services
`
`without the permission of Adelos or the United States Navy. These Halliburton
`
`products and services infringe the Asserted Patents.
`
`11. Under the guise of negotiating and establishing a business relationship
`
`with Adelos, Halliburton induced Adelos to divulge information related to the
`
`Adelos Proprietary Technology. Defendants then misappropriated that information
`
`and surreptitiously filed patent applications covering this technology, falsely
`
`claiming that agents of Halliburton had invented the technology, when they did
`
`not. In addition, Halliburton began to incorporate the technology disclosed in the
`
`Asserted Patents into its own products and services. At no time did Defendants
`
`disclose to Adelos or the United States Navy its efforts to convert the Adelos
`
`Proprietary Technology or its infringement of the Asserted Patents.
`
`12. As a result of Halliburton’s improper and illegal behavior, Adelos
`
`now brings this suit for conversion and patent infringement.
`
`- 5 -
`
`HALLIBURTON, Exh. 1012, p. 0005
`
`
`
`
`
`II. NATURE OF ACTION
`
`13. This is a civil action for Defendants’ conversion of the Adelos
`
`Proprietary Technology, as well as for Defendants’ infringement of the ’971
`
`Patent, the ’863 Patent, and the ’884 Patent, arising under Montana law and the
`
`patent laws of the United States, 35 U.S.C. § 1, et seq.
`
`14. Adelos is the exclusive licensee of the Navy Patents, and any patents
`
`issuing thereon, with all right, title and interest necessary to bring this action and
`
`recover all amounts due thereon. Adelos additionally has all rights, title, and
`
`interest in any reissue, divisional and continuation patent applications resulting
`
`from the Navy Patents.
`
`15. As set forth in detail herein, Defendants acquired under false
`
`pretenses access to the Adelos Proprietary Technology and secretly claimed it as
`
`their own in patent applications. Additionally, Defendants have made, used,
`
`imported, offered to sell or sold – and continue to make, use, import, offer to sell
`
`or sell – the technology claimed in the Asserted Patents. Defendants’ infringement
`
`of the Asserted Patents has been, and continues to be, willful.
`
`16. Adelos seeks damages, including punitive damages, for Defendants’
`
`conversion of the Adelos Proprietary Technology, as well as damages under 35
`
`U.S.C. §§ 284-285 for Defendants’ infringement of each of the Asserted Patents.
`
`Adelos additionally seeks a declaratory judgment pursuant to 28 U.S.C. §§ 2201-
`
`- 6 -
`
`HALLIBURTON, Exh. 1012, p. 0006
`
`
`
`
`
`2202 assigning to Adelos any Halliburton patent applications based on the Adelos
`
`Proprietary Technology and/or adding representatives of Adelos as the true
`
`inventors. Adelos also seeks a preliminary, and thereafter a permanent, injunction
`
`preventing Defendants from continuing to benefit from the Adelos Proprietary
`
`Technology.
`
`III. THE PARTIES
`
`17. Plaintiff Adelos, Inc. is a Nevada corporation with its principal place
`
`of business located at 145 Southlake Crest, Suite 2, Polson, Montana 59860.
`
`Adelos, Inc. is a subsidiary of S&K Technologies, Inc. S&K Technologies, Inc. is
`
`a federally-chartered corporation owned by the Confederated Salish and Kootenai
`
`Tribes.
`
`18. Adelos is an advanced fiber optic sensor development company that
`
`has specialized in marketing and commercializing its fiber optic sensor products
`
`for over a decade. Adelos and its predecessors have collaborated with specialized
`
`groups at the United States Navy, the Idaho National Laboratory, and the
`
`Department of Defense on projects related to this fiber optic sensing technology.
`
`19. Defendant Halliburton Company is a Delaware corporation with its
`
`principal place of business located at 3000 North Sam Houston Parkway East,
`
`Houston, Texas 77032. Halliburton Company is registered to do business in
`
`Montana and, on information and belief, regularly and systematically conducts
`
`- 7 -
`
`HALLIBURTON, Exh. 1012, p. 0007
`
`
`
`
`
`business throughout the United States, including Montana. Halliburton Company
`
`can be served with process through its registered agent, Capitol Corporate Services
`
`Inc., at 26 W. Sixth Ave., Helena, Montana 59601-0000.
`
`20.
`
`In 2007, at a time when the company was under investigation by the
`
`Justice Department and the Securities and Exchange Commission, Defendant
`
`Halliburton Company opened a corporate headquarters in Dubai and relocated its
`
`chairman and chief executive officer there. The establishment of this new
`
`headquarters abroad allowed Halliburton Company to take advantage of Dubai’s
`
`particularly liberal tax, investment and residency laws.
`
`21. Defendant Halliburton Energy Services, Inc. is a Delaware
`
`corporation with its principal place of business located at 3000 North Sam Houston
`
`Parkway East, Houston, Texas 77032. Halliburton Energy Services, Inc. is a
`
`wholly owned subsidiary of Halliburton Company. Defendant Halliburton Energy
`
`Services, Inc. is registered to do business in Montana and, on information and
`
`belief, regularly and systematically conducts business throughout the United
`
`States, including Montana. Halliburton Energy Services, Inc. can be served with
`
`process through its registered agent, Capitol Corporate Services Inc., at 26 W.
`
`Sixth Ave., Helena, Montana 59601-0000.
`
`22. Defendant Optiphase, Inc. was a California business with its principal
`
`place of business located at 7652 Haskell Ave., Van Nuys, California 91406.
`
`- 8 -
`
`HALLIBURTON, Exh. 1012, p. 0008
`
`
`
`
`
`Optiphase, Inc. was acquired by Halliburton in 2013, and on information and belief
`
`is a wholly owned subsidiary of Halliburton Energy Services, Inc. Optiphase, Inc.,
`
`also referred to now as Optiphase – A Halliburton Service, can be served with
`
`process through the registered agent for Halliburton Energy Services, Inc., Capitol
`
`Corporate Services Inc., at 26 W. Sixth Ave., Helena, Montana 59601-0000.
`
`23. Defendant SensorTran, Inc. was a Delaware business with its
`
`principal place of business located at 4401 Freidrich Lane, Bldg. 307, Austin,
`
`Texas 78744. SensorTran was acquired by Halliburton in 2011, and on
`
`information and belief is a wholly owned subsidiary of Halliburton Energy
`
`Services, Inc. SensorTran, Inc. can be served with process through the registered
`
`agent for Halliburton Energy Services, Inc., Capitol Corporate Services Inc., at 26
`
`W. Sixth Ave., Helena, Montana 59601-0000.
`
`24.
`
` Defendant Pinnacle Technologies, Inc. was a Texas business with its
`
`principal place of business located at 9949 West Sam Houston Pkwy N, Houston,
`
`Texas 77064. Pinnacle Technologies, Inc. was acquired by Halliburton in 2008,
`
`and on information and belief is a wholly owned subsidiary of Halliburton Energy
`
`Services, Inc. Pinnacle Technologies, Inc., also referred to now as Pinnacle – A
`
`Halliburton Service, can be served with process through the registered agent for
`
`Halliburton Energy Services, Inc., Capitol Corporate Services Inc., at 26 W. Sixth
`
`Ave., Helena, Montana 59601-0000.
`
`- 9 -
`
`HALLIBURTON, Exh. 1012, p. 0009
`
`
`
`
`
`IV. JURISDICTION AND VENUE
`
`25. This Court has subject matter jurisdiction over this action pursuant to
`
`28 U.S.C. §§ 1331 and 1338(a) because this action arises under the patent laws of
`
`the United States. This Court has supplemental jurisdiction over Adelos’ state law
`
`conversion claim pursuant to 28 U.S.C. § 1367 because this claim arises from the
`
`same case or controversy as Adelos’ patent claims.
`
`26. This Court has personal jurisdiction over Defendants, significant
`
`providers of products and services to the energy industry around the world,
`
`including throughout the United States. Defendants market their products and
`
`services throughout the entire United States, including Montana.
`
`27. This Court has personal jurisdiction over Defendants pursuant to the
`
`Montana Long-Arm Statute (Mont. R. Civ. P. § 4B(1)) because Defendants have
`
`transacted business within Montana and have purposefully directed, and continue
`
`to purposefully direct, infringing activities at the state of Montana. Defendants
`
`have also committed, and continue to commit, torts within Montana.
`
`28. Defendants are also subject to this Court’s personal jurisdiction
`
`because Defendants: (1) have committed, and continue to commit, acts of patent
`
`infringement and conversion in Montana; (2) have directed their acts of patent
`
`infringement and conversion at the state of Montana; (3) have regularly conducted,
`
`and continue to conduct, business in Montana; (4) have engaged in continuous and
`
`- 10 -
`
`HALLIBURTON, Exh. 1012, p. 0010
`
`
`
`
`
`systematic activities in Montana; (5) have solicited business within the state of
`
`Montana; and (6) have derived, and continue to derive, substantial revenue from
`
`goods and services provided to companies and individuals in Montana.
`
`29. Venue is proper in this district under 28 U.S.C. §§ 1391(b), 1391(c)
`
`and 1400(b). Defendants Halliburton Company and Halliburton Energy Services,
`
`Inc. are registered to do business in this district and on information and belief,
`
`Defendants: (1) have transacted and continue to transact business in this district,
`
`(2) have committed and continue to commit acts of infringement of the Navy
`
`Patents and conversion of the Adelos Proprietary Technology in this district,
`
`and/or (3) a substantial part of the events giving rise to these claims occurred in
`
`this district. On information and belief, Defendants Optiphase, Inc., SensorTran,
`
`Inc., and Pinnacle Technologies, Inc. have no registered place of business separate
`
`and distinct from that of Halliburton Company and/or Halliburton Energy Services,
`
`Inc.
`
`V.
`
`SUMMARY OF THE TECHNOLOGY AT ISSUE
`
`30. The Adelos Proprietary Technology turns ordinary fiber optic cable
`
`into a highly adept sensing device. Dr. Robert Michael Payton invented the first
`
`generation of this technology for the United States Navy at the Naval Undersea
`
`Warfare Center, which in the 1990s had begun exploring the use of fiber optic
`
`sensors for submarine and surface ship towed “listening” arrays.
`
`- 11 -
`
`HALLIBURTON, Exh. 1012, p. 0011
`
`
`
`
`
`31. Originally conceived as a way to locate enemy submarines, Dr.
`
`Payton and the United States Navy spent years and millions of dollars developing
`
`their approach. This work matured into what would become known as the
`
`Battlescape Land Undersea Extensible Rayleigh Optical Sensor Electronics
`
`project, or BLUE ROSE, for short. For years, BLUE ROSE was deployed by the
`
`United States Navy in a highly classified and effective anti-submarine warfare
`
`program.
`
`32. The Adelos Proprietary Technology includes utilizing fiber optic
`
`cable laid out across long distances or placed in deep wellbores, such that the fiber
`
`optic cable itself becomes a sensing device for detecting phenomena (e.g., acoustic
`
`changes, temperature changes, or pressure changes) at virtually any point along the
`
`fiber optic cable. This is accomplished by sending optical signals down the fiber
`
`optic cable and then analyzing various optical signals reflected back (typically
`
`called back-scattering) from the fiber optic cable. By conditioning the initial
`
`optical signals with known patterns of code (typically called modulating), an
`
`analysis of the reflected optical signals results in greater accuracy and better signal
`
`resolution for detected phenomena. The patterns of code allow for the analysis to
`
`pinpoint locations of phenomena and to decipher specific characteristics, such as a
`
`precise acoustic change, a precise temperature change, or a precise pressure change
`
`at the pinpointed location.
`
`- 12 -
`
`HALLIBURTON, Exh. 1012, p. 0012
`
`
`
`
`
`33. While this fiber optic sensing technology was initially developed by
`
`the United States Navy for submarine sensing applications, as the United States
`
`Navy continued to make improvements on the technology over time, it saw the
`
`incredible commercial potential of additional applications of the BLUE ROSE
`
`technology. This included applications in such diverse industries as oil and gas
`
`exploration and homeland security, and as a result, the United States Navy decided
`
`to declassify the BLUE ROSE technology in an effort to pursue patent protections
`
`for these novel applications. In fact, the current market for distributed fiber optic
`
`sensing technology is estimated at $586 million annually, and that market is
`
`expected to double over the next three years.
`
`34. Now protected by four United States Patents (the Navy Patents), as
`
`well as more than a dozen pending patent applications, this novel technology
`
`provides for a fiber optic sensor array that can detect real-time, location-specific
`
`changes along an optical fiber, such as sound, pressure and temperature. These
`
`four United States Patents were issued to inventor Robert Michael Payton and
`
`assigned to The United States of America represented by the Secretary of the
`
`Navy.
`
`35.
`
`In an effort to market and commercialize the technology disclosed in
`
`the Navy Patents more effectively and to enforce its rights under the Navy Patents,
`
`- 13 -
`
`HALLIBURTON, Exh. 1012, p. 0013
`
`
`
`
`
`the United States Navy selected Adelos to be their partner and exclusive licensee to
`
`the Navy Patents.
`
`VI. FACTUAL BACKGROUND
`
`A. The Adelos Proprietary Technology Has Achieved Commercial Success
`
`36. Adelos develops fiber optic sensor systems for use by the Department
`
`of Defense and Department of Energy, as well as in the oil and gas, perimeter
`
`security, and environmental monitoring industries, among others. The Adelos
`
`Proprietary Technology is able to detect and identify more quickly and accurately
`
`conditions of interest, track objects across space in real-time, and identify naturally
`
`occurring “false positive” events.
`
`37. Adelos has been successful in further developing the United States
`
`Navy’s technology. For example, Adelos has created systems directed toward
`
`perimeter and homeland security applications, where the sensitive detector can
`
`“hear” intruder or troop movements along vast borders. Adelos has also developed
`
`the capability of the system to “listen” to geological features and movements,
`
`opening the capability to “hear” down oil well bores and extract valuable data
`
`about underground gas and petroleum conditions.
`
`38. This technical superiority has resulted in commercial success for
`
`Adelos, as it has received multiple contracts for the use of its fiber optic sensing
`
`technology. By way of example, the Department of Energy Idaho National
`
`- 14 -
`
`HALLIBURTON, Exh. 1012, p. 0014
`
`
`
`
`
`Laboratory – National Security Test Range partnered with Adelos to be its primary
`
`advanced testing center. The United States Air Force Nuclear Weapons Center
`
`also chose Adelos’ systems for its critical defense systems to help guard the
`
`Nation’s nuclear-tipped inter-continental ballistic missiles.
`
`B. Defendants’ Attempts to Acquire the Adelos Proprietary Technology
`
`39.
`
`In late 2011, Halliburton contacted the United States Navy and
`
`expressed an interest in acquiring rights to its BLUE ROSE fiber optic sensing
`
`technology. The United States Navy directed Halliburton to contact Adelos, the
`
`exclusive licensee of the Navy Patents, about their interest in acquiring rights to
`
`this technology.
`
`40. Shortly thereafter, Halliburton and Adelos began discussions
`
`regarding Halliburton’s interest in the Adelos Proprietary Technology. Halliburton
`
`expressed its disappointment with its current fiber optic sensing system and
`
`represented that it was interested in establishing a business relationship with
`
`Adelos.
`
`41. During the next couple of years, from early 2012 through late 2014,
`
`Halliburton proceeded to extract detailed technical information about the Adelos
`
`Proprietary Technology. Believing that Halliburton was acting in good faith and
`
`intending to enter into a business relationship with Adelos, Adelos provided details
`
`- 15 -
`
`HALLIBURTON, Exh. 1012, p. 0015
`
`
`
`
`
`related to the Adelos Proprietary Technology to Halliburton in an effort to
`
`facilitate this potential business relationship.
`
`42.
`
`In addition to its numerous requests to Adelos for technical
`
`information, Halliburton also demanded that it be allowed to observe multiple tests
`
`of Adelos’ fiber optic sensing systems. In May 2012, Christopher Stokely and
`
`David Barfoot, agents of Halliburton, visited the headquarters of Adelos near
`
`Polson, Montana for two days of intense, detailed technical discussion regarding
`
`the Adelos Proprietary Technology, to observe the technology in action, as well as
`
`to extract more technical data from Adelos.
`
`43. During discussions with Adelos, Halliburton expressed its
`
`disappointment with its current fiber optic sensing system, and after witnessing the
`
`superior functionality and performance of the Adelos Proprietary Technology,
`
`Halliburton agent Christopher Stokely referred to the Adelos system as “a unique
`
`type of distributed acoustic sensor” and expressed interest in performing additional
`
`field tests.
`
`44. As Halliburton continued to induce Adelos to disclose information,
`
`Adelos continued to attempt to engage in negotiations with Halliburton regarding
`
`the Adelos Proprietary Technology as well as entering into a potential business
`
`relationship. Halliburton encouraged these negotiations as a means of justifying its
`
`demands for more and more detailed technical information.
`
`- 16 -
`
`HALLIBURTON, Exh. 1012, p. 0016
`
`
`
`
`
`45.
`
`In September 2012, after having provided Halliburton with the
`
`technical information it requested, the testing that it had requested, and
`
`demonstrating the technology to Halliburton’s agents in person, Halliburton
`
`informed Adelos that due to budget concerns it would have to postpone any further
`
`discussions until the beginning of 2013.
`
`46.
`
`In early 2013, rather than approaching Adelos, Halliburton instead
`
`approached the United States Navy concerning a potential business relationship
`
`involving the Adelos Proprietary Technology. Once again, the United States Navy
`
`directed Halliburton to speak with Adelos.
`
`47. Shortly thereafter, Adelos and Halliburton restarted discussions.
`
`Halliburton agent Christopher Stokely again requested additional field testing of
`
`this technology. Following these requests for additional testing, and despite
`
`numerous attempts over the next few months, Adelos was unable to get in touch
`
`with Mr. Stokely, or any other agent of Halliburton, for further discussions.
`
`48. On August 12, 2013, Halliburton surreptitiously filed an international
`
`patent application (PCT/US13/054588) (attached hereto as Exhibit D) entitled
`
`“Systems and Methods for Spread Spectrum Distributed Acoustic Sensor
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`Monitoring.” This patent application disclosed the technology that is the heart and
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`soul of Adelos’ fiber optic sensing technology.
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`- 17 -
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`HALLIBURTON, Exh. 1012, p. 0017
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`49. The technology in this Halliburton patent application disclosed some
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`of the very same technology Halliburton had requested information about from
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`Adelos and about which Halliburton had represented that it was negotiating a
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`business relationship in good faith.
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`50. Halliburton falsely claimed in this application that its agents,
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`including Christopher Stokely, were the sole inventors of the technology.
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`51. Halliburton also did not disclose in this application any of the Navy
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`Patents, the same patents that had been at the center of the potential business
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`relationship and discussions between Halliburton and Adelos for over a year.
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`52. Halliburton likewise never advised Adelos or the United States Navy
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`that it had filed, or intended to file, this international patent application.
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`53. On May 19, 2014, in the issued Written Opinion of the International
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`Searching Authority (attached hereto as Exhibit E), all claims (Claims 1-24) of
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`Halliburton’s pending international patent application (PCT/US13/054588) were
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`effectively deemed to be no different than the technology invented by the United
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`States Navy and disclosed in at least one of the Navy Patents (the ‘971 Patent).
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`54. The opinion stated that the claims did not disclose any patentable
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`technology separate and distinct from what was disclosed in the ‘971 Patent, and
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`that any minor differences were obvious in light of the disclosures in the ‘971
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`- 18 -
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`HALLIBURTON, Exh. 1012, p. 0018
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`Patent. Thus, the International Searching Authority confirmed that Halliburton
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`was merely attempting to patent the Adelos Proprietary Technology.
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`55. After its attempts to convert the Adelos Proprietary Technology by
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`filing an international patent application were rejected, Halliburton and Adelos
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`briefly reopened negotiations for the Adelos Proprietary Technology in early 2015.
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`56. Not long after reopening discussions, Halliburton and Adelos
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`executed a Non-Disclosure Agreement so that the parties could continue their
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`discussions. This agreement applied only to confidential materials disclosed after
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`the March 24, 2015 effective date. After dragging their feet for months,
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`Halliburton executed the Non-Disclosure Agreement in April 2015.
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`57. Almost immediately after executing the Non-Disclosure Agreement,
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`all discussions with Halliburton stopped. Halliburton formally broke off
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`“negotiations” with Adelos several weeks later, stating, “[T]he ROI is just not
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`there.” There was ultimately no performance pursuant to this agreement as no
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`technical information was shared and no documents were marked confidential
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`pursuant to it.
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`58.
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`In January 2016, six months after it broke off discussions with
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`Adelos, Halliburton once again took the Adelos Proprietary Technology and
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`attempted to claim it as their own in a United States patent application (No.
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`- 19 -
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`HALLIBURTON, Exh. 1012, p. 0019
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`14/903,503) entitled “Systems and Methods for Spread Spectrum Distributed
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`Acoustic Sensor Monitoring” (attached hereto as Exhibit F).
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`59. This application was published on May 26, 2016 and disclosed
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`technology that is the heart and soul of Adelos’ fiber optic sensing technology.
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`60. Unlike Halliburton’s PCT application, this United States patent
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`application disclosed the ‘971 Patent as containing similar subject matter. The
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`‘971 Patent is the same Navy Patent referenced in the International Searching
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`Authority’s Written Opinion, which stated that Halliburton’s international patent
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`application did not disclose an invention separate and distinct from what was
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`already invented and disclosed in the ‘971 Patent.
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`61. This United States application likewise falsely claims that Halliburton
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`agents, including Christopher Stokely, were the sole inventors of the technology it
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`disclosed. Halliburton again failed to disclose to either Adelos or the United States
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`Navy that it had filed, or intended to file, this United States patent application.
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`C. Defendants’ Infringement of the Navy Patents
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`62. During its discussions with Adelos, Halliburton expressed its
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`displeasure with the performance of its own distributed sensing system. After
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`witnessing the superior functionality of Adelos’ own distributed sensing systems,
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`Halliburton defrauded Adelos under the guise of entering into a business
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`relationship. Without notice, and without the permission of Adelos, Halliburton
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`- 20 -
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`HALLIBURTON, Exh. 1012, p. 0020
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`began to incorporate the technology disclosed in the Asserted Patents into its own
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`products and services.
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`63. Defendants have been infringing, and continue to infringe, the
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`technology disclosed in the Asserted Patents through its distributed sensing
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`products and services marketed under various trade names, including but not
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`limited to Pinnacle, Optiphase, and SensorTran. These infringing products include
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`Defendants’ DAS and DTS products, which include but are not limited to the:
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`Halliburton DAS and DTS Interrogator systems, Pinnacle DAS and DTS
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`Interrogator systems, Optiphase DAS Interrogator systems, SensorTran DTS
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`Interrogator systems, and FiberWatch systems. Defendants’ infringing services
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`include those services that incorporate any of Defendants’ infringing products, and
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`include but are not limited to: Defendants’ FiberWatch, StimWatch, FlowWatch,
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`FiberCoil, FiberView, and FiberLog services. Collectively, these infringing
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`products and services are herein referred to as the “Accused Distributed Sensing
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`Products and Services.”
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`64. As a result of Defendants’ infringement, Adelos has suffered
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`irreparable harm due to the loss of potential customers and contracts, the loss of
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`market share, and the deterioration of its goodwill, and will continue to suffer such
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`harm until and unless such infringement by Defendants is enjoined. Moreover,
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`there is no other adequate remedy at law other than an injunction.
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`- 21 -
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`HALLIBURTON, Exh. 1012, p. 0021
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`65. Additionally, as a result of Defendants’ infringement, Adelos has
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`suffered significant monetary damages.
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`VII. CAUSES OF ACTION
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`COUNT I
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`INFRINGEMENT OF U.S. PATENT NO. 7,030,971
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`66. Adelos re-alleges and incorporates the allegations in Paragraphs 1
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`through 65 of this Complaint, as if fully set forth herein.
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`67. Defendants have infringed, and continue to infringe, one or more of
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`the claims of the ‘971 Patent in violation of 35 U.S.C. § 271(a), literally and/or
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`under the doctrine of equivalents, by making, using, selling and/or offering for sale
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`within the United States, and/or importing into the United States, the Accused
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`Distributed Sensing Products and Services.
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`68. By way of example, Defendants’ infringement of claim 22 of the ‘971
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`Patent is illustrated in the preliminary infringement claim chart attached hereto as
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`Exhibit G.
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`69. On information and belief, Defendants’ infringement of the ‘971
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`Patent is willful and i