Opinion
Civil Action No. 3:02-CV-1347-N
March 4, 2003
MEMORANDUM OPINION AND ORDER
Plaintiff Halliburton Energy Services, Inc. ("Halliburton") complains against Defendant Weatherford International, Inc. ("Weatherford") and Defendant BJ Services Company ("BJ") for patent infringement under 35 U.S.C. § 1, et seq. Halliburton seeks judgment against the Defendants and injunctive relief against further infringement of the claims of United States Patent Number 5, 271, 468 (the " `468 patent"), issued December 21, 1993 and United States Patent Number 5, 224, 540 (the " `540 patent"), issued July 6, 1993, each entitled "Downhole Tool Apparatus with Non-Metallic Components and Methods of Drilling Thereof."
Before the Court is Halliburton's motion for a preliminary injunction. Oral arguments were held on Halliburton's motion on September 19, 2002. After considering the Parties' briefs and arguments, and for the reasons stated below, this motion is DENIED.
I. BACKGROUND
Halliburton, Weatherford, and BJ all provide services and equipment to customers in the oil industry. Halliburton's patents at issue in this action relate to oil well tools called bridge plugs, see Figure 1 from the `468 patent at right. Bridge plugs are used to seal off or "plug" portions of an oil well during certain oil production procedures. Often times after the procedures are complete, bridge plugs are removed from the oil wells. The claims at issue for the purpose of deciding this motion pertain to the bridge plug apparatus itself and a method of setting the bridge plug in a well bore and then removing the plug by drilling it out. Figure 1 illustrates a bridge plug set in place in a well casing about to be drilled out and removed from the well.Traditionally, bride plugs were constructed of metals such as steel or cast-iron. The relevant claims of Halliburton's `468 and `540 patents pertain to bridge plugs made of non-metallic component parts. The relevant component parts of a bridge plug include (1) a center mandrel — the main structural body on which the tool is built, (2) a packing element — an often doughnut-shaped, rubber element positioned around the center mandrel to seal off the lower portion of the well bore, and (3) slips — anchoring assemblies to hold the tool in place. Figure 8 from the `468 patent, depicted on the right, demonstrates one embodiment of Halliburton's bridging plug. The anchoring components in figure 8 consist of upper and lower slips, slip supports, and wedges. When the well tool is set, the packer elements are compressed and expand to form a seal with the well casing (as shown). This expansion pushes the upper wedge upward and the lower wedge downward and the forces the slips outward to engage the well casing. In this embodiment of the Halliburton's invention, the slip supports help hold the slips, and therefore the bridge plug, in place in the well bore. Halliburton claims that its tool's non-metallic composition allows for a less expensive and more reliable removal of the plug from an oil well bore.
Halliburton's non-metallic bridge plugs, marketed as part of their FAS DRILL(r) tool line, are removed by drilling the plugs out of the well bore. The plugs are drilled into small bits and chips that can be circulated through and flushed out of the well bore. Halliburton asserts that prior to its non-metallic tools, most drillable bridge plugs were constructed of cast-iron. These cast-iron plugs were more costly and problematic to drill out of well bores than non-metallic plugs. Halliburton claims that its FAS DRILL(r) plugs can be removed from well bores with less expensive equipment, in less time, and with fewer problems than their metallic counterparts.
Halliburton contends in its motion that Weatherford and B J are infringing upon claims 1 and 30 of its `468 patent and claim 3, which is dependent upon claim 2, which is dependent upon claim 1, of its `504 patent. These claims read as follows:
Claim 1 of the `468 Patent
Claim 30 of the `468 Patent
1. A well bore process comprising the steps of: constructing a downhole tool such that a component thereof is made of a non-metallic material, said tool comprising: a center mandrel; and a plurality of slips disposed around said mandrel for grippingly engaging a well bore when in a set position; wherein at least one of said mandrel and said plurality of slips is said component; positioning said downhole tool into locking, sealing engagement with said well bore; and drilling said tool out of said well bore.
30. A downhole apparatus for use in a well bore, said apparatus comprising: a center mandrel made of non-metallic material; and slip means disposed on said mandrel for grippingly engaging said well bore when in set position.
1. A downhole apparatus for use in a well bore, said apparatus comprising: a center mandrel; and slip means disposed on said mandrel for grippingly engaging said well bore when in a set position, said slip means being at least partially made of a non-metallic material.
2. The apparatus of claim 1 characterized as a packing apparatus and further comprising packing means disposed on said mandrel for sealingly engaging said well bore when in a set position.
3. The apparatus of claim 2 wherein said slip means is an upper slip means disposed above said packing means and further comprising a lower slip means disposed below said packing means, said lower slip means being at least partially made of a non-metallic material.
Halliburton argues that Weatherford's FracGuard Composite plugs and BJ's Python Composite plug incorporate aspects of its FAS DRILL(r) tools and infringe upon the cited patent claims. The Defendants' plugs, Halliburton asserts, have non-metallic center mandrels and slip assemblies made at least partially of non-metallic materials. Additionally, Halliburton claims that the Defendants' marketing materials boast quick and easy drill outs of their composite (non-metallic) plugs.
II. DISCUSSION
To obtain a preliminary injunction, Halliburton must show "(1) a reasonable likelihood of success on the merits; (2) irreparable harm if an injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction's favorable impact on the public interest." Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). With regard to the first element, Halliburton must show, in light of the burdens that will inhere at trial, that (1) its patent was infringed, and (2) any challenges to the validity and enforceability of its patent "lack substantial merit." Purdue Pharma LP. v. Boehringer Ingelheim GmbH, 237 F.3d 1359, 1366 (Fed. Cir. 2001).
Weatherford and BJ challenge the validity of Halliburton's patents. Specifically, the Defendants claim that Halliburton's relevant patent claims were anticipated or rendered obvious by prior art. An assessment of the likelihood of validity of a patent claim over the prior art also involves a two-step process. First, the court determines the scope and meaning of the patent claims asserted to determine the subject matter for which patent protection is sought. See Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1353 (Fed. Cir. 1999). Secondly, the properly construed claims are compared with the prior art. Id. at 13 54. A determination that a claim is invalid as being anticipated or lacking novelty under 35 U.S.C. § 102 requires a finding that "each and every limitation is found either expressly or inherently in a single prior art reference." Celeritas Techs. Inc. v. Rockwell Int'l Corp., 150 F.3d 1354, 1361 (Fed. Cir. 1998). Whether a claim would have been obvious within the meaning of 35 U.S.C. § 103 is a question of law based on underlying findings of fact including: "(1) the scope and content of the prior art, (2) the level of ordinary skill in the art, (3) the differences between the claimed invention and the prior art, and (4) secondary considerations of nonobviousness." Smiths, 183 F.3d at 1354 (citing Graham v. John Deere Co., 383 U.S. 1, 17-18(1966)).
Because an issued patent is presumed to be valid, 35 U.S.C. § 282, the Defendants must establish invalidity by clear and convincing evidence. WMS Gaming Inc. v. Int'l Game Techs., 184 F.3d 1339, 1355 (Fed. Cir. 1999). In the context of a preliminary injunction, however, while "the burden of proving invalidity is with the party attacking validity, " the party seeking the injunction "retains the burden of showing a reasonable likelihood that the attack on its patent's validity would fail." H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387 (Fed. Cir. 1987). When the presumptions and burdens applicable at trial are taken into account, the injunction should not issue if the party opposing the injunction raises "a substantial question concerning infringement or validity, meaning that it asserts a defense that [the party seeking the injunction] cannot prove lacks substantial merit." Tate Access Floors v. Interface Architectural Resources, Inc., 279 F.3d 1357, 1365 (Fed. Cir. 2002) (internal quotation marks omitted); New Eng. Braiding Co. v. A. W. Chesterton Co., 970 F.2d 878, 883 (Fed. Cir. 1992) ("While it is not the patentee's burden to prove validity, the patentee must show that the alleged infringer's defense lacks substantial merit.").
A. Anticipation by the `266 Patent
Both Defendants argue that Halliburton's patents are invalid because of anticipation. A patent is anticipated and therefore invalid when the invention was described in a printed publication either before the date of invention by the applicant or more than one year before the date of the application for the patent in the United States. 35 U.S.C. § 102(a), 102(b) (2003). For a claim to be invalid on the basis of anticipation under section 102(b), "[t]he invention must have been known to the art in the detail of the claim; that is, all of the elements and limitations of the claim must be shown in a single prior art reference, arranged as in the claim." Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1383 (Fed. Cir. 2001).
Weatherford argues in its surreply that United States Patent Number 1, 684, 266 (the " C266 patent"), entitled "Bridging Plug, " issued on September 11, 1928 anticipates the relevant claims of Halliburton's `468 and `540 patents. The `266 patent is for an improved bridge plug made of wood, a non-metallic material. This patent raises a substantial question regarding the validity of Halliburton's relevant patent claims.
The Patent and Trademark Office ("PTO") did not review the `266 patent prior to its issuance of Halliburton's patents-in-suit. "Deference is due the PTO's decision to issue a patent with respect to evidence bearing on validity which it considered but no such deference is due with respect to evidence it did not consider." American Hoist Derrick Co. v. Sowa Sons, Inc., 725 F.2d 1350, 1359 (Fed. Cir.), cert. denied, 469 U.S. 821 (1984).
1. Claim 1 of the `468 Patent
Claim 1 of the `468 patent describes a process for (i) locking and (ii) sealing an oil well tool, i.e. bridge plug, in a well bore and then (iii) drilling the tool out of the hole. The `468 tool apparatus itself contains (iv) a center mandrel and (v) a plurality of slips (for positioning the tool in place) wherein (vi) either the mandrel or the slips are made of a non-metallic material. In comparison, the `266 patent discloses a bridging plug that has (iv) a center mandrel constructed of (vi) wood that can be easily (iii) drilled out of a well bore. App. at W00213, lines 16-21, 90-98. The `266 plug utilizes a (v) plurality of slips that (i) engage the well bore to prevent movement of the tool when the plug is set. App. at W000214, lines 3-12. The `266 bridging plug also has rubber rings distributed around the mandrel for (ii) sealingly engaging the well bore when the plug is locked in position. Id. at lines 68-73. The `266 patent, therefore, discloses the elements and limitations of Claim 1 of the `468 patent.
2. Claim 30 of the `468 Patent
The `266 patent likewise appears to anticipate Claim 30 of the `468 patent. Claim 30 describes the bridge plug apparatus as comprising (i) a non-metallic center mandrel and (ii) a slip means disposed on the mandrel for grippingly engaging the well bore when the tool is in a set position. As discussed above, the `266 patent discloses a bridging plug apparatus containing (i) a non-metallic (wood) center mandrel and a plurality of slips for locking, or grippingly engaging, the well bore when the tool is set. The apparatus of claim 30 however differs from claim 1 in that 30 requires the apparatus to contain a "slip means." Halliburton argues that "slip means, " as defined in the specification of the patent-in suit, includes (a) slips, (b) a cone for wedging the slips, and (c) a support structure for the slips on the opposite side of the slips from the wedge. App. at 000010, col. 3, 1. 26-28; App. at 000029, col. 29-34. The Defendants do not offer an alternate construction of slip means. In response to Halliburton's construction of "slip means, " Weatherford argues that the `266 plug utilizes (a) slips and (b) a tapered, conical wooden component that wedges the slips into engagement with the well bore. Weatherford, however, does not directly address in its argument whether the C266 patent discloses the element of a slip support structure on the opposite side of the slips from the wedge.A Markman hearing will ultimately determine the proper construction of the term "slip means, " however, for the purposes of this motion, the "slip means" language is broad enough to apply to the slip structure disclosed in the `266 patent. When claims are drafted in "means plus function" form, the presumption is that 35 U.S.C. § 112 ¶ 6 applies. A "means plus function" claim limitation is construed to cover the structure disclosed in the specification of the patent to perform the claimed function plus equivalents of that structure. Caterpillar Inc. v. Deere Co., 224 F.3d 1374, 1379 (Fed. Cir. 2000).
The means plus function limitation does not override, however, the section 112 requirement that the claims particularly point out and distinctly claim the subject matter of the invention. In re Donaldson Co., 16 F.3d 1189, 1195 (Fed. Cir. 1994). A claim can not be limited by reading the specification into the claim:
it is the language itself of the claims which must particularly point out and distinctly claim the subject matter which the applicant regards as his invention, without limitations imported from the specification, whether such language is couched in terms of means plus function or consists of a detailed recitation of the inventive matter. Limitations in the specification not included in the claim may not be relied upon to impart patentability to an otherwise unpatentable claim.In re Lundberg, 244 F.2d 543, 548 (C.C.P.A. 1957).
Claim 30 of Halliburton's `468 patent requires a slip means disposed on the tool's mandrel for grippingly engaging the well bore when the tool is in a set position. The claims of the ` 266 patent disclose slips engageable upon the casing, designed to prevent upward and downward movement of the plug within the casing. Functionally, both slip structures engage the well bore or well casing to prevent movement of the plug when the tool is set. If the precise structure of the "slip means" was critical to establishing the novelty of Halliburton's invention, then it was incumbent upon Halliburton to particularly point out and distinctly claim that structure. Because Halliburton's patent claims do not include a support structure for the slips on the opposite side of the slips from the wedge, the Court declines to read this limitation into claim 30 of the `468 patent in order to avoid the anticipation of the `468 patent by the `266 patent. A slip support on the opposite side of the slips from the wedge, therefore, is not a necessary element of "slip means." The `266 patent, thus, discloses the elements and limitations of claim 1 of the `468 patent.
3. Claims 1-3 of the `540 Patent
Claim 3 of the `540 patent, like claim 30 of the `468 patent, is an apparatus claim describing the bride plug. The elements of claim 3, which is dependent upon claim 2, which is dependent upon claim 1, include (i) a center mandrel, (ii) a packing means disposed on the mandrel for sealingly engaging the well bore when the tool is set, (iii) a partially non-metallic slip means, wherein the slip means consists of (a) an upper slip means disposed above the packing means, and (b) a lower slip means, being at least partially non-metallic, disposed below the packing means. The `266 patent discloses these elements and limitations and therefore anticipates claim 3 of the `540 patent
As discussed previously, the bridging plug described in the `266 patent has a (i) center mandrel. The `266 tool also has (ii) a packing means — rubber rings and possibly wooden segments disposed on the mandrel that sealingly engage the well bore when the tool is set. App. at W000214, lines 68-73 ("The rubber rings 22 also engage the casing and are compressed, thus forming a packer or seal to prevent the leakage of fluid between the exterior surface of the segments 10 and the casing."). As discussed in construing the elements of claim 30, the `266 tool contains (iii) a slip means partially made of wood. Additionally, the slip means consists of (a) upper slips located above the rubber rings and (b) lower slips located below the rings. App. W000214, 1. 3-12 ("These [upper] slips have upwardly directed teeth 18, which, when they engage the casing C, will prevent upward movement of the plug within the casing. Each of the segments 10 has a stationary slip 19 secured to its lower end, these slips being provided with downwardly directed teeth 20, which, when they engage the casing, will prevent downward movement of the plug.") The lower slip means also utilize the wooden conical element for wedging the slips, therefore the lower slip means are partially non-metallic. The `266 patent, therefore, discloses the elements and limitations of Claim 3 of the `540 patent, and claims 1 and 30 of the `468 patent.
The wooden segments of the `266 tool form a cylinder around the mandrel, and when the tool is set, the segments push on the slip cones to lock the slips in the well bore.
4. Halliburton Has Not Shown that Weatherford's Anticipation Defense Lacks Substantial Merit
Weatherford has succeeded with its burden of raising a substantial question regarding the validity of the relevant claims of Halliburton's patents-in-suit. Halliburton, however, has failed to show that Weatherford's defense lacks substantial merit. In its response to Weatherford's surreply, Halliburton argues that the `266 tool (1) cannot seal the well bore, (2) does not have a plurality of slips disposed on the mandrel, and (3) has no seal member on the mandrel. The Plaintiffs arguments are unavailing.
First, the relevant claims of Halliburton's patents do not require that the bridging plug perfectly seal the well bore. Claim 1 of the `468 patent, rather, requires that the bridge plug is positioned into a locking, sealing engagement with the well bore, and claim 2 of the `540 patent requires a packing means disposed on said mandrel for sealingly engaging the well bore. The `266 tool does sealingly engage the well bore — the `266 plug has rubber rings that engage the well bore when compressed "thus forming a packer or seal to prevent the leakage of fluid between the exterior surface of the segments 10 and the casing." App. at W000214, lines 70-73.
Halliburton's attorney further argued at the preliminary injunction hearing that the `266 plug does not sealingly engage the well bore because the spaces between the tool's wooden segments form leak paths. The proper inquiry for a claim to be invalid on the basis of anticipation requires that "all of the elements and limitations of the claim be shown in a single prior art reference, arranged as in the claim." Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1383 (Fed. Cir. 2001). The language of the `266 patent discloses a tool that sealingly engages the well casing or well bore, therefore Halliburton's argument that the C266 plug does not actually seal the well bore fails to rebut Weatherford's invalidity defense.
See footnote 3 for a description of segments.
Next, Halliburton argues that the `266 bridging plug does not have a plurality of slips disposed on the mandrel, rather the slips are on the tool's segments. In this argument, Halliburton mischaracterizes its claims. Claim 1 of the `468 patent requires "a plurality of slips disposed around said mandrel." Dispose means "to place or set in a particular order" or "to arrange." See THE AMERICAN HERITAGE(r) DICTIONARY OF THE ENGLISH LANGUAGE (4th ed. 2000). The slips of the `266 tool are placed or arranged around the mandrel. Claim 30 of the C468 patent and claim 1 of the `540 patent require that the slip means, rather than the slips themselves, is disposed on the mandrel. This argument fails for the purpose of determining this motion because the term "disposed on" does not require that the slip means be physically attached to the mandrel. The slip means of the `266 plug is arranged on the mandrel. Halliburton's argument regarding the disposition of the `266 slips thus fails.
Lastly, Halliburton asserts that the `266 tool does not have a seal member on the mandrel. Halliburton's patent claims, however, require only that a "packing means" be disposed on the mandrel. The rubber rings of the `266 patent are arranged on the mandrel, therefore Halliburton's defense fails. Halliburton, thus, has not shown that Weatherford's defense of anticipation fails. Halliburton's motion for preliminary injunction is denied, because Weatherford raised a substantial question regarding the validity of the relevant claims of Halliburton's `468 and `540 patents.
B. Obviousness of the `468 and `540 Patents
The Defendants also argue that prior art renders the relevant claims of Halliburton's patents-in-suit obvious. A patent claim will be invalid if it is obvious to one of ordinary skill in the pertinent art:
[a] patent may not be obtained . . . if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.35 U.S.C. § 103(a) (2003). The determination of obviousness can be made by comparing the claimed device to a single prior art reference. However, the obviousness determination is often made by comparing the claimed device to a combination of references. Karsten Mfg. Corp., 242 F.3d at 1385. "In holding an invention obvious in view of a combination of references, there must be some suggestion, motivation, or teaching in the prior art that would have led a person of ordinary skill in the art to select the references and combine them in the way that would produce the claimed invention." Id. The Defendants argue in their responses and surreplies that a number of publications either alone, or in combination, render both the `468 and `540 patents obvious.
1. Baker Tools
Both Defendants argue in their briefs that publications describing Baker Oil Tools' ("Baker") Prime Fiberglass Packer and AD-Type Fiberglass Packer (collectively the "Baker tools") render obvious claims 1 and 30 of the `468 patent and claims 1 and 2 of the `540 patent. Baker's 1968 Special Products Manual discloses the Baker Fiberglass Packer and a 1968 World Oil Advertisement (collectively "Baker references") discloses both Baker tools. The Baker references predate the filing of the `468 and `540 patents by more than twenty years, and the patent examiner did not consider these materials during the prosecution of Halliburton's patents-in-suit These references appear to raise a substantial question about the validity of some of the relevant claims of Halliburton's patents.
For the purposes of this opinion, packers and bridge plugs are considered to be similar downhole oil well tools.
The components of the Baker tools include a packing element and a plurality of slips disposed around a center mandrel. All components of the Prime Fiberglass Packer are constructed of non-metallic substances, and the mandrel of the AD-Type Fiberglass Packer is made of a non-metallic substance. Halliburton argues that the Baker tools could not be positioned into a locking, sealing engagement with the well bore. However, the function of the slips is to "bite into the casing" or lockingly engage the well bore, and the packing element is designed to sealingly engage the well bore. The incorporation of these design elements coupled with the description in the Special Products Manual for "running" or setting the tool suggest that the Baker tools could be positioned into a locking, sealing engagement with the well bore.
Halliburton further argues that the Baker tools do not have the necessary element of a slip support on the opposite side of the cone as part of the slip means. As discussed above, a slip support opposite the cone is not a necessary element of "slip means" for the purposes of deciding this motion. Thus, the Baker tools' slip mechanism is consistent with the defined term "slip means." The Baker references, therefore, anticipate or render obvious claim 30 of the `468 patent and claims 1 and 2 of the `540 patent.
The Baker references do not disclose the drill out element in claim 1 of `468 patent. The Defendants argue that persons skilled in the art knew to drill out bridge plugs from well bores if the tools became stuck. The Baker references coupled with this general knowledge do not render obvious Halliburton's method claim. Claim 1 of the `468 patent describes a process for routinely setting a well tool and then drilling it out. The abnormal drill out of a malfunctioning bridge plug is not a customary part of the process for setting the Baker tools nor is there any suggestion in the references themselves that the Baker tools could or should be drilled out. The Baker references and the knowledge of abnormal plug drill outs do not render obvious claim 1 of the `468 patent.
The Defendants also argue that the Baker references, combined with other prior art, such as United States Patent Number 4, 708, 202 (the " `202" patent), suggest routine drill out of bridge plugs. The `202 patent and the `266 patent discussed above disclose that drilling out downhole tools, such as packers and bridge plugs, constructed of non-metallic components is desirable. These patents specifically state that non-metallic components improve the drillabillity of well tools. The coupling of the Baker references with either the `202 patent or the `266 patent renders claim 1 of the `468 patent obvious.
2. Other Prior Art References
The Defendants also argue that other prior art references, taken together with the Baker references, render the relevant claims of the patents-in-suit obvious. The Defendants state that the `202 patent, entitled "Drillable Well-Fluid Flow Control Tool, " issued on November 24, 1987 discloses every element and limitation of Halliburton's claim 1 and 30 of the `468 patent and claims 1 and 2 of the `540 patent except the non-metallic mandrel or slips. The Baker references, Defendants argue, coupled with the `202 patent render these claims obvious. Additionally, the `202 patent itself discusses "forming a number of the components of the tool from [non-metallic substances]" to improve the tools' drillability. App. PI. at 000130, col. 7, 1.23-27. This language suggests forming tool components, such as the mandrel or slips, from non-metallic substances, and the Baker Special Products Manual discloses packers constructed entirely of non-metallic substances. The `202 patent and the Baker references, therefore, raise a substantial question as to the validity of claims 1 of the `468 patent and claims 1 and 2 of the `540 patent.
Defendants also argue United States Patent Number 3, 306, 366 (the " `366 patent"), entitled "Well Packer Apparatus/' issued on February 28, 1967 discloses the common geometry of well tools with slips above and below the packing means that act in opposite directions. This slip geometry is consistent with the `266 patent discussed above. The upper slip assembly prevents the plug from moving upward in the well and the lower slip assembly prevents downward movement. The combination of the Baker references with the slip geometry disclosed in both the `875 and `266 patent appears to raise a substantial question as to the validity of claim 3 of the `540 patent.
Whether a claim would have been obvious within the meaning of 35 U.S.C. § 103 is a question of law based on underlying findings of fact including: the scope and content of the prior art, the level of ordinary skill in the art, and the differences between the claimed invention and the prior art. In light of these factual determinations discussed above, the relevant claims of Halliburton's patents-in-suit are obvious. Secondary considerations such as commercial success, long felt but unsolved needs, failure of others, copying and unexpected results may also be utilized "to give light to the circumstances surrounding the origin of the subject matter sought to be patented." Graham v. John Deere Co. U.S. 1, 17-18 (1966). These secondary factors favor a finding of nonobviousness of Halliburton's patents-in-suit: Halliburton's FAS DRILL(r) tools have enjoyed commercial success; the marketplace needed an easily drillable bridge plug; others, such as Mr. Harris, attempted but failed in designing and testing such a drillable tool; and Halliburton has presented evidence of the alleged copying of its FAS DRILL(r) tools by the Defendants. However, the factual determinations pertaining to the scope and content of the prior art, the level of ordinary skill in the art, and the differences between the claimed invention and the prior art overcome the secondary considerations. The Defendants, therefore, have raised a substantial question regarding the obviousness of the relevant claims of Halliburton's patents-in-suit.
III. CONCLUSION
The Defendants have shown a substantial question regarding the validity of relevant claims of the patents-in-suit. The `266 patent anticipates claims 1 and 30 of the `468 patent and claims 1-3 of the `540 patent. The Baker references alone anticipate or render obvious claim 30 of the `468 patent and claims 1 and 2 of the `540 patent. The Baker references taken together with the `202 patent or `266 patent render obvious claim 1 of the `468 patent and claims 1 and 2 of the `540 patent. Lastly, the Baker references and the `366 or `266 patent render obvious claim 3 of the `540 patent.
Halliburton has not show that the Defendants' attacks on its patents lack substantial merit. Thus, Halliburton has not demonstrated a likelihood of success on the merits of its claims at trial. Therefore, Halliburton's motion for a preliminary injunction is denied.
In light of this order, (1) Halliburton's motion for expedited discovery filed on June 27, 2002, (2) Halliburton's motion for temporary restraining order filed on June 27, 2002, (3) Weatherford's and BJ's motion for enlargement of time filed on July 1, 2002, (4) Halliburton's motion to strike filed on August 27, 2002, (5) Weatherford's motion to strike the declarations in support of Halliburton's requests for preliminary relief filed on September 11, 2002, and (6) Weatherford's motion to strike Halliburton's consolidated response to Defendants' surreplies or, alternatively, motion for leave to file a reply brief filed on September 11, 2002 are denied as moot.
ORDER
Before the Court is Defendant BJ Services Company's ("BJ") motion to transfer venue under 28 U.S.C. § 1404(a) to the Houston Division of the Southern District of Texas. After reviewing the motion, the parties' arguments and briefing, and the relevant law, the Court DENIES BJ's motion.Plaintiff Halliburton Energy Services, Inc. ("Halliburton") filed a complaint on June 27, 2002 against Defendant Weatherford International, Inc. ("Weatherford") and BJ for patent infringement under 35 U.S.C. § 1 et seq. Halliburton seeks judgment against the Defendants and injunctive relief against further infringement of the claims of United States Patent Number 5, 271, 468 issued December 21, 1993 and United States Patent Number 5, 224, 540 issued July 6, 1993 (the "patents-in-suit"), each entitled "Downhole Tool Apparatus with Non-Metallic Components and Methods of Drilling Thereof." The patents-in-suit pertain to oil well tools called bridge plugs. In response to Halliburton's claims, the Defendants assert that they are not infringing upon Halliburton's valid patent claims and that Halliburton's patents are invalid and unenforceable.
The issue before this Court is whether it is proper to transfer this case from Halliburton's chosen forum, the Northern District of Texas, to the Southern District of Texas as requested by BJ. Pursuant to section 28 U.S.C. § 1404(a), a district court at its discretion may transfer a case to any district where it could have been originally brought "for the convenience of parties and witnesses, in the interest of justice." Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988). It is clear that this action could have been brought in the Southern District of Texas. The corporate headquarters of both Defendants are in the Houston Division, and the most of the design and development of the allegedly infringing devices has occurred in the Southern District. The Court, therefore, will focus its attention on whether issues of convenience and justice warrant a transfer of venue.
The decision to transfer is made to prevent waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense. See Stabler v. New York Times Co., 569 F. Supp. 1131, 1137 (S.D. Tex. 1983). To determine whether transferring venue will serve this purpose, "the trial court must consider all relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." 15 CHARLES ALAN WRIGHT, ARTHUR R. MILLER EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3847, at 370 (2d ed. 1986). Typically, these relevant factors include: "(1) the plaintiffs choice of forum; (2) the availability of compulsory process for the attendance of unwilling witnesses; (3) the cost of obtaining the attendance of willing witnesses; (4) the accessibility and location of sources of proof; (5) the relative congestion of the courts' dockets; (6) the accessibility of the premises to jury view; (7) the relation of the community in which courts and the jurors are required to serve to the occurrence giving rise to the suit; and (8) the time, cost, and ease with which the trial can be conducted, and all other practical considerations relative to the trial and determination of the case." Bank One, N.A. v. Euro-Alamo Invs. Inc., 211 F. Supp.2d 808, 811-12 (N.D. Tex. 2002).
BJ bears the burden of proving by a preponderance of the evidence that transfer is appropriate. See Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966). This requires a particularized showing of why transfer is necessary, including identification of key witnesses and the general content of their testimony. Bank One, 211 F. Supp.2d at 812. A plaintiff's privilege to choose his forum should be highly esteemed. Time, 366 F.2d at 698. A court may not transfer venue where the result will be merely to shift the burden of trial from one party to the other. Bank One, 211 F. Supp.2d at 812.
BJ has not met its evidentiary burden of showing that transfer is appropriate. First, the cost of obtaining the attendance of witnesses does not favor transfer. BJ's sparse evidentiary record contains only one declaration from its Associate General Counsel, Mark Airola. Mr. Airola states that four of BJ's key employee witnesses work in the Southern District, three in the Houston Division and one in the Corpus Christi Division. Halliburton counters that four of its key employee witnesses live in the Northern District. The location of these employee witnesses, thus, does not favor either party. Transferring the action would merely shift the cost of obtaining the attendance of employee witnesses from BJ to Halliburton.
Halliburton also lists the names often engineers and technical staff that work in Duncan, Oklahoma. The location of these employees does not favor either forum.
BJ also asserts in its motion that other key trial witnesses are located in Houston. Though BJ's assertions are facially compelling, BJ does not carry its evidentiary burden to support those assertions. Mr. Airola states, upon information and belief, that three of BJ's bridge plug customers are headquartered in Houston. BJ's statement is too general and inconclusive to meet the obligation of making a particularized showing why transfer is necessary. BJ wholly fails to identify key customer witnesses or specify the general content of their testimony. The location of these customers, therefore, is irrelevant.
BJ also argues in its motion, without any evidentiary support, that the design and development of Weatherford's allegedly infringing devices occurred in the Houston area, therefore most of Weatherford's key witnesses will work and reside around Houston. The location of Weatherford's witnesses in Houston would be a fact favoring transfer if BJ had supported this assertion with any evidence. Likewise, BJ states that employees of a competitor, Baker Hughes, may need to testify about relevant prior art at trial and that because Baker Hughes corporate headquarters and technology center is located in Houston, it is likely that these witnesses would work and reside in Houston. BJ makes this general allegation without any evidentiary support, therefore the location of hypothetical Baker Hughes witnesses is not a fact favoring transfer.
The location and accessibility of sources of proof does not favor either forum. BJ's documents pertaining to the design, development, sales, marketing and patenting of its bridge plugs are located in the Southern and Eastern Districts of Texas, and Halliburton's relevant documents are in the Northern District of Texas and Oklahoma. A transfer of this action would merely shift the burden of producing documents for trial from BJ to Halliburton. In its motion, B J also asserts, without evidence, that the relevant trial documents of Weatherford and Baker Hughes are located in Houston. Since these assertions are unsupported, they do not favor transfer to the Southern District.
BJ admits in its motion that the dockets of the Southern and Northern District are comparable, therefore the relative congestion of the courts' dockets is a neutral factor. BJ does not address in its motion the necessity or importance of a jury view, therefore this factor does not support transfer. The relation of the forum to the occurrence giving rise to the suit is also a neutral factor. The alleged infringement of Halliburton's patents-in-suit has occurred in many different states including Texas, Oklahoma, Alaska and Wyoming. The design and testing of BJ's bridge plug have occurred in the Southern District and Halliburton's tool's design and testing occurred in the Northern District. Both the Northern District and the Southern District bear some relation to the occurrences giving rise to the suit, therefore this factor does not support transfer of this action.
The final catch-all factor — the time, cost, and ease with which the trial can be conducted, and all other practical considerations relative to the trial and determination of the case — tilts in favor of the case remaining in the Northern District. Though discovery has not yet begun, the parties have filed a number of motions, including a motion for preliminary injunction. The Court has already expended significant time becoming familiar with the patents-in-suit and the myriad of invalidity issues pertaining to the claims of the patents. A transfer of the action to the Southern District would result in delay while the new court learns the relevant technology and assesses the validity issues.
On balance, the 1404(a) transfer factors favor that the action remains in the Northern District. No factor supports a Southern District forum. A few of the factors favor that the case be tried in the Northern District, and many of the relevant factors are neutral. A transfer of the case to the Southern District would merely shift the burden of trial from BJ to Halliburton. Therefore, BJ's motion to transfer venue under 28 U.S.C. § 1404(a) to the Houston Division of the Southern District of Texas is DENIED.
In light of this order BJ's Motion for a briefing schedule filed on August 5, 2002 is denied as moot.
ORDER REGARDING TRANSITION
This case was transferred to this Court's docket. In order to provide for an efficient transition, the Court ORDERS as follows:1. All existing scheduling orders, trial settings and referrals to magistrate judges are adopted and remain in full force and effect. Due to the random nature of the transfer process, some months have a disproportionate number of cases set for trial. In order to equalize the number of cases set for trial each month, some cases may be moved back one month. The parties will be advised if their case is under consideration for such a move. Over time the Court intends to shift to a one week trial docket, so the parties may be advised that their case is set for a specific week within the month for which it is now set. Until such time as that notice is provided, cases remain on whatever length trial docket was established by the transferring court.
2. Counsel are directed to confer and file a joint status report with the Court no later than fourteen (14) days after the date of this Order. In the event parties disagree regarding any of the requested information, the parties should identify their differing positions, but should include them in a single document. If no scheduling order is in place, the status report will serve as the consultation specified in Rule 16(b), and the Court will enter a scheduling order following receipt of the report. The status report should address the following matters:
a. Date case was filed and a short (2-3 sentence) description of nature of suit.
b. Is case set for trial? If so, please give date. If not, please state date by when case will be ready for trial.
c. Estimated length of trial.
d. Is a scheduling order in place? If so, please attach copy. If not, please briefly describe what discovery has been completed and what additional discovery is contemplated, and state when discovery will be complete.
e. Are all parties joined and served? If not, please identify absent parties and when joinder is anticipated.
f. Has the case been mediated? If not, is mediation currently ordered? If not, would mediation be helpful in resolving the case?
g. Are any matters currently referred to a magistrate judge for determination? If so, please identify.
h. Identify any issues the parties anticipate will arise that will require prompt court attention to ensure the orderly preparation of the case for trial, or other matters you want to bring to the attention of the Court.
i. Identify all motions that are fully briefed and awaiting decision, and for each such motion state: party filing, date filed, style of motion, and whether urgent.
3. In order to expedite resolution of discovery disputes during this transition, the Court is establishing an expedited discovery hearing docket on Monday afternoons. Any party may request expedited hearing of a discovery dispute filed after the date of this Order. Requests must be made by separate letter to the Court's Judicial Assistant, Donna Hocker, and must be received at least ten (10) days prior to the requested docket; requests may be made concurrently with filing the motion. If the matter is set on the expedited docket, the Court will advise the parties of applicable procedures by separate order. Seeking relief from the Court on discovery disputes prior to conducting a meaningful, substantive conference with the opposing party is STRONGLY discouraged. A motion or objection to the taking of a deposition that is filed within three (3) business days of the notice has the effect of staying the deposition pending court order on the motion or objection; otherwise the deposition will not be stayed except by court order.