Free Trial Brief - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-cv-02579-RPM NATIONAL OILWELL VARCO, L.P., Plaintiff, v. PASON SYSTEMS USA CORP., Defendant.

PLAINTIFF NATIONAL OILWELL VARCO, L.P.'S TRIAL BRIEF ON CLAIM CONSTRUCTION
Robert M. Bowick Matthews, Lawson, & Bowick PLLC 2000 Bering Suite 700 Houston, Texas 77057 . Phone: (713) 355-4200 Fax: (713) 355-9689 Jane Michaels Holland & Hart LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8000 Fax: (303) 295- 8261 John W. Raley , III Cooper & Scully, P.C. 700 Louisiana Street, Suite 3850 Houston, TX 77002 Phone: (713) 236-6801 Fax: (713) 236-6880

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TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii I. II. III. INTRODUCTION.................................................................................................................1 SEVERAL TERMS ALREADY HAVE BEEN CONSTRUED. .........................................1 THE COURT MUST CONSTRUE A NUMBER OF TERMS. ...........................................2 [1] [2] [3] [4] [5] [6] [7] [8] [9] regulates/regulating the release ..............................................................................4 a drilling fluid pressure regulator ...........................................................................7 coupled ...................................................................................................................9 measuring ...............................................................................................................9 changes .................................................................................................................10 outputting..............................................................................................................10 representing the changes; represents ....................................................................11 relay ......................................................................................................................12 responsive; in response to.....................................................................................17

[10] drill string control signal ......................................................................................18 [11] drill string controller.............................................................................................19 [12] decrease ................................................................................................................21 [13] increase.................................................................................................................22 [14] rate of release........................................................................................................23 [15] drill .......................................................................................................................25 [16] relaying.................................................................................................................26 [17] controlling; control the release .............................................................................26 [18] bit weight..............................................................................................................27 [19] selecting................................................................................................................28

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[20] any one of said first signal, said second signal, and both.....................................28 [21] said selected signal or signals...............................................................................29 IV. CONCLUSION ...................................................................................................................30

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TABLE OF AUTHORITIES FEDERAL CASES C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858 (Fed. Cir. 2004)............................................................................................15 Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998)............................................................................................1 Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335 (Fed. Cir. 1998)..........................................................................................15 Gart v. Logitech, Inc., 254 F.3d 1334 (Fed. Cir. 2001)..........................................................................................15 Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367 (Fed. Cir. 2005)..........................................................................................15 Laitram Corp. v. Cambridge Wire Cloth Co., 863 F.2d 855 (Fed. Cir. 1988)...........................................................................................15 In re Lee, 277 F.3d 1338 (Fed. Cir. 2002)............................................................................................5 Moll v. N. Telecom, Inc., 119 F.3d 17 (Fed. Cir. 1997)..............................................................................................10 Robotic Vision Sys., Inc. v. View Eng'g, Inc., 19 F.3d 1370 (Fed. Cir. 1999)............................................................................................10 SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278 (Fed. Cir. 2005)..........................................................................................15 Tehrani v. Hamilton Med., Inc., 331 F.3d 1351 (Fed. Cir. 2003)..........................................................................................11 Texas Instruments, Inc. v. U.S. Int'l Trade Comm'n, 805 F.2d 1558 (Fed. Cir. 1986)..........................................................................................15 Varco, L.P. v. Pason Sys. USA Corp., 436 F.3d 1368 (Fed. Cir. 2006).................................................................................. passim

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OTHER AUTHORITIES McGraw-Hill Dictionary of Scientific and Technical Terms (6th ed. 2003) ......................... passim Webster's New World Collegiate Dictionary (4th ed. 1999)................................................. passim University of Texas at Austin Petroleum Extension Service, A Dictionary for the Oil and Gas Industry (1st ed. 2005)........................................................................................ passim

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I.

INTRODUCTION.

Plaintiff National Oilwell Varco submits this Trial Brief on Claim Construction in conjunction with its Opening Trial Brief. Before the jury can compare the claims of Plaintiff's patent against the Pason AutoDriller ­ Defendant Pason Systems USA Corp.'s infringing device ­ the Court must determine the scope and meaning of those claims. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir.1998) (en banc).

II.

SEVERAL TERMS ALREADY HAVE BEEN CONSTRUED.

The Court already has construed several terms from the `142 Patent: CLAIM 1 ELEMENT "drilling fluid pressure regulator" COURT'S INTERPRETATION "The term drilling fluid pressure regulator must be understood in the context of the use of measurement of changes in drilling fluid pressure and producing a signal representing changes in drilling fluid pressure." "a device that communicates an electric, mechanical or pneumatic signal" "connected" "measurement of changes over time which will also be compared to a set reference point"

1 1 1, 11 & 14

"relay" "coupled" "measuring change"

Ruling on Claim Construction Issues (Doc. No. 166).

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The Court of Appeals for the Federal Circuit has construed two terms in the `142 Patent: CLAIM 14 ELEMENT "selecting" FEDERAL CIRCUIT'S INTERPRETATION "`selecting' in claim 14 must refer to the [automatically performed] conflict resolution process that occurs between controlling parameters" "This disclosure and corresponding Figures do not limit the invention as a whole to the use of pneumatically operated valves; rather they merely list such valves as but one example of relays operable in the present invention."

11 & 14

"relaying"

Varco, L.P. v. Pason Sys. USA Corp., 436 F.3d 1368 (Fed. Cir. 2006). Finally, the Court has clearly established that it will not accept any attempt Pason may make to limit the claims of the `142 Patent to the preferred embodiment of the patent's specification. See id. ("The structure for producing a signal in response to changes in drilling fluid pressure in these method claims [Claims 11 & 14] are not limited to the structure for measuring changes or outputting a signal described in Claim 1 as Pason seems to suggest."); id. ("That argument is rejected. It violates the principles of claim construction that ordinarily the claim is not limited to the described preferred embodiment and the doctrine of claim differentiation because depending claim 5 includes the same limitations advocated by Pason.").

III.

THE COURT MUST CONSTRUE A NUMBER OF TERMS.

Based on the claim charts the parties submitted in connection with their briefs on claim construction, see Doc. Nos. 158-59; see also Doc. Nos. 137, 139-146, 154, 157, 160-61, the Court must construe the claim terms numbered and highlighted below in its instructions to the jury:

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Claim 1 1. An automatic drilling system for automatically [1] regulating the release of the drill string of a drilling rig during the drilling of a borehole, comprising: a drilling fluid pressure sensor; [2] a drilling fluid pressure regulator [3] coupled to said drilling fluid pressure sensor, said [2] drilling fluid pressure regulator [4] measuring [5] changes in drilling fluid pressure and [6] outputting a signal [7] representing those [5] changes; a [8] relay [3] coupled to said [2] drilling fluid pressure regulator, said [8] relay [9] responsive to [6] the output signal of said [2] drilling fluid pressure regulator to supply a [10] drill string control signal at an output thereof; and [11] a drill string controller [3] coupled to said [8] relay wherein [12] a decrease in drilling fluid pressure results in said [8] relay supplying a [10] drill string control signal that operates said [11] drill string controller to effect an [13] increase in the [14] rate of release of said drill string and an [13] increase in drilling fluid pressure results in said [8] relay supplying a [10] drill string control signal that operates said [11] drill string controller to effect a [12] decrease in the [14] rate of release of said drill string." Claim 11 "11. A method for automatically [1] regulating the release of the drill string of a drilling rig [15] drill, comprising the steps of: [4] measuring drilling fluid pressure; producing a signal in response to [5] changes in drilling fluid pressure, said signal [7] representing the [5] changes in drilling fluid pressure; [16] relaying said signal to a [11] drill string controller; and [17] controlling said [11] drill string controller to [13] increase the [14] rate of release of said drill string when said signal [7] represents a [12] decrease in drilling fluid pressure and

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to [12] decrease the [14] rate of release of said drill string when said signal [7] represents an [13] increase in drilling fluid pressure." Claim 14 "14. A method for automatically [1] regulating the release of the drill string of a drilling rig [15] drill, comprising the steps of: [4] measuring drilling fluid pressure and [18] bit weight; producing a first signal in response to [5] changes in drilling fluid pressure, said first signal [7] representing the [5] changes in drilling fluid pressure; producing a second signal in response to [5] changes in [18] bit weight, said second signal [7] representing the [5] changes in [18] bit weight; [19] selecting [20] any one of said first signal, said second signal, and both said first and second signals to [17] control the release of said drill string; and [16] relaying [21] said selected signal or signals to a [11] drill string controller which [1] regulates the release [of] said drill string [9] in response to [21] said selected signal or signals." Trial Ex. 1 (emphasis and numbering added). The tables attached as Exhibit 1 compare the parties' respective interpretations of the terms identified above. Below, Varco highlights the differences between the parties' interpretations for each term. [1] regulates/regulating the release

Varco's Interpretation Pason's Interpretation "to adjust (increase or decrease) the rate, i.e., "controlling the downward movement" the speed, of the lowering of the drill string" Pason has stipulated that its AutoDriller falls within the scope of this element ­ the preamble language of Claims 1, 11 and 14. Amended Final Pretrial Order (Doc. No. 174), Stip.

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13 ("Pason's AutoDriller is an automatic drilling system for automatically regulating the release of the drill string of a drilling rig during the drilling of a borehole.") (emphasis added). As such, no further interpretation is necessary. In any event, Varco's definition of the term is consistent with the PTO's understanding of the term, as well as the term's plain meaning. The PTO, which is presumed to possess ordinary skill in the relevant art, see In re Lee, 277 F.3d 1338, 1345 (Fed. Cir. 2002), unmistakably understood the term "regulating" to mean adjusting (increasing or decreasing) the rate (that is, the speed) of the lowering of the drill string. Trial Ex. 3, USPTO Reasons for Patentability/Confirmation ("Varney does not teach or suggest effecting an `increase in the rate of release' and a `decrease in the rate of release' as it pertains to independent claims 1, 9 and 11. Claims 2-8, 10 and 12-15 are patentable due to their dependency on claims 1, 9 and 11."). Webster's New World Collegiate Dictionary (4th ed. 1999) [hereinafter Webster's] defines "regulate" as "to adjust to a particular . . . rate." Moreover, Varco's definition of the term "regulating" is consistent with the specification of the `142 Patent, which describes how a drill string controller "regulates" the release of the drill string: With valve 236 opened further, air motor 204 receives an additional amount of compressed air which increases the speed with which it rotates. In response, cable reel 206 raises brake handle 208 causing brake 32 to further disengage from drum 26. Consequently, drum 26 releases cable 28 an additional amount, thus lowering drill string 21. Trial Ex. 1, Col. 10, ll. 23-30. The slowing down of the first shaft removes the driving force from cable reel 206, thus allowing it to unspool cable 207 to lower brake handle 208. With brake handle lowered, brake 32 increases its

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braking of drum 26, resulting in the release of the cable 28 slowing to its calibrated value. Id. Col. 10, ll. 56-61 (emphasis added). Pason would have this Court interpret "regulate" broadly to include generic "control" in a transparent attempt to have the claims read upon the prior art. The PTO already has rejected one such request from Pason, and this Court should do likewise. During this litigation Pason requested an ex parte re-examination of the `142 Patent, asserting that its claims are invalid as anticipated or obvious in view of U.S. Patent No. 3,223,183 to Varney. The PTO confirmed the validity of the `142 Patent in part because Varney fails to teach or suggest "regulating" the release of the drill string ­ that is, effecting an "increase" or "decrease in the rate of release." Trial Ex. 3, PTO Reasons for Patentability/Confirmation ("Varney does not teach or suggest effecting an `increase in the rate of release' and a `decrease in the rate of release' as it pertains to independent claims 1, 9 and 11. Claims 2-8, 10 and 12-15 are patentable due to their dependency on claims 1, 9 and 11.").

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[2]

a drilling fluid pressure regulator

Varco's Interpretation Pason's Interpretation "a drilling fluid (i.e., mud) pressure regulator, "A dedicated device," e.g., a device that is capable of detecting and responding to electrical, mechanical, hydraulic or alternatively, or pneumatic signal(s)" "the drilling fluid pressure regulator depicted as element 200 in figure 3 of the `142 Patent." The Court's Interpretation: "Pason seeks to limit the `drilling fluid pressure regulator' to the device described in the specifications particularly Element 200, describing a Bourdon tube pneumatic device. That argument is rejected. It violates the principles of claim construction[.]"1 "The term drilling fluid pressure regulator must be understood in the context of the use of measurement of changes in drilling fluid pressure and producing a signal representing changes in drilling fluid pressure." Ruling on Claim Construction Issues (Doc. No. 166), at 3.

Varco's interpretation of "regulator" is consistent with the ordinary meaning of that term. See, e.g., McGraw-Hill Dictionary of Scientific and Technical Terms (6th ed. 2003) [hereinafter McGraw-Hill] (defining "regulator" as "a device that maintains a desired quantity at a predetermined value or varies it according to a predetermined plan," defining "automatic regulator" by referring to the definition of "automatic controller," and defining "automatic controller" as "[a]n instrument that continuously measures the value of a variable quantity or
1

At times, Pason itself has advocated an interpretation similar to the Court's interpretation, and antithetical to the interpretation Pason has advanced in this Court. See Varco, 436 F.3d at 1375 ("In addition, Pason's counsel at oral argument similarly conceded that relaying in claim 14 should not be limited to pneumatically operated valves"); Trial Ex. 2, Pason's Ex Parte Reexamination Request (stating that the `142 Patent "is not drawn to the specific apparatus disclosed in the Bowden disclosure, but rather recites terms that encompass a variety of other embodiments of apparatus including electrical implementations," and "is not drawn to method steps performed using the specific apparatus disclosed in the Bowden disclosure, but rather recites the steps using terms that may be practiced by a variety of other apparatus embodiments such as the electrical and drilling fluid pressure implementations"). 7

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condition and then automatically acts on the controlled equipment to correct any deviation from a desired preset value."); Webster's (defining "regulator" as "a mechanism for controlling or governing the movement of machinery, the flow of liquids, gases, electricity, steam, etc."). Varco's interpretation also is consistent with the specification for the `142 Patent. As described in the specification, the regulators in the patented invention "receive their respective signals to measure changes in those signals and produce an output signal representative of any changes." Trial Ex. 1, Col. 2, ll. 4-6. One of the purposes of the "signal representative of any changes" is to identify a change in the related drilling parameter from a set-point value such that rate of release may be controlled to bring the drilling parameter back to the set-point value. The regulators output this signal representing a change in the associated drilling parameter to another device ­ a valve operating as a relay ­ which then supplies a control signal to a drill string controller in response to the output signal from the regulator. The drill string controller controls the rate of release of the drill string. Trial Ex. 1, Col. 2, ll. 15-20. The "regulator" element of Claim 1 of the `142 Patent is described as performing specific functions, namely measuring changes in drilling fluid pressure and outputting a signal representing those changes. Ex. 1, Col. 4, ll. 43-45 (emphasis added). The Court should summarily reject any effort Pason may make to urge that a computer processor cannot serve as a regulator. During the prosecution of the `142 Patent the PTO Examiner concluded that the "regulator" language of Claim 1 of the `142 Patent encompasses computer microprocessors. See Trial Ex. 2, August 10, 1994 Office Action ("Rogers discloses a drilling optimization control system (Figs 1-3) which comprises a computer control system for optimizing the penetration rate. In which the drilling rpm and the thrust (or bit weight) are

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monitored and manipulated by the computer to achieve the optimal penetration conditions (Col. 4, lines 16+)."). [3] coupled

The Court's Interpretation "connected" (not limited to the location of the attachment, e.g., at the output of the drilling fluid regulator) Ruling on Claim Construction Issues (Doc. No. 166) Based upon this Court's interpretation, no further interpretation of "coupled" is necessary. [4] measuring

Varco's Interpretation Pason's Interpretation "finding out, determining, calculating, "finding out, determining or ascertaining" ascertaining" Varco and Pason urge interpretations of "measuring" that are substantially the same, with the exception of Varco's inclusion of the term "calculating." Pason's interpretation is based upon its contention that the Pason AutoDriller system does not "measure" weight-on-bit, but instead calculates it. See Amended Final Pretrial Order (Doc. No. 174), Stip. 16 ("Pason's AutoDriller calculates weight on bit as part of the user interface on both the AutoDriller and EDR systems. Weight on bit is the calculated differential between the measured weight of the drill string off bottom and when drilling.") (emphasis added). Pason contends that its AutoDriller system only measures or senses the hookload (the total suspended weight of the drill string) with either a dead line tension sensor or dead line anchor pancake sensors and then uses these signals to calculate weight-on-bit.

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The Federal Circuit repeatedly has rejected interpretations similar to those proposed by Pason. For example, in Robotic Vision Systems, Inc. v. View Engineering, Inc., 19 F.3d 1370 (Fed. Cir. 1999), the Federal Circuit determined that calculating and measuring are analogous. Id. at 1371 n.1; see also Moll v. N. Telecom, Inc., 119 F.3d 17 (Fed. Cir. 1997) (same). Moreover, it is well-understood in the oil and gas drilling industry that the relative tension of the dead line is a proxy for the weight of the drill string supported by the derrick, such that all surface weight indicators measure weight-on-bit. This is precisely how the `142 Patent's bit weight sensors determine weight-on-bit. Finally, Varco's interpretation is consistent with the ordinary meaning of the term "measuring." See, e.g., Webster's (defining "measured" as, among other things, "calculated"). [5] changes

The Court's Interpretation: "measurement of changes over time which will also be compared to a set reference point" See Ruling on Claim Construction Issues (Doc. No. 166) This Court squarely rejected Pason's interpretation of "changes," which limited the term either to changes over time or to changes from a set-point, but not both. Based upon the Court's construction, no further interpretation of this element is necessary. [6] outputting

Varco's Interpretation Pason's Interpretation "to produce, deliver, transfer, generate, and/or "generate" transmit a signal (e.g., information, variable, entity, etc.) for something"

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The term "outputting" as used in the phrase "outputting a signal," refers to the generation or production of a signal from a device. With respect to Claim 1 of the `142 Patent, it is the pressure regulator that outputs a signal. Varco's construction is consistent with the ordinary meaning of the term "output." See, e.g., McGraw-Hill (defining "output" as "[t]he activity of transmitting the generated information"); Webster's (defining "output" as "to deliver or transfer"); University of Texas at Austin Petroleum Extension Service, A Dictionary for the Oil and Gas Industry (1st ed. 2005) [hereinafter Oil and Gas Dictionary] (defining "output" as "a signal transmitted from a device"). Moreover, Varco's use of the term "signal" in its definition of "outputting" is consistent with the ordinary meaning of the term "signal." See, e.g., Oil and Gas Dictionary (defining "signal" as "information about a variable that can be transmitted"); id. (defining "measured signal" as "the electrical, mechanical, pneumatic, or other variable applied to the input of a device"); McGraw-Hill (defining "signal" as "an entity that signifies some other thing, and may be interpreted"). [7] representing the changes; represents

Varco's Interpretation Pason's Interpretation "to be a sign or symbol for; to stand for; "symbolizing, standing for, directly related to, symbolize; equivalent of; correspond to; indicative of, a reasonable proxy for, or indicative of; directly related to; a reasonable equivalent to only those changes" proxy for" the changes, i.e., see [5] changes above In similar circumstances, the Federal Circuit has construed the term "representing" as "broad enough to include `symbolizing' or `to stand for'," "directly related to," "indicative of" and/or "a reasonable proxy for" and rejected a defendant's overly-narrow "equivalent to" interpretation. See, e.g., Tehrani v. Hamilton Med., Inc., 331 F.3d 1351, 1361 (Fed. Cir. 2003).

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Moreover, Varco's interpretation of "representing" is consistent with the ordinary meaning of the term and supported by the specification of the patent. Webster's defines "represent" as "to be a sign or symbol for; symbolize" and "to be the equivalent of; correspond to." The preferred embodiment of the `142 Patent discloses an output signal that represents the current measured pressure. This signal also necessarily represents a change from the set-point pressure and the previously-measured pressure since a change in measured pressure causes a change in the output of the regulator. As the `142 Patent describes: even under optimal drilling conditions drill bit 23 will rise `off bottom', thus requiring drilling fluid pressure regulator 200 to readjust the release of cable 28 from drum 26. Any time drill bit 23 rises even slightly `off bottom', drilling fluid pressure within drill string 21 decreases. Drilling fluid pressure sensor 34 measures that decrease and supplies Bourdon tube 210 with a hydraulic signal representing that decrease [i.e., change]. Ex. 1, `142 Patent, Col. 10, ll. 5-12. [8] relay Varco's Interpretation Pason's Interpretation "a device that communicates, conveys, or "a dedicated device" imparts an electrical, mechanical, hydraulic or pneumatic signal to e.g., control the movement (neutral, up or down) of the rig's hoisting system's brake handle" The specification of the `142 Patent makes clear that Bowden acted as his own lexicographer to define a "relay" as not limited to an "electric relay" or a binary device, but any device ­ including pneumatic valves, hydraulic valves, electromagnetic or solid state relays, and the like ­ that convey or pass along a variable signal as described in the specification of the `142 Patent. The preferred embodiment of the `142 Patent teaches pneumatic valves that "operate as

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relays." The specification of the `142 Patent describes the operation of the relay of the preferred embodiment as follows: Each of the regulators attaches to a relay which is responsive to that regulators output signal to supply a drill string control signal to a drill string controller." (`142 Patent, Col. 2, ll. 15-18); As shown in FIG. 2, automatic driller 33 comprises drilling fluid pressure regulator 200, bit weight regulator...which receive the drilling signals developed by drilling fluid pressure sensor 34, bit weight sensor 35...Automatic driller 33 further comprises air motor 204 which drives differential gear unit 205. Differential gear unit 205 manipulates cable reel 206 to raise and lower brake handle 208 via cable 207, thereby adjusting the braking force brake 32 applies against drum 26. Regulators 200-203 connect to valves 236-239, respectively, to output a pneumatic signal to air motor 204 which drives air motor 204 to control brake 32 and, thus, the release of cable 28 from drum 26. Although regulators 200-203 may be used concurrently to control brake 32, they may also be utilized individually or in any combination to control the release of cable 28 from drum 26. In the preferred embodiment, valves 236-239 are pneumatic valves that operate as relays to supply compressed air to air motor 204. Specifically, valves 236-239 connect in series to deliver compressed air from an air supply (not shown) to air motor 204. That is, the air supply delivers the compressed air to valve 236 through flow regulator 212. Air pressure gauge 231 registers the air pressure supplied to valve 236 and displays the value for the automatic driller operator. Flow regulator 212 functions to limit the pressure of the compressed air delivered to air motor 204 will drive cable reel 206. Flow regulator 212, therefore, determines the maximum rate at which drill bit 23 could penetrate into formation 87." (`142 Patent, Col. 7, ll. 16-48). The drill string controller attaches to the relays to receive a drill string control signal from the regulator or regulators controlling the drilling operation. Illustratively, when the relay connected to the drilling fluid pressure regulator receives a decrease in drilling fluid pressure signal, it supplies a drill string control signal that operates the drill string controller to effect an increase in the rate of release of the drill string. Conversely, an increase in drilling fluid pressure results in the relay supplying a drill string control signal that

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operates the drill string controller to effect a decrease in the rate of release of the drill string. If, however, the relay connected to the bit weight regulator receives a decrease in bit weight signal, it supplies a drill string control signal that operates the drill string controller to effect an increase in the rate of release of the drill string. Conversely, an increase in bit weight results in the relay supplying a drill string control signal that operates the drill string controller to effect a decrease in the rate of release of the drill string. Trial Ex. 1, Col. 2, ll. 25-43). The `142 Patent describes a preferred embodiment that contains valves that operate as relays by communicating a variable signal in response to changes in a measured parameter to the actuating device. This is explicitly described in the `142 Patent (Ex. 1) at Col. 8, ll. 42-44, as follows: Nozzle 216 mounts on plate 215 to deliver variable amounts of compressed air from the air supply to diaphragm 240 of valve 236 [operating as a relay] in response to changes in drilling fluid pressure. And at Col. 8, ll. 52-57: In normal operation, Bourdon tube 210 manipulates flapper 213 in response to changes in drilling fluid pressure to vary the amount of compressed air nozzle 216 delivers to valve 236 [operating as a relay]. That variable amount of compressed air alters the opening of valve 236 [e.g., relay] and, thus, the force with which the compressed air drives air motor 204. Thus, the relay valves disclosed in the `142 Patent are not merely switches, as Pason improperly contends, but operate as a variable control flow device ­ a choke. For example, an adjustable choke is a common flow device that can vary the volume of fluid, such as a flowing gas and/or liquid, to pass through it as a result of changes to a drilling parameter. Thus, the relay valves are not limited to simple on and off switches but include widely variable openings,

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orifices and/or flow-through diameters to control the amount of compressed air or hydraulic fluid (i.e., the signal) which is passed on by the valves. Additionally, the Federal Circuit ruled that the specification of the `142 Patent did not limit the claims to the pneumatically operated preferred embodiment having pneumatic valves as "relays." Varco, 436 F.3d at 1370. The Court was quite clear on this point: As outlined above, nothing in the claim language requires or even suggests the use of pneumatically operated valves in performing the relaying step. Rather, the only discussion of pneumatically operated valves in the intrinsic record comes from the specification: `In the preferred embodiment, valves 236-239 are pneumatic valves that operate as relays to supply compressed air to air motor 204.' 142 patent, col. 7, ll. 35-37. This disclosure and corresponding Figures do not limit the invention as a whole to the use of pneumatically operated valves; rather they merely list such valves as but one example of relays operable in the present invention. See C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 864 (Fed. Cir. 2004) (`Statements that describe the invention as a whole, rather than statements that describe only preferred embodiments, are more likely to support a limiting definition of a claim term.') (citing Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335, 1347 (Fed. Cir. 1998)); SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1286 (Fed. Cir. 2005) (`References to a preferred embodiment, such as those often present in a specification, are not claim limitations.' (Quoting Laitram Corp. v. Cambridge Wire Cloth Co., 863 F.2d 855, 865 (Fed. Cir. 1988)); Gillette, 405 F.3d at 1374 (`This court has cautioned against limiting the claimed invention to preferred embodiments or specific examples in the specification.') (quoting Texas Instruments, Inc. v. U.S. Int'l Trade Comm'n, 805 F.2d 1558, 1563 (Fed. Cir. 1986)); Gart v. Logitech, Inc., 254 F.3d 1334, 1342 (Fed. Cir. 2001) (noting that drawings [depicting the preferred embodiment] are not meant to represent the invention or to limit the scope of coverage defined by the words used in the claims themselves.); see also `142 patent, col. 24, ll. 27-35 (stating the present invention is not limited to the preferred embodiment). Id. at 1370.

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For these reasons, the relays disclosed in the preferred embodiment of the '142 Patent "transmit or pass along" signals (e.g., pneumatic or hydraulic signals) to the drill string controller consistent with Varco's proposed construction. Furthermore, during the reexamination of the '142 Patent the PTO concluded that the relay of claims 1 and 9 included devices responsive to the output of the pressure transducer including such devices as an electrical signal discriminator. See Trial Ex. 2, April 15, 2004 Order Granting Reexamination (A "[d]iscriminator 128 is a relay responsive to the output signal of the pressure transducer."). In fact, Pason has itself previously taken the position that the "relay" of Claim 1 of the `142 Patent should be interpreted in this way--devices that "pass through" a signal. See Ex. 2, Pason's Reexamination Request ("The signal produced by elements 124 [pressure transducer] and 125 [potentiometer] pass through a signal discriminator 128 and power transformer 132 produce a signal that controls the operation of the drill string brake 134 as described in Varney at column 10 lines 3 through 25.") (emphasis added). Additionally, during the prosecution of the `142 Patent the PTO considered prior art references which taught electrical relays that included transducers, computer controls, microprocessors and signal discriminators; e.g. conditioners; amplifiers; filters; and/or comparators and initially rejected Claim 1 in view of such relays taught by the prior art. See File History (Ex. 2), PTO Office Action (WS 140) which provided as follows: "Rogers discloses a drilling optimization control system (Figs 1-3) which comprises a computer control system for optimizing the penetration rate. In which the drilling rpm and the thrust (or bit weight) are monitored and manipulated by the computer to achieve the optimal penetration conditions (Col. 4, lines 16+)."

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Furthermore, the prior art made of record by the USPTO during the prosecution of the `142 Patent, e.g., Ball, Rogers, Alder, Gray, Jr. et al., Tanaka et al., Jasinski and Frink et al. (Exs. 3-11), each disclosed relay(s) that were electronic in design and that included transducers for measuring certain parameters coupled to computer components that constituted regulators that produced signaling that was transmitted or passed along to a drill string controller. Nowhere in the prosecution history did the applicant for the `142 Patent distinguish his invention from the prior art of record based upon the physical structure of the relay or the function that it performed. For these reasons, the relay language of Claim 1 is not limited as referring to only a pneumatic valve relay or a binary-type relaying device. [9] responsive; in response to Pason's Interpretation "capable of generating and communicating an electrical, mechanical, pneumatic or hydraulic signal responsive to" "resulting in a precise cause and effect relationship between changes in the parameters and acceleration or deceleration of the drill string in a manner that might be expressed as follows: accelerating the downward movement drill string when the selected Signal(s) represent(s) a decrease in drilling pressure, a decrease in bit weight, or both, and decelerating the downward movement drill string when the selected Signal(s) represent(s) an increase in drilling pressure, and increase in bit weight, or both." The term "in response to," as in "producing a signal in response to" is described in the specification as responsive to a change as described above. The regulators of the preferred embodiment react or respond to changes in drilling parameters by creating varying signals.

Varco's Interpretation "in response to, e.g., a reaction to something"

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Varco relies upon the ordinary meaning of the term. See, e.g., McGraw-Hill ("response ­ a quantitative expression of the output of a device or system as a function of the input. Also known as system response. The value of some measurable quantity after a treatment has been applied."); Webster's ("responsive ­ that gives or serves as an answer or response"). [10] drill string control signal

Varco's Interpretation Pason's Interpretation "a signal used to control the rate of release of "the signal of the drilling fluid pressure the drill string" regulator" In the preferred embodiment of the specification the "drill string control signal" is the relative amount of compressed air delivered to an air motor ­ a drill string controller. The amount of compressed air controls the rotational speed and thus the direction of the cable wheel of the motor, which in turn lifts and lowers the draw work's brake handle via a cable connected between the wheel and handle ­ increasing and decreasing the braking force applied to the drum, and thereby increasing or decreasing the rate of release of the drill string. In another embodiment (Figure 14) of the `142 Patent, the drill string control signal is a hydraulic signal delivered to a coil tubing unit that unspools and drives tubing into the bore hole. This controller includes various motors driven by the hydraulic fluid, which is a drill string control signal. These motors control the speed at which the drill string advances into the borehole (rate of release). Thus, a "drill string control signal" is a signal used to control the rate of release of a drill string.

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[11]

drill string controller

Varco's Interpretation Pason's Interpretation "a device that controls the rate of release of the "any device or system able to control the drill string" advancement of the drill string during drilling operations"

The drill string controller of the preferred embodiment is an air motor that is driven by the force of compressed air supplied to it. As described by the specification: Automatic driller 33 further comprises air motor 204 which drives differential gear unit 205. Differential gear unit 205 manipulates cable reel 206 to raise and lower brake handle 208 via cable 207, thereby adjusting the braking force brake 32 applies against drum 26. Regulators 200-203 connect to valves 236-239, respectively, to output a pneumatic signal to air motor 204 which drives air motor 204 to control brake 32 and, thus, the release of cable 28 from drum 26. Col. 7, ll. 23-30. The compressed air then flows through valves 237-239 to air motor 204 ... The compressed air entering air motor 204 activates it and begins it rotating. As air motor 204 rotates, differential gear unit 205 transfers that motion to cable wheel 206 which picks up brake handle 32 via cable 207 to lessen the braking force brake 32 exerts on drum 26. Consequently, drum 26 releases cable 28 to place more weight of drill string 21 on drill bit 23 causing an increasing in drilling fluid pressure. Col. 9, ll. 37-47. With valve 236 opened further, air motor 204 receives an additional amount of compressed air which increases the speed with which it rotates. In response, cable reel 206 raises brake handle 208 causing brake 32 to further disengage from drum 26. Consequently, drum 26 releases cable 28 an additional amount, thus lowering drill string 21. Col. 10, ll. 23-31.

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Consequently, valve 236 closes slightly to deliver less compressed air to air motor 204 causing it to rotate more slowly. In response, differential gear unit 205 releases cable reel 206 to that brake handle 208 lowers...The slowing down of the first shaft removes the driving force from cable reel 206, thus allowing it to unspool cable 207 to lower brake handle 208. With brake handle 208 lowered, brake 32 increases its braking of drum 26, resulting in the release of cable 28 slowing to its calibrated value. Col. 10, ll. 42-61. Therefore the relative amount of compressed air delivered to the air motor (i.e., the controller) controls the rotational speed and thus the direction of the cable wheel, which lifts and lowers the draw work's brake handle ­ increasing and decreasing the braking force applied to the drum, and thereby increasing or decreasing the rate of release of the drill string. Thus, the `142 Patent teaches a controller having a cable wheel or spool that is attached to the draw work's brake handle via a cable, that receives and responds to a drill string control signal by lifting or lowering the draw work's brake handle which in turn increases or decreases the braking force applied to the drum and hence increases or decreases the rate of release of the drill string. In another embodiment (Figure 14) of the `142 Patent, the drill string controller comprises a hydraulically driven coil tubing unit that unspools and drives tubing into the bore hole. This controller includes various motors, which control the speed at which the drill string advances into the borehole ­ that is, the rate of release.

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[12] Varco's Interpretation "to become less than another value"

decrease Pason's Interpretation "decrease [from the previous value or relative to a set point, but not both]"

Varco's construction of the term "decrease" is consistent with the term's ordinary meaning. See, e.g., Webster's ("decrease ­ to become or cause to become less, smaller, etc.; diminish; 1. a decreasing; lessening; diminution"). Thus, a decrease in drilling fluid pressure exists when a measured value of drilling fluid pressure (P2) has become less than another drilling fluid pressure (P1) to which it is compared. The specification of the `142 Patent describes an example of what causes the drilling fluid pressure to decrease: the rising off bottom of the drill bit. "Rising off bottom" is a term of art used in the drilling industry that describes the process of the bit cutting away at the bottom of the borehole, i.e., digging, faster than the drill bit is advanced (released) into the borehole. Thus, if the bit is cutting faster than the bit is being released then the bit will eventually cut away the formation to the point that the bit is no longer in contact with the formation, i.e., it rises off the bottom of the hole. This is explained in the specification as follows: Unfortunately, even under optimal drilling conditions drill bit 23 will rise `off bottom', thus requiring drilling fluid pressure regulator 200 to readjust the release of cable 28 from drum 26. Any time drill bit 23 rises even slightly `off bottom', drilling fluid pressure within drill string 21 decreased. Drilling fluid pressure sensor 34 measures that decrease and supplies Bourdon tube 210 with a hydraulic signal representing that decrease. Any decrease in drilling fluid pressure registered by Bourdon tube 210 causes it to contract. Ex. 1, `142 Patent, Col. 10, ll. 6-15.

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[13] Varco's Interpretation "to become greater than another value"

increase Pason's Interpretation "an increase [from the previous value or relative to a set point, but not both]

The ordinary meaning of an "increase" is "to become greater in size, amount, degree, etc.; grow." Webster's. Thus, an increase in drilling fluid pressure exists when a parameter (P2) has become greater as compared to another parameter (P1). The specification of the `142 Patent describes an example of what causes the drilling fluid pressure to increase: the forcing of the drill bit against the bottom of the bore hole, also called the resting of the bit "on bottom." "On bottom" is a term of art used in the drilling industry that describes the process of the bit asserting weight or pressure against the bottom of the borehole necessary for the teeth of the bit to drill the formation. This is explained in the specification as follows: Drum 26 lowers drill string 21 until drill bit 23 again resides `on bottom' so that an increase in the pressure of the drilling fluid within drill string 21 may be effected. As the drilling fluid pressure returns to its optimal value, drilling fluid pressure sensor 34 registers that increase and supplies Bourdon tube 210 with a hydraulic signal representing that increase. Ex. 1, Col. 10, ll. 29-36. Consequently, drum 26 releases cable 28 to place more weight of drill string 21 on drill bit 23 causing an increase in drilling fluid pressure. Ex. 1, Col. 9, ll. 45-47. The drilling fluid pressure increases because of the increase in resistance of the drilling fluid motor caused by the of force or weight the drill string applies to the bit. Because the

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drilling fluid or mud drives the mud motor (to cause bit rotation) any increase in resistance to turn (torque) of the motor causes a corresponding increase in the pressure of the drilling fluid. [14] rate of release

Varco's Interpretation Pason's Interpretation "the rate (i.e., speed or change over time) of "speed of movement down the borehole" release (lowering)" The ordinary meaning of "rate" is "the amount of change of some quantity during a time interval divided by the length of time interval." McGraw-Hill; see also Webster's (defining "rate" as "speed of movement or action"). The ordinary meaning of "release" is "to set free, as from confinement; 2. to let go." Webster's. Thus, the rate of release is the speed or change in distance per time (e.g., miles per hour (mph) or feet per second (fps)) of the release of drill string. Rate of Release ("ROR") is a term of art in the drilling industry. In the specification the ROR is described as follows: Brake 32 controls the release of cable 28 from drum 26 to adjust the vertical position of drill string 21 with respect to derrick 20. Ex. 1, Col. 3, ll. 63-65 (emphasis added). Drawworks 22 must adjust drill string 21 vertically along derrick 20 in order to retain drill bit 23 `on bottom' (i.e., on the bottom of borehole 86) and maintain the progression of borehole 86 through formation 87. Ex. 1, Col. 4, ll. 16-19 (emphasis added). As air motor 204 rotates, differential gear unit 205 transfers that motion to cable wheel 206 which picks up brake handle 32 via cable 207 to lessen the braking force brake 32 exerts on drum 26. Consequently, drum 26 releases cable 28 to place more weight of drill string 21 on drill bit 23 causing an increase in drilling fluid pressure.

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Ex. 1, Col. 9, ll. 44-48 (emphasis added). Accordingly, brake 32 must be manipulated to permit drum 26 to release cable 28 and adjust drill string 21. Ex. 1, Col. 4, ll. 28-30 (emphasis added) Automatic driller 33 senses when drill bit 23 is "off bottom" and manipulates brake 32 to release cable 28 and lower drill string 21 until drill bit 23 is again "on bottom." Ex. 1, Col. 4, ll. 36-38. With valve 236 opened further, air motor 204 receives an additional amount of compressed air which increases the speed with which it rotates. In response, cable reel 206 raises brake handle 208 causing brake 32 to further disengage from drum 26. Consequently, drum 26 releases cable 28 an additional amount, thus lowering drill string 21. Ex. 1, Col. 10, ll. 23-30. The slowing down of the first shaft removes the driving force from cable reel 206, thus allowing it to unspool cable 207 to lower brake handle 208. With brake handle lowered, brake 32 increases its braking of drum 26, resulting in the release of the cable 28 slowing to its calibrated value. Ex. 1, Col. 10, ll. 56-61. In the preferred embodiment, the amount of braking force the brake exerts on a drum is proportional to the rate or speed at which the drum turns. The drill string is lowered into the borehole via gravity acting upon it. The upper end of the drill string is connected to the rig's hoisting system, and therefore the degree of braking force applied to drum determines the speed or rate that cable is unspooled and hence the rate at which the drill string moves vertically with respect to the derrick.

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In another embodiment, the rate of release (speed of lowering of the drill string) is controlled by the speed of the motors and chains of the coil tubing unit, which are driven by hydraulic fluid. This is not unlike the speed or rate at which the wheels rotate to move a vehicle ­ the faster the motors and chains rotate the faster the drill string will be inserted or lowered into the well. The prosecution file history of the `142 Patent describes ROR in a manner consistent with Varco's proposed construction. Ex. 2, November 7, 1994 Office Action Response, at 5("valve 236 controls air motor 204 to release the drill string at a rate that maintains the drilling fluid pressure at 2000 psi"). [15] Varco's Interpretation No Interpretation Necessary drill Pason's Interpretation "during the drilling of a borehole"

Pason has stipulated that its AutoDriller falls within the scope of this element found in the preamble language of Claims 11 and 14. Amended Final Pretrial Order (Doc. No. 174), Stip. 13 ("Pason's AutoDriller is an automatic drilling system for automatically regulating the release of the drill string of a drilling rig during the drilling of a borehole."). Pason's interpretation improperly reads a functional limitation into the claim's preamble element. An automatic driller performs its patented method "during the drilling of a borehole," otherwise it would be improper to identify it as a "driller."

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[16]

relaying

Varco's Interpretation Pason's Interpretation "to convey" or "transmitting", i.e., passing on "passing along" or passing through. Based upon the parties' respective interpretations provided in their respective claim charts (Doc. Nos. 159 & 159), there is no dispute as to the meaning of this claim element. [17] controlling; control the release

Varco's Interpretation Pason's Interpretation "to exercise authority over; direct; command; No Interpretation Provided over the release, e.g., the lowering of the drill string" The term "control" as used in Claim 11 refers to a signal that operates the drill string controller. The controllers of the preferred embodiments of the `142 Patent are operated by both hydraulic and pneumatic signals to control the rate of release of the drill string. Varco's construction is consistent with the ordinary meaning of "control." See, e.g., Webster's ("control ­ 2. to regulate; 4. to exercise authority over, direct, command; 5. to operate or regulate [this knob controls the volume of sound]"; Oil and Gas Dictionary (defining "control" as "manual or automatic regulation of a process" and "[a] means or device to direct and regulate a process or sequence of events"); id. ("controlling means ­ elements of a controller that produce a corrective action. Information is sent back from the process, compared to the desired set point, and corrective action of the controlled variable is taken if deviation exists."

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[18]

bit weight

Varco's Interpretation Pason's Interpretation "the sensed weight of the drill string placed No Interpretation Provided upon the drill bit" It is Varco's position that the term "bit weight" as in measuring bit weight is not in dispute. However, Pason recently suggested that its AutoDriller does not "measure bit weight" because bit weight (also called weight-on-bit) is a calculated variable ­ not a measured quantity. However, nearly every rig-mounted device used to determine bit weight has measured bit weight in exactly the same way: as the mathematical difference between the weight of the drill string hanging "free" in the wellbore, and the weight of the drill string when the drill bit is resting on the bottom of the wellbore. Both these weights are measured by testing the tension in the lines that suspend the drill string. The prior art cited in the `142 Patent further describes how a person having ordinary skill in the art understands how "bit weight" is "measured." See, e.g., U.S. Patent No. 4,491,186 to Alder, Col. 1, ll. 40-42 ("the weight imposed on the drill depends on the tension in the drilling lines from which the drill string is suspended in the derrick."); U.S. Patent No. 4,662,608 to Ball, Col. 1, ll. 25-31 ("[T]he weight of the pipe string on the drill bit is measured by the tension in the drill line."); id. Col. 8, ll. 24-26; U.S. Patent No. 4,875,530 to Frink et al., Col. 2, ll. 23-34 ("To determine the weight on bit, the drill string is weighed . . . just prior to the bit touching downhole . . . . As soon as the bit touches down, the drill string weight is reduced since the tension in the drill string is reduced by the weight on bit."). The specification of the `142 Patent discloses at least four industry standard weight indicators that are "utilized to supply a weight on bit signal to automatic driller 33." Trial Ex. 1,

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`142 Patent, Col. 6, ll. 13-14. These sensors include (1) a clipper weight indicator, id. Col. 6, ll. 13-37; (2) an anchor weight indicator Id.; (3) a hydraulic load cell id. Col. 22, ll. 115-23; and (4) a pressure transducer. Id. Each of these sensors produces signals indicative of the tension of the rig's hoisting system. The sensors utilize the tension to enable determination of the weight of the drill string suspended from the rig's hoisting system. Varco's construction is consistent with the ordinary meaning. of the term "weight." Oil and Gas Dictionary ("weight indicator ­ an instrument near the driller's position on a drilling rig that shows both the weight of the drill stem that is hanging from hook (hookload) and the weight that is placed on the bit by the drill collars (weight on bit)." [19] selecting

Court of Appeals for the Federal Circuit's Interpretation: "`selecting' in claim 14 must refer to the [automatically performed] conflict resolution process that occurs between controlling parameters." Varco, L.P. v. Pason Sys. USA Corp., 436 F.3d 1368 (Fed. Cir. 2006) [20] any one of said first signal, said second signal, and both

Varco's Interpretation Pason's Interpretation "any one or both, i.e., first (or) second (or) first "the First Signal, or the Second Signal, or both and second" the First and Second Signals" The phrase or terms "any one . . . and both" should be construed to mean one or both in accordance with the ordinary and accepted meaning of the plain language of the term. The preferred embodiment of the specification discloses valves connected in series whereby the variable amount of compressed air or hydraulic fluid permitted to pass there through, i.e., the drill string control signal, controls the rate of release of the drill string. In the preferred embodiment, the valve that allows the least amount of air or fluid to pass (signal) to the drill

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string controller will control the rate of release of the drill string. However, if two or more valves are open equal amounts (allowing identical signals to pass) then it is possible for these two or more identical signals to control the rate of release of the drill string. In these embodiments the valves, operating as relays, do not combine values of the identical signals to create the sum of the two or more signals. Instead, the respective signals are compared with one another and the selected "signal" or "signals" that controls the rate of release is the signal or signals causing the controller to increase the rate of release the least. [21] said selected signal or signals Pason's Interpretation "the Signal or Signals chosen"

Varco's Interpretation "the chosen signal or chosen signals"

The term "selected" refers to the signal or signals that are automatically selected as described in Section [19] above. Varco's construction is consistent with the ordinary meaning of the term "select." See, e.g., McGraw-Hill ("select ­ 1. to choose a needed subroutine from a file of subroutines; 2. To take one alternative if the report on a condition is of one state, and another alternative if the

report on the condition is of another state"); Webster's ("select ­ chosen in preference to another or others; picked out; choice"). The term "signal" refers via antecedent basis to either (1) the signal representing changes in drilling fluid pressure; or (2) the signal representing changes in weight-on-bit. The term "signals" refers to both (1) the signal representing changes in drilling fluid pressure; and (2) the signal representing changes in weight-on-bit. The term "or" is readily understood as "either" ­ introducing any one of the possibilities.

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IV.

CONCLUSION

The Court should use the claim constructions urged by Varco in this brief, and its earlier briefing, to instruct the jury on the nature of the claims of the `142 Patent. Dated August 15, 2008 Respectfully submitted,

s/ Jane Michaels Jane Michaels HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8000 Fax: (303) 295- 8261 [email protected] Robert M. Bowick Matthews, Lawson, & Bowick PLLC 2000 Bering Suite 700 Houston, Texas 77057 . Phone: (713) 355-4200 Fax: (713) 355-9689 John W. Raley , III Cooper & Scully, P.C. 700 Louisiana Street, Suite 3850 Houston, TX 77002 Phone: (713) 236-6801 Fax: (713) 236-6880 ATTORNEYS FOR PLAINTIFF

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CERTIFICATE OF SERVICE

I hereby certify that on 8/15/2008, I have caused to be electronically filed the foregoing with the Clerk of Court using CM/ECF system which will send notification of such filing to the following e-mail addresses: Timothy Atkinson Mark Haynes Mark E. Lacis Kelley Bergelt Ireland, Stapleton, Pryor & Pascoe, P.C. 1675 Broadway, Suite 2600 Denver, CO 80202

s/ Jane Michaels
3911839_1.DOC

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