Free Trial Brief - District Court of Colorado - Colorado

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 1 of 73

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. ______________________________________________________________________________ DEFENDANT'S TRIAL BRIEF

August 15, 2008

Attorneys for Defendant Pason Systems USA Corp.

IRELAND, STAPLETON, PRYOR & PASCOE, P.C. Timothy G. Atkinson, # 18477 Mark E. Haynes, # 12312 Kelley A. Bergelt, # 35168 Mark E. Lacis, # 37421 1675 Broadway, Suite 2600 Denver, Colorado 80202 Phone: 303-623-2700 Fax: 303-623-2062

361791-8

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 2 of 73

TABLE OF CONTENTS INTRODUCTION ........................................................................................................................ 1 OVERVIEW OF TECHNOLOGY ................................................................................................ 4 I. II. III. Historical Drilling Technology .....................................................................4 The '142 Patent........................................................................................6 Pason's AutoDriller....................................................................................7

CLAIM CONSTRUCTION..................................................................................9 I. II. III. IV. V. Remaining Disputed Terms...........................................................................9 Claim Construction Must Be Consistent With The Specification And The History.........11 The Specification Of The '142 Patent Contains Precise And Limited Teachings............13 The Prosecution History Also Supports A Limiting Construction Of The Claims..........15 Words Have Meaning................................................................................18

ISSUES TO BE DETERMINED AT TRIAL.............................................................20 I. The '142 Patent Is Neither Infringed Literally Nor Under The Doctrine Of Equivalents...20 A. No Reasonable Juror Will Be Able To Conclude That Pason's AutoDriller Literally Infringes Either The System Or Methods Claimed In The '142 Patent...20 Pason's AutoDriller Does Not Infringe Under The Doctrine Of Equivalents...................................................................................23

B.

II.

Even If The Jury Concludes That Pason Infringes, Pason Will Establish Several Defenses To Infringement Meriting Judgment In Its Favor....................................24 A. The '142 Patent Is Invalid Under 35 U.S.C. § 102(b) Because The Invention Was Offered For Sale/In Public Use More Than One Year Prior To The Patent Application...................................................................................24 Prior Art Invalidates The'142 Patent......................................................30 1. The Presumption Of Validity Is Diminished When Material Prior

B.

361791-8

i

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 3 of 73

Art Was Not Considered By The PTO During Prosecution And Re-Exam.............................................................................30 2. 3. Prior Art Fully Anticipates The Relevant Claims Of The '142 Patent.......31 The '142 Patent Is Invalid Under 35 U.S.C. § 103 Because It Lacks Novelty And Was Obvious To One Of Ordinary Skill In The Art...........35 a. Scope And Content Of The Prior Art..........................38 b. Differences Between The Prior Art And Claims At Issue............................................................42 c. Secondary Considerations Are Insufficient To Overcome Pason's Overwhelming Prima Facie Case Of Obviousness.............................................45 C. If The Court Construes The Claims As Broadly As Varco Suggests, The '142 Patent Is Invalid For Failing To Provide An Enabling Disclosure.........45 The '142 Patent Is Invalid Due To The Applicant's Inequitable Conduct During Prosecution and Re-Exam.........................................................50 1. 2. 3. 4. 5. Method Of Determining Inequitable Conduct..................................50 Duty Of Candor.....................................................................51 Materiality...........................................................................52 Intent To Deceive..................................................................53 Bowden's Non-Disclosures Were Material And Constitute Intent To Deceive The PTO...............................................................53 Nondisclosure Of Invalidating First Sale.........................................55 Bowden's Inequitable Conduct Renders This An Exceptional Case...................................................................................56

D.

6. 7.

III.

This Is Not A Case Of Willful Infringement ......................................................62

CONCLUSION................................................................................................61

361791-8

ii

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 4 of 73

TABLE OF AUTHORITIES Cases ABP Patent Holding, LLC v. Convergent Label Tech., Inc., 194 F. Supp. 2d 1257 (M.D. Fl. 2002) .....................................................................................12, 13 Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 261 F.3d 1329 (Fed. Cir. 2001) ............................................................................................20 Agrizap, Inc. v. Woodstream Corp., 520 F.3d 1337 (Fed. Cir. 2008) .................................37 AK Steel Corp. v. Sollac & Ugine, 344 F.3d 1234 (Fed. Cir. 2003) ..............................45, 47 Allen Eng'g Corp. v. Bartell Indus., 299 F.3d 1336 (Fed. Cir. 2002) ........................26, 28, 54 Allied Colloids Inc. v. Am. Cyanamid Co., 64 F.3d 1570 (Fed. Cir. 1995) ......................28, 29 Aqua Marine Supply v. AIM Machining, Inc., 247 F.3d 1216 (Fed. Cir. 2001).....................26 Atlanta Attachment Co. v. Leggett & Platt, Inc., 516 F.3d 1361 (Fed. Cir. 2008)..............27, 28 Automated Bus. Co. v. NEC Am., Inc., 202 F.3d 1353 (Fed. Cir. 2000)..............................56 Automotive Techs. Int'l, Inc. v. BMW of N. Am., Inc., 501 F.3d 1274 (Fed. Cir. 2007)............47 Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d 1558 (Fed. Cir. 1987)...........................29 Baxter Int'l, Inc. v. COBE Labs., Inc., 88 F.3d 1054 (Fed. Cir. 1996)................................28 Bell Atlantic Network Serv. v. Covad Comm. Group, Inc., 262 F.3d 1258 (Fed. Cir. 2001).......13 Black & Decker, Inc. v. Robert Bosch Tool Corp., 260 Fed. Appx. 284 Fed. Cir. 2007)..........60 BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007)................................20 Brasseler, U.S.A. I., L.P. v. Stryker Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001)..................52 In Re Brigance, 792 F.2d 1103 (Fed. Cir. 1986).........................................................29 Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368 (Fed. Cir. 2001) .............31 Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226 (Fed. Cir. 2003) .....................................................................................................51, 53, 54

361791-8

iii

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 5 of 73

Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs., 394 F.3d 1348 (Fed. Cir. 2005) ...54, 56 Burke, Inc. v. Bruno Indep. Living Aids, Inc., 183 F.3d 1334 (Fed. Cir. 1999)......................13 Cabinet Vision v. Cabinetware, 129 F.3d 595 (Fed. Cir. 1997).......................................50 Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir. 2007).................................28 Celeritas Techs. Ltd. v. Rockwell Int'l Corp., 150 F.3d 1354 (Fed. Cir. 1998)..................31, 32 Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998)...................................20 Dann v. Johnston, 425 U.S. 219 (1976).................................................................42 Dawn Equip. Co. v. Ky. Farms, 140 F.3d 1009 (Fed. Cir. 1998)....................................23 Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006)...............51, 52 Dippin' Dots, Inc. v. Mosey, 476 F.3d 1337 (Fed. Cir. 2007)........................18, 21, 22, 50, 55 Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126 (1877).......................................26 Eltech Sys. Corp. v. PG Indus., Inc., 903 F.2d 805 (Fed. Cir. 1990).................................56 Evident Corp. v. Church & Dwight, Nos. 97-3275 (MLC) & 98-4376 (MLC), 2002 U.S. Dist. LEXIS 22600, *29-30 (D.N.J. Sept. 17, 2002), aff'd, 78 F. App'x 113 (Fed. Cir. 2003)......................................................................54 Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323 (Fed. Cir. 2008)..............................31 Fox Indus., Inc. v. Structural Pres. Sys., Inc., 922 F.2d 801 (Fed. Cir. 1991).......................55 Graham v. John Deere Co., 383 U.S. 1 (1966)......................................................36, 38 Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041 (Fed. Cir. 2001)..........................26 Hebert v. Lisle Corp., 99 F.3d 1109 (Fed. Cir. 1996)...................................................50 In Re Huang, 100 F.3d 135 (Fed. Cir. 1996)..............................................................45 Hycor Corp. v. Schlueter Co., 740 F.2d 1529 (Fed. Cir. 1984)........................................29 Impax Labs., Inc. v. Aventis Pharms. Inc., 468 F.3d 1366 (Fed. Cir. 2006).....................50, 53

361791-8

iv

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 6 of 73

Juicy Whip, Inc. v. Orange Bang, Inc., 292 F.3d 728 (Fed. Cir. 2002)...............................50 K-2 Corp. v. Salomon S.A., 191 F.3d 1356 (Fed. Cir. 1999)...........................................34 Kingstown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988)................50 KSR International Co. v. Teleflex, 127 S. Ct. 1727 (2007)...........2, 30, 35, 36, 37, 38, 42, 44, 45 Ex parte Kubin, 83 U.S.P.Q.2d 1410 (BNA) (B.P.A.I. 2007)..........................................38 Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533 (Fed. Cir. 1991)......................................20 Leapfrog Enters., Inv. v. Fisher-Price¸ Inc., 485 F.3d 1157 (Fed. Cir. 2007)...............35, 37, 45 Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371 (Fed. Cir. 2007)..........................32, 47 Liquid Dynamics Corp. v. Vaughn Corp., 449 F.3d 1209 (Fed. Cir. 2006)...........................46 Li Second Family L.P. v. Toshiba Corp., 231 F.3d 1373 (Fed. Cir. 2000)...........................52 Lough v. Brunswick Corp., 86 F.3d 1113 (Fed. Cir. 1996).............................................28 Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995)..............................12 Mathis v. Spears, 857 F.2d 749 (Fed. Cir. 1988)........................................................56 M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335 (Fed. Cir. 2006)..........53 Merck & Co., Inc. v. Danbury Pharmacal, Inc., 873 F.2d 1418 (Fed. Cir. 1989)...................52 Minnesota Mining and Manufacturing Co. v. Appleton Papers, Inc., 35 F. Supp. 2d 1138 (D. Minn. 1999).........................................................................................29 Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261 (Fed. Cir. 1986)...........................21 Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995)...........................................53 Netscape Commc'ns. Corp. v. Konrad, 295 F.3d 1315 (Fed. Cir. 2002).........................26, 27 Netword, LLC v. Centraal Corp., 242 F.3d 1347 (Fed. Cir. 2001)...............................12, 13 New Railhead Mfg. L.L.C. v. Vermeer Mfg., Co., 298 F.3d 1290 (Fed. Cir. 2002).................29

361791-8

v

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 7 of 73

Novo Nordisk Pharms., Inc. v. Bio-Tech. Gen. Corp., 424 F.3d 1347 (Fed. Cir. 2005)............31 On Demand Mach. Corp. v. Ingram Indus., 442 F.3d 1331 (Fed. Cir. 2006)........................47 Peters v. Active Mfg. Co., 129 U.S. 530 (1889)..........................................................31 Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998)......................................................26, 27 Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342 (Fed. Cir. 2007)...................31 Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)................................................12 Plumtree Software, Inc. v. Datamize, LLC, 473 F.3d 1152 (Fed. Cir. 2006)........................26 Polaroid Corp. v. Eastman Kodak Co., 789 F.2d 1556 (Fed. Cir. 1986).............................31 Prima Tek II L.L.C. v. Polypap, S.A.R.L., 412 F.3d 1284 (Fed. Cir. 2005)..........................32 Promega Corp. v. Applera Corp., 2002 WL 32355680 (W.D. Wis. 2002)......................13, 14 Purdue Pharma L.P. v. Boehringer Ingelheim GMBA, 237 F.3d 1359 (Fed. Cir. 2001)..........50 Scaltech Inc. v. Retec/Tetra, L.L.C., 178 F.3d 1378 (Fed. Cir. 1999).................................26 In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007)............................59, 60, 61 Sitrick v. Dreamworks, LLC, 516 F.3d 993 (Fed. Cir. 2008)..........................................47 In re Smith, 714 F.2d 1127, 1134 (Fed. Cir. 1983) .....................................................28 Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249 (1887) ............................................28 Special Devices, Inc. v. OEA, Inc., 131 F. Supp. 2d 1171 (C.D. Cal. 2001)........................56 Spectrum Int'l, Inc. v. Sterilite Corp., 164 F.3d 1372 (Fed. Cir. 1998)..............................21 Tex. Instruments, Inc. v. U.S. Int'l Trade Comm'n, 988 F.2d 1165 (Fed. Cir. 1993)...............34 Toro Co. v. White Consol. Indus., Inc., 266 F.3d 1367 (Fed. Cir. 2001)..............................24 TP Labs., Inc. v. Prof'l Positioners, Inc., 724 F.2d 965 (Fed. Cir. 1984), cert. denied, 469 U.S. 826 (1984)....................................................................................29

361791-8

vi

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 8 of 73

Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167 (Fed. Cir. 2002)..........................................................................................31 Vehicular Techs. Corp. v. Titan Wheel Intern., Inc., 141 F.3d 1084 (Fed. Cir. 1998)..............20 In re Wands, 858 F.2d 731 (Fed. Cir. 1988)..............................................................46 Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997).........................23, 24 Warner Lambert Co. v. Teva Pharms. USA, Inc., 418 F.3d 1326 (Fed. Cir. 2005).............46-47 Federal Statutes 35 U.S.C. § 102...................................................................24, 25, 26, 28, 31, 33, 34 35 U.S.C. § 103........................................................................29, 35, 36, 37, 38, 42 35 U.S.C. § 112..............................................................................3, 12, 16, 45, 46 35 U.S.C. § 285...............................................................................................56 Miscellaneous U.S. Const. art. I, § 8, cl. 8..................................................................................35 37 C.F.R. § 1.56(a)......................................................................................51, 52 U.S. Dept. of Commerce, Manual of Patent Examining Procedure, § 2001.04 (8th ed. 2001)......................................................................................................51 U.S. Fed. Trade Comm'n, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy (2003), http://www.ftc.gov/os/2003/10/innovationrpt.pdf..........30 Duty of Disclosure, Reply to Comment 3, 57 Fed. Reg. 2021 (Jan. 17, 1992).......................52 Examination Guidelines for Determining Obviousness Under 35 U.S.C. 103 in View of the Supreme Court Decision in KSR International Co. v. Teleflex Inc., 72 FR 57526-01 (Oct. 10, 2007)..........................................................................................37 U.S. Patents & Prior Art U.S. Patent No. 1,891,329 ("LeCompte")...............................................................38

361791-8

vii

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 9 of 73

U.S. Patent No. 2,005,889 ("Dillon").................................................................33, 38 U.S. Patent No. 3,223,183 ("Varney").....................................................................39 U.S. Patent No. 3,550,697 ("Hobhouse")............................................................33, 40 Young, F.S., Computerized Drilling Control, Journal of Petroleum Technology (April 1969)..................................................................................9, 40, 41, 42 U.S. Patent No. 4,662,608 ("Ball")...................................................................40, 42 Brett, J.F. & Warren, T.M., Field Experiences with Computer-Controlled Drilling, Society of Petroleum Engineers, SPE 20107 (March 8, 1990)...............9, 32, 33, 41, 44, 55 U.S. Patent No. 5,474,142 ("Bowden") ...............1, 2, 3, 4, 6, 7, 8, 9, 11, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 28, 30, 31, 32, 33, 35, 38, 40, 42, 44, 45, 48, 49, 50, 53, 55, 56, 57, 58, 62

361791-8

viii

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 10 of 73

INTRODUCTION In this case for patent infringement, Plaintiff National Oilwell Varco ("Varco") seeks to use the Patent Act as a sword to stifle competition from an independently developed and distinct technology marketed by Pason Systems USA Corp. ("Pason"), with allegations that Pason's AutoDriller (the "AutoDriller") infringes U.S. Patent No. 5,474,142 issued to Bobbie Bowden ("the '142 patent"). But the evidence will establish that Pason's AutoDriller is a substantially different device than the invention described in the '142 patent and does not infringe either literally or under the doctrine of equivalents. The only similarity between Pason's computercontrolled technology and the elements and steps taught and legitimately claimed in the '142 patent are that they both use inputs from sensors on a drilling rig to control the advancement of the drill string during drilling operations. Beyond that, the differences between the technology taught in the '142 patent and that developed for the Pason AutoDriller, and the way these competing technologies accomplish their objectives, could hardly be more dissimilar. In order to bring Pason's technology within the scope of the '142 patent's teaching, Varco seeks to have this Court construe the '142 patent's claims broadly, so that these claims might encompass the adaptive analysis of multiple inputs made possible, not by the '142 patent's disclosure of a series of mechanical devices, but by the computer algorithm Pason experimentally developed and perfected. It is Varco's need to stretch the claim language to something neither taught nor imagined by the '142 patent that causes the fundamental challenge for the Court and the jury in resolving this case properly. Divorced from the specification and embodiments disclosed therein--a set of separate regulators lined up in a series that will function continuously and proportionately with mechanical certainty--the '142 patent claims would

361791-8

1

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 11 of 73

extend to any device that started with sensors and ended with some element of drill string control. At that breadth, the '142 patent is deficient in its teaching and reads directly on a number of inventions and disclosures that preceded it. Construing the '142 patent's claims in a manner driven by their express terms as understood by those with ordinary skill in the art, and consistent with the specification and prosecution history, will narrow those claims to elements and steps that perform their designated functions continuously, in an exclusive fashion, with a certain and proportionate cause and effect result. Despite Varco's continual protests to the contrary, that construction will not require importing limitations from the preferred embodiment: such a device could be electronic, pneumatic, or even cloned by a computer program, even though the '142 patent discloses only pneumatic control. The distinction lies not in the embodiments, but in the very invention itself, what it teaches, and the representations made during prosecution to explain that teaching and separate the invention of the '142 patent. This distinguishes it from earlier devices that did not operate in a similar manner. Properly and narrowly construed, the evidence will show that the Pason AutoDriller does not infringe the claims of the '142 patent. If, however, the Court adopts a broader claim construction, one that encompasses greater variation in cause and effect and less precision in outcome, then the Court will have no other choice but to invalidate the '142 patent for any one of a number of reasons. First, unless the claims are limited to what Mr. Bowden invented and taught, the prior art clearly encompasses the '142 patent's claim limitations and the patent should be declared invalid as either anticipated or, alternatively, obvious under the recently articulated standard in KSR International v. Teleflex. Second, even if not declared invalid as anticipated or obvious, if construed broadly enough to

361791-8

2

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 12 of 73

ensnare the AutoDriller, the '142 patent as claimed by Varco is invalid because it is not sufficiently enabled under 35 U.S.C. § 112, ¶ 1. Lastly, the '142 patent should also be held invalid and unenforceable due to the applicant's first sale or public offering more than one year before the application and/or its inequitable conduct during the patent's prosecution where the applicant intentionally failed to disclose to the PTO material prior art. These defenses to the '142 patent's validity and enforceability, coupled with substantive non-infringement defenses, will establish that Pason's conduct was not objectively reckless to support a finding of willfulness. Varco accordingly has no support for an elevated damages claim even if Pason is found to infringe and the '142 patent is upheld. Varco's willfulness claim results almost entirely from an isolated e-mail generated by Pason's Canadian counsel in the heat of preparations for a preliminary injunction hearing. Varco presented that e-mail in the hearing and yet still did not establish a probability of success on the merits. That fact alone should be dispositive on the issue of willfulness, no matter how dramatically Varco still endeavors to misuse the e-mail. Pason believes that the evidence at trial will: (1) conclusively establish that Pason's AutoDriller is a distinct and materially different device from the one contemplated by the '142 patent, operates in a substantially different way, and therefore does not infringe the '142 patent; (2) invalidate the '142 patent due to Mr. Bowden's first-sale/public use of the invention outside the statutory one-year period; (3) result in a determination that the plethora of prior art evidence, including that which was known and intentionally withheld from the PTO during prosecution, renders the '142 patent invalid as either anticipated or obvious; or, alternatively (4) compel the

361791-8

3

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 13 of 73

Court to invalidate the patent due to the applicant's inequitable conduct before the PTO. It is that misconduct, not Pason's continuing sale of the AutoDriller, that makes this case is exceptional and allows the Court to award Pason its attorneys' fees and costs incurred over the course this litigation. OVERVIEW OF TECHNOLOGY I. Historical Drilling Technology. In order to set in context the decisions that the Court and jury will need to make, Pason believes that a general survey of drilling technology will be of some benefit, particularly as it relates to the drilling operations that both the '142 patent and the Pason AutoDriller seek to control, and to understanding the prior art that will be introduced in the case. The history follows a fairly consistent pattern from the introduction of new technologies to the development of the tools used to automate and control their function. Almost all present-day wells are bored by rotary drilling equipment, which originated during the early 1900s in Europe. In rotary drilling, a large, heavy bit is attached to a length of hollow drill pipe. As the well gets deeper, additional sections of pipe are connected at the top of the hole using the above ground height of the oil derrick and platform. The whole length of pipe -- the drill string -- is twisted by a rotating turntable, which sits on the floor of the derrick. Although a number of technologies exist to place pressure on the bit as it sits against a formation, the most commonly used method is the gravitational force caused by the weight of the drill string suspended from the derrick and released by a cable attached to the draw works.

361791-8

4

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 14 of 73

During operations, in order to clean rock cuttings from the hole, as well as lubricate and cool the spinning bit, a pressurized stream of fluid called drilling mud is continuously forced to the bottom of the hole. The mud also helps prevent cave-ins by shoring up the sides of the hole. The first autodrillers, as disclosed in a patent issued to Dillon in the early 1930s, focused on a number of parameters relating to the rotary technology, including torque, engine rpm, some measurement of or proxy for the weight on bit placed on the formation, and fluid pressure. In the case of LeCompte, also a 1930s patent, the fluid pressure was measured in a telescoping joint close to the downhole end of the drill string, a practice that was repeated in the Varney patent many years later. The devices as taught in these patents typically set limit controls for the desired parameters. In a fashion akin to an on-off switch, when those limits are exceeded, for example by either too much or too little pressure, the advancement of the drill string is either retarded or enhanced until equilibrium is re-established. By the 1960s, however, a number of pneumatic devices, like the Satellite system invented and patented by Bobbie Bowden's father, used weight on bit as measured by hookload to provide for more continuous and proportionate automated control. In the 1950s, the first positive displacement motors ("PDMs") were introduced into rotary drilling. The PDMs were situated down the hole, directly connected to and powering the bit. While using a PDM, the drilling fluid, or drilling mud, took on an added function. The pumping of fluid powered the PDM and allowed the driller to spin the bit at a rate faster than was possible with only a rotary table on the surface.

361791-8

5

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 15 of 73

With the introduction of PDMs, drillers were able to drill directionally, as opposed to solely vertically, which brought about new challenges for automated control of the drill string. Weight on bit determinations calculated from readings made on the surface could not take into account how much of the weight of the string was resting upon and deflected to the side of the hole, versus how much truly rested on the bit. To overcome this challenge, drillers were taught by the PDM manufacturers to rely on other variables for control, including measuring the pressure of the drilling mud as it flowed through the PDM and spun the drill bit. This was significant because pressure would only rise when the bit made contact with the formation being drilled: it would not change if the bit was simply spun in midair, without contacting a surface. By the late 1960s, the literature was filled with teachings on the relationship between fluid pressure as it ran through the PDM and the need to apply the brake as pressure rose, and ease off the brake when pressure fell. As PDMs increased in use and market acceptance, it was only a matter of time before automation replaced the need to have a driller stand with a hand on the brake always watching for changes in fluid pressure and responding to them by speeding up or slowing down the release of the drill string. II. The '142 Patent. Although it was by no means the first device to do so, the '142 patent, applied for in 1993 and issued in 1995, was one of the devices that took this next logical step. Like Dillon sixty years earlier, it purported to control using a number of parameters, alone or in combination. As described in the Summary of the Invention, the '142 patent covers: [A]n automatic drilling system [that] controls the drill string of a drilling rig in response to any one of, any combination of, or all of

361791-8

6

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 16 of 73

drilling fluid pressure, bit weight, drill string torque, and drill string RPM to automatically release the drill string of the drilling rig during the drilling of a borehole... '142 patent, c. 1, ll. 57-63. Like Dillon, LeCompte and Varney, the '142 patent used drilling fluid pressure as one of those parameters, although the method and precision of the control applied was closer to the then-existing weight on bit controllers than to the earlier on-off switches. That method of continuous, proportionate control using fluid pressure was described in the '142 patent's specification and is reflected in the language of the claims at issue. In those claims, two concepts are found in the language that emphasize this development. The first is the generation and relaying of a signal that responds to changes in drilling fluid pressure (instead of waiting until a limit is exceeded), and the second is the increasing or decreasing of the rate of release in response to that signal (instead of turning a switch on or off). 1 The evidence will show that this distinction was critical to the patentability of the '142 invention, and has a direct bearing upon the construction or validity of the relevant claims. III. Pason's AutoDriller. Pason's Electronic Drilling Recorder system ("EDR") is a computerized monitoring system that collects, processes and transmits data received from various sensors while drilling a well, and has been on the market in the United States since the mid-1990s. Pason's AutoDriller is a later companion development that piggybacks onto and cannot work without the EDR. It takes the data generated by the sensors attached to the EDR, processes that data through an

Of the claims at issue, only Claim 1 and Claim 11 speak to increasing or decreasing the rate of release. Claim 14 is not limited in this manner.
361791-8

1

7

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 17 of 73

adaptive algorithm, and determines from that how to automatically control the drill string by activating a stepper motor that raises or drops the brake handle on a traditional draw works. Like the '142 patent, the AutoDriller has the benefit of sensors that measure hookload (as a proxy for weight on bit), and fluid pressure, and a user can set control parameters for either to run independently or for both to run simultaneously. In a technical sense the digital operation of the AutoDriller is not continuous (it generates digital information packets at the rate of 50 times every second), but the processing speed is similar to what might be found in a continuous control. Where the AutoDriller differs from the '142 patent's teaching and claims is in the way it works. The AutoDriller does not set up a series of separate regulators and relays for each parameter. Instead, the AutoDriller uses the advantages of computer technology to simultaneously analyzer a multitude of variables and to adapt that analysis as drilling proceeds. As a result, the cause and effect certainty and proportionality of the '142 patent's device and method claims are never assured in the AutoDriller's operation. Unlike the '142 patent, in the AutoDriller a change in fluid pressure from a user-designated set point will not always generate a signal and relay that signal to the stepper motor that activates the brake handle. Unlike the '142 patent, even when the AutoDriller sends a signal, that signal is not directly proportionate to the change that was detected. By virtue of its programming, the AutoDriller always controls the release of the drill string in response to multiple parameters, including draw works movement, rate of penetration from the EDR, historical performance that adapts and adjusts the set point, hookload, pressure, and other safety variables, including block height.

361791-8

8

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 18 of 73

The '142 patent took teachings from earlier patents and devices and applied them to develop a multiple-parameter, continuous and proportionate control scheme. Pason drew from a different strand of earlier developments pioneered by Young in 1969 and Warren and Brett in 1989: adaptive computerized control of known drilling parameters. CLAIM CONSTRUCTION I. Remaining Disputed Terms. The Court has already received extensive briefing on the construction of the claims at issue, and resolved several of the disputed terms. 2 In addition to the rulings already made, the parties are in agreement that, according to Claim 14, "selecting any one of said first signal, said second signal, and both said first and said second signals to control the release" means selecting either the drilling fluid pressure signal, the bit weight signal, or both the drilling fluid pressure signal and the bit weight signal at the same time, to control the release of the drill string. Plaintiff's Opening Markman Brief, January 5, 2007, at p. 67. Other arguments were left open to be decided in the context of the evidence presented at trial. Pason believes that the following, underlined terms, will bear additional consideration following the presentation of evidence. Rather than restating its earlier arguments in their In its January 10, 2008 Ruling on Claims Construction Issues, this Court determined that the "drilling fluid pressure regulator" according to Claim 1 "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." See Ruling on Claims Construction Issues, at 3. As to the "relay" according to Claim 1 ­ which is "coupled" to the drilling fluid pressure regulator ­ the Court ruled that it is "connected" to the drilling fluid pressure regulator. Id. at 4. The Court resolved: "measuring change" in Claim 1 "necessarily requires measurement of changes over time which will also be compared to a set reference point." Id. Lastly, the Court determined: "[t]he structure for producing a signal in response to changes in drilling fluid pressure in these method claims [Claims 11 and 14] are [sic] not limited to the structure for measuring changes or outputting a signal described in Claim 1..." Id.
2

361791-8

9

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 19 of 73

entirety, Pason incorporates its Markman submissions by reference and offers limited additional argument below in Sections III, IV, and IV. Claim 1: 1. An automatic drilling system for automatically regulating the release of the drill string of a drilling rig during the drilling of a borehole, comprising: a drilling fluid pressure sensor; a drilling fluid pressure regulator coupled to said drilling fluid pressure sensor, said drilling fluid pressure regulator measuring changes in drilling fluid pressure and outputting a signal representing those changes; a relay coupled to said drilling fluid pressure regulator, said relay responsive to the output signal of said drilling fluid pressure regulator to supply a drill string control signal at an output thereof; and a drill string controller coupled to said relay wherein a decrease in drilling fluid pressure results in said relay supplying a drill string control signal that operates said drill string controller to effect an increase in the rate of release of said drill string and an increase in drilling fluid pressure results in said relay supplying a drill string control signal that operates said drill string controller to effect a decrease in the rate of release of said drill string. Claim 11: 11. A method for automatically regulating the release of the drill string of a drilling rig drill, comprising the steps of: measuring drilling fluid pressure; producing a signal in response to changes in drilling fluid pressure, said signal representing the changes in drilling fluid pressure; relaying said signal to a drill string controller; and

361791-8

10

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 20 of 73

controlling said drill string controller to increase the rate of release of said drill string when said signal represents a decrease in drilling fluid pressure and to decrease the rate of release of said drill string when said signal represents an increase in drilling fluid pressure. Claim 14: 14. A method for automatically regulating the release of the drill string of a drilling rig drill, comprising the steps of: measuring drilling fluid pressure and bit weight; producing a first signal in response to changes in drilling fluid pressure, said first signal representing the changes in drilling fluid pressure; producing a second signal in response to changes in bit weight, said second signal representing the changes in bit weight; selecting any one of said first signal, said second signal, and both said first and said second signals to control the release of said drill string; and relaying said selected signal or signals to a drill string controller which regulates the release said [sic] drill string in response to said selected signal or signals. The importance of definitive rulings on these issues cannot be overstated. They will determine whether or not the case is primarily one of noninfringement or invalidity. II. Claim Construction Must Be Consistent With The Specification and The History. For the almost five years the case has been pending, the claim construction battle has been largely one over the extent to which Pason is trying to import limitations into the claims from the preferred or alternate embodiments shown in the '142 patent. That has never been Pason's intent. Rather, Pason believes in accordance with the established methods of claim construction that Varco goes too far in its efforts to write terms out of the claims, while

361791-8

11

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 21 of 73

encouraging the Court to also ignore the specification's teachings that must enlighten the construction. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) ("Claims must be read in view of the specification, of which they are a part."), aff'd, 517 U.S. 370 (1996); ABP Patent Holding, LLC v. Convergent Label Tech., Inc., 194 F. Supp. 2d 1257, 1260 (M.D. Fl. 2002) (quoting Netword, LLC v. Centraal Corp., 242 F.3d 1347, 1352 (Fed. Cir. 2001)) ("[i]t is well settled that the task of claim construction permits and requires the Court 'neither to limit nor to broaden the claims, but to define, as a matter of law, the invention that has been patented.'"); Netword, 242 F.3d at 1352 (citing 35 U.S.C. § 112 ¶¶ 1, 2) ("The role of the specification includes presenting a description of the technologic subject matter of the invention, while the role of the claims is to point out with particularity the subject matter that is patented."). While the claims define the scope of the invention, the specification generally provides the context for claim interpretation. Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005). And "[i]t is important to keep in mind that the purposes of the specification are to teach and enable those of skill in the art to make and use the invention and to provide a best mode for doing so." Id. at 1323. Therefore, while a claim's terms define the scope of the patent, a patent's terms cannot be so liberally construed such that the teachings of the specification do not teach and enable one of ordinary skill in the art to make and use the invention as claimed. Varco also goes too far in dismissing the importance of the prosecution history. A patent's "claims are directed to the invention that is described in the specification; they do not have meaning removed from the context from which they arose. Thus the claims are construed to state the legal scope of each patented invention, on examination of the language of the claims, the description in the specification, and the prosecution history." Netword, 242 F.3d at 1352. In

361791-8

12

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 22 of 73

addition to claim revisions made during prosecution, an argument made to the examiner to distinguish prior art, or to overcome an indefiniteness rejection, can have a narrowing effect by either applying a special meaning to terms in the claim, or by choosing one among several possible ordinary definitions of a claim term. "The prosecution history is therefore relevant to determine whether the patentee 'has relinquished a potential claim construction in an amendment to the claim or in an argument to overcome or distinguish a reference.'" ABP Patent, 194 F. Supp. 2d at 1261 (citing Bell Atlantic Network Serv. v. Covad Comm. Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir. 2001)). III. The Specification of the '142 Patent Contains Precise and Limited Teachings. The '142 patent teaches only one way to accomplish the three claims at issue: separate regulators for bit weight and fluid pressure attached in a series, resulting in exclusive signals that will have a consistent and proportional effect. 3 Pason simply seeks to have this Court construe the claims consistent with the device and methods Bobbie Bowden actually invented and claimed. This is not a disguised effort to get away from the rule that "an attribute of [a] preferred embodiment cannot be read into [a] claim as a limitation." Promega Corp. v. Applera Corp., 2002 WL 32355680, *11 (W.D. Wis. 2002) (quoting Burke, Inc. v. Bruno Indep. Living Aids, Inc., 183 F.3d 1334, 1341 (Fed. Cir. 1999). As in Promega, "this is not a case of limiting broad claims to a narrower preferred embodiment." Id. Instead, Pason, as did the accused infringer in Promega, points to sections of the '142 patent, well before the preferred embodiment section of

3

In this regard, the primary and alternate embodiments are identical. The alternate embodiment presents only a different way of moving the drill stem into the hole, which does not involve a draw works and brake.

361791-8

13

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 23 of 73

the patent -- entitled "Background of the Invention" and "Summary of the Invention" -- that unambiguously demonstrate that the '142 patent's teachings do not support Varco's broad claim interpretations. Specifically, the "Summary of the Invention" section explains that each of the regulators "receive their respective signals to measure changes in those signals and produce an output signal representative of any changes." '142 patent, c. 2, ll. 4-6. The Summary explains that: Each of the regulators attaches to a relay which is responsive to that regulators [sic] output signal to supply a drill string control signal to a drill string controller. The relays connect in series so that all the regulators may be utilized concurrently to provide a drill string control signal to the drill string controller via their respective relays... Id. at c. 2, ll. 15-20. The "Summary of the Invention" is also clear in its explanation of the direct cause and effect relationship between increases or decreases in pressure and corresponding decreases or increases in the rate of release of the drill string: 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 [sic] 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 operates the drill string controller to effect [sic] a decrease in the rate of release of the drill string. Id. at c. 2, ll. 25-35. Besides the Abstract, Background of the Invention, Description of the Related Art, Summary of the Invention and Brief Description of the Drawings, the only teaching in the '142

361791-8

14

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 24 of 73

patent exists in the Detailed Description of the Preferred Embodiments. Glaringly absent from any teaching in the '142 patent is an explanation of how a regulator may operate to detect and respond to multiple inputs, or output a corresponding control signal that reflects the processing of multiple parameters that may or may not correspond to the measured change in the parameter. Instead, the teachings of the '142 patent are clear, repeated and unequivocal: the operation of the invention taught by the '142 patent requires separated sensors, regulators, and relays, each of which apply to a particular parameter, generate a distinct signal, and have a certain effect on the movement of the drill string. To suggest that the '142 patent discloses a way to program a computer algorithm that uses multiple variables simultaneously in an adaptive fashion, and to construe the claims so broadly as to encompass that method, would extend the claims beyond reason. IV. The Prosecution History Also Supports A Limiting Construction Of The Claims. Although Mr. Bowden, at the time of the initial prosecution and subsequent reexamination, was aware of prior art such as Dillon, LeCompte, Varney, and others, he made the bold decision not to put those inventions before the examiner, and instead represented that he was the first to come up with a way to control the drill string automatically using fluid pressure, and the first to run multiple parameters in combination. 4 Even though the examiner was dealing with incomplete and misleading information, the prosecution of the '142 patent exposes limitations consistent with the specification and plain language of the claims.

"Typical automatic drillers presently control the drill string using only bit weight." '142 patent, c. 1, ll. 14-15. Thus, the applicant explained, "a need exists for an automatic driller that not only operates through bit weight measurements but also operates in response to other measurements so that directional or horizontal boreholes may be drilled." Id. at c. 1, ll. 51-54.
361791-8

4

15

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 25 of 73

The construction of Claim 14 is significantly enlightened by arguments made to the examiner during the prosecution of the '142 patent. During prosecution, in response to two rejections for failing to adequately enable the invention under 35 U.S.C. § 112, Bowden argued that his "automatic drilling system utilizes all four drilling parameters to control a drilling operation even though they are interrelated by selecting one parameter as the primary control parameter and then using the remaining parameters as secondary or back-up controls." Amendment "A", June 10, 1994, at p. 2 (emphasis added). Bowden further explained that "the parameter set to provide primary control regulates the release of the drill string unless one of the remaining parameters reaches an undesirable level that triggers it to override the primary control and regulate release of the drill string." Id. Notwithstanding this explanation, the examiner again rejected the application for failing to provide an adequate enabling disclosure as required by 35 U.S.C. § 112. In response, on November 7, 1994, Bowden submitted his Amendment After Final Under 37 C.F.R. § 1.116, along with an exhibit containing daily drilling logs to further explain how the device was enabled, explaining that "[t]he placement of regulators 200-203 in series permits the selection of one parameter as the primary control and the remaining parameters as secondary controls as described in the specification..." Id. at p. 4 (emphasis added). It was only after making these arguments to the examiner to overcome the enablement rejection that the patent was issued. Accordingly, Claim 14, the only claim at issue that deals with multiple parameters, must be understood and construed in light of the need for (1) the regulators and relays to be set up in series; and (2) the need for one parameter to be set as a primary control and the other to be set as a secondary control. Otherwise, the claim is not enabled.

361791-8

16

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 26 of 73

The re-examination that occurred on the basis of Varney is also useful to claim construction. As set forth in Pason's initial Markman submission, when the PTO was informed that Mr. Bowden was not the first to use fluid pressure to automatically regulate the release of a drill string, the PTO determined that a substantial question of patentability existed. The Varney patent, like Dillon and LeCompte before it, monitored fluid pressure, and when it reached a certain predetermined point, flipped a switch that controlled the release of the drill string at a predetermined rate until equilibrium was re-established. In its response to the re-examination, Varco persuaded the PTO that Varney, in disclosing a system that only sent a signal once a limit was reached, and then regulated the release in a predetermined manner (rather than continuously and proportionately), did not teach the method or system Mr. Bowden had developed. The European prosecution of the companion to the '142 patent sheds a final light on the meaning of the '142 claims. Although Claims 1 and 11 contain the concept of increasing or decreasing the "rate of release," which was also significant to the Varney re-examination, the language of Claim 14 is different. There, the claim speaks of "regulating the release," a much broader concept in plain meaning and one that is distinct from the "resulting in" an increase or decrease in the "rate of release" language of Claims 1 and 11. Looking at the Dillon patent's similar use of multiple parameters, one of which was fluid pressure, the European Patent Office entertained an opposition to claim language that was identical, as originally filed, to Claim 14 of the '142 patent. In response to that opposition, and in order to distinguish the Bowden invention and claims from Dillon and others, the European corollary of Claim 14 was "amended during [the] opposition proceeding by replacing the feature, that 'the release' of the drill string is controlled by changes of given parameters, by the feature,

361791-8

17

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 27 of 73

that 'the rate of release' of said drill string is controlled by changes of said parameters." See Interlocutory Decision in Opposition Proceedings, dated Dec. 9, 2004, at p. 3. In that fashion, Bowden was able to distinguish his claims from the non-continuous, non-proportional device Dillon taught. In light of this history, Varco can not assert that Claims 1 and 11 encompass a system and/or method that may or may not generate a control signal in response to a change in fluid pressure, may or may not relay said signal, and may or may not make a proportionate response in the rate of release of the drill string. Likewise, Claim 14 may not be re-written so that "regulates the release" means "regulates the rate of release," or construed to avoid the need for a series of discrete operations that employ a primary/secondary control scheme when multiple parameters are used. V. Words Have Meaning. The words Mr. Bowden selected in describing the Claims of the '142 patent were his, and they were tied to what he invented and taught. With regard to Claim 1, the Court has already determined that drilling fluid pressure regulator according to Claim 1 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, Jan. 10, 2008, at p. 3. That drilling fluid regulator cannot, in light of the Varney re-examination response, be expanded to any device that may, in combination with other factors, perform in that fashion. See Dippin' Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007). Nor can Varco simply write the first three words out of the equation, such that a "drilling fluid pressure regulator coupled to said drilling fluid pressure sensor, said drilling fluid pressure regulator

361791-8

18

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 28 of 73

measuring changes in drilling fluid pressure and outputting a signal representing those changes," means exactly the same thing as a "regulator coupled to said drilling fluid pressure sensor, said regulator measuring changes in drilling fluid pressure and outputting a signal representing those changes." Pason submits that the remaining terms in Claim 1 - "a signal representing," "results in," and "to effect," cannot be broadened into weasel words that mean "may," "can," "might," or "among other things." The method outlined in Claim 11 must also be understood within the same context of being responsive to the drilling fluid pressure parameter, and only that parameter as outlined above, and as having the same cause and effect result on the rate of release. Claim 14 covers a method for controlling the release of the drill string, and for the same reasons as articulated regarding Claim 11, the plain meaning of the "first signal" produced "in response to changes in drilling fluid pressure" and the "second signal" produced "in response to changes in bit weight" and "representing the changes" in drilling fluid pressure and bit weight necessarily requires that each signal represent those specified changes, not the processed outcome of multiple inputs. And "regulat[ing] the release" of the drill string in response to multiple parameters, as taught, also requires the operator to first designate a primary control and a secondary control as explained during the prosecution of the '142 patent and in the specification. See Amendment "A", June 10, 1994, at p. 2; Amendment After Final Under 37 C.F.R. § 1.116, November 7, 1994, at p. 4; '142 patent at c. 20, ll. 41-49, c. 24, ll. 4-11. 5

Because Claim 14 does not have same cause and effect language with regard to rate of release as Claims 1 and 11, it does not suffer from the same limitation regarding the certainty and proportionality of the response. Claim 14 is invalid for other reasons.
361791-8

5

19

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 29 of 73

ISSUES TO BE DETERMINED AT TRIAL I. The '142 Patent is Neither Infringed Literally Nor Under the Doctrine of Equivalents. A determination of infringement requires a two-step analysis. "First, the court determines the scope and meaning of the patent claims asserted, and then the properly construed claims are compared to the allegedly infringing device." Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted). To prove infringement, the plaintiff must establish by a preponderance of the evidence that one or more claims of the patent read on the accused device literally or under the doctrine of equivalents. Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 261 F.3d 1329, 1336 (Fed. Cir. 2001). Pason believes that all three claims at issue, properly construed, will not extend to the Pason AutoDriller. A. No Reasonable Juror Will Be Able to Conclude that Pason's AutoDriller Literally Infringes Either the System or Methods Claimed in the '142 Patent.

It is axiomatic that a patent claim is directly infringed only if each step of the claimed method is performed or each element of the claimed system/device is present. BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378-79 (Fed. Cir. 2007) (citing cases); Vehicular Techs. Corp. v. Titan Wheel Intern., Inc., 141 F.3d 1084, 1089 (Fed. Cir. 1998). Therefore, once claims are construed, failure to meet even a single element within a claim precludes a literal infringement finding. See Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991). Varco contends that because the '142 patent contains the presumptively expansive language "comprising," this Court should expand the claims to allow Pason's AutoDriller-- which practices substantially different and additional steps and uses substantially different and

361791-8

20

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 30 of 73

additional elements--to fall within a literal reading of the '142 patent. However, while "comprising" permits the presentation of additional unrecited components, its application may not be extended so broadly as to alter or abrogate a claim limitation. When "comprising" is used as a transition term for method claims, there is a presumption that the claim does not preclude the use of additional steps. Dippin' Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007). But, "[t]he presumption raised by the term 'comprising' does not reach into each of the steps to render every word and phrase therein open-ended--especially where, as here, the patentee has narrowly defined the claim term it now seeks to have broadened." Id. Thus, the open-ended transition "comprising" does not free a claim from its own limitations. Id.; see also Spectrum Int'l, Inc. v. Sterilite Corp., 164 F.3d 1372, 1380 (Fed. Cir. 1998) (rejecting expansive application of "comprising" as applied to a structure claim, stating, "'Comprising' is not a weasel word with which to abrogate claim limitations."); Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1271 (Fed. Cir. 1986) (holding that transitional phrase "which comprises" does not affect the scope of the particular structure recited within the method claim's step). Thus, the term "comprising" in either a structure or method claim permits additional elements or steps to be performed, but does not allow the patentee to expand beyond the limitations of a recited structure element or method step. The evidence at trial will leave the jury no choice but to conclude that there is no literal infringement of the '142 patent. Pason's AutoDriller does not contain a separate drilling fluid pressure regulator that measures changes in drilling fluid pressure and outputs a signal representing merely those changes in drilling fluid pressure. Instead, the AutoDriller always measures multiple parameters of which drilling fluid pressure is but a part, and outputs a control

361791-8

21

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 31 of 73

signal, or chooses not to output a signal based upon the processed result of a complex calculation. Furthermore, while the words, teachings and history require a direct cause and effect relationship between an increase or decrease in drilling fluid pressure which results in the drill string controller decreasing or increasing the rate of release of the drill string, the AutoDriller always receives signals representing absolute values of multiple parameters and will never simply increase or decrease the advancement of drill string in response to a corresponding decrease or increase in drilling fluid pressure. The AutoDriller's algorithm is far too sophisticated and complex, and necessarily will always consider multiple inputs before it determines what is the most effective braking force to be applied in order to obtain optimal rate of penetration. As to the method claims at issue, Claims 11 and 14, literal infringement in light of Dippin' Dots is similarly precluded. As to Claim 11, the AutoDriller never produces a signal in response to changes in drilling fluid pressure that represents those changes alone. If there is any signal, it always represents something more than drilling fluid pressure. The AutoDriller sends a packet of information, 50 times a second, containing real-time absolute value measurements of multiple parameters, not change calculations and representations. That packet ("said signal" in the language of Claim 11 or "said first signal" in the language of Claim 14) dies in the processing step and is relayed nowhere. Because the algorithm constantly and unfailingly processes multiple parameters, even if the operator chooses to control the AutoDriller only by drilling fluid pressure, the signal ultimately generated and sent to the stepper motor, if any, will always be

361791-8

22

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 32 of 73

something more, and the result of a change in drilling fluid pressure from an initial target is uncertain. As to Claim 14, Pason's AutoDriller does not produce a first and second separate signal in response to changes in drilling fluid pressure or bit weight and is unable to select both signals and relay them to a drill string controller. The signal issue is the same as in Claim 11. There is a disjunction between the packet of data the AutoDriller receives and the signal, if any, it decides to send the stepper motor after processing. There is no relaying of the first or second signal as the '142 patent claimed. And the evidence will show without dispute that even running under both pressure and weight control, the AutoDriller automatically selects one or the other, but never both to send to the stepper motor. Moreover, should the Court adopt the primary/secondary control scheme as a limitation of Claim 14, the sophistication of the Pason algorithm means that it need not practice that step. Thus, there is no literal infringement of Claim 14. B. Pason's AutoDriller Does Not Infringe Under the Doctrine of Equivalents.

In the absence of literal infringement, an accused product may still infringe under the doctrine of equivalents, but only if the accused device contains an equivalent for each element not literally infringed. Dawn Equip. Co. v. Ky. Farms, 140 F.3d 1009, 1015 (Fed. Cir. 1998). In Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997), the Supreme Court adopted an objective test of substantial equivalency, accomplished in an element-by-element analysis, to determine whether the differences between the accused product and the invention are insubstantial. Id. at 34-36; see also Toro Co. v. White Consol. Indus., Inc., 266 F.3d 1367, 1370 (Fed. Cir. 2001). The most prevalent articulation of the insubstantial differences test is the

361791-8

23

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page 33 of 73

"function/way/result" test: infringement occurs when a claimed element and the accused element perform substantially the same function in substantially the same way to obtain substantially the same result. Warner-Jenkinson, 520 U.S. at 39. Pason has not seen any theory on how the elements contained in Pason's AutoDriller perform substantially the same function, in substantially the same manner, to obtain substantially the same result as the '142 patent. Although in concept it might be possible to program a computer to function as the invention claimed by the '142 patent does, separate regulators and relays aligned in a series, that is not the algorithm Pason developed. Should Varco's trial brief actually articulate a theory based upon equivalents, Pason will rebut accordingly. II. Even if the Jury Concludes that Pason Infringes, Pason Will Establish Several Defenses to Infringement Meriting Judgment in its Favor. Should Varco succeed in establishing infringement of the '142 patent literally or under the doctrine of equivalents, the '142 patent should be held invalid under one or more of the following theories: (1) on-sale bar/public use; (2) anticipation/obviousness; (3) non-enablement; or (4) inequitable conduct. A. The '142 Patent is Invalid Under 35 U.S.C. § 102(b) Because the Invention was Offered for Sale/in Public Use More Than One Year Prior to the Patent Application.

Although it does not anticipate that the issue will take up a substantial portion of the trial time, at the conclusion of the evidence Pason intends to seek findings and a determination that the '142 patent is invalid because the invention it embodied and revealed was offered for sale/in public use more than a year prior to the April 19, 1993 application date, in violation of 35 U.S.C. § 102(b).

361791-8

24

Case 1:03-cv-02579-RPM

Document 185

Filed 08/15/2008

Page