Federal Circuit affirms invalidation of three WesternGeco patents
The US Court of Appeals for the Federal Circuit said yesterday that “substantial evidence” supports the invalidation of three patents owned by WesternGeco that are currently at the centre of a dispute at the US Supreme Court.
Circuit Judge Raymond Chen delivered the judgment yesterday, May 7.
Following inter partes reviews (IPRs) requested by oil company Petroleum Geo-Services, the Patent Trial and Appeal Board (PTAB) determined that six claims of WesternGeco’s three patents (7,080,607; 7,162,967; and 7,293,520) were unpatentable on the grounds of obviousness.
The patents cover technology which identifies prime oil and gas drilling locations beneath the ocean floor.
Ion Geophysical Corporation, a provider of geosciences services, had been granted permission to join the reviews instigated by Petroleum.
Following the PTAB’s decision, WesternGeco, a subsidiary of global oilfield services company Schlumberger, appealed to the Federal Circuit. Petroleum withdrew from the Federal Circuit proceedings after settling with WesternGeco, but Ion did not.
The overarching dispute between WesternGeco and Ion dates to 2009, when WesternGeco filed a claim for patent infringement at the US District Court for the Southern District of Texas, Houston Division.
It alleged that Ion had violated proprietary technology and caused contracts and profits to be lost. The technology was covered by the three patents involved in the PTAB proceedings, as well as one more (6,691,038).
The US Supreme Court is currently reviewing the patent infringement dispute, which was decided in WesternGeco’s favour by a jury in Texas, to determine whether the Federal Circuit erred in finding that lost profits arising from activities outside the US are unavailable in cases where patent infringement is proven.
WesternGeco appealed against the PTAB’s findings in the IPRs instigated by Petroleum. It argued that the PTAB’s invalidation determinations were wrong and should be reversed.
WesternGeco also argued that the IPRs were time-barred and therefore not judicially reviewable. The company served Ion with a patent infringement complaint in 2009, which was more than a year before Petroleum filed the IPRs.
Under 35 USC section 315(b), defendants in litigation are been barred from seeking IPRs of the claims involved in the dispute if they did not petition for the reviews within a year of being served with the infringement complaint.
Chen said “substantial evidence” supports the PTAB’s conclusion that Ion and Petroleum are not “sufficiently close” to be classed as “privies” in law, and therefore the IPRs were not time-barred.
The Federal Circuit also affirmed the board’s finding that the six challenged claims of the three patents were obvious. The PTAB “appropriately relied on the prior art and expert testimony about how the skilled artisan would have modified the prior art,” Chen explained.
The court concluded that “substantial evidence supports its obviousness determination”.
Brian Hanson, president and CEO of Ion, said: “Today, our patents, which were filed first, remain valid while theirs have been invalidated.”
Hanson added that he is hopeful that the Supreme Court will confirm that foreign lost profits are unavailable in the ongoing dispute with WesternGeco, particularly as some of the patent claims invalidated yesterday formed the basis of the award of damages in Texas.
A spokesperson for WesternGeco said: "We disagree with the decision of the Court of Appeals and are investigating whether or not to seek rehearing, because some of the patent claims wilfully infringed by Ion remain conclusively valid."
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