The company has been in dispute in the US and Europe over the
drill bit designing software, and won its US case. There it sued
Smith International, a competitor which is also from Texas, for
infringement of patents it held in the software system.
A Texas court awarded Halliburton $41 million in damages in the
US case, but in the UK the High Court found that Halliburton's
patents were poorly drafted and Smith won the case.
Following that ruling, Smith and Halliburton came to a private
settlement over the technology, but Halliburton went on with its
appeal in relation to one of the two technologies at issue, a
'force balancing' patent. Following the settlement Smith did not
take part in the appeal.
In the US the courts found that Smith had infringed the patents
in its use of similar designing software and ordered that it remove
certain functions from its software.
The English court took a rigorous approach to analysing the
patents and found that it did not adequately describe the system it
sought to patent. In order to be valid a patent must describe a
process so completely that a person who knows that subject area
must be able to replicate it using only the contents of the
patent.
The High Court found that Halliburton's patent did not do that,
and the Court of Appeal has now agreed. Justice Jacob ruled that
the patent was missing vital details, contained wrong equations,
demanded a higher level of expertise than allowed and that it
relied on material external to the patent, and therefore was not a
valid patent.
Defending the trial judge's conclusions, Jacob wrote that
building a system using the patent would involve a lot of work,
"work which would be 'agony', work which in part would be enough to
justify publication in a peer-reviewed scientific publication. That
seems ample enough material for him to decide that the invention
was not disclosed clearly and completely enough for it to be
performed by a person skilled in the art".
The patents involved relate to the design of oil-drilling bits
which penetrate rock in particular ways. This is a highly technical
area and the patent on appeal was one which was designed to balance
the forces of three drill heads.
The patent failed to give a vital piece of information related
to the activity of two parts of the drill, the bit and the cone.
The patent does not outline what the ratio of the bit speed to the
cone speed is, which the trial judge had found was essential to the
operation of the drill.
A failure to impart such vital information, affirmed the Appeals
Court ruling, means that a person skilled in the area would not be
able to recreate the invention, and thus that patent must fail.
The judge also found that a vital equation contained within the
patent was wrong. "Once the fundamental assumption for the modeling
is shown to be wrong, one would expect the model so based to be
useless," said Jacobs. "If garbage is put in, you would expect it
to come out: the evidential onus must lie on anyone who wants to
show otherwise."
Taking these elements together, Jacobs said that "it is hardly
surprising the Judge found [the patent] insufficient".
Halliburton had argued that some information which would make it
possible to replicate the invention was contained in a separate
academic document, which Halliburton said should be taken to form
part of the patent.
Jacobs disagreed, saying that that assumption could not be made.
"A patent is supposed to teach people how to perform the
invention," he said. "If necessary information is not actually in
the patent, then the skilled person must be given a clear
unambiguous direction of where to get it. He cannot be expected to
find such a direction buried in acknowledgements of the prior
art."
Jacobs upheld the original court's decision and refused
Halliburton leave to appeal on certain of the facts of the case,
which it had applied to do.
