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Drilling Claims Invalid for Lack of Enablement and Indefiniteness

00-1053
January 05, 2001

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Last Month at the Federal Circuit - February 2001

Judges: Rader (author), Michel, and Lourie

In Union Pacific Resources Co. v. Chesapeake Energy Corp., No. 00-1053 (Fed. Cir. Jan. 5, 2001), the Federal Circuit affirmed a district court’s decision holding a patent invalid for nonenablement and indefiniteness. The Court also refused to find inequitable conduct or to award attorney fees and found no error with the district court having admitted lay opinion testimony regarding enablement.

Union Pacific Resources Company (“UPRC”) owns U.S. Patent No. 5,311,951 (“the ’951 patent”) covering a specific process of horizontal drilling for the exploration of oil and natural gas. The ’951 patent discloses a process for accurately locating a drill bit in three dimensions as it is steered through a horizontal, serpentine borehole. Essentially, the process correlates location data from an offset vertical borehole with location data from the horizontal borehole. This correlation process requires converting the horizontal location data into a format showing vertical location data. Importantly, this correlation process employs a computer program to rescale the converted location data.

UPRC brought suit against a number of companies in the U.S. District Court for the Northern District of Texas, alleging infringement of the ’951 patent. These companies included, inter alia, Chesapeake Energy Corporation; Chesapeake Operating, Inc.; and Chesapeake Exploration Limited Partnership(collectively “Chesapeake”).

After a bench trial, the district court held the ’951 patent invalid for nonenablement and indefiniteness, found that UPRC did not commit inequitable conduct, refused to find the case exceptional or award attorney fees, and determined that Chesapeake did not infringe the ’951 patent. In deciding definiteness, the district court had found that the specification’s failure to define the term “comparing” rendered all of the claims indefinite. As to enablement, UPRC had admittedly kept the details of a rescaling computer program as a trade secret, rather than include them in the specification. Although the district court had concluded that the inventors did not consider the program to be the best mode of practicing the invention, this lack of disclosure led to the enablement problem. The district court had admitted the opinion testimony of eight lay witnesses under Fed. R. Evid. 701 over UPRC’s objection that such enablement testimony constituted expert testimony admissible only under Fed. R. Evid. 702, despite the fact that Chesapeake had not submitted expert reports or otherwise complied with this rule.

On appeal, the Federal Circuit agreed with the district court’s claim construction, found that the specification did not enable one of ordinary skill in the art to employ the pivotal “correlation” process, and held indefinite the “comparing” steps in both independent claims of the ’951 patent. The Court agreed that the specification did not explain the meaning of the term “comparing.” Rather, it appeared that the “comparing” step referred to the complex “correlation” process that was suggested but not explained in the specification. Because “comparing” could have other meanings, however, the Court agreed that it rendered the claims indefinite. Moreover, UPRC’s decision to keep the details of this actual correlation process a trade secret supported the failure of the specification to enable the claimed invention.

Also, the Federal Circuit found no abuse of discretion in the district court’s admission under Fed. R. Evid. 701 of the enablement testimony, because the lay witnesses testified based on their own extensive, personal experience in the oildrilling industry. Additionally, the Federal Circuit found that the district court had not abused its discretion in refusing to find inequitable conduct, to find the case exceptional, or to award attorney fees. Having affirmed that all claims of the ’951 patent were invalid, the Federal Circuit did not reach the infringement issue.