Despite Federal Court of Canada judgment, Essential Energy vows to continue fracking patent fight

Despite judgment, Essential Energy vows to continue fracking patent fight by Dan Healing, January 5, 2016, Calgary Herald
A legal showdown over who owns a well completion technology helping fuel the shale oil and gas boom in North America will rage on despite a first-round court victory by the company that claims to hold the patent, says Essential Energy Services Ltd.

The Calgary-based company vowed in a news release Monday night that it will continue to defend itself against a patent infringement claim launched by privately owned Packers Plus Energy Services Inc., despite Packers’ claim earlier Monday of a victory over Canuck Completions Ltd. in a similar lawsuit. Packers is based in Calgary; Canuck in Sylvan Lake, 150 kilometres to the north.

Essential president and chief executive Garnet Amundson contended in an interview on Tuesday that privately owned Canuck abandoned its defence in order to “make it go away” so it could complete a deal to be sold to TMK Completions, a Houston-based subsidiary of Moscow-based steel pipe manufacturer TMK Group.

He said the judgment delivered by the Federal Court of Canada last month — rendering $7.7 million in damages, $495,000 in costs, the dismissal of Canuck’s counterclaim and upholding of Packers’ patent — doesn’t affect his company’s ability to make its case in court. Packers launched a suit against Essential in October 2013, three months after filing its Canuck claim.

“The decision with Packers Plus and Canuck, in our interpretation, was a mediated settlement which gets submitted to the court and that’s what a consent judgment is,” Amundson said.

Essential’s trial has been set for February 2017. Amundson said his company is committed to presenting evidence to prove that it hasn’t violated Packers’ patent and that the patent is invalid anyway because Packers’ “Open Hole Multistage Ball Drop Fracturing System” was in common use well before the patent’s effective filing date of November 2001.

He said it’s possible other companies being sued by Packers will support the fight.

“What’s wonderful for us now, as Packers Plus has been rapidly issuing similar lawsuits to many other energy services companies, there’s a commonality of belief. A whole bunch of service companies, including ourselves, aren’t going to intentionally violate a patent.”

Tracey Beaudoin, general counsel for Packers, said on Tuesday that Essential is incorrect when it suggests Canuck and Packers agreed to a settlement. She said the court made its judgment based on Canuck admitting to the facts in the claim.

“If we had settled, there would have been a settlement agreement outside of court, that’s typically the mechanism. There was no settlement,” she said. “They (Essential) say the judgment doesn’t appear to be based on a review of the merits but there were reasons why Canuck didn’t want the merits to be reviewed.”

She said she can’t reveal how many patent lawsuits Packers is currently involved in because they are at various stages of development and some haven’t been disclosed publicly.

In an interview Monday, Packers president and CEO Dan Themig said the court decision proves that the patent is valid, adding Packers spent tens of millions of dollars to develop and perfect its technology and will continue to enforce its ownership rights.

… Ball drop technology is used in multi-stage fracking. It involves launching a ceramic ball the size of an orange with fluid into a well. When the ball reaches its target, it activates a port and opens a sleeve. Sand is pumped down at high pressure to fracture the rock. When the fracturing is completed, another ball is launched to fracture the next stage.

Packers’ lawsuit against Essential targets its Tryton MSFS ball and seat system which it began using in 2009. Essential said its other products and services are not affected. [Emphasis added]

[Read Andrew Nikiforuk’s new book, Slick Water, for a “deft history of fracking” including the original frac patent lawsuits]

This entry was posted in Global Frac News, Other Legal. Bookmark the permalink.