Canrig Drilling Technology Ltd. v. Trinidad Drilling Ltd.

Filing 96

MEMORANDUM AND ORDER Joint Pretrial Order due by 1/9/2017., Docket Call set for 1/20/2017 at 10:00 AM in Courtroom 9F before Judge Nancy F Atlas)(Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CANRIG DRILLING
TECHNOLOGY LTD.,
Plaintiff,
v.
TRINIDAD DRILLING L.P.,
Defendant.

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December 12, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. H-15-0656

MEMORANDUM AND ORDER
This patent case is before the Court on the Motion for Partial Summary
Judgment that Trinidad Drilling’s Alternative Products Do Not Infringe (“Alternative
Products Motion”) [Doc. # 72] filed by Defendant Trinidad Drilling, L.P.
(“Trinidad”), to which Plaintiff Canrig Drilling Technology Ltd. (“Canrig”) filed a
Response [Doc. # 82], and Trinidad filed a Reply [Doc. # 91]. Also pending is
Trinidad’s Motion for Summary Judgment that the Accused Products Do Not Infringe
the Asserted Claims (“Non-infringement Motion”) [Doc. # 73], to which Canrig filed
an Opposition [Doc. # 81], and Trinidad filed a Reply [Doc. # 92].1

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Also pending is Canrig’s Motion for Partial Summary Judgment Regarding
Intervening Rights [Doc. # 69]. Trinidad filed a Response [Doc. # 85], noting that it
is not pursuing an intervening-rights defense in this case. Canrig did not file a reply.
The Motion for Partial Summary Judgment Regarding Intervening Rights is denied
as moot.

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The case is also before the Court on Trinidad’s Motion to Exclude Certain
Testimony of Plaintiff’s Expert Keith Womer (“Womer Motion”) [Doc. # 71], to
which Canrig filed a Response [Doc. # 83], and Trinidad filed a Reply [Doc. # 94].
Also, Canrig filed a Motion to Strike or Exclude Certain Opinions of Arthur Zatarain
(“Zatarain Motion”) [Doc. # 75], to which Trinidad filed a Response [Doc. # 86], and
Canrig filed a Reply [Doc. # 88]. Canrig also filed a Motion to Exclude Certain
Testimony of Thomas Britven (“Britven Motion”) [Doc. # 77], to which Trinidad filed
a Response [Doc. # 84], and Canrig filed a Reply [Doc. # 93].
The Court has carefully reviewed the record in this case, including all briefing
and exhibits submitted by the parties in connection with the pending motions. Based
on that review, and the application of relevant legal authorities, the Court issues the
following rulings.
I.

BACKGROUND
Canrig and Trinidad each manufacture oil and gas drilling equipment. Canrig

is the owner of reissued United States Patents No. RE44,956 (“the ’956 Patent”) and
No. RE44,973 (“the ’973 Patent”) (collectively, the “Patents-in-Suit”). Canrig alleges
that Trinidad infringes claims in these two patents.
Originally, oil rig drilling was exclusively vertical. Later, in order to reach oil
and gas reserves that were inaccessible through vertical drilling, apparatus and

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methods were developed to allow directional drilling. Unlike vertical drilling,
directional drilling presents two significant challenges: (1) accurately steering the
drilling path of the well and (2) overcoming friction inherent in the directional drilling
process.
In directional drilling, a bend in the motor assembly is added just above the drill
bit. The rig operators “steer” the drilling by rotating the drill string (which is a series
of heavy, steel pipes connected together) to change the direction the bend is pointing,
also known as the “toolface orientation.”

Setting and maintaining “toolface

orientation” is necessary in order to steer the drilling path accurately. Previously, the
driller needed to rotate the drill pipe manually, count the number of rotations, and then
stop the rotation when he believed the toolface orientation was correct. This method
lacked accuracy, in part because it was monotonous and subject to human error.
Additionally, it involved a significant amount of guess work by the driller to reorient
the toolface. Drillers used their experience to estimate the number of rotations that
needed to be made at the surface in order to turn the downhole motor assembly the
desired amount for accurate toolface orientation. When the driller made the estimated
number of rotations, he would manually stop the rotation of the drill string, measure
the toolface orientation, and repeat as many times as needed to achieve the correct
orientation.

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The second challenge in directional drilling is overcoming friction between the
lower surface of the drill string and the bottom of the wellbore. This friction can
cause the drill string to stick to the bottom of the well and impede the advance of the
drill bit. By twisting the drill string back and forth (referred to as oscillation), a driller
can reduce the amount of sticking caused by friction. The driller is required to rotate
the drill string enough to eliminate sticking but not so much that it changes the
direction of the drilling.
Claims 1 and 4 of the ’973 Patent describe a system and method for rotating a
drill string to a predetermined angle. Claim 2 of the ’973 Patent and Claim 7 of the
’956 Patent describe a system and method for oscillating the drill string between
predetermined angles for the purpose of reducing friction. Canrig asserts that its
patented technology eliminates the guess work previously inherent in directional
drilling. Canrig asserts that its patented method of rotating or oscillating the drill
string to a predetermined angle enables drillers to control the rotation of the drill string
instantly and automatically while drilling, increasing the accuracy of the directional
drilling process. Canrig filed this lawsuit, alleging that Trinidad is infringing Claims
1, 2, and 4 of the ’973 Patent and Claim 7 of the ’956 Patent.
Following the completion of discovery, the parties filed the pending motions.
Each motion has been fully briefed and is now ripe for decision.

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II.

MOTIONS FOR SUMMARY JUDGMENT
A.

Applicable Legal Standards

Summary Judgment.– Rule 56 of the Federal Rules of Civil Procedure
mandates the entry of summary judgment, after adequate time for discovery and upon
motion, against a party who fails to make a sufficient showing of the existence of an
element essential to the party’s case, and on which that party will bear the burden at
trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “When evaluating a motion
for summary judgment, the court views the record evidence through the prism of the
evidentiary standard of proof that would pertain at a trial on the merits.” SRAM Corp.
v. AD-II Engineering, Inc., 465 F.3d 1351, 1357 (Fed. Cir. 2006). Summary judgment
on infringement is appropriate only if there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law. See Ultimatepointer,
L.L.C. v. Nintendo Co., Ltd., 816 F.3d 816, 824 (Fed. Cir. 2016). The infringement
analysis at the summary judgment stage requires the Court to compare the patent
claims as construed with the accused device. See Convolve, Inc. v. Compaq Computer
Corp., 812 F.3d 1313, 1317 (Fed. Cir. 2016).
Infringement.– “[W]hoever without authority makes, uses, offers to sell, or
sells any patented invention, within the United States . . . infringes the patent.” 35
U.S.C. § 271(a); Lexmark Int’l, Inc. v. Impression Prods., Inc., 816 F.3d 721, 726

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(Fed. Cir. 2016). “Patent infringement requires a two-step analysis.” Grober v. Mako
Prods., Inc., 686 F.3d 1335, 1344 (Fed. Cir. 2012).

In the first step, the Court

construes the asserted claim terms. See id. The second step, a “comparison of the
claims to the accused device, is a question of fact, and requires a determination that
every claim limitation or its equivalent be found in the accused device.” Planet
Bingo, LLC v. GameTech Int’l, Inc., 472 F.3d 1338, 1343 (Fed. Cir. 2006). The
comparison is only to the patent claims, not to any specific embodiment in the patent
specification or to the patent holder’s commercial embodiment. See Amgen Inc. v.
Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1347 (Fed. Cir. 2003).
B.

Alternative Products Motion

The issue of whether there were available, acceptable, non-infringing
alternatives to an allegedly infringing product is a factor in determining damages for
infringement. See Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1393 (Fed. Cir.
2003). The proffered alternatives must have been available, acceptable, and noninfringing. See, e.g., Wechsler v. Macke Int’l Trade, Inc., 486 F.3d 1286, 1298 (Fed.
Cir. 2007); Laser Dynamics, Inc. v. Quanta Computer, Inc., 2011 WL 197869, *3
(E.D. Tex. Jan. 20, 2011). Trinidad seeks summary judgment only on the “noninfringing” element.

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During the course of this litigation, Trinidad developed alternative products that
it argues are non-infringing. The Patents-in-Suit claim methods and equipment for
automatically rotating and oscillating the drill string to “predetermined angles.” The
claim term “predetermined angle” has been construed, by stipulation of the parties
with the agreement of this Court, to mean “an angle having a size that is determined
prior to any movement of the drill string through that angle.” See Stipulation on
Claim Construction [Doc. # 42], p. 1; Order on Claim Construction [Doc. # 44], p. 1.
In the invention claimed by the Patents-in-Suit, a computer automatically
rotates the drill string in a forward or reverse direction toward a predetermined angle.
Trinidad has developed four versions of a computer software product that controls the
rotation of the drill string based on an angle calculated after the drill string begins to
move through the angle.
The four versions are referred to as AXD-1, AXD-2, AXD-3, and AXD-4. In
AXD-1, when the drill string has rotated half-way to the user-entered setpoint, a new
setpoint (“Calculated Setpoint”) is calculated based on the measurement of the realtime torque applied to the drill string. The ultimate size of the angle of rotation is
calculated while the drill string is rotating through the angle. The Calculated Setpoint
will fall within one of two “Setpoint Zones” – one for the forward rotation and one for
the reverse rotation. AXD-2 operates in the same manner, except the two “Setpoint

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Zones” are separated by a “Dead Zone” where the rotation cannot stop. AXD-3 is a
variation of AXD-2 that uses a random number rather than the real-time torque
measurement to calculate the Calculated Setpoint. Canrig does not dispute that AXD3 is non-infringing. AXD-4 is a further variation, with differences that the parties
agree are “not relevant to the question at issue in this motion.” AXD-3 and AXD-4
are theoretical variations that have not been developed or used to rotate drill strings.
It is uncontested that if AXD-1 and AXD-2 are non-infringing, AXD-4 is similarly
non-infringing.
Canrig argues that Trinidad has failed to show as a matter of law that alternative
products AXD-1 and AXD-2 are non-infringing. Canrig argues that if the measured
torque does not change from one rotation cycle to the next, then the Calculated
Setpoint would remain the same and, therefore, be “predetermined.” The relevant
inquiry is not, however, whether the Calculated Setpoint remains the same for
consecutive rotation cycles, but when the Calculated Setpoint – the value of the angle
of rotation – is established. In this case, the evidence is uncontroverted that the
Calculated Setpoint is determined after the drill string begins to move through the
angle. As a result, the angle is not “predetermined,” and AXD-1 and AXD-2 are noninfringing because they do not satisfy the “predetermined angle” claim limitation.

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Canrig argues that a district judge in the Eastern District of Texas in a different
lawsuit involving the same patent claims stated:
if the drill string is oscillating at 180 degrees and the computer
determines a new on-the-fly angle of 160 degrees . . . the 160 degree
value is not predetermined with respect to that single 160 degree
oscillation. However, the 160 degree value is predetermined with
respect to the next oscillation cycle (assuming no other immediate
change from the computer).
Memorandum Opinion in Canrig Drilling Tech. Ltd. v. Omron Oilfield and Marine,
Inc., Exh. B to Response [Doc. # 82], p. 8. In that case, the issue was whether the
claim limitation required that the angle be entered by an operator rather than generated
by a computer. See id. at 7. The district court held that the claims are “sufficiently
broad enough to encompass both angles entered by an operator and generated by a
computer.” Id. The district court agreed, however, that “the angle must be determined
before the drill string begins to move through that angle.” Id. The district court
distinguished between an “unknown angle” and a “predetermined angle.” See id. at
8. In this case, AXD-1 and AXD-2 cause the computer to recalculate the angle during
each rotation. To use the Eastern District court’s example, the computer does not
recalculate to a 160 degree angle and then maintain that calculation until another
change is required. Instead, again referring to the Eastern District court’s example,
there is an “immediate change from the computer” as it conducts a new calculation to
establish a new angle. It is irrelevant that this newly-calculated angle may be the same
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for more than one rotation. It is not “determined” until the calculation is made by the
computer, and it is uncontroverted that the computer makes the calculation after the
drill string begins to move through the angle. Canrig’s reliance on the Eastern
District’s decision in Omron is unpersuasive.
Trinidad is entitled to summary judgment that AXD-1 and AXD-2 are noninfringing alternatives. Because the Court has found that the undisputed evidence
demonstrates that AXD-1 and AXD-2 are non-infringing, there is no dispute that
AXD-3 and AXD-4 are likewise non-infringing. Trinidad remains obligated to prove
that these non-infringing alternatives were also acceptable and available.
C.

Non-Infringement Motion

The asserted claims of the Patents-in-Suit each require a sensor that detects or
monitors a drill string. Unlike the asserted claims, Claim 3 of the ’973 Patent, which
is not an asserted claim, requires “a first sensor adapted to detect the rotation of said
motor at the surface, wherein the first sensor is at the surface.”
Trinidad argues that its accused device, the Axio-Driller, does not infringe the
asserted claims because it uses a sensor that detects or monitors the rotation of the
motor, not of the drill string. Specifically, Axio-Driller uses a sensor located on the
motor that senses the rotation of the motor, then uses the information from the sensor
together with other information to compute the rotational position of the drill string.

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Claims 1 and 2 of the ’973 Patent require “a sensor adapted to detect” the
rotation or the rotational position of the drill string. Claim 4 of the ’973 Patent and
Claim 7 of the ’956 Patent require “monitoring” the rotational position or the rotation
“of a drill string” “with a sensor.” Canrig argues that the claim does not include a
limitation that the sensor detect or monitor the drill string directly. Although this is
accurate, the claim language clearly requires that it is the sensor that detects or
monitors the rotation of the drill string. Therefore, a product that detects or monitors
something other than the drill string and uses that information to calculate or
otherwise determine the rotation of the drill string would not satisfy this claim
limitation.
Canrig asserts, with supporting evidence, that Trinidad’s accused product uses
a sensor to monitor the rotation of both the motor and the drill string. Canrig points
out that the sensor is located on the motor, which is connected to the drill string
through a gear box. As a result, the sensor on the motor is in “rotational engagement”
with the drill string. The rotation of the drill string is then displayed on the AxioDriller’s user interface.
It is undisputed that the Axio-Driller’s sensor detects and monitors the motor.
Canrig has presented evidence, however, that raises a genuine issue of material fact
regarding whether the Axio-Driller’s sensor, although located on the motor, also

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detects and monitors the drill string as well as the motor. As a result, summary
judgment is inappropriate on the infringement issue.
III.

MOTIONS TO EXCLUDE EXPERT OPINIONS
A.

Applicable Legal Standards

Witnesses who are qualified by “knowledge, skill, experience, training or
education” may present opinion testimony to the jury. FED. R. EVID. 702; see, e.g.,
Whole Woman’s Health v. Hellerstedt, __ U.S. __, 136 S. Ct. 2292, 2316 (2016);
Moore v. Ashland Chem., Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc); Huss v.
Gayden, 571 F.3d 442, 452 (5th Cir. 2009).2 To be admissible, an expert’s proffered
testimony must be both relevant and reliable. Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579, 591-92 (1993); Carlson v. Bioremedi Therapeutic Sys., Inc., 822
F.3d 194, 199 (5th Cir. 2016).
The expert testimony must be relevant and the expert’s proposed opinion must
be one that would assist the trier of fact to understand or decide a fact in issue. See
Weiser-Brown Operating Co. v. St. Paul Surplus Lines Ins. Co., 801 F.3d 512, 529
(5th Cir. 2015); Bocanegra v. Vicar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003)
(citing Daubert, 509 U.S. at 591-92). “A party seeking to introduce expert testimony

2

In a patent case, the district court evaluates whether to exclude expert testimony under
the law of the regional circuit. See Sport Dimension, Inc. v. Coleman Co., 820 F.3d
1316, 1323 (Fed. Cir. 2016).

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must show (1) the testimony is based upon sufficient facts or data, (2) the testimony
is the product of reliable principles and methods, and (3) the witness has applied the
principles and methods reliably to the facts of the case.” Huss, 571 F.3d at 452 (citing
Smith v. Goodyear Tire & Rubber Co., 495 F.3d 224, 227 (5th Cir. 2007)); see also
Carlson, 822 F.3d at 199.
“Reliability” requires that the proponent of the expert testimony must present
some objective, independent validation of the expert’s methodology. See Brown v.
Illinois Cent. R. Co., 705 F.3d 531, 536 (5th Cir. 2013). The objective of the Court’s
gatekeeper role is to ensure that an expert “employs in the courtroom the same level
of intellectual rigor that characterizes the practice of an expert in the relevant field.”
Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999); Hodges v. Mack Trucks
Inc., 474 F.3d 188, 194 (5th Cir. 2006).
The Court’s gatekeeping role is no substitute, however, for the adversarial
process. See Pipitone v. Biomatrix, Inc., 288 F.3d 239, 250 (5th Cir. 2002).
“Vigorous cross-examination, presentation of contrary evidence, and careful
instruction on the burden of proof are the traditional and appropriate means of
attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596; MM Steel, L.P.
v. JSW Steel (USA) Inc., 806 F.3d 835, 852 (5th Cir. 2015).

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B.

Womer Motion

Trinidad asserts that the Patents-in-Suit are invalid as obvious. Keith Womer
is Canrig’s expert on non-obviousness. Specifically, Womer opines that the Patentsin-Suit were not obvious because Canrig’s ROCKit software product has been a
commercial success, met an unmet need for the product, was copied by others, and
received high praise. Trinidad moves to exclude Womer’s opinions regarding nonobviousness because there is no evidence that ROCKit embodies the Patents-in-Suit.
See Womer Motion, p. 1.
In his Expert Report, Womer identifies, by general description in paragraph 25
and by detailed list in Appendix 2, the documents and other information on which he
relied in reaching his opinion. See Womer Expert Report, Exh. U to Canrig’s
Response [Doc. # 83], ¶ 25 and Appendix 2. For example, he reviewed the Patents-inSuit and their prosecution histories, deposition testimony and exhibits, and documents
produced in discovery in this case. See id., ¶ 25. Additionally, he states that he has
spoken with the inventors and has inspected the ROCKit embodiment of the Patentsin-Suit. See id.
Womer is entitled to base his opinion regarding non-obviousness, and the
underlying assumption that ROCKit embodies the Patents-in-Suit, on information he
identified in his Expert Report, even if he fails to set forth a detailed explanation on

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this subject. See, e.g., Daubert, 509 U.S. at 592; Cromwell v. Wal-Mart Stores, Inc.,
46 F. App’x 733, *2 (5th Cir. Aug. 9, 2002); In the Matter of M&M Wireline &
Offshore Servs., LLC, 2016 WL 4681196, *3 (E.D. La. Sept. 7, 2016). Womer is
“permitted to assume the underlying facts” on which he bases his opinion. Cromwell,
46 F. App’x at *2 (citing Daubert, 509 U.S. at 592). Trinidad had the opportunity to
question Womer during his deposition if there was any dispute regarding the factual
basis for Womer’s assumption that Canrig’s ROCKit product embodies the Patent-inSuit, but Trinidad failed to ask any questions on this issue. It will be Canrig’s
obligation at trial to present evidence to support Womer’s assumption that the ROCKit
software product embodies the Patents-in-Suit. Trinidad will have the opportunity to
cross-examine Womer regarding the basis for his assumption, and the jury will decide
whether the assumptions are supported by credible evidence. The Womer Motion is
denied.
C.

Zatarain Motion

One of Trinidad’s expert witnesses, Arthur Zatarain, offers opinions regarding
proper claim construction and regarding inequitable conduct on the part of Canrig.
In the Zatarain Motion, Canrig seeks to exclude these opinions. Specifically, Canrig
argues that Zatarain should not be permitted to offer opinions on claim construction
because that is an issue for the Court and not for the jury. Canrig argues also that the

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opinions regarding inequitable conduct should be excluded because Trinidad has not
asserted inequitable conduct as an affirmative defense in this case.
Canrig is correct that expert opinion on claim construction is inadmissible. See
CytoLogix Corp. v. Ventana Med. Sys., Inc., 424 F.3d 1168, 1172 (Fed. Cir. 2005).
“The risk of confusing the jury is high when experts opine on claim construction
before the jury,” even where there is agreement by the parties to present such expert
testimony and where the district court instructs the jury that the district court’s claim
construction governs. See id. Therefore, Zatarain will not be permitted to present to
the jury any opinions regarding proper claim construction.
Canrig is equally correct that opinions regarding inequitable conduct are
inadmissible because they are not relevant to any issue in the case. Indeed, Trinidad
agrees that Zatarain’s opinions that relate specifically to inequitable conduct are
inadmissible and stricken. Trinidad argues, however, that some of the statements in
the section of Zatarain’s expert report entitled “inequitable conduct” relate also to
issues other than inequitable conduct and would, therefore, be admissible.
Under this Court’s general practice, written expert reports are not admitted into
evidence and are not provided to the jury. Instead, the expert’s opinions are presented
through the expert’s testimony, either live at trial or through deposition. In this case,
if Canrig presents evidence that the Patent and Trademark Office (“PTO”) issued and

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reissued the Patents-in-Suit, then Zatarain can testify regarding his opinion that certain
relevant prior art was not before the PTO when it made those decisions. Zatarain
cannot, however, testify that Canrig failed to disclose the prior art or otherwise
characterize the reason the prior art was not before the PTO. Additionally, Zatarain
may not speculate regarding whether the PTO would have reached a different result
if all relevant prior art references were before it. The Zatarain Motion is granted in
part and denied in part as set forth herein.
D.

Britven Motion

Thomas Britven is Trinidad’s expert on damages. Britven notes that Canrig is
seeking only reasonable royalty damages, not lost profits. Britven opines that the
appropriate royalty is a one-time royalty in the amount of $120,000 if Trinidad’s
available and acceptable alternatives are found to be non-infringing, or $500,000 if
those alternatives are not found to be non-infringing. To arrive at this opinion,
Britven conducted quantitative analyses including a cost approach, a market approach,
and an income approach. Canrig objects to four different calculations presented by
Britven in support of his analysis. Three of the calculations relate to Britven’s use of
the analytical approach. The fourth relates to Britven’s analysis based on a license
agreement between Canrig and Shell International Exploration and Production, Inc.
(“Shell”) involving technology referred to as “Z-Torque.”

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Analytical Approach.– When using the analytical approach or method for
calculating a reasonable royalty, that royalty is computed by subtracting the alleged
infringer’s usual or acceptable net profit from its anticipated net profit realized from
sales of infringing devices. See TWM Mfg. Co. v. Dura Corp., 789 F.2d 895, 899
(Fed. Cir. 1986). The approach focuses on the alleged infringer’s projected profits
from the infringing product. See Energy Transp. Group, Inc. v. William Demant
Holding A/S, 697 F.3d 1342, 1357 (Fed. Cir. 2012).
In one of his calculations using the analytical method, Britven compared the
profitability of Trinidad rigs equipped with the Axio-Driller software for the time
period July 2009 until they received Axio-Driller, with the time period after they
received Axio-Driller. In another calculation, Britven compared the profitability of
two similar Trinidad rigs for an identical time period during which one rig had AxioDriller and the second rig did not. In a third calculation, Britven studied the same two
rigs but rather than compare their profitability, he compared their drilling
performance. These calculations resulted in a zero or negative value added from use
of the Axio-Driller product.
Canrig objects to these calculations because, Canrig argues, the profitability
calculations do not account for other variables that may have affected profitability,
and the drilling performance calculation includes large periods of time when drilling

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occurs without the Axio-Driller being used. The arguments, while perhaps valid, do
not render Britven’s calculations inadmissible. Instead, Canrig’s arguments are
relevant to the appropriate weight to which Britven’s opinions may be entitled – a
matter to be addressed through cross-examination and closing argument. Britven
notes specifically that several factors can contribute to the profitability of a drilling
rig and, as a result, it may be difficult “to isolate the specific contributions that
specific features have on profitability.” See Britven Report, Exh. A to Britven
Motion, ¶ 248. He concedes that the incremental profitability from using the AxioDriller cannot be determined with “absolute precision,” but notes that he has used the
analytical approach (in a manner approved by the Federal Circuit) in combination with
other analyses to reach his opinions about the amount of a reasonable royalty.
Britven’s opinions, and the analytical approach bases for them, are admissible under
Daubert and its progeny.
Z-Torque License.– Britven conducted a market-approach analysis in which he
considered four settlement and license agreements between Canrig and alleged
infringers. Canrig does not object to Britven’s use of the market-approach analysis,
or to his consideration of three of the four agreements, including a 2009 License
Agreement between Canrig and Shell, referred to as the “Soft Torque Agreement.”
Canrig objects only to Britven’s consideration of a 2015 License Agreement between

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Canrig and Shell, referred to as the “Z-Torque Agreement.” Canrig argues that
“Britven has no basis for his assumption that Z-Torque is technically comparable” to
Canrig’s patented invention. See Britven Motion, p. 16.
Canrig’s expert, Daniel Lindsay, states in his Expert Report that he has
reviewed and considered the Soft Torque Agreement “and a related Z-Torque Rotary
License Agreement . . ..” See Lindsay Report, Exh. B to Response [Doc. # 84], ¶ 84
(emphasis added). Lindsay states that “Shell subsequently improved its Soft Torque
[technology] with a newer version called Z-Torque.” See id., ¶ 90. Although Lindsay
states that the Soft Torque technology and Canrig’s ROCKit technology “are not
considered analogous inventions,” see id., ¶ 84, Lindsay discusses the two “related”
agreements in reaching his opinions.
Britven assumes that the Soft Torque technology (considered by Britven
without objection) and the Z-Torque technology are related because Shell made
modifications to the Soft Torque product, and the modified product is called “ZTorque.” See Britven Report, ¶ 193. Britven assumes also, for purposes of his
damages opinion, that the Z-Torque Agreement is related to the Patent-in-Suit. As
noted above in connection with the Womer Motion, Britven is entitled to assume
underlying facts. It will be Trinidad’s obligation to present evidence at trial to prove
those underlying assumptions, subject to Canrig’s cross-examination. The jury can

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evaluate the validity of the underlying assumptions and the weight to which Britven’s
ultimate conclusions are entitled. Britven’s inclusion of the Z-Torque Agreement as
a factor in his market-approach analysis does not render his damages opinions
unreliable or otherwise inadmissible.
Conclusion on Britven Motion.– Canrig’s objections to certain calculations and
assumptions used by Britven to reach his opinion regarding a reasonable royalty raise
issues that may affect the weight to which those opinions are entitled. The objections
do not, however, provide a basis for excluding Britven’s opinions or the bases
therefore.
IV.

CONCLUSION AND ORDER
For the reasons stated herein, it is hereby
ORDERED that Canrig’s Motion for Partial Summary Judgment Regrading

Intervening Rights [Doc. # 69] is DENIED AS MOOT. It is further
ORDERED that Trinidad’s Motion for Partial Summary Judgment that
Trinidad Drilling’s Alternative Products Do Not Infringe [Doc. # 72] is GRANTED.
It is further
ORDERED that Trinidad’s Motion for Summary Judgment that the Accused
Products Do Not Infringe the Asserted Claims [Doc. # 73] is DENIED. It is further

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ORDERED that Trinidad’s Motion to Exclude Certain Testimony of Plaintiff’s
Expert Keith Womer [Doc. # 71] is DENIED. It is further
ORDERED that Canrig’s Motion to Strike or Exclude Certain Opinions of
Arthur Zatarain [Doc. # 75] is GRANTED IN PART AND DENIED IN PART. It
is further
ORDERED that Canrig’s Motion to Exclude Certain Testimony of Thomas
Britven [Doc. # 77] is DENIED. It is further
ORDERED that the deadline for the parties’ Joint Pretrial Order remains
January 9, 2017, and docket call is rescheduled to 10:00 a.m. on January 20, 2017.
SIGNED at Houston, Texas, this _____ day of December, 2016.
12th

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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