Dow Chemical Co v. Halliburton Oil Well Cementing Co Halliburton Oil Well Cemeting Co v. Dow Chemical Co

• Citation: 89 L.Ed. 973,64 USPQ 412,65 S.Ct. 647,324 U.S. 320
• Decision Date: 05 March 1945
• Docket Number: 61,Nos. 50,s. 50
• Parties: DOW CHEMICAL CO. v. HALLIBURTON OIL WELL CEMENTING CO. HALLIBURTON OIL WELL CEMETING CO. v. DOW CHEMICAL CO
• Court: United States Supreme Court

324 U.S. 320

65 S.Ct. 647

89 L.Ed. 973

DOW CHEMICAL CO.

v HALLIBURTON OIL WELL CEMENTING CO.

HALLIBURTON OIL WELL CEMETING CO.

v. DOW CHEMICAL CO.

Nos. 50, 61.

Argued Feb. 6, 1945.

Decided March 5, 1945.

Messrs. Bernard A. Schroeder and Charles J. Merriam, both of Chicago, Ill., for Dow Chemical Co.

Mr. Leonard S. Lyon, of Los Angeles, Cal., for Halliburton Oil Well Cementing Co.

Mr. Justice MURPHY delivered the opinion of the Court.

In issue here is the validity of United States Patent No. 1,877,504, relating to 'the treatment of deep wells, such as oil, gas, brine or water wells, to increase the output therefrom,' issued to John J. Grebe and Ross T. Sanford on September 12, 1932.

Petitioner, the owner of the patent, brought this suit against respondent for alleged infringement. Both the District Court for the Eastern District of Michigan and the Sixth Circuit Court of Appeals held the patent invalid for want of invention and denied relief. 139 F.2d 473. Previously the Tenth Circuit Court of Appeals, in reversing the judgment of the District Court for the Northern District of Oklahoma, had held the patent valid and infringed in a suit brought by petitioner against another party. Dow Chemical Co. v. Williams Bros. Well Treating Corp., 10 Cir., 81 F.2d 495, certiorari denied 298 U.S. 690, 56 S.Ct. 960, 80 L.Ed. 1408. The conflicting views of the appellate courts concerning the validity of the same patent led us to grant certiorari in this case, 322 U.S. 719, 64 S.Ct. 1145, 1146, and oblige us to decide independently the factual issue of validity. Universal Oil Products Co. v. Globe Oil & Refining Co., 322 U.S. 471, 473, 64 S.Ct. 1110, 1111.

The stated object of the Grebe-Sanford patent is 'to counteract some preventable natural causes for the decline of yield of a well' where the well has been drilled into a limestone or other calcareous formation. As oil is pumped from a well, the underground flow to the well decreases and the yield declines until pumping is no longer profitable. Yet it is known that when that point is reached there often remains embedded in the rock formation a great deal of oil unrecoverable by ordinary processes. Many methods have been suggested to recover this hidden oil. The forcing of water or gas into the rock formation, the heating of the surrounding rock and the use of explosives have all been proposed but found wanting in one way or another.

Eventually, however, the idea was conceived of using acid to dissolve the limestone, thus opening channels through which the oil could flow into the well. This idea first appears to have been developed in United States Patent No. 556,669, issued on March 17, 1896, to Herman Frasch, with a half interest being assigned to John W. Van Dyke. The essence of this patent was the introduction into the oil well of a large solution of hydrochloric acid under pressure, with fresh water being added later to force the acid further into the limestone. Frasch recommended the use of commercial hydrochloric acid containing from 30% to 40% by weight of the acid gas HCl; he further recommended that the acid remain in the well for twelve hours. A suitably arranged packer was to be used to confine the acid to the lower or oil-yielding portion of the well hole.

Frasch also recognized that the hydrochloric acid was likely to corrode the metal well equipment. Hence the patent suggested that the regular well tubing be removed and that an enameled or lead-lined pipe be inserted to conduct the acid down into the well, 'or it may be otherwise made proof against corrosion.' An additional suggestion was that an alkaline liquid be introduced to neutralize the acid after it had performed its function.

Frasch's method proved successful in disintegrating limestone rock and increasing the flow of oil. The record shows that at least fourteen commercial wells near Lima, Ohio, were treated with this process in 1895 and 1896, resulting in substantial production increases in most instances. Wide publicity was given to these operations. But despite this success, Frasch and Van Dyke soon discontinued their work along these lines. The reasons for this abandonment are not clearly disclosed by the record. Respondent suggests personal reasons on the part of Frasch and Van Dyke and claims that the relatively undeveloped oil industry at that time had little use for such an invention. Petitioner, however, contends that Frasch's method was so cumbersome and expensive that it was commercially impracticable;¹ such is also the reason advanced by the court in the Williams Bros. case, 81 F.2d at page 496.

Whatever the reason for the failure of the Frasch method to achieve wide-spread use, the Grebe-Sanford patent in issue claims to be an improved method of treating wells with a hydrochloric acid solution. The patent expressly recognizes the Frasch treatment but states that it was never generally adopted 'due to the fact that the acid attacks the metallic casing, pump tube, etc. about as actively as the rock, and causes serious damage thereto.' To meet this alleged defect, the Grebe-Sanford patent proposes the use of a hydrochloric acid solution containing 'a small amount of a substance capable of inhibiting attack of the acid upon metal surfaces * * * with which it comes in contact.' The preferred inhibiting agent is one of several specified arsenic compounds, to be added in the amount of from 1% to 5% of the weight of the solution. Numerous other inhibitors are also suggested. The patent further states that 'the strength of the aqueous hydrochloric acid solution, in general best adapted to the purpose in hand, may be between about 5 per cent and about 20 per cent, and preferably should be between 10 and 15 per cent although other concentrations may be used, if desired.' Claim 8 (claims 1, 5, 7, 8 and 9 are in issue) best sums up the preferred form of the Grebe-Sanford process:

'The method for increasing the output of an oil well which comprises charging into the pump tube a quantity of a 5 to 20 per cent hydrochloric acid solution containing a relatively small amount of a corrosion inhibitor, expelling the acid from the tube into the bore of the well by applying pressure thereon, permitting the acid to act upon the rock formation surrounding the well cavity and withdrawing the spent acid.'

The parties differ as to the precise scope of the alleged patentable improvement over the Frasch method of acidizing wells. Respondent urges, and the two courts below held, that the sole object of the Grebe-Sanford process is simply to protect the well equipment from corrosion by adding an inhibiting agent to the hydrochloric acid solution.² Petitioner has consistently claimed, on the other hand, that the patent specifies three novel points which elevate the described process to the level of an invention: (1) the addition of an inhibiting agent to the hydrochloric acid solution to prevent corrosion; (2) the use of a dilute rather than a concentrated hydrochloric acid solution; and (3) the use of the ordinary pump tube instead of a specially protected supply pipe to introduce the acid into the well. Assuming without deciding that petitioner's version of the alleged improvement is correct, however, we hold that no one of these three claims and no combination thereof evidences that degree of skill and ingenuity which constitutes the essential ingredient of a true invention.

(1) The addition of an inhibiting agent. It is clear that the Grebe-Sanford suggestion that an inhibiting agent, preferably an arsenic compound, be added to the hydrochloric acid solution presents no patentable advance over the prior art. Petitioner makes no claim that the inhibiting agent in any way affects the chemical action of the acid on the limestone rock; it states merely that the inhibitor acts so as to prevent or restrict the corrosive effect of the acid on the metal well tubing and equipment. But long before the Grebe-Sanford process was patented it had been known that inhibiting agents could be used to protect metals from acid solutions. More particularly, it was well known that arsenic compounds mixed with hydrochloric acid solutions acted as effective inhibitors and numerous patents embodying that principle had been granted.³ Various inhibitors were available on the market at the time of the conception of the Grebe-Sanford process and were used extensively in the commercial pickling of iron and steel products in acid solutions and in the transportation of acids in metal containers.

There was evidence, moreover, that in 1928 and 1929 the Gypsy Oil Company had successfully used inhibited hydrochloric acid to remove scale from certain of its oil wells drilled in sandstone formations. This process was based upon a report made on behalf of the Mellon Institute at Pittsburgh at the request of the Gypsy Oil Company, which had been bothered by the formation of scale on the metal well equipment. The report, after noting that 'the selection of a solvent was...