672 F.2d 523 (5th Cir. 1982), 80-2170, Reed Tool Co. v. Dresser Industries, Inc.

Docket Nº:80-2170.
Citation:672 F.2d 523
Party Name:214 U.S.P.Q. 501 REED TOOL COMPANY, Plaintiff-Appellant, v. DRESSER INDUSTRIES, INC. and Smith International, Inc., Defendants-Appellees.
Case Date:April 08, 1982
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 523

672 F.2d 523 (5th Cir. 1982)

214 U.S.P.Q. 501

REED TOOL COMPANY, Plaintiff-Appellant,

v.

DRESSER INDUSTRIES, INC. and Smith International, Inc.,

Defendants-Appellees.

No. 80-2170.

United States Court of Appeals, Fifth Circuit

April 8, 1982

Vinson & Elkins, A. H. Evans, W. Ronald Robins, Houston, Tex., for plaintiff-appellant.

Arnold, White & Durkee, John F. Lynch, Houston, Tex., for Dresser Ind.

Christie, Parker & Hale, Andrew J. Belansky, Pasadena, Cal., for Smith Intern., Inc.

Page 524

Appeal from the United States District Court for the Southern District of Texas.

Before GARZA and RANDALL, Circuit Judges [*].

GARZA, Circuit Judge:

Reed Tool Company ("Reed"), a Texas corporation primarily engaged in the business of manufacturing and selling rotary equipment, brought suit against two of its principal competitors, Dresser Industries, Inc. ("Dresser") and Smith International, Inc. ("Smith"), alleging infringement of United States Patent No. 3,495,668. 1

The patent in question relates to a three-cone rotary rock bit used to drill oil and gas wells. 2 At trial, the defendants denied infringement and alleged invalidity and unenforceability of the patent both on equitable and statutory grounds. The district court found the patent to be invalid under several theories, 3 and the other issues in the case, including infringement, were never reached. Because this court finds the patent invalid, we affirm the lower court's decision.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

It is apparent after reviewing the district court's opinion that much time and effort was devoted to outlining both the facts of this case and the evolution of rotary rock bit design. 4 Rather than try to improve upon them, we instead incorporate them by reference and will discuss only those facts as are pertinent to our decision.

Three-cone rotary rock bits have been used to drill oil and gas wells for nearly half a century. The evidence at trial particularly focused on two types of three-cone bits-milled tooth bits and insert bits.

For many years, the principal type of rotary rock bits used in the drilling industry were milled tooth bits. The cutting structure of these bits consists of rows of elongated

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steel teeth which are integrally formed with the cutter. The outer surface of the teeth and of the cutter are carburized or "case hardened" to increase their wear resistance. The tooth type structure has the advantage of being comparatively strong, since the teeth are actually an integral part of the steel cutter from which they extend, and since the uncarburized steel core of each tooth lends ductility to the structure so that it can absorb shocks and shear forces encountered in drilling. Because hard and soft formations yield more easily to different drilling forces, the design of these milled tooth bits varied in accordance with the type of formation for which they were intended. Invariably, however, milled tooth bits employed cutter skew or offset in order to gouge and scrape away rock formations. 5

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Prior to the introduction of insert bits, milled tooth bits were the workhorses in oil well drilling. Utilization of milled tooth bits over the years, however, indicated that such bits were less than ideal for drilling hard rock formations. No matter how well-designed they were, milled tooth bits were limited by the strength of the metal with which they were constructed. In drilling the hard rock formations, the carburized steel of which the bits were constructed ground down very quickly. In very hard rock formations, a milled tooth bit might drill for only a few feet, after which it would have to be pulled out of the hole and replaced. This was very expensive, not only in terms of the number of bits required for drilling a well, but also in terms of the time required for each "round trip" in which the drill string, often thousands of feet in length, would have to be removed from the hole and disconnected, joint by joint, so that the drill bit could be changed.

This problem was substantially eliminated by the introduction of the insert bit in the early 1950's. In contrast to the way

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milled tooth bits are manufactured, with portions of thick-walled cutters being machined away to create integrally-formed cutter teeth, insert bits are manufactured by boring sockets into the cutters, heating them up until the holes expanded, and then dropping in inserts of an extremely hard substance, tungsten carbide. When the sockets cooled, the holes would contract and the inserts would be permanently affixed in place. Although these inserts are much harder than the carburized steel from which the cutters are formed, they are also more brittle. For this reason, the early inserts were closely spaced and did not protrude far from the conical cutter. Moreover, the cutters were not skewed or offset; instead of gouging and scraping away at rock formations, drilling was accomplished by crushing the rock under the weight of heavy drill collars.

Because there was not as great a need for more wear-resistant teeth in soft and medium-density formation drilling, insert bits were not, at first, used to drill in these formations. Nevertheless, as time went on, the various characteristics which had been used to adapt milled tooth...

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