Johnston Formation Testing Corp. v. Halliburton, 7991.

• Decision Date: 23 February 1937
• Docket Number: No. 7991.,7991.
• Citation: 88 F.2d 270
• Parties: JOHNSTON FORMATION TESTING CORPORATION et al. v. HALLIBURTON et al.
• Court: U.S. Court of Appeals — Fifth Circuit

88 F.2d 270 (1937)

JOHNSTON FORMATION TESTING CORPORATION et al. v. HALLIBURTON et al.^*

No. 7991.

Circuit Court of Appeals, Fifth Circuit.

January 9, 1937.

Rehearing Denied February 23, 1937.

D. A. Simmons, of Houston, Tex., and J. N. Saye, of Longview, Tex., for appellants.

Leonard S. Lyon and Henry S. Richmond, both of Los Angeles, Cal., and Ben F. Saye, of Duncan, Okl., for appellees.

Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.

SIBLEY, Circuit Judge.

Erle P. Halliburton and Halliburton Well Cementing Company sued Johnston Formation Testing Corporation and E. C. Johnston for infringement of patent No. 1,930,987, which was applied for by John T. Simmons, alleged inventor, February 10, 1926, but not granted till October 17, 1933. Simmons before applying for the patent assigned an interest to Henderson, but within three months after the application was filed they had assigned first partially and then wholly to Halliburton. The patent covers a method and an apparatus for testing the productivity of formations encountered in drilling oil and other deep wells. The defendants also have patents, granted while the Simmons patent was pending in the Patent Office, under which the alleged infringing apparatus has been used and operations conducted. We read in the proceedings in the Patent Office the statement of Halliburton that twenty patents had been granted in this particular testing art while the Simmons patent was pending, which makes apparent the great activity at this period. It appears in the record that both Halliburton and Johnston and their companies make thousands of these deep well tests and no doubt there are others making them also. Evidently, since Halliburton claims all others to be infringers of the Simmons patent, the monopoly contended for would if established very seriously affect many persons and businesses. In Edwards v. Johnston Formation Testing Corporation (D. C.) 44 F.(2d) 607, affirmed (C.C.A.) 56 F. (2d) 49, the present defendants were sued by Edwards, the patentee in No. 1,514,585 issued November 4 1924, and therefore antedating the Simmons application some fifteen months. The holding was that neither Edwards nor Johnston were pioneers in the well testing art, that Edwards had not a basic patent, but was only an improver, and his monopoly was limited to his improvement. It is now claimed that the Simmons invention is basic at least in the employment of a single string of pipe to make the test, and in trapping in it an uncontaminated sample from the bottom of the well.

Seven claims only were originally made by Simmons, all for an apparatus and none mentioning the single pipe string as an element. They are not here asserted to be infringed. Claims 8 to 19, inclusive, for method and apparatus, are relied on. They (or their predecessors) were twice rejected by the examiners as anticipated by other patents and twice rewritten in the effort to differentiate or narrow them. They were as now presented again rejected, but on appeal to the Board of Appeals they were allowed, and the patent issued. The decision of the Board of Appeals was followed by the District Judge in this case, but in Halliburton v. Honolulu Oil Corporation (D.C.) 18 F. Supp. 58, in the Southern District of California, Judge Cosgrave thought the method claims 8 and 18 were invalid and the apparatus claims if valid were to be restricted to the form disclosed and not infringed, following our conclusion in the case of Edwards v. Johnston Formation Testing Corporation, supra. We are of opinion that Judge Cosgrave's conclusion is correct and will state as clearly and as briefly as possible our reasons.

The drilling of very deep wells by the rotary method which has come into extensive use only during the present century, and the methods of testing the strata pierced practiced before the invention of Edwards, including the use of packers, "rat-holes," and sampling chambers, are described in the opinions in 44 F.(2d) 607, and 56 F.(2d) 49 and need not be repeated. Several of the older patents brought forward in this case were there discussed. What was said of them in relation to the Edwards and Johnston patents is largely true as to the Simmons patent which came into the same art at nearly the same time that Edwards and Johnston did. We will again discuss some of them as specially bearing on the Simmons' claims. Of the method claims 18 is representative, as copied in the margin.^* It assumes familiar apparatus and claims a monopoly on a new use of the old apparatus to achieve a result in a better way. That apparatus includes a single string of pipe lowered into the well (the drill stem is always present and usable), a packer on the string (either a rat-hole or an expansible packer), and a valve (of any appropriate kind) at the lower end of the string. These three simple and well-known elements are to be used by lowering the pipe into the well with the valve closed against the drilling fluid until the packer is set, then by opening the valve to admit cognate fluid below the packer, then by closing the valve so as again to prevent the drilling fluid from entering when the packer is released and the pipe drawn up with its contents. Thus broadly claimed (improved apparatus being put out of mind), no novelty and certainly no invention can be claimed for the method. Packers and pipes with valves in them have long been in use to get what is below the packer free from what is above and without removing what is above. Whether a large quantity is taken from a finished well or a small sample from an unfinished well does not materially alter the method nor the function of the elements used. There has always been water encountered in oil wells; and the drilling fluid is only very muddy water voluntarily put and kept in the well for special reasons instead of running in from natural sources. Expansible and removable packers with pipes through them to reach the oil, gas, or other desired fluid beneath are shown in the Stewart patents, No. 171,589, December 28, 1875; and No. 230,080, July 13, 1880. "Rat-hole" packers set by the weight of the piping pressing them down and removable by simply lifting them are shown in Koch, No. 208,610, October 1, 1878; Bloom, No. 785,933 March 28, 1905; and McCready No. 1,522,197, January 6, 1925. The Cooper patent, No. 1,000,583, August 15, 1911, shows a collapsible packer used to separate water above from what is to be gotten below. The pipe carries a valve to be opened and shut from the surface, but the device is complicated. We find the simplicity of the Simmons method, along with all its operations, reasonably disclosed in the old patent to Franklin, No. 263,330, August 20, 1882. There is the single pipe, with a packer mentioned but its function esteemed so familiar as to need no emphasis, capable of being lowered into and withdrawn from a well, with the entrance into or escape from the pipe to be controlled by a valve operated from above while the pipe is lowered into or withdrawn from the well. The importance of Franklin to this method claim is that he describes the use of a packer on a single string of pipe with a valve in the pipe in the very operation of putting them in and taking them out of the well. We do not agree with the Board of Appeals that Franklin does not disclose a packer. It is mentioned. Evidently one must be used for without it oil would never flow through the pipe as desired and there could be no use of the valve to control the flow. The packer is necessary to prevent the escape of gas and build up...