Kiva Corporation v. Baker Oil Tools, Inc.

• Decision Date: 29 May 1969
• Docket Number: No. 26733.,26733.
• Citation: 412 F.2d 546
• Parties: KIVA CORPORATION, Plaintiff-Appellee, v. BAKER OIL TOOLS, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

412 F.2d 546 (1969)

KIVA CORPORATION, Plaintiff-Appellee, v. BAKER OIL TOOLS, INC., Defendant-Appellant.

No. 26733.

United States Court of Appeals Fifth Circuit.

May 29, 1969.

Frank Gibson, Humphrey, Gibson & Darden, Wichita Falls, Tex., Oscar A. Mellin, Carlisle M. Moore, Mellin, Hanscom & Hursh, San Francisco, Cal., for appellant.

Milburn E. Nutt, Nelson, Montgomery & Robertson, Wichita Falls, Tex., Jerry J. Dunlap, Dunlap, Laney, Hessin & Dougherty, Oklahoma City, Okl., for appellee.

Before COLEMAN and GODBOLD, Circuit Judges, and SCOTT, District Judge.

COLEMAN, Circuit Judge:

In the District Court judgment was entered, pursuant to the verdict of a jury, declaring invalid Baker Oil Tool Patents No. 2,799,346 ('346) and No. 2,806,532 ('532) relating to certain oil well tools known as "retrievable bridge plugs". We affirm.

Kiva Corporation, plaintiff below and appellee here, sought a declaratory judgment that the two patents were invalid, or if valid not infringed by Kiva. Baker answered and counterclaimed, asserting that Kiva had, in fact, infringed. At pre-trial Kiva stipulated that if '532 is valid then it had been infringed. The case went to the jury on special interrogatories, with the result above stated. Baker's motions for a judgment notwithstanding the verdict and for a new trial were denied. The appeal followed.

In response to the special interrogatories, the jury found that Patent '532 was in prior public use, was not new, and was obvious. It likewise found that Patent '346 did not disclose an operative device, did not disclose the "best mode", was not new, and was obvious. The jury further determined that Kiva did not infringe '346.

Baker vigorously contends that each and all of the jury findings are clearly erroneous; that the court erred in submitting issues as to obviousness, newness, and infringement to the jury; that the court erred in denying Baker's motion for a directed verdict and a judgment notwithstanding the verdict; and the court particularly erred in refusing to instruct the jury to disregard the testimony of the witness Greenroyd as to prior use of '532.

In Micr-Shield Company v. First National Bank of Miami, 5 Cir., 1968, 404 F.2d 157, 161 cert. denied 394 U.S. 960, 89 S.Ct. 1308, 22 L.Ed.2d 561, this Court defined appellate function in a case of this kind:

"There can be no real dispute between the parties as to the applicable law which controls our decision. For the most recent statement of these principles in this circuit, see Metal Arts Co. v. Fuller Co. (5 Cir., 1968), 389 F.2d 319. As pointed out there, while patent validity is a question of law, it is to be `decided on the basis of factual inquiries\'. Graham v. John Deere Co. (1966) 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545. In Graham, as we pointed out in the Metal Arts Company case, supra, `the court noted several preliminary factual inquiries which are pertinent in determining validity in the face of the defense based on obviousness, but the principle is equally applicable to a defense involving lack of novelty. Two of these are the scope and content of the prior art and the difference between the prior art and the claims in issue. The conclusionary inquiry then is to determine the question of novelty vel non on the basis of the preliminary findings. The clearly erroneous rule applies in such cases. Hughes Tool Co. v. Varel Mfg. Co., 5 Cir., 1964, 336 F.2d 61\'.

"It is also pointed out in the Metal Arts case that a finding of prior public use as a defense must be based on evidence that is `clear, satisfactory, and by some it is said beyond a reasonable doubt * * *\', citing Southern Implement Mfg. Company v. McLemore (5 Cir., 1956) 350 F.2d 244."

Most recently, in a decision dated April 7, 1969, this Court en banc defined the standard for the sufficiency of the evidence in connection with motions for directed verdicts and for judgments notwithstanding the verdict, Boeing Company v. Shipman, 5 Cir., 411 F.2d 365:

"If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury. The motions for directed verdict and judgment n. o.v. should not be decided by which side has the better of the case, nor should they be granted only when there is a complete absence of probative facts to support a jury verdict. There must be a conflict in substantial evidence to create a jury question. However, it is the function of the jury as the traditional finder of the facts, and not the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses."

I The Factual Aspects

The function of the retrievable drill plug may be illustrated in the following manner: An oil well may descend through several oil producing zones. The thickness of each zone and the spacing between zones varies according to the particular geological formations which may be encountered and drilled. To extract oil from each zone a hollow casing is placed into the drill hole and cemented into place. This casing at each zone is then perforated so as to open holes into the formation from which the oil is sought to be recovered.

Many formations contain rock, sand or other materials which prevent the flow of oil into the casing. To stimulate the flow into the casing, the zones or formations are chemically treated. Two common methods are used: (1) acidizing, whereby acid is forced through the perforations and into the formations, causing the rocks (usually limestone) to be eaten away and thus increasing the size of the passage for the oil to flow into the casing; and (2) fracturing, whereby a fluid is forced through the perforations, building up pressure in the formation, causing it to fracture and open cracks, thus allowing oil to flow into the casing.

Each zone has to be treated independently of all others in order to create a pressure and force the fluid into that particular zone.

Before development of the retrievable bridge plug, a zone was isolated either by use of a permanent bridge plug or a straddle packer.

A. The permanent bridge plug — To seal off a zone using a permanent bridge plug, a plug is run down the well and anchored to the casing at a point below the zone to be treated. This is to prevent the fluid from flowing in the casing above or below the plug. Next, tubing is placed in the casing and a retrievable packer is run on the tubing down the well and above the perforations in the zone which is to be treated. As a consequence, the zone is sealed off from other zones. The fluid is then pumped down the tubing and through the perforations into the zone.

To treat another zone, the retrievable packer is removed from the well, a second permanent bridge plug is inserted below the next zone, and the retrievable packer is again sent down the casing to a point above the zone to be treated. Each zone is similarly treated. The disadvantage of this method is that a permanent bridge plug cannot be retrieved, and to reopen the well, each bridge plug must be drilled out. In addition, it is a time-consuming process to remove the retrievable packers each time a zone is treated.

There are, however, two advantages to the permanent bridge plug system: (1) since the plug and the packer are not physically connected, they may be flexibly fitted to conform to the varying depths of each zone; (2) both the plug and the packer are attached to the casing by toothed slips, permitting a great amount of pressure to be exerted on the casing before the plug will break.

B. The straddle packer — In this instance, two packers, upper and lower, are used. These are physically connected and separated by tubing. As a unit, these packers are run down the casing and positioned so that the packers straddle the perforations in each zone. The advantage to this system is that all zones may be treated without having to remove the packers, and after treatment, the equipment may be recovered.

But like the permanent bridge plug, it has its disadvantages: (1) since there is no way to anchor the packers to the casing, not as much pressure can be built up between the packers; (2) since the packers are physically connected, there is no flexibility to accommodate the varying depths of each zone. To compensate for that, the packers often have to be removed from the well and readjusted.

The retrievable bridge plug involved in the questioned patents was developed by Baker Oil Tools, Inc. as an improvement over the permanent bridge plug and straddle packer systems. It is essentially composed of a retrievable bridge plug, an upper packer and a releasable connection between them. The packer and plug are attached on the surface and run down into the well together. When they reach the zone to be treated, the retrievable bridge plug is placed below the perforations in that zone and released from the upper packer. When it is released, the plug seals the casing and prevents the flow of fluid past it. The upper packer is then pulled up and located at the upper end of the perforations, thereby sealing the zone at the top and isolating that zone. Fluid is pumped through a tube inserted in the center of the packer and then through perforations. After the zone is treated, the packer is lowered and connected with the bridge plug. Together they are moved upward and the same procedure is repeated with another zone.

The retrievable bridge plug combines all of the advantages of the other methods: all zones may be treated in a single trip up the casing; no plug is left in the casing after treatment; since the...