Shields v. Halliburton Co., Civ. A. No. 78-0065.
| Decision Date | 26 June 1980 |
| Docket Number | Civ. A. No. 78-0065. |
| Citation | 493 F. Supp. 1376 |
| Court | U.S. District Court — Western District of Louisiana |
| Parties | C. Nelson SHIELDS, Jr., Trustee, and Advance Engineering, Inc., (an indirect subsidiary of Baker International Corporation), Plaintiffs, v. HALLIBURTON COMPANY, Halliburton Services, Brown & Root, Inc., and Brown & Root Marine Operators, Inc., Defendants. |
COPYRIGHT MATERIAL OMITTED
Robert W. Turner, Hubbard, Thurman, Turner, Tucker & Glaser, Dallas, Tex., for plaintiffs.
James E. Cockfield, Kenway & Jenney, Boston, Mass., for defendants.
Plaintiffs are C. Nelson Shields, Jr., Trustee and assignee of the two patents in issue, and Advance Engineering, Inc., exclusive licensee and an indirect subsidiary of Baker International Corporation. The defendants are Halliburton Company, Halliburton Services, Brown and Root, Inc. and Brown and Root Marine Operators.
The plaintiffs claim that defendants have infringed claims 1-15 of their U. S. Bassett & Olsen Patent 28,2321 and seek to have this patent held valid, enforceable and infringed. Defendants deny these claims and additionally, ask the Court to declare a second patent of plaintiffs, U. S. Patent No. 3,832,857 () to be invalid and unenforceable.
The present proceeding is limited to the issue of liability of the defendants for patent infringement with the actual accounting for damages being severed.
The determination of this case is of paramount importance because if the patent is valid, the plaintiffs, for all practical purposes, would enjoy a time-limited monopoly in grouting offshore structures for oilwell drilling and production operations.
Since the 1950's, many of these structures or platforms have been placed offshore and they stand on the sea bed on tubular jacket legs (usually 4 to 8 legs per platform) and include piles which are driven through the interior of the legs, along their length, and into the sea bed to aid in the stability of the structure.
When an offshore platform is set, the jacket legs are generally open at the bottom to the sea, and the annulus between the pile and jacket legs will fill with water up to the water line of the surrounding ocean. A water filled annulus is thus created along the inside length of each of the jacket legs between the pile and the jacket leg.
A common practice since the late 1950's, has been to place grout or cement in the annulus formed to help increase the stability of the overall structure by bonding the pile to the jacket leg. At that time, the conventional grouting procedures for new platforms under construction was to install two grout lines on each leg near the lower end of the leg up to just above the water line. One line would be located below the other and an initial plug of grout would be placed in the bottom of the leg using this line in an attempt to seal the bottom of the leg to prevent loss of the main column of grout to be subsequently added. After the initial plug was set, and if it had been successfully placed, the second stage of grouting could proceed with filling of the annulus above the plug by the second grout line. The grout would displace the sea water in the leg up the annulus and out the top and if grout of good consistency would eventually flow out of the top of the leg, the operation was a success.3
In the case of ungrouted platforms, originally set without grout lines, there was little success. Attempts were made by forcing grout in the top of the leg through sea water in the leg by placing a small grout pipe down the annulus. Another method was to use deep-sea divers to install clamps and valves onto the legs below the water line near the bottom of the legs to permit grout lines to be hooked for grouting operations from the bottom of the leg as described above.4
Conventional grouting presented a number of problems. Many times, the first stage plug would fail to hold and consequently, second stage grout would be lost out of the bottom of the leg. Once this occurred, the original grout lines could not be reused as they would be filled with hardened grout. Although conventional grouting is still used today, it is not the desired method from a point of time, economy or results.5
In the latter part of 1968, or the first two months of 1969, Max Bassett, through a company he had formed, called Guardian Engineering, attempted, unsuccessfully, to perform a conventional grouting job for McDermott.6 He noticed a small air compressor on the barge that divers had been using. Being completely out of ideas and having nothing to lose at this point, he attempted to dewater the annulus with air pressure applied at the top prior to grouting and was successful. He used air pressure to prevent water from returning to the leg while introducing grout from the top of the leg.7 The evidence is not clear as to whether or not this operation was a complete success, but there is no doubt it was the first time that this procedure had ever been applied. A few days later, Bassett disclosed this air pressure grouting procedure to H. W. Olsen (now deceased) who had some additional ideas to be used. The first item was the use of a vibrator device to be attached to the upper end of the jacket leg to help the expulsion of water by air pressure in a firm sea bottom. In case a soft sea bottom is not encountered, it may be necessary to break the bond at the bottom of the leg between the leg and the sea bottom to permit water to be driven out. The second item that Olsen contributed provided that if a short plug (less than one-half the annulus) is used in the first stage of grouting, the grout can be constrained or loaded by the air pressure until it is fully set. By not releasing all the air during grouting, this short plug is formed and air pressure is held on the plug until it sets.8
Mr. Olsen, who later assigned all of his rights in the patents to Bassett, and Bassett, submitted their joint ideas to a patent attorney, which resulted in the issuance of United States Patent No. 3,601,999 on August 31, 1971. In the meantime, Bassett disclosed the air pressure grouting concept to Mr. Cliff Tannahill of Union Oil Company in February, of 1969, and Bassett's company, Guardian Engineering, was awarded a job which was successfully completed in June, of 1969. In connection with the Union job, Bassett made an arrangement with a James Ratteree to supervise the field operations and explained the entire procedure to Ratteree.9 Bassett and Ratteree did several jobs together and terminated their relationship. The defendants claim that during this relationship, Ratteree conceived the idea independently of Bassett and Olsen, of a reducing air pressure feature, which operates in the following manner: As the grout is introduced, the air pressure is monitored and controlled to prevent ingress of water that might dilute the grout. This control is generally provided by letting out air pressure as grout pressure builds up in the annulus to maintain a static air pressure in the leg. By doing this, the combination of air pressure and hydrostatic pressure of the grout substantially equals the hydrostatic pressure of the sea water at the bottom of the leg, which is trying to enter the leg. Thus, as the hydrostatic pressure of the grout rises, the air pressure is bled off, and reduced. It should be noted that when the annulus is about half full, the hydrostatic pressure of the grout, without any air pressure, will provide the pressure to keep the sea water out of the annulus; i. e., a hydrostatic balance will prevail.10 Bassett claims that he told Patteree that that they would have to reduce air pressure to compensate for the buildup of grout pressure. As the story unfolds, it will be seen that no specific mention of air pressure reduction is disclosed in the patent under consideration, RE No. 28,232.
From September, of 1969, until late 1972, Bassett was generally unsuccessful in gaining the support of the oil industry in using his new method.11
Bassett employed two University of Houston professors to conduct a model study of the air pressure grouting method in 1972, which resulted in a film used in advertising and selling of the air pressure grouting method, to the industry. Around 1975, the method became commercially acceptable12 and was used by many of the major oil companies including Gulf, Texaco, Exxon, Shell and Mobil.13 Further, many platforms constructed and designed today for grouting do not include the conventional grout lines and are designed specifically for use of the air pressure grouting procedure.14 It has been estimated that in the future, air pressure grouting will be used in seventy-five (75%) per cent to eighty (80%) per cent of the grouting jobs.15
In late 1972, Bassett presented his grouting method to the Western Company, and in January, of 1973, Western became the exclusive licensee under the Bassett and Olsen patent U. S. No. 3,601,999. Mr. Ned Conley, the attorney for the Western Company, felt that Bassett was entitled to broader protection than was granted in the patent, and filed additional applications, including the issuance of RE 28,232, and the 3,832,857 patent also involved in this suit.16 Claim 10 of 3,832,857 (overdisplacing), is directed to a procedure in which a predetermined amount of grout is added to the top of the initial plug after all the air pressure is relieved and prior to setting up to force any water in the bottom of the leg out.
As a result of a 1974 suit, Advance Engineering replaced Western as the exclusive licensee under the Bassett patents and Advance continues in that position today.
It appears that from 1968, to 1977, the defendants, Halliburton, and Brown and Root, unless they used Advance Engineering for air pressure grouting, continued to use grouting...
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