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Something "Not so New" in the World of Fracking

On April 25, 2019, the Federal Court of Appeal issued its decision in a longstanding patent dispute in the oil patch regarding hydraulic fracturing technology: Packers Plus Energy Services Inc. and Rapid Completions LLC v. Essential Energy Services Ltd. et al, 2019 FCA 96. In support of its patent, Packers had issued a series of infringement suits against several players in the Canadian oil industry, including Baker Hughes Canada and Weatherford.

In a unanimous decision of the three member panel, the Federal Court of Appeal denied the appeal of Packers Plus Energy Services Inc. ("Packers") and Rapid Completions LLC (collectively, the "Appellants") from a trial decision dismissing Packers' claim of infringement and instead invalidating its Canadian Patent No. 2,412,072 (the "Patent") on the basis of anticipation and obviousness (2017 FC 1111). The Appellate Court upheld the Trial Court's finding of invalidity on the basis of obviousness, finding it unnecessary to address the issues of anticipation or infringement which were also found against Packers at trial.

Central to the suit, and appeal, was the claim in Packers' Patent of a method (colloquially referred to as the "ball-drop method") capable of use in a variety of wellbores (particularly in open holes) to see fracking fluids selectively discharged using a series of packers, ports, and sliding sleeves. 

After reconfirming and applying the established law regarding obviousness, the Federal Court of Appeal concluded that the Trial Judge had not committed any palpable and overriding error and thus dismissed each of the Appellants' seven arguments as to how the Trial Judge had purportedly erred as being without merit. The Federal Court of Appeal summarized its review of the Trial Judge's findings as follows:

"[T]he Federal Court found that the prior art, itself, disclosed most of what was claimed by the appellants to be inventive, namely, the ball-drop method, which types of packers were suitable for withstanding fracturing pressures in an open hole and the benefits of fracking using open as opposed to cased holes. To this, the common knowledge of the skilled person added one element, namely identification of which specific packers were suitable for use with the ball-drop method in an open hole—a matter concerning which the 072 patent provided no information. Based on the elements of the prior art that the Federal Court found would have been located by a skilled person in a reasonably diligent search and that were within the skilled person's general knowledge, the Federal Court found that there was nothing inventive in the claims in suit."

As a result, it concluded that the Trial Judge's finding of obviousness stood and the appeal failed.

If you have any questions, please contact Tamela Coates at tcoates@lawsonlundell.com or any member of our Litigation and Dispute Resolution Group.

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This blog is authored by members of the Litigation and Dispute Resolution Department. We follow new and interesting issues emerging in the legal and business communities. The wide range of experience among the members of our litigation group will provide a diverse and insightful examination of current legal trends and topics. Our goal is to provide a source of valuable information and insight on a wide variety of matters for our readers.

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