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Oct. 26 — A patent infringement lawsuit brought by offshore drilling giant Transocean against rival Seadrill has been stayed pending resolution of Seadrill's attempt to have Transocean patent claims invalidated in an administrative proceeding, the U.S. District Court for the Southern District of Texas ruled Oct. 22.
The court said that even if the Patent Trial and Appeal Board does not decide until March whether to consider if some of Transocean's patent claims are invalid, Transocean's case will not be unduly prejudiced by a stay.
Transocean Offshore Deepwater Drilling Inc. of Houston is a subsidiary of Transocean Ltd. of Vernier, Switzerland, a well-known contractor of offshore petroleum drilling equipment and services employing more than 13,000 people in Africa, North and South America, Southeast Asia, Australia, India, the Mediterranean and northern Europe.
In 2010, a Transocean drilling rig—the Deepwater Horizon—exploded in the Gulf of Mexico, killing 11 people and causing the BP oil spill, which lasted three months and spilled 210 million gallons of oil over 68,000 square miles.
Transocean holds four method and apparatus patents related to a “dual-activity” offshore drilling rig with two hoists mounted to an oil derrick (U.S. Patent Nos. 6,047,781, 6,056,071, 6,068,069 and 6,085,851).
Seadrill Ltd. of London is also an offshore drilling company, which was originally based in Norway and employs 9,000 people worldwide, including in Africa, southeast Asia, northern Europe, and South America.
In January, Transocean sued Seadrill Americas Inc. of Houston and several affiliated entities, alleging that its four patents were infringed by three drillships: West Auriga and West Vela in the Gulf of Mexico, and West Neptune, which was still under construction.
In September, Seadrill filed a petition with the Patent and Trademark Office seeking inter partes review of the '781 patent, the '851 patent and the '069 patent, asserting invalidation of asserted claims. Seadrill then filed a motion in this case for stay pending any action by the Patent Trial and Appeal Board.
According to the court, the PTAB might not even decide whether to institute inter partes review of the patents before March.
In granting the motion for stay, the court referred to a three-factor test, one very similar to that employed in Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107 (N.D. Cal. 2006), and Semiconductor Energy Lab. Co., Ltd. v. Chimei Innolux Corp., No. SACV 12-21-JST JPRX, 2012 BL 415062 (C.D. Cal. Dec. 19, 2012).
• whether a stay will unduly prejudice or provide a tactical disadvantage to the non-moving party,
• whether a stay will simplify the issues in question, and
• whether the litigation is at an early stage.
Under the undue prejudice factor, the court rejected Transocean's claim that staying the matter pending PTAB action put it at a disadvantage because its main witnesses were in their 70s and 80s.
The court found no evidence in the record of ill health of the persons in question and, with respect to two of them, Transocean did not even say that they had been retained as experts in this case.
Furthermore, although Transocean had asserted that it was a direct competitor against Seadrill, there was no evidence “that the two parties compete for any of the same customers or contracts.”
Moreover, Transocean was not seeking injunctive relief against Seadrill but rather patent licensing fees, and thus any prejudice suffered from a delay of remedy could be compensable by money damages, the court said.
On the issue of whether PTAB resolution would simplify the issues before the court, the court said that they would—even if the patent claims are not invalidated by the PTAB.
Indeed, the court found reasons to believe that the PTAB would institute inter partes review, and that Seadrill would be successful in invalidating at least one patent claim.
Finally, the court said that this proceeding “is still in its early stages,” and the parties had “not yet incurred substantial burdens associated with extensive discovery, claim construction and other joint litigation tasks.”
The court's ruling was issued by Judge Gray H. Miller.
Transocean was represented by Norton Rose Fulbright US LLP, Houston. Seadrill was represented by Locke Lord LLP, Houston.
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