Legal Case Summary

Core Laboratories LP v. Spectrum Tracer Services


Date Argued: Wed Apr 06 2016
Case Number: 2015-1789
Docket Number: 3056459
Judges:Not available
Duration: 31 minutes
Court Name: Federal Circuit

Case Summary

**Case Summary: Core Laboratories LP v. Spectrum Tracer Services** **Docket Number:** 3056459 **Court:** [Specify Court if known, e.g., United States District Court] **Date:** [Specify Date of Ruling or Filing if known] **Parties:** - **Plaintiff:** Core Laboratories LP - **Defendant:** Spectrum Tracer Services **Background:** Core Laboratories LP, a provider of proprietary services and products for the oil and gas industry, filed a lawsuit against Spectrum Tracer Services, a competing company engaged in similar operations. The dispute arose from allegations of breach of contract, misappropriation of trade secrets, and unfair competition. Core Laboratories accused Spectrum Tracer of unlawfully utilizing proprietary information and trade secrets obtained during previous business dealings. **Legal Issues:** 1. Breach of Contract: Core Laboratories alleged that Spectrum Tracer violated non-disclosure agreements (NDAs) that were in place when the companies had dealings. 2. Misappropriation of Trade Secrets: The plaintiff claimed that Spectrum Tracer unlawfully acquired and used trade secrets that belonged to Core Laboratories, causing economic harm. 3. Unfair Competition: Core Laboratories argued that Spectrum Tracer's actions constituted unfair competition, damaging Core's business and reputation. **Arguments:** - **Plaintiff's Argument:** Core Laboratories presented evidence that their trade secrets were disclosed to Spectrum Tracer under conditions of confidentiality. The plaintiff argued that Spectrum Tracer's actions were not only unlawful but also indicated a pattern of unethical business practices. - **Defendant's Argument:** Spectrum Tracer denied the allegations, asserting that any information used was obtained through legitimate means and that they had not breached any contractual obligations. They argued that the claims made by Core Laboratories lacked sufficient evidence and were intended to stifle competition. **Outcome:** The court's decision and any rulings on motions, as well as subsequent appeals (if applicable), would indicate the resolution of the case. If a judgment was made in favor of Core Laboratories, it may have included damages awarded for lost profits, injunctions against Spectrum Tracer, or enforcement of non-disclosure agreements. Conversely, if the court ruled in favor of Spectrum Tracer, it may have dismissed Core's claims and potentially awarded costs or damages to the defendant. **Conclusion:** The case of Core Laboratories LP v. Spectrum Tracer Services highlights important issues surrounding trade secrets, contractual obligations, and competitive practices in the business environment. The final judgment would likely have significant implications for both parties and the industry at large, potentially setting a precedent for similar cases in the future. (Note: Specific details regarding the court’s ruling and any subsequent developments would require further research as of the date of this summary.)

Core Laboratories LP v. Spectrum Tracer Services


Oral Audio Transcript(Beta version)

of other more you I need my room. Core labs, the Spectrum Tracer Services. Mr. Johnson? That's correct. You can proceed. Thank you, Your Honor, and may it please the court. I'd like to focus on three grounds for reversal of the board here that can't reasonably be contested on the undisputed facts. They relate to the motivation to combine Henkeland-Dienes, the motivation to combine Henkeland-Hall, and the nexus issue on secondary considerations. First, the board aired and concluded, so those are all reviewed as factual questions. Those are reviewed as factual questions. That's correct, Your Honor. What's our standard? What's our standard? What's our standard of review on reviewing factual questions from the board? It's the substantial evidence standard, but of course there has to be evidence, and as I'll explain, there's undisputed record on these points. Beginning with the first point, the board aired and concluded that an ordinarily skilled artist in would have combined Dienes with Henkeland-Hall, where Dienes directly teaches away from that combination. And it does so in the planist possible terms. This is a quote, the injection rate should not be so high that the formation will fracture. In addition, why does this actually teach torts using it for fracking? Because it says if you use this in a method with a high pressure rate, which is what the other reference is talking about, then it will cause fracturing. I think it's talking about incidental fracturing or curing Your Honor, and I think it would be classic hindsight to say that an ordinarily skilled artist in which the undisputed definition of that here is three to five years of experience using tracers in hydraulic fracturing would read a statement like that that basically says, whatever you do, don't fracture and say that

. Well, that's coming from an area where you want to avoid fracturing. But if you're working from a reference where the whole point of it is to fracture and you go to this other thing about tracers and it says, don't use high pressure and you know you're using high pressure because it will fracture. I don't understand how that teaches away at all. Well, as I can distinguish this away from using high pressure if you don't want to fracture, but if you do, it seems perfectly consistent with it. I don't think that's a fair reading of the statement, but I would note that the expert testimony on this point of whether there's a motivation to combine is also undisputed. Dr. Wouli, a co-res expert spoke to this point. He said, there would be no motivation to combine the teaching of Henkel and Deans. That's found at page 1568 of the record paragraph 14. Dr. Jennings never denied his testimony about the vast differences between water flooding operations and hydraulic fracturing and they are considerable. And he was completely silent on the issue of the process. Well, the differences are considerable. Okay. And the caution in Deans is directed to the water flooding process and there's no suggestion in Deans that it wouldn't work for hydraulic fracturing, then how is that inconsistent? I think you have to read the reference as a whole, Your Honor, and a direct teaching like that where you're dealing with an expert who has this expertise, they're not going to combine those teachings and the expert on that particular point is in fact undisputed. The second basis I'd like to talk about for reversal of the board is that the examiner's use of hall as an obvious reference is a classic case of hindsight as well

. Hall discloses the use of tracers to monitor mud circulation in a completely different field that of drilling. This is before any production begins. Hydraulic fracturing doesn't occur until drilling is completely done. Again, it's undisputed that there are major differences between drilling and fracturing. And this court's teaching in clay, this court held there that teachings cannot be considered to be within the same field of endeavor merely because they relate to the petroleum industry. There you have facts where the court says we're not going to treat extraction of petroleum as the same field as storage of petroleum. Here we think the same principle applies to the idea of drilling versus production through hydraulic fracturing. In addition, isn't that the question of how of using tracers to determine how much I'm quoting of a given material is left in an oil well after injection of materials into the well? I'm sorry, you're on. I didn't quite follow. Where do you think that? Is it the 175 pet directed to addressing using tracers and then I quoted to determine how much of a given material is left in an oil well after injection of materials into the well? It's talking about the method of determining the extent of recovery of materials injected into an oil well. But you have to read that field of endeavor in light of the amended claim language. That's the teaching of this court in cases such as Figuio and Old Town, Canoe, that you have to read the specification in light of the amended claim language. The amended claim language is limited to hydraulic fracturing. It's limited to fluids for hydraulic fracturing. And so if you might take an example from a different context, if you had someone who came up with an invention and it was for a method of improving heating coils and the method had an application in the context of radiators and it had an application in the context of the posters. And on re-examination, the application is applied to radiators, was invalidated

. That would not mean that there might not have been an inventive insight as to toasters. And if the party had surrendered the claim language here, core surrendered, the embodiments related to things other than hydraulic fracturing. Obviously originally they thought they had an invention that had broader application. But the specification is very clear that you're dealing with different things here, not similar contexts. Returning to hall, the background section of the patent teaches, as we've discussed, that the field of the invention is determining the extent of recover materials injected in an oil well. Figuio constrains that hall itself is not about recovering injected material. Hall relates to monitoring with tracers the circulation of drilling mud in a well during drilling. And the principal purpose of that is to measure lag time. The secondary purposes of that also don't relate to the purposes of core invention. So even if hall were analogous art and we don't think it is, it addresses different problems. Measuring how long it takes the mud to circulate, mud dilution, mud movement between wells. And it's classic hindsight to say that it's obvious to repurpose the solution to a different problem. You said you don't think hall is analogous art. Correct. The board said the question is not whether the combined art is analogous to each other. But whether the combined references are each analogous to the applicants endeavor

. You agree with that statement? I agree that the comparison is between the prior art and the invention. The applicants endeavor. Correct. Is the applicants endeavor what is described in a particular claim? Or is the applicants endeavor what is described in the written description? Or is the applicants endeavor technically the specification, which is both the written description and all of the claims? How do we know what the applicants endeavor is? Big O-teaches. If you have to view the field of endeavor in light of quote, the claimed invention. So this case obviously involves the wrinkle where the claimed invention changed. And so you have a situation where the specification talks about broader applications. You mean by specification, are you now saying written description? Correct. Are now talking about applications that have been surrendered and that are really in a sense no longer relevant. So the specification has to be read, that's what Big O-teaches, in light of that amended claim language. And I think that's the logical. We still look at the written description while we're doing that. You still look at the written description, but I think two things are relevant on that point. The first is that if you do look at the written description, it's not like the written description says this is all one big happy thing wherever everything is similar. It talks at length about the differences and the expert testimony is undisputed on the differences between these sub parts of the oil and gas industry. But in addition, if you look at the language of section 112A, it talks about the specification

. The specification is designed to provide a written description that allows people to make and use the invention. But it's the claimed invention that's relevant. And so naturally, if the invention that's claimed changes, that has implications for how you look at the specification. And that we think, but it's still worth the bullet. You can't look beyond the fracking field for art, does it? Well, there's a two-pronged test obviously for one analogous artist. One is the field of endeavor and the other is whether it's reasonably pertinent. That's the teaching of clay and and clay and several other decisions. But because these different areas of art deal with different problems, they're not reasonably pertinent. We think it's hindsight to suggest that they are. Look at what Dean's is dealing with. It's dealing with a problem in the context of water flooding. And it's trying to determine the saturation point. Once the saturation point is determined under Dean's, it doesn't matter how much of the injected water is recovered. So if you look at the expert in the field, I'm sorry. I'm sorry. It's your expert

. It's Dr. Woolie? No, no. What's their standard? Oh, I'm sorry. What's the ordinarily skilled art? Yes, it's three to five years of experience. And this is undisputed with the use of tracers in hydraulic fracturing. Not about the oil and gas field as a whole. What's their training? I believe the record. I can double check this and speak to it on rebuttal. I believe the record speaks of a bachelor's. And I remember the part I remember specifically is three to five years of experience. Yeah, bachelor's in petroleum engineering. In some type of engineering, I can check that I can't recall specifically. But the definition is of three to five years of experience with tracers in fracturing. That wasn't my question. Well, I'm basically petroleum engineer, isn't it? I presume so, Your Honor. I can't recall what specific type of engineering it specifies

. But again, you're dealing with different problems. And so that remains a fact question, though, doesn't it? As to what is analogous or hard? It does, Your Honor. But the evidence that if you look carefully at the testimony of Dr. Woolie and the testimony of Dr. Jennings, you will see that on point after point, Dr. Jennings does not engage Dr. Woolie. That's true across the board as the claim construction. It's true as to motivation to combine if you don't want to reach, if you don't want to decide it on the basis of analogous art. And it's true on a level of ordinary skill. Even on the issue of analogous art, there's much that Dr. Woolie says that it's undisputed. If I may, I'd like to address one third point. And it relates to the issue of secondary consideration and the issue of a nexus. The board's sole reason for not considering Kors' evidence of secondary consideration is that it viewed Mr. Hampton's testimony as opinion testimony that had to be corroborated

. And that was just a fundamental legal error. The testimony that Mr. Hampton offered was based on his personal knowledge. He was Kors' former president. He gave undisputed testimony that Kors practices every step of the invention. Now, if you look at pages A16 to A17 of the board's decision, what does it say? It says corroboration is required because this is opinion testimony. It wasn't. That was just a fundamental legal error. And once you consider that, then the secondary consideration evidence is undisputed. I see that I'm in my rebuttal time unless there are further questions I'll reserve. Mr. Brown. Yes, thank you, Your Honor. Dennis Brown on behalf of the Appellate Inspectorate of Tracer Services. I think I would like to start with the in-revegeo that seem to be a main focus of the reply brief and as we come up with my own focus here. And I think it's important to point out that in-revegeo does exactly the opposite

. Can you just give me a second? I think what is the evidence on the motivation that come on, Henkel and Deans? Because it seems to me, Henkel gets you almost all the way. And Deans is just getting to the specific Tracer method. And Deans is, you know, indisputably not in fracturing, but it's in a drilling kill. Yes, yes. Deans are specific evidence that the board pointed to that somebody would, a ordinary skill would go to Deans to fill out the hole in Henkel. Yes, clearly Deans is in the field of endeavor. And of course, you look first of all to Henkel. And Henkel discloses a stage fracturing procedure. It's the very same procedure which is disclosed in the examples at the end of the core patent, the six-execute, reverses the order of the breakers. He wants the first stage in a break first. So that's really the only difference there. And then he teaches, and the example he has an example for in column 17 of the patent says, it is simple to verify the effectiveness of these procedures, whether you're successful and recovering all the fracturing fluid from the affirmation, which is what Henkel is all about. That's the title of his patent. He says, simply do a tracer study. So you're correct. You have all the steps of the claims

. You have a preparing a fraction fluid. You have the academic had mixing of tracers with all the stages. You have the injection of the material into the well. And then you have the recovery of the production fluid. And then you're monitoring that for the presence of the tracer. And at that point, you're simply in the lab. You've drawn your samples. It's a question of, okay, what kind of data do I get? And clearly, Henkel is teaching. You look for the tracers. And he's assuring us that this procedure will be successful. Those tracers follow the material. So you're going to detect them. Question is what do you do with them? Henkel provides repeated teaching suggestion and motivation, specifically stating that the goal of his procedure is to remove as much fracturing fluid as possible. And then he talks about effective fracturally length and effective. And saying he want the effective to be essentially the total. He want all of that material out of there. So he provides that motivation to do that. And then you look to these other references, such as Deans or Hall or what have you. And they all involve procedures where you're performing a tracer study for a downhill procedure. And you're recovering material. Deans doesn't just teach about, you know, dispersion or what have you Deans says that you do a tracer study. And he says the sole purpose of the tracer study is for material balance purposes. And the only thing Deans wants to know about that is how much fluid comes out. That's the whole reason the tracer study is being performed. He also goes to some length to distinguish the tracer study from the procedure which he is doing. He says it's not really material to the procedure. It's not part of the procedure. It's done with procedure. But the point he's making is you're injecting a fluid into the well. You want it to pick up in a mobile phase and carry some of that out of the well. Now the tracer isn't picking up that fluid. Just like any other tracer in this field, you want a small amount

. So he provides that motivation to do that. And then you look to these other references, such as Deans or Hall or what have you. And they all involve procedures where you're performing a tracer study for a downhill procedure. And you're recovering material. Deans doesn't just teach about, you know, dispersion or what have you Deans says that you do a tracer study. And he says the sole purpose of the tracer study is for material balance purposes. And the only thing Deans wants to know about that is how much fluid comes out. That's the whole reason the tracer study is being performed. He also goes to some length to distinguish the tracer study from the procedure which he is doing. He says it's not really material to the procedure. It's not part of the procedure. It's done with procedure. But the point he's making is you're injecting a fluid into the well. You want it to pick up in a mobile phase and carry some of that out of the well. Now the tracer isn't picking up that fluid. Just like any other tracer in this field, you want a small amount. You want it to not be interactive with anything else. You just want it to follow the material out. And so what Deans is saying is we're going to inject this fluid. And it's going to carry this stuff out. And then we're going to do a calculation. And part of that calculation is knowing how much of the injected fluid came out as well. Now Deans could assume that it all came out. But he says you know the best way to do it is to do a tracer study and just confirm that it all came out. So he teaches that hall specifically teaches that you plot the tracer concentration over time. And the area under that curve is going to give you the amount of tracer that is recovered. And he says that is important. Is that what you need from Hall is that specificity? Because I was a little confused about why you even needed to get to Hall. It seemed like Henkel and Deans pretty much covered it. They do. That's what the board said. And the board stopped at that point and didn't go on

. You want it to not be interactive with anything else. You just want it to follow the material out. And so what Deans is saying is we're going to inject this fluid. And it's going to carry this stuff out. And then we're going to do a calculation. And part of that calculation is knowing how much of the injected fluid came out as well. Now Deans could assume that it all came out. But he says you know the best way to do it is to do a tracer study and just confirm that it all came out. So he teaches that hall specifically teaches that you plot the tracer concentration over time. And the area under that curve is going to give you the amount of tracer that is recovered. And he says that is important. Is that what you need from Hall is that specificity? Because I was a little confused about why you even needed to get to Hall. It seemed like Henkel and Deans pretty much covered it. They do. That's what the board said. And the board stopped at that point and didn't go on. Hall is cited for one minor dependent claim in this case. But you know, concerning in Ray Vigio. At first we were focused on Clay and we pointed out for the board that Clay twice. You know, we're not talking about procedure where one is down a hole and then the other is some procedure for filling the void volume in a tank as was the issue in Clay. Clay twice cites the wood case as being authoritative. And there the court looked to the field of endeavor as described in the field of the invention at the beginning of the patent. And we pointed out that all of these references, that the field of endeavor in the core patents is the present invention particularly relates to a method for determining the extent of recovery of materials injected into an oil well during oil and gas exploration and production using chemical crazy. All these references fall right within that description. And then the problem that is being addressed is in the core patents is that it would be desirable in the art of oil and gas production to be able to determine how much of a given material is left in an oil well after drilling, fracturing, or any other operation requiring the injection of materials into an oil well. For under the definition of the problem itself, you see the relevance of drilling or other procedures. But these references fall within that scope under in-ray wood. But then core looks to in-ray beigio and attempts to confine the scope of analysis are to essentially be only anticipatory references which involve the addition of craters to fracturing fluids. But beigio also favorably cited the wood case. Here's what Beigio said. In favorably citing what Beigio states pages 1323 to 25, the test for analogous art requires the PTO to determine the appropriate field of endeavor by reference to the explanations of the invention subject matter in the patent application, including the embodiments, function, and structure of the client invention. See wood and the slides there

. Hall is cited for one minor dependent claim in this case. But you know, concerning in Ray Vigio. At first we were focused on Clay and we pointed out for the board that Clay twice. You know, we're not talking about procedure where one is down a hole and then the other is some procedure for filling the void volume in a tank as was the issue in Clay. Clay twice cites the wood case as being authoritative. And there the court looked to the field of endeavor as described in the field of the invention at the beginning of the patent. And we pointed out that all of these references, that the field of endeavor in the core patents is the present invention particularly relates to a method for determining the extent of recovery of materials injected into an oil well during oil and gas exploration and production using chemical crazy. All these references fall right within that description. And then the problem that is being addressed is in the core patents is that it would be desirable in the art of oil and gas production to be able to determine how much of a given material is left in an oil well after drilling, fracturing, or any other operation requiring the injection of materials into an oil well. For under the definition of the problem itself, you see the relevance of drilling or other procedures. But these references fall within that scope under in-ray wood. But then core looks to in-ray beigio and attempts to confine the scope of analysis are to essentially be only anticipatory references which involve the addition of craters to fracturing fluids. But beigio also favorably cited the wood case. Here's what Beigio said. In favorably citing what Beigio states pages 1323 to 25, the test for analogous art requires the PTO to determine the appropriate field of endeavor by reference to the explanations of the invention subject matter in the patent application, including the embodiments, function, and structure of the client invention. See wood and the slides there. And then the court has an added parenthetical comment regarding wood which is very interesting. It actually states that in wood the field of endeavor rather than being expansive was confined to the scope explicitly specified in the background of the invention. Okay, core latches on to that language, the structure of the client invention, in attempts to live at the scope as we have said. However, this is completely the opposite of what occurred in Beigio. The Beigio patent was about a hairbrush. And that's all it was about. And you look at the claims of that patent and you say repeated limitations saying this is a brush for hair. So in rain wood perhaps it's just a hairbrush. But in Beigio they say now we're going to look to the structure of the client invention and see if other structures might be applicable as well and by gully they add toothbrushes. So that is just exactly the opposite effect is what we see here. And in this case, you know regardless of whether you're with the majority or the minority in In rain Beigio there is nothing about the amended claims of the core patents which takes them out of the field of endeavor or the identification of the problem. The amended claims are still squarely within the definition of the field of endeavor in the patent application or in the core patents. I don't think the amendments to the claims then change the analysis. No the language they're still literally right within that definition. Also you know determining you know recovery after drilling, fracturing or any other operation are identified as simply being different embodiments of the same invention in the core patents. They're literally listed together

. And then the court has an added parenthetical comment regarding wood which is very interesting. It actually states that in wood the field of endeavor rather than being expansive was confined to the scope explicitly specified in the background of the invention. Okay, core latches on to that language, the structure of the client invention, in attempts to live at the scope as we have said. However, this is completely the opposite of what occurred in Beigio. The Beigio patent was about a hairbrush. And that's all it was about. And you look at the claims of that patent and you say repeated limitations saying this is a brush for hair. So in rain wood perhaps it's just a hairbrush. But in Beigio they say now we're going to look to the structure of the client invention and see if other structures might be applicable as well and by gully they add toothbrushes. So that is just exactly the opposite effect is what we see here. And in this case, you know regardless of whether you're with the majority or the minority in In rain Beigio there is nothing about the amended claims of the core patents which takes them out of the field of endeavor or the identification of the problem. The amended claims are still squarely within the definition of the field of endeavor in the patent application or in the core patents. I don't think the amendments to the claims then change the analysis. No the language they're still literally right within that definition. Also you know determining you know recovery after drilling, fracturing or any other operation are identified as simply being different embodiments of the same invention in the core patents. They're literally listed together. The Tracer study that you use, the procedures used, they're all the same regardless of the procedure. There is no there are no unexpected or surprising results identified in the core patents regarding fracturing versus the other methods. The patents as we know from the title are about a method for determining the extent of recovery materials injected into oil wells and strangely if we accepted core's arguments that would logically mean that the original dependent climb 8 which had this restriction the material is a material used for fracturing. The original climb 8 of core patents would not be in the same field of endeavor as climb 1 from which they depended. I'm going to make regarding core's kind of contention essentially that apparently the board is required to take it face value testimony from declarations. I would just note that that is also contrary to the previous decisions of this court. Two good examples the Demaco Court, the Van Langstorff Licensing K-851F2D-101392, also Wires V. Masterlock-6. Where are we're aware of our standard of work? Okay well you know that you said in our case law clearly establishes that the patentee must establish a nexus between the evidence of commercial success and the patent invention. And this court's decision in in Ray Academy of Science, the Tech Center was particularly instructive. There you stated that the board has broad discretion as to wait to give declarations offered in the course of prosecution citing your or quoting actually from your previous V. Landervin-Garner case you said according little weight to broad concludes the restatements in expert testimony before the board that it determined were unsupported by corroborating the references was within the discretion of the trial or fact to get each item of evidence such way as it feels appropriate. And then you also said the board is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting the opinions expressed in the declarations. And here Mr. Hampton submitted brochure which purportedly described the services but did not show that or did not confirm that the actual commercial procedure which for provides the spectra-cam service includes the concluding step of the claims which is calculating the amount of material recovered. Mr

. The Tracer study that you use, the procedures used, they're all the same regardless of the procedure. There is no there are no unexpected or surprising results identified in the core patents regarding fracturing versus the other methods. The patents as we know from the title are about a method for determining the extent of recovery materials injected into oil wells and strangely if we accepted core's arguments that would logically mean that the original dependent climb 8 which had this restriction the material is a material used for fracturing. The original climb 8 of core patents would not be in the same field of endeavor as climb 1 from which they depended. I'm going to make regarding core's kind of contention essentially that apparently the board is required to take it face value testimony from declarations. I would just note that that is also contrary to the previous decisions of this court. Two good examples the Demaco Court, the Van Langstorff Licensing K-851F2D-101392, also Wires V. Masterlock-6. Where are we're aware of our standard of work? Okay well you know that you said in our case law clearly establishes that the patentee must establish a nexus between the evidence of commercial success and the patent invention. And this court's decision in in Ray Academy of Science, the Tech Center was particularly instructive. There you stated that the board has broad discretion as to wait to give declarations offered in the course of prosecution citing your or quoting actually from your previous V. Landervin-Garner case you said according little weight to broad concludes the restatements in expert testimony before the board that it determined were unsupported by corroborating the references was within the discretion of the trial or fact to get each item of evidence such way as it feels appropriate. And then you also said the board is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting the opinions expressed in the declarations. And here Mr. Hampton submitted brochure which purportedly described the services but did not show that or did not confirm that the actual commercial procedure which for provides the spectra-cam service includes the concluding step of the claims which is calculating the amount of material recovered. Mr. Hampton tried again. He submitted a supplementary declaration and he submitted what is called an initial flow report. And he admitted that this is the report which they typically give to their customers. And in that report you see that all they did was plot the concentrations of the tracer over time. There was never any calculation of the amount recovered. Mr. Hampton testified regarding that report at trial, pointed to the plot of tracer concentrations over time. And as has now been done in briefing here, the only thing the Court has been able to point to is the fact that in the particular chart that they show two curves show zero return. And two stages actually the fracturing procedure is a zero concentration. The others show actual values. So it is of course contention somehow that those two stages where there was no return are a calculation of the amount of material recovered. We obviously don't see that. Those are not calculations. Those are just data points. And the fallacy of that is seen as we pointed out in the fact that they have indicated that spectrum has copied their procedure and pointed to a chart that spectrum produces where all of the stages of the fracturing procedure were producing. So even in that case none of them were zero

. Hampton tried again. He submitted a supplementary declaration and he submitted what is called an initial flow report. And he admitted that this is the report which they typically give to their customers. And in that report you see that all they did was plot the concentrations of the tracer over time. There was never any calculation of the amount recovered. Mr. Hampton testified regarding that report at trial, pointed to the plot of tracer concentrations over time. And as has now been done in briefing here, the only thing the Court has been able to point to is the fact that in the particular chart that they show two curves show zero return. And two stages actually the fracturing procedure is a zero concentration. The others show actual values. So it is of course contention somehow that those two stages where there was no return are a calculation of the amount of material recovered. We obviously don't see that. Those are not calculations. Those are just data points. And the fallacy of that is seen as we pointed out in the fact that they have indicated that spectrum has copied their procedure and pointed to a chart that spectrum produces where all of the stages of the fracturing procedure were producing. So even in that case none of them were zero. Here again we're at a loss under their own definition. How anything there could be a calculation of the amount of material recovered. Well if the police the court I will conclude. Thank you. That's fine. That pleases us. In our purity. Chief Justice Roberts said he never read a brief and said I wish they would have been longer. I would like to do a few quick points and then I want to speak to Judge Hughes question about Henkel because I think it is very important. In terms of the background of the post it is somebody with an engineering degree unspecified you will find it at page 1584 of the record. But I would know that that is irrelevant in light of in reclay which says where you are dealing with these different fields of endeavors and not particular the same particular problem the post wouldn't pick it up. Second on Nexus. We're talking about fact testimony here. Mr. Hampton testified from firsthand knowledge that tracer concentrations are used to determine the amounts of fluid that are flowing back page 1018 of the record. Mr

. Here again we're at a loss under their own definition. How anything there could be a calculation of the amount of material recovered. Well if the police the court I will conclude. Thank you. That's fine. That pleases us. In our purity. Chief Justice Roberts said he never read a brief and said I wish they would have been longer. I would like to do a few quick points and then I want to speak to Judge Hughes question about Henkel because I think it is very important. In terms of the background of the post it is somebody with an engineering degree unspecified you will find it at page 1584 of the record. But I would know that that is irrelevant in light of in reclay which says where you are dealing with these different fields of endeavors and not particular the same particular problem the post wouldn't pick it up. Second on Nexus. We're talking about fact testimony here. Mr. Hampton testified from firsthand knowledge that tracer concentrations are used to determine the amounts of fluid that are flowing back page 1018 of the record. Mr. Ferrell the founder of spectrum who spent 15 years at court and testified to intimate familiarity with court's methods didn't dispute this. We would say no corroboration is necessary but the brochure does provide it if you need it. Third on wood. Wood did not involve a claim amendment. If you look at big yo. Big yo is not just a one way ratchet. It just doesn't suggest that if you adopt the broader claim construction the field of endeavor might be broader. If you have a narrower claim construction it might be narrower. Now on Judge Hughes comment that Henkel gets you almost all the way I want to speak to that because everything that Henkel supposedly should have provided them motive to combine existed before Henkel. Deans is two decades before Henkel. Hall is a decade before Henkel. The idea that you want to maximize fracturing fluid cleanup. That's been known since the beginning of hydraulic fracturing we cite the records and page 61 of our opening brief. There were millions of dollars to be made in solving this problem. Henkel doesn't disclose the combination. Why? Because Henkel is focused on a very different problem and I think it's classic hindsight to say that in light of Henkel we should have seen it

. Ferrell the founder of spectrum who spent 15 years at court and testified to intimate familiarity with court's methods didn't dispute this. We would say no corroboration is necessary but the brochure does provide it if you need it. Third on wood. Wood did not involve a claim amendment. If you look at big yo. Big yo is not just a one way ratchet. It just doesn't suggest that if you adopt the broader claim construction the field of endeavor might be broader. If you have a narrower claim construction it might be narrower. Now on Judge Hughes comment that Henkel gets you almost all the way I want to speak to that because everything that Henkel supposedly should have provided them motive to combine existed before Henkel. Deans is two decades before Henkel. Hall is a decade before Henkel. The idea that you want to maximize fracturing fluid cleanup. That's been known since the beginning of hydraulic fracturing we cite the records and page 61 of our opening brief. There were millions of dollars to be made in solving this problem. Henkel doesn't disclose the combination. Why? Because Henkel is focused on a very different problem and I think it's classic hindsight to say that in light of Henkel we should have seen it. Henkel is determining effectiveness in whether the fluid at the end of the fracture returns first. If 10% of the fluid comes back under Henkel and is the 10% at the tip Henkel declares success and goes home. Coors innovation was to find one more sentence. That all of the fluid could be recovered by this inventive means. We thank the coordinators to Court to reverse.

of other more you I need my room. Core labs, the Spectrum Tracer Services. Mr. Johnson? That's correct. You can proceed. Thank you, Your Honor, and may it please the court. I'd like to focus on three grounds for reversal of the board here that can't reasonably be contested on the undisputed facts. They relate to the motivation to combine Henkeland-Dienes, the motivation to combine Henkeland-Hall, and the nexus issue on secondary considerations. First, the board aired and concluded, so those are all reviewed as factual questions. Those are reviewed as factual questions. That's correct, Your Honor. What's our standard? What's our standard? What's our standard of review on reviewing factual questions from the board? It's the substantial evidence standard, but of course there has to be evidence, and as I'll explain, there's undisputed record on these points. Beginning with the first point, the board aired and concluded that an ordinarily skilled artist in would have combined Dienes with Henkeland-Hall, where Dienes directly teaches away from that combination. And it does so in the planist possible terms. This is a quote, the injection rate should not be so high that the formation will fracture. In addition, why does this actually teach torts using it for fracking? Because it says if you use this in a method with a high pressure rate, which is what the other reference is talking about, then it will cause fracturing. I think it's talking about incidental fracturing or curing Your Honor, and I think it would be classic hindsight to say that an ordinarily skilled artist in which the undisputed definition of that here is three to five years of experience using tracers in hydraulic fracturing would read a statement like that that basically says, whatever you do, don't fracture and say that. Well, that's coming from an area where you want to avoid fracturing. But if you're working from a reference where the whole point of it is to fracture and you go to this other thing about tracers and it says, don't use high pressure and you know you're using high pressure because it will fracture. I don't understand how that teaches away at all. Well, as I can distinguish this away from using high pressure if you don't want to fracture, but if you do, it seems perfectly consistent with it. I don't think that's a fair reading of the statement, but I would note that the expert testimony on this point of whether there's a motivation to combine is also undisputed. Dr. Wouli, a co-res expert spoke to this point. He said, there would be no motivation to combine the teaching of Henkel and Deans. That's found at page 1568 of the record paragraph 14. Dr. Jennings never denied his testimony about the vast differences between water flooding operations and hydraulic fracturing and they are considerable. And he was completely silent on the issue of the process. Well, the differences are considerable. Okay. And the caution in Deans is directed to the water flooding process and there's no suggestion in Deans that it wouldn't work for hydraulic fracturing, then how is that inconsistent? I think you have to read the reference as a whole, Your Honor, and a direct teaching like that where you're dealing with an expert who has this expertise, they're not going to combine those teachings and the expert on that particular point is in fact undisputed. The second basis I'd like to talk about for reversal of the board is that the examiner's use of hall as an obvious reference is a classic case of hindsight as well. Hall discloses the use of tracers to monitor mud circulation in a completely different field that of drilling. This is before any production begins. Hydraulic fracturing doesn't occur until drilling is completely done. Again, it's undisputed that there are major differences between drilling and fracturing. And this court's teaching in clay, this court held there that teachings cannot be considered to be within the same field of endeavor merely because they relate to the petroleum industry. There you have facts where the court says we're not going to treat extraction of petroleum as the same field as storage of petroleum. Here we think the same principle applies to the idea of drilling versus production through hydraulic fracturing. In addition, isn't that the question of how of using tracers to determine how much I'm quoting of a given material is left in an oil well after injection of materials into the well? I'm sorry, you're on. I didn't quite follow. Where do you think that? Is it the 175 pet directed to addressing using tracers and then I quoted to determine how much of a given material is left in an oil well after injection of materials into the well? It's talking about the method of determining the extent of recovery of materials injected into an oil well. But you have to read that field of endeavor in light of the amended claim language. That's the teaching of this court in cases such as Figuio and Old Town, Canoe, that you have to read the specification in light of the amended claim language. The amended claim language is limited to hydraulic fracturing. It's limited to fluids for hydraulic fracturing. And so if you might take an example from a different context, if you had someone who came up with an invention and it was for a method of improving heating coils and the method had an application in the context of radiators and it had an application in the context of the posters. And on re-examination, the application is applied to radiators, was invalidated. That would not mean that there might not have been an inventive insight as to toasters. And if the party had surrendered the claim language here, core surrendered, the embodiments related to things other than hydraulic fracturing. Obviously originally they thought they had an invention that had broader application. But the specification is very clear that you're dealing with different things here, not similar contexts. Returning to hall, the background section of the patent teaches, as we've discussed, that the field of the invention is determining the extent of recover materials injected in an oil well. Figuio constrains that hall itself is not about recovering injected material. Hall relates to monitoring with tracers the circulation of drilling mud in a well during drilling. And the principal purpose of that is to measure lag time. The secondary purposes of that also don't relate to the purposes of core invention. So even if hall were analogous art and we don't think it is, it addresses different problems. Measuring how long it takes the mud to circulate, mud dilution, mud movement between wells. And it's classic hindsight to say that it's obvious to repurpose the solution to a different problem. You said you don't think hall is analogous art. Correct. The board said the question is not whether the combined art is analogous to each other. But whether the combined references are each analogous to the applicants endeavor. You agree with that statement? I agree that the comparison is between the prior art and the invention. The applicants endeavor. Correct. Is the applicants endeavor what is described in a particular claim? Or is the applicants endeavor what is described in the written description? Or is the applicants endeavor technically the specification, which is both the written description and all of the claims? How do we know what the applicants endeavor is? Big O-teaches. If you have to view the field of endeavor in light of quote, the claimed invention. So this case obviously involves the wrinkle where the claimed invention changed. And so you have a situation where the specification talks about broader applications. You mean by specification, are you now saying written description? Correct. Are now talking about applications that have been surrendered and that are really in a sense no longer relevant. So the specification has to be read, that's what Big O-teaches, in light of that amended claim language. And I think that's the logical. We still look at the written description while we're doing that. You still look at the written description, but I think two things are relevant on that point. The first is that if you do look at the written description, it's not like the written description says this is all one big happy thing wherever everything is similar. It talks at length about the differences and the expert testimony is undisputed on the differences between these sub parts of the oil and gas industry. But in addition, if you look at the language of section 112A, it talks about the specification. The specification is designed to provide a written description that allows people to make and use the invention. But it's the claimed invention that's relevant. And so naturally, if the invention that's claimed changes, that has implications for how you look at the specification. And that we think, but it's still worth the bullet. You can't look beyond the fracking field for art, does it? Well, there's a two-pronged test obviously for one analogous artist. One is the field of endeavor and the other is whether it's reasonably pertinent. That's the teaching of clay and and clay and several other decisions. But because these different areas of art deal with different problems, they're not reasonably pertinent. We think it's hindsight to suggest that they are. Look at what Dean's is dealing with. It's dealing with a problem in the context of water flooding. And it's trying to determine the saturation point. Once the saturation point is determined under Dean's, it doesn't matter how much of the injected water is recovered. So if you look at the expert in the field, I'm sorry. I'm sorry. It's your expert. It's Dr. Woolie? No, no. What's their standard? Oh, I'm sorry. What's the ordinarily skilled art? Yes, it's three to five years of experience. And this is undisputed with the use of tracers in hydraulic fracturing. Not about the oil and gas field as a whole. What's their training? I believe the record. I can double check this and speak to it on rebuttal. I believe the record speaks of a bachelor's. And I remember the part I remember specifically is three to five years of experience. Yeah, bachelor's in petroleum engineering. In some type of engineering, I can check that I can't recall specifically. But the definition is of three to five years of experience with tracers in fracturing. That wasn't my question. Well, I'm basically petroleum engineer, isn't it? I presume so, Your Honor. I can't recall what specific type of engineering it specifies. But again, you're dealing with different problems. And so that remains a fact question, though, doesn't it? As to what is analogous or hard? It does, Your Honor. But the evidence that if you look carefully at the testimony of Dr. Woolie and the testimony of Dr. Jennings, you will see that on point after point, Dr. Jennings does not engage Dr. Woolie. That's true across the board as the claim construction. It's true as to motivation to combine if you don't want to reach, if you don't want to decide it on the basis of analogous art. And it's true on a level of ordinary skill. Even on the issue of analogous art, there's much that Dr. Woolie says that it's undisputed. If I may, I'd like to address one third point. And it relates to the issue of secondary consideration and the issue of a nexus. The board's sole reason for not considering Kors' evidence of secondary consideration is that it viewed Mr. Hampton's testimony as opinion testimony that had to be corroborated. And that was just a fundamental legal error. The testimony that Mr. Hampton offered was based on his personal knowledge. He was Kors' former president. He gave undisputed testimony that Kors practices every step of the invention. Now, if you look at pages A16 to A17 of the board's decision, what does it say? It says corroboration is required because this is opinion testimony. It wasn't. That was just a fundamental legal error. And once you consider that, then the secondary consideration evidence is undisputed. I see that I'm in my rebuttal time unless there are further questions I'll reserve. Mr. Brown. Yes, thank you, Your Honor. Dennis Brown on behalf of the Appellate Inspectorate of Tracer Services. I think I would like to start with the in-revegeo that seem to be a main focus of the reply brief and as we come up with my own focus here. And I think it's important to point out that in-revegeo does exactly the opposite. Can you just give me a second? I think what is the evidence on the motivation that come on, Henkel and Deans? Because it seems to me, Henkel gets you almost all the way. And Deans is just getting to the specific Tracer method. And Deans is, you know, indisputably not in fracturing, but it's in a drilling kill. Yes, yes. Deans are specific evidence that the board pointed to that somebody would, a ordinary skill would go to Deans to fill out the hole in Henkel. Yes, clearly Deans is in the field of endeavor. And of course, you look first of all to Henkel. And Henkel discloses a stage fracturing procedure. It's the very same procedure which is disclosed in the examples at the end of the core patent, the six-execute, reverses the order of the breakers. He wants the first stage in a break first. So that's really the only difference there. And then he teaches, and the example he has an example for in column 17 of the patent says, it is simple to verify the effectiveness of these procedures, whether you're successful and recovering all the fracturing fluid from the affirmation, which is what Henkel is all about. That's the title of his patent. He says, simply do a tracer study. So you're correct. You have all the steps of the claims. You have a preparing a fraction fluid. You have the academic had mixing of tracers with all the stages. You have the injection of the material into the well. And then you have the recovery of the production fluid. And then you're monitoring that for the presence of the tracer. And at that point, you're simply in the lab. You've drawn your samples. It's a question of, okay, what kind of data do I get? And clearly, Henkel is teaching. You look for the tracers. And he's assuring us that this procedure will be successful. Those tracers follow the material. So you're going to detect them. Question is what do you do with them? Henkel provides repeated teaching suggestion and motivation, specifically stating that the goal of his procedure is to remove as much fracturing fluid as possible. And then he talks about effective fracturally length and effective. And saying he want the effective to be essentially the total. He want all of that material out of there. So he provides that motivation to do that. And then you look to these other references, such as Deans or Hall or what have you. And they all involve procedures where you're performing a tracer study for a downhill procedure. And you're recovering material. Deans doesn't just teach about, you know, dispersion or what have you Deans says that you do a tracer study. And he says the sole purpose of the tracer study is for material balance purposes. And the only thing Deans wants to know about that is how much fluid comes out. That's the whole reason the tracer study is being performed. He also goes to some length to distinguish the tracer study from the procedure which he is doing. He says it's not really material to the procedure. It's not part of the procedure. It's done with procedure. But the point he's making is you're injecting a fluid into the well. You want it to pick up in a mobile phase and carry some of that out of the well. Now the tracer isn't picking up that fluid. Just like any other tracer in this field, you want a small amount. You want it to not be interactive with anything else. You just want it to follow the material out. And so what Deans is saying is we're going to inject this fluid. And it's going to carry this stuff out. And then we're going to do a calculation. And part of that calculation is knowing how much of the injected fluid came out as well. Now Deans could assume that it all came out. But he says you know the best way to do it is to do a tracer study and just confirm that it all came out. So he teaches that hall specifically teaches that you plot the tracer concentration over time. And the area under that curve is going to give you the amount of tracer that is recovered. And he says that is important. Is that what you need from Hall is that specificity? Because I was a little confused about why you even needed to get to Hall. It seemed like Henkel and Deans pretty much covered it. They do. That's what the board said. And the board stopped at that point and didn't go on. Hall is cited for one minor dependent claim in this case. But you know, concerning in Ray Vigio. At first we were focused on Clay and we pointed out for the board that Clay twice. You know, we're not talking about procedure where one is down a hole and then the other is some procedure for filling the void volume in a tank as was the issue in Clay. Clay twice cites the wood case as being authoritative. And there the court looked to the field of endeavor as described in the field of the invention at the beginning of the patent. And we pointed out that all of these references, that the field of endeavor in the core patents is the present invention particularly relates to a method for determining the extent of recovery of materials injected into an oil well during oil and gas exploration and production using chemical crazy. All these references fall right within that description. And then the problem that is being addressed is in the core patents is that it would be desirable in the art of oil and gas production to be able to determine how much of a given material is left in an oil well after drilling, fracturing, or any other operation requiring the injection of materials into an oil well. For under the definition of the problem itself, you see the relevance of drilling or other procedures. But these references fall within that scope under in-ray wood. But then core looks to in-ray beigio and attempts to confine the scope of analysis are to essentially be only anticipatory references which involve the addition of craters to fracturing fluids. But beigio also favorably cited the wood case. Here's what Beigio said. In favorably citing what Beigio states pages 1323 to 25, the test for analogous art requires the PTO to determine the appropriate field of endeavor by reference to the explanations of the invention subject matter in the patent application, including the embodiments, function, and structure of the client invention. See wood and the slides there. And then the court has an added parenthetical comment regarding wood which is very interesting. It actually states that in wood the field of endeavor rather than being expansive was confined to the scope explicitly specified in the background of the invention. Okay, core latches on to that language, the structure of the client invention, in attempts to live at the scope as we have said. However, this is completely the opposite of what occurred in Beigio. The Beigio patent was about a hairbrush. And that's all it was about. And you look at the claims of that patent and you say repeated limitations saying this is a brush for hair. So in rain wood perhaps it's just a hairbrush. But in Beigio they say now we're going to look to the structure of the client invention and see if other structures might be applicable as well and by gully they add toothbrushes. So that is just exactly the opposite effect is what we see here. And in this case, you know regardless of whether you're with the majority or the minority in In rain Beigio there is nothing about the amended claims of the core patents which takes them out of the field of endeavor or the identification of the problem. The amended claims are still squarely within the definition of the field of endeavor in the patent application or in the core patents. I don't think the amendments to the claims then change the analysis. No the language they're still literally right within that definition. Also you know determining you know recovery after drilling, fracturing or any other operation are identified as simply being different embodiments of the same invention in the core patents. They're literally listed together. The Tracer study that you use, the procedures used, they're all the same regardless of the procedure. There is no there are no unexpected or surprising results identified in the core patents regarding fracturing versus the other methods. The patents as we know from the title are about a method for determining the extent of recovery materials injected into oil wells and strangely if we accepted core's arguments that would logically mean that the original dependent climb 8 which had this restriction the material is a material used for fracturing. The original climb 8 of core patents would not be in the same field of endeavor as climb 1 from which they depended. I'm going to make regarding core's kind of contention essentially that apparently the board is required to take it face value testimony from declarations. I would just note that that is also contrary to the previous decisions of this court. Two good examples the Demaco Court, the Van Langstorff Licensing K-851F2D-101392, also Wires V. Masterlock-6. Where are we're aware of our standard of work? Okay well you know that you said in our case law clearly establishes that the patentee must establish a nexus between the evidence of commercial success and the patent invention. And this court's decision in in Ray Academy of Science, the Tech Center was particularly instructive. There you stated that the board has broad discretion as to wait to give declarations offered in the course of prosecution citing your or quoting actually from your previous V. Landervin-Garner case you said according little weight to broad concludes the restatements in expert testimony before the board that it determined were unsupported by corroborating the references was within the discretion of the trial or fact to get each item of evidence such way as it feels appropriate. And then you also said the board is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting the opinions expressed in the declarations. And here Mr. Hampton submitted brochure which purportedly described the services but did not show that or did not confirm that the actual commercial procedure which for provides the spectra-cam service includes the concluding step of the claims which is calculating the amount of material recovered. Mr. Hampton tried again. He submitted a supplementary declaration and he submitted what is called an initial flow report. And he admitted that this is the report which they typically give to their customers. And in that report you see that all they did was plot the concentrations of the tracer over time. There was never any calculation of the amount recovered. Mr. Hampton testified regarding that report at trial, pointed to the plot of tracer concentrations over time. And as has now been done in briefing here, the only thing the Court has been able to point to is the fact that in the particular chart that they show two curves show zero return. And two stages actually the fracturing procedure is a zero concentration. The others show actual values. So it is of course contention somehow that those two stages where there was no return are a calculation of the amount of material recovered. We obviously don't see that. Those are not calculations. Those are just data points. And the fallacy of that is seen as we pointed out in the fact that they have indicated that spectrum has copied their procedure and pointed to a chart that spectrum produces where all of the stages of the fracturing procedure were producing. So even in that case none of them were zero. Here again we're at a loss under their own definition. How anything there could be a calculation of the amount of material recovered. Well if the police the court I will conclude. Thank you. That's fine. That pleases us. In our purity. Chief Justice Roberts said he never read a brief and said I wish they would have been longer. I would like to do a few quick points and then I want to speak to Judge Hughes question about Henkel because I think it is very important. In terms of the background of the post it is somebody with an engineering degree unspecified you will find it at page 1584 of the record. But I would know that that is irrelevant in light of in reclay which says where you are dealing with these different fields of endeavors and not particular the same particular problem the post wouldn't pick it up. Second on Nexus. We're talking about fact testimony here. Mr. Hampton testified from firsthand knowledge that tracer concentrations are used to determine the amounts of fluid that are flowing back page 1018 of the record. Mr. Ferrell the founder of spectrum who spent 15 years at court and testified to intimate familiarity with court's methods didn't dispute this. We would say no corroboration is necessary but the brochure does provide it if you need it. Third on wood. Wood did not involve a claim amendment. If you look at big yo. Big yo is not just a one way ratchet. It just doesn't suggest that if you adopt the broader claim construction the field of endeavor might be broader. If you have a narrower claim construction it might be narrower. Now on Judge Hughes comment that Henkel gets you almost all the way I want to speak to that because everything that Henkel supposedly should have provided them motive to combine existed before Henkel. Deans is two decades before Henkel. Hall is a decade before Henkel. The idea that you want to maximize fracturing fluid cleanup. That's been known since the beginning of hydraulic fracturing we cite the records and page 61 of our opening brief. There were millions of dollars to be made in solving this problem. Henkel doesn't disclose the combination. Why? Because Henkel is focused on a very different problem and I think it's classic hindsight to say that in light of Henkel we should have seen it. Henkel is determining effectiveness in whether the fluid at the end of the fracture returns first. If 10% of the fluid comes back under Henkel and is the 10% at the tip Henkel declares success and goes home. Coors innovation was to find one more sentence. That all of the fluid could be recovered by this inventive means. We thank the coordinators to Court to reverse