Oil and gas companies routinely pay tens of millions of dollars for high-resolution images of hidden crude reservoirs under the ocean floor. As a result, competition is fierce among the marine seismic surveying companies that specialize producing such images, and they're constantly trying to improve the accuracy of their surveys. A jury has now found that one company, Ion Geophysical Corp., tried to take shortcuts in its R&D and willfully infringed four patents belong to rival WesternGeco Ltd.
A federal jury in Houston returned a verdict on Thursday that Ion willfully infringed four patents relating to geological analysis owned by the WesternGeco, a unit of Schlumberger Limited, the world's largest oilfield services company. The jurors awarded WesternGeco $93.4 million in lost profits and $12.5 million in reasonable royalties. The verdict is a resounding win for Schlumberger's lawyers at Kirkland & Ellis, who were led by Washington D.C. partner Gregg LoCascio. Lee Kaplan of Smyser Kaplan & Veselka primarily handled the damages part of the case.
WesternGeco hired Kirkland to bring an infringement complaint against Ion in 2009. Ion doesn't perform seismic surveys, but it manufactures equipment for companies that do. The case focuses on an ION product called DigiFIN, which helps keep seismic imaging machines in place as they get towed around the ocean floor by exploration vessels. WesternGeco claimed that DigiFIN is an unlawful copy of its patented steering technology, and that Ion's infringement caused it to lose out on surveying contracts. WesternGeco ended up adding one of ION's customers, rival Fugro-Geateam Inc., to its complaint in 2011.
ION's lawyers at Porter Hedges and Fugro's lawyers at Arnold & Knobloch moved for summary judgment in March, arguing that there's no evidence that ION or any of its customers used WesternGeco's patented devices and methods within U.S. territory. U.S. District Judge Keith Ellison in Houston wasn't convinced, setting the stage for a four-week jury trial that kicked off July 23.
Fugro opted to settle on Aug. 13. If Thursday's verdict holds up on appeal, ION may wish it made a deal to end the case as well. Publicly, the company is taking an upbeat tone. "As we know after winning our patent infringement case in the past, the jury verdict is only the first phase in this legal battle," said ION CEO Brian Hanson in a statement. "We intend to challenge the verdict and the damages amount in the trial court and, if necessary, through the appeals process." Porter Hedges partner David Burgert didn't return our call seeking comment.
"We are pleased that the jury found that ION infringed all four WesternGeco patents and did so willfully," Kirkland's LoCascio said in a statement: "The jury's rejection of all of ION's invalidity arguments and the size of the award also reaffirms the value and significance of WesternGeco's pioneering technology in this field."
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