UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD. AMERIFORGE GROUP INC. Petitioner

Transcription

1 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Paper No. 1 AMERIFORGE GROUP INC. Petitioner v. WORLDWIDE OILFIELD MACHINE, INC. Patent Owner Inter Partes Review No. IPR PETITION FOR INTER PARTES REVIEW UNDER 35 U.S.C. 312

2 Petitioner s Exhibit List Exhibit Description 1001 U.S. Patent No. 6,601,650 (the 650 Patent ) 1002 U.S. Patent No. 4,997,162 ( Baker ) 1003 U.S. Patent No. 4,215,749 ( Dare ) 1004 U.S. Patent No. 7,013,970 ( Collie ) 1005 The Design of a Coiled Tubing Cutter for Use In Subsea Oil Drilling Applications, Masters Thesis, Massachusetts Institute of Technology, 1999 ( Schlegelmilch ) 1006 MIT Libraries Catalog webpage for Ex U.S. Patent No. 4,671,312 ( Bruton ) 1008 U.S. Patent No. 5,803,431 ( Hoang ) 1009 Excerpts of Prosecution History of the 650 Patent 1010 Joint Claim Construction and Prehearing Statement, Worldwide Oilfield Machine, Inc. v. Ameriforge Group, Inc. d/b/a AFGlobal Corp., Civil Action No. 4:13-cv-3123 (S.D. Tex.) (filed Aug. 15, 2014) 1011 Declaration of Glen Stevick ( Stevick ) 1012 Excerpts from McGraw-Hill Dictionary of Mechanical and Design Engineering (1984) Coiled Tubing: The next Generation, by Ali Chareuf Aphgoul, et. al., Oilfield Review, Spring U.S. Patent No. 5,845,708 ( Burge ) 1015 Excerpts from Coiled Tubing Handbook, 3 rd Ed., U.S. Patent No. 4,081,027 ( Nguyen ) 1017 NORSOK Standard D-002, Rev. 1 System Requirements Well Intervention Equipment (October 2000) 1018 Excerpts of American Petroleum Institute (API) Specification 16A, Spec. for Drill-Through Equipment, Shear Ram Test (1997) 1019 U.S. Patent No. 6,457,370 ( Okano ) 1020 U.S. Patent No. 4,590,823 ( Neves ) 1021 WO 2014/ ( Jaffrey ) -i-

3 I. INTRODUCTION Pursuant to 35 U.S.C. 312 and 37 C.F.R et seq., Ameriforge Group, Inc. ( Petitioner ) requests inter partes review of claims 1, 2, 4-10, 12-14, 16, 18, and 19 (the Challenged Claims ) of U.S. Patent No. 6,601,650 ( the 650 Patent, Ex. 1001), which issued on August 5, The Board is authorized to deduct all required fees associated with this petition from Fulbright & Jaworski Deposit Account No / II. MANDATORY NOTICES A. Real Party in Interest (37 C.F.R. 42.8(b)(1)) Ameriforge Group, Inc. ( Petitioner ) is the real party-in-interest. B. Related Matters (37 C.F.R. 42.8(b)(2)) The following matter may effect, or be effected by, a decision in this proceeding: Worldwide Oilfield Machine, Inc. v. Ameriforge Group, Inc. d/b/a AFGlobal Corp., Civil Action No. 4:13-cv-3123 (S.D. Tex.) (the Litigation ). C. Lead and Back-Up Counsel (37 C.F.R. 42.8(b)(3)) Lead counsel: Eagle H. Robinson (Reg. No. 61,361) Back-up counsel: Mark T. Garrett (Reg. No. 44,699) D. Service Information (37 C.F.R. 42.8(b)(4)) eagle.robinson@nortonrosefulbright.com Post: Eagle H. Robinson, Fulbright & Jaworski LLP, 98 San Jacinto Boulevard, Suite 1100, Austin, TX

4 Phone: Fax: Petitioner consents to electronic service. III. GROUNDS FOR STANDING Pursuant to 37 C.F.R (a), Petitioner certifies that the 650 Patent is available for inter partes review, and that Petitioner is not barred or estopped from requesting an inter partes review challenging the Challenged Claims on the grounds identified in this Petition. The 650 Patent has not been subject to a previous estoppel-based proceeding of the AIA, and Petitioner was served with the original complaint in the above-referenced Litigation within the last 12 months. IV. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED A. Claims for which Review is Requested (37 C.F.R (b)(1)) Petitioner requests the review and cancellation as invalid of claims 1, 2, 4-10, 12-14, 16, 18, and 19 of the 650 Patent. Of these, claims 1, 2, 4-5, 9, 12-14, 16, 18, and 19 address methods of using and systems including the cutting gate valve of the 650 Patent (the Valve Claims ), and claims 6-8 and 10 address methods of determining the force needed on a gate to cut a tubular within a gate valve (the Testing Claims ). As explained in detail below, Patent Owner s claim construction positions in the Litigation result in the Testing Claims and Valve Claims allegedly covering use of the same structures. As such, proposed grounds for the Testing Claims build upon those for the Valve Claims. -2-

5 B. Statutory Grounds of Challenge (37 C.F.R (b)(2)) For the reasons presented below, Petitioner seeks the following relief: Ground 1: Invalidation of claims 1, 2, 4-7, 9, 12, 14, 16, 18, and 19 under 35 U.S.C. 102(b) based on Baker (U.S. Patent No. 4,997,162 Ex. 1002). Baker issued March 5, 1991, rendering it prior art to the 650 Patent (which was filed November 6, 2001, and claims priority to August 9, 2001) under at least 102(b). Ground 2: Invalidation of claims 1, 2, 4-10, 12-14, 16, 18, and 19 under 103(a) based on Baker (Ex. 1002) and Dare (U.S. Patent No. 4,215,749 Ex. 1003). Dare issued August 5, 1980, rendering it prior art under at least 102(b). Ground 3: Invalidation of claims 1, 2, 4-7, 9, 12-14, 16, 18, and 19 under 103(a) based on Baker (Ex. 1002) and Collie (U.S. Patent No. 7,013,970 Ex. 1004). Collie issued March 21, 2006 but is a national-stage entry of a PCT application filed April 12, 2001, rendering it prior art under at least 102(e). Ground 4: Invalidation of claims 6-8 and 10 under 103(a) based on Baker (Ex. 1002) and Schlegelmilch ( The Design of a Coiled Tubing Cutter for Use In Subsea Oil Drilling Applications Ex. 1005). Schlegelmilch published in 1999 (Ex. 1006), rendering it prior art under at least 102(b). Ground 5: Invalidation of claims 1, 2, 4-7, 9, 12-14, 16, 18, and 19 under 102(b) based on Bruton (U.S. Patent No. 4,671,312 Ex. 1007). Bruton issued June 9, 1987, rendering it prior art under at least 102(b). -3-

6 Ground 6: Invalidation of claims 1, 2, 4-10, 12-14, 16, 18, and 19 under 103(a) based on Bruton (Ex. 1007) and Dare (Ex. 1003). Ground 7: Invalidation of claims 1, 2, 4-7, 9, 12-14, 16, 18, and 19 under 103(a) based on Bruton (Ex. 1007) and Collie (Ex. 1004). Ground 8: Invalidation of claims 6-8 and 10 under 103(a) based on Bruton (Ex. 1007) as well as Schlegelmilch (Ex. 1005). As explained in detail below, these grounds are not cumulative of each other and all are required to fully explain the invalidity of the challenged claims. V. REASONS FOR THE RELIEF REQUESTED UNDER 37 C.F.R (a)(2) AND (b)(4) A. Background 1. The 650 Patent As the BACKGROUND OF THE INVENTION section reflects, Blowout Preventor (B.O.P.) stacks [we]re frequently utilized in oilfield wellbore Christmas trees such as, for instance, lower riser packages in offshore wells, and may include a first set of rams for sealing off the wellbore and a second set of rams for cutting pipe such as tubing and/or cutting wireline. Ex at 1: But B.O.P. stacks were known to have numerous undesirable features, including that they were quite bulky and heavy and expensive for initial installation, that maintenance costs for replacing such B.O.P. stacks [could] be many times the original installation costs, and that B.O.P.s frequently require[d] maintenance -4-

7 after cutting pipe because, [f]or instance, the cut pipe may become stuck within the B.O.P. stack blocking other operations. Id. at 1: [G]ate valves with various types of cutters ha[d] [also] been developed including gate valves with one or more cutting edges for cutting wireline, but the inventor believed they were smaller and ha[d] not been utilized to replace B.O.P. stacks. Id. at 1: The inventor thus believed his invention related at least in part to using larger gate valves to replace B.O.P. stacks in way that addresses the above problems. Id. at 1: The Field of the Invention section thus explains that the present invention relates generally to gate valves and, more particularly, to a large I.D. [inner diameter] gate valve with a cutter operable for repeatable cutting pipe and/or wireline so as to be especially suitable for replacing an entire BOP stack in a lower riser package. Id. at 1: However, as the prior art discussed below reveals, such gate valves had already been used in place of B.O.P.s in the exact types of subsea Christmas trees discussed in the 650 Patent. The 650 Patent is entitled Method and apparatus for replacing BOP with gate valve, and describes a gate valve capable of reliably cutting tubing utilizing a cutting edge with an inclined surface that wedges the cut portion of the tubing out of the gave valve body. Id. at Abstract. The figures of the 650 Patent depict only a single embodiment. As shown in the annotated version below, Figure 2-5-

8 shows gate valve 100 with a length of tubing 122 extending through gate 102 from left to right. In use, bore 104 and tubing 122 would typically be vertical. As annotated here, Figure 3 shows gate 102 closing and starting to cut tubing

9 As shown in these figures, gate 102 includes a single inclined, sloping surface 124 that defines an aperture 128 with a diameter that is at a maximum on the edge of the gate at 110 and at a minimum on the edge at 106. Ex at 7:21-22; 7: A valve seat 108 is adjacent to side 106 of the gate, and a seat 112 is adjacent to side 110 of the gate. Id. at 7: As shown, seat 108 has a constant inner diameter, whereas the diameter of seat 112 tapers from a maximum adjacent surface 110 to a minimum that is spaced apart from the gate 102. Id. at 7: The taper of the gate aperture 128 and the taper in seat 112 are intended to permit valve 100 to cut a tubular 122 in a single piece, thereby preventing any small pieces of tubing from becoming stuck in the valve. See, e.g., id. at 7:66-8:3. Some prior art gate valves included a non-tapered gate aperture that resulted in a gate with dual cutting edges that would simultaneously cut at both sides of the gate, thereby cutting free a length of wireline roughly equal to the thickness of the gate. See, e.g., Ex at FIG. 2 (U.S. Patent No. 5,803,431 Hoang ; cited by Patent Owner during prosecution of 650 Patent). In contrast, the tapered aperture (128) of the 650 Patent results in only a single cutting edge (at side 106), and the tapered seat 112 is intended to ensure that a tubular or wireline can exit the gate aperture 128 without being pinched by the opposite edge (at side 110), thereby permitting gate 102 to close and seal the passage. See Ex at 7:63-8:5. The -7-

10 angled surface (124) defining the gate aperture (128) can also impart a force (to the left in Figure 3) to push the pipe 106 out of valve 100. Id. at 7:66-8:1. The 650 Patent teaches that testing can determine the amount of force needed to close the gate (102) to cut a tubular (122). See, e.g., id. at Abstract, 8: As shown in the annotated version below, FIG. 4 depicts a test system: Test system (150) includes a test gate 152 that has the same dimensions as gate 102, and [t]ubing 158 [that] has the same dimensions as tubing 122. Ex at 8: A test housing 151 slidably engages gate 152 by providing an aperture of the same general type as the gate valve housing would support gate 102. Id. at 8: Test housing is also suitably supported by some means such -8-

11 as the earth 154 to thereby provide a suitable mounting against which large forces may be applied such as in a machine shop, in which a [h]ydraulic press 156 or other suitable means may then be utilized to apply a known, measurable, and selected amount of force or pressure to gate 152 until pipe 158 is cut. Id. at 8: The 650 Patent explains that [i]t is difficult to calculate the required force on gate 102 to cut tubing 122 due to the many variables involved and the preferred method of determining the amount of pressure or force on gate 152 is best made empirically by utilizing test system 150. Ex at 8: Prosecution History Of the Challenged Gate Valve Claims, claims 1, 2, 9, 10, 12-14, and 16 were rejected under 102(b) as anticipated by Dare (Ex. 1003). Ex at 3. The Examiner specifically noted that [t]he gate valves [of Dare] are mounted to casing for controlling fluid flow without the use of a BOP. Id. Independent Claim 1 is directed to a method for a gate valve mountable onto a wellbore casing, and recites a number of steps for making and mounting a cutting gate valve on a wellbore casing. Id. at 15. Patent Owner amended claim 1 to recite mounting said gate valve on said well casing for controlling fluid flow without also utilizing a in place of at least one BOP on said well casing...; providing that said first and second seats each have different internal diameters adjacent said slidable gate, and argued that Dare does not disclose seat elements -9-

12 with different internal diameters adjacent the gate.... Id. at 15, 13. Patent Owner did not dispute the Examiner s statement that [t]he gate valves [of Dare] are mounted to casing for controlling fluid flow without the use of a BOP, and did not argue that Dare s gate valve is not mounted on a well casing for controlling fluid flow in place of at least one BOP on the well casing. Id. at 13, 3. Independent Claim 9 is directed to a method for cutting a pipe within a wellbore utilizing a gate valve such that said pipe is pushed away from a gate within said gate valve, and recites a number of features of the gate valve itself. Ex at 17. Patent Owner amended claim 9 to recite: providing [[an]] a single inclined surface on said aperture... said single inclined surface extending from said minimum size to said maximum size of said aperture, and argued that the claimed single inclined surface is superior to Dare s two inclined surfaces: Id. at 17, 13. Dare does not disclose a single inclined space as per claim 9. It will be noted that Dare discloses only use of two differently inclined surfaces on the gate. It is not clear the Dare gate valve would operate without two differently inclined surfaces on the gate (See Dare Col. 1, lines 55-62). Applicant believes a single inclined surface in the gate which cooperates by wedging action with the inclined surface in the seat is much more effective to prevent sticking pipe than the Dare design with two differently inclined surfaces. The Dare embodiment is likely to have pipe stick at the sharp edge provided by the seat. -10-

13 Independent Claim 14 is directed to a gate valve for a subsea riser package installation that is operable for replacement of a BOP, and recites that the subsea riser package installation further compris[es] a number of features of the gate valve itself. Patent Owner amended claim 14 to recite: said subsea riser package installation having no being operable for replacement of a B.O.P.,... a first seat on a first side of said sliding gate and a second seat on a second side of said sliding gate, at least one of said first seat or said second seat defining an interior passageway with an axial seat length wherein said interior passageway comprises a conical surface extending along a substantial portion of said axial seat length, and argued that Dare does not disclose... one or more seats having a conical interior.... Ex at 13. Patent Owner did not dispute the Examiner s statement that [t]he gate valves [of Dare] are mounted to casing for controlling fluid flow without the use of a BOP, and did not argue that Dare s subsea riser package is not operable for replacement of a B.O.P. Id. at 13, 3. Independent claim 18, which is similar to claim 14, was added in the response and recites that the subsea riser package [is] sized for carrying a tubular therein having a diameter greater than two and one-half inches, and said valve seat defining an interior wall with a second inclined inner surface, said second inclined surface defining an inner diameter which decreases with respect to axial -11-

14 distance away from said sliding gate. Id. at 8-9. Patent Owner argued Dare does not disclose one or more seats having inclined surfaces.... Id. at 13. B. Claim Construction (37 C.F.R (b)(3)) In an inter partes review, a claim in an unexpired patent is given the broadest reasonable construction in light of the specification of the patent in which it appears. 37 C.F.R (b). 1 Petitioner therefore requests that the claim terms be given their broadest reasonable interpretation (BRI), as understood by one of ordinary skill in the art and consistent with the disclosure. See Office Patent Trial Practice Guide, 77 Fed. Reg , (Aug. 14, 2012). The parties proposed constructions in the Litigation (see Ex. 1010), several of which offered by Patent Owner are indicative of the narrowest possible BRI of certain terms. Although a different standard applies in litigation, Patent Owner s proposals are relevant to the BRI. During AIA debate, Senator Kyl stated: This [district court] information should help the Office understand and construe the key claims of a patent. It should also allow the Office to identify inconsistent statements made about claim scope for 1 Other forums, such as district courts, apply different standards of proof and claim interpretation. Any interpretation, construction, or application of the Challenged Claims in this Petition (whether implicit or explicit) are specific to the BRI standard. Petitioner reserves the right to revise or depart from its interpretation, construction, or application of the Challenged Claims under any other standard. -12-

15 example, cases where a patent owner successfully advocated a claim scope in district court that is broader than the broadest reasonable construction that he now urges in an inter partes review. 157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011) 2 ; see also Sterner Lighting, Inc. v. Allied Elec. Supply, Inc., 431 F.2d 539, 544 (5th Cir. 1970) (citation omitted) ( A patent may not, like a nose of wax, be twisted one way to avoid anticipation and another to find infringement. ). 1. on said well casing / [on/to] a wellbore casing Claim 1 recites mounting said gate valve on said well casing, claim 6 recites said gate valve being mountable on a wellbore casing, and claims 14 and 18 recite said subsea riser package being connectable to a wellbore casing. The 650 Patent does not explicitly define these phrases. In the Litigation, Patent Owner asserted that on [said] well casing should be construed to mean directly to said well casing or indirectly with other equipment such as a BOP stack, lower marine riser package or emergency disconnect package. Ex at 6. As such, on said well casing, on a wellbore casing, and to a wellbore casing should be construed for purposes of this proceeding as: directly or indirectly to the well[bore] casing. 2 As considered in relation to the BRI standard in SAP America, Inc. v. Versata Dev. Group, Inc., CBM , Paper 70 at 16, n. 13 (Jun. 11, 2013). -13-

16 2. cutting edge Independent claims 1, 9, 14, and 18 each recites a cutting edge on the gate. Certain prior art cited during prosecution of the 650 Patent used cutting edge to include a square edge defined by two surfaces meeting at a 90-degree angle. For example, Hoang s shearing gate valve includes a cutting edge 90 that is square: Ex at 4:32-34 ( A 90 corner is machined on weld overlay material 80 forming an annular cutting edge 90 at each mouth of opening 46. ). Patent Owner asserted in the Litigation that cutting edge includes more than just a vertex of two surfaces, and instead includes a narrow surface or wedge that performs a cutting function. Ex at 6. A narrow surface includes a surface between two vertices, and a wedge includes a vertex and the adjoining surfaces. Certain prior art cited during prosecution also used cutting edge for a -14-

17 shearing surface. Dare includes a cutting edge 90 having a thickness of 1/8 5/8 inch for shearing tubing: See Ex at FIG. 5, 4:22-32, 5: Given Patent Owner s position in the Litigation and the prior art uses of cutting edge in the context of cutting and shearing gate valves, cutting edge should be construed for purposes of this proceeding as: an acute or square edge and any surface adjoining the edge that contacts an item to be cut or sheared. 3. test body for slidably supporting a test gate Independent claim 6 recites a test body for slidably supporting a test gate. The 650 Patent depicts a single embodiment of its test body (151). Ex at FIG. 4. [T]est housing 151 slidably engages gate 152 by providing an aperture of the same general type as the gate valve housing would support gate 102. Id. at 8: Patent Owner asserted in the Litigation that Petitioner s proposed construction of a body, other than that of a gate valve,... was too narrow, and -15-

18 proposed a competing construction of any housing that limits the test gate to one degree of freedom such that it can slide along one axis. Ex at 8 (emphasis added). While portions of Patent Owner s proposed construction are narrower than what is required by the plain language of the claim, it illustrates that the BRI need not exclude the body of a gate valve itself. Therefore, test body for slidably supporting a test gate should be construed for purposes of this proceeding as: a housing that slidably receives a test gate for cutting a test pipe. 4. test gate comprising dimensions related to said gate Independent claim 6 recites test gate comprising dimensions related to said gate. The 650 Patent depicts a single embodiment of a test gate (152) that has the same dimension as gate 102. Ex at FIG. 4, 8: Notably, the test gate (152) is not depicted as including a bore or aperture. Ex at 61. Patent Owner s Litigation position for test body (addressed above) makes clear that, for the BRI, the word test need not exclude the gate of a valve. Patent Owner also asserted that dimension[s] related to means dimension similar to, the same as, or proportional with. Ex at 8. As such, test gate comprising dimensions related to said gate should be construed for purposes of this proceeding as: a gate for cutting a test pipe, the gate having dimensions that are similar, identical, or proportional to dimensions of the valve gate. -16-

19 5. hydraulic press Claims 8 and 10 recite using a hydraulic press to determine a force for cutting a pipe. The 650 Patent does not define the term, and the dictionary definition of press is quite broad: [a]ny of various machines by which pressure is applied to a workpiece.... See Ex Further, qualifying phrases in claims 8 and 10 confirm that hydraulic press could include a hydraulic actuator similar to one used for a shearing gate valve: hydraulic press which is not utilized for controlling a gate valve for applying said force to said test gate and hydraulic press of a type not utilized for controlling a valve for said wellbore. Ex at Cl. 8, 10 (emphasis added). For purposes of this proceeding, hydraulic press should therefore be construed as: a hydraulic machine by which pressure is applied to a workpiece. 6. subsea riser package Independent claims 14 and 18 recite a gate valve for a subsea riser package installation. The 650 Patent takes a broad view of riser package, noting the use of BOP stacks in oilfield wellbore Christmas trees such as, for instance, lower riser packages in offshore wells. Ex at 1: As such, for purposes of this proceeding, subsea riser package installation should be construed consistently with Patent Owner s Litigation position to mean a lower marine riser -17-

20 package, lower riser package emergency disconnect package, workover riser system, BOP stack, or subsea wireline lubricator system. (Ex at 7). C. Level of Ordinary Skill in the Art A person of ordinary skill would have been generally familiar with the use of shearing gate valves for cutting wirelines, and macaroni and coiled tubing in oil and gas wells, such as during drilling and/or workover operations of wells. Such a person would have also recognized that the functionality of shearing tubulars with gate valves is largely governed by the same principles that govern the shearing of tubulars in shearing-ram blowout preventers. Ex at This level of ordinary skill is also evidenced by prior art and the 650 Patent itself. See Ex at 23; Chore-Time Equip., Inc. v. Cumberland Corp., 713 F.2d 774, 779 (Fed. Cir. 1983); Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001). Here, the 650 Patent and prior art demonstrate that a person of ordinary skill would have known of various hydraulic actuators for subsea applications, and would have been able to implement shearing gate valves in any of multiple known subsea applications. Ex at 23. D. The Challenged Claims Are Invalid Under 102(b) or 103(a) 1. Ground 1 Anticipation by Baker Baker discloses a shearing gate valve that is capable of shearing a wire line or small pipe extending through its bore. Ex at Title, 1:

21 Baker discloses a structure in which there is a single shearing of the wire line or cable and a configuration to allow the lower portion of the sheared cable element to fall from the interior of the gate and the valve into the well without any short section being sheared from its upper end. Ex at 5:5-10, 5:43-62, FIG. 7. As shown in the annotated version of FIG. 9 above, gate 202 is positioned between seat rings 204 and 206. Id. at 6:2-4. A sleeve 210 is positioned in the -19-

22 gate and includes [an] outlet bore 212 [defining a minimum inner diameter and cutting edge adjacent seat ring 204] and an inlet tapered [or inclined] surface 214 which diverges outwardly toward seat ring 206 [at a maximum inner diameter opposite the cutting edge]. Id. at 6: Seat ring 206 includes [a] tapered [or inclined, conical] surface which mates with the diameter of the inlet end of tapered surface 214 and reduces the bore in seat ring Id. at 6: Baker also repeatedly states that its gate valve is used on a well. Id. at 4:56-59 ( present invention is used on a well ); 6:28-34 (referring to FIGS. 9-11: allow the sheared cable element to fall into the well ). To be used on a well as explicitly taught by Baker, the valve inherently must be directly or indirectly connected to a well casing, and Baker s valve body 12 includes flanges for such a connection. See Ex at FIG. 12; Ex at 63. Baker s valve is also fully capable of being closed independently of a BOP that may also be connected to a well casing, and is thus capable of controlling fluid in place of a BOP or being utilized without using a B.O.P. Ex at 64. a. Baker anticipates claims 1, 2, 4-7, 9, 12-14, 16, 18, and 19 Claim 1 Baker (Ex. 1002) 1[p][i] A method for a gate valve mountable onto a wellbore casing, FIG. 2 (see mounting flanges on either side of valve body 12); FIGs. 9-11; 4:56-59 ( invention is used on a well ). Ex at

23 Baker (Ex. 1002) 1[p][ii] said gate valve being operable for controlling fluid and cutting tubing, comprising: 1[a] mounting said gate valve on said well casing for controlling fluid flow in place of at least one BOP on said well casing; 1[b] mounting a slidable gate within said gate valve, said slidable gate having a first side and a second side opposite said first side; 1[c] providing first and second seats for said slidable gate; 1[d] positioning said slidable gate between said first and second seats such that said first side of said gate is adjacent said first seat and said second side of said gate is adjacent said second seat; 6:25-28 ( gate at the completion of shearing the cable element (FIG. 10) and in its closed position of sealing ); 6:35-41 ( gate valve which can shear a wire line or tubular... without... interfering with the sealing ); 1:13-15 ( capable of shearing wire line or small pipe ). 6:25-28 (referring to FIG. 11: in its closed position of sealing against seat ring 204. ); 6:28-34 (referring to FIGS. 9-11: allow the sheared cable element to fall into the well ); 2:42-45 ( Pat. Nos. 4,081,027 and 4,341,264 disclose ram type blowout preventers ). Ex at FIGs (first side nearest seat ring 204; second side nearest seat ring 206). 6:2-4 ( Gate is positioned between seat rings 204 and 206. ). FIG. 9 (first side nearest seat ring 204; second side nearest seat ring 206); 6:11-13 ( Seat ring 206 includes tapered surface which mates with... the inlet end of tapered surface ); 6:16-17 ( side 220 of seat ring 204 which engages gate 202 ). -21-

24 1[e] providing that said first and second seats each have different internal diameters adjacent said slidable gate; 1[f] forming an aperture through said slidable gate; 1[g] providing a cutting edge on said slidable gate of said gate valve within said aperture such that said cutting edge defines at least a portion of said aperture. Claim 2 2. The method of claim 1, further comprising: mounting said gate valve in a subsea installation. Claim 4 4. The method of claim 1, further comprising: providing that said aperture has a minimum size at said first side of said slidable gate. Claim 5 5. The method of claim 1, further comprising: providing a single inclined surface defining aperture which is angled with respect to an axis through said aperture from about three degrees to about twenty-five degrees. FIG. 9 (see seat ring 204 with smaller inner diameter adjacent gate 202 than seat ring 206). FIG. 9; 6:9-11 ( Sleeve 210 includes outlet bore 212 and inlet tapered surface 214 which diverges outwardly toward seat ring 206. ). FIGs (square edge at right of outlet bore 212 and adjoining surface of outlet bore 212); 6:25-27 ( gate at the completion of shearing of the cable element (FIG. 10) ). 2:42-45 (Patent No. 4,081,027 discloses a subsea BOP); Ex at 66. FIGs (square edge at right of outlet bore 212 and adjoining surface of bore 212). FIG. 9; 5:54-58 ( it is preferred that the diverging taper on the tapered bore have angles of taper which are preferred to be in the range of 10 to 12 degrees ); 5:67-68 ( Valve 200 is similar in structure to valve ). -22-

25 Claim 6 6. A method for determining force needed on a gate to cut a tubular disposed within a gate valve, said gate valve being mountable on a wellbore casing such that said tubular is positional within said wellbore casing, said method comprising: 6[a] providing a test body for slidably supporting a test gate, said test gate comprising dimensions related to said gate; 6[b] inserting a test pipe through said test body and said test gate, said test pipe comprising a dimension related to said tubular; 6[c] applying force to said test gate until said pipe is cut by said test gate; and 6[d] measuring said force on said test gate required for cutting said test pipe by sliding movement of said gate. Claim 7 The method of claim 6, further comprising: designing an actuator for said gate such that said actuator is capable of producing said force. See claim elements 1[p][i]-[ii], 1[a]. See claim element 1[a]. See claim element 1[p][ii]. See claim element 1[p[ii]. 6:47-53 ( the use of the forms of the present invention which provide the single shearing of the cable element require less force to complete the shearing of the cable element that the form of the present invention which provides the dual shearing of the cable element. ). Ex at 75. 3:13-20 ( [A]ctuator 22 which is shown as a simply pneumatic actuator having piston chamber 24 with piston 26 slidable therein and spring 28 urging piston 26 upward as shown. Connecting rod 30 extends from piston 26 through bonnet 20 into engagement with gate -23-

26 Claim 9 9[p] A method for cutting a pipe within a wellbore utilizing a gate valve such that said pipe is pushed away from a gate within said gate valve, said gate defining an aperture therethrough, said method comprising: 9[a] providing said gate valve with a cutting edge on one side of said gate along said aperture through the gate; 9[b] providing a single inclined surface on said aperture through said gate such that said aperture opens from a minimum size adjacent said cutting edge to a maximum size distal said cutting edge, said single inclined surface extending from said minimum size to said maximum size of said aperture; 9[c] inserting said pipe into said wellbore through said gate valve; 9[d] closing said gate within said gate valve; and 9[e] cutting said pipe as said gate closes such that said inclined surface produces a force on said pipe to move said pipe away from said gate. 32 for moving gate 32 within chamber 18 to open or close flow therethrough between inlet 14 and outlet 16. ). FIG. 9 (see tapered surface 214); 6:35-42 ( the present invention provides a gate valve which can shear a wire line or other tubular member ). Ex at 67. See claim element 1[g]. FIG. 9 (tapered surface 214); 6:9-11 ( Sleeve 210 includes outlet bore 212 and inlet tapered surface 214 which diverges outwardly toward seat ring 206. ). FIG 2; 6:35-42 ( a gate valve which can shear a wire line or other tubular member extending therethrough ). 6:25-27 ( gate at the completion of shearing of the cable element (FIG. 10) ). FIG. 10; 6:9-11 ( Sleeve 210 includes outlet bore 212 and inlet tapered surface 214 which diverges outwardly toward seat ring 206. ). Ex at

27 Claim The method of claim 9, further comprising: utilizing said gate valve on a wellbore without using a B.O.P. Claim The method of claim 9, further comprising: providing that said inclined surface is angled with respect to an axis through said aperture of said gate within said gate valve in a range of from three degrees to twenty-five degrees. Claim 14 14[p][i] A gate valve for a subsea riser package installation, said gate valve comprising a valve body defining a flow passageway therethough, said gate valve being operable for cutting a tubular extending through said gate valve and said subsea riser package, 14[p][ii] said subsea riser package installation being operable for replacement of a B.O.P, 14[p][iii] said subsea riser package being connectable to a wellbore casing, said subsea riser package installation further comprising: 14[a] a sliding gate within said gate valve; 2:42-45 ( Pat. Nos. 4,081,027 and 4,341,264 disclose ram type blowout preventers ). Ex at 64. See claim 5. FIGS See claim element 1[p][ii]. See claim element 1[a]. Ex at See claim element 1[p][i]. Ex at See claim element 1[b]. 14[b] a cutting edge mounted on one side of said sliding gate; 14[c] an inclined surface adjacent said cutting edge such that said cutting edge and said inclined surface define at least a portion of aperture through said sliding gate; 14[d] a hydraulic actuator for said gate valve operable to apply sufficient force to said sliding gate to cut said tubular; and -25- See claim element 1[g]. See claim element 9[b]. FIG. 2; 3:13-14 ( actuator 22 which is shown as a simply pneumatic actuator.... ); 2:42-45 (Patent No. 4,081,027

28 14[e] a first seat on a first side of said sliding gate and a second seat on a second side of said sliding gate, at least one of said first seat of said second seat defining an interior passageway with an axial seat length wherein said interior passageway comprises a conical surface extending along a substantial portion of said axial seat length. Claim The gate valve of claim 14, wherein said inclined surface is angled with respect to an axis through said aperture by from three degrees to twenty degrees. Claim 18 18[p][i] A gate valve for a subsea riser package installation, said gate valve comprising a valve body defining a flow passageway therethough, 18[p][ii] said subsea riser package being sized for carrying a tubular therein having a diameter greater than two and one-half inches, 18[p][iii] said subsea riser package being connectable to a wellbore casing, said subsea riser package installation further comprising: 18[a] a sliding gate within said gate valve mounted for transverse movement with respect to said flow passageway; 18[b] a cutting edge mounted on said sliding gate; discloses a BOP with hydraulic actuator). Ex at See claim element 1[e]. 6:11-14 ( Seat ring 206 includes tapered surface 215 on its interior which... reduces the bore in seat ring 206 to the flow diameter through the valve passages. ). See claim 5. See claim element 14[p][i]. 4:33-35 ( Testing of a 2 9/16 inch... model of the improved design shearing gate valve.... ). Ex at See claim element 14[p][iii]. See claim element 14[a]. See claim element 14[b]. -26-

29 18[c] a first inclined surface adjacent said cutting edge such that said cutting edge and said first inclined surface define at least a portion of an aperture through said sliding gate; 18[d] a hydraulic actuator for said gate valve operable to apply sufficient force to said sliding gate to cut through said diameter of said tubular; and 18[e] a valve seat adjacent said sliding gate, said valve seat having an axial seat length, said valve seat defining an interior wall with second inclined inner surface, said second inclined surface defining an inner diameter which decreases with respect to axial distance away from said sliding gate. Claim The gate valve of claim 18, wherein said second inclined inner surface extends along at least a substantial portion of said axial seat at length. See claim element 14[c]. See claim element 14[d]. See claim element 14[e]. See claim element 14[d]. 2. Ground 2 Obvious over Baker and Dare Dare discloses a gate valve which may be forcefully closed to shut in a well and to shear off any tubing, cables, wires, or other suspension members that are suspended in the flowline of the well. Ex at 1: Dare teaches the use of its valve in a a subsea wellhead and Christmas tree assembly, as shown in FIG. 1 (inset below). Id. at 2: The wellhead assembly includes a casing head 12 from which one or more strings of well casing (not shown) extend downwardly into the wellbore. Id. at 2: The Christmas tree assembly -27-

30 extends upward from the casing head 12 and, at its upper end, includes a hydraulic connector 30 that receives the gate valve 10. Id. at 2: A riser assembly 32 extends upwardly from gate valve 10 to the surface.... Ex at 4:68-5:1. A person of ordinary skill would have recognized this use of Dare s shearing gate valve 10 as part of a lower riser package. Id. at 4:54-56 ( In use, valve body 34 is carried on the lower end of the riser assembly 32 and is coupled with the top of hydraulic connector 30. ); see also Ex at 76. A person of ordinary skill would have also recognized that, in the absence of Dare s shearing gate valve, the type of riser package disclosed by Dare would include a BOP. Ex at 78. Dare s valve 10 includes a gate 42 that is actuated by a pair of hydraulic cylinders 52 and 54. Ex at 3: Gate 42 includes a single cutting edge 90 and two inclined surfaces defining an undercut portion 96 and undercut area 100 to permit the sheared suspension member to freely fall downwardly through port into the well without jamming gate 42. Id. at 5:24-29, FIG. 5. Claims 1, 2, 4-10, 12-14, 16, 18, and 19 are obvious over Baker and Dare. To the extent Patent Owner may contend that Baker does not disclose or suggest using its gate valve with a hydraulic actuator (claims 14d, 18d), in a subsea installation or subsea riser package (claim elements 2, 14p[i]-[iii], 18p[i]-[iii]), or in place of or without also using a BOP (claim elements 1[a], 12, 14[p][ii]), it -28-

31 would have been obvious to do so in view of Dare. 3 For example, it would have been obvious to use Baker s shearing gate valve in a subsea riser package of the type disclosed by Dare, and/or to use the hydraulic actuator disclosed by Dare to actuate Baker s valve. Ex at 68-69, 80. Similarly, it would also have been obvious to modify Dare s subsea riser package to include the gate/seat structure of Baker, which would necessarily also include Dare s hydraulic actuator mechanism. Ex at Motivations for such combinations include: Improved Flow Characteristics: A person of ordinary skill would have been motivated to use Baker s gate/seat configuration instead of that of Dare to achieve improved flow characteristics through the valve. Ex at For example, Baker teaches that it is preferred that the diverging taper on the tapered bore through the gate and the tapered valve seat are inclined in the range of 10 to 12 degrees and at most 15 degrees or less so that there is a minimum of disturbance to the flow therethrough and still provide the opening through which the lower 3 For clarity, all of the remarks herein related to obviousness (e.g., motivations) are from the perspective of a person of ordinary skill in the art as of August 9, As noted above, Patent Owner did not dispute the Examiner s assertion during prosecution that [Dare s] gate valves are mounted to casing for controlling fluid flow without the use of a BOP, and did not argue that Dare s subsea riser package is not operable for replacement of a B.O.P. Ex at 13,

32 sheared portion of the cable element can drop from the gate bore before the gate completely closes. Ex at 5: Dare s structure includes a constantdiameter upstream valve seat 48 and a gate with a first inclined surface 98 angled at degrees (preferably degrees), and a second inclined surface 102 angled at degrees (preferably 45 degrees). Ex at FIGs. 2, 5; 4: As a result, Dare s valve would suffer from increased flow disturbances in its open configuration due to the abrupt change in the shape (and increase in size) of the flowpath between seat 48 and undercut portion 100. Ex at 79. Increased flow disturbances (i.e., turbulence) are undesirable because, for example, turbulence can increase erosion of sealing surfaces of the seats adjoining the gate. Ex at 82. For example, when Dare s gate 46 is in the open position, a large portion of the sealing surface of seat 50 is exposed to flow and susceptible to erosion. Id.; see also Ex at FIG. 6. In contrast, when Baker s gate is in the open position, the sealing surfaces of seats 204, 206 are covered and protected by Baker s gate. Ex at 82; see also Ex at FIG. 9. As such, in addition to including the more-desirable bore angles through its gate, Baker s design better protects against erosion of seals. Ex at 82. Manufacturability & Cost Minimization: A person of ordinary skill would have been motivated to use Baker s gate/seat configuration instead of Dare s to improve ease of manufacture and reduce the cost of manufacturing. Ex at -30-

33 83. Baker s gate bore is circular and symmetrical around its axis, which such a person would have recognized to be easier and less-expensive to manufacture than Dare s asymmetrical bore. Ex at 83. In particular, a radially symmetrical bore can be manufactured with a king mill or boring tool rather than a morecomplex computer-numerically controlled (CNC) machining systems. Ex at 83. In contrast, Dare s gate bore is asymmetrical and would require morecomplex and more-expensive equipment and processes. Ex at 83. Combining Prior Art Elements According to Known Methods to Yield Predictable Results: As explained above, Baker and Dare provide alternative gate/seat structures for achieving similar results in a gate valve: (1) shearing a wire line or tubular in only a single place at one side of the gate, and (2) providing sufficient space at the opposite side of the gate to permit the sheared wire line or tubular to exit the gate before it fully closes. A person of ordinary skill could have modified Dare s gate/seat configuration to include Baker s alternative gate/seat configuration by at least August 8, Such a modification would have been a straightforward task for such a person at that time (Ex at 84), and the combination would have yielded nothing more than predictable results to that person (e.g., a shearing gate valve with the functions identified immediately above as possessed by both designs (Ex at 84)), thus rendering the combination obvious. See KSR Int l Co. v Teleflex Inc., 550 U.S. 398, 416 (2007). -31-

34 Further, to the extent Patent Owner may contend that Baker s gate valve is not sufficiently large to be used in place of or without using a BOP, it would have been obvious to also simply increase the size of Baker s gate valve to do so. See, e.g., Powers-Kennedy Contracting Corp. v. Concrete Mixing & Conveying Co., 282 U.S. 175, 185 (1930); Maulsby v. Minn. Casket Co., 84 F.2d 107, 110 (8th Cir. 1936). For example, various sizes of casing, risers, and tubing were known in the art as of August 9, 2001, and it would have been obvious to size of Baker s gate valve for use with any known size of casing, riser, or tubing, including those larger than 2 ½ inches in diameter. Ex at 70-72, 79. For example, Dare discloses that tubing with which its shearing gate valve may be used is normally one inch in diameter or less, [and] it is sometimes considerably larger such as two inches in diameter with a wall thickness of about 1/8 inch. Ex at 1: A person of ordinary skill would have recognized the macaroni tubing discussed in Dare was known to range in diameter up to 3 ½ inches. Ex at 44. Such a person thus would have understood that Dare s shearing gate valve and similar types of shearing gate valves could be sized to shear macaroni tubing with such larger diameters, and that it would have been desirable to do so to be usable with various known sizes of tubing. Ex at 79. Dependent claim 8 recites utilizing a hydraulic press which is not utilized for controlling a gate valve for applying said force to said test gate, and dependent -32-

35 claim 10 recites determining said force for cutting said pipe utilizing a hydraulic press prior to said step of cutting, wherein said hydraulic press of a type not utilized for controlling a valve for said wellbore. It would have been obvious for a person of ordinary skill in the art to have tested the force required to shear a tubular with Baker s gate valve using a single fail-safe hydraulic actuator similar to actuator 22 shown in Baker, for example, prior to incorporating Baker s gate/seat structure into Dare s system. Ex at 86. Alternatively, it would have been obvious to test Baker s valve using a hydraulic shop press of the type well known in the art and included in nearly all, if not all, fabrication shops of the type that have manufactured such valves. Id. at 87. Such testing would have required no more than the application of force to Baker s gate using a known hydraulic actuator or hydraulic shop press, which would have been different than the type of hydraulic actuator mechanism in Dare s system, which includes dual hydraulic cylinders and no return spring. Id. at Such a person would have been motivated to perform these types of tests on Baker s valve to determine the amount of force that would be needed to shear tubulars, and/or to avoid the time and expense of manufacturing an actuator prior to testing the valve. Id. 3. Ground 3 Obvious over Baker and Collie Collie discloses a subsea lower riser package 128 that is connectable to a wellbore via wellhead 10, and that includes large bore gate valves 138, 140 at -33-

36 least one of which may, if required in an emergency, be used to shear the coiled tubing string. Ex at 6:55-59; 2:55-56 ( subsea christmas tree ). -34-

37 Collie teaches that its large bore shearing gate valve is used on a wellbore without a BOP. As shown in the annotated version below, FIG. 12 shows a modification... for which the installation process is similar to a conventional christmas tree, in that a BOP stack is not used on the tree. Ex at 6: Collie also teaches that its shearing valve is operable to cut tubing and control fluid flow in place of at least one BOP, and that its lower riser package is operable for replacement of a BOP: The BOP stack and marine riser are removed from the wellhead 10 prior to tree installation and a lower riser package 128, emergency disconnect package 130 and an open water riser 132 are used for the coiled tubing hanger installation... Installation and recovery of the coiled tubing string may be carried out..., without the use of a BOP. Id. at 6:39-55 (emphasis added). Collie s large bore gate valves are sufficiently large to carry a tubular having a diameter greater than 2 ½ inches. Ex at Collie s gate valves are for use with casing initial section 100, the bore diameter of which can range from 6 inches up to at least 9 5/8 inches. Ex at 12:56-58, 13:30. Collie further teaches that the BOP stack replaced by lower riser package 128 has a diameter of up to 18 ¾ and no less than 6. Id. at Table 1, col. 10 ( 18 ¾ system or smaller 6 minimum ID ). Collie also teaches that its coiled tubing hanger 12 can be delivered and removed through gate valves 122, 124, which necessitates gate valve sizes significantly in excess of 2 ½ inches. Id. at 6:53-59; Ex at

38 Collie thus inherently discloses a shearing gate valve that is sufficiently large to carry a tubular with a diameter greater than 2 ½ inches. Ex at a. Collie is not cumulative of Dare Dare and Collie take different approaches to their respective shearing gate valves and disclose different sizes and types of tubing known to be sheared with such gate valves. Dare discloses a particular design for a shearing gate valve in a wellbore Christmas tree that is suitable for shearing macaroni or straight tubing that may be larger than one inch in diameter (e.g., two inches), but does not specify any particular size for its valve or Christmas tree. Collie, on the other hand, generically discloses using a large bore shearing gate valve to shear coiled tubing in place of a BOP. Additionally, Dare is prior art under 102(b), whereas Collie is prior art under 102(e) and could potentially be sworn behind by Patent Owner. Both Dare and Collie are therefore necessary to fully present the state of the art as of the earliest priority date to which the Challenged Claims may be entitled. b. Combining Baker and Collie was obvious Claims 1, 2, 4-7, 9, 12-14, 16, 18, and 19 are obvious over Baker and Collie. To the extent Patent Owner may contend that Baker and Collie do not disclose or suggest a hydraulic actuator (claim elements 14[d], 18[d]), it would have been obvious in view of Collie to use a hydraulic actuator for Baker s valve. Collie includes a hydraulic actuator for a valve. Ex at 5: Hydraulic -36-