NCS Multistage Inc. v. Kobold Corporation

NCS Multistage Inc. v. Kobold Corporation
Court (s) Database
Federal Court Decisions
Date
2023-11-07
Neutral citation
2023 FC 1486
File numbers
T-1420-18, T-567-20
Decision Content
Date: 20231107
Dockets: T-1420-18
T-567-20
Citation: 2023 FC 1486
Ottawa, Ontario, November 7, 2023
PRESENT: The Honourable Madam Justice McVeigh
Docket: T-1420-18
BETWEEN:
NCS MULTISTAGE INC.
Plaintiff/ Defendant by Counterclaim
and
KOBOLD CORPORATION, KOBOLD COMPLETIONS INC. AND 2039974 ALBERTA LTD.
Defendants/ Plaintiffs by Counterclaim
Docket: T-567-20
AND BETWEEN:
NCS MULTISTAGE INC.
Plaintiff/ Defendant by Counterclaim
and
PROMAC INDUSTRIES LTD.
Defendant/ Plaintiff by Counterclaim
Table of Contents
I. Introduction 4
II. Background 7
A. Pleadings and History of the Proceeding 7
B. Trial 10
C. Technical Background 11
III. Issues 13
A. Common and Legal Issues 13
B. NCS Patents 15
C. Kobold Patents 20
D. Analytical Framework 22
IV. Evidence 23
A. Fact Witnesses 23
B. Expert Witnesses 26
V. Legal Principles 33
A. Claim Construction 33
B. Validity 42
C. Infringement 75
VI. Summary of Prior Art 75
A. NCS’s 676 and 652 Patents 75
B. NCS’s 907 and 026 Patents 78
C. NCS’s 704 Patent 80
D. Kobold’s 571 Patent 84
VII. Common Issues 87
A. The POSITA 87
B. CGK 92
C. Interpreting Terms in Common 100
VIII. Claims Construction 142
A. NCS’s 676 Patent 142
B. NCS’s 652 Patent 174
C. NCS’s 907 Patent 197
D. NCS’s 026 Patent 226
E. NCS’s 704 Patent 243
F. Kobold’s 571 Patent 273
IX. Validity 283
A. NCS’s 676 Patent 283
B. NCS’s 652 Patent 313
C. NCS’s 907 Patent 336
D. NCS’s 026 Patent 370
E. NCS’s 704 Patent 377
F. Kobold’s 571 Patent 409
X. Infringement 433
A. Kobold’s 571 Patent 433
XI. Other Legal Issues 438
A. Induced Infringement 438
B. Common Design 439
C. Does the Agreement affect this action? 439
D. Estoppel, Acquiescence, and Other Doctrines 440
XII. Remedies 440
XIII. Costs 442
A. The Law on Costs 442
B. Submissions and Considerations 445
C. Decision as to Costs 448
XIV. Conclusion 449
APPENDIX A 452
APPENDIX B 490
APPENDIX C 493
APPENDIX D 512
JUDGMENT AND REASONS
I. Introduction [1] This action and counter-action pertain to a number of patents (seven, now reduced to six) relating to tools and sleeves used to drill multistage horizontal oil wells for hydrocarbons. The Plaintiff and Defendant by counterclaim, NCS Multistage Inc [NCS], and the Defendants and Plaintiffs by counterclaim, Kobold Corporation, Kobold Completions Inc, and 2039974 Alberta Ltd (collectively, “Kobold”), and Promac Industries Ltd [Promac] (collectively, the “Defendants”), provide equipment to the oil and gas industry for hydraulic fracturing.
[2] NCS sued the Defendants for infringement of the following of NCS’s patents (collectively, the “NCS Patents”). As well, NCS claimed induced infringement and infringement by common design:
Canadian Patent No. 2,693,676 [676 Patent or 676];
Canadian Patent No. 2,820,652 [652 Patent or 652];
Canadian Patent No. 2,738,907 [907 Patent or 907];
Canadian Patent No. 2,766,026 [026 Patent or 026]; and,
Canadian Patent No. 2,820,704 [704 Patent or 704].
[3] In response, Kobold asserted that NCS’s patents were invalid, and counter-sued claiming that NCS infringed Kobold’s Canadian Patent No. 2,856,830 [830 Patent or 830] and Canadian Patent No. 3,027,571 [571 Patent or 571]. Kobold subsequently abandoned its action for infringement of the 830 Patent.
[4] Due to the complexity of this case, the number of patents at issue and the detailed submissions of the parties, these reasons are lengthy. First, there is a description of the complex history of this matter, followed by a note on the trial. Next, briefly is set out the nature of each patent and the relevant claims at issue. Finally, a list of the issues decided, and then the witnesses who appeared as part of this trial and their backgrounds is provided.
[5] It is necessary to comment on the number of issues raised in these actions. I am mindful of a similar discussion by Justice Locke:
[9] Before continuing, I feel compelled to say a few words about the lack of wisdom of raising so many issues on appeal, especially so many issues that are so factually suffused, without due attention to the standard of review on such issues. Firstly, the appellants’ approach suggests that they themselves cannot identify any issues that are particularly strong. This suggestion was compounded at the hearing of the appeal when, despite the Court’s suggestion that the appellants focus on their strongest points, the appellants insisted on addressing all of the issues raised in their memorandum of fact and law. Not only did this approach miss an opportunity to highlight certain of the issues, but it also prevented the appellants from delving deeper into points that might have merited more discussion. In addition to hurting the appellants’ own case on appeal, this approach also made unnecessary additional work for the Court and delayed the release of this decision…
Western Oilfield Equipment Rentals Ltd v M-I LLC, 2021 FCA 24 at para 9 [Western Oilfield].
[6] A helpful combination of some of the experts’ primers on fracking tools and methods will be found in Appendix A. Excerpts of all Patent Act sections referenced will be found in Appendix B. Any Figures referenced from the patents at issue or the prior art will be found in Appendix C. The Joint Statement of Issues will be found in Appendix D.
[7] The Joint Statement of Issues provided to this Court on December 21, 2021, contained 128 separate issues, many with their own sub-issues. After closing submissions, the parties had narrowed the scope of claims at issue down from approximately 145 claims across seven patents to approximately 123 claims at issue across six patents, still with 128 separate issues.
[8] There is no doubt this case is deeply complicated and highly technical – it has been referred to by counsel as “perhaps the most complex intellectual property matter before the Federal Court” and “more patent construction than most judges engage in during their entire judicial career.” There is no way to be certain, but I am inclined to agree with counsel’s sentiment. I am, as Justice Locke was, of the opinion that putting all these issues before the Court was an unwise litigation strategy.
[9] Lest this become a trend for this Court, or for the parties before it, I feel compelled to state that, in my view, putting these countless issues before the Court for simultaneous determination was detrimental to the aims of the parties in presenting the most clear and effective arguments. It is also contrary to the general principle of this Court to secure the just, most expeditious and least expensive outcome of every proceeding.
[10] This manner of presenting a case is akin to trial by everything but the kitchen sink. It unnecessarily obscured the points made by each party, took the parties’ and experts’ time and focus away from the determinative issues.
II. Background A. Pleadings and History of the Proceeding (1) The Parties [11] NCS and Kobold are competitors in the oilfield services industry; they provide equipment to the oil and gas industry for hydraulic fracturing [fracking].
[12] Promac provides custom machining services, primarily to businesses in the oil and gas industry. Promac primarily machines components for subsurface equipment, including sliding sleeves and components for tools. Relevant here, Promac manufactured sleeves and tools for Kobold.
[13] A Bottom Hole Assembly [BHA] typically has one or more “packers”, used to isolate different zones of the wellbore, and perform other operations such as opening sleeves or perforations through the casing.
[14] The NCS Patents, reviewed in further detail below, can be broken down into three groups: (1) downhole tools (the 676 and 652 Patents), (2) methods of shifting frac sleeves (the 907 and 026 Patents), and (3) frac valves (the 704 Patent). The NCS and Kobold Patents are reviewed in greater detail below. The 571 Patent owned by Kobold can likewise be described as a downhole tool.
(2) The Actions [15] On July 24, 2018, NCS filed its Statement of Claim for Court File T-1420-18, commencing a patent infringement action against Kobold in respect of the NCS Patents. Kobold commenced its counterclaim by filing its initial Statement of Defence and Counterclaim on July 12, 2019, including allegations of impeachment respecting the NCS Patents and infringement of Kobold’s 571 Patent.
[16] On May 21, 2020, NCS filed its Statement of Claim for Court File T-567-20, commencing an infringement action based on common design against Promac. On July 22, 2020, Promac filed its Statement of Defence and Counterclaim, including claims impeaching the NCS Patents.
(3) 2015 Lawsuit and Settlement Agreement [17] There was a previous lawsuit [T-1942-15] filed for infringement between the two parties in 2015, when NCS sued Kobold (operating as a prior Kobold company named Kobold Services Inc) for infringement of the 907 Patent and the 676 Patent. The action was brought with respect to Kobold’s G3 technology. After several years of negotiation, the parties ultimately settled the dispute by way of a Settlement Agreement dated January 7, 2016 [Agreement]. NCS alleges that further infringement occurred after the Agreement was entered into by the parties. Kobold disputes what the agreement covered and there was extensive evidence led regarding the negotiation between the parties as to the agreement.
(4) Alberta Court of King’s Bench Action [18] There is currently other litigation stemming from the Agreement ongoing between the parties at the Alberta Court of King’s Bench. Kobold began the manufacture and sale of a technology known as the G5 Sleeve. The parties dispute whether NCS was aware of this during their settlement negotiations. Regardless, the Alberta Court of King’s Bench action stems from NCS’s belief that the G5 Sleeves breach the settlement agreement.
[19] In that matter, NCS brought an application for an interlocutory injunction, which was ultimately dismissed by Justice Horner on June 21, 2018: NCS Multistage v Kobold Corporation, 2018 ABQB 485. The question on that matter was whether the G5 Sleeve is of the "general design" of the G3 Sleeve as outlined in the Settlement Agreement. Justice Horner, in dismissing the injunction application, found that that there was no clear breach but that serious issues about the scope of the Agreement are present in view of the evidence of the negotiations leading up to the Agreement that was submitted by Kobold. The matter is presently stayed pending the outcome of this litigation.
[20] A related dispute at the time of the trial is in the Alberta Court of King’s Bench between Kobold, Kicking Horse Oil & Gas Ltd [Kicking Horse], and a number of third parties including RM Engineering Inc [RM Engineering]. This dispute relates to claims in product liability. Though NCS is not party to that dispute, it submits that the facts are at least somewhat relevant to the instant case as it pertains to the allegedly infringing technology having been used on Kicking Horse well sites as well, and providing evidence with respect to Kobold’s control over wellsite operations. In addition, the President of RM Engineering, Ian Ross, was a witness in this trial and felt constrained in his answers given the ongoing litigation.
(5) Ongoing Federal Action [21] On April 6, 2020, Kobold brought an action in this court against NCS for infringement of its Canadian Patent No. 2,919,561 relating to its invention for a Tension Release Packer for a BHA. This action was being litigated at the time of the trial. In September 2021, NCS brought a motion for summary judgment seeking dismissal of the action. This motion was dismissed by Justice Zinn on December 17, 2021: Kobold Corporation et al v NCS Multistage Inc, 2021 FC 1437.
(6) Appeal of Constructive Trust Amendment [22] Finally, NCS is appealing the decision of Justice Manson in NCS Multistage Inc v Kobold Corporation, 2021 FC 1395. In that decision, Justice Manson affirmed the decision of Prothonotary Ring in the underlying action of this matter, where she denied NCS’s motion to amend its pleading to include an allegation of constructive trust. The Federal Court of Appeal granted NCS’s motion to stay the appeal proceedings pending the issuance of the judgment in the present action: NCS Multistage Inc v Kobold Corporation, 2022 FCA 42.
B. Trial [23] Throughout the trial the Plaintiff brought several motions, on which orders were rendered during the trial so I will not include further discussion on those motions.
[24] The Plaintiff provided five fact witnesses: Robert Nipper, Marty Stromquist, John Ravensbergen, Ian Ross, and Richard Finney, and two expert witnesses: Doug Lehr and Dr. Rex Mennem. The Defendants provided four fact witnesses: Shawn Deugo, Per Angman, Tom Watkins, and Chris Baudistel, and three experts: Michael Chambers, Sean David, and Dr. William Fleckenstein. I note that all the Defendants retained the same counsel.
[25] The trial was originally scheduled to proceed in-person; however, due to a spike in cases of COVID-19 in December 2021 and January 2022 the bulk of the trial was conducted virtually, with the exception of closing arguments. I wish to commend counsel for their flexibility in this, as it was by this flexibility and ingenuity that they were able to make their cases effectively in a manner unaffected by the changing circumstances.
C. Technical Background [see also: technical primers Appendix A] [26] Fracking is a method of extracting oil and gas from beneath the earth’s surface. Hydrocarbons such as oil and natural gas are contained in underground formations. In order to access these hydrocarbons and bring them to the surface, a well is drilled. However, the formation may require additional treatment, such as “fracking” to stimulate the extraction of the hydrocarbons. This typically involves pumping large amounts of fluid at high pressure into the well.
[27] These formations may require horizontal drilling to allow the formation to be stimulated with multiple stages. The two forms of multistage horizontal stimulations are “Perf and Plug” and “Frac Sleeves.” Frac sleeves can actuate with balls dropped from the surface or with tools run on coiled tubing, which open the sleeves and allow the formation to be stimulated either down the coiled tubing or by pumping the stimulation fluid at high pressure down the annulus of the coiled tubing.
[28] Well treatment may be done in stages in order to selectively treat different zones of the formation. To do so, a completion tool, referred to as a BHA, can be run into the wellbore.
(1) Well Drilling and Completion [29] Casing is joined together to run from the surface to a well’s total depth. When several joints of casing are connected, this is often referred to as a “string” of casing.
[30] As explained by Mr. Chambers, Kobold’s expert, in the late 1980’s many wells began to be drilled horizontally. Horizontal drilling exposed more of the formation but also allowed the driller to intersect natural fractures in the rock which could transport oil and gas to the wellbore. Canada has since seen a movement from vertical to horizontal drilling.
[31] Where the well has low permeability (known as “tight”), it will require stimulation to produce oil and gas. Rocks such as tight sandstone, carbonate, or shale require fracturing using large volumes of water and/or proppant to keep the created fracture open.
[32] Mr. Lehr, NCS’s expert, explains that fracking involves injecting fluids under high pressure through perforations in the casing and into the rock formations to create new fractures in the rock.
(2) Tools and Sleeves [33] Two critical terms in this decision are “tools” and “sleeves.” As noted by the experts, tools refer to devices that perform an intended function in a wellbore. This may refer to a single function, or multiple functions. Multiple tools together, chosen for a specific job, form a BHA. The BHA is assembled at the well site by threading the tools together. For example, perforating guns and abrasive jet perforation devices are tools that are run downhole to achieve perforation. Sliding sleeves are a tubular that is covered by at least one more tubular which can slide along the length of the first tubular.
III. Issues [34] I have divided the issues into three categories: Common and Legal Issues, NCS Patents, and Kobold Patents.
[35] Even though some issues were worded differently between the parties’ closing submissions, pleadings, and the Joint Statement of Issues, the issues listed below in this section fully encompass the issues left to decide at the end of the trial. Further note should be taken that not all issues will be addressed, only those found to be determinative or of particular significance to the matter at hand. Where issues are not addressed in the analysis, there are brief reasons in the appropriate sections for why they were not addressed.
A. Common and Legal Issues [36] While it is rare for cases involving multiple patents to have common issues between the patents and other legal issues, the remarkable similarity between the patents at issue, resemblance of the submissions between the parties, and (mostly) general agreement between the experts, it is a better use of resources to consolidate like issues to avoid unnecessary duplication. As will be discussed in the analysis, the Common Issues are replicated issues arising from each patent.
[37] The Common Issues are as follows:
What is the person of skill in the art [POSITA] relevant to the NCS and Kobold patents?
What is the common general knowledge [CGK] relevant to the NCS and Kobold patents?
What construction do I adopt of relevant claim terms repeated among multiple patents?
[38] The Legal Issues raised by the parties include whether Kobold induced Promac to infringe NCS’s Patents, whether “common design” is a viable cause of action under Canadian patent law, if the Agreement affects this action, if NCS is estopped by res judicata or any equitable remedy from asserting infringement claims and misrepresentation and Patent ownership. Some of these and other legal issues raised were addressed and some are not in the legal analysis. As previously mentioned, where issues were raised and are not addressed in the analysis, there are brief reasons in the appropriate sections for why they were not addressed.
B. NCS Patents (1) The 676 Patent [39] In the context of stimulation operations within a wellbore (fracturing or fracking), debris is a common problem. The 676 Patent relates to a downhole tool assembly with debris relief, and a method for using it for completing a well. The debris relief features, including forward and reverse circulation pathways, allow it to be used in solids-laden environments.
[40] Canadian Patent No. 2,749, 636 [636 Patent] is a forced division of the 676 Patent and relates to multi-function valves for downhole assemblies and pressure equalization assemblies comprising such valves.
[41] The independent claims are Claims 1, 18, and 34.
[42] The Joint Statement of Issues suggests Claims 1-34 are at issue. In their closing submissions, the Plaintiff maintains this is the case, though the Defendants only frames Claims 1-32 as being at issue. As they were all argued at trial, and given the parties appear at odds about which claims are still at issue, I will construct Claims 1-34.
[43] The following specific allegations are levied against the claims of the 676 Patent:
Anticipation: Claims 1, 4, 8-12, and 18-31;
Obviousness: Claims 1-32;
Overbreadth: Claims 1-32; and,
Inutility: Claims 1-32.
[44] NCS alleges the Defendants infringed Claims 1-32 of the 676 Patent.
(2) The 652 Patent [45] The 652 Patent discloses the same invention as the 676 Patent, directed at downhole tools and debris relief therein.
[46] The 652 Patent is a forced division of the 636 Patent and relates to downhole assemblies that include a debris relief passageway within a J-slot and methods of using the assemblies to improve stimulation operation in a debris-laden environment.
[47] The Joint Statement of Issues suggests Claims 1-26 are at issue. In their closing submissions, the Plaintiff maintains this is the case, though the Defendants only frames Claims 4 and 6-26 as being at issue. As they were all argued at trial, and given the parties appear at odds about which claims are still at issue, I will construct Claims 1-26.
[48] The following specific allegations are levied against the claims of the 652 Patent:
A. Anticipation: Claims 1, 4, 6, 8-10, 13, 19, 20, 22, and 24;
Obviousness: Claims 4 and 6-26;
Overbreadth: Claims 4 and 6-26;
Inutility: Claims 1-26;
Insufficiency: Claims 1-26;
Ambiguity: Claims 19-23;
Double Patenting: Claims 1-18 and 24-26; and,
Prior Disclosure: Claims 1-26.
[49] NCS alleges the Defendants infringed Claims 4 and 6-26 of the 676 Patent.
(3) The 907 Patent [50] In the context of an oil or gas well, it is common for the sleeve to shift in order to enable or disable flow from varying portions of the assembly. The 907 Patent claims a system and method for a shifting sleeve in stimulation operations within a wellbore in which a ported tubular provides selective access to the adjacent formation through, among other means, being opened or isolated.
[51] The parties agree on Claims 1-28 being at issue for the 907 Patent, and this is also reflected in the Joint Statement of Issues. I shall construct all 28 claims.
[52] The following specific allegations are levied against the claims of the 907 Patent:
Anticipation: Claims 16-23;
Obviousness: Claims 1-28;
Overbreadth: Claims 1-28;
Inutility: Claims 1-28;
Insufficiency: Claims 1-28; and,
Ambiguity: Claims 22, 23, and 26-28.
[53] NCS alleges the Defendants infringed Claims 1-3-, 8-10, 12-18, and 20-28 of the 907 Patent.
(4) The 026 Patent [54] The 026 Patent discloses the same invention as the 907 Patent (i.e. it is a forced division), directed at methods of shifting frac sleeves to open one or more ports in a tubular.
[55] The Defendants and the Joint Statement of Issues suggest Claims 1-14 are at issue. In their closing submissions, the Plaintiff frames Claims 1-14 and 24-26 as being at issue. I take it this must be a typo, as there are only 14 claims in the 026 Patent, and I will only construct those 14 claims.
[56] The following specific allegations are levied against the claims of the 026 Patent:
A. Anticipation: Claims 1, 2, 6, 7, 11, and 12;
Obviousness: Claims 1-14;
Overbreadth: Claims 1-14;
Inutility: Claims 1-14; and,
Insufficiency: Claims 1-14.
[57] NCS alleges the Defendants infringed Claims 1 and 6-14 of the 026 Patent.
(5) The 704 Patent [58] The 704 Patent claims a valve for the fracturing of a wellbore. The valve comprises a tubular mandrel and a frac window. A valve may be closed to prevent fluid communication from the tubing string out the frac window, or opened to enable this. This tool may be installed in a downhole tool which has a perforation device, and can be used with either one or two sealing elements.
[59] There was some back and forth regarding the invention story of this patent, but it will have no material impact on the issues at hand.
[60] The Joint Statement of Issues suggests Claims 1-30 are at issue. In their closing submissions, the Plaintiff suggests Claims 1-26 and 28-30 are at issue, and the Defendants frame Claims 1-16, 18-23, and 28-30 as being at issue. As only Claims 1-23 and 28-30 were argued at trial, and given the parties appear at odds about which claims are still at issue, I will construct Claims 1-23 and 28-30.
[61] The following specific allegations are levied against the claims of the 704 Patent:
Anticipation: Claim 1;
Obviousness: Claims 1-30;
Overbreadth: Claims 1-30;
Inutility: Claims 1-30;
Insufficiency: Claims 1-30;
Ambiguity: Claims 4, 5, 10, 18, and 21; and,
Double Patenting: Claims 1-30.
[62] NCS alleges the Defendants infringed Claims 1-16, 18-23, and 28-30 of the 704 Patent.
C. Kobold Patents (1) The 830 Patent [63] The 830 Patent claims an apparatus for a downhole tool with a shock-absorbing sleeve, particularly for use in absorbing or dampening the effects resulting from the actuation of a shifting sleeve during downhole operations.
[64] The action regarding infringement of this patent is no longer being pursued.
(2) The 571 Patent [65] The 571 Patent describes a shock-absorbing dampening system for a sliding sleeve that uses viscous dampening to control the speed of the sleeve and is titled “Downhole Tool Having a Shock-Absorbing Sleeve.” The inventors of the 571 Patent are Per Angman, Kevin Graf, Chris Baudistel, and Mark Andreychuk.
[66] The 571 Patent was filed on July 10, 2014, and has a priority date of July 10, 2013. It is not in dispute that it is a voluntary divisional the 830 Patent.
[67] Kobold called Mr. Angman as a fact witness and he explained the 571 Patent invention background. Kobold also called Dr. Fleckenstein as its expert and NCS called Dr. Mennem. I note that the Court struck portions of Dr. Mennem’s report related to measurements taken by Mr. Watson. Mr. Finney also acted as a fact witness for NCS. He is NCS’s VP of manufacturing and explained the LP3 sleeve that is alleged to infringe the 571 Patent.
[68] Kobold is only alleging that those embodiments without a seal are infringed.
[69] The Joint Statement of Issues suggests Claims 1-27 are at issue. In their closing submissions, NCS argues Claims 1-16 are at issue. Kobold argues across all the issues that Claims 1-27 are still at issue. Out of an abundance of caution, I will construct Claims 1-27.
[70] The following specific allegations are levied against the claims of the 571 Patent:
Anticipation: Claims 1-3, 25, and 27;
Obviousness: Claims 1-27;
Overbreadth: Claims 1-27;
Inutility: Claims 1, 25, and 27;
Insufficiency: Claims 1, 24, 25, and 27;
Ambiguity: Claims 1, 6, and 25-27; and,
Double Patenting: Claims 1-27.
[71] Kobold alleges NCS infringed Claims 6, 11, 12, and 16 of the 571 Patent.
D. Analytical Framework [72] Below is an outline of the framework of the analysis:
Evidence: A discussion of the Fact and Expert Witnesses whose submissions were heard and received, including issues with the evidence from those witnesses;
Legal Principles: An overview of all the legal principles required to reach a conclusion in this case;
Summary of Prior Art: Given there is repetition and overlap in prior art for each patent there is a general summary of the applicable prior art for each patent with references back to those summaries;
Common Issues: the Common Issues are addressed as outlined in the Issues section above;
Claims Construction: A claim-by-claim construction for each patent, bearing in mind the weight of the evidence and the Common Issues findings;
Validity: A patent-by-patent analysis for each head of validity issues raised, following the order laid out in the Issues section above;
Infringement: For claims that survive the validity analysis, there is a fact-specific analysis of whether or not the valid claims have been infringed by the other party; and,
Other Issues: The various other issues are dealt with.
[73] Following this analysis are the findings on Remedies and Costs, followed by the Conclusion, and Judgment.
IV. Evidence A. Fact Witnesses [74] The Court had the benefit of helpful fact witnesses, all of which were found to be credible.
(1) Fact Witnesses for NCS (a) Robert Nipper [75] Robert Nipper was the Chief Executive Officer of NCS Multistage, LLC, the publicly traded parent company of the Canadian NCS Multistage Inc. He is listed as an inventor on the 676, 652, 907, and 026 Patents.
(b) Marty Stromquist [76] Marty Stromquist is a co-founder of NCS Multistage, LLC, serving variously as Chief Operating Officer from 2010-2015, Chief Technology Officer in 2016, and President from 2016-2020. His practical experience is extensive, lacking a formal education is of no discernible disadvantage to him in the oil and gas industry. He worked for a number of companies that are mentioned in this trial as well as doing his own start up companies. Mr. Stromquist is presently a director of NCS Multistage, LLC. He is listed as an inventor on four of the five patents asserted by NCS: the 676, 652, 907, and 026 Patents. Mr. Stromquist negotiated with Kobold on behalf of NCS regarding the previous patent dispute between the parties.
(c) John Ravensbergen [77] John Ravensbergen is an engineer and the Chief Technology Officer of NCS Multistage, LLC, having previously served in Research and Development and as Engineering Manager. He joined NCS in 2011, and previously worked for a firm called “Baker Hughes” from 2010-2011, and before that at a firm called “BJ Services” beginning in 1996. He is listed as an inventor on the 704 Patent, and is additionally an inventor of over 100 patents.
(d) Ian Ross [78] Ian Ross is the President and one of the founders of RM Engineering. Mr. Ross has experience relevant to this trial because he was on a job site where Kobold tools and sleeves were sold to be installed in a well for a company called Kicking Horse [See: history of proceedings section; actions].
(e) Richard Finney [79] Richard Finney is the Vice-President of Manufacturing at NCS Multistage, LLC, handling matters related to supply chain, maintenance, and repair operations.
(2) Fact Witnesses for Kobold and Promac (a) Shawn Deugo [80] Shawn Deugo currently serves as technical support for Promac; previously, he was General Manager of Promac for several decades. Additionally, he was Promac’s corporate representative during the discovery process. His knowledge relates to the nature of the services that Promac provides. Mr. Deugo has done manufacturing for both NCS and Kobold in the past as well as numerous other oil and gas related companies.
(b) Per Angman [81] Per Angman is one of the founders of Kobold, and a listed inventor on the 571 Patent. He possesses a master’s degree in mining engineering, and has worked on designing tools in the oil industry for several decades. Prior to founding Kobold in 2007, Mr. Angman was chief engineer for 15 years at Tesco Corporation where he worked on their casing drilling technology. At Tesco, Mr. Angman was involved in the design and development of downhole tools.
(c) Tom Watkins [82] Tom Watkins is the Chief Technology Officer at Advance Upstream. He has prior experience with BJ Services [BJ] (which, as noted, became part of Baker Hughes), and, while there, was involved in a project called the “OptiPort Sleeve.”
(d) Chris Baudistel [83] Chris Baudistel is the President of Kobold Completions Inc, and was until recently the General Manager of all three Kobold Defendants. He was also Kobold’s corporate representative during discovery. Prior to working at Kobold, Mr. Baudistel worked with Mr. Angman at Tesco Corporation from 2001 until 2008. At this point Mr. Baudistel joined Kobold, where he worked as Manager of Operations for many years.
B. Expert Witnesses [84] The Parties had many disputes regarding specific evidence from and general credibility of each expert. Despite these disputes, I found all the experts credible and helpful to the court. There were issues regarding experts co-mingling claims construction issues with validity issues, and using disclosure improperly. I will address particular issues with the experts’ evidence after discussing their qualifications.
(1) Experts for NCS (a) Dr. Rex Mennem [85] Dr. Rex Mennem holds a PhD in Mechanical Engineering from Purdue University. He is currently the founder and principal of Touchstone Technology Services LLC, which provides technical and management consulting to companies in the oil and gas industry. Prior to forming Touchstone, Dr. Mennem worked at Schlumberger from 2004 to 2020 in engineering.
[86] Dr. Mennem was qualified as an expert in the design, development and operation of downhole equipment and completion accessories in the oil and gas industry, including but not limited to sliding sleeves. He offered evidence on the 571 Patent.
(b) Mr. Doug Lehr [87] Mr. Lehr is an engineer with over 40 years of experience in designing tools for oil and gas applications. He holds a Bachelor of Science in Mechanical Engineering from the University of Texas, as well as an MBA in Finance and Marketing from the University of Houston.
[88] He is the Founder and Principle of Integris Technology Services LLC, a consultancy offering services in litigation consulting, product and system development, failure analysis and design assurance in the oil and gas industry. Previously, he worked at Baker Hughes in various roles for 10 years, and spent more than 15 years at BJ Services.
[89] Mr. Lehr was qualified as an expert in the engineering, design and operation of tools for oil and gas applications, including but not limited to downhole tools and sleeves for use in hydraulic fracturing. He offered evidence on the validity and infringement of the NCS Patents.
(c) Issues Regarding Mr. Lehr’s Opinions [90] One quirk I must have regard for throughout this decision and in reviewing the evidence is Mr. Lehr’s tendency, both in his reports and in testimony, to rely upon the disclosure in the patents when interpreting claims. This is not in and of itself a problematic practice, but Mr. Lehr repeatedly misuses the disclosure in ways that artificially expand the scope of the claims he interprets. NCS relies on Mr. Lehr’s interpretations during their construction submissions, and by extension throughout their remaining submissions regarding the patents.
[91] The clearest example, which will be analyzed in depth later in this decision, is Mr. Lehr’s construction of the term “comprising.” In his construction, Mr. Lehr suggested the use of this term in the 676 Patent referenced an open-ended portion of the patent’s disclosure using similar non-exhaustive language such as “will typically include” or the inclusion in the disclosure of the ability to make “modifications to the specified devices and the arrangement of the assembly.” He further attempts to construe claims which use this recursively non-exhaustive language by suggesting elements which are absent in a claim can be included by extrapolation because the non-exhaustive nature of “comprising” permits any element captured in the CGK, necessary or otherwise, to be included in the claim by virtue of this non-exhaustive language. While a specific discussion on the use and interpretation of non-exhaustive language follows later in this decision, this is a firm example of misusing language in the patent disclosure to expand the interpretation of the claim beyond the invention being claimed.
[92] Mr. Lehr frequently relies on the CGK to add elements to claims by extrapolation. In addition to being improper, this brings greater scrutiny to Mr. Lehr’s description of the CGK. It is fair to characterize his description of the CGK as pessimistic. While the other experts were in agreement on the broad strokes of the CGK with respect to the NCS Patents, Mr. Lehr took several positions which appeared at odds with expertise and historical facts. One such example was Mr. Lehr’s position that downhole tools would often get stuck in deviated wells (particularly in coiled tubing operations) due to debris issues, and that operators were not using coiled tubing for fracturing operations because they were afraid of getting stuck. To the contrary, fracturing using coiled tubing conveyed tools has been used for about 25 years, and was a proven technology by the year 2000. This method was used when it met the operators’ needs and budget. Mr. Lehr’s opinions call into question his description of the CGK.
[93] For these reasons, I am forced to give less weight to Mr. Lehr’s opinions regarding the construction of relevant claim terms, the CGK, and the claims themselves, as well as NCS’s reliance on them. I will conduct my own construction of the relevant claim terms, the CGK, and the claims themselves to maintain as much fairness to the parties as possible, while considering and weighing each expert’s opinions throughout this decision.
(2) Experts for Kobold (a) Mr. Michael Chambers [94] Mr. Chambers holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M University. He has over 35 years of experience as an engineer, manager and consultant in the oil and gas industry. Mr. Chambers has authored over a dozen publications and has given numerous industry presentations. He holds four patents in the United States related to oil and gas technology.
[95] Mr. Chambers was qualified as an expert in wellbore completions engineering in the oil and gas industry, including the design and supervision of completions operations such as perforating, shifting sleeves, and fracturing, as well as the tools and technology used to carry out such operations. He offered evidence on the validity and infringement of the NCS Patents.
(b) Mr. Sean David [96] Mr. David is a professional engineer with over 18 years of experience, including as a well-site supervisor. He was the expert for the Defendants in the Alberta Injunction application. He was qualified as an expert mechanical engineer with expertise in drilling, completions and production operations as well as tool design, and with specific experience in managing fracturing operations and selecting tools for coil tube fracturing involving shiftable sleeves. He offered evidence on the validity and infringement of the NCS Patents.
(c) Dr. William Fleckenstein [97] Dr. Fleckenstein is a professional engineer with a PhD in petroleum engineering from the Colorado School of Mines. He is currently also a professor at the Colorado School of Mines and teaches a course that involves educating students on sleeves, slips, packers, J-profiles and other subject matter that is directly relevant to the issues in dispute in this action. He also has significant experience working in the oil and gas industry, and is a named inventor on two patents relating to sliding sleeves. He offered evidence on the validity and infringement of the 571 Patent.
[98] Dr. Fleckenstein was qualified as an expert in fracturing operations, including the design of sliding sleeves.
(d) Alleged Issues Regarding Kobold’s Experts [99] Throughout the trial, NCS raised numerous issues with Kobold’s experts. NCS repeatedly impugned the impartiality and independence of Kobold’s experts, asserting that no weight or consideration should be given to their evidence for a variety of reasons mostly related to their independence and objectivity. These issues largely apply to Mr. Chambers’ and Mr. David’s evidence.
[100] One such issue concerned a shop tour that Mr. David and Mr. Chambers took of Kobold’s facilities along with counsel for Kobold and other Kobold representatives. During trial, NCS raised concerns about the purpose of the tour after learning that Mr. David and Mr. Chambers attended the tour together and were given a demonstration and explanation from Kobold engineers about the functioning of Kobold’s technology. This tour had been disclosed in Mr. David’s expert report but not in Mr. Chambers’. NCS brought a motion seeking further disclosure from Kobold about the purpose and the events of the shop tour. I granted the motion in part, requiring disclosure of any communication between counsel for Kobold and Mr. David with respect to the shop tour but did not find the tour tainted the experts in any way or that Counsel was unethical in the situation.
[101] NCS raised another issue with Mr. David and Mr. Chambers with respect to the 676 Patent and the search terms they used when searching for the relevant state of the art. NCS argued that the Court must refrain from relying on the testimony of Mr. David and Mr. Chambers because it was unclear which search terms had been provided to them by Kobold’s counsel and which they had searched for independently.
[102] I accept that it is pr