Bird & Bird wins ground-breaking patent dispute against Halliburton

21 July 2005

First UK inter partes trial to discuss patentability of computer implemented inventions

International law firm Bird & Bird has been advising Texas based Smith International on a ground-breaking patent dispute against Halliburton, one of the world's largest providers of products and services to the oil and gas industry. The case, in which Smith International has successfully contested two patents owned by Halliburton, is also the first inter partes case, i.e. one involving parties on either side, in the UK directed at the patentability of inventions implemented by computer. The judgment, issued today, ruled in favour of Smith International and found Halliburton’s patents invalid.

The case relates to the design of roller cone drill bits used for drilling oil and gas wells across the world. Although the patents did not expressly say so, they essentially related to certain aspects of design using a sophisticated simulation computer program. Halliburton alleged that the use of Smith’s IDEAS software infringed the patents and that the bits resulting from this design process also infringed. Smith in turn, alleged that Halliburton’s patents were invalid.

Morag Macdonald, co-head of Bird & Bird’s International Intellectual Property Group, led the defence for Smith International. Commenting she said:

“Underlying Smith’s defence was the “insufficiency” test. In order to be able to obtain the monopoly of a patent, the patentee has to put enough detail into his patent to allow someone familiar with the technical field in question to carry out the invention. If this sort of detail is absent from the patent it is said to be insufficient. In order to produce a computer simulation of a roller cone drill bit some very complex mathematics and dynamics is required which the Judge found was not adequately nor, in some cases correctly, explained in the patents. On this basis, both patents had an insufficient disclosure and were found invalid”.

Wesley Noah, Chief Patent Counsel of Smith International added:

“Bird & Bird developed a very effective defence and we were delighted with their input in and understanding of this highly complex technical area”.

An important aspect of the case is that it is also the first trial involving parties on either side in the UK where the two parties involved have questioned what business methods, mental acts and computer programs are patentable. Morag explains:

“Smith claimed that certain of the claims in the Halliburton patents were not patentable because they simply disclosed mental acts. The Judge found that what was discussed in the patents had to be carried out by way of a computer program and that although the claims in their current form are not patentable, if they are amended to refer specifically to the industrial application to which the mental act is being put using a computer, they may in his opinion be valid patentable subject matter”.

It is important to note that this discussion is not affected by the recent decision in the European Parliament to reject the Directive on Patents for Computer Related Inventions since the law the Judge was considering is that which is currently in place under the European Patent Convention which does allow for patenting computer implemented inventions providing they have an industrial application.

This judgment followed a three week trial held at the beginning of the year involving evidence of a highly technical nature. The Bird & Bird team was led by partner Morag Macdonald with assistance from Mark Heaney, Edward Barker and Helen Conlan. David Kitchin QC, Adrian Speck and James Abrahams from 8 New Square were the barristers involved. UK firm Bristows represented Halliburton.