Date: 20040531
Docket: T-150-01
Citation: 2004 FC 791
Ottawa, Ontario, this 31st day of May, 2004
PRESENT: THE HONOURABLE MADAM JUSTICE SNIDER
BETWEEN:
WARREN WESSEL AND WESTMEN OILFIELD RENTALS
(ALBERTA) LTD.
Plaintiffs
(Defendants by counterclaim)
- and -
ENERGY RENTALS INC.
Defendant
(Plaintiff by counterclaim)
REASONS FOR JUDGMENT
SNIDER J.
[1] The petroleum industry requires a myriad of special services to ensure the continued efficient production of oil and gas from wells in Canada. This has given rise to a secondary industry that specializes in providing those services. Westmen Oilfield Rentals (Alberta) Ltd., ("Westmen") and Energy Rentals Inc. ("Energy Rentals") are two such companies.
[2] These companies are competitors in providing power swivel units together with drill collars to petroleum companies for the purpose of reworking or servicing their oil and gas wells. Transportation of this heavy and cumbersome equipment from well site to well site has required the use of trailers that can transport the weight. Often two trailers have been used - one for the power swivel head and a second to carry the drill collars. At other times, a highboy trailer that required a highboy tractor for pulling was necessary. Mr. Warren Wessel, the president of Westmen, thought that there was a better way.
[3] Mr. Wessel is the inventor and holder of Canadian patent 2,206,675 (the "'675 patent") issued March 21, 2000 for a trailer mounted power swivel unit. By licence agreement dated June 29, 1997, Westmen holds the exclusive rights to construct and use the invention that is referred to as the "Westmen trailer". The cargo deck of the Westmen trailer is divided lengthwise into two sections. The power swivel, hydraulic motor and related equipment (hydraulic hoses, etc.) are affixed to the one section and drill collars, which balance the unit, are loaded onto the other section. As a result of this arrangement, the Westmen trailer can transport all of the necessary servicing equipment on one trailer that can be hauled by a pick-up truck. Westmen operates 12 Westmen trailers.
[4] About two years after the Westmen trailer was put on the road, Energy Rentals began operating trailers that resemble Mr. Wessel's invention. Energy Rentals has 13 such units in operation.
[5] Mr. Wessel and Westmen commenced this action claiming that Energy Rentals is infringing its patent by operating its trailers. Energy Rentals denies the claim on the basis that the '675 patent is invalid and, in any event, the design of their trailers does not infringe.
Issues
[6] The issues to be determined are as follows:
7. Is the '675 patent invalid for the reason of:
(a) obviousness, having regard to the lack of inventiveness of the Westmen trailer; or
(b) anticipation, having regard to the prior public design and use of trailers that were in operation prior to the invention date?
2. If the '675 patent is valid, do the trailers of Energy Rentals infringe on that patent?
Background
[7] To understand the context of this action, it is helpful to describe briefly the piece of equipment that is the subject of this litigation and its role in the petroleum industry.
[8] Oil and gas wells often need maintenance on surface or down-hole equipment. Working on an existing well to restore or increase oil and gas production is an important part of the industry. This is where the power swivel is most useful.
[9] In a joint filing of exhibits for this trial and to assist me in understanding the nature of a typical power swivel unit, the parties included a copy of the Instruction Manual for the Bowen Model S-2.5 Power Swivel. The Bowen models, which I accept as representative of the units that are accommodated on the Westmen trailers and the Energy Rental trailers, are described as "hydraulic motor driven, pipe rotating machines". The swivel head alone is a rotary tool that is suspended over the well head allowing the drill stem to rotate freely. All Bowen power units, in addition to the swivel head, consist of an engine assembly with a direct driven, variable displacement hydraulic pump, hydraulic piping, hydraulic fluid reservoir, a trailer or skid assembly, and a hose reel assembly with necessary hoses to supply hydraulic fluid power to the power swivel motor.
All of these components are skid or trailer mounted to form a portable unit that can be moved from well site to well site and utilized from the trailer as required.
[10] Drill collars are heavy, thick-walled tubes - usually steel - used between a drill pipe and the bit in the drill stem to stiffen the drilling assembly and put weight on the bit. This allows the bit to drill more effectively. Although not required in all circumstances, drill collars are more often than not used in association with the operation of a power swivel. When needed, they are supplied together with the power swivel unit and transported to the well site at the same time.
Analysis
[11] It was agreed that a patent is presumed valid and that a party challenging the validity of a patent bears the burden of convincing the Court that the patent in question is, on a balance of probabilities, invalid. In this case, Energy Rentals submits that the patent for the Westmen trailer is invalid because of obviousness or anticipation. The Plaintiffs submit that Mr. Wessel's invention is valid - that Energy Rentals has not met its burden to show that the patent is invalid.
What is the proper construction of the patent?
[12] Before turning to the issues of invalidity and infringement, I must identify the essential elements of the invention claimed in the '675 patent (Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067 at para. 43). Claim 1 (the sole claim) of the '675 patent states that the embodiments of the invention are as follows:
A trailer mounted power swivel, comprising in combination:
1. an elongate trailer having ground engaging wheels and a cargo deck; the cargo deck being divided lengthwise into a first section and a second section; and
2. a power swivel unit secured solely to the first section, thereby causing a load imbalance which renders the trailer unstable for highway travel until the second section of the cargo deck is under load, the second section of the cargo deck being adapted to carry a sufficient number of drill collars to sufficiently counterbalance the weight of the power swivel unit until the stability of the trailer is restored
[13] In construing this patent, I am mindful of the guidance from recent decisions of the Supreme Court of Canada (Whirlpool, supra; Free World Trust v. Électro Santé Inc. [2000] 2 S.C.R. 1024). These cases teach that patent claims are to be construed in an informed and purposive fashion and that excessive literalism is to be avoided. As Justice Binnie explained in Whirlpool,supra, at paragraph 45, the "key to purposive construction is therefore the identification by the court, with the assistance of the skilled reader, of the particular words or phrases in the claims that describe what the inventor considered to be
the 'essential' elements of his invention".
[14] No experts were presented to assist in the task of construction. Accordingly, I bring to this part of my analysis the plain ordinary meaning of the words used, albeit in the specialized context of the petroleum industry.
[15] Having considered the words of the claim, the principles of claim construction and the evidence presented regarding the invention, I conclude that the following are the essential elements of the claim:
1. The claim as a whole is addressed to a trailer that has been adapted to transport all of the components of a power swivel unit, as described in paragraph 9 above.
2. The trailer is divided lengthwise into two sections, with the components of the power swivel affixed to one section.
3. Without the addition of weight to the second section, the trailer will be sufficiently unbalanced to be unstable for highway travel.
[16] The parties agreed that the term "highway" is to be interpreted as set out in subsection 1(g) of the Alberta Highway Traffic Act, R.S.A.2000, C. H-8:
(g) "highway" means any thoroughfare, street, road, trail, avenue, parkway, driveway, viaduct, lane, alley, square, bridge, causeway, trestleway or other place, whether publicly or privately owned, any part of which the public is ordinarily entitled or permitted to use for the passage or parking of vehicles . . .
Given that the trailers are to be used in the petroleum industry, a purposive construction of the patent would interpret "highway" to include all types of roadways that would be travelled on by the units. The characteristics inherent in driving on such roadways are discussed later in these reasons starting at paragraph 50.
[1] Considerable attention was given throughout this proceeding to the concept of stability and instability. I am satisfied that the term "unstable for highway travel" as used in the patent does not mean that the trailer rolls over under any and all circumstances. Rather, it means there is a reasonable possibility that the trailer, without the balancing load, could overturn in certain driving situations or that the driver of the towing vehicle could lose control. The issue of stability is discussed in greater detail starting at paragraph 31.
[2] Finally, with respect to the nature of this patent, I observe that the claim embodies far more than simply a "layout, plan or design" as was the situation before the Patent Appeal Board and Commissioner of Patents in Re Application No. -995 For A Townhouse Building Design (1979), 53 C.P.R. (2d) 211. The Board, in refusing to grant a patent in respect of an architect_s design for the layout of a townhouse, stated that the plan was "clearly directed to a layout, plan or design totally lacking in any mechanical or structural novelty or invention". In contrast, the invention before me is much more than a mere design. It is an invention that is mechanical or structural by its very nature. Whether the invention is novel or inventive is to be determined.
Issue 1(a): Is the '675 patent invalid for the reason of obviousness, having regard to the lack of inventiveness of the Westmen trailer?
[3] As Justice Binnie for the Supreme Court of Canada stated in Apotex Inc. v. Wellcome Foundation Ltd. (2002), 21 C.P.R. (4th) 499 at paragraph 37, "[t]he patent monopoly should be purchased with the hard coinage of new, ingenious, useful and unobvious disclosures." Thus, an invention should not be patentable if the subject matter was obvious. The test of the obviousness of an invention uses the concept of a skilled technician.
[4] A helpful description of the skilled technician that this Court and experts giving evidence in this proceeding must contemplate when considering an allegation of obviousness was provided by Justice Hugessen for the Federal Court of Appeal in Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 at 294 (F.C.A.):
The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. The classical touchstone for obviousness is the technician skilled in the art but having no scintilla of inventiveness or imagination; a paragon of deduction and dexterity, wholly devoid of intuition; a triumph of the left hemisphere over the right. The question to be asked is whether this mythical creature (the man in the Clapham omnibus of patent law) would, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. It is a very difficult test to satisfy.
This test has been widely mentioned and followed by this Court.
[5] In the case before me, I must determine whether a mythical skilled oilfield service technician would be led, based on the state of the art, to the claimed invention without conducting further experiments, serious thought or research (Farbwerke Hoechst Aktiengesellschaft v. Halocarbon (Ontario) Ltd. (1979), 42 C.P.R. (2d) 145 at 155 (S.C.C.); Diversified Products Corp. v. Tye-Sil Corp. (1991), 35 C.P.R. (3d) 350 at 365-366 (F.C.A.); SmithKline Beecham Pharma Inc. v. Apotex Inc. (2001), 14 C.P.R. (4th) 76 at 99-101 (F.C.T.D.), aff'd (2002), 291 N.R. 168 (F.C.A.)). Further, "[i]t is well-established that evidence of a "mere scintilla of invention" is sufficient to support the validity of a patent." (Diversified Products,supra). Therefore, the simplicity of an invention is not a bar to patent validity.
[6] The invention before me is undeniably simple. However, its apparent simplicity does not lead inextricably to the conclusion that the Westmen trailer is obvious and not worthy of a patent. In my view, there are a number of factors that support a conclusion of inventiveness, in spite of the simplicity of the unit.
1. No prior similar units: Prior to the Westmen trailer, there were no trailers with this design being used in the industry. As stated by a number of the witnesses, prior to the invention, the power swivel equipment was shipped in a balanced fashion on the trailer, allowing no room for the drill collars. As a result, a second trailer or a much larger skid-mounted unit was required, thereby adding substantial cost to the transportation of these units. With the introduction of the trailer, Westmen was able to offer a better overall contract price for use of the power swivel unit. Mr. Scott Biluk and Mr. Dale Rangen, current or former employees of Energy Rentals, both acknowledged that the Westmen trailer was the first such unit that they had seen. Mr. Biluk went so far as to agree that he got the idea for the Energy Rentals trailer after he had seen the Westmen trailer in operation.
2. Commercial success: A factor that can support inventiveness is the commercial success of the invention. (Diversified Products, supra). And, Mr. Wessel's invention showed immediate commercial success. Within a very short time, he had 12 Westmen trailers on the road operating widely in Alberta and Saskatchewan. In one significant example, all of the producers in Brooks who had used his company_s services converted to the use of the Westmen trailers.
3. Solution not "plain as day": To be obvious, an invention must be "plain as day" or "crystal clear" (Bayer Aktiengesellschaft v. Apotex Inc. (1995), 60 C.P.R. (3d) 58 at 80-81 (Ont. Gen. Div.), aff'd (1998), 82 C.P.R. (3d) 526 (Ont. C.A.); leave to appeal dismissed, [1998] S.C.C.A. No. 563). That description does not fit the Westmen trailer. Mr. Wessel did not come easily to the invention; he designed and fabricated the trailer over a period of time hiding out in his workshop to prevent prying eyes from seeing the development of his invention. Mr. Neil McKay appeared as an expert. His expertise was uncontested and includes significant experience in regard to motor vehicle operation and roadworthiness. He has spent over 30 years practising in his fields of expertise in Alberta. His testimony was that it would be "very unusual" to mount permanently mounted equipment on one side of a trailer as opposed to both sides. He agreed that most of the time when people are designing a trailer "they design it with permanently mounted equipment to be balanced without any additional load".
4. "Imitation is the sincerest flattery": Mr. Wessel, in 1998, had a falling out with one of his clients who had been using the Westmen trailer. This client, as explained by Mr. Biluk, approached Energy Rentals and said that he would contract with the company to use such a unit if they had one. From that request, Energy Rentals formed a team whose task was to develop a similar unit. Mr. Rangen acknowledged during cross examination that the goal of the team was to "get around" Mr. Wessel's patent. After significant effort, the first Energy Rentals unit was placed on the road. The company built three more such units and acquired 9 more in a corporate acquisition. As with the Westmen trailers, these units are commercially successful. Leaving aside until later in this decision the question as to whether the Energy Rentals trailer infringes, the mere fact that the competitor took steps to copy the unit is indicative of the inventiveness of the Westmen trailer.
[7] In summary, the Westmen trailer was an invention that was not intuitive, that took significant time and effort to develop, that demonstrated immediate commercial success and that was copied by a competitor. Cumulatively, the effect of these factors is "simply irresistible" (Beloit, supra, at p. 296); the patent was inventive and not obvious. Stated in words that mirror those of Justice Hugessen in Beloit, supra, the mythical creature (the man in the Clapham omnibus of patent law) would not, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. The claim of obviousness fails and the '675 patent is not invalid by reason of obviousness.
Issue 1(b): Is the '675 patent invalid for the reason of anticipation, having regard to the prior public design and use of trailers that were in operation prior to the invention date?
[8] Energy Rentals submits that the Westmen trailer does not meet the definition of "invention" in the Patent Act R.S., c. P-4, s. 1 in that it was "known or used" by another person prior to the invention date, as required by paragraph 27 (1) (a) of the Patent Act. In other words, Energy Rentals is relying on a plea of "anticipation". In making this argument, Energy Rentals refers solely to the prior use of up to two trailers developed in the 1980s that could carry both a swivel unit and drill collars on a single unit. This, Energy Rentals submits, demonstrates that the Westmen trailer meets the test of anticipation in that the invention was made known to the public before the relevant time. The relevant time is the date of application for the patent, that date being May 29,1997.
[9] To be pleaded successfully, anticipation must be found in the specific prior use. One must be able to look at the prior use and find in it all the information that, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill and without the possibility of error (Beloit, supra at 297). Any prior use that does not contain the entire combination of the essential elements is not anticipatory.
[10] Energy Rentals produced Mr. Terry Gunderman who testified about the earlier trailers. From 1986 to 1997, Mr Gunderman was the owner of Red Hawk Well Servicing, a service rig contracting company that carries out down-hole maintenance on existing oil and gas wells. Prior to his acquisition of Red Hawk, in the early 1980s, Mr. Gunderman was part owner of another well service company. He described two trailers that purportedly were used to transport a power swivel and drill collars on one trailer unit, in a fashion similar to the Westmen trailer. The first of these was constructed around 1982 or 1983 and the second was part of Mr. Gunderman's acquisition of another service company in 1986. These trailers were in operation in southeast Saskatchewan and southwestern Manitoba until some time in 2000. Neither unit is in service today. However, for purposes of this trial, the trailers were located and photographed in a surplus equipment yard near Red Deer, Alberta and identified by Mr. Gunderman as the trailers that he had owned. Although the power swivel equipment and collars were no longer present, the design of the two trailers can be discerned from the photographs presented to Mr. Gunderman and from his testimony as follows:
1. The first trailer was designed and fabricated by Mr. Gunderman's company in 1982 or 1983. In that unit, the swivel was mounted over the axles, toward the rear and slightly off to one side. The trailer was designed for a "rig assist unit" meaning that there was no diesel engine or hydraulic system on the trailer. Rather, this equipment would run off a separate rig hydraulic system already in place at the well site. Up to four drill collars could be carried on the trailer in a corrugated tray located to the left of the mounted power swivel. Mr. Gunderman acknowledged that a large red tool box that was centred on the trailer was added for balance and convenience.
2. The second trailer was also designed to transport a rig assist unit to the field. On this trailer, the power swivel was located right in the middle of the trailer towards the back end. Two drill collars could be transported on either side.
[11] The second trailer can be eliminated immediately from the analysis of anticipation, since the evidence is that the drill collars were placed one either side of the swivel unit, rather than on one side. The placement of drill collars on the second section of the Westmen trailer is an essential component of the invention.
[12] With respect to the first trailer, the large red tool box is an added element that is not incorporated into the Westmen trailer.
[13] It is critical to this examination that the Gunderman trailers were designed to carry rig assist swivels only. This is a dramatic departure from the invention. Without the extra weight of the engine and related equipment, the load carried by those trailers would be significantly reduced. Thus, carrying the swivel unit on one side of a trailer would not necessarily cause instability.
[14] The differences between the Gunderman trailers are significant. As a result of these differences, I am unable to conclude that someone looking at either of these trailers would be able to find in it all the information that, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill and without the possibility of error. Accordingly, I conclude that neither of the Gunderman trailers are sufficient to allow Energy Rentals to succeed in its plea of anticipation. These two trailers are not evidence that the invention was known as of the relevant date of May 29, 1997. The plea of anticipation fails and the '675 patent is not invalid by reason of anticipation.
Issue 2: Do the trailers of Energy Rentals infringe on the '675 patent?
[15] The Energy Rentals trailers closely resemble the Westmen trailers. Both trailers carry the power swivel equipment on one side, although in slightly different positions. Both have been adapted to carry drill collars on the other side, although the Energy Rentals trailers are frequently sent out without the drill collars. In my view, neither the minor different positioning of the equipment nor the use of the Energy Rentals trailers without drill collars is sufficient to conclude that the '675 patent is not infringed. Neither of these differences is essential to the embodiment of the invention.
[16] On the other hand, there is an essential element of the invention that must be examined. The '675 patent provides that the Westmen trailer is sufficiently unbalanced without the drill collars to be unstable for highway travel. Accordingly, I must determine whether the Energy Rentals trailer is unbalanced and whether that imbalance is sufficient to render the trailer unsafe for highway travel. If these questions are answered in the affirmative, the conclusion will be that the '675 patent is infringed.
Are the Energy Rentals trailers balanced side to side?
[17] Mr. Dale Rangen, a witness for Energy Rentals, was employed as a journeyman heavy duty mechanic in the power swivel unit of the company during the relevant times. Together with a few selected individuals, Mr. Rangen was part of a team that designed the first trailer for Energy Rentals. This team set out to design a trailer that was balanced when carrying the power swivel unit and not drill collars. At the time of the team brainstorming design sessions, Mr. Rangen had seen the Westmen trailer; the yards of the two competitors are only about a block apart. In cross examination, Mr. Rangen acknowledged that he wanted to build a balanced trailer because he "read the patent" and he agreed that he was looking for a way to get around the patent.
[18] During the course of fabrication and prior to final welding of the prototype unit, the trailer was weighed and adjustments made to the positioning of the equipment with the objective of achieving both proper hitch weight and balance side to side. Significantly, however, Mr. Rangen agreed that the initial weighing was carried out without the hydraulic system, wiring, fuel lines or hoses. All of this equipment would later be located on the same side of the trailer as the swivel and engine, thereby adding significant weight to the one side of the trailer. In spite of the goal to design a balanced trailer and even with the adjustments carried out during the weighing, Mr. Rangen agreed, during cross examination, that the trailer that ultimately was fabricated was not balanced side to side.
[19] From this testimony, I conclude that the Energy Rentals trailers are not balanced from side to side. However, it does not automatically follow that the '675 patent is infringed: the essential element of the invention is that the trailer, without the additional weight provided by the drill collars, is sufficiently unbalanced to be unstable for highway travel.
Are the Energy Rentals trailers sufficiently unbalanced to be unstable for highway travel?
[20] Three experts appeared in this proceeding to assist me in answering the question of the stability or instability of the trailers at issue. Energy Rentals produced two experts:
· Mr. Frank Yuzyk, a professional engineer prepared and signed a report (the "Yuzyk report") on behalf of Allan R. Nelson Engineering (1997) Inc. who was asked by Energy Rentals to determine if their power swivel trailers are stable without adding a load of drill collars onto them. His qualifications were accepted without question.
· Mr. Gerald Lorimer, a professional engineer, prepared and signed a report (the "Lorimer report") on behalf of Allan R. Nelson Engineering (1997) Inc. who was asked to review and comment on the Yuzyk report and the report prepared by Mr. Neil McKay (the McKay report), described below. Although I accepted Mr. Lorimer as an expert, I noted at the time that his qualifications as they relate to roadworthiness in particular were not as directly related to the subject as those of the other witnesses.
[17] The third expert was Mr. Neil McKay, a professional engineer. Mr. McKay produced the McKay report on behalf of A.D. Williams Engineering Inc. who was asked by Westmen to compare the patented Westmen trailer and the Energy Rentals trailer. Mr. McKay also reviewed the Yuzyk report. There were no questions about his qualifications. Indeed, Mr. McKay's experience is the most directly related to the questions before me.
[18] In my view, the necessary analysis commences with an examination of the stability or instability of the Westmen trailer. The results of this analysis will give me a reference against which to compare the Energy Rentals trailer.
(a) Stability of the Westmen trailer
[19] Mr. McKay examined carefully the stability of both trailers. He described the situation facing each vehicle as follows:
When a vehicle is turning, the contact between the road surface and the tires provides the resistance to sideslip, thus accelerating the trailer inwards. The overturn moment is a result of the inward acceleration of the trailer mass acting through the centre of gravity multiplied by the moment arm, or the distance of the centre of gravity above the road surface. The front outside of the trailer tire on the outboard side is assumed to be the pivot point for the overturn. . . . .
The restoring moment is the product of the acceleration due to gravity acting on the trailer mass through the centre of gravity to the outside of the trailer tire.
. . . when the overturn moment (OM) is greater that the restoring moment (RM), the trailer will overturn. [emphasis added]
[20] The critical factor in the analysis becomes the friction coefficient (¦ value) developed between the road surface and the trailer tires. The zf > y value is calculated by dividing the distance from the centre of gravity to the edge of the wheel (y) by the height above ground of the centre of gravity (z). In a situation where zf > y, the OM is greater that the RM and the trailer will overturn.
[21] On typical road surfaces, usual ¦ values are in the magnitude of 0.75g. Higher values are possible on good road surfaces.
[22] With respect to the Westmen trailer, Mr. McKay found that the trailer, when loaded only with the swivel equipment on the right side, would lose stability when the friction coefficient (¦ value) of 0.80g was reached. That is, when an ¦ value equal or greater than 0.80g is achieved, the overturn moment is greater than the restoring moment and the trailer will lose stability in turns. Mr. McKay concludes that the critical overturn risk for the Westmen trailer (and the Energy Rentals trailer) would occur as a result of quick lane changes or evasive manoeuvres. His testimony was that the imbalance of a trailer results in an instability that increases the risk of rollover or loss of control in evasive manoeuvres and, potentially, in other less critical manoeuvres.
[23] Of the two other experts, only Mr. Lorimer commented on the stability of the Westmen trailer. During his testimony, he stated that the Westmen trailer is in the upper range of stability for heavy commercial vehicles. In my view, this is not an expert opinion that the unloaded Westmen trailer is stable when operating in all types of situations as would be faced by a vehicle in the petroleum industry. I prefer the careful analytical work of Mr. McKay.
[24] On the basis of the evidence, I find that the Westmen trailer without the load of the drill collars is sufficiently unbalanced to be unstable in certain evasive manoeuvres carried out on certain types of highways.
[25] Given that the Westmen trailer, without the loaded drill collars, is unstable, it follows that a trailer with the same characteristics of that trailer would also be unstable. The question then becomes whether there are differences in the two trailers that would lead to the conclusion that the unloaded Energy Rentals trailer is stable.
(b) Stability of the Energy Rentals trailer
[26] The key elements of the submissions and evidence of Energy Rentals are that:
1. a field test of the Energy Rentals trailer shows that it is stable for highway use; and
2. a theoretical analysis of the Energy Rentals trailer demonstrates that it has different stability characteristics.
[27] Allan R. Nelson Engineering (1997) Inc. was asked by Energy Rentals to determine if their power swivel trailers are stable without adding a load of drill collars onto them. Mr. Yuzyk, a professional engineer, prepared and signed the report. His investigation consisted of a field test where he observed the unit in transport without an additional load of drill collars and an overturning analysis of the unit. His field test was conducted on January 7, 2000 in Red Deer, Alberta when he observed the Energy Rentals trailer being towed by a new diesel truck. Mr Yuzyk chose a route that, in his view, would enable him to examine how the trailer would corner at various speeds in directions most likely to cause overturning. The trailer did not overturn. His observations were as follows:
· the trailer when stationary, exhibited no obvious lean to the equipment loaded side prior to testing;
· throughout the towing of the trailer, no discernible lean or sway was observed at any time;
· the trailer cornered typical in-town corners at speeds varying from 20-30 kph with no discernible lean observed;
· no discernible lean was observed when the trailer was transported through corners on the highway at speeds from 80-105 kph;
· control of the trailer during braking was also good; and
· two times during the testing, it was necessary to brake quickly and the trailer tracked straight.
[28] Mr. Yuzyk's overall opinion, based on both his field test and his theoretical analysis (discussed below), was that "the trailer is a safe and stable operating unit under normal operating conditions and speeds with due consideration for road configuration and condition, without the presence of drill collars on the trailer deck". Mr. Yuzyk_s expertise was not questioned.
[29] Energy Rentals submits that I should accept this opinion of a recognized expert in the area as evidence that the Energy Rentals trailers are sufficiently balanced to be stable for highway travel and, accordingly, that there is no infringement. For a number of reasons, I cannot conclude, on the basis of this opinion, that the Energy Rentals trailers are sufficiently balanced without the drill collars to be stable for highway travel.
[30] I do not question what Mr. Yuzyk observed during the test. However, the concern that I have is with the limited scope of the field test. The test was conducted by a very experienced driver almost exclusively on dry, paved, major roadways during clear weather. Mr. Yuzyk acknowledged that the driver never exceeded posted speed limits. Further, although the driver conducted some quick stops, those were done in a straight line. The only cornering was carried out at low steady speeds. The test included no evasive or emergency manoeuvres.
[31] As noted above, the definition of "highway" is broad. A "highway" includes a wide variety of roads - from major, multi-lane throughways to rough, unpaved roads that provide access to oilfield production facilities. Some of the "highways" used by the trailers, as described by Mr. Rangen, would include roadways that are subject to 75% road bans for part of the year, thereby indicating a road that is likely to be rough and to provide driving challenges as a matter of course. Further, it is obvious that the trailers would be driven in a great variety of weather conditions, including through rain, high winds, snow, ice and fog. It would be odd indeed if these units were driven only on smooth paved roadways during sunny, clear weather. And yet, these were exactly the conditions under which Mr. Frank Yuzyk carried out his "field test"of the Energy Rentals trailer.
[32] In my view, to be valid, the road observations ought to have been made in a much wider range of operating conditions that more closely resemble the typical conditions often encountered by drivers in the field - for example, at speeds at least equal to posted speeds, in poor weather conditions and incorporating more extreme manoeuvres. It is unrealistic to base a field test for vehicles in oilfield operations under such ideal road and weather conditions. In summary, the test was very limited and did not provide an adequate field test of the stability of the unit. Accordingly, I conclude that the results of the field test do not support a conclusion that the Energy Rentals trailer is sufficiently balanced to be stable for highway travel.
[33] Mr. Yuzyk also carried out a theoretical analysis of the overturn potential of the Energy Rentals trailer. A summation of the overturn analysis is contained in Mr. Yuzyk_s report.
The overturning analysis of the trailer was performed using calculated weights of the trailer and major equipment weights as supplied by Energy Rentals, and verified as required. The basis of the overturning analysis assumes that the plane of overturning runs from the center [sic] of the fifth wheel, to the outside center of the forward axle set . . . . The center of gravity (CG) of the major pieces of equipment was determined, and using this information the CG of the entire trailer unit was calculated. Using the CG, it was possible to determine the overturning moment of the trailer, which is the point at which the trailer will not have any weight on the tires on one side of the trailer. It was then possible to relate the speed of the trailer and the turning radius through which it is moving.
The analysis was performed assuming the diesel tank is empty, and no drill collars are being carried on the unit. This is to reflect the most conservative conditions for overturning possible. . . . The analysis indicates that the trailer unit has weight on all tires at a typical cornering speed of 25 kph if the turning radius is 7.6 meters. On the highway, at a speed of 100 kph, the minimum turning radius for all the tires to have weight on them is 121.5 meters. These values indicate that for normal operating conditions and speeds, the unit will not overturn. [emphasis added]
[34] I have concerns with this analysis.
1. The theoretical analysis was also based on ideal driving situations in that Mr. Yuzyk assumed a maximum highway speed of 100 kph and 25 kph for curves. The speed limit for many of Alberta's major four-lane highways is 110 kph. Further, the low speed assumed for curves may be unrealistic of many drivers in the petroleum industry. This alone raises significant doubt in my mind about the usefulness of the analysis.
2. I accept the testimony of Mr. McKay that instability not only increases the risk of overturning but the risk of loss of control. Mr. Yuzyk's overturn analysis does not discuss this aspect of stability in his report.
[35] Accordingly, I give little weight to the Yuzyk report. Overall, it does not support the proposition that the unloaded Energy Rentals trailer is stable.
[36] The final expert, Mr. Lorimer, commented on both the Yuzyk report and the McKay report. His conclusion was that the Energy Rentals trailer is considered to be more stable than the Westmen trailer in an unloaded condition for the following reasons:
1. The calculated rollover threshold for the Energy Rentals trailer is approximately 15% higher for the Westmen trailer;
2. The 8-wheeled suspension of the Energy Rentals trailer may be stiffer than the 6-wheeled Westmen trailer; and
3. The axle weight ratio for the Energy Rentals trailer is 25% less than the Westmen trailer.
[37] The first of these reasons was based on his determination of rollover thresholds for each of the trailers calculated in accordance with a methodology of the University of Michigan Transportation Research Institute ("UMTRI"). UMTRI has published a number of articles and papers regarding truck rollover. The UMTRI methodology differs from that used by Mr. McKay in that it uses different y and z measurements. While Mr. McKay measured the y distance from the outer edge of the trailer wheels at road surface to the centre of the mass, the UMTRI approach involves measuring from the centre of the wheels at the road surface to the centre of the mass of the trailer. The UMTRI methodology results in a lower rollover threshold. Nevertheless, the relative values are helpful in comparing the stability of the two trailers. Using the UMTRI approach, Mr. Lorimer calculated the rollover threshold for the Energy Rentals unit to be 0.60 g. Mr. Lorimer carried out a similar calculation for the Westmen trailer simply by reducing the y measurement by 12 inches to account for the distance from the trailer_s edge to the centre of the tire tread on the single-wheeled axle of the Westmen trailer. His conclusion was that the rollover threshold for the Westmen trailer was 0.52 g. This was the basis for Mr. Lorimer's conclusion that the rollover threshold for the Energy Rentals trailer is approximately 15% higher for the Westmen trailer.
[38] Unfortunately, Mr. Lorimer_s initial calculations were flawed. Under cross-examination, he agreed that the comparable measurement for the Westmen trailer would more correctly have been between 7.5 and 8 inches. The resulting recalculation, using 8 inches instead of 12 inches, changes the calculation for the rollover threshold of the Westmen trailer to 0.61 g. Thus, the difference in rollover threshold between the two trailers is negligible.
[39] The second of Mr. Lorimer's reasons - that the 8-wheeled suspension of the Energy Rentals trailer may be stiffer than the 6-wheeled Westmen trailer - was speculative. Little explanation was offered as to why this would make a difference in the stability of the trailer, even if the statement is correct.
[40] Finally, Mr. Lorimer provides, as a reason for his stability conclusion, that the axle weight ratio for the Energy Rentals trailer is 25% less than the Westmen trailer. The ratio of axle weights for the unloaded Westmen trailer is 2:1 and for the Energy Rentals trailer is 1.5:1. Mr. Lorimer explains that this 25% difference implies that the Energy Rentals trailer will have improved stability over the Westmen trailer in a similar unloaded condition. Once again these statements are devoid of analysis or explanation.
[41] Of the three reasons stated for his conclusion, Mr. Lorimer's calculation of the rollover threshold is the most relevant. And that calculation, once corrected, shows insignificant difference in the stability of the two trailers. Thus, common sense tells me that, if the Westmen trailer is unstable, then so is the Energy Rentals trailer.
[42] Having considered all of the evidence, I am satisfied that the Energy Rentals trailer infringes the '675 patent. More specifically, when compared to the essential elements of the invention:
1. The Energy Rentals trailer has been designed to transport all of the components of a power swivel unit.
2. The Energy Rentals trailer is divided lengthwise into two sections, with the components of the power swivel affixed to one section.
3. Without the addition of weight to the second section, the Energy Rentals trailer will be sufficiently unbalanced to be unstable for highway travel.
Conclusion and Directions
[43] In conclusion, and for the reasons set out in the foregoing, the Plaintiffs_ claim will succeed and that of the Respondent will fail.
[44] It follows that, at this stage of this proceeding, the Plaintiffs are entitled to the following:
1. judgment in their favour;
2. a declaration that:
a) the _675 patent is valid; and
b) the _675 patent is infringed by the Defendant;
3. an order:
a) that the counterclaim of the Defendant is dismissed;
b) enjoining the Defendant from infringing the _675 patent;
4. its costs.
[45] Counsel for the Plaintiffs is directed to prepare for endorsement a draft judgment to implement these conclusions, as provided by Rule 394 of the Federal Court Rules, 1998. Such draft judgment or motion for judgment is to be filed with this Court by June 15, 2004. Together with the draft judgment or motion for judgment, the Plaintiffs are directed to file a proposed schedule for assessment of damages. In addition, the Plaintiffs are entitled to an immediate order enjoining the Defendant from dismantling or removing equipment from the infringing trailer units until further Order of this Court. Parties are to make written submissions on the issue of delivery up of the infringing trailer units in accordance with the following schedule:
1. Plaintiffs' submissions to be served and filed by June 8, 2004;
2. Defendant's submissions to be served and filed by June 15, 2004; and
3. Plaintiffs' reply submissions to be served by June 18, 2004.
_Judith A. Snider_
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-150-01
STYLE OF CAUSE: Warren Wessel and Westmen Oilfield
Rentals (Alberta) Ltd. v. Energy Rentals Inc.
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: April 5 - April 7, 2004
REASONS FOR : The Honourable Madam Justice Snider
APPEARANCES:
Mr. J. Cameron Prowse FOR PLAINTIFFS
Mr. G. Bruce Comba FOR DEFENDANT
SOLICITORS OF RECORD:
Prowse Chowne LLP FOR PLAINTIFFS
Edmonton, Alberta
Mr. Morris Rosenberg FOR DEFENDANT
Deputy Attorney General of Canada