Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc.

Transocean Offshore Deepwater Drilling, Inc. (Transocean) (plaintiff) created a dual-activity rig for offshore drilling, improving the efficiency of the process. At the time, drilling rigs generally could only raise and lower one thing at a time. Transocean alleged that Maersk Drilling USA, Inc. (Maersk) (defendant) infringed its rig and brought suit in the United States District Court for the Southern District of Texas. The district court granted Maersk summary judgment based on its finding that Transocean’s claims were an obvious combination of two prior art references, inventions by Horn and Lund. The United States Court of Appeals for the Federal Circuit reversed, finding that although the existence of the inventions of Horn and Lund created a prima facie case of obviousness, the district court failed to consider Transocean’s rebuttal using objective evidence of nonobviousness. On remand, Transocean presented substantial, objective evidence of nonobviousness. Specifically, Transocean presented: evidence that its dual-activity rig obtained a 10-12 percent market premium over a single-activity rig; industry documents, including position papers and magazine articles containing industry praise of the invention and the unexpected drilling efficiency it allowed; an internal Maersk document stating that in designing its rigs, it must “incorporate the same efficiency improvement features as used by [its] competition,” and that “[t]his feature is generally described as ‘dual-activity.’”; evidence that certain industry experts stated that the duly-acting drill would collide too often, thus preventing the dual-activity rig from functioning properly; evidence of several instances where Transocean licensed its dual-activity rigs to third parties; and evidence that its dual-activity rig solved a long-felt need for greater offshore drilling efficiency. A jury found Transocean’s dual-activity rig to be nonobvious based on these objective factors of nonobviousness. The district court, however, granted Maersk’s motion for judgment as a matter of law, finding that the evidence was not sufficient to overcome the prima facie case of obviousness. Transocean appealed.