By Dani Kass

Law360 (June 16, 2020, 10:32 PM EDT) -- Halliburton Energy Services Inc. will go back on trial in August for a Texas federal jury to decide whether two of its products infringe a gas separator patent, a question another jury couldn't answer in March.

U.S. District Judge Andrew S. Hanen on Tuesday scheduled the retrial for Aug. 24, following a pandemic-related delay. At issue will only be whether Halliburton's Q-Max XT and GSB products infringe a Legacy Separators LLC's patent for a downhole gas separator used in oil and gas drilling operations, and what damages would stem from any infringement.

The first jury in March cleared Halliburton of claims that another product infringed the patent, and rejected arguments that the patent was invalid. The litigation has also involved dueling contract, trade secrets and fraud claims and counterclaims, none of which were successful. 

The Houston jury was stuck on the final two infringement claims after more than a week of deliberations, and right as the COVID-19 pandemic was picking up, two jurors were excused over illnesses and the courthouse was shut down. The retrial had originally been set for July, but was rescheduled due to the pandemic. The parties agreed to the Aug. 24 date, with a final pretrial conference scheduled for Aug. 10.

"We and our client are very much looking forward to the retrial on the two surviving patent claims and appreciate the early setting provided by the court, particularly in light of the complicated circumstances posed by the coronavirus pandemic," Aimee Perilloux Fagan of McKool Smith PC, who represents Halliburton, said. "Halliburton has vigorously defended this lawsuit for six years and looks forward to its ultimate resolution."

R. Paul Yetter of Yetter Coleman LLP, who represents Legacy, said the date is "great news," and that "we look forward to finishing the last two core claims."

The litigation stems from Legacy and inventor Guy Morrison's April 2010 supply agreement with Global Oilfield Services, which was acquired by Halliburton in a merger that closed in 2013.  

Legacy sued Halliburton in March 2014, alleging that Halliburton made "knockoff" equipment that infringed its patent. The Oklahoma-based company also accused Global Oilfield Services' former CEO Wayne Richards of fraud for falsely telling Morrison that he had no plans to sell the company to Halliburton in order to land the exclusive deal with Legacy.

Legacy asked jurors for between $15.1 million and $20.4 million for the royalties it alleged it was owed from the sales of Halliburton's three "knockoff" separators. It also asked for between $8 million and $11.8 million based on Richards' alleged fraud in saying he had no intent to sell Global.

In response, Halliburton hit Legacy and Morrison with contract, trade secret theft and fraud counterclaims, arguing that Morrison didn't own the intellectual property for the products he was selling and that he breached the contract by ending his agreement with Halliburton to produce the separators.

The dispute headed to trial March 2, and the jury was tasked with answering 24 questions on Legacy's patent and fraud claims, as well as Halliburton's counterclaims. Before deliberations, two jurors who fell ill were excused and replaced with alternates. A six-member jury began in-person deliberations March 13 and continued as courts across the country shuttered and delayed other jury trials in response to the coronavirus outbreak.

"The coronavirus presents unique challenges for the jurors, the court staff, counsel and witnesses," Fagan said Tuesday. "We have been closely monitoring how other courts have attempted to address those challenges thus far, and look forward to working with Judge Hanen and the Southern District to ensure a safe, but fair trial for all involved."

The patent-in-suit is U.S. Patent No. 8,424,597.

Legacy is represented by R. Paul Yetter, James E. Zucker, Pamela L. Hohensee, Thomas M. Morrow, Matthew C. Zorn, Reagan W. Simpson and Robert D. Woods of Yetter Coleman LLP.

Halliburton is represented by Aimee Perilloux Fagan, Samuel F. Baxter, Phillip M. Aurentz, Robert Marc Manley, Meredith Anne Elkins, Marcus Rabinowitz and Avery Roderick Williams of McKool Smith PC, and Terrie L. Sechrist of Sechrist Duckers LLP.

The case is Legacy Separators LLC v. Halliburton Energy Services Inc. et al., case number 4:14-cv-02081, in the U.S. District Court for the Southern District of Texas.

--Additional reporting by Michelle Casady and Dorothy Atkins. Editing by Breda Lund.

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